Free Reply to Response to Motion - District Court of Arizona - Arizona

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Ira M. Schwartz (I.D. No. 010448) Michael A. Cordier (I.D. No. 014378) DeCONCINI McDONALD YETWIN & LACY, P.C. 7310 N. 16th Street, Suite 330 Phoenix, Arizona 85020 Telephone (602) 282-0500 Facsimile (602) 282-0520
Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF ARIZONA

DECONCINI MCDONALD YETWIN & LACY, P.C.

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Erchonia Medical Inc., et al Plaintiff, v. Miki Smith, et al Defendants. ____________________________________ Erchonia Medical Inc., et al Plaintiff, v. Miki Smith, et al Defendants. ____________________________________ Robert E. Moroney, LLC Plaintiff, v. Erchonia Medical, Inc., et al Defendants.

Case No.:CIV 02-2036-PHX-MHM Consolidated with CIV 02-2048-PHX-MHM and CIV 02-2353-PHX-MHM

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ERCHONIA MEDICAL INC. AND KEVIN TUCEK'S REPLY IN SUPPORT OF OBJECTIONS TO SPECIAL MASTER'S FINAL REPORT AND RECOMMENDATION ON CLAIM CONSTRUCTION

Case 2:02-cv-02036-MHM

Document 328

Filed 04/27/2006

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Erchonia Medical Inc. and Kevin Tucek

(collectively referred to as

"Erchonia") submit this Reply in Support of their Objections to the Special Master's Final Report and Recommendation on Claim Construction (Final Report). For the reasons set

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forth in Erchonia Medical Inc. And Kevin Tucek's Objections To Special Master's Final
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Report And Recommendation On Claim Construction ("Objections") and further discussed
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below, the term "optical arrangement" should be defined as "a collection comprising
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mirrors, lenses, prisms and other devices placed in some specified configuration which
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DECONCINI MCDONALD YETWIN & LACY, P.C.

reflect, refract, dispense, absorb, polarize or otherwise act on light."
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I.
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Erchonia Did Not and Could Not Have Agreed to the Modifications to the

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Definition of "Optical Arrangement." In their Response In Opposition To Erchonia Medical, Inc.'s and Kevin Tucek's Objections to Special Master's Final Report and Recommendation on Claim Construction by Robert E. Moroney, LLC, Robert E. Moroney, and A Major Difference, Inc. (the "Response") the REM Parties argue that the parties agreed to the meaning of "optical arrangement" during the Markman hearing. However, this is not the case. Of primary importance is that, when this discussion took place, the REM Parties themselves made clear that they were not agreeing to this definition. The transcript portion included in the REM Parties' Response omits the dialogue leading up to the discussion of the definition offered by the Special Master. This dialogue includes: SPECIAL MASTER PETERSON: Yeah. Actually, I think you're out of time, but I'll let you finish up. MR. BRUNELLI: Well, I don't know that ... You clearly have reviewed the briefs. You clearly have a grasp of the parties' positions. If the Court does not agree that the inventors have acted as their own lexicographer in this case on "optical arrangement," then I go back to my opening argument and say please still define "optical

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arrangement" beyond the words "optical arrangement." They have to mean something. And Erchonia's proposal right now is simply that "an optical arrangement" be defined as "an optical arrangement." That is nonsensical to me. It will not be helpful to the Court; it will not be helpful to a jury. We need to know what the componentry of "an optical arrangement" is. At a minimum, it has to be at least two optical elements that can perform the functions required, and that they have to be in serial relation. SPECIAL MASTER PETERSON: Let me ask you, Mr. Brunelli, do you have a paper and pencil handy? MR. BRUNELLI: I do. SPECIAL MASTER PETERSON: Okay. I am going to dictate slowly the definition for "optical system" taken from the McGrawHill Dictionary of Scientific and Technical Terms, and it is in the field of optics. It is, quote: A collection comprising mirrors, lenses, prism and other devices placed in some specified configuration which reflect, refract, disperse, absorb, polarize or otherwise act on light, period, close quote. Now, my question, Mr. Brunelli, is what, if anything, in the Specification or prosecution history would indicate that would incorrectly describe "optical arrangement"? MR. BRUNELLI: Could I have one moment to consider? SPECIAL MASTER PETERSON: Sure. MR. BRUNELLI: Okay. I've got two points. One, I read the definition as requiring at least -- Because of the word "collection," I read that as requiring at least two of these things. Is that how you're reading it, as well? SPECIAL MASTER PETERSON: Well, I hadn't gotten to that point yet, but all right. MR. BRUNELLI: So if there is -- I suppose you could read "collection" as requiring only one or more of these, as well, so there is an ambiguity there. If it's -- If it's not at least two, I think neither the

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Specification nor the file history support -- would support that reading. Second, I believe that a -- "other devices" is broad in that it may include things that are not optics such as mechanical elements, a mechanical mask, or an electromechanical element such as a motorized mirror. Those are clearly -- Those types of things are clearly not encompassed by the Specification. SPECIAL MASTER PETERSON: All right. Let's -MR. BRUNELLI: And let me tell you why. SPECIAL MASTER PETERSON: Well, just a second. Let me -- We can solve that issue easily by changing "other devices" to "other optical devices." MR. BRUNELLI: Okay. SPECIAL MASTER PETERSON: And if we just make it clear, we say "a collection comprising two or more." MR. BRUNELLI: If we went with "a collection comprising two or more mirrors, lenses, prisms or other optical devices placed in some specified configuration which reflect, refract, disperse, absorb, polarize or otherwise act upon light" and you're asking me if that would be an acceptable definition for "optical system," and clearly I think that would because it came out of the dictionary, as you just stated, and then the next question becomes does "optical system" -can "optical system" be changed for "optical arrangement"? Am I following you? SPECIAL MASTER PETERSON: Well, no, you're changing the second question slightly. Is that an accurate definition of the term "optical arrangement" as it is used in the context of the patent and the prosecution history? MR. BRUNELLI: Well, I really think that the -- because of the way this patent was drafted, I really think that the patentee defined "optical arrangement" as being a particular thing. Transcript of Conference Call Held before the Special Master on August 26, 2005 ("Tr."), p. 39-43. As revealed by these transcript portions, this dialogue demonstrates that this was just what 4
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it purports to be, namely oral argument on the interpretation of claims; and not any type of agreement or stipulation. It is clear that, at this point in the argument, the REM parties

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were not agreeing to this definition. They were still arguing their position that the term
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"optical arrangement" was a term coined by the inventors that needed to be construed as a
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means plus function term or a coined term, as explicitly stated by the REM Parties'
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counsel. In fact their counsel felt the need to further clarify that this was merely argument
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in the alternative to his primary argument. See. Tr. p. 43 where Mr. Brunelli states,
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"...let's assume this argument is falling short, in your opinion, and so I will argue in the
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alternative."
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In addition, it should be noted that this portion of the argument occurred at the end of the proceeding, specifically at a point when the Special Master indicated that both parties were essentially out of time for argument. See Tr. p. 39 and p. 43.

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Further, when counsel for Erchonia was asked about this definition, the response
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was, "I think the definition you read out of the McGraw-Hill dictionary was extremely
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accurate. I don't have any concerns with what you've proposed as alternative language
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here other than making clear two things..." (emphasis added) Tr. p. 45. However, just
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prior to this, Erchonia's counsel had discussed the patent file history and referred the
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Examiner to the portion of the file history where other optical arrangements were shown in
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the prior art, including references to the Ohshiro and Blum Patents (U.S. Patent No.
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4,905,690 and U.S. Patent No. 4,784,135 respectively) which were discussed in the patent file history. In particular the transcript reflects the following: MR. SCHWARTZ: Well, I think those are all good questions, then. I will tell you that I think that -- seeing the file history, that there is -that the examiner, at least, had the opinion that optical -- Well, he had a discussion about other optical arrangements as taught in Oshiro and Blum, and kind of my interpretation of his -- what you stated, he had a long discussion about other optical arrangements that could be used, including light generating prisms and lenses and those things, and discussed that they were well-known in the art. 5
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So I would support your -- I support the contention that "optical arrangement" is broader than just a line generating prism and a collimating lens. And I also, as I said earlier, believe "optical system" and "optical arrangement" are equivalent. Tr. p. 45. As discussed in Erchonia's Objections, the discussion on this point between the Examiner and Erchonia is reflected in patent file history and is discussed in the Special Master's Draft Report where he cites to the relevant portion of the patent file history. See Draft Report, p. 28. A review of this portion of the Draft Report demonstrates that this position was raised with the Special Master as part of the Markman briefing and hearing process. It is improper to argue that this point was conceded by Erchonia. A review of the Markman briefing indicates that the issue of the exact language for the definition of "optical arrangement" was not even addressed as an issue by the REM Parties until first raised at the oral argument. The Markman briefs filed in this matter demonstrate that the parties debated the issue raised by the REM Parties whether the term "optical arrangement" was drafted in means-plus function format or was a coined term, and therefore limited to the structure set forth in the Patent. See Markman Brief of Defendants Robert E. Moroney, LLC, Robert Moroney, Miki Smith, George Gonzalez and Lorena Guzman, KMS Marketing, Inc. and A Major Difference, Inc. The REM Parties argued that, as a means-plus-function claim, the term "optical arrangement" must be limited to a prism and a collimating lens. Id. Erchonia disputed this contention arguing that the term was not so limited, but rather was known in the art. The Special Master ruled that the term was not a means-plus-function claim or a coined term and found that there was substantial use of this term in the prior art and that it was well known. He then referred to the McGraw-Hill dictionary for the definition. See Final Report, p. 73. The Special Master preliminarily found that this alone was sufficient to resolve the dispute and so indicated in his Draft Report. See Draft Report, p. 112. It was only after he allowed the parties to comment on the draft report that this precise issue was raised by the REM Parties, and then Erchonia responded. A review of these proceeding demonstrates that

DECONCINI MCDONALD YETWIN & LACY, P.C.

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Erchonia has never waived its objections to the limitations now in dispute. See Erchonia's Reply To Response To Special Master's Draft Report And Recommendation On Claim Construction.

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II.
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"Optical Arrangement Can Include a Single Optical Element." In arguing that the definition of optical arrangement requires two or more optical

elements, the REM Parties contend that Erchonia has improperly relied on extrinsic
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evidence by referring to the Ohshiro patent.
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First, the REM parties misconstrue Erchonia's argument. Erchonia's argument
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refers primarily to the discussion in the patent file history where the Ohshiro reference was
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discussed. See Final Report, p. 83-87. The patent file history is intrinsic, not extrinsic
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evidence. Phillips v. AWH Corp., 415 F. 3d 1303, 1317 (Fed. Cir. 2005). Further, it is appropriate and preferred to review the patent file history to obtain an understanding of the patent claims. Id; See also Final Report, p. 19, 23. The important point is that the Special Master in reviewing the patent file history discussing Ohshiro talks about the means for focusing the laser light. Final Report p. 84. As this is part of the intrinsic evidence, and was discussed during the prosecution of the `096 Patent, it is important to demonstrate that a single lens was contemplated as a possible interpretation of the "optical arrangement" used in the patented invention. The REM Parties then criticize Erchonia's description of Ohshiro. In fact, it is not particularly the Ohshiro reference that is important, but rather the discussion of the prior art in the patent file history that is important. See Final Report, p. 85. Second, the REM parties have misinterpreted what the Ohshiro reference show. Ohshiro teaches an invention, "characterized by having a series of first lenses, each corresponding to a semiconductor laser, designed for making the laser beams emitted from each of the semiconductor lasers parallel, and a second lens which collects these multiple parallel beams and focuses them to a single point to obtain a treatment laser beam." U.S. Patent No. 4,905,690, Col. 2 ln. 63 ­ Col. 3 ln. 1. (emphasis added). In discussing the Ohshiro 7
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reference, in connection with the `096 Patent application, it was not the series of first lenses which was discussed as a focusing mechanism, rather it was the single second lens which is the focusing mechanism. The Blum Patent, U.S. Patent No. 4,784,135, also

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discussed in patent file history in connection with Ohshiro and discussed in the Final
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Report, also shows a single cylindrical lens. Final Report, p. 84 citing Blum, U.S. Patent
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No. 4,784,135, Fig. 1.
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The REM Parties also object to the reference to the other patents cited by the
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Special Master in his Final Report, which indicate a single optical element can be used as
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an optical arrangement. However, since these documents were used by the Special Master
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and relied, at least in part, by him in rendering his recommendation, it is appropriate for
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Erchonia to comment on those references to indicate that they support a finding that an optical arrangement can consist of a single optical element. See Final Report, p. 87-109. See Phillips, 415 F. 3d 1303, 1317 (Fed. Cir. 2005), allowing the use of extrinsic evidence. Finally, as stated in Erchonia's Objection, the Special Master improperly made his determination on the issue of whether "optical arrangement" requires two or more optical elements based on his statement that neither party had provided proof on the question of how one of ordinary skill in the art would interpret this, yet ultimately he ruled against Erchonia based on their failure to come forth with evidence to support their position. However, the law on this issue is that it is improper to assign party a burden of proof on this issue. Nikon Corp. v. ASM Lithography B.V., 308 F.Supp.2d 1039, 1057 (N.D. Cal 2004); Level One Communications Inc. v. Seeq Technology, Inc., 987 F. Supp. 1191, 1196 (N. D. Cal. 1997). For these reasons, the Special Master's recommendation on this

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particular issue should be reconsidered by the Court or remanded to the Special Master for further consideration of this one issue. III. Conclusion For the reasons set forth above, the Court should find that the definition of "optical arrangement" is "a collection comprising mirrors, lenses, prisms and other devices placed 8
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in some specified configuration which reflect, refract, dispense, absorb, polarize or otherwise act on light." In the alternative, the Court should remand this matter to the Special Master for additional proceedings limited to making a legal recommendation on

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the precise issue of whether an "optical arrangement" as used in the `096 Patent should be
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interpreted to require two or more optical elements or whether a single element can serve
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as an optical arrangement.
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DECONCINI MCDONALD YETWIN & LACY, P.C.

DATED this 27TH day of April, 2006. DeCONCINI MCDONALD YETWIN & LACY

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By s/Ira M. Schwartz Ira M. Schwartz Michael A. Cordier 7310 N. 16th St., Suite 330 Phoenix, Arizona 85020 (602) 282-0500 Attorneys for Erchonia Medical Inc. and Kevin Tucek

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Certificate of Service I certify that on April 27, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to those attorneys registered with CM/ECF: Michael Warzynski, Esq. JARDINE BAKER HICKMAN & HOUSTON PLLC 3300 N. Central Avenue, Suite 2600 Phoenix, AZ 85012 Co-Counsel for Erchonia Medical Inc. Benjamin B. Lieb, Esq. Robert Brunelli, Esq. SHERIDAN ROSS PC 1560 Broadway, Suite 1200 Denver, CO 80202 Attorneys for Robert E. Moroney, LLC, Robert E. Moroney, and A Major Difference Inc. David Bray, Esq. MARISCAL WEEKS MCINTYRE & FRIEDLANDER PA 2901 N. Central Avenue, Suite 200 Phoenix, AZ 85012 Attorneys for Robert E. Moroney, LLC, Robert E. Moroney, and A Major Difference Inc. Gregory L. Miles, Esq. Lori A. Curtis, Esq. DAVIS MILES PLLC 1550 E. McKellips Road, Suite 101 Mesa, AZ 85203 Attorneys for John and Claudette Brimhall Dominic L. Verstagen, Esq. KUNZ PLITT HYLAND DEMLONG & KLEIFIELD 3838 N. Central Avenue, Suite 1500 Phoenix, AZ 85012 Attorneys for John and Claudette Brimhall Scott A. Salmon, Esq. THE CAVANAGH LAW FIRM 1850 N. Central Avenue, Suite 2400 Phoenix, AZ 85004 Attorneys for George Gonzalez and Lorena Guzman Gordon S. Bueler, Esq. BUELER JONES, LLP 1300 N. McClintock Drive, Suite B-4 Chandler, AZ 85226 Attorneys for Miki Smith and KMS Marketing, Inc. /////

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And a courtesy copy mailed to: Gail R. Peterson, Esq. Cox Smith Matthews 112 East Pecan Street, Suite 1800 San Antonio, TX 78206 Special Master s/Ira M. Schwartz

DECONCINI MCDONALD YETWIN & LACY, P.C.

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