ParkerVision V. Qualcomm: Recent Motions Analyzed

| About: ParkerVision, Inc. (PRKR)

I have been following and short ParkerVision (NASDAQ:PRKR) since at least 2003. I am not a lawyer, but have been involved in some extensive patent litigation over my own patents.

There have been important motions filed by both Qualcomm (NASDAQ:QCOM) and PRKR recently. As I predicted in previous articles (ParkerVision Vs. Qualcomm: Where Is The Upside?, ParkerVision V. Qualcomm: Redux, Recent Motions For Summary Judgment By ParkerVision And....), some of the main issues in dispute are invalidity, convoyed sales, and indirect infringement. I recommend reading those articles again to understand the issues, and will only analyze the substance of the recent filings in this article.

Motions for Summary Judgment were filed on May 22, 2013. (ParkerVision269; Qualcomm270)

Replies to motion for Summary Judgment were filed on June 25, 2013. (ParkerVision277 Declarations276-1 Declarations276-2; Qualcomm275-1 Qualcomm275-2)

Sur-replies (final replies) were filed on July 11. (ParkerVision295 Declarations296 Supplement297; Qualcomm294)

Daubert Motions were filed on July 7, 2013 (ParkerVision285, Qualcomm288)

Replies (final) to Daubert Motions are due on July 21 or 24.

I will summarize the various motions and replies, and give an opinion as to the likely outcomes.

Qualcomm's motions for partial summary judgment

  1. ParkerVision failed to introduce any evidence that Atheros products were infringing.
  2. ParkerVision failed to introduce any evidence that Qualcomm had pre-suit knowledge of 4 of the 6 asserted patents.
  3. Qualcomm is entitled to summary judgment as to 50% duty cycle products.

For (1) ParkerVision has conceded that there was no evidence presented against Atheros products. ParkerVision wants to be able to re-allege such claims later in another suit, Qualcomm wants them permanently barred.

For (2) ParkerVision's reply tries to show that a jury could infer knowledge of the 4 patents, but was not able to show any direct evidence of knowledge. Qualcomm points out that, to meet the burden for indirect infringement, ParkerVision must show actual evidence of knowledge of the patents (inference in not legally sufficient), in addition to proof that Qualcomm was deliberately and intentionally infringing.

It seems somewhat likely that Qualcomm could win this motion. If so, it is possible that ParkerVision would drop those four patents from the case, as without indirect infringement, the damages would be significantly smaller.

For (3), Qualcomm makes an excellent technical case. ParkerVision's reply is confused, but probably is enough that the judge will deny the motion for summary judgment, as there is evidence of facts in dispute. This could go either way, but the safest path is for the judge to deny it, and let the jury decide.

ParkerVision's motion for partial summary judgment

  1. ParkerVision argues that Qualcomm did not present any evidence that the prior art meets the "generating" limitation of the asserted claims.

Qualcomm, in reply, makes two points. First, that ParkerVision's definition of "generating" differs from the court's Markman ruling (and from the definition that ParkerVision used in its non-infringement expert report.) Second, that Qualcomm's expert witness did, in fact, show direct evidence that the prior art meets ParkerVision's newly modified definition of "generated".

ParkerVision's final reply adds no new arguments, but asks that the judge should, if necessary, further clarify what "generating" means and then grant summary judgment of no invalidity.

I can't see how this motion can possibly be sustained -- the standard for summary judgment is very high and ParkerVision has failed to even come close to meeting the burden. There are clear facts in dispute by the experts, and it is very clear that Razavi (Qualcomm's expert witness) did show evidence that the prior art meets the definition of "generating," both using the court's Markman definition, and using ParkerVision's attempt to change the court's definition.

Frankly, I think this motion was made more to appeal to investors than with the hope that the judge would grant it. I think it also shows how important it is to ParkerVision that Qualcomm not be allowed to even present an invalidity case, as, in my opinion, it is overwhelmingly persuasive that the patents-in-suit are invalid over prior art.

Daubert Motions

For the Daubert motions, the replies are due 14-17 days after the original filing, which is July 21 or 24 (my understanding is that they must be filed on July 21, but are not visible on PACER until July 24.) These are just my preliminary thoughts before seeing the replies.

Qualcomm's Daubert motion:

  1. ParkerVision should not be allowed to use a royalty "profit" base or to use the negotiations during 1999 as evidence of a hypothetical negotiation in 2007.
  2. Using a Profit Split based on the "Nash Bargaining Solution" is contrary to case law.
  3. Redacted
  4. No evidence of convoyed sales was given by ParkerVision, so they must not be allowed to allege it.
  5. ParkerVision's damages expert (Benoit) presented no evidence for contributory infringement.

I found Qualcomm's arguments compelling (what was not redacted), but until ParkerVision has had a chance to reply, I will maintain an open mind (especially on 4 and 5). ParkerVision must show that they presented some legally sufficient proof of convoyed sales and contributory infringement (not just allegations), as ParkerVision has a strong burden of proof on those two points. Losing on these two points would be a disaster for ParkerVision, reducing the maximum damages to quite small numbers.

ParkerVision's Daubert motion:

  1. ParkerVision wants to disallow Leonard (Qualcomm's damages expert witness) from using the ParkerVision/Via Telecom license agreement as evidence of a reasonable royalty rate, as well as the Berkana acquisition by Qualcomm.
  2. ParkerVision wants to disallow Razavi's invalidity opinions.

Motion (1) seems frankly outrageous. ParkerVision freely and voluntarily signed a licensing agreement with Via Telecom in 2007, which included a license to practice all of ParkerVision's patents, not just the patents-in-suit, and which was signed at the exact time of the hypothetical royalty "negotiation" when Qualcomm allegedly started infringing. This is the best possible evidence and I don't see how a plausible argument can be made that it should be disallowed.

ParkerVision argues that you can't use a value of a license to a pool of 100 patents to determine the value of a subset (i.e., the six patents-in-suit). The answer to this seems obvious, i.e., that the value of the license for the pool of 100 patents sets an upper bound on a reasonable royalty, as clearly a license to the entire pool is worth more than the subset. This license agreement remains the best available information as to what ParkerVision would have accepted in 2007 as a royalty.

For (2), the arguments are essentially the same as ParkerVision's summary judgment of no invalidity. I believe ParkerVision failed to prove its case for no invalidity and thus believe that they failed here also. It's not clear to me why they are making the same arguments in two motions.

Final observations

The ParkerVision technical expert witness Paul Prucnal is actually an expert in optics, not radio electronics (RF). Dr. Prucnal has no published paper in RF -- all of his papers are on optics or optical networking. The Qualcomm technical expert Behzad Razavi has is well known in the RF field, with many papers and two well-known RF textbooks, including papers on mixers.

The ParkerVision damages expert (Paul Benoit) is an accountant, not an economist. This is unusual. The Qualcomm damages expert (Gregory Leonard) is an economist.

ParkerVision argues in its Daubert motion that Qualcomm has put forward no evidence that there are non-infringing alternatives. I am skeptical that this is true (and await Qualcomm's reply brief), but note that ParkerVision has asserted that the Qualcomm chips were non-infringing prior to 2007. ParkerVision made this assertion as defense against laches.

ParkerVision's arguments that the prior art is missing the "generating" functionality leads to the conclusion that the Qualcomm chips are not infringing, as Qualcomm circuits are identical to some of the prior art. ParkerVision attempts to avoid this dilemma by using different Markman definitions in their infringement contentions than in their invalidity arguments, which is obviously contrary to law.

If Qualcomm wins the motions on convoyed sales or contributory infringement, the maximum potential damages are significantly (6x or more) reduced. A ruling against either side's damages expert opinion would be of significance, but is hard to analyze with so many details redacted. The ParkerVision motion on invalidity is obviously important, but I see little chance of it being granted, and even less of surviving appeal if it was granted. Most of the remaining motions, if granted, would clarify and simplify the trial, but have less immediate impact.

Disclosure: I am short PRKR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long a small amount of QCOM.