A Litigant's Perspective on the Issues Affecting Court Reporters Presented by the Engate Patents
By Thomas I. Ross
In January 2003, Engate Inc. sent royalty license agreements to several dozen reporting firms, charging that these companies were infringing on the company's patents. The lead defense counsel for WordWave, one of the companies currently involved in litigation with Engate, here offers his opinion on Engate's patent infringement claims.
Starting in 1993, two patent attorneys began filing a series of U.S. patent applications directed to various add-on functionalities associated with the creation of a realtime written transcript of a testimonial proceeding, such as a deposition or trial. To date, these patent applications have resulted in the issuance of 16 U.S. patents. The patents are assigned to Engate Inc., a company formed by the patent attorneys. In August 2001, Engate filed a patent infringement suit, which included all of its 16 patents, in the U.S. District Court in Chicago against a number of the larger court reporting service companies, including my client, LegaLink, a division of WordWave Inc. This patent infringement action, styled Engate Inc. v. Esquire Deposition Services, et al., Civil Action No. 01C6204, is still pending.
In the beginning, with 16 patents asserted, over 300 patent claims were at issue. By early 2002, Engate had reduced the number of claims asserted to 131. As we pressed for explanations for the charges of infringement, during the discovery process, Engate dropped the number of asserted claims again to 26. Currently, Engate has pending a motion for summary judgment of direct infringement in which it is asserting only seven claims. The defendants have pending their own cross-motion for summary judgment of no direct infringement with respect to all 26 remaining claims. Following the Court's decision on these motions, any claim remaining at issue for infringement will then have its validity and enforceability addressed by the defendants.
In January and February 2003, court reporting agencies across the country that advertise realtime court reporting services received a letter from Engate's counsel alleging that they could be liable for infringement of the Engate patents and urging them to agree to a royalty licensing arrangement to protect themselves from litigation. The Engate letter included a form license agreement under the patents, which called for a running royalty of $0.35 per page transcribed in any deposition in which realtime reporting services are used. The task for these court reporting agencies is to knowledgeably decide how to react to the Engate letter.
The purpose of this article is to provide information based on our experience on behalf of LegaLink in defending against these very same patents. Having spent over 18 months in litigation addressing the issue of infringement of these patents, we offer the following assessment.
Basic Principles of Patent Infringement
The patent rights are defined by the claims in a patent, which appear as numbered paragraphs at the end of the patent document. Any claim can separately be the basis for patent infringement liability.
There are three ways a patent claim may be infringed, and any such infringer is joint and severally liable. First, direct infringement occurs when one, without license, makes, uses, offers to sell or sells the claimed invention, or its equivalent, within the United States. Therefore, in order for one to directly infringe a patent claim, that person must engage in one of the prohibited activities such that every element of the claim is met as a matter of that activity. Second, contributory infringement is based on the furnishing of a material component to the patented product or process, which component is not capable of non-infringing use. To establish liability for contributory infringement, Engate must show a resulting direct infringement. And third, inducing infringement requires acts encouraging a resulting direct infringement with the specific intent that such acts will result in the direct infringement.
A patent claim cannot be infringed if the claim is invalid. There are various reasons a claim may be found invalid. The relevant one for purposes of this discussion is prior art invalidity. A claim is invalid if the claimed subject matter was anticipated in the prior art, or would have been obvious from the prior art to a person of ordinary skill in the art by the time the patented invention was made. Where a patent claim is shown, by clear and convincing evidence, to describe that which was previously known or which would have been obvious, the patent claim is invalid and hence unenforceable.
The Engate Patents
None of the patent claims in the Engate patents covers, per se, a court reporter's creation of a realtime written transcript nor a court reporter providing a realtime written transcript feed to the computer terminal of an attorney. Each of the claims of the Engate patents may be grouped into at least one of four subject matter categories as follows (in some cases, the patent claims fall into more than one of the categories).
Attorney terminals used only by the attorney to perform a specialized function. Most claims of the Engate patents call for at least one attorney terminal (a laptop computer) for receiving the realtime transcript feed from the reporter's CAT system and installed with software used only by the attorney to work with the transcript signal. Independent of the court reporter, these patent claims recite such attorney functions as annotating key words found in the transcript, associating issue codes with portions of the transcript, messaging back and forth between attorney terminals regarding associated portions of the transcript, searching the transcript for selected term,1 and automatically identifying possible objections based upon certain phrases appearing in the transcript. The patents in this category include U.S. Patent 5,369,704; 5,444,615; 5,740,245; 5,815,639; 5,884,256; 5,926,787; 5,940,800; 5,950,194; 5,970,141; 6,026,395; and 6,055,531.
Realtime synchronization of the realtime transcript with audio and/or video signals. Some of the patents include claims that are directed to use of equipment and software which makes possible realtime synchronization of video signals and/or audio signals for display at the attorney terminal during a realtime transcription proceeding.2 The patents in this category include U.S. Patent 5,878,186; 5,949,952; and 6,282,510.
Remote attorney computer terminal is accessing the realtime deposition transcript (proxy server required). These patent claims are directed to realtime remote access and require an attorney terminal located at a remote location which receives the realtime deposition transcript feed via the Internet. The patents containing claims in this category are U.S. Patent 5,930,141; 5,949,952;3 and 6,023,675.
Transcription software affording phoneme library translates. Two of the Engate patents contain claims which call for the reporter's CAT system to substitute phonemes, where possible, for untranslates in the realtime transcript. As distinguished from letter representations of reporter keystrokes or stored recognized words for certain reporter keystrokes, the phonemes are phonetic representations of the reporter keystrokes that, when pronounced, sound like the word actually spoken. The patents in this category are U.S. Patent 5,815,639;4 and 5,926,787.
It is clear that most of the Engate patent claims require devices such as a laptop computer provided by an attorney and containing special interactive transcript software used by the attorney during the testimonial proceeding. To the extent that an attorney terminal is required by the claims of the Engate patents, either on-site or at a remote location, such terminals are used exclusively by the attorneys. The claims require steps or features that an attorney carries out subsequent to the generation of the realtime transcript by the court reporter. The attorney carries out these steps or uses these features independent of the transcription that the reporter provides.
The patent claims directed to synchronization require that the video or audio synchronization take place during (as opposed to after) the testimonial proceeding. Currently, to the extent that a proceeding is videotaped, and the videotape is synchronized with the transcription text, such synchronization is performed as a separate, independent step subsequent to the proceeding and by an independent contractor.
We are presently unaware of any commercial CAT system which affords phoneme library translates.
From the above analysis, it does not seem plausible that a court reporter could be liable for direct infringement of the Engate patent claims. Likewise, given the present state of technology in CAT systems and because the equipment provided by and used by reporters has substantial non-infringing uses, it does not seem plausible that reporters could be liable for contributory infringement. Indeed, the equipment the reporter uses to transcribe a proceeding, including the steno machine and computer equipment, is used by the reporter regardless of whether a reporting proceeding includes realtime transcription. The computer used by the reporter would quite obviously have substantial non-infringing uses.5
Finally, it is not seen how the reporter could be inducing infringement. Indeed, it is the attorney who requests the services of the reporter. The attorney, independent of the court reporter, determines whether to carry out or implement features associated with the attorney interactive software. Of course, the current technological limitations in court reporter equipment generally preclude infringement of CAT system claims. But, in any event, probably the most effective tack court reporters can take to assessing the Engate patents is to consider the invalidity of the patent claims in view of prior art.
Invalidity of the Engate Patent Claims
For purposes of demonstrating the invalidity of patent claims, prior art may be in the form of a printed publication, a known public use performed in the United States, or a prior sale in this country of equipment for performing the claimed step or containing the claimed features. With respect to the subject matter of the Engate patents, the prior art includes a number of realtime court reporting events which involved technology developed or provided by NCRA beginning in the 1980s. For example, computer-integrated courtrooms were equipped with attorney terminals capable of interacting with the realtime transcript in the U.S. District Court located in Phoenix, Ariz. (Judge Roger Strand), the U.S. District Court located in Chicago, Ill. (Judge Prentice Marshall), and the Wayne County Circuit Court located in Detroit, Mich. (Judge Robert Columbo). By 1993, there may have been more than 20 CICs in the United States using realtime reporting.
A few examples of printed prior art are included in a sidebar below. As the excerpts illustrate, realtime reporting systems that included computer-aided transcription software and attorney terminals were known and in use prior to the applications for the Engate patents. The computer-aided transcription software converted the keystrokes to readable text by looking up matches in a cross-reference library. The excerpts further illustrate that the attorney could use his/her terminal to highlight, annotate, search and issue code within the realtime text. The attorney could also receive the text at a remote terminal and share messages between attorney terminals. As concerns synchronizing video and/or audio with realtime text, it is understood that closed captioning of testimonial proceedings, such as committee hearings in Congress, was provided to television audiences prior to 1993.6
What Can Court Reporters Do?
The court reporting agency that receives the notice letter from Engate should initially review its business insurance coverage to determine if there is protection for a patent infringement liability claim and notify the insurance carrier if that is the case. Following that, recourse may be sought from the realtime and CAT software and stenographic equipment providers to determine if they will indemnify against these patent infringement claims. Ultimately, it is expected that concerned reporters and reporting agencies would best be served by pulling together a joint defense group in anticipation of possible litigation. Even in the pending patent action in Chicago, the defendant court reporting services have recognized they have a common interest in defending against the Engate patents and operate cooperatively, sharing information. The same approach by those who have received the letters from Engate or otherwise anticipate receiving such letters is ultimately the best recourse.
Continuation of alleged infringing activity following Engate's letter of notification of the patents can be the basis for a finding of willful infringement, if the activity is indeed found to be infringing. To be found a willful patent infringer makes one subject to possible punitive damages, including an award of the patentee's reasonable attorney fees in bringing the patent enforcement action. To avoid willful infringement, if the continued activity is later determined infringing, the person receiving notice of the patents must take steps to determine an informed and credible basis for believing continuation of the accused activity will not be found infringing. Typically a clearance opinion, if possible, is obtained from a reliable patent attorney. A favorable opinion from a knowledgeable expert in the field covering the above-noted defenses may also qualify as a competent clearance opinion. Such an expert opinion could be obtained in common by a joint defense group for all of the reporting agencies on notice under the Engate patents.
As of this writing, we understand NCRA is helping its members to form just such a joint defense group with respect to the Engate patents. Its principal purpose is to identify possible invalidating prior art information for review by an expert who may then issue a common report to the effect that all relevant patent claims are invalid and hence unenforceable. Information regarding the CIC projects in Phoenix, Ariz., and elsewhere commencing in the 1980s has already been collected over the years by NCRA. To the extent certain Engate patent claims are directed to reporting technology which does not exist, these claims already cannot be infringed.
In closing, we expect discovery to proceed and rulings to issue from the Court in Chicago this summer. We will keep you informed through NCRA.
About the Author
Thomas I. Ross is a litigation partner at Marshall, Gerstein & Borun, Chicago, Ill., which represents WordWave, Inc., and its LegaLink division in the lawsuit: Engate, Inc. v. Esquire Deposition Services, et al., Civil Action No. 01C6204 (N.D. Ill.). He is the lead attorney for WordWave in that action. The views expressed in this article are his own and shall not be treated as the rendering of legal counsel to the reader.
- With respect to U.S. Patent 6,026,395, Engate also asserts that claims in this patent pertain to a court reporter conducting a computer search on the CAT system for a selected word or phrase during the course of transcribing the proceeding. Court reporters who simply scroll back through the transcript to locate search words during the proceeding would not be practicing these claims.
- The subject matter of these claims is not to be confused with post-proceeding or post-production synchronization of video or audio with the closed captioning of the transcript. Also, should a CAT system provide a built-in audio recorder, the patent claims recite particular synchronization techniques which are more involved than a simple standard offset technique.
- Claim 38 of the U.S. Patent 5,949,952 calls for communicating video images and text to a remote terminal.
- Claim 1 of U.S. Patent 5,815,639 apparently recites first and second, successively accessed phoneme libraries.
- Engate has identified LiveNote software in its infringement allegations. The sale or distribution of LiveNote software may also have substantial non-infringing uses. However, since the filing of the lawsuit, LegaLink is no longer a reseller of realtime deposition software in the United States.
- C-SPAN began televising testimonial proceedings in the U.S. House of Representatives in 1979. C-SPAN began televising closed captioned proceedings in the U.S. House of Representatives in February 1991. C-SPAN televised the Clarence Thomas Senate confirmation hearings live in October 1991.
Responding to Engate's Claims
To restate, the article written by Thomas Ross offers the perspective of defending counsel in the current Engate litigation. The author is providing his own argument regarding the status and future conclusion of this matter, and his opinions should not be construed as legal advice or the opinions of NCRA. Obviously, attorneys for Engate would offer a different perspective. Readers are cautioned to seek their own independent legal advice.
In response to Engate's demand letters, on January 30, 2003, NCRA President Laurel Eiler distributed a letter to NCRA members providing general background information regarding the Engate issue and how NCRA was responding to it. Specifically:
- NCRA's legal counsel has followed this litigation closely and worked with the defendants' attorneys to provide information, contacts and other resources that can be used by the defendants to support their argument that no valid patent has been infringed because the processes and technology were in use prior to the patent applications being filed.
- NCRA believes that the manufacturer of realtime systems and software, not the consumer who buys it, should be responsible for assuring that their product does not infringe on any valid patents. NCRA has contacted all of the realtime and litigation-support manufacturers regarding this litigation to determine their willingness to work with NCRA members to resolve these complaints as quickly as possible and indemnify the users of their software for any infringement claims involving Engate's patents. To date, no vendor has yet offered to hold their licensees harmless from the claims. However, several vendors have indicated a willingness to help NCRA's members defend against Engate's claims.
- NCRA has actively investigated ways to pool resources and facilitate an organized and effective joint defense by those firms currently targeted by Engate and those that may be targeted in the future. The first step in this process involved the creation of a listserv for those firms that have received demand letters, giving them a way to communicate among themselves and with NCRA and providing them with quick access to any new information. The second step involves working with NCRA counsel and counsel from the defending firms to collect prior art in order to examine the feasibility of developing an expert legal opinion for use by those firms that have received demand letters and decided to participate in the joint defense group. Each firm that received a letter made an independent decision on how to respond to Engate.
Regardless of the actions taken by NCRA, any firm or individual who receives a demand letter is strongly urged to seek advice from competent legal counsel since there is possible substantial financial exposure if the patents ultimately are determined to be valid. Even though NCRA believes the responsibility for defending against patent infringement claims should lie with the manufacturers of the allegedly infringing software, this does not relieve any firm or individual from defending itself against any asserted claims.
It is important to stress that, at this point in time, the court has not addressed whether the Engate patents are valid or whether infringement actually has occurred.
If you have received a letter from the Stadheim & Grear attorneys for Engate and not yet notified NCRA, please do so. Forward a copy to NCRA, 8224 Old Courthouse Road, Vienna, VA 22182-3808, to the attention of Peter Wacht. Feel free to contact us with any questions by phone (703-556-6272) or e-mail (email@example.com).
Examples of Prior Art
The following excerpts are examples of the numerous descriptions of the prior art realtime reporting systems that were known prior to the applications for the Engate patents.
The Phoenix CIC uses a Novell "local area network" linking ten DOS 286 work stations. A local area network, or LAN, as it is referred to, is a system that electronically links a number of otherwise separate personal computer work stations together so they can communicate with each other and so they can share one central data base that is created and maintained on a specific item of computer hardware called a "file server." The work stations are located on the judge's bench, at each counsel's table, and at the courtroom deputy clerk's station, the court reporter's position, the secretary's desk, and at each law clerk's desk. (Honorable Roger G. Strand, "The Courtroom of the Future," The Judges Journal, Spring 1989, Vol. 28, No. 2.)
The NSRA has organized and helped finance three experimental "Courtrooms of the Future" across the country, installing computers in a county courtroom in Detroit, and in federal courts in Chicago and Phoenix. ... The reporters association provided Xscribe hardware and software for the court, and the official court reporter, Merilyn Sanchez, provided her own personal CAT (computer-aided transcription) equipment. ... Attorneys in the Phoenix courtroom also make use of issue-coding functions, Sanchez says, marking portions of testimony relevant to an argument or a line of questioning, or passages mentioning a particular defendant. Lawyers can write notes to themselves on the screen as the proceedings move along, she adds. (Donald Johnston, "Computers: Shorthand For Change," Fulton County Daily Report, March 13, 1989.)
Discovery ZX, made by Chicago-based Stenograph Legal Services Inc., is the litigation-support software used in Strand's courtroom and also in many law firms. It allows several ways of coding, searching, and annotating text. Working in their personal computer files, attorneys can "issue-code" their copies of the testimony as it happens, by assigning numbers to subjects of particular interest and marking the transcript electronically whenever the subject is mentioned. ... Attorneys can also program the computer to automatically highlight certain words whenever they occur - court reporter Sanchez, for example, highlights the word objection in Judge Strand's file so he can easily find the questions or statements that prompt objections. "The system permits the court to search the record directly with far more comprehension and far more accuracy than taking trial notes, and thus allows the court to do its job more efficiently," says Strand. (Diane Knox, "Phoenix's Courtroom of the Future," The American Lawyer, May 1991.)
A computer-integrated courtroom brings together all the latest advances offered through CAT technology. In a CIC, computer terminals are located at the counsel tables and judge's bench and are tied into the court reporter's CAT system. Through CAT, judges, lawyers and litigants can see printed English text of testimony on monitors just seconds after the testimony is given. ... Another feature, litigation support software, allows attorneys to review prior testimony on their monitors during cross-examination without having to interrupt the proceeding to ask the reporter to search through pages of notes. Instead, at the touch of a button, the computer finds the testimony in question and flashes it onto the monitor. (B.J. Shorak, "Computer Courtrooms," The Advocate, Vol. 42, October 1989.)
The testimony crawls across the small television screen on the defense table almost as quickly as the words are spoken by the witness and the prosecutor. ... Court reporter Jere L. With takes down the testimony on his electronic stenographic machine, which translates the words into a series of alphabetical outlines. ... "Those outlines are then transmitted to a computer terminal which sorts them out and matches them up with the corresponding English word," With said. ... "Words the computer can't find, or can't recognize, are spelled out on the screens phonetically." ... The judge did say the phonetic spelling can create problems if the words are taken out of context, but that if read in context they produce understandable sentences that convey the intended meaning. (Bill Hazlett, "Computer Also on Trial in L.A. Courtroom," The Los Angeles Times, February 19, 1982.)
By using a standard electric stenotype wired directly to CAT system equipped with a special program, he is able to create captions of live telephone events as they happen. ... "I'm using the computer to convert my strokes into captions for broadcast as the words are spoken." ... "World News Tonight" is transmitted, or fed, three times each evening to network affiliate stations. (Marshall S. Jorpeland, "Court Reporter Helps Make the Silent Screen Speak," NSR, April 1982.)
For the most current information on the Engate matter, visit NCRA's Key Issues Area.