Doctrine of Laches -- Apple Comes With Unclean Hands!

Doctrine of Laches -- Apple Comes With Unclean Hands!

I’d like to revisit the issue of laches for a moment.

1. If Apple REALLY believed it had been “prejudiced by a 15-year delay” in filing a suit by Burst, then why didn’t it move for dismissal of this case long before even the Markman hearing? Why waste everyone’s time with a legal process that should be barred because of a 15-year delay in prosecuting the Burst infringement claims? -- I’d suggest that the reason is its Motion for SJ has no merit!

2. Apple’s motion is chock full of misstatements! Let’s start with the 1990 date that they use for the beginning of the laches period -- the “15 years” until the beginning of this Action in Jan. 2006. This is indisputably a false statement because Apple’s own Motion references QuickTime 1.0 being released in December 1991, and because in that first release, Apple’s QT was not infringing in any way the Burst patents! QT was simply playing back “QT movies” on the Macintosh. Apple says, “Burst believed that Apple s QuickTime product infringed its patents based on its compression and transmission functionality.” But in those early years, QT had no “transmission functionality.”

QuickTime 1.0 (1991) was Mac playback from internal HDD or CD-ROM. That was it!

QuickTime 2.0 (1994) added Windows playback and some Web browser plug-ins. Apple’s own Motion is supported by a news clipping from MacWeek (May 20, 1996) that reported Apple “demonstrated” a functioning plug-in for QT for the FIRST TIME, in April, 1996 -- a full six years after the Apple Motion’s declaration of “fact,” that “as of 1990, QuickTime performed all the same functions that Burst now accuses are infringing in the iPod ...,” and that Burst believed “QuickTime was infringing as of 1990.” Again, QT 1.0 was released in Dec. 1991! So much for professional exactitude, Powers! Power’s client -- that’s Apple, remember! -- can’t seem to help him find Apple documentation of when “Fast Start” was actually available! Was it version 2.6 of QT? Who knows? The news clipping is not primary evidence that the function appeared in an actual Apple product in 1996. We do know, however, that it was available prior to 1998, when it was a feature in the release of QuickTime 3.0.

The MacWeek news clipping said the plug-in “will require (Netscape) Navigator 3.0. When was Navigator 3.0 released? August of 1996. So taking Apple’s best case scenario, by August 1996 you could use a browser to download QT movies with ”Fast Start” functionality. From 8/96 until 6/02, when Burst filed suit against Microsoft, a period of 2 months short of the 6-year laches period had expired. (Perhaps this is why Apple uses a news clipping for 5/96, rather than an official Apple announcement of availability, or the 8/96 introduction date of Navigator 3.0, as the “release date” for Fast Start. The earliest the QT plug-in with Fast Start could be said to be “released” would be 8/96, because without Navigator 3.0, the plug-in would be useless!) But at any rate, once Burst had commenced legal proceedings against Microsoft for infringement of these same patents, the laches period had ended. As I posted a few days back:

“In addition, "... laches may be excused ... by the pendency of a suit ..."

http://www.lectlaw.com/def/l056.htm

Apple was certainly put on notice by the suit against Microsoft, that Burst intended to enforce its patents, and that Apple would likely face a similar suit should Burst prevail against Microsoft. Which it did! Apple had adequate opportunity at that point (the laches period being short of 6 years) to take the necessary action to see that the relevant evidence was protected, and to take whatever actions it felt necessary to defend itself from a future Burst suit for infringement.

So we can accurately say: On its face, the 6-year period of laches NOT having expired prior to Microsoft v Burst, Apple did NOT suffer evidentiary prejudice. Apple had clear notice from Burst that its products were infringing the patents, and the Microsoft suit should have caused Apple to take all necessary steps to preserve evidence to the best of its ability, including, if it chose, to record the "fading memories of (Apple) witnesses.” At any rate, impairment of the evidentiary value of witnesses cannot be blamed on Burst. Burst did not have the resources to sue Apple at the same time it was suing Microsoft for patent infringement, anti-competitive business practices, breach of contract, spoliation of evidence, et al. It’s unreasonable and unjust to ask a court to bar Burst from damages to its intellectual property for all the years prior to filing a specific suit against Apple. It’s inequitable for BURST -- not for Apple!

Now that was the BEST case for Apple! They just missed the 6-year period -- by their own starting date of 8/96, which they tacitly admit to. But since Apple is praying to the Court for EQUITY, and relief from “the prejudice of the delay,” let’s take a closer look at the facts here! Let’s take a closer look at the development of streaming media, as well as progressive downloading (“Fast Start” or "pseudo-streaming"), during the 1990’s.

From the Amended Burst Complaint against Microsoft:

42. (When originally established, Real Networks) applied real-time streaming technology to mainly audio files so that the user would not have to wait to download a whole song before beginning to listen to the first part of the song. Beginning in about 1997, Real Networks began to apply its streaming technologies to video, but playback was limited to postage stamp size screens, jerky motion, and frequent network disruption.

46. (From the “Findings” in the DOJ case against Microsoft.) “In 1997, senior Microsoft executives viewed Real Networks’ streaming software with the same apprehension with which they viewed Apple’s playback software — as competitive technology that could develop into part of a middleware layer ….RealNetworks was, in 1997, the leader, in terms of usage share, of streaming media. Real Networks’ streaming software presented a set of APIs that competed for developer attention with APIs exposed by the streaming technologies in Microsoft’s DirectX. … In 1997, senior Microsoft executives viewed Real Networks’ streaming software with apprehension — (In June 1997) Microsoft signed a letter of intent for the acquisition of a streaming media company called VXtreme.” (Read: Apple was not a player in streaming technologies in 1997!)

31. Though for a time, two media players dominated the market for media players compatible with Windows-based PC computers– Microsoft’s Windows Media Player and Real Networks’ RealPlayer, since the introduction of Windows Media 9 Series, Microsoft has built a substantial lead in both distribution and usage of its media player. While Apple also produces a QuickTime for Windows player, it currently has a very small share of the Windows–based PC streaming media video market. Streaming media also requires specialized server software to respond to the requests by a PC user to deliver media content files. Real Networks and Microsoft are the primary suppliers of this server software, though again Real Networks’ server sales have been declining precipitously. Apple only began to provide a server capable of streaming files over IP networks in 1999 and has obtained only a very small share of the market.

So, let’s face it! If you search around the Web long enough, you can find all the relevant dates about what these companies were doing. Apple was behind in streaming technology, and working hard to catch up (beginning with the Second Coming of Steve Jobs in 1997). I found this story, in February of 1999, that shows that Apple’s QuickTime was STILL not capable of real-time streaming as late as Feb. 1999:

NOV(2007)