David W. Axelrod, OSB #750231 Email daxelrod ... - magic · Page 2 - XAP’S REPLY ISO ITS...

XAP’S REPLY ISO ITS POST-TRIAL PROPOSED FINDINGS OF FACT

SCHWABE, WILLIAMSON & WYATT, P.C.Attorneys at LawPacwest Center

1211 SW 5th Ave., Suite 1900Portland, OR 97204

Telephone 503.222.9981

PDX/117132/154237/CKO/2858111.6

David W. Axelrod, OSB #750231Email [email protected] E. Mansfield, OSB #05539Email [email protected] E. Tingleaf, OSB #054463Email [email protected], Williamson & Wyatt, P.C.Pacwest Center1211 SW 5th Ave., Suite 1900Portland, OR 97204Telephone 503.222.9981Fax 503.796.2900

Of Attorneys for Defendant, Xap Corporation

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

COLLEGENET, INC.,

Plaintiff,

vs.

XAP CORPORATION,

Defendant.

No. 03-1229-BR

XAP CORPORATION’S REPLY IN SUPPORT OF ITS POST-TRIAL PROPOSED FINDINGS OF FACT

Case 3:03-cv-01229-BR Document 824 Filed 08/18/08 Page 1 of 32 Page ID#: 7108

Page 1 - XAP’S REPLY ISO ITS POST-TRIAL PROPOSED FINDINGS OF FACT




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I. INTRODUCTION AND ORGANIZATION OF THIS REPLY

CollegeNET’s (“CN”) 70-page responses on top of their 60 pages of authorized briefing

present a blizzard of contentions not unlike the blizzard of materials dumped on the Patent Office

in reexamination. CN employs a number of tactics. Many of its fact statements have no record

citation. Other of its record citations simply are unrelated to the claims made for the actual

evidence or the story that CN attributes to the actual evidence, particularly the testimony from

Dr. Maier. Arguments that CN now makes for documents that are admitted without any witness

testimony in fact contradict CN’s fact contentions. Thirty pages is insufficient to detail these

errors, so examples will have to suffice and the decision to not respond to an individual

contention contrary to Xap’s contentions is due to lack of space, not agreement.

II. XAP’S INEQUITABLE CONDUCT CLAIM

A. ApplyWeb 1: Reply ISO Xap’s Post-trial PFF, ¶¶ 1-18

1. ¶¶ 4, 5. Proof that the “ns-home” directory software cannot reflect the

“production” code used in the public AW1 system in the six months prior to the Critical Date lies

in three facts that CN admits or ignores: First, despite having an automatic revision control

system, CN contends (CN Resp. to ¶ 4) that it did not maintain an identifiable production code

used in the public system. Second, because CN contends that it had to constantly modify the

production version of app.pl throughout the six months prior to the Critical Date to customize

forms, the “last modified” August 28, 1996 and December 5, 1996 programs in “ns-home” could

not reflect “production” code changes implemented in 1997. See example of Golden Gate

University (GGU) below. These 1997 modifications to both app.pl and to ques.pl necessarily

had to be in the public system as they were necessary to support online application forms

processed by CN (PTX 3042). See id., Xap Post-trial PFF, ¶ 5. Third, the post-trial stipulated

fact that the app.pl program was split into two programs app.pl and ques.pl in the aw.test library,

coupled with the proof that these programs supported forms that were online in early 1997,






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confirms these programs are the best and only evidence of the production code.1

One example disproves many of CN’s arguments, particularly Hitchcock’s 2008

testimony that multi-page forms were not ready for patenting prior to the Critical Date. Golden

Gate University (GGU) contracted for AW1 service on August 1, 1996. DTX 2006, p. 1. While

creating the GGU forms, a change was made to ques.pl on April 11, 1997 to add a new field

category with the attribute name: VISA_TYPE_APPLY. 2 PTX 3159 version 1.21; PTX 1058. No

version of app.pl contains this new field category. DTX 2036, 2037, 2047. It is only present in

ques.pl and mg_ques.pl, a version of ques.pl that Mr. Hitchcock worked on to develop multi-

page capability. PTX 1058, lines 1390-1393; XAPSC04/aw.test/RCS/ques.pl,v at lines 5977-

5980. The online3 GGU applications all had multi-page capability, as evidenced by the directive

1 The sophistry of CN’s position is exemplified by its reference (¶ 5) to “Xap’s own

admission that AW1 operated . . . before the initial creation of ques.pl. . . .” CN plays this game as well (CN ¶ 14) with the keygen.pl program. Both ques.pl and keygen.pl were, prior to early 1997, subprograms within app.pl. See citations infra pp.7-8. They were pulled out (“refactored” in Mr. Hitchcock’s parlance) as separate programs, as reflected in the engineering notes CN cites (PTX 3007), for enhancement. Ques.pl contains the questions for form field labeling. CN cannot contend that the questions in ques.pl (before or after its separation into a separate program) are not necessary to the public system. Xap never asserted that no version of process.pl was in the older ns-home libraries (and CN gives not citation for this straw man assertion), only that there is no version or process.pl in the August 28, 1996 version on which Dr. Maier based most of his opinions.

2 The specific lines of code added were:sub VISA_TYPE_APPLY {

&ISELECT(“For which visa type will you be applying? “, “VISA_TYPE_APPLY”,1,””,””,”F-1”,”J-1”,”Other”);

&ITEXT(“ if other, please specify: “,”VISA_TYPE_APPLY_OTHER”,20,40);}And the accompanying RCS comment was: @changes for GGU app. PTX 3159 version 1.21; PTX 1058.

3 Before applications could be used to submit data, the application must be added to the key_update.pl program, so that the key values of the application, fee information, and recipient e-mail addresses could be placed in the application database. The use of key_update.pl to create the institution keys file is confirmed by DTX 2035 (activate_app.doc and addkey.doc) and by DTX 2184 (aw_arch.doc from xapsco4\aw.test\docs) as well as DTX 2078, a version of aw_arch.doc with Hitchcock's handwritten annotations. The pre-critical date code of key_update.pl shows that ggu.in, ggugd.in, ggugm.in, ggui.in, and ggun.in were in use as of the critical date. DTX 2074-E. All five of these .in files bear comments that they were “put online” on 05-06-97.






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“MULTIPAGE/nn” in all GGU’s .in files that were online. DTX 2051-56; PTX 342.4 The

degree and non-degree GGU applications went online on or after May 5, 1997. See, e.g.,

comments to RCS entries for ggu.in and gggun.in (DTX 2053, 2054); PTX 342. CN processed

GGU applications for the first time in May 1997 on the public system, based on records CN

repeatedly cites to this Court. PTX 3042. These records contradict (1) Hitchcock’s 2008 story

that multi-page capability did not exist pre-Critical Date, (2) Wolfston/Maier stories that changes

in aw.test were not used in the production code, and (3) CN’s arguments that it has no

knowledge of when ques.pl was used in production. These records also cast doubt on the

credibility of CN and its witnesses on all other contested facts and issues.

CN’s reliance on the aw.test library code to prove modifications made to the public

system in early 1997 (e.g., PTX 3159), coupled with its admitted failure to maintain any other

copy of the production code warrants a finding that the aw.test/RCS code reflects the production

capabilities prior to the Critical Date. CN’s contention that the records may have been lost

before litigation was contemplated in March 1998 (CN Memo, 25-26) denies the admitted fact

that the Smart Loan service was still in use and it was only 6 months after the college

applications service was restyled as AW2. 7/8/08 Supp. Agreed Facts, ¶¶ 1, 7. A finding of bad

faith or improper conduct is not required to permit the Court to exercise its inherent authority to

make judgments about the lost evidence. Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir.

1993); Unigard Sec. Ins. Co. v. Lakewood Eng’g & Mfg. Corp., 982 F.2d 363, 365, 368, 369 (9th

Cir. 1992). In the absence of an explanation and with a duty to preserve the code, an inference

that the lost code would have been adverse to CN is warranted. See eSpeed, Inc. v. BrokerTec

USA, L.L.C., 417 F. Supp. 2d 580, n.9 (D. Del. 2006).

2. ¶ 6. In the face of (1) DTX 2072, (2) the descriptions in the patent applications of the

importance of separating the function of generating the form from the application instructions

and the use of an independent naming methodology for user data (DTX 2079, ‘278 patent, 5:61-

4 None of the .in files for any GGU application were modified after May of 1997. SeeDTX 2179 (directory list for pre-Critical Date files of XAPSC04\aw.test\RCS at lines 181-186).






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63, 6:54-60, 7:29-8:03, 10:40-63, 11:22-25, claims 2, 14, 23, 24, 32), and (3) lengthy arguments

to the Patent Office in October 2001 regarding what the prior did not teach (DTX 2093 at 3-7), it

takes some chutzpah to assert that the Batcheller architecture and naming methodology was in

the prior art in the context of processing multiple forms for multiple institutions by a third party

forms processor. CN’s evidence? An uncorroborated one-line statement from Dr. Maier who

claims he referred to it in his Ph.D thesis. Maier Tr. 718:10-18.

3. ¶ 8. CN’s opposition proves that AW1 had substantial capability to customize forms.

CN concedes that prior to the Critical Date the AW1 library included over 500 sharable field

choices and that as many as 1200 school-specific fields had been created to customize forms. It

identifies no respect in which a school was unable to select the information that it wanted, in the

order that it wanted it, and separately branded to the school rather than a “common” form. It also

acknowledges that under the AW1 architecture, once created, these fields could be used in the .in

files to add to or modify forms without making any further changes to the forms engine. None of

this information or capability was disclosed to the Patent Office.

Nor does CN dispute: that the public AW1 system had the proven capability to share data

and pre-populate forms between applications whenever the attribute name used to characterize

the user data was the same between forms, that the customized pre-Critical Date forms (e.g.,

Mercer and Virginia Tech) share as many as 30 such identical fields, and that CN advertised this

capability widely. None of this information was disclosed to the Patent Office.

Instead, CN argues first that it was time consuming to create these different form fields

and that the common fields (not the school specific #! fields) required additional coding to the

forms engine so that they would thereafter be available for any later school application. Second,

CN argues that, if the customization was implemented with new but slightly different labeling

through the addition of new sharable fields, data sharing would not be optimized. There are two

complete rejoinders to these arguments.

Nothing in the patent claims coverage sought by CN conditions customization on






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optimizing data sharing. Data sharing is subservient in the alleged inventive system, because

that function is met if there is any data sharing (“some” in the language of claims 1-20 of the

‘278 patent). Nor do instances of computer bugs that required fixing or limitations on the early

attribute naming structure justify a wholesale denial of the capabilities of the prior art.

More importantly, here as with the related misrepresentations concerning “hard-coding”

and metadata, CN avoids discussing the alleged inventive solution that is identified in the patent.

See Xap Reply to CN Post-trial Memo, pp. 6-9. That solution—programming the forms engine

to accept arguments that would override the default labeling and field parameters in the forms

engine with instructions from the application information file—was used in the AW1 system.

Id.; see also Xap Post-trial PFF, ¶ 37; Frederiksen Tr. 203:25 - 210:15, 220:4 - 230:6, and was

simply extended to more and more form fields after Mr. Batcheller left and prior to the Critical

Date. There is no dispute about that fact. Id. The game that CN plays to avoid this fatal defect in

its defense is telling.

At trial, Dr. Maier delivers CN’s argument that the preferred embodiment of the

invention is different, in these respects, from the prior art AW1 system. Dr. Maier opines:

It talks about the user attribute table, which if you read about it elsewhere is not a blob, its structured individual fields. And the application data file can optionally supply arguments to directives. I read that as saying[,] for any directive, the application data file has the option of giving an argument to it, and I don’t see those in ApplyWeb 1. Tr. 722:22-723:03 (emphasis added).

Dr. Maier is technically correct that AW1 did not have this solution available “for any directive,”

because the technique was used in AW 1 only with selected form fields calls and thereafter

extended—but the alleged inventive solution is in the prior art. Dr. Maier’s sophistic technique

is to read into the patent an unexpressed restriction requiring this alleged inventive solution to be

available “for any directive,” otherwise he will opine that it need not be disclosed. There is no

such requirement anywhere in the patent. By these techniques, reflective of the semantics that

Wolfston used with the Patent Office, CN seeks to justify its failure to disclose these key features

of the prior art to the Patent Office.






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4. ¶ 9. See infra ¶ 6 (discussing CN Resp. to ¶¶ 11-17 re: processing user information).

5. ¶ 10. See infra ¶ 16 (discussing CN Resp. to ¶¶ 44-46 re: data sharing).

6. ¶¶ 11-17. See also infra ¶ 17. These paragraphs of Xap’s proposed findings walk

through the capability of AW1 to process user data. Wolfston represented AW1 had no

capability to process user data for transfer to the college in a requested format and could only

send a stored flat text file.

CN seeks to divorce, from Wolfston’s duty to disclose, all of the cndb.pl routines that

operated in AW1, in communication with a commercial Illustra RDBMS, to store and

manipulate (i.e., process) applicant information. The software restructures the BLOB of user

data into an associative array or index table. The index separately lists each field with the user

information and the metadata characterization that identifies what that information is. This is an

“atomistic” listing (compare CN Resp. to ¶ 11), though that term is nowhere used in the patent.

That the additional software routines of the cndb.pl library provide the capability, rather than the

RDBMS database software, is irrelevant to Wolfston’s duty to disclose the capabilities of the

AW1 system. CN is simply wrong when it asserts that the AW1 system did not link tables of

applicant information because it did not use an RDBMS call but instead used cndb.pl routines

that accessed the tables through the user i.d. Frederiksen, Tr. 248:01-254:02, 311:21-313:08.

Similarly, CN does not meet the substance of Xap’s proof regarding the processing of

user data. From the time the AW1 system processed a user’s request to submit an application

until the time the application was submitted and receipt acknowledged in the Log table, the AW1

system does not touch the application form, the .in file, or the programs used to present the form.

Xap agrees that the .in file is used, in conjunction with the key_update.pl program, to create the

“keys” listing, a file that is then maintained in the Institution table. The CMDS SIS option

exemplifies that AW1 had the capability to create that “keys” file separately from the .in file and

thereby to select different fields and/or a different ordering, if desired, or invoke (or add to) the

format options queried every time the key_update.pl program was run. The relevant points are






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that 1) the pre-generated “keys” file was independent of the .in file and was thus not affected by

the customization of forms and 2) the AW1 system had the capability to process user data.

The capabilities programmed into and available on the public system to a contracting

party like CMDS are prior art under 35 U.S.C. § 102(b), whether or not commercially used. Xap

Reply ISO Post-trial Memo, 10. Nor is it relevant that CMDS did or did not implement a

capability to receive the electronic downloads that the AW1 system was capable of delivering.

The claims of the ‘278 patent refer to the features and capabilities of the third party forms

servicer’s system and are not dependent on whether the customer has purchased a computer or

software with which to receive that electronic information. None of CN’s arguments excuse the

failure to disclose the actual capabilities of the AW1 system in these respects.

CN argues that Hitchcock knew nothing of these processing capabilities. It represents to

the Court that keygen.pl was not created until May 20, 1997 (when it was put on what is the only

evidence of the public system) but neglects to state that keygen.pl was a “refactoring” of the

app.pl program created by Jon Batcheller.5 The momentous (CN’s and Maier’s characterization)

May 20 merger adding the refactored keygen was described in Hitchcock’s words at the time as

“minor migration mods.” PTX 3156. Nor did Hitchcock merely “touch” (CN’s characterization)

these files. He refactored, in versions that CN fails to cite, the CMDSAPP.in (DTX 2074-C) file

in the same way that he broke out keygen.pl. He modified the key_update.pl program to enable

it to handle multi-page forms processing as part of what was obviously a system-wide

conversion. DTX 2074-Y, lines 293-295 and 2093-2103, making three times the revisions to this

important program as CN admits. DTX 2074-Y at lines 174, 199, 214, 229, and 294. He could

not have made these refactorings beginning in January 1997 without observing the plain-as-day

structure of the key_update.pl program (DTX 2074-E, consisting of only eleven pages) or the

5 See Hitchcock Tr. 432:24-433:6. DTX 2037, lines 206-212 and 3158-3164 invoke and then run the “write_keys” routines in the earliest public system. The same code is simply carried forward with Hitchcock’s “refactoring” into two different programs. PTX 3141 (keygen.pl) p. 4-5 for the write keys code, p. 3 for the invocation and p.2 for comments on how the keys are written, and the role of key_update.pl to save the keys file to the Institution table, all from the 1996 versions of app.pl.






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distinct field ordering and selection of the CMDS keys file that he put on the AW1 system.

Most importantly, these records and capabilities could have been identified, if Hitchcock or

Wolfston had decided to review the records of AW1 before filing the Wolfston Declaration.

A simple comparison of the AW1 system capabilities with the information disclosed in

the Wolfston Declaration makes clear that highly material information was withheld and that

there is no plausible explanation.

7. ¶ 18. See infra ¶ 22 (CN Resp. to ¶¶ 72-73 re: Non-disclosure of Jon Batcheller as

possible inventor).

B. The Sallie Mae Smart Loan Contract: Reply ISO Xap’s Post-trial PFF, ¶¶ 19-28

8. ¶¶ 19-23. CN’s contentions that it need not disclose the Smart Loan because it did

not embody the alleged invention, because it was immaterial solely for the reason that it did not

involve “multiple institutions,” and because the contract was not completed and the service

delivered prior to the Critical Date delivered are erroneous legal contentions rebutted in the Xap

Reply ISO Post-trial Memo at pp. 1-6 and need not be repeated here.

CN’s assertion that the Smart Loan contract did not require the tracking of state is wrong.

It required tracking the condition of the application form so that an applicant could complete the

application over multiple sessions, if desired, and it required notification to the applicant of

delivery of the application data to Sallie Mae. DTX 2149, Exhibit B; DTX 2236 (Ratliff depo.),

36:14-21. Fulfillment of these contract conditions requires tracking the state of the application.

CN’s effort to dismiss Smart Loan because it did not use ApplyWeb 1 software is irrelevant.

What is important were the previously undisclosed (and denied, DTX 2093, pp. 4-7) features of

the prior art that the Smart Loan contract taught. Again, CN’s behavior in 1997 makes

abundantly clear that the importance of Smart Loan to the college applications processing service

was obvious. A combination of Smart Loan and a true disclosure of AW1 was information of

the highest materiality.

9. ¶¶ 24-28. Mr. Ratliff testified that: he knew of no respect in which the logical order of






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development process set forth in CN’s implementation schedule (DTX 2154) was not followed

(DTX 2236 at 49:18-50:04); the category of “testing on browsers/platforms” was the category in

which he tested his work to confirm that it functioned for its intended purpose (Id. at 50:20-

52:24, 57:23-58:7); and the presentation code and JavaScript implementing the verification

functions were completed before the review of the form presentation with Sallie Mae on May 21,

1997 (Id. at 78:22-79:07, 82:16-84:05; DTX 2159). The test of the data upload (“Live Data

Test”) originally scheduled for April 18, 1997 (DTX 2154) recites: “The interface and database

will now be hooked together ready for the actual submission of an application in order to test the

data submission, receipt by Sallie Mae, and acknowledgment to [CN].” CN presented no

evidence suggesting in any way that the confirming test was not performed, did not work as

intended or was in any respect other than a routine implementation of a data transfer. A test

system being used by Sallie Mae for purposes corresponding to “Sallie Mae Ongoing Review”

and “Final Cleanup and Testing” was operating over the Internet by the Critical Date. DTX

2163, 2164.

The Court can review these records and evaluate whether, in light of CN’s failure to

maintain records of the Smart Loan™ software, Xap has shown that the important system

components—data uploads per Sallie Mae’s specification, data checking, or multi-page

capability—had or had not been shown to work for their intended purpose by the Critical Date.

The verification function was, by Mr. Ratliff’s own acknowledgement, ready for patenting when

the contract was signed because implementation in the context of the Smart Loan service was

well known in the art. Tr. 597:18 to 598:3.

The JavaScript verification code is part of the HTML code and accompanies the

transmittal of the form code to the user’s browser. See PTX 3066-C; DTX 2236, at 29:5-25.

Without any explanation, Dr. Maier gives a conclusory opinion that sending such script with the

similar transmission of HTML code from the AW1 system would be “difficult or impossible”

(CN’s characterization in its brief, CN Resp. to ¶ 26). The behavior of CN’s CEO and its Vice






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President of Marketing in spring 1997, preparing and publishing offers to provide the Smart

Loan verification service to colleges and describing Smart Loan as the same technology as used

in the college forms system, is an effective rebuttal to Dr. Maier’s uncorroborated opinions.

C. The Patent Applicants and the ‘278 and ‘042 Prosecution Histories: Reply ISO Xap’s Post-trial PFF, ¶¶ 29-32

10. ¶¶ 29-32. CN’s argument to the Patent Office at DTX 2093, pp. 4-7, listing the

many features of the claimed inventions that CN asserted were not taught in the prior art speaks

for itself. The Court does not need the parties’ extended argument to compare CN’s argument to

the examiner with the undisclosed features of the AW1 and Smart Loan systems, or to CN’s

2008 trial argument that it had no duty to accurately disclose those systems because individual

features were, CN now argues, well know in the art.

CN incorrectly states that Xap agrees that Scharmer did not teach sharing user

information across forms. The examiner found, and Ms. Frederiksen agrees, that Scharmer does

teach storing user data in a database and pre-populating later forms with some of that

information. See Xap Post-trial PFF, ¶ 92. CN did not stand pat and argue that point to the

examiner, but instead amended its claims. As elsewhere, CN makes a number of unsupported

claims and attributions, including the incorrect contention that changing the template form

rendered by the DataBlade engine required re-programming that engine. The arguments CN

otherwise makes here are repetitions of arguments made and rebutted elsewhere.

D. The Wolfston Declaration

1. Paragraph 10: Reply ISO Xap’s Post-trial PFF, ¶¶ 33-37

11. ¶ 34. Xap addressed CN’s contentions and tactics in defense of paragraph 10 in Xap

Resp. to CN Post-trial Memo at pp. 6-9 in Xap Resp. to CN Post-trial PFF, section II.G, and in

part in paragraph 3 (response to ¶¶ 4-5), above. Xap incorporates those responses.

Mr. Wolfston is sophisticated in computer science and the examiners are persons of skill

in the art. Both know the difference between a computer software program and a text file, such

as the application data file (aka, application information file) that figures prominently in the ‘278






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and ‘042 patents. With evidence of the true capabilities and architecture of the AW1 system of

the forms engine— including AW1’s programming of the forms engine to accept arguments to

directives from the “.in files”—it is the Court’s role to determine whether Wolfston fully

disclosed the prior art to the Patent Office.

CN’s assertion that the purported limitations of AW1 were overcome by the preferred

embodiment is rubbish, as detailed in the references above. AW1 already used the technique of

arguments to directives to provide customized field labeling and parameters, through such

controls as TableText and Itext that were reviewed in detail by Barbara Frederiksen. Frederiksen

Tr. 203:25 - 210:15, 220:4 - 230:6. The only improvement made was to simply extend this

technique to additional fields. Now CN seeks to assert that the inventive aspect was to list the

attribute names for the fields in an Attribute Table with unidentified additional information. This

is grasping at straws. The system architecture and attribute naming structure of AW1 is what is

described in the preferred embodiment and claimed in the patents.

CN makes an additional misstatement, perhaps inadvertent, that warrants correction. CN

asserts that “labels” had to be identical to permit sharing in AW1. This is incorrect. Sharing

occurred whenever the attribute name (e.g., person_name_last_(1)) assigned to the user data was

the same. It did not matter whether the label for a field was “Father” or “Guardian,” if the

attribute name for both was the same, sharing took place. See Xap Post-trial PFF, ¶¶ 9, 44.

12. ¶ 35. See supra, ¶ 11. Many of CN’s claimed facts have no citation. While CN

concedes here that changes to a college application could be made without re-programming the

forms engine—highly material information that it kept from the Patent Office—it grossly

exaggerates, without citation, the frequency of those changes. CN now seeks to include as

changes made to an application, here and in paragraph 36, all of the code changes made to

correct grammatical errors in forms labeling, to add new sharable fields, and to enhance the

AW1 system capabilities by programming the forms engine to accept arguments for directives—

an alleged inventive feature of the patents. All of these additions, and very few changes to the






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forms engine for school-specific application issues, are what make up version 1.75 of DTX 2037.

Lines 1002 and 1035 of DTX 2037 are examples of modifying the forms engine program to

accept arguments to directives—on the pre December 5, 1996 system that CN contends was a

production program at that time. Frederiksen Tr. 204:23-206:22.

Changes to the forms engine to add system-wide capabilities for all forms or to correct

punctuation in default labeling have nothing to do with the claim element “allowing new form

data fields corresponding to applicant information not previously requested to be added to an

application form without requiring alterations of existing application forms or programs that

access the database.” ‘278 patent, claim 1. Creating a program with 575 sharable directives by

the Critical Date simply confirms the capability to customize forms. These fields are not created

for the 60-80 forms then in the CN system but by definition are available for the tens or hundreds

of forms that follow. Such apples to oranges comparisons underlie each of CN’s contentions and

Dr. Maier’s demonstrative exhibits. Xap incorporates here its discussion of the faulty Dr. Maier

testimony, paragraph 3, above.

13. ¶ 36. See supra, ¶ 12. CN’s comparison of apples to oranges does not reduce the

teaching of the AW1 functions. An exemplary instance again comes from the Golden Gate

University forms that were put online in May 1997. See supra ¶ 3.

14. ¶ 37. Though CN now admits that AW1 had the capability and taught the technique

of using arguments to directives to improve customization of forms and to add or modify

additional fields without re-programming, CN’s argument to dismiss this teaching and its failure

to disclose this capability to the Patent Office is made of whole cloth. The application of iText

and Tabletext arguments to directives is precisely the technique claimed as the important feature

of the patent architecture that improves data sharing and customization. The Court can readily

determine from its own reading of the Wolfston Declaration whether this admitted capability

(admitted by CN only because faced with incontrovertible proof in the CN source code) was

disclosed by Wolfston. If it was not, as Xap submits, that alone is inequitable conduct and the






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continuing cover-up of that capability is clear and convincing evidence that it was intentional.

2. Paragraph 6: Reply ISO Post-trial PFF, ¶¶ 39-41

15. ¶¶ 39-41. See Xap Response to CN Post-Trial PFF, section II.B. CN argues that it

could not provide the customization required by its customers because online applications did

not look exactly like paper applications. The patent specification and claims, however, do not

require this level of customization. They require customization in the selection of the content of

information requested of applicants, the order and selection of the content, and/or branding with

the institution name and/or logo. DTX 2079, ‘278 patent, 6:5-9, (claim 1) 22:34-39, (claim 5)

23:36-39; see also Xap Resp. to CN Post-trial PFF, p. 4 (limits on customization attributed to

limits of HTML technology, not AW1), Nusbaum Tr. 342:14-343:01.

According to CN, to consider Wolfston’s representations in light of the patent

specification and claims constitutes inappropriate claim construction. CN Resp. to ¶ 39. The

descriptions of customization need no construction, however, or one would have been provided

at this stage of this litigation. The examiner viewed Wolfston’s Declaration (the only material he

was given regarding AW1) in light of the applied-for patent to determine patentability. This is

exactly how the Court must view Wolfston’s representation in order to determine whether it was

false or misleading. Wolfston failed to tell the PTO that AW1 could do exactly what was

claimed in the patent.

CN argues that there is a direct connection between customization of application forms

and data sharing (i.e., that increased customization led to less data sharing), a subject that is not

explained to the examiner in paragraph 6. See CN Resp. to ¶ 41. Whether customization affects

data sharing is irrelevant to determining inequitable conduct. Customization cannot be denied if

“some” data sharing still occurs, even if it reduces data sharing. See infra ¶ 16. Optimizing data

sharing is not a limitation of any patent application claims. CN’s argument is no justification to

deny AW1’s customization capability to the PTO.

CN also incorrectly argues that there is a dependency between customization and the






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ability to upload data to institutions in a format specified. In AW1, application forms were

created in response to directives from an application data file. Customization occurred before an

applicant ever entered data (i.e., the form had the same questions, layout and order, and

branding, whether a user had entered data or not). The user data was stored separately from the

forms and could be culled by individual tag names corresponding to the form field information

for uploading to the institutions. When user data was selected for transfer to an institution, the

AW1 programs did not interact with the .in files, the application form, or the programs that

created them. The user data was searched and retrieved through separate programs using a pre-

configured “keys” file. The software that configured the keys file (which determined the

selection order of data in the data uploads) used the .in file as a default input by choice. The

development of the CMDS SIS option that results in a different selection and ordering of the pre-

configured keys file demonstrates that the system had the capability to implement other

orderings if desired. CN’s alleged dependency is created not from a limitation of AW1 but from

a desire to justify Wolfston’s concealment of AW1’s flexibility. See Xap Resp. to CN Post-trial

PFF, p. 4

CN does not address the fact that Wolfston told the PTO that AW1 could not provide the

customization required by its customers, yet, with Wolfston’s direct oversight (Tr. 567:25-

568:9), told actual and potential customers the exact opposite throughout the lengthy period that

he now asserts the “toy” system did not work. Xap Post-trial PFF, ¶¶ 40-41. Customers were

directed to websites of Mercer, Virginia Tech, and other universities to view forms that were

“fully tailored to the individual specifications of each college client.” DTX 2018 at CNA71250

(emphasis original); see also 2004, 2013, 2023. Deposition of Kelly Queijo, former Va. Tech

administrator and current CN employee at 12:5-20, 31:13-19, 36:4-6, 38:15-17, attached as

Exhibit 1 to Declaration of Johnathan E. Mansfield (“Mansfield Decl.”) (CN provided in 1996 a

custom application that looked like the Virginia Tech undergraduate application); see also id. at






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46:19-48:13 (presented the AW1 service, including its customization ability, at a conference).6

The fact that AW1 was capable of providing customization would have been material to a

reasonable patent examiner in determining patentability. This materiality is shown by the facts

that AW1 performed what is required by the patent; that CN heavily marketed the customization

ability to its customers and its customers chose AW1, in part because of its customization ability;

and that during prosecution, the applicants distinguished Scharmer, in part, because Scharmer

lacked “branding.” DTX 2093, p. 5; CN Resp. to Xap Post-trial PFF, ¶ 30.


16. ¶¶ 44-46. See Xap Resp. to CN Post-Trial PFF, section II.A. CN misstates Xap’s

position. Xap is not arguing that CN did not disclose a “theoretical” data-sharing capability of

AW1. CN clearly did make this misleading disclosure. “Theoretical” conveys to the examiner

that it is not tested, proven, or publicly available. The statement is misleading and false because

of what CN failed to disclose about AW1’s data-sharing capability: data sharing was publicly

available for a year prior to the Critical Date; that the data-sharing was tested and proven by

Wolfston himself (Tr. 507:17-508:7; CN Resp. to Xap Post-trial PFF, ¶ 10) and by CN every

time an application was put online (Tr. 93:3-15); and that data sharing was widely advertised to

students to drive traffic to CN’s website (see, e.g., DTX 2012-15, 2019 at CNA79030, 2023,

2028). Even in this litigation, CN has admitted that AW1 had the capability of sharing data

between fields that had the same attribute designation. See CN Resp. to Xap Post-trial PFF, ¶

10. This is more than CN told the PTO.

For the reasons stated above, there is no dependency between data sharing and either the

customization of forms or the processing of user data for transfer to a school that makes these

false statements accurate. Optimizing data sharing at the expense of customization or data

transfer is not a subject of the patent and is contradicted by the requirement of the patent claims

6 Xap maintains its objection to CN’s submission of deposition testimony of Queijo, who,

as a CN employee, should have been made to appear live (in person, via video, or otherwise) so she could be asked about documents identified by CN since her deposition.






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that only “some” data share. This is an after-the-fact argument created to justify Wolfston’s

blanket denial of key functions of the prior art AW1 service.

CN now tries to rely on an alleged oral conversation between Wolfston and the PTO

examiner about data sharing. This testimony is incompetent and thus cannot be relied upon for

the inequitable conduct analysis. All communications with the PTO must be on the record, and

claims of unrecorded oral disclosures to the PTO cannot be considered to determine whether the

applicants engaged in inequitable conduct. Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423,

1439 (Fed. Cir. 1984) (“No attention will be paid to any alleged oral promise, stipulation, or

understanding in relation to which there is disagreement or doubt.’ 37 C.F.R. § 1.2 []”).

As it does throughout its responses, CN fails to address the voluminous marketing

materials touting the data-sharing (see, e.g., DTX 2012, 2013, 2014, 2015, 2019 at CNA79030,

2023, 2028) and other capabilities of AW1, except to say that it thought the data-sharing

capability existed so it advertised it. Contrary to CN’s assertion that “there is no evidence that

Mr. Wolfston was responsible for all marketing literature and solicitations” (CN Resp. to Xap

Post-trial PFF, ¶ 85), Wolfston admitted at trial that he supervised the marketing group, that his

practice was to review marketing material before it was publicized, and that there was only one

instance in which marketing literature was publicized without his approval. Tr. 567:25-568:9. A

reasonable examiner, having been presented with information suggesting that data sharing was

only conceptual and not proven, would have found CN’s starkly different view of data sharing,

as presented in its marketing literature, to be highly material: “some” data sharing was an

element of all claims of the ‘278 patent and a function that CN argued distinguished its invention

from the “best” prior art reference before the examiner at the time that the Wolfston declaration

was submitted—the Scharmer patent. DTX 2093, p. 6.

4. Paragraphs 6 and 12: Reply ISO Xap’s Post-trial PFF, ¶¶ 47-52

17. ¶¶ 47-52. See Xap Reply to CN Post-trial Memo, pp. 9-11; Xap Resp. to CN Post-

trial PFF, section II.C. CN’s unsupported assertion—that it was not allegedly new for a third






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party forms servicer to create a customized form for an institution and provide it to users over the

Internet, to collect and store the applicant’s data, and then to provide that data to the institution in

a format specified by the institution that was different than the format provided by the same

forms servicer to other institutional customers—might have credibility if CN or the patent

applicants had told that to the Patent Office. Instead, they told the Patent Office the opposite.

DTX 2093, p. 6 (e.g., “[A]pplicants submit that Scharmer does not teach transmitting the

applicant information from the completed form to any institution.”) CN makes these claims for

the first time in this Court in an effort to avoid its obligation to have disclosed material

information when prosecuting the patent applications.

Similarly, CN simply ignores its obligation to disclose pre-Critical Date contracts, such

as the admitted agreement to supply user data to Carnegie Mellon in EDI format using AW1. A

contract for sale does not cease to be prior art simply because the contract is terminated in the

midst of scheduling the installation. CN raises no fact in these paragraphs, as distinguished from

unsupported argument, that is not addressed in the referenced papers, above.


18. ¶¶ 54-57. See Xap Resp. to CN Post-trial PFF, section II.H. Wolfston’s Declaration

asserts that AW1 “could not … determine whether an application was in process, complete, or

transmitted to the school.” DTX 2094, ¶ 11. AW1, however, did exactly that. AW1 had a Log

table that stored a record of steps in the processing of an application, including whether a given

application was in process, complete and saved, paid, transmitted to the institution, and

acknowledged by the institution. DTX 2035, p. 6; 2072; Tr. 99-103, 138-140. Batcheller, the

architect of AW1, described AW1’s maintenance of state in his architectural record. This record

explains with respect to state that, for example, a save operation ultimately results in a log entry

made representing the save, and a save and send operation ultimately results in a log entry made

representing the send. DTX 2072, p. 2. John Stedman confirmed that AW1 kept track of

payments paid and other operations in order to determine the status of operations. Tr. 499:17-






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501:10. What AW1 did is exactly what is described in the patent specifications and exactly what

CN describes in its post-trial response briefing—a given operation results in a given state.

CN appears to argue that, because AW1 relied upon an email communication back from

the college acknowledging receipt of the application which AW1 then automatically logged to

the User’s Internet-accessible account, that AW1 had no state capability. CN Resp. to Xap Post-

trial PFF, ¶ 55 (citing in part, Batcheller’s trial testimony at p. 13).7 This is a baseless argument,

because nothing in the patent specification requires all states to be automatic, and CN’s own

documentation of AW1 shows that the maintenance of states was automatic.8 The patents

broadly describe the maintenance of state, and what the patents describe is precisely what AW1

did. DTX 2079 (‘278 patent), 9:13-16, 13:64-66, 14:32-37, 18:35-43, 20:36-40; see also

corresponding provisions in DTX 2098 (‘042 patent).

Once again, CN ignores its marketing literature that confirmed the ability of AW1 to

maintain state. Students and institutions both were told that the status of an application could be

tracked through the AW1 system and that students could view the status online. DTX 2018 at

CNA71259-60; 2019 at CNA79030; DTX 2015. AW1 maintained the status of applications as a

result of operations, whether they occurred automatically or not. This is exactly what the patents

describe, and exactly what CN said AW1 did not do in the Wolfston declaration.

While the state maintenance feature is not separately claimed as an invention, CN used

7 Page 13 of the 2008 trial transcript is part of the pre-trial transcript, has no testimony

from Batcheller, and pertains to prosecution history estoppel and not maintenance of state.8 While the acknowledged “state” required the school to act to acknowledge receipt of the

application, AW1 still automatically showed the user the result of this operation—that the application was acknowledged—in response to the school’s act. DTX 2078 at CNA07552 (Batcheller’s architectural recording explaining that ackbot responds automatically to the receipt of an e-mail and tells the student user that his or her application has been received and “sendbot will find the ack and stop re-sending the data”). Also, CN cites DTX 2035 for the statement that “[a]utohandle expired apps and acks” was in the queue for development, but ignores the following statement in this exhibit showing that state maintenance did occur automatically in AW1: “Done!! x Sendbot reads AK log to terminate additional sends.” DTX 2035 also does not support CN’s contention that “acknowledgement by the school (‘ack’) was an ‘operation’ and not a ‘state’ as reflected in the state machine.” CN Resp. to Xap Post-trial PFF, ¶ 55 (citing DTX2035).






PDX/117132/154237/CKO/2858111.6

the lack of state to support its misrepresentation of AW1’s capability to store and process

applicant information. See DTX 2094, ¶ 11. The truth respecting AW1’s capability to track

state was information that would be important to a reasonable examiner and is thus material.


19. ¶¶ 59-61. See Xap’s Reply to CN’s Post-trial Memo, pp. 9-10; Xap Resp. to CN

PFF, section II.E. CN repeats unsupported claims made and addressed previously. The “flat text

file” that it attributes to AW1 was only in the pre-Illustra prototype system. Tr. 92:8-17. CN

never disclosed to the Patent Office the AW1 software capability of converting the binary large

object files of user data into an associative array that enables individual searching and retrieval,

as it now asserts (CN Resp. to ¶59) without any reference. Contrary to its attribution to Dr.

Maier (id.), Dr. Maier conceded on cross-examination that a flat text file and a structured file

coupled with software programmed to manipulate the structured data file are very different

animals. Tr. 735-39. CN simply refuses to compare what the AW1 system could do in fact with

what Wolfston and the applicants disclosed.


20. ¶¶ 63-67. See Xap Resp. to CN PFF, section II.D. CN’s denials of multi-page

capability fall apart in the face of the evidence of the Golden Gate University applications that

were processed on the public system in May, 1997. See supra ¶ 3. CN ignores Mr. Hitchcock’s

own architecture record that documents the operation by April 17, 1997 of the multi-page

program (mp_app.pl, later merged with app.pl) that he developed in early 1997. DTX 2074-T.

These programs were running prior to May 20, according to CN’s own documentation of

“ApplyWeb 1.0.” While CN asserts without any reference that other programs had to be

developed to support multi-page capability, it never identifies such programs, never

demonstrates when they were put online, and never submits any evidence that multi-page

capability was put into production at any different time. CN’s documents disprove CN’s

contention and Mr. Hitchcock’s “belief” that now contradicts his 2004 deposition testimony.






PDX/117132/154237/CKO/2858111.6


21. ¶¶ 69-71. Wolfston made separate representations that (1) AW1 did not store

metadata, i.e., “information about the data fields,” and (2) AW1 was “incapable of performing

data checking.” DTX 2094, ¶ 9. The statement regarding metadata is independent of the denial

of data checking capability. CN incorrectly argues a dependency between the two sentences in

order to contend that the denial of metadata only applies to metadata used for data checking. But

the denial of metadata stands alone and, in the context of the patent applications that claim

metadata for many uses other data validation, can only be understood for its plain and clear

meaning. CN is also wrong when it argues that the attribute name of a name:value pair is not

metadata. CN Resp. to Xap Post-trial PFF, ¶¶ 69, 71. Both of CN’s arguments are inconsistent

with the patent specification.

As defined in the ‘278 and ‘042 patent specifications, metadata is “information that

characterizes the applicant data.” DTX 2079, ‘278 patent, 2:27-34. The patent applicants

claimed a number of uses of “metadata” to secure the broadest scope of protection from the PTO,

including “describing” the user data (‘278 patent claim 18) and “sharing [the user data] between

applications” (‘278 patent claim 20). The only example of metadata in the patent is the attribute

name used to characterize user data (‘278 patent, 16:1-35), precisely the use found in AW1. No

examples of metadata used for data checking are disclosed in the patent; it is only described as a

general function or goal. By claiming these broad uses of metadata, Wolfston contradicts his

intent to use the narrower definition of “metadata” in his Declaration.

Wolfston’s attempt to reconcile his conduct is hopelessly conflicted. He admits that

“metadata” should be understood as described in the patent specification. Tr. 543:10-544:03.

But because the patent does not support his representation that metadata was limited to data

checking, he then narrows the definition of “metadata” by testifying that he was not representing

that “all kinds of metadata” were absent in AW1, only “[m]etadata pertaining to data fields” if it

was used for data validation. Id. The PTO cannot be expected to know his subjective and

undisclosed definition of “metadata.” See Therasense, Inc. v. Becton, Dickson & Co., 2008 U.S.






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Dist. LEXIS 48638, at *70 (N.D. Cal. June 24, 2008). Nor is there any basis in the specification

or claims of the patent application for Dr. Maier’s opinion that a reasonable examiner would

understand this unexpressed limitation. Tr. 701:11-702:18. The testimony of both Wolfston

and Dr. Maier is driven by a desire to avoid the consequences of inequitable conduct for this

representation and should be rejected. See Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer,

Inc., 326 F.3d 1226, 1238 (Fed. Cir. 2003) (quotations and citation omitted) (assertion of

immateriality of prior art was unpersuasive due to “self-serving testimony of an interested

witness” and lack of objective evidence and expert testimony).

There is clear and convincing evidence that the AW1 system stored metadata to

characterize user data and the data fields for a number of purposes. The primary use was to

implement the attribute naming functions that control sharing of user information between forms.

This methodology was conceived by Jon Batcheller, as described in his architecture record (DTX

2072).9 Batcheller, the “architect” of AW1, testified that applicant data was stored in

name:value pairs. The “name” (e.g., “person_name_last(1)”) describes the data (e.g.,

“Minetto”), so that the data could be correctly placed in the form and sharing could be

controlled. Tr. 91-92, 104, 249. Compare the metadata described for the same purpose in the

‘278 patent specification at 16:11-35. The “pound bang” (i.e., “#!”) metadata of AW1 was used

with form fields to designate those that were limited to one or a group of schools. This and other

metadata were stored in the .in files and in the user data BLOB to implement the very functions

claimed in the ‘278 patent claims 18 and 20—functions unrelated to using metadata for data

checking. Xap Post-trial PFF, ¶¶ 9, 30, 44, 59, 69-71. Ms. Frederiksen also testified that the

“name” of a name:value pair serves as metadata:

9 CN never offers evidence that another conceived of these features. The metadata

identified in the patent specification is used to implement the forms generating architecture that Batcheller created. That architecture is discussed at length in Xap’s responses because it is, at the least, one of the key elements of the alleged inventions as objectively determined from the patent specification. See Xap Resp. to CN Post-trial Memo, p. 6-9; Xap Post-trial PFF, ¶¶ 6, 18, 35, 44, 54, 63, 72.






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[W]ithin the blob, there are these separate fields delineated via a delimiter. And each one is labeled with the appropriate name. Now that name also serves as the metadata whereby sharing is controlled[.] Tr. 253:02-06 (emphasis added).

The evidence demonstrates that metadata was used in AW1 as described in the patent.

Wolfston had to conceal the presence and use of metadata in the prior art AW1 system to ensure

that broad claims involving metadata (e.g., ‘278 patent claims 18 and 20) would issue. This

intentional concealment of material information to patentability is inequitable conduct.

E. Jon Batcheller Should Have Been Disclosed as an Inventor of CN’s Patents-in-Suit: Reply ISO Xap’s Post-trial PFF, ¶¶ 72-73

22. ¶¶ 72-73. CN does not dispute that Jon Batcheller is the “architect” of the AW1

system. CN Resp. to Xap Post-trial PFF, ¶ 18. The disagreement lies in whether AW1 is the

subject matter of any part of the patents claims in suit. CN Memo, 16. “[T]he

misrepresentations concern inventorship, and while falsehoods regarding inventorship do not

ordinarily affect patentability of the claimed subject matter, inventorship is nonetheless a critical

requirement for obtaining a patent.” Applied Materials, Inc. v. Multimetrixs, LLC, 2008 U.S.

Dist. LEXIS 55635, at *14-*15 (N.D. Cal. July 18, 2008). Omission of an inventor “calculated

to ‘obfuscate the threshold issue of inventorship’” is material, and that alone can support a

finding of inequitable conduct. Id. at *15 (quoting Perseptive Biosystems, Inc. v. Pharmacia

Biotech, Inc., 225 F.3d 1315, 1321-22. (Fed. Cir. 2000). Xap has presented clear and convincing

evidence that Batcheller’s individual contribution to the AW1 system is the subject matter of at

least two exemplary claims in the patents-in-suit and, based on key claims limitations attributed

solely to his work, found in numerous claims of the ‘042 and ‘278 patents.

Batcheller, a neutral party with nothing to gain from this lawsuit (Tr. 77:07-09), testified

extensively about his development of the features of AW1 that are present in the claims of the

patents. One of the key features of the patented inventions is the separation of the application

data file (.in file, the “strength of the ApplyWeb[1] system”, Tr. 85, discussing DTX 2072) from

the forms engine (app.pl). Batcheller conceived of this architecture and wrote the code to

implement this AW1 feature, only later described in the patent applications of others. Tr. 85-86,






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98. In both the ‘278 and ‘042 patents, the interaction between the .in file and app.pl is

diagrammed in Figure 13—a schematic of claim 1—and claimed separately in claim 2 of the

‘278 patent. Batcheller described how each component in Figure 13 of the invention

corresponded to a component in AW1 and in many of the elements of the combination of

functions claimed by the ‘278 and ‘042 patents. Tr. 95:13-98:07. Through his work on AW1,

Batcheller confirmed that he conceived and implemented (i.e., wrote the code) nearly all of the

limitations of claim 1 in the ‘278 patent. Tr. 117:11-122:05. For example, Batcheller conceived

and implemented the data sharing limitation in claim 1 of the ‘278 patent by using “keys” (e.g.,

attribute naming method) in the .in file. This methodology of using “keys” allowed data to share

between common keys of two different forms. Data sharing is a key step and element of every

one of the claims of the ‘278 patent. Batcheller wrote the code to implement this feature of

AW1. Tr. 85:12-89:08, 121:05-25.

CN asserts, through only the unsupported statement of Dr. Maier, that this architecture

was in the prior art. Were there such art, CN should have identified it to the Patent Office or to

this Court. CN also disputes that Batcheller “conceived” of this architecture as described in the

patents. CN Resp. to Xap Post-trial PFF, ¶ 18. However, the trial testimony that CN cites

actually contradicts its position if one reads just a few lines past the snippet that CN proffers. Tr.

97:20-98:01, 119:14:25. It is also notable that CN has not presented any corroborated evidence

that any named inventor conceived of the architecture and features that Batcheller testified to

conceiving.

Whether Mr. Batcheller is an inventor or not was an issue for the Patent Office to

determine. Nusbaum Tr. 370–372. There is substantial evidence that he is, obligating CN (as

assignee of the patent applications) and the other applicants to identify him. By omitting

Batcheller as a co-inventor, Wolfston downplayed the importance and sophistication of the prior

art AW1 system that was in public use before the Critical Date and concealed material

information about the true inventorship that would have been important to the examiner’s






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responsibilities. See Applied Materials, 2008 U.S. Dist. LEXIS 55635, at *15. Failure to

identify Batcheller as a possible co-inventor on the patents with intent to deceive is inequitable

conduct. See Frank’s Casing Crew & Rental Tools v. PMR Techs., Ltd., 292 F.3d 1363, 1376

(Fed. Cir. 2002).

F. The Reexamination of the ‘042 Patent: Reply ISO Xap’s Post-trial PFF, ¶¶ 74-83

23. ¶ 74. See Xap Reply to CN Post-trial Memo, pp. 11-13; Xap’s Response to CN’s

PFF, section IV. One cannot read the ‘042 reexamination file record without the clear and

unmistakable conviction that the patentability of every claim hinged on one element. That is

certainly how Mr. Wolfston understood it, from page 148 of his January 23, 2008 deposition:

Q. Now, it appears from the examiner's interview summary that the patentee's position at this point boiled down to the one contention, that the references do not teach providing data in an institution "In a format specified by the institution. Do you see that?”A. Yes. Correct. Q. Is that accurate? A. Yes.

24. ¶ 75. CN’s effort now to quibble that the snippet that Wolfston presented to the PTO

as an accurate description of Xap’s prior art offering came from a proposal to contract (that CN

knows was fulfilled) and not a contract speaks volumes for CN’s defense. Wolfston testified that

he used the Texas proposal because it was the best evidence. DTX 2239. The Court and the

parties know he could have used the CSU Mentor contract that was in evidence at the 2006 trial

and that was signed and fulfilled in 1996, but it would only prove again that the snippet

submitted was false and misleading.

25. ¶ 76-77. See Xap Response to CN PFF, section IV. Wolfston now argues that the

proof that the snippet was false was on the single page that he left with a group of 48 other

pages, never filed as or with an IDS, never called out to the examiners, and never presented in

his PowerPoint in the first place. The full page does not as clearly prove the falsity of

Wolfston’s representations as does the clear delineation only two pages earlier in Xap’s proposal

of the multiple formats offered. But what defense is it to say “I misled the Patent Office and






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slipped into their file something closer, but not fully truthful, than what I expressly said in a

carefully prepared PowerPoint presentation”? This contention only makes clear that Wolfston

intended to mislead when he culled the snippet and presented it. See infra ¶ 29.

26. ¶ 78. Xap made a typographical error. The CSU contract is a 1996 contract, not a

1997 contract. It was signed in August 1996 and performed by November 1996, as CN is aware.

DTX 2009; DTX 2229 (excerpt of 2006 trial testimony of Dr. Frank Tansey). That Xap offered

both electronic flat file delivery formats and EDI 189 and delivered multiple formats in

fulfillment of the contract, all as testified in the 2006 trial, is inconsistent only with Mr.

Wolfston’s effort to mislead the Patent Office into thinking that CN was the first to offer

customers a choice of formats for the transfer of user data.

27. ¶ 79-80. CN’s arguments are baseless. Proven contracts introduced at a trial after

lengthy discovery and supported by sworn deposition and Court testimony, and confirmed by a

jury’s verdict that necessarily found this key element (“in a format specified”) met by these prior

art systems, are the antithesis of “uncorroborated” rumors. This is truly a desperate argument, as

is the contention that the fact that Xap did not call Mr. Shin to the 2008 trial has any relevance.

The test of Wolfston’s representation is what was in the trial record and thus known to Mr.

Wolfston as contrasted with what Wolfston presented to the PTO in a carefully scripted

PowerPoint presentation designed to mislead the examiners into believing that no prior art

vendor offered customers a choice among the formats that CN belatedly offered. Mr. Shin’s

testimony was presented at the 2006 trial, confirming that CollegeEDGE offered a comma

delimited flat file delivery and also offered EDI 189 if any college was prepared to use it. 2006

Tr. 1198-99, 1223-24, (Exh. 2 Mansfield Decl.) Colleges could specify fixed or variable fields

and select the order of fields, all of which are different formats as described in the ‘042 patent

(DTX 2098), 21:1-6 and new claims 50 and 51. That is what Wolfston would have told the

Patent Office had he been truthful. Finally, CN’s continued assertion that it fulfilled its duty to

disclose by including the transcript of the trial in 17,000 pages of undifferentiated material shows






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that submission for what it is, a trial tactic for use in this Court. See Xap Resp. to CN PFF,

section IV.

III. MATERIALITY: Reply ISO Xap’s Post-trial PFF, ¶ 84

28. ¶ 84. CN’s simple response that “Xap is incorrect” offers, and requires, little to

reply in terms of materiality. Each of Wolfston and CN’s misrepresentations and concealment of

important information, as discussed in all of Xap’s post-trial briefings, would be important to a

reasonable examiner. Nusbaum Tr. 329-335, 340-341. In particular, false statements in the

Wolfston declaration are inherently material. “In finding inequitable conduct on the basis of

false affidavits, the Federal Circuit has repeatedly commented that ‘[i]n contrast to cases where

allegations of fraud are based on the withholding of prior art, there is no room to argue that

submission of false affidavits is not material.’” Applied Materials, 2008 U.S. Dist. LEXIS

55635, at *16-17 (citing cases) (emphasis added); see also eSpeed, Inc. v. BrokerTec USA,

L.L.C., 480 F.3d 1129, 1136 (Fed. Cir. 2007).

IV. INTENT: Reply ISO Xap’s Post-trial PFF, ¶¶ 85-90

29. ¶¶ 85-90. CN’s arguments against intent to deceive the Patent Office are

contradictory. Specifically, CN claims that Wolfston did not know AW1 at a “detailed level,”

relying on Batcheller and Hitchcock for information (CN Resp. to ¶ 85) and that Hitchcock was

never “fully familiar” with the AW1 code either (CN Resp. to ¶ 86). But then CN argues that

“neither Mr. Hitchcock nor Mr. Wolfston felt the need to review” their own records to verify the

truthfulness of the Wolfston Declaration (CN Resp. to ¶ 88). Wolfston and Hitchcock had six

months between the submission of the IDS and the Declaration to refresh their recollections. A

review of Hitchcock’s work or Batcheller’s architecture records—at a broad, not “detailed” code

level—would have disproved a majority of the statements in the Declaration. The duty of

disclosure to the Patent Office is absolute, as Wolfston testified he and Hitchcock were keenly

aware. Tr. 530:25-531:09. There is no excuse for untruthful statements based on facts that were

“reasonably remembered” (CN. Resp. to ¶ 86) because that conduct falls short of the duty owed






PDX/117132/154237/CKO/2858111.6

to the Patent Office. Contrary to CN’s contention in ¶ 87, specific motivation to conceal highly

material information in order to obtain a patent can be a factor for finding intent to deceive. See

Cargill Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1366-67 (Fed. Cir. 2007).

Wolfston testified that all marketing literature and press releases for CN (except for one

unidentified instance) went public only with his approval. Tr. 567:25-568:09. The discrepancy

of what Wolfston offered the public and what he disclosed to the Patent Office is too stark a

contrast. The pre-Critical Date marketing statements are clear and convincing evidence that

Wolfston and CN intentionally concealed the true capabilities of AW1 and the Smart Loan

service/contract. See Cognex Corp. v. VCode Holdings, Inc., 2008 U.S. Dist. LEXIS 40370, at

*91 (D. Minn. May 19, 2008) (annual report disclosed material information that was concealed

from the Patent Office).

This intent to deceive continued during the Reexamination. Far from “accurately and

fairly” disclosing the trial testimony of Dr. Tansey and Mr. Shin (CN Resp. to ¶ 89), Wolfston

and CN continued their intentional concealment of highly material information. CN Resp. to ¶¶

78-80. CN repeatedly insists that it provided full disclosure by submitting 17,000 pages for the

Examiner to review (CN Resp. to ¶ 89, referencing its responses to ¶¶ 79, 80). Without

providing any guidance as to where relevant pages were located, the disclosure was anything but

accurate and fair. This conduct is clear and convincing evidence of intent to deceive. See

eSpeed, 480 F.3d at 1138 (burying material reference in 1139 pages is intent to deceive); see also

Cognex, 2008 U.S. Dist. LEXIS 40370, at *88-89 (identification of reference in IDS without

guidance to Examiner is lack of disclosure) (citing Li Second Family L.P. v. Toshiba Corp., 231

F.3d 1373, 1379 (Fed. Cir. 2000). CN cannot counter this point of law.

V. BALANCING OF INTENT AND MATERIALITY: Reply ISO Xap’s Post-trial PFF, ¶ 91

30. ¶ 91. CN offers nothing in this rebuttal that is not already addressed. Prior art

cannot be withheld from the Patent Office because an applicant contends it did not function

efficiently or was not commercially competitive—a contention that can be alleged to apply to






PDX/117132/154237/CKO/2858111.6

virtually all prior art products and services. Ciba-Geigy Corp. v. Alza Corp., 864 F. Supp. 429

(D. N.J. 1994), aff'd in relevant part, 68 F.3d 487 (Fed. Cir. 1995); F.B. Leopold Co., Inc. v.

Roberts Filter Mfg. Co., 1997 U.S. App. LEXIS 16233, at *6 (Fed. Cir. July 2, 1997)(reference

cannot be ignored “simply because it fails to disclose a device that works as well as the patented

device”), Graham v. Gun-Munro, 2001 U.S. Dist. LEXIS 7110, *13 (N.D Cal. May 22, 2001)

(“A prior art reference does not have to work as effectively as the patented invention (or even

function at all) to qualify as prior art for the purpose of an obviousness inquiry.”)

VI. PROSECUTION HISTORY ESTOPPEL: Reply ISO Xap’s Post-trial PFF, ¶¶: 92-95

31. ¶¶ 92-95. See Xap Reply to CN Post-trial Memo, section IV and Xap Resp. to CN

Post-trial PFF, section VII. CN ignores the “records” amendment in arguing that the rationale

for “the amendment” is merely tangentially related to Xap’s accused equivalent database—a

structure that does not have the claimed “records” structure. CN’s new argument (its prior

argument was that Scharmer does not have a database, despite clear language in Scharmer that it

does) is that the important distinction is that Scharmer has a database that does not stored user-

entered information, while CN’s alleged invention does. CN says this means the comparison is a

database versus no database for user-entered information, instead of a comparison of the

database in Scharmer versus the database in CN’s alleged invention.

First, CN is trying to ignore Scharmer’s database while saying that it is not. If Scharmer

has a database that stores client data, and the Scharmer patent expressly states that it does, then

CN’s distinction must have been that its database for storage of applicant data was different, and

CN used the records limitations, in part, to show this distinction. Even accepting CN’s theory

that one distinction from Scharmer is the storage of user-entered information, the records

limitations explain how CN’s invention enters the user-entered information into the database,

and CN made these amendments to overcome the Scharmer prior art rejection. CN cannot ignore

the records limitations by saying that this amendment was not necessary.

Second, the objective record does not show that Scharmer did not have a database to store






PDX/117132/154237/CKO/2858111.6

user-entered information. The objective record must consider what the examiner found during

prosecution, and cannot be determined by relying solely upon the applicants’ arguments.

Although CN asserts that “the Examiner correctly noted that certain pre-existing applicant

information is drawn from a database and automatically inserted into new forms” such that the

Examiner did not find that Scharmer claimed storing user-entered data in a database, the

objective record shows otherwise, which is presumably why CN fails to quote what the

Examiner actually said. See CN Resp. to ¶ 92. The Examiner actually said that Scharmer shows

“posting the application on the server and storing the applicant information in the database is

described in col. 2, lines 29-44 and col 5, lines 40-48” and “automatically inserting into some of

the data fields of the second application form the data storage is described in col. 2, lines 50-65.”

DTX 2087, 3-4 (emphasis added). The Examiner did not find that Scharmer did not disclose a

database storing user-entered information.

Finally, CN offers no reason for the amendment adding the records limitations, but

instead just ignores the amendment. Even if CN were correct that the rationale for distinguishing

Scharmer had nothing to do with the records limitations, this cannot overcome the presumption

of prosecution history estoppel for two reasons, as a matter of law. First, a patentee cannot argue

post hoc that the amendment at issue was not necessary to overcome the examiner’s rejection.

Int’l Rectifier v. Ixys, 515 F.3d 1353, 1359 (Fed. Cir. 2008); see also Schwarz Pharma, Inc. v.

Paddock Labs., Inc., 504 F.3d 1371, 1377-78 (Fed. Cir. 2007). Second, if there is no objective

reason for an amendment, the presumption of prosecution history estoppel is irrebuttable. Festo

v. Shoketsu Kinzoku Kabushiki, 344 F.3d 1359, 1371-72 (Fed. Cir. 2003) (en banc); see also

Biagro W. Sales v. Grow More, 423 F.3d 1296, 1306 (Fed. Cir. 2005).

By again ignoring the records limitations added by amendment, CN seeks to argue that

static versus dynamic allocation is a non-issue, when in fact the claim language makes it the

central issue in determining whether the accused equivalent is merely tangentially related to the

reason for the amendment. CN chose to add the records limitations, claiming only records with






PDX/117132/154237/CKO/2858111.6

“each record capable of storing information corresponding to each of the database fields.” DTX

2079, ‘278 patent, 22:51-52. CN does not even quote the language of the amendment (which is

the only amendment at issue) in its analysis. The language of the amendment implements,

together with the fields limitation,10 the result achieved as stated in the “thereby” clause (one of

CN’s purported rationales for the amendment) and distinguishes the Scharmer database, which

stored applicant data, from the CN database. Even if CN did not have to claim static allocation,11

it chose to do so, and the public has a right to rely upon that. Xap’s database uses dynamic

allocation (finding memory as data needs to be stored, wherever the memory is located). The

reason for the amendment and the accused equivalent are directly related, and CN fails to rebut

the presumption of prosecution history estoppel.

Finally, CN argues that Xap’s assertion—that an accused product or service that does not

literally infringe cannot infringe under the doctrine of equivalents when prosecution history

estoppel applies—has been rejected by the U.S. Supreme Court. CN Resp. to ¶ 94. CN states

Xap’s assertion correctly, but has the law wrong. The Supreme Court held exactly what CN says

Xap is asserting. Unless a patentee can rebut the presumption of prosecution history estoppel

(and CN fails to do so here), the limitation that was amended for reasons of patentability cannot

be infringed under the doctrine of equivalents and must be infringed literally. This is what

prosecution history estoppel is about. Festo, 344 F.3d at 1367.

10 CN asserts that Xap improperly attempts to make the “fields” limitation an issue in

determining tangentiality. CN Resp. to Xap Post-trial PFF, ¶ 93. Xap merely cites the “fields” limitation to explain that it, like the “records” limitations, defines the structure of CN’s database. The “field” limitation has no bearing on the relationship of the rationale for the “records” limitations to Xap’s accused equivalent, and Xap’s analysis does not depend on the “fields” limitation.

11 Dr. Maier’s testimony (see CN Resp. to Xap PFF, ¶ 94) that user-entered data can be stored in a database just as easily by either static or dynamic allocation, and that the use of static or dynamic allocation has no bearing on a system’s ability to change forms without reprogramming, is simply a variant of the argument that CN did not have to claim static allocation to overcome the Scharmer rejection and could instead have claimed storage of records without defining the type of memory allocation. Overwhelming case precedent now rejects thatargument as a matter of law. It does not, however, rebut that CN chose to do so and cannot rebut the presumption of prosecution history estoppel by arguing merely that it did not need to do so.






PDX/117132/154237/CKO/2858111.6

Dated this 18th day of August, 2008.

Respectfully submitted,

Schwabe, Williamson & Wyatt, P.C.

By: s/ David W. AxelrodDavid W. Axelrod, OSB #750231Johnathan E. Mansfield, OSB #05539Yvonne E. Tingleaf, OSB #054463Telephone 503.222.9981Of Attorneys for Defendant Xap


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