In this article I analyze the recent motions for summary judgment filed by ParkerVision (PRKR) and Qualcomm (QCOM) on May 22, 2013, which should be of significant interest to those following this patent case.
I will only consider in detail ParkerVision's first and main argument (A) concerning invalidity.
The entire issue revolves around the meaning of the claim term "generating a lower frequency signal." In its Markman ruling the court found that no construction of these terms is necessary in view of the terms' use of plain and direct language.
ParkerVision is attempting to add an additional constraint to the plain and direct language of the claims - that "transferred energy is discharged from the storage device to drive the downstream load to generate the lower frequency or baseband signal, resulting in a sawtooth-like waveform that represents the repeated charging and discharging of the storage device."
This restriction (mandating the discharge of a storage capacitor as part of "generation") is not in the claims themselves (or in the Markman ruling) but ParkerVision is (impermissibly) trying to add it in this motion and in the expert witness reports. ParkerVision did use a similar phrase in the Markman hearing - but only as a feature of the ParkerVision preferred implementation that would be disallowed by the Qualcomm definition of "sampling" (not of "generating"). ParkerVision never argues in the Markman hearing that such discharge is an inherent requirement of the claims. In such were the case, ParkerVision should have made it explicit in its proposed definition of "generating a lower frequency signal" rather than arguing that the plain and direct language was sufficient.
There are two obvious problems with this after-the-Markman narrowing of the claims.
First, it is an attempt to significantly modify the Markman ruling by narrowing the plain and direct language of the claims - the court decided on the normal definition of "generating" (as requested by ParkerVision), while now ParkerVision is basing its entire argument for a finding of no invalidity on a new and much narrower definition of "generating," i.e. that "generating" must include the process of discharging a storage capacitor. Since both Qualcomm and the definition used by the judge in the Markman ruling disagree with this definition of generating, I can see no possibility of this argument succeeding as a matter of law. In fact, I would think most judges would find the argument insulting, as it clearly is an attempt to subvert the clear meaning of Markman ruling.
The second is that ParkerVision's argument (if it holds) for redefining the plain meaning of "generating" results in clear proof of non-infringement by the Qualcomm chips - none of the Qualcomm chips "generate" the down-converted signal by significantly discharging the storage capacitor. As an example, look at the block diagram for the QSC6270 - there is an op amp after the storage capacitor (just as in the prior art) - which op amp takes infinitesimal current from the storage capacitor, preventing more than trivial discharge of the capacitor. Thus ParkerVision has just proven non-infringement - if the court buys the argument of this briefing.
I give one final example of ParkerVision's technically incorrect arguments from ParkerVision's brief: 'Because voltage and energy are not the same, and because you do not discharge or extract energy from the storage device when measuring voltage, generating a voltage differential across the poles of an energy storage device is not "generating the lower frequency signal from the transferred energy" as required by the Asserted Claims of the '551, '518, and '371 Patents.
First of all, it's simply not true: "because you do not discharge or extract energy from the storage device when measuring voltage" is clearly false - any real life circuit that measures voltage takes small (possibly very small, but not zero) amounts of energy from the capacitor in order to measure voltage, and so the capacitor is, in fact, ever so slightly discharged during any voltage measurement, and hence small, but non-zero, amounts of energy are always extracted from the storage device when measuring the voltage.
As any EE would know, the capacitor extracts and stores energy from the input signal. The energy stored in a capacitor results in a voltage on the capacitor. The transferred energy can be measured by examining the voltage - there is no need to significantly discharge the capacitor to "generate" the lower frequency signal from the transferred energy - it is not only possible but actually is a better implementation (i.e., more accurate) to generate the lower frequency signal by taking minimal current (minimal discharge) from the capacitor, and the generating process is clearly (indisputably, in my view) using the transferred energy that was stored in the capacitor, as measured by the voltage on the capacitor.
ParkerVision is deliberately attempting to confuse the court by conflating the charging of the capacitor by taking energy from the input (which is defined in the Markman) with significantly discharging the capacitor when generating the lower-frequency signal (which is not in the Markman or in the claims and which ParkerVision is trying to add as a new requirement.)
There are clear questions of fact which preclude the granting of this motion. I am certain that the Qualcomm reply (due in 30 days) will be much more comprehensive than my brief analysis, but there are such obvious flaws (both technical and legal) in the arguments that I felt compelled to put them to paper.
Qualcomm is asking for summary judgment as to Atheros products, (B) summary judgment of no indirect Infringement on four of the six asserted patents and (C) summary judgment of non-infringement as to Qualcomm's 50% duty cycle products.
I will not do a detailed analysis of the Qualcomm filing at this point, but will wait until ParkerVision's reply (due in 30 days). If Qualcomm is correct that ParkerVision has presented no evidence as to the Atheros products, I would suggest that is likely to be granted. As presented by Qualcomm, the cases seem compelling, but ParkerVision may offer additional evidence which could change my mind.
The most interesting part of Qualcomm's motion is the extensive list of attachments. Looking over the history of the Qualcomm/ParkerVision relationship, one can conclude that there was no offer made by Qualcomm for the D2D technology. In the fall of 1999, Qualcomm's emails were constantly referring to how poorly the testing of D2D had gone, that the ideas were not new, to ParkerVision's constant failure to deliver on promises, and that the technology, even if could actually be made to work, needed to be "cheap" to be worth further evaluation effort, and by the end of 1999 Qualcomm officially told ParkerVision that it had no further interest in D2D. I suggest that everyone (even non-technical investors) would learn a lot about Qualcomm's case (and ParkerVision misrepresentation thereof) from reading the emails in the attachments to this filing.
Brief review of some major issues remaining in case
1. Convoyed Sales
2. Indirect infringement
These issues were covered in two previous articles (linked to above), which I encourage you to read. I will give a brief update here.
ParkerVision is alleging infringement only of Qualcomm's chips containing a transceiver, but is asking for damages for both baseband and transceiver chips. Since transceiver chips have an ASP of $3-4, while baseband chips sell for $20-$30, this is a major factor in any possible damages award.
In the most recent conference call, Jeff Parker completely misstated the legal requirements to prove convoyed sales applies to baseband chips (which is ParkerVision's burden to prove), saying that the only requirements are that the chips be sold together. This is factually incorrect, as the major requirement to prove convoyed sales is that "the patent-related feature is the basis for customer demand" for the non-infringing chip (i.e. Qualcomm's baseband chips). As I have stated in the past, Qualcomm chips are sold almost entirely on the strength and quality of the IP and implementation of the baseband. The RF chips (transceiver) are sold as a convenience for the customer, and are not a driving factor in the choice of vendor. It is very unlikely that ParkerVision can prevail on convoyed sales given the clear facts. In recent cases (the last 5 or so years), judges and appeal courts have swung strongly against convoyed sales, and while is commonly alleged, it is rarely granted, especially for NPEs, such are ParkerVision (which has no lost sales to protect.)
Since the damages numbers that Jeff Parker discussed in his conference were based on convoyed sales, those numbers should be reduced by roughly a factor of 6 (or more, i.e. roughly $25 down to $4), resulting in maximum damages well under $60M (as compared to the $350M or so that Jeff Parker hinted at).
Qualcomm manufactures and sells essentially all of its chips outside the US. For ParkerVision to collect any damages directly from Qualcomm, it must prove Indirect Infringement. I have discussed this at length in a previous article. I continue to believe that Qualcomm's defenses against indirect infringement are very strong. In my view, the current summary judgment motion only hints at Qualcomm's full case. If Qualcomm wins on this point (as is quite likely), then the maximum damages from Qualcomm would be at most a few million dollars. ParkerVision would then be forced to sue the direct infringers (Apple, Samsung, etc.)
Validity and Infringement
We are now seeing the first briefings on these issues. I feel strongly that all of the ParkerVision claims are invalid by anticipation over extensive prior art, and that invalidity would be obvious to anyone of ordinary skill in the art. We should see more filings on both subjects over the next few months.
Additional disclosure: I am long a small amount of QCOM.