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Leader v. Facebook - Leader's lawyers dismantle Facebook's response brief


This blog analyzes Leader's Reply Brief following Facebook's Response Brief in Leader Technologies, Inc. v. Facebook, Inc., 08-cv-862-JJF-LPS (D.Del. 2008). In a recondite rebuff of Facebook's legal argument, Leader lawyers take Facebook to the proverbial woodshed.

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Origin of Facebook's
Important new facts have emerged from Leader v. Facebook

 WBNS-10TV (CBS) Columbus, Ohio Aug. 29, 2011 – Leader v. Facebook                                                  Leader Technologies,
                                                                                                                    Inc. v. Facebook, Inc.,
                                                                                                                    08-cv-862 (D.Del. 2008)

                                                                                                                    Scroll down
                                                                                                                       below CBS-TV news
                                  WBNS-10TV (CBS)                                                                      video to read posts
                                  investigative report by
                                  Paul Aker, Aug. 29, 2011
                                                                                                                    ««« TABLE OF POSTS

                                                                                                                      11/28/2011 - Leader's
                                                                                                                    lawyers dismantle
                                                                                                                    "schizophrenic" response

                                                                                                                      Click here for
 © WBNS The fight goes on. Click to read Leader's Federal Circuit Opening Brief. The trial resulted in a split      SUMMARY "Bottom Line:
 verdict. Leader won on "literal infringement" of 11 of 11 claims and no prior art. Facebook won on a               American Innovation is on
 technicality called on sale bar that "invalidates" the patent for this trial only if not overturned. Leader says   the line"
 Facebook confused the jury with attorney "trial theater" instead of "clear and convincing" evidence.
                                                                                                                    1. Mark Zuckerberg used
                                                                                                                    Leader white paper to
 Click here for an HTML version of this post                                                                        build Facebook
 Monday, November 28, 2011                                                                                          2. Jury transforms
                                                                                                                    disbelief into evidence
 Leader's lawyers dismantle Facebook’s                                                                              3. No evidence? No
 "schizophrenic” response brief                                                                                     problem. Fabricate it.

 OPINION: One blogger's perspective                                                                                 4. Facebook’s' trial

 Oral arguments will now be scheduled in front of a 3-                                                              5. Facebook's "court
                                                                                                                    room theater"
 judge panel at the Federal Circuit Court of Appeals
                                                                                                                    6. Facebook's "I'm tired"
 In a recondite rebuff of Facebook's legal arguments,                                                               tactic

 Leader lawyers take Facebook to the proverbial                                                                     7. Missing Facebook
 woodshed. The stage is now set for a showdown on legal
 matters that will affect American innovation and                                                                   8. Expert witness
                                                                                                                    practices "dark arts"
 jurisprudence for many years, if not decades. If Leader
 prevails it will support the American inventor and                                                                 9. Patent Office records
                                                                                                                    disprove Facebook
 entrepreneurial spirit. If Facebook prevails it will
                                                                                                                    10. Facebook's jury
 encourage big infringers to steal inventions and use                                                               binder innuendo
 revenue from the inventions to fend off the day of
                                                                                                                    Share/Print this blog
 November 28, 2011 — Leader Technologies today filed its reply brief (Gray Brief, click
 here) following Facebook's response brief (Red Brief, click here) to Leader's opening
 appeal brief (White Brief, click here) in Leader Technologies, Inc. v. Facebook, Inc.,
 08-CV-862-JJF-LPS (D.Del. 2008). This was the final brief before oral arguments. The
 U.S. District Court trial resulted in a split verdict. Leader won the meat of the trial:                           Subscribe to this blog
 Leader won on "literal infringement" of 11 of 11 patent claims and no published prior art.
 In other words, the engine running Facebook is Leader's invention. Facebook won on
 an esoteric law called "on sale bar and public disclosure." On appeal to the Federal                                   Posts
 Circuit Court of Appeals in Washington D.C., Leader argues that Facebook had no
                                                                                                                                       Generated using
Circuit Court of Appeals in Washington D.C., Leader argues that Facebook had no
evidence of sale/public disclosure and confused the jury with court room theatrics.             Comments
Facebook says their evidence was "substantial."

Leader shows that Facebook's response is riddled with inconsistencies,
misrepresentations, misdirection, weak or non-existent legal argument and pointless          Email me updates
invectives. Among the highlights are these:
                                                                                             Email address... Submit
   1. "Sole question for the jury" sidelined: After making inventor Michael
      McKibben's credibility the "sole question for the jury" at trial, Facebook now
      sidelines this argument in favor of new arguments that were not presented to the
      jury or in post-trial motions, sort of. (Perhaps because Facebook knows that
      appeals judges, unlike a jury, are not misled by trial theater.)

   2. "Muckracking": While sidelining McKibben's credibility as their main argument,
      Facebook schizophrenically trash-talks McKibben on no fewer than 17 pages of
      its brief (e.g., "McKibben lied," "McKibben's lies," "McKibben's guilty
      knowledge," "McKibben's falsehoods").

   3. Opposite-evidence: After relying on the idea that disbelief of an inventor's
      testimony is affirmative evidence of the opposite, Facebook feebly defended
      this "general principle;" as if they don't really believe it themselves. The
      implications of this argument, if it prevails, are profound on all law since it will
      open the door for the guilty to encourage their victims to testify truthfully, then
      use "dark arts" tactics to encourage the jury to disbelieve the truthful testimony.
      This was Facebook's evident tactic at this trial.

   4. Ignored Legal Argument: Facebook ignored (failed to "differentiate") most of
      the legal arguments Leader made in its opening White Brief. Such conduct
      signals a lack of belief in one’s key lower court arguments. More damaging to
      Facebook, by not arguing the law, they waive their defenses under those laws.

   5. "Phantom NDA" Debunked: In a myopic interlude, Facebook spends an entire
      page of its Red Brief accusing McKibben of lying about an April 2, 2001 NDA,
      calling it a "phantom NDA" (non-disclosure agreement)—this is after being
      shown that particular NDA at trial and hearing McKibben's testimony that Dr.
      Vincent Russo was the Wright-Patterson Air Force Base person at that meeting.
      A quick Google search confirms that Dr. Vincent J. Russo was indeed the top
      civilian who was leading Wright-Patterson at that time. See S. Hrg. 108-100,
      108th Cong. III, p. 11 (2003) (testimony of Dr. Vincent J. Russo), U.S.
      Government Printing Office, TEXT 170K | PDF 5.5M; Facebook Red Br. 40, 44.
      Mr. McKibben testified, Trial Tr. 10805:24-10806:3, as follows:

             Q. The meeting you had on April 2nd, 2001, was it with Mr.
             A. No. I had not met him yet.
             Q. Okay. Who was at that meeting?
             A. The person at that meeting was invited by the senior people
             from the University of Dayton to attend. And was the top civilian at
             Wright Patterson Air Force Base. His name was Vincent Russo.
             Q. Did you obtain an NDA from Mr. Russo?
             A. I did.

      Facebook’s new "phantom NDA" accusation on p. 40 of their Red Brief is wrong
      —and knowingly so. Model Rules of Professional Conduct 3.3, Candor Toward
      The Tribunal ("(a) A lawyer shall not knowingly: (1) make a false statement of
      fact or law to a tribunal").

   6. Both cannot be true: Facebook used Leader's provisional patent source code
      to successfully invalidate Leader’s earlier provisional patent priority date—based
      on the testimony of Facebook's expert witness Dr. Saul Greenberg. Dr.
      Greenberg testified that the invention was not present in the source code.
      However, Facebook then argued just the opposite when trying to prove on
      sale/public disclosure. For on sale/public disclosure bar, Facebook ignored Dr.
      Greenberg's testimony, and argued that days earlier it was present, disclosed
      and offered for sale. The problem here is that while Facebook produced code to
      disprove the presence of the invention in the provisional patent, it produced no
      source code to prove on sale bar. Both cannot be true. The absence of source
      code proof is fatal. See Expert witness practices "dark arts."

   7. Ignoring the "clear and convincing standard" legal argument; re-arguing
      trial evidence instead: Facebook spends 11 pages re-arguing its trial evidence.
      Leader's appeal argument is on the "clear and convincing evidence" legal
      standard. Facebook largely ignored that question of law and merely re-argued its
      trial case. This could prove fatal since hard evidence of the kind that only

                                                                                                              Generated using
       trial case. This could prove fatal since hard evidence of the kind that only
       source code could provide was glaringly missing. In fact, the trial record reveals
       a Facebook "smoking gun." Even Facebook's own attorney argued to the trial
       court that the only way they could tell if Leader2Leader practiced the invention
       was to study the source code. See Facebook's letter to Judge Stark containing
       Facebook attorney Mark Weinstein's statement. Trial Doc. No.283, Ex. 3, PDF
       p. 11 ("in order to analyze whether or not it practices the '761 patent...Facebook
       would require... the source code for Leader2Leader"). The judge was persuaded
       and gave Facebook access, but tellingly, none of it was produced trial.

       Facebook cannot argue that they provided "substantial" evidence to meet their
       "clear and convincing" burden of proof when they didn't produce the one piece of
       evidence that they themselves argued vehemently to the trial court they needed
       to make their element-by-element case—the Leader source code. This is likely

   8. New arguments: Facebook's brief argued "alternative grounds for affirmance."
      This means that Facebook made new arguments to the court on appeal that it
      did not make in the lower court. Such tactics signal lack of belief in the strength
      of one’s case, and appeals courts rarely give such "Hail Mary" arguments much
      weight, if any.

   9. No expert testimony: Facebook makes brand new arguments about Leader’s
      patent claims that it did not argue to the jury, nor did it argue in post-trial
      motions. The arguments are too technical for discussion here since they
      address esoteric areas of patent law like "infringement theories," "limitations,"
      "claim construction," "indefiniteness" and "presumption of validity." These new
      Facebook arguments are likely out-of-order since they are normally the subject
      of extensive pre-trial expert witness reports and testimony that are dictated by
      well-settled law called the Markman Hearing and Daubert Motions. The expert
      testimony from both sides would have been presented to the jury. None of this
      happened with these new arguments.

More review of this Federal Circuit appeal will be forthcoming now that all the legal
arguments are in.

Reckless Modus Operandi

The elephant-in-the-room question for Facebook is their motivation for not settling this
case. The engine running their site is Leader's invention. Facebook "literally infringes"
Leader U.S. Patent No. 7,139,761—that is now proven and will most likely be affirmed
on appeal.

Given a pending damages, willfulness and injunction trial in this case, one cannot
imagine Facebook going public with this risk disclosure embedded in a prospectus.
Another theory endorsed by some pundits familiar with this case is that Facebook has
adopted a "lawfare" posture against all those from whom it has stolen intellectual
property. PhD candidate, Christi Scott Bartman, recently wrote on this subject.

Whatever the motivation for continuing to press convoluted arguments, Facebook's
legal case appears to have no legs. American inventor-ship is on trial here. Will it back
the innovation horses, or the leg-less horsemen? Time will tell.


Posted by Patent Blogger 4 at 4:05 PM

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Other posts in this series of blogs about Leader v. Facebook

  Leader's lawyers dismantle Facebook's "schizophrenic" response brief
  SUMMARY - Leader v. Facebook trial analysis--American Innovation is on the line
1. Mark Zuckerberg used Leader white paper to build Facebook
2. Jury transforms disbelief into evidence
3. No evidence? No problem. Fabricate it.
4. Facebook's trial conduct
5. Facebook's "court room theater"
6. Facebook's "I'm tired" tactic
7. Missing Facebook Documents
8. Expert witness practices "dark arts"
9. Patent Office records disprove Facebook


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