# Appendix — Milgo Electronic Corp. v. Codex Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1376%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1984 - **Citation:** 466 U.S. 931 ## Text Office - Supreme Court. S 8: FILED “I- WSO, FEB 6 1984 No. - ALEXANDER L. STEV4S meeCTERK In the Supreme Court of the United States Octoser Term. 1983 MILGO ELECTRONIC CORPORATION, ET AL.. PETITIONERS. c. CODEX CORPORATION, ET AL.. RESPONDENTS. APPENDIX TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT Marcus E. Conn. P.C. Corne ius J. MoyniHan, Jr.. P.C.* Peasopy & Brown One Boston Place Boston. Massachusetts 02108 (617) 723-8700 Attorneys for the Petitioners * Attorney of Record Blanchard Pres. Inc.. Boston. Maw — Law Printers Appendix I TABLE OF CONTENTS e®eeeveseeseoeoveseseeeoeeeeoeeeeseegeatceeneunsbe (THIS PAGE INTENTIONALLY LEFT BLANK) ——_— DIGITAL (-1 — 1-2 DIGITAL | oreirat NARROY | einen = UNCONDITIONED =e NARROW DATA -—= }— el BAND PASS 53] Te erneee [Ce span Pass IN pa FILTER oe 6-4 LINE CHANNELS FILTER J 2 y? 6-a T-a 3” 2400 Hr DATA TO PULSE 20 ! CLOK 22 ENCODER J ss -y SERIAL BINARY 0 | DA 0 2 ’ \ 200 ps | 250 ps \ ory 3 | 4 PULSES "5 |}— = RING COUNTER 433 § 7 24-1 7h ¥- " nye 30-1 9] 30-2 | 26-3 ri 13-21 KC a 8 P. PHASE F180? _, 28-5 pad FILTER ee (ree a . 279° 2-7 a 3 3 j ct a 33 IDE WODULATOR LINE Vv XIGNAddv o96T “PT AINE PsTTs RALSI$ MOLLVSINAMMOD VLIVG ZNI1 GNOHZATIL GILIAIT ONVE T Jeeus-syeeus £4 O61, ‘II “4°y ONVHM ‘A ONVS €Z0'pzS'E LON NQIUXZ S.ysUIeId Aug. 11, 1970 . SANG Y. WHANG 3,524,023 _ BAND LIMITED TELEPHONE LINE DATA COMMUNICATION SYSTEM Filed July 14, 1966 7 Sheete-Sheet 3 FIG.2 | f FIG4 FIGS ov FIG6 - Aug. 11, 1970 SANG Y. WHANG 3,524,023 BAND LIMITED TELEPHONE LIWE DATA COMMUNICATION SYSTEM Filed July 14, 2966 | 7 Shests-Shest 3 FIGS ev _ ao et eee -- 4 “4 a % $2 53 1250 ps PROOUCT BP FUER pe et) > Loman is puase DETECTOR noe 96 KM, Law ano }Oata OSCILLATOR 2400 BITS foee. DATA He 42 ace “ 49 | | COMVERTER BP FureR > peonee BPFETER —asS. B 3 800 My f Ewre.ore 1 OP FLTER DETECTOR =e Hy CLOCK OSCILLATOR | 2400 Hy CLOCK 2900 Ms CLOCK, OC “fuwtiien 9 80US-e90qs 1 rv eeet ‘pt 4106 petts OL3E ‘IL “Sny ONYHM ‘A ONYS MELSAS MOLLYDINNRNOD YiV2 2NIT ENOEZTTAL GESINI1 a1vE €z0"ves‘t BARD UIMITED TELEPHONE UIKE DATA COMMUMICATION SYSTEM Filed July 14, 1966 7 Sheete-Sheet & PHASE SHIFT NETWORKS FIG iZ Se? Sey ar fafa fe Le “Le Nl mn AT y | : | Pe *h Ate — |e AND WOLD GATES | + a ae = 001 + + »~ - 000 + + + _ 100 + + + + 10! | aT - + + + tis oul = = + + 110 = = = + 010 = - = — O11 WULTIPLIER SIGNS ry ae > Vv _— GATA CORVERTER 2400 WH, CLOCE — - cv BANI LIVITED TELEPBOME LINZ DATA COMMUNICATION SYSTEM Filed July 14, 1966 T Syeete-Sheet 6 LILI tt (ora — mle Bane i ov S21v9 ONY suUNaNe . indi 338A *. BAND LINIT?T > TELSPRVURE BARE DATA CUREUPIUATIUS O13tEe 7 Sheets-Sheet 7 Filed July 14, 1966 SHIFT REE:STERS (RING COUNTER) DATA po gt 08-7 0b: AXD CATES. | ' { = i Fou FIG. @ t a. we te ne 8 106 Si a | v4 . “ ems cond : ae, -§ gx sane - . tee Gee Pe Fas ee ss oe. he, ee 1966. Welunin toes athe tani ite tendans employed by the defendant Milgo; he had little specific ex- perimental models in process, but did not bring out its first commercially successful product until after the issuance of the Whang 023. Whang was assigned by Milgo to devise a modem to satisfy the requirements of Western Union, which was seeking a 2400 bps modem for use on lines with characteristics similar to the commercial dial telephone system. Western Union specified that the modem should operate within a 1000Hz band width, at the “sweet spot.” Seen: Ser 2 connie aie ciao with the following salient characteristics: 1. An eight-phase signal. 2. A baud interval of .001250 seconds (T). 3. A composite filter having a passband width of 800Hz, i.e., } Hz and a roll-off characteristic of 100% or less, i.e., a composite filter which complied with the Nyquist criterion. 4. A carrier frequency of approximately 1700Hz so that the passband was located within the 1000Hz “sweet spot” of the BEX system and commercial telephone dial systems. 5. A fixed compromise equalizer 6. A device for center sampling of the equalized signal. D-14 7. A timing device which derived a pulse from the envelope of the data signal, translated this pulse to a very high frequency signal to time the receiver to achieve sampling as nearly as possible at the center of beach baud. While the experimental modem first exhibited to Western Union may have had a composite filter roll-off of less than 50%, the 175 modems actually sold to Western Union had composite filter roll-off substantially in excess of 50%. They worked very well. Whang’s solution of Western Union's problem was a radical departure from the approach of other contemporary modem designers, and successfully utilized a method of data transmis- sion generally regarded as unfeasible. The accepted philosophy among modem engineers skilled in the art called for development of suitable automatic equalizers so that transmission could be accomplished without distortion over a wide spectrum of frequencies. Speed could be achieved over the wider band widths without encountering the narrow tolerances of eight-phase transmission. In July, 1966, Whang filed an application for what became the '023 patent, listing the defendant Milgo as his assignee. After many amendments, including the addition of center sampling to the claims, and after considerable discussion with the examiner, the patent was issued August 11, 1970. I find the following to be significant prior art which was not considered by the patent examiner: Bennett & Davey, Data Transmission McGraw-Hill, N. Y¥., N, ¥. (1962) Chapters 5, 8, 10, 11 Widl, W, “An Experimental data Transmission, System”, Ericsson Review, Vol. 39, No. 3, 1962, pp. 62-71 Evans, G.L., Enriquez, E. and Wilson, Q. C. “A High Speed, Serial, Four-Phase Data Modem for Regular Telephone Circuits”, Convention Record Global Com- munications, May, 1961, pp. 100-104 D-12 4 ge Fy Ss” F, = Frequency of carrier Amp! itude Frequency In the common case a and c would also normally be approx- imately equal, but the curve may be slightly asymmetrical in this respect, as evidenced by spectrographs produced in court. There are a number of filters which will meet this criterion, but which have slopes of different sharpness. They are des- cribed as having different percentages of “roll-off” or wide or narrow “skirts”. The skirts refer to the frequency ranges out- side the passband at which some significant energy is trans- mitted, and I have labeled them S’ and S” in the above diagram. A symmetrical filter is said to have 100% roll-off when S’ plus S” equals the passband; 50% roll-off when S’ plus S” equals 50% of the passband, and so on. For an asymmetrical filter, the roll-off of each skirt is calculated by comparing S’ and S” to one-half the passband. Roll-off in excess of 100% would not satisfy the geometry of the Nyquist criterion described above. The narrower the skirts, 7.¢., the lower the percentage roll-off, the more efficient the filter is at at- tenuating the energy outside the passband. Sharp roll-off also increases the delay distortion within the passband, as well as increasing the difficulty in recovering ae ED CRESS, AD Spee eQen ey outside the passband. gis D-15 I further find that the applicant misrepresented the work of Irland as using full modulation interval decoding rather than center sampling. The assumed novelty of combining center sampling with the other elements of present claim 25 was ap- parently a significant factor in securing the allowance of present claims 1, 19 and 25 of the '023 patent. It is upon these indepedent claims that defendants principally rely in their counterclaim for infringement. After the issuance of the patent, Milgo affixed labels assert- ing the protection of the Whang '023 patent on its modems with the following model numbers: WU 2247 (the original Western Union Model) 4400/24 PB 2200/20 2200/24 3300/36 20 LSI 24 LSI 201 LSI 201C LSI 96 MM 26 LSI The label was removed from the 2200/20 and 2200/24 on January 28, 1976. On April 11, 1977, Milgo removed the labels from all models except the WU 2247 (which was by that time obsolete), the 4400/24 PB, (which was related to the WU 2247, but which had somewhat narrower skirts) and the 96 MM. Both the labeling and the unlabeling were done at the direc- tion of Attorney Stanley Jones, Milgo’s patent attorney, who prosecuted the '023 application in the patent office and who has represented Milgo in all subsequent litigation concerning that patent, including the present case. Of the Milgo models listed above, only model 96 MM has “narrow skirts”, i.e., a combined filter rolloff of 50% or less. Mr. Whang presently asserts that his patent covers Miigo - ne a ee D-16 4400/24 PB, 4400/48, 4600/48, 48 MM and 96 MM, and also asserts infringement by various models of other manufacturers (Chart FF). Mr. Whang testified that all of these were designed with narrow skirted filters. I find that all of these modems do have a combined filter characteristic of less than 50% cosine roll-off except the 4400/24 PB. I find that most of the 4400/24 PB produced and sold had a cosine roll-off of greater than 50%, in fact on some modems close to 100%. A few individual modems in the 4400/24 PB series may have had a cosine roll-off close to 50% , but this appears to have been a haphazard consequence of the vagaries of filters. Prior Litigation: Milgo Electronic Corporation o. United Business Communications, Inc., 189 USPQ 160 (D. Kansas 1976); aff'd per curiam, 623 F.2d 645 (10th Cir. 1980). On July 19, 1971, Milgo brought suit against United Business Communications, Inc. (“UBC”) for infringement of Whang testified and the court Sound that the patent obvered Milgo Models 4600, 4400/24," 4400/48, 24 LSI and 20 L9§ He ’ also testified that the composite filter of all of those modems 4400/48. Thi Mdnent ectehens fer ORC amen adetnadl tr Goad any of the modems, so that Whang’s assertion went un- The district court found that the "023 patent was valid as a novel and non-obvious combination of old elements of the art. Findings 32 and 33 are as follows: ™ This series included the Western Union WU 2247 and the 4400/24 PB. _ a le + ie Sele ee D-17 32. Prior to the Whang ‘023 invention, the modem in- dustry believed that the modem that performs the best with greatest noise tolerance margin over a good line or without a line (back-to-back) would also perform the best over a poor line. For that reason, most prior art modems employed wide band energy spectrum and two or four level modulation. [Citations omitted). 33. The Whang ‘023 invention made a breakthreugh because Whang approached the problem with a com- pletely opposite philosophy. His approach was based on the theory that a modem that would perform the best and adequately over a lousy line would perform adequately over any line (Whang ‘023, Col. 2, lines 38-43). Whang’s invention combined both eight level modulation and ex- treme band limiting into one modem. The Whang ap- proach represented a new and novel conceptual theory that went against the state of the then existing modem art. [Citations omitted]. 189 USPQ at 173. The court also concluded that a composite filter characteristic of less than 50% cosine roll-off was included in the claims. The district judge ruled that an inventor may be his own lexicographer, and that Mr. Whang had written his own specifications without benefit of some of the existing text- books. Finding 61 states in part: 61. ... The Whang invention teaches and claims his composite filter means which, when expressed mathe- matically in terms of roll-off of DX J-1, requires a roll-off of from about 50% roll-off down to the ideal or zero per- cent rolloff of the 1/T Nyquist limit. [Citation omitted]. The features of a narrowband composite “filter means” of the Whang ‘023 patent represent a significant and non- obvious improvement over the widebandwidth filters recommended for phase modulated systems in DX J-1. D-18 The Court of Appeals for the Tenth Circuit affirmed the judgment of the district court. In an extended per curiam opinion, the court picked up on the divergent philosophy of contemporary modem designers compared to that embodied in the 023 patent, the failure of Whang’s predecessors to find a practical solution to high-speed transmission of data over or- dinary long-distance switch voice-grade lines and the commer- cial success of Milgo modems. (The evidence of commercial success in the district court, however, included evidence of the sale of modems now said not to be covered by the patent because of their wide-skirted filters.) The Court of Appeals made no mention of roll-off characteristics of filters in its opinion, but presumably in affirming the judgment it affirmed the district court's findings relative to filters. Defendants’ Position at Trial The defendants’ principal witness on the "023 patent was Sang Whang, the inventor. On cross-examination Mr. Whang conceded several times that differential phase modulation, limiting the passband to ; Hz and center sampling were old, not only separately but in combination.’ He says further his patent is a modem patent, not a filter patent, and does not teach anything about designing filters. He says the novelty of his invention is the combination of these elements with severe band limiting. By severe band limiting he means a passband of | Hz and confinement of subsantially all the passed energy within the “sweet spot”. The energy level at the “sweet spot” edges should be no more than “a couple of percent”. Ac- cording to Mr. Whang, a person skilled in the art would recognize that a combined filter roll-off of % or less would be required. In drawing the in the ‘023 patent he claims to have used the phrase“ } Hz passband” in a special sense to include the confinement of substantially all of the energy within the “sweet spot”. * Whang also conceded that derivation of clock from the signal envelope existed in the prior art. D-19 In support of his present reading of the patent he points out that the preferred embodiment calls for a signal time of .00125 second, a passband width of 800Hz,i.e., { Hz, and a carrier frequency of 1700Hz, located in the middle of the “sweet spot” between 1200Hz and 2200Hz. According to Whang, specifica- tions made it clear that substantially all of the energy outside of the “sweet spot” should be attenuated. If it were true that the patent claims called for a composite filter with the above characteristics, and energy at the “sweet spot” limits was down around 2% , I find that a person skilled in the art would infer the necessity of constructing a composite filter with a cosine roll-off of about 50% or less. Facts Which Impeach Whang’s Testimony 1. In the art of filter design, at least as applied to data transmission, “passband” has a generally accepted meaning. It is used to denote the range of frequencies which a filter passes at amplitude levels down to about -3db. Whang was a filter specialist before he undertook the invention of modems. He is, moreover, a highly educated man, with considerable facility in technical language (despite his present disclaimers). He wrote a master's thesis on filters. I find it highly unlikely that he used the term “passband” in his patent in anything other than the ordinary sense. Furthermore, the use of “passband” in the generally accepted sense is consistent with the rest of the language in the patent, and Mr. Whang’s new special meaning is not. I further find that a person skilled in the art would read the word “passband” as used in the ‘023 patent as meaning the range of frequencies passed by the composite filter of the modem at amplitude levels down to about -3db. 2. Alternate embodiments of Whang’s invention as des- cribed in col. 14, 1. 68-72 of the ‘023 patent would permit the edges of the passband to coincide with the edges of the “sweet spot”. Since a perfect zero roll-off filter is impossible, the necessary implication is that there will be substantial amounts D-20 of energy transmitted outside the “sweet spot”. Accordingly, it is not even a permissible inference from the language of the patent that all of the energy except “a couple percent” would be within the “sweet spot”. Whang’s conclusion that a teaching of “narrow’ skirts” is to be implied from the centering of the passband in one of his suggested embodiments is com- pletely undermined by the lines cited. 3. Figure 3 of the '023 patent is described as depicting “a typical desired response of signal in FIG. 2 when subjected to proper band limiting filter.” (Col. 2, 1. 69-70). In a subse- quent patent authored by Mr. Whang (Scott-Whang 3,988,540), the '023 patent is referred to as prior art. Figure 3 is reproduced as Figure 1A and described as “an illustration of waveforms from the aforementioned prior art patent” (540, col. 2, 1. 67-9). At the trial, under repeated questioning by the court, Mr. Whang unequivocally stated that he intended this figure to represent the signal actually transmitted by the modem described in the "023 patent. This figure depicts the signal transmitted through a composite filter having a roll-off of 100% , i.e., skirts of the maximum width consistent with the Nyquist criteria described above. 4. Milgo’s prototype modem, the 4400/24 (or WU 2247), the development of which led to Whang’s purported invention, had wide skirts. Subsequent Milgo modems with wide skirts were labeled with the ‘023 patent number on them. Mr. Whang was Milgo’s principal modem designer, and these modems constituted his claim to fame in modem design. He was a specialist in filter design as well. I find his present testimony that he was unaware of the filter characteristics of the WU 2247 and other Milgo modems carrying the 023 label not to be credible. I find that the concept of narrow skirts as the novel teaching of the ‘023 patent to have been devised by Mr. Jones and Mr. Whang after the fact, for purposes of establishing the validity of the ‘023 patent in the Kansas litiga- tion. D-21 Ultimate Finding of Fact Concerning Filter Roll-Off Characteristics of the Whang ‘023 I conclude that the Whang 023 patent, neither expressly or by implication, on neither the claims nor the specifications, describes a composite filter roll-off characteristic of less than 50% as an element of the invention. On the contrary, I find that, as Whang himself testified at one point, Whang left it to the design engineer to determine the roll-off characteristics of the composite filter anywhere within the limits of the Nyquist criterion, i.e., from zero to 100 percent, depending upon the requirements of the particular application. Characteristics of the Allegedly Infringing Codex Modems Most of the present line of Codex modems have composite filter roll-off of less than 50% . They have in fact very “narrow skirts” of the order of 25% roll-off. They employ the Nyquist band width of + Hz. Defendants urge that they also employ center sampling, an element of all of the independent claims of the Whang ‘023 patent upon which the defendants rely in this action, namely claims 1, 19 and 25. Plaintiffs claim that their use of a digital automatic adaptive equalizer permits a dif- ferent system. Center sampling takes advantage of the Nyquist bandwidth resulting from the composite filter of the modem. Use of this bandwidth ( | Hz) produces a null in the intersymbol in- terference at the center of succeeding bauds. The pattern of these various signals which shows on an oscilloscope vaguely resembles a human eye, viz., D-22 and the process is referred to as sampling at the “eye”. The delay distortion of the commercial switched dial telephone lines, however, will obliterate the “eye”, because the null points of various elements of intersymbol interference will be out of synchronization. In the 023 patent, Whang specifies the use of a fixed compromise equalizer to reduce the effect of this distortion and to permit reasonably accurate sampling at the center of each baud. The utilization of the fixed equalizer is also described in some of the dependent claims of the patent (e.g., claims 6-10). The essence of the center sampling process is sampling every time at the center of each baud. The sampling system employed by Codex reads the signals before they are equalized. The sample is taken at a point perceived by the decoding device as the point that maximizes band edge signal energ’’. In a perfect line this would indeed be in the center of the baud, but in a real line it may be in the center or substantially off-center on either side. For purposes of the Codex system it does not matter. The distortion is later resolved in the automatic adaptive equalizer.‘ There is a resemblance to center sampling, in that the sam- ple is taken at intervals of T, but I would suppose that to be a likely characteristic of any sampling technique. It is also true that the Codex decoding system, i.e., sampling at the point that maximizes band edge signal followed by adaptive equalization and integration, achieves the same result as center sampling. Indeed, the Codex and Milgo modems are compatible. I find, however, that the means employed by Codex are basically and conceptually different from center sampling in the sense employed in the ‘023 patent, and indeed are an- tithetical to the entire concept and purpose expressed by Whang in the ‘023 patent. * The automatic adaptive equalizer is rather complex. The signals are stored and integrated, that is, averaged out, and released in an integrated form which makes sense to a decoding device. D-23 I conclude that the plaintiff Codex does not employ center sampling in its modems, and accordingly does not infringe the independent claims 1, 19 and 25 of the Whang '023 patent. FINDINGS OF FACT—VILIPS "194 One of the characteristics of long-distance commercial telephone lines which affects data transmission is the presence on the line of echo suppressors. These are devices which permit signals to be transmitted in only one direction at a time, the preference being given to the stronger signal. Without them an ordinary telephone user will receive echoes of his own voice. The problem with them is that they require about 100 milli- seconds to reverse direction. Data is transmitted in small blocks. The receiving unit acknowledges receipt and signals any errors. If there is an error in transmission, the block of data is repeated; if not, a new block is transmitted. This cycle is repeated at a very rapid rate. The additional turnaround time of the modems resulting from the time required to reverse the echo suppressors cumulates over a succession of transmis- sion cycles until it represents a substantial loss of valuabl= time in the transmission of data. The purpose of the device described in the Vilips, "194 patent is to deactivate the echo suppressors. A special tone is transmitted over the line which disables the ehco suppressors. Echo suppressors remain disabled if there is energy constantly on the line, even though the special tone has ceased. There may be gaps in transmission which would permit the echo sup- pressors to start up again, however, requiring a repetition of the initial disabling procedure. This is prevented by a second tone generated on the line as soon as the disabling tone stops, which remains on during the entire transmission. This tone has a frequency within the band width of the telephone system which does not overlap the frequencies of the data transmit- ting signal. This tone has no purpose other than to disable the echo suppressors in order to facilitate fast turnaround of the data transmitting signals. ol he D-24 The issue is whether this device is sufficiently novel and non-obvious as to constitute an invention. I find that it was well known in the prior art that echo sup- pressors, once disabled, would remain disabled as long as there was energy on the line, and that this could be accomplished by a signal on a second frequency channel. In the prior art as it related to modems, this was accomplished by a reverse chan- nel, which transmitted in the direction opposite to that of the main data signal and at a different frequency. This reverse - channel was also used for data transmission for different pur- poses in different applications, but it was recognized that it could be used solely for the purpose of disabling the echo sup- pressors in order to reduce the turnaround time.* The device described in the Vilips '194 patent eliminates the data carrying aspect of the secondary channel and causes the continuing tone to be activated by the modem rather than the business machine to which the modem is attached. In the prior art, the reverse channel was activated automatically, even though there was no data to transmit, but the device for doing so was located in the business machine. The Vilips device is smaller.and cheaper because the data transmitting and receiving components are eliminated. I find that the device described in the Vilips ‘194 patent represents (1) the exploitation of one well-recognized aspect of a device utilized in the prior art to the exclusion of other aspects, and (2) a business judgment that the market would forego additional data transmittal capacity in the secondary channel in return for a more compact and less expensive modem. In my view, changing the activating device from the business machine to the modem was an improvement, but an improvement of the order of a mechanic’s expedient rather than an invention. ~ ® “Disablement of Echo Suppressors”, CC ITT Supplement No. 85, Ex- tract from AT&T Contribution Com. Sp. A/No. 75, July, 1963, pp. 674-688; Bell System Technical Reference, “Data Sets 402C and 402D Interface Specification”, November, 1964. This prior art was not disclosed to the Pa- tent Office. D-25 RULINGS OF LAW 1. The claims of a patent, in order to be valid, must be novel and non-obvious over the prior art. 35 U.S.C. §§ 102, 103. 2. The protection of a patent does not extend beyond its claims. United States v. Adams, 383 U.S. 39, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966). 3. Terms used in a patent shall be given their ordinary meaning among persons skilled in the art, unless it is plain from the context that a special meaning has been assigned to them by the inventor. Eastern Electric, Inc. v. Seeburg Corp., 310 F.Supp. 1126 (S.D.N.Y.1969), aff'd 427 F.2d 23 (1970). 4. The exploitation of one generally known aspect of a device utilized in the prior art and the elimination of other aspects of the device does not constitute an invention, and the purported patent of such a device is invalid. Shu-Conditioner, Inc., v. Bixby Box Toe Company, 294 F.2d 819 (ist Cir. 1961). 5. A patent is presumed to be valid, but that presumption is negated to the extent that relevant prior art was not presented to or discovered by the patent examiner. 6. The presumption of validity of a patent is also negated to the extent that the prior art was misrepresented to the patent examiner and this misrepresentation affected the examiner's decision. 7. Comity should be extended to the prior decision by another court concerning the validity of a patent, even though the prior litigation did not involve a party to the present case. While the decision of the other court is not binding on parties who did not participate in the prior case, it is to be considered strongly persuasive in the absence of convincing new evidence or clear conviction that the prior decision is incorrect as a mat- ter of law. Spray-Bilt, Inc. v. Ingersoll-Rand World Trade, Ltd., 350 F.2d 99 (Sth Cir. 1965); New York Scaffolding Co. v. Liebel-Binney Construction Co., 243 F. 577 (3d Cir. 1917), aff'd 254 U.S. 24, 41 S.Ct. 18, 65 L.Ed. 112 (1920). D-26 8. The decision of another court concerning the validity of a patent may be considered less persuasive if it was based on material misrepresentations of fact by the prevailing party. 9. A device is equivalent to a patented device, and thus infr- inges, if it produces a similar result by similar means. CONCLUSIONS Applying the foregoing rulings of law to the findings of fact, I come to the following conclusions: 1. The presumption of validity of the Whang '023 patent has been rebutted by evidence of relevant prior art not before the examiner and by evidence of a misrepresentation of part of the cited prior art by the applicants. 2. The persuasive effect of the findings of the District Court of Kansas is adversely affected both by a misapplication of law and a misrepresentation of facts. The court's conclusion that the 023 patent claims included a narrow-skirted filterappears to be based on mistaken application of the rule that an inven- tor can be his own lexicographer. The rule only applies with respect to terms with an accepted meaning if the inventor clearly signals that he intends to apply an idiosyncratic defini- tion.* Furthermore, the court based its conclusions concerning narrow skirts on a misrepresentation of fact, namely, that the first commercial embodiment of the invention in fact had a narroW-skirted filter. The Kansas court was also impressed with the fact that Whang had achieved a practical breakthrough in the 4400/24 and WU 2247 modems. In my view, Whang did indeed make a practical breakthrough, but it was not the result, as the Kan- sas court thought, of the narrow-skirted filter. As previously stated, the practical breakthrough was accomplished by the WU 2247 which concededly did not have a composite filter * Ellipse Corporation vo. Ford Motor Company, 452 F.2d 163 , 167 (7th Uir., 1971); Chemical Construction Corp. o. Jones & Laughlin Steel Corp., 311 F.2d 367, 371 (3rd Cir., 1962); Rubbermaid Incorporated vo. Contico In- ternational, inc., 381 F.Supp. 666, 671 (E.D.Mo., 1974). D-27 with less than 50% roll-off. In my view, the breakthrough was the result of Whang’s discovery that within a narrow band width all pairs of telephone lines would have such similar distortion characteristics that they could be reliably equalized with a fixed equalizer. This in fact is stated in the introduction to the '023 as the principal advantage of his invention. Col. 2, 11, 27-49. Neither in Kansas nor in the present case, however, has Milgo sued on any of the claims of the patent which incor- porate « fixed equalizer, and in this case, at least, has specifically and forcefully argued that the use of the fixed equalizer is not to be read into claims 1, 19 and 25 from the embodiment in the specifications. 3. Claims 1, 19 and 25 of the Whang '023 patent are invalid. Mr. Whang has admitted that differential phase modulation, the use of the Nyquist band width, center sampling and the derivation of clock from signal envelope were all old, both singly and in combination. The evidence corroborates his ad- mission. The asserted novelty, a composite filter roll-off of less than 50% , is nowhere stated in any of the claims or specifica- tions of the patent, either expressly or by implication. Since there is no novelty, there is no invention. - 4. Even if the "023 patent were valid, the Codex modems do not infringe because they do not employ one of the critical elements of claims 1, 19 and 25, namely center sampling. 5. The Vilips "194 patent is invalid for lack of invention; i.e., it is merely a mechanic's adaptation of prior art that is both old and obvious. In accordance with the stipulation of the parties, I conclude that if the "194 patent were valid, the Codex modems would infringe it. ATTORNEYS’ FEES Plaintiffs seek their attorneys’ fees on the ground that this is a special case because defendants have deliberately fabricated the narrow skirt theory and have attempted to assert the Ragsdale '503 patent which the inventor himself admitted had D-28 no novelty in the claims asserted in this trial. I regretfully come to the conclusion that the plaintiffs are correct. The evidence is very strong that Whang knew that the WU 2247 modem had wide skirts, and quite persuasive that he also knew that a number of Milgo modems labeled as covered by the '023 patent did also. Mr. Whang’s present posture of ig- norance of the meaning of terms in his own field of specialty is not at all persuasive. Both Mr. Whang and Attorney Jones are highly trained and sophisticated people. I cannot escape the conclusion that both of these men have deliberately misrepresented the narrow skirt issue to both the District Court of Kansas and to this court. One of the unavoidable hazards of patent litigation is the fact that district judges are likely to have no background in the technology involved. This places a heavy burden on patent lawyers and their expert witness to do their best to mitigate the situation rather than ex- ploit it. Defendants’ post-trial brief strikes me as doing just the reverse; in fact, it verges perilously close to double-talk. Accordingly, I rule that this is a special case and the plain- tiffs are entitled to reasonable attorneys’ fees. ORDER FOR JUDGMENT A judgment shall enter declaring that claims 1, 19 and 25 of the Whang ‘023 patent are invalid in accordance with the foregoing; declaring that plaintiffs’ modems do not infringe said claims; declaring that claims 1 and 5 of the Ragsdale '503 are invalid for lack of novelty in accordance with the motion for summary judgment allowed during trial; declaring the Vilips '194 patent invalid for lack of invention; and declaring that if the Vilips "194 patent were valid, the Codex modems would infringe it. The defendants’ counterclaim shall be dismissed on the merits, and plaintiffs awarded their at- torneys’ fees after further hearing. : « = ; * * a : Te at bG E-1 Unrrep States Distrcr Courr D. MASSACHUSETTS Civ. A. No. 76-793-S. CODEX CORPORATION and Yellow Freight System, Inc., Plaintiffs, v. MILGO ELECTRONIC CORPORATION and International Communications Corporation, Defendants. June 16, 1982. Paul F. Ware, Jr., Goodwin, Procter & Hoar, Boston, Mass., for plaintiffs. Marcus E. Cohn, and Cornelius J. Moynihan, Jr., Peabody & Brown, Boston, Mass., Harold L. Jackson, and Stanley R. Jones, Jackson, Jones & Price, Tustin, Cal., for defendants. MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR ATTORNEYS FEES Sxinnen, District Judge. In my Amended Findings, Rulings and Order of March 3, 1982 (“March Order”), I held that plaintiffs were entitled to recover their reasonable attorneys’ fees under 35 U.S.C. § 285. Plaintiffs have now submitted time records covering the six years of this suit (from 1976 to 1982), defendants have employed a computer program to organize those records into a usable form, and three days of hearings have been held on the reasonableness of plaintiff's request for $1,014,662. 96 in fees and disbursements. For the reasons which I follow, I find that plaintiffs are entitled to recover $678,832.50 in attorneys’ fees and disbursements. {1} Section 285 provides that in “exceptional cases” a court “may award reasonable attorneys fees to the prevailing party” in a patent case. 35 U.S.C. § 285. “Exceptional” circumstances in- —3 j tu PY. ; “ae 4 tte Cran a E-2 clude “conduct that is fraudulent, malicious, in bad faith, (cita- tion omitted], and unfair, inequitable, [or] unconscionable”. Campbell v. Spectrum Automation Co., 601 F.2d 246, 251 (6th Cir. 1979). The major purpose of awarding attorneys’ fees in such cases is to “compensate the prevailing party for costs that it would not have incurred but for the conduct of the losing party”. Id., Arbrook, Inc. v. American Hospital Supply Corp., 202 U.S.P.Q. 685, 688 (N.D. Tex. 1979). While § 285 clearly authorizes the award of “reasonable attor- ney fees”, determining what items are properly included in that award has been a subject of some debate. At the heart of the at- torneys’ fees award is time spent on the validity of the patent claims and some courts have held that that time is all that is recoverable under § 285. See, Chromalloy American Corp. v. Alloy Surfaces., Inc., 353 F.Supp. 429, 432-33 (D. Del. 1973). {2} 1 think that is too restrictive an approach. The compen- satory purpose of § 285 is best served if the prevailing party is allowed to recover his reasonable expenses in prosecuting the en- tire action. These expenses include lawyers’ fees for time spent on the issue of attorneys’ fees itself, see, Arbrook, 202 U.S.P.Q. at 688, and disbursements necessary to the case. See, id., at 690, Molinaro v. Burnbaum, 201 U.S.P.W. 150, 156 (D. Mass. 1978), - but see, CTS Corp. v. Electro Materials Corp. of America, 476 F.Supp. 144, 145 (S.D.N.Y. 1979). Thecompensatory purpose of § 285, as well as the more general policy supporting assignment of nonlegal work to nonlegal personnel, see, Furtado v. Bishop, 635 F.2d 915, 920 (1st Cir. 1980), are also best served by allowing recovery of time spent by paralegal personnel, including summer law clerks.' See. Clairol, Inc. v. Save-Way Industries, Inc., 211 U.S.P.Q. 223, 225-226 (S.D. Fla. 1980), but see, CTS Corp., 476 F.Supp. at 145. Inclusion of these items in an award under § 285, however, does not relieve a court of its responsibility to ensure that the fees and disbursements charged were reasonable. ' I do not think, however, that plaintiffs are entitled to recover for secretarial services billed separately by their attorneys. See, Ciairol, inc., 211 U.S.P.Q. at 225. Such costs are normally included as overhead in attorneys’ hourly rate. E-3 Due Process. [3] Turning to the merits, defendants challenge my holding that plaintiffs are entitled to recover their attorneys’ fees on the grounds that they were denied due process by my failure to con- duct a separate evidentiary hearing on the “exceptional” nature of this case. The same issue was presented in Campbell v. Spectrum Automation Co. , 601 F.2d 246 (6th Cir. 1979). In that case, the District Court found that plaintiff had acted in bad faith based upon the evidence presented at trial. Campbell, 601 F.2d at 251. It then concluded that plaintiffs’ conduct was sufficient to qualify the case as an “exceptional” one and awarded attorneys’ fees under § 285. Jd. at 250. Plaintiff's request for a separate evidentiary hearing on the reasonableness of his conduct was denied. Id. The Court of Appeals confirmed. It held that where the factual issues supported a finding of “exceptional” cir- cumstances are brought out at trial, the court is authorized to decide a motion under § 285 based solely upon the trial record. Id. at 252. I reach a similar result in this case. In my March Order, I held that this case was an exceptional case entitling plaintiffs to attor- neys’ fees. That holding was based upon my findings that defen- dants “deliberately fabricated the narrow skirt theory and have attempted to assert the Ragsdale '503 patent which the inventor himself admitted had no novelty”. March Order at 33. These findings were based upon the extensive evidence produced at trial. Defendants knew that the issues of misrepresentation and obviousness were going to be raised at trial and had an oppor- tunity to rebut plaintiffs’ evidence at that time. Their failure to do so does not warrant an additional hearing. Attorneys’ Fees. [4] The amount of attorneys’ fees to be awarded is deter- mined by using the “lodestar” approach. Furtado v. Bishop, 635 F.2d at 920. While the “lodestar” formula was developed in civil E-4 rights cases, it is applicable to “all cases” in which attorneys’ fees are awarded. /d. It imposes a two-part analysis upon the court. First, the “lodestar” is calculated by multiplying a reasonable hourly rate by the number of hours spent, excluding time “beyond that consistent with a standard of reasonable efficiency and productivity”. Id. Second, the lodestar is adjusted up or down to take account of factors not included in its initial calcula- tion. Id. The lodestar approach, however, is not designed to enmesh the court “in a meticulous analysis of every detailed facet of the professional representation”. Copeland v. Marshall, 641 F.2d 880, 903. (D.C. Cir. 1980). Duplication and unnecessary expenditures of time can be compensated for by percentage reductions of the lodestar. Jd. Rates. The appropriate hourly rates to be used in calculating the lodestar are “those prevailing in the community for similar work”, taking into account the attorneys’ skill and experience. Id. at 892. “If it appears that the hourly rate charged is within a range normally charged for [a] patent infringement suit by at- torneys of comparable experience and expertise the Court will look no further”. Chromalloy, 353 F.Supp. at 431. As a basis fur determining the prevailing rates, plaintiffs have submitted two studies by the standing committee on Economics of the American Patent Law Association, Inc. (“APLA”). Each study contains a summary of the results of a survey of rates charged by members of the APLA. The data is presented both on a nationwide basis and for individual cities, including Boston. The results of the 1980 survey (discussed in the 1981 report) indicate that the hourly rates charged by plaintiffs’ attorneys at Fish and Richardson are, with a few exceptions, at or below the 50th percentile for partners and associates on both a national and a Boston based scale. See, Appendix A. The three individuals who charged rates at the 75th percentile or higher are a partner with 30 years’ experience and two associates (one with 3 and one rhe s . E-5 with 5 years’ experience) who were heavily involved in the case. I find that the higher rate was warranted for all three of those in- dividuals because of their experience and ability. Plaintiffs also employed the firm of Goodwin, Procter and Hoar to assist with the trial in this case. The partner most in- volved in the case was Paul F. Ware, Jr. He charged an average hourly rate of $91, an eminently reasonable rate for a litigator of his skill and experience.* Three other partners at Goodwin, Pro- cter and Hoar were also consulted on a limited basis, at rates ranging from $100 per hour to $120 per hour, along with one associate who billed at $48 per hour. The three partners were in- dividuals of high skill and long experience and the rate charged for the associate was well within that charged by other Boston firms. As a result, I find that their rates were reasonable as well. [5] In most cases in which attorneys’ fees are awarded, each attorney will be found to have two or more reasonable hourly rates depending upon the type of work done: a higher rate will be used to compensate for time spent in-court than for time spent out-of-court or doing administrative tasks. See, Pilkington v. Bevilacqua, 632 F.2d 922, 924 (ist Cir. 1980). I do not think that such a multi-tiered approach is necessary in this case, however. Because of the large number of attorneys involved, over 25, and the fact that the hourly rates charged by those attorneys were comparatively low, the difficulties that I would encounter in assigning different rates to all the different tasks performed by those attorneys is not warranted by any risk of unfairness to defendants created by use of straight hourly rates. Accordingly, the actual rates charged by plaintiffs’ attorneys will be used to calculate the lodestar.’ * This is true even though he had not had much experience in patent cases. In fact, as a newcomer to modems, he was acutely aware of the problem of explain- ing modem technology to a judge who was also without technical * The actual rates charged by the paralegals and law clerks, which ranged from $15 to $32 per hour (with one technical consultant receiving $60 per hour during 1976), are reasonable and will be used as weil. a E-6 Hours. {6} The next step in calculating the lodestar is to determine the number of hours reasonably spent by plaintiffs’ counsel. The actual time spent and billed by plaintiffs’ attorneys does not necessarily equal the reasonable time spent, it merely provides the starting point for my inquiry. Copeland, 641 F.2d at 891. In order to be compensable, the time has to be: (1) thoroughly documented; (2) spent upon the issues which gave rise to the find- ing of exceptional circumstances; (3) non-duplicative; and (4) not spent in a manner inconsistent with “a standard of reasonable efficiency and productivity”. Furtado, 635 F.2d at 920, Copeland, 641 F.2d at 891-892. Documentation. [7] In order to recover attorneys’ fees, the prevailing party has to submit a “detailed record of time spent. . . and the duties performed”. King v. Greenblatt, 560 F.2d 1024, 1027 (1st Cir. 1977). This duty is not limited to submitting the attorneys’ raw time sheets, but requires that the time records be organized and presented in a manner which will enable the court to value that time. City of Detroit v. Grinnell Corp., 495 F.2d 448, 471 (2nd Cir. 1974). Valuation requires that the data be broken down to show the way in which the time was spent and by whom. Id. Plaintiffs’ submissions are not organized in such a manner. They consist of the time sheets, expense sheets, and bills prepared by plaintiffs’ attorneys, with monthly totals by attorney. No attempt was made to categorize the time according to type of work done or the person doing it. In a case the size of this one, plaintiffs’ submission is inade- quate. In order for me to properly apply the Furtado approach and value the time spent by plaintiffs’ representatives, I have to know how much time was spent on what kind of work and by | whom. While that information is contained in the mountain of time sheets submitted by plaintiffs, the only way I could extract it is by analyzing each of the individual daily time sheets prepared by over 50 individuals over a six-year period. Such an effort E-7 would be an incredible waste of judicial time. The individuals and law firms who represented plaintiffs and whose time is to be categorized are in a much better position to undertake such a project. This is especially true where the costs of recovering at- torneys’ fees are included in the award, as they are here. Fortunately for plaintiffs, defendants have taken it upon themselves to organize the time sheets into a more useful form. They have done so through the use of a computer program. First the information on the individual time sheets was keypunched for entry into the computer.‘ Second, the data was fed into a pro- gram which sorted it into several categories. The first set of categories consisted of type of work done.® The second consisted of monthly totals of work done by all people submitting time sheets, including lawyers, law clerks, paralegals, and secretaries. These categories were then sorted and summed in various ways in order to indicate what time was spent on what type of work by whom. While I am not suggesting that a computer is necessary in order to determine the appropriate amount of an attorneys’ fees award, I find that, with a few adjustments, the results of defen- dants’ program provide a useful basis upon which to value the * According to the testimony of Joseph J]. Dempty, the author of the program and the person responsible for its performance, only an insignificant number of time sheets were unable to be keypunched due to ® ‘The computer was directed to select certain key words from the description on the time sheets of the type of work done and assign that time to a separate category for each key word. The categories used were: Affidavit; AT & T; Con- ference; Deposition; Exhibit; Foreign; Fractional; Ilegible; Interrogatories; Non-lawyer; Post-brief; Prior Art; Ragsdale; Reply Brief; Research; Rixon Litigation; Travel; Trial; Trial Brief; Trial Prep; Wm. Rymer; YF/Kan- sas 1; YF/Kansas 2; 0 Miscellaneous; Affidavit + (the plus indicates that the time E-8 time spent by plaintiffs’ attorneys.* The testimony indicated that plaintiffs’ attorneys’ time records were used to provide the data for the program and, after some tinkering, the program calculated a total amount of attorneys’ fees charged remarkably close to that claimed in plaintiffs’ totals: plaintiffs claimed ap- proximately $809,000 in attorneys’ fees (exclusive of disbursements) and the result of the computer run’ was a total of approximately $812,000 in attorneys’ fees. Accordingly, I will use $812,000 and the hours represented therein as the starting point for my valuation.* [8] 1 do think, however, that it is the responsibility of the prevailing to organize the information in support of its requested * Two major adjustments are necesary. The first results from the difficulty the keypunchers apparently had in reading individuals’ initials. For example, GAM was an attorney with Fish and Richardson. Any time sheets submitted with his initials were placed in his category and the fee calculated by using his rate. On the other hand, no rate was included in the program for an individual with the initials CAM, because no such person worked on this case. Yet, the keypunchers read several time sheets to have been prepared by CAM and they were entered in his category, not in CAM’s where they presumably belonged. Since CAM had no rate, no fee could be calculated and the hours were not included in the total calculations. A total of 1,107.9 hours were not included in this manner. If those hours are multiplied by the average rate charged by all persons working for plaintiff, approximately $50 per hour, an upward adjustment of $55,395.00 can be made in the grand total of charges calculated by defendants. The second major adjustment has to do with the way the “plus” categories are calculated and the changes that have to be made before they can be subtracted from the grand total where appropriate. See, note 8 infra. ” Adjusted as discussed in n.6 and exclusive of approximately $3,000 in secretarial fees. * My discussion of the reasonable time spent by plaintiff's representatives will be in terms of total charges for different types or work, not in terms of hours spent thereon (as is done in most lodestar cases). This approach is just as accurate and is more helpful in this case because: (1) the actual rates charged are being used to calculate the lodestar, thereby eliminating the need to separately tally the hours spent so that they can be multiplied by court-determined “reasonable” rates; (2) so many individuals were involved in this case, at so many different rates, that it would be very difficult and time consuming to break out all the separate hours and apply the appropriate charge; and (3) defendants’ computer program has already done the necessary sorting and produced its results of total charges for a particular category, thereby producing a useful base from which to pro- ceed. E-9 award into a form similar to that prepared by defendants here. While it may be sufficient to submit the raw time sheets and sum- mary totals in very small cases, it forces the court to do an organizational task much more efficiently done by the moving party. Furtado and the lodestar approach have been in use long enough so that counsel in cases as large as this one should be aware that a court is unlikely to look kindly upon an undifferen- tiated mass of time sheets. It is in the moving party's best interest, as well as the court's, to see that the information is presented in a manner which lends itself to ready analysis under Furtado. [9] Because plaintiffs failed to so organize their submission or to compensate defendants for the costs of doing so, I find that a 10% reduction in the requested fees award ($81,200) is war- ranted. Taking the categories included in the computer program and the results therein as the starting point, other more specific areas of insufficient documentation warrant reductions. (10, 11} First, there is the category of “fractional” charges. Some of the time sheets submitted included work on cases other than this one. Since the time spent on the different cases was not clearly identified, plaintiffs allocated a certain percentage of the time spent (usually 50% ) to this case and included in it their re- quested award. These hours are not compensable. Where a party cannot prove that the time claimed was spent upon an issue for which they can recover, the time will be excluded. In this case, the total amount included in the “fractional” category was almost $20,000. Since only one-half of that amount was claimed by plaintiff, only one- half, or $10,000, will be deducted from the requested award. {12} Second, the majority of time sheets submitted by William W. Rymer, a senior partner at Fish and Richardson, contained no description (or an illegible one) of the work con- ducted. Such unidentified time charges provide me with no basis for determining if the time was spent on a compensable issue, or in a reasonable manner. Accordingly, a 50% reduction in the $115,000 billed by Mr. Rymer is appropriate (resulting in a $57,500 reduction in the requested award). E-10 Issues. (13, 14} Plaintiffs can only recover for time spent on issues that were infected by defendants’ misconduct. See, Campbell, 601 F.2d at 251. In my March Order, I found that defendants had acted improperly with respect to the Whang ‘023 and Ragsdale '503 patents. While defendants also lost on the Vilips patent, their conduct there did not warrant a finding of excep- tional circumstances. Therefore, plaintiffs are not entitled to recover their attorneys’ fees for work on that claim. While it is difficult to determine the amount of time spent on the Vilips claim from either plaintiffs’ submissions or defendants’ computer run, given that it was a minor part of this action, I find that a $20,000 reduction is appropriate. Plaintiffs are entitled to recover for time spent appealing the forum issue (because it was an integral part of this action) and for time spent monitoring the other actions involving these patents (in order to locate useful evidence and legal theories). They are not entitled to recover the $8,500 claimed for time spent in the Rixon litigation (if recovery is appropriate anywhere, it is in that litigation itself) or the $8,000 claimed for time spent traveling.® See, Furtado, 635 F.2d at 922. Duplication. [15] Plaintiffs are also only entitled to recover for time spent in a nonduplicative manner. In order to recover for the full amount of time spent by several individuals working on ope proj- ect, such as a brief, or appearing at one function, such as a * The amounts claimed for time spent traveling and on the Rixon litigation were calculated in the following manner: (1) the total charges in the “Travel” and “Rixon™ categories were located, $510 and $738 respectively; (2) the total charges in the “Travel + " and“Rixon + ” categories were located, $14,954 and $15,764 respectively; (3) the totals for the two “plus” categories were divided in half to reflect the double counting done by the computer in order to generate the plus categories, resulting in charges of approximately $7,500 and $8,000 respeo- tively; and (4) the adjusted total charges from the plus categories were added to those from the “pure” categories to reach the $8,000 and $8,500 figures. The same approach is followed for each of the other calculations made in the re- mainder of this opinion where both a “pure” and a “plus” category are involved. E-11 deposition, plaintiffs have to provide a “convincing description of the division of labor”. Jd. Where no such description is given, reductions are warranted. [16] The major area of duplication challenged by defendants is the retention of Goodwin, Procter and Hoar to assist Fish and Richardson during the trial. Defendants claim that in order for Mr. Ware to conduct the trial a large amount of time had to be spent educating him on relevant technology and patent law in general, resulting in a massive duplication of effort. While it is clear that a fair amount of time was spent educating Mr. Ware, I do not think it was entirely unreasonable to do so. He is a much more experienced trial attorney than any of the Fish and Richardson personel and did an excellent job presenting the evidence in a comprehensible manner. In fact, if Mr. Ware had been more involved earlier in the case, I suspect that significant savings would have occurred in the amount of time and money spent during the recovery process. Defendants point to other areas of duplication as well: in at- tendance at depositions and trial; and in preparation of several briefs. These areas, combined with the fact that some time was lost in educating Mr. Ware, lead me to the conclusion that a 10% reduction is appropriate in the following areas: (1) conferences; (2) depositions; (3) post-trial brief; (4) reply brief; (5) trial; and (6) trial brief. Since a total of approximately $280,000 was charged in these areas, the 10% reduction amounts to $28,000. Unreasonable Time. [17] Nor can plaintiffs recover for time spent in a manner in- consistent with “a standard of reasonable efficiency and produc- tivity”. Id. at 920. Defendants maintain that the vast majority of time spent by plaintiff on discovery is inconsistent with such a standard. They argue that with the wealth of information available from other cases, few new facts were available for discovery by plaintiffs. Defendants’ argument is not wholly correct in that it ignores the difficulties facing plaintiffs in this case. First, the major case E-12 which defendants contend could have been used by plaintiffs, Milgo Electronics Corp. v. United Business Communications, Inc., (“Kansas Litigation”), ended in a verdict unfavorable to plaintiffs’ case. They then had to overcome the result of that case and prove that it had been based upon Milgo’s misrepresenta- tions. Second, defendants were uncooperative during dis-overy. Barriers to plaintiffs’ efforts were constantly erected in order to conceal those misrepresentations. Defendants are correct, however, in that even faced with these obstacles, plaintiffs engaged in a substantial amount of un- necessary discovery. This overkill is apparent in the thousands of dollars spent for legal research in support of basically factual discovery motions, in the number of marginally relevant documents requested and reviewed, in the number of depositions conducted, and in the time spent attempting to obtain modems for testing. The excessive amount of discovery conducted by plaintiffs warrants a 30% reduction in the following categories: (1) pleadings; (2) research; (3) depositions (above the 10% already deducted); and (4) miscellaneous. This reduction equals $65,400. A specific item of $16,000 to research a motion under Rule 37 is a particularly egregious example. An additional $15,000 shall be deducted on this account. Calculation of the Lodestar. | Beginning with the total amount claimed by plaintiffs and subtracting the previously disclosed amounts, the lodestar is calculated as follows: Total fees claimed $812,000 Reductions; Documentation organization (81,200) fractional charges (10,000) Wm. W. Rymer (57,500) Issues Vilips (20,000) Rixon ( 8,500) travel ( 8,000) Duplication (28,000) E-13 Adjustments. In some cases, the lodestar will be adjusted up or down to take account of factors which are not included in its initial calcula- tion. Id. at 924. The party proposing such an adjustment has the burden of proving that it is warranted. Copeland, 641 F.2d at 892. No such adjustment has been shown to be necessary in this case. Plaintiffs have argued that the lodestar adjustment should be used to bring the “reasonable” lodestar charge up to what they were actually billed. Such an adjustment, however, would eviscerate the court's duty to determine a reasonable fee. Accordingly, the amount of fees to be awarded to plaintiffs is $518,400. Disbursements. (18) Plaintiffs have also requested expenses and disburse- ments of $200,540.63. In support of their claim they have sub- mitted copies of the original expense sheets and bills. In reviewing those records, I find that a number of them in- clude miscellaneous xeroxing, telephone, and other charges which cannot be traced directly to this case, or even isolated in order to determine their reasonableness. Accordingly, a 20% reduction in the expenses claimed is appropriate, bringing the amount of disbursements awarded to $160,432.50.'° Summary. Plaintiffs are awarded $518,400.00 in fees and $160,432.50 in disbursements, for a total of $678,832.50. Judgment to enter. APPENDIX A mnie REI s 5S ---$'tt 7 Fee mun =z. (87m) La hee ‘ath ¥ 4 TRE “ «& -. > « WAS 0 leTepet PO! 1960 RaNOwenE saTA® Gime meres Compared TO 1B (owns) Marts Plaintiffs’ request that Dr. Forney’s travel expenses be included in the award is denied on the ground that he is a full-time Codex employee. (3/HR) 5 Pinpee eT Sie Tt ke YEARS OF EXPERIENCE BESESER EF FIG 2 1960 NATIONWIDE ASSOCIATE BILLING RATES COMPARED TO F & f (INITIALS) RATES Survey data for Figs. 1 and 2 are from Tables 32 and 33 of the 1980 survey. 75 TH PERCENTILE 150- fa SOTH PERCENTILE BALING 120- wwn > ee ot a = ms al REH FPP Ngee 40- . 20- FQ@R ATTORNEY ( INITIALS ) FIG 3 1960 BILLING RATES OF PARTNERS OF BOSTON PATENT Law FIRMS (WITHOUT TAKING INTO ACCOUNT YEARS OF EXPERIENCE) E-15 75 TH PERCENTILE 100-7 50 TH PERCENTILE is. Z mung 70 — oe Rate 60 | Gam GAL _ lly 1 | ves mi pencomus 40 ‘o% ; “| BAe eS Poe WEB PTC RAS CIC TAF MKM RJQ OAM 40- FQR ATTORNEY ( INITIALS) FIG 4 1960 BILLING RATES OF ASSOCIATES OF BOSTON PATENT Law FIRMS (WITHOUT TAIGNG INTO ACCOUNT YEARS OF EXPERIENCE ) Survey data for Pigs. 3 and 4 and from Tables 29 and 30 of the 1980 survey. F-1] APPENDIX F United States Court of Appeals “a For the First Circuit P No. 82-1644 83-1076 CODEX CORPORATION, ET AL., PLAINTIFFS, APPELLEES, 0 MILGO ELECTRONICS CORPORATION, ET AL., DEFENDANTS, APPELLANTS. No. 82-1707 CODEX CORPORATION, ET AL., PLAINTIFFS, APPELLANTS, D MILGO ELECTRONICS CORPORATION, ET AL., DEFENDANTS, APPELLEES. JUDGMENT Entered: August 2, 1983 These causes came on to be heard from the United States District court for the District of Massachusetts, and were | y. fe G-l APPENDIX G United States Court of Appeals nite a tie Fit Choatt © No. 82-1644 83-1076 CODEX CORPORATION, ET AL., PLAINTIFFS, APPELLEES, v. MILGO ELECTRONIC CORPORATION, ET AL., DEFENDANTS, APPELLANTS. No. 82-1707 CODEX CORPORATION, ET AL., PLAINTIFFS, APPELLANTS, v MILGO ELECTRONIC CORPORATION, ET AL., DEFENDANTS, APPELLEES. Argued May 5, 1983. Decided Aug. 2, 1983. Allen Kirkpatrick, W , D.C., with whom Larry S$ Nixon, Cushman, Darby & , Washington, D.C, Marcus E Cohn, P.C., David H. Gibbs, Boston, Mass., Peabody & Brown, emeag he we oer og Jackson, Albin H. Gess, and ackson, = > ee ppadaua jeetnateat saci es -, etal., Paul F. be beay! Boston, Mass., with whom Goodwin, Procter & Hoar, Robert E. Hillman, G Lee, William E. Booth, and Fish & Richardson, Boston, Mass, were on brief, for Codex Corp ps, ‘ d , . a, G-2 Before Campse.., Chief Judge, Bownes, Circuit Judge, and RE,* Chief Judge. Bowness, Circuit Judge. Milgo Electronic Corporation and International Com- munication (Milgo) appeal from an adverse declaratory judg- ment in a patent validity action brought by Codex Corpora- tion and Yellow Freight Systems, Inc. (Codex). Codex cross- appeals because of the failure of the district court to grant all of the relief it sought and on the ground that the amount of at- torney fees awarded it was too low. The district court opinion is reported, Codex Corp. v. Milgo Electronic Corp., 534 F.Supp. 418, 432 (1). Mass. 1982). The dispute revolves around three patents, all owned by Milgo as assignee: (1) No. 3,524,023, Sang Y. Whang, inventor, Band Limited Telephone Line Data Communication System (Whang '023); (2) No. 3,619,503, Robert GC. Ragsdale, inventor, Phase and Amplitude Modulated Modem (Ragsdale '503); and (3) No. 3,783,194, Viesturs V. Vilips, inventor, Data Modem Having a Fast Turnaround Time Over Direct Distance Dialed Networks (Vilips '194). I. Background All computer machine languages operate on a binary number system. This system or language involves only two elements: positive or negative or, most commonly, 1 or 0. Computers do not always operate alone; some are built to communicate with other computers. In order for one com- puter to talk with another some sort of communication link has to be established. At the time the patents in this case were issued the primary communication link was direct distance dialed telephone lines (DDD). Unfortunately for talking com- * Hon. Edward D. Re, Chief Judge of the United States Court of Interna- tional Trade, sitting by designation. es G-3 puters, binary or digital data cannot be transmitted over DDD lines rapidly and reliably. To transmit information through DDD lines the transmission must be made in an analog form. This analog transmission is best thought of in terms of a sinusoidal waveform (sine wave) as illustrated below: i, ai ae = 2 oe The above illustration shows a sine wave with an amplitude of one and a cycle duration of T seconds. Both of these terms will be explored in some detail later. For computers to talk one with the other it is necessary to transform digital signals to analog at the transmitting com- puter and back again at the receiving computer. This transfor- mation is accomplished in both instances by a modem. The word “modem” is short for modulator-demodulator. Modulation is the alteration of the sine wave in some manner so as to impart some information to it. For the purposes of this litigation modulation can take one of three forms: phase modulation, amplitude modulation, or a combination of both phase and amplitude modulation. Phase modulation, or more specifically in this case differen- tial phase modulation, is acomplished by sending out a signal pulse during a modulation period followed by another modulation period with a signal pulse of a different phase. The receiving modem detects this phase shift which contains the information in each signal pulse. . i c-— eee 5 oh . Saas G-4 Amplitude modulation is accomplished in the transmitting modem by changing the amplitude of the sinusoidal sine wave from one modulation period to the next. The receiving modem detects this change in amplitude thus reading the information contained in the signal pulse. The combination of phase and amplitude modulation is accomplished by changing both to the phase and amplitude of the sine wave from one modula- tion period to the next. The speed at which information can be transmitted depends primarily on two factors. First, it depends on the number of signal pulses (bauds) that can be transmitted per second, and secondly, it depends on the number of discrete “bits” of binary data (1 or 0) that can be encoded in each baud (bits per baud). A problem with analog signal transmission is that some distortion of the signal is bound to occur; the received signal is not going to be identical to the one transmitted. This distortion is a function of two characteristics, one of the signal, the other of the DDD line itself. The problem with the DDD line is that at the upper and lower ends of the frequency range available the analog signal is susceptible to amplitude and delay distortion. These distor- tions are fatal to fast and accurate transmission of informa- tion. It was well-known in the early 1960's that at the center of this available frequency range there existed a “sweet spot.” The sweet spot is a band of about 1000 Hz' in a range between the frequencies of 1200 Hz and 2200 Hz which has the characteristic of being relatively free from distortions. The problem with the signal occurs when it is modulated. Modulation causes a dispersal of energy up and down the fre- quency spectrum. This energy, outside of the sweet spot, is susceptible to delay and amplitude distortion. The delayed reception of this energy by the receiving modem will distort the apparent phase and amplitude of the received signal caus- ing inaccurate decoding of the information. ' A Hertz (Hz) is one cycle per second. G-5 To solve this problem of energy dispersal over the frequency spectrum a composite filter to filter out energy at all but the desired frequencies is used. This solution, however, causes its own problems, it spreads the signal out over time. The energy representing the signal in one baud is smeared in time so that some of it is still “ringing” or echoing in the bauds that succeed it. This ringing causes intersymbol interference or confusion from one baud to the next. The next step was to solve this problem. In 1928 Harry Nyquist published his discovery that an infor- mation carrying pulse, or baud, of duration in time of T seconds required a bandwith of 1/T Hz for accurate transmis- sion. This basic constraint on the bandwidth is crucial to mitigating the intersymbol interference. Nyquist went on to describe a filter which would accom- plish this. The ideal Nyquist filter, called “brickwall,” passes only this 1/T bandwith. It was recognized that the actual con- struction of such a brickwall filter was not possible. Practical filter design requires the use of filters with a roll-off of greater than zero. The diagram and text which follows illustrates both the brickwall filter and the concept roll-off. Prequeacy G-6 The carrier frequency (f ) is the frequency of the sine wave which is modulated by the modem to produce the informa- tion-carrying signal pulse. The portions of the bell-shaped curve that extend beyond the brick wall are known as the skirts. One way of defining the roll-off of the filter is by taking the ratio of the width of the skirt along the abscissa to the width of the Nyquist ideal of 1/T Hz. A composite filter ex- hibits 50% roll-off when the sum of the skirts is 1/2T Hz. It should also be noted that to meet Nyquist’s criteria a roll-off of 100% is the maximum allowable. One further necessary element of modem design is a mechanism for determining when a baud begins and ends. Concomitant with that determination is the need to know when or where to read the information contained in a baud. The mechanism for determining when to sample or read the information contained in a baud is called “clock” in the pre- sent art. It is a characteristic of the 1/T bandpass filter that the energy of the signal pulse will be minimum at the beginning of the pulse, build to a maximum at approximately the middle of the pulse, and then decay to a minimum point at the end of the pulse. It is this characteristic that permits clock recovery by the receiving modem. This allows the receiving modem to read the information at the center of each signal pulse. Nyquist revealed that with a 1/T bandpass filter the interference or ringing caused by one baud would be zero at the center of the succeeding baud. Thus, the concept of center sampling was born; the idea being to read the information encoded in a baud as close as practicable to the center of each baud. The presence of echo suppressors on the DDD lines present yet another problem to modem designers. Echo suppressors ‘permit signals to be transmitted in only one direction at a time, the preference being given to the stronger signal. It is a characteristic of DDD lines and associated amplifiers that if echo suppressors were not present the telephone user would hear echoes of his own voice. The problem with the echo sup- G-7 pressors is that they take 100 milliseconds to reverse direction or turn around. This means that once the first party stops talk- ing and the second party starts it takes 100 milliseconds before the echo suppressor will pass on the second party's speech energy. For spoken communication a 100 millisecond tur- naround delay is no problem. For data communications a 100 millisecond turnaround delay is intolerable. The solution to this problem is to disable or turn off the echo suppressors by putting a tone on the line. It was well recog- nized in the early 1960's that echo suppressors once disabled would remain disabled as long as there was energy on the line. This could be accomplished by a signal transmitted at a fre- quency other than the frequency of the main data channel. This had been accomplished, up to the time of application for the patents in this case, by utilizing a reverse channel. A reverse channel transmits a signal in a direction opposite to that of the main data signal and at a different frequency. This reverse channel could be used for limited data transmission or solely for the purpose of disabling the echo suppressors in order to reduce the turnaround time. Il. The Whang ‘023 Patent Whang admitted at trial that the only novel feature to be found in his patent, Whang '023, was “narrow skirts.” That is, a roll-off of 50% or less. The other salient features of Whang ‘023 such as differential phase modulation, limiting the pass- band to 1/T Hz and center sampling were already known both separately and in combination. We agree with the district court’s conclusion that the asserted novelty, a composite filter roll-off of 50% or less, is nowhere to be found in any of the claims 1, 19, or 25 either expressly or by implication. Since the asserted novelty does not, in fact, exist there is no invention. The ultimate question of patent validity is one of law. Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 693, 15 L.Ed. 2d 545 (1965). A determination of validity, G-8 however, requires certain factual inquiries, such as anticipa- tion of prior art. Carter-Wallace, Inc. v. Gillette Co., 675 F.2d 10, 15 (1st Cir. 1982). The findings of fact by the court below can be set aside only if they are clearly erroneous. Forbro Design Corp. v. Raytheon Co., 532 F.2d 758, 763 (ist Cir. 1976); Fed. R. Civ. P. 52(a). This is a recognition of the trial court's superior position with respect to factual deter- minations. Any resolution of factual questions “requires a balancing of credibility, persuasiveness and weight of evidence.” Graver Mfg. Co. v. Linde Co., 339 U.S. 605, 609, 70 S.Ct. 854, 857, 94 L.Ed. 1097 (1949). “A finding is ‘clearly erroneous’ when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1947). Milgo urges that because claims 1, 19, and 25 are “means plus function” claims we must turn to the specification for ex- planation. We agree that this is the correct approach. 35 U.S.C. § 112, but contrary to Milgo’s assertion we do not find any language in the specification describing narrow skirts. It is true that “a patent should not be struck down...where a reasonable construction of the specifications and claims will protect the invention. ...” Corning Glass Works v. Anchor Hocking Glass Corp., 374 F.2d 473, 478 (3d Cir. 1967), and that a patentee may be his own lexicographer, choosing his own words, “so long as he remains consistent in their use and makes their meaning reasonably clear.” Ellipse Corp. v. Ford Motor Corp., 452 F.2d 163, 167 (7th Cir. 1971), cert. denied, 406 U.S. 948, 92 S.Ct. 2041, 32 L.Ed.2d 337 (1972). But it is also true that the law requires the specifications to be written in “such full, clear, concise, and exact terms as to enable any person skilled in the art...to make or use the same [invention]....” 35 U.S.C. § 112. The inventor may not transform the claim into “a nose of wax which may be turned G-9 and twisted in any direction, by merely referring to the specification, so as to make it include something more than, or something different from, what its words express.” White v. Dunbar, 119 U.S. 47, 51, 75 S.Ct. 72, 74, 30 L.Ed. 303 (1886). The 50% roll-off requirement is nowhere explicitly stated in the specification, nor is it implied. In fact, the specification can be read to reach the opposite. As Whang admitted, and the district court found, it was left up to the design engineer to decide what roll-off to use, with the proviso that it meet the Nyquist criteria. This would put the roll-off anywhere from 0 to 100% . This is not the degree of specificity required by 35 U.S.C. § 112 so as to make 50% roll-off part of the invention. Milgo seeks to justify its position through a tortured reading of Eibel Process Company v. Minnesota & Ontario Paper Company, 261 U.S. 45, 43 S.Ct. 322, 67 L.Ed. 523 (1923). In Eibel the critical factor of pitch in the invention was defined in the claims by the terms “high” and “substantial.” The figure which accompanied the specification illustrating this improve- ment to pitch indicated an angle of 4% or an elevation of 12 inches. References to small elevations shown in prior art devices indicated that the patentee had in mind elevations substantial as compared to them. In Eibel the critical factor was pitch; in Whang '023 it is the 50% roll-off. Whang "023, unlike the patent in Eibel, gives no numerical representations of the critical factor. Neither does it discuss the percentage roll-off in prior art so as to indicate to those skilled in the art that a roll-off of 50% or less is an essen- tial element in the function of Whang ‘023. Since 50% roll-off is not included in claims 1, 19, or 25 of Whang ‘023 the question becomes whether the named claims are valid without the narrow skirts. We first state the legal principles involved. The claims of a patent in order to be patentable and valid must, among other things, not have been “described in a printed publication tn this or a foreign country... more than G-10 one year prior to the date of application for patent in the United States... . 35 U.S.C. § 102(b). In order for a publica- tion to anticipate an invention as defined in a patent claim under 35 U.S.C. § 102(b), the publication “must disclose all the elements of the claimed combination, or their equivalents, functioning in substantially the same way to produce substan- tially the same results.” Decca Limited v. United States, 420 F.2d 1010, 1027, 190 Ct.Cl. 454, cert. denied, 400 U.S. 865, 91 S.Ct. 102, 27 L.Ed.2d 104 (1970). To give the grant of a patent substance and value there is a rebuttable presumption that the patent is valid. 35 U.S.C. § 282. Evidence of prior art not considered by the Patent and Trademark Office (PTO), especially in combination with evidence of omissions or inaccuracies in prior art presented to the PTO, eviscerates the presumption of validity. Parker v. Motorola, Inc., 524 F.2d 518, 521 (5th Cir.), cert. denied, 425 U.S. 975, 96 S.Ct. 2175, 48 L.Ed.2d 799 (1975). The presumption of validity can be strengthened by a prior judicial determination of validity. American Home Products Corp. v. Lockwood Mfg. Co., 483 F.2d 1120, 1125 (6th Cir.), cert. denied, 414 U.S. 1158, 94 S.Ct. 917, 39 L.Ed.2d 110 (1973). However, that which strengthens the presumption and even the presumption itself can be rebutted by a showing of clear and convincing evidence to the contrary. Saf-Gard Products, Inc. v. Service Parts, Inc., 532 F.2d 1266, 1271 (9th Cir.), cert. denied, 429 U.S. 896, 97 S.Ct. 258, 50 L.Ed.2d 179 (1976). It should be noted that while the presumption of validity can be rebutted, the burden of persuasion “is and always remains upon the party asserting invalidity... .” Solder Removal Co. v. United States International Trade Commission, 582 F.2d 628, 633, 65 CCPA 1290 (1978). The district court found that the presumption of validity which attached to Whang ‘023 was rebutted by three pieces of prior art not before the PTO when Whang ‘023 was isssued. Further, the district court accorded no comity to the prior G-1l adjudication of validity of Whang ‘023 by the district court of Kansas in Milgo Electronics Corp. v. United Telecommunica- tions, Inc., 189 USPQ 160 (D. Kan. 1976), aff'd, 623 F.2d 645 (10th Cir.), cert. denied, 449 U.S. 1066, 101 S.Ct. 794, 66 L.Ed.2d 611 (1980). We first discuss the question of comity and then the prior art. As discussed earlier, a patentee can be his own lexicographer only if the specification clearly indicates the unique meaning that he wishes to attach to a word or phrase. Unfortunately, the Kansas District Court misapplied this rule of law. The Kansas court allowed Whang to define the term “passband width” as found in claims 1, 19, and 25 so as to incorporate 50% roll-off. This is contrary to the lexicographer rule because Whang's definition was not one used by those skilled in the art nor is the unique meaning of “passband width” made reasonably clear anywhere in Whang ‘023 to those skilled in the art. This is a case “where comity, being a rule of conve- nience intended to persuade, not to command. . ., should not prevail against an opposite judgment when based upon clear conviction.” New York Scaffolding Co. v. Liebel-Binney Con- st. Co., 243 F. 577, 581 (3d Cir. 1917), aff'd, 254 U.S. 24, 41 S.Ct. 18, 65 L.Ed.2d 112 (1920); see, Barr Rubber Products Co. v. Sun Rubber Co., 425 F.2d 1114, 1120 (2d Cir.), cert. denied, 400 U.S. 878, 91 S.Ct. 118, 27 L.Ed.2d 115 (1970). We agree with the district court's conclusion that no comity should be given to the findings of the District Court of Kansas. We also agree that Whang ‘023 is invalid for lack of novelty. Absent the narrow skirts, which are not part of the patent, Whang '023 lacks any novel improvement over the prior art. The district court's finding that any of the three references cited fully anticipated claims 1, 19, and 25 of Whang ‘023 was correct.* * The references are: Bennet & Davey, Data Transmission, McGraw-Hill, N.Y., N.Y. (1965) Chapters 5, 8, 10, 11; Widl, W., An Experimental Data Transmission System, Ericsson Review, Vol. 39, No. 3, pp. 62-71 (1962); Evans, G.L., Enriquez, E., and Wilson, Q.C., A High Speed Serial, Four- G-12 Milgo, by a footnote in its brief, would have us remand this action to the district court for a determination of the validity of dependent claims 2-5, 10, 11, 20, 27-29, 36, and 37 of Whang ‘023. Codex, who originally brought the declaratory judgment action in the district court, specifically asked the court to be silent on the validity of the dependent claims. Milgo had every opportunity in the court below to assert the dependent claims in their cross-claim for infringement. It failed to do so and will not be heard to complain on appeal. Moreover, in any future action Milgo would be collaterally estopped from asserting the validity of the dependent claims on the basis that they incorporate narrow skirts, 50% roll-off, or 2% energy at the passband edges, all of which are func- tionally equivalent. “It is the issues litigated, not the specific claims around which the issues were framed, that is deter- minative.” Westwood Chemical, Inc. v. United States, 525 F.2d 1367, 1372, 207 Ct.Cl. 791 (1975). See Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, et al., 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). Ill. Ragsdale 503 Milgo contends, on two grounds, that it was error for the district court to have entered summary judgment for Codex finding claims 1 and 5 of Ragsdale ‘503 invalid. First, they argue that summary judgment may not be entered on an oral motion at trial, and second, they assert that claims 1 and 5 of Ragsdale ‘503 are valid. Milgo made no objection to the action of the district court at the time of the ruling on Codex’s motion for summary judg- ment, although it had an opportunity to do so. This forecloses our review of this issue. Fed. R. Civ. P. 46. “The purpose of Rule 46 is to inform the trial judge of possible errors so that he may have the opportunity to consider his rulings and correct them if necessary.” Stone v. Morris, 546 F.2d 730, 736 Phase Data Modem for Regular Telephone Circuits, Convention Record Global Communications, pp. 100-104 (May 1961). G-13 (7th Cir. 1976); C. Wright & A. Miller, Federal Practice and Procedure § 2472, at 454-56 (1971). The rule that issues not raised in the trial court cannot be considered by the Court of Appeals as a basis for reversal is adhered to save in exceptional circumstances where the obvious result “would be a plain miscarriage of justice.” Hormel v. Helvering, 312 U.S. 552, 558, 61 S.Ct. 719, 722, 85 L.Ed. 1037 (1941); Johnston v. Holiday Inns, Inc. , 595 F.2d 890, 894 (1st Cir. 1979). We find no miscarriage of justice here. We agree with the district court's finding that claims 1 and 5 of Ragsdale ‘503 are invalid. It is uncontroverted that Ragsdale ‘503 teaches, and claims 1 and 5 cover, a modem containing (a) phase modulation encoding; (b) amplitude modulation encoding; and (c) a composite filter means of a passband width of 1/T Hz. The alleged novelty is the combina- tion of all three elements. The district court found, and we agree, that the combination was not novel. Ragsdale ‘503 does not pass muster under 35 U.S.C. § 102(a); it was squarely an- ticipated by a single prior art reference.? IV. Vilips "194 The district court found Vilips "194 invalid as obvious based on two prior art references not before the examiner.‘ Milgo asserts that this was error. The Supreme Court has laid out the factual analysis to be followed in passing on obviousness in light of 35 U.S.C. § 103: “Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved.” Graham v. John Deere, 383 U.S. at 17, 86 S.Ct. at 694. * Luck, R., (Thesis) Digital Phase and Amplitude Modulated Systems 1961). Fail Recent ites Oration CEM Saiahennie ts, Ricans from AT & T Contribution Com. Sp. A/No. 75, pp. 674-688 (July 1963). Data Sets ‘402C and 402D Interface Specification, Bell System Technical Reference (November 1964). G-14 The findings resulting from this factual analysis are re- viewed against the clearly erroneous standard. Carter- Wallace, inc. v. Gillette Co., 675 F.2d at 13. As already discussed in the background section, it was well-known in the prior art that echo suppressors, once disabled, would remain disabled as long as there was energy on the line. In the prior art this was accomplished by a reverse channel which transmitted in a direction opposite to that of the main data signal. This reverse channel was at a different, much lower frequency. While in some prior art references the reverse channel was used to carry data it was recognized that the reverse channel need not carry data but could serve the singular purpose of disabling the echo suppressors. The district court found as follows: “The device described in the Vilips ‘194 patent eliminates the data carrying aspect of the sec- ondary channel and causes the continuing tone to be activated by the modem rather than the business machine to which the modem is attached.” Codex Corp. v. Milgo Elec. Corp., 534 F.Supp. at 432. The court went on to describe the prior art's concept of having the mechanism for applying this tone in the business machine, versus the Vilips "194 concept of making the device smaller and eliminating the data receiving components. The court found that the elimination of the data receiving components was not an invention but an “improvement on the order of a mechanic's expedient.” Jd. at 432. We find no errors in the findings of fact of the district court. Applying the legal standard of obviousness, we affirm the disrict court's conclusion that Vilips ‘194 was obvious in light of the prior art. V. Award of Attorney Fees The district court, pursuant to 35 U.S.C. § 985.5 awarded attorney tees to Codex, finding that this was an “exceptional case” within the purview of the statute. SO > ©. § So provides: “The court in exertional cases may award toavorebic attorney fees to the prevailing party.” G-15 A reviewing court will not interfere with the determination by the district court of attorney fees in a patent case absent an abuse of discretion or an erroneous conception of law. St. Regis Paper Co. v. Royal Industries, 552 F.2d 309, 316 (9th Cir.), cert. denied, 434 U.S. 996, 98 S.Ct. 633, 54 L.Ed.2d 490 (1977); Graham v. Jeoffroy Mfg., Inc.. 253 F.2d 72, 78 (5th Cir.), cert. denied, 358 U.S. 817, 79 S.Ct. 28, 3 L.Ed.2d 59 (1958). Attorney fees are usually awarded under § 285 “only where the district court finds strong evidence of unfairness and bad faith on the part of the losing party.” Colortronic Reinhard & Co. v. Plastic Controls, 668 F.2d 1, 8 (lst Cir. 1981); Plymouth Rubber Co. v. Minnesota Mining & Manufacturing Co., 203 F.Supp. 595, 601 (D. Mass. 1962), aff'd, 321 F.2d 151 (ist Cir. 1963), cert. denied, 375 U.S. 969, 84 S.Ct. 489, 11 L.Ed.2d 417 (1964). To support the award of attorney fees in a patent case there must be precise findings that clearly show the necessary prerequisites of inequitable conduct. Dow Chemical Co. v. Dart Industries, Inc., 475 F.2d 124, 125 (9th Cir.), cert. denied, 414 U.S. 1039, 94 S.Ct. 540, 38 L.Ed.2d 330 (1973). We agree with Milgo that the proper standard of proof in assessing whether the necessary prerequisites of inequitable conduct exist is the “clear and convincing” standard. Barr Rubber Products Company v. Sun Rubber Company, 425 F.2d at 1120. The relevant inquiry is not whether the district court expressly stated that it was applying the “clear and con- vincing” standard but whether its findings do meet this standard. The district court made the following findings: Plaintiffs seek their attorneys’ fees on the ground that this is a special case because defendants have deliberately fabricated the narrow skirt theory and have attempted to assert the Ragsdale ‘503 patent which the inventor himself admitted had no novelty in the claims asserted in = "tN G-16 this trial. 1 regretfully come to the conclusion that the plaintiffs are correct. The evidence is very strong that Whang knew that the WU 2247 modem had wide skirts, and quite persuasive that he also knew that a number of Milgo modems labeled as covered by the ‘023 patent did also. Mr. Whang's present posture of ignorance of the meaning of terms in his own field of specialty is not at all persuasive. Both Mr. Whang and Attorney Jones are highly trained and sophisticated people. | cannot escape the conclusion that both of these men have deliberately misrepresented the narrow skirt issue to both the District Court of Kansas and to this court. One of the unavoidable hazards of patent litigation is the fact that district judges are likely to have no background in the technology in- volved. This places a heavy burden on patent lawyers and their expert witness to do their best to mitigate the situa- tion rather than exploit it. Defendants’ post-trial brief strikes me as doing just the reverse; in fact, it verges perilously close to double-talk. Codex Corp. v. Milgo Electric Corp., 534 F.Supp. at 433-34. We hold that these findings, which were supported by the evidence and were clear and precise, mect the “clear and con- vineing™ standard. Milgo also contends that they were denied a fair opportuni- ty to defend against the charge of deliberate misrepresenta- tion. We believe that the district court's reliance on Campbell v. Spectrum Automation, 601 F.2d 246 (6th Cir. 1979), oi this point was well taken. There, as here, the district court found that the party against whom attorney fees were adjudged had acted in bad faith based on the evidence presented at trial. The Court of Appeals for the Sixth Circuit held that where factual issues supporting a finding of “excentional” cir cormetanens are Deamebt ont ot trieh che court wove cothormved iv decide a motion under 39 U.S.C. § 255 based solety on the ’ ‘ ’ ‘ G-17 VI. Amount of Attorney Fees We now turn to the question of the amount of attorney fees awarded Codex. The district court used the “lodestar” ap- proach set forth in Furtado v. Bishop, 635 F.2d 915 (1st Cir. 1980), which was based on the analysis used in Copeland v. Marshall, 641 F.2d 880 (D.C. Cir. 1980), and Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir. 1976). The starting point is to calculate the “lodestar”: “The number of hours reasonably expended multiplied by a reasonable hourly rate.” Copeland, at [891]. This would involve separating out work done in relation to a firm's hierarchy, from senior partner to junior associate (and, we would add, including work that was or ought to have been assigned to a non-lawyer); eliminating time beyond that consistent with a standard of reasonable efficiency and productivity; and, after receiving documentation and possibly holding a hearing, assigning appropriate hourly rates for the kinds of work done by those at dif- ferent levels of expertise. This results in a “lodestar” fee that then is adjusted upward or downward to reflect the contingent nature of any fee (if such is not reflected in the hourly rate), delay in payment, quality of representation (i.e., an unusually good or poor performance above or below the skill already reflected in the hourly rates), exceptional (and unexpected) results obtained, etc. Furtado v. Bishop, 635 F.2d at 920 (footnote omitted). Codex argues that we should modify this approach in a case _ such as this where the litigation was caused in large part by the unethical conduct of Milgo and its attorneys. It contends that under such circumstances it should be saved completely harmless from the cost of the litigation. It further urges that due to the arms length relationship with its attorneys, great weight should be given to the bargained-for fees. We do not agree. G-18 The fee charged a client by its attorneys is a private matter in which the court, barring unusual circumstances, will not get involved. When, however, a court is compelled by the nature of the case or statutory mandate to award attorney fees to a party, the determination of such award is not only a mat- ter of public record, it becomes part of the great body of our law. A court would be shirking its responsibility to render a principled decision were it to accept without scrutiny and close examination the fees agreed upon by client and counsel. Although Furtado was a civil rights case, its applicability is not limited to that type of case. Indeed, the origin of the “lodestar” analysis was a private, multidistrict plumbing fix- tures antitrust case, Lindy Brothers Builders, Inc. v. American Radiator & Standards Sanitary Corp., 540 F.2d 102. As we noted in Furtado, the “lodestar” approach is one “that can be applied by trial courts in all cases and can also lend itself to meaningful review.” Furtado v. Bishop, 635 F.2d at 920. The district court found, and we agree, that Codex’s sub- missions were inadequate. They submitted time sheets, ex- pense sheets, and bills prepared by their attorneys, with monthly totals by attorney. The critical element missing was a categorization of the time spent according to what type of activity was engaged in and by whom. In line with the first part of the “lodestar” analysis the district court made specific reductions for poor documenta- tion, time unreasonably spent, duplication of effort, and for time spent on issues other than those which were infected by Milgo’s misconduct. We have examined each of these specific reductions and find no errors of law or abuse of discretion by the district court. Nor did the district court err in refusing to adjust the award upward. We affirm the amount of attorney fees as awarded by the district court. VII. Post Trial Motions We will review the denial of a Rule 59 motion only for abuse of discretion. Nimrod v. Sylvester, 369 F.2d 870, 873 (ist Cir. 1966); C. Wright & A. Miller, Federal Practice and Procedure § 2818 at 118 (1973). Likewise, the denial of a Rule 60(b) mo- tion will be reversed only where the district court has abused its discretion. Wilkin v. Sunbeam Corp., 466 F.2d 714, 717 (10th Cir. 1972), cert. denied, 409 U.S. 1126, 93 S.Ct. 940, 35 L.Ed.2d 258 (1973). It follows from our discussion of the liability issues that the district court did not abuse its discretion in denying Milgo’s motions for a new trial and relief from judgment. VIII. Unclean Hands Codex urges us to find all three patents involved in this ac- tion wholly unenforceable because of unclean hands. This issue was not addressed by the district court, although it was presented by Codex in its trial and post trial briefs. Because the facts and the law are clear we think it can be decided without the benefit of findings by the district court. Codex finds support fur its contention in the Supreme Court's decisions in Precision Co. v. Automotive Co., 324 U.S. — 806, 65 S.Ct. 993, 89 L.Ed. 1381 (1945), and Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 54 S.Ct. 146, 78 L.Ed. 293 (1933). In Keystone Driller, the patent applicant paid off another inventor to suppress his prior art pertinent to one of a group of related patents. The case emphasizes two points in finding that five related patents were unenforceable due to in- equitable conduct with respect to one of them. First. the devices covered by the five patents must be “important, if not essential, parts of the same machine.” Id. at 246, 54 S.Ct. at 148. Second, the inequitable act must have “immediate and necesary relation to the equity that he seeks in respect of the matter in litigation.” Id. at 245, 54 S.Ct. at 147. i —e ra ‘. +a G-20 In Precision Co., 324 U.S. 806, 65 S.Ct. 993, 89 L.Ed. 1381, “* there was misconduct involving at least two of the three patents in suit in the Patent Office and all three were tied together by contracts which were consummated as an integral part of the unsavory conduct. The patents at issue here do not have the strong interconnec- tions which the Supreme Court found so compelling in the cited cases. There is neither the interdependence of all claims in all the patents which the Supreme Court found in Keystone Driller, nor the inequitable conduct touching all the patents which was found in Precision Co. The maxim of “he who comes into equity must come with clean hands” of necessity gives wide range to a court's use of “discretion to withhold punishment of behavior which it con- siders not to warrant so severe a sanction.” Norton Co. v. Carborundum Co., 530 F.2d 435, 442 (Ist Cir. 1976). Based on our review of the facts and the applicable law, we refuse to apply the unclean hands doctrine to the three patents as a whole. The findings of the district court as to the in- validity of the specific claims embodied in the three patents is affirmed. Affirmed. No costs to either party. H-1 APPENDIX H United States Court of Appeals For the First Circuit Nos. 82-1644 83-1076 CODEX CORPORATION, ET AL., PLAINTIFFS, APPELLEES, v. MILGO ELECTRONICS CORPORATION, ET AL., DEFENDANTS, APPELLANTS. Before Campse tt, Chief Judge. Corrin, Bownes & Breyer, Circuit Judges, and Re*, Judge. ORDER OF COURT Entered September 9, 1983 Upon consideration uf “Petition for Rehearing and Sugges- tion for Rehearing En Banc”, which document was submitted to the members of the panel and to the judges of the Court who are in regular active service; and The judges of the panel having voted to deny the petition for rehearing, and the judges of the Court who are in regular active service having voted against rehearing en banc, It is ordered that said application for rehearing en banc is hereby denied. By the Court: (s) Francis P. Scigliano, Clerk. * Of the United States Court of International Trade, sitting by designation. [cc: Messrs. Cohn, Kirkpatrick and Ware. | 1-1 APPENDIX I EXCERPTS FROM THE TESTIMONY OF SANG WHANG “Q. > © BEFORE THE KANSAS DISTRICT COURT Would you relate the energy limits of 800 and 1000 hertz as you have defined it in your ‘023 patent in suit to the rolloff factor and compute for us the rolloff fac- tor that you have specified in your patent by that calculation? . Yes, I will. I must also say that during Dr. Beam’s deposition, he equated 1000 [Hz] to 800 [Hz] as 25% rolloff and I couldn't help but smiling because that is the theoretical people’s point of view, and without having the cosine rolloff or percentage rolloff when I say don’t put energy outside the thousand hertz, I don't mean make sure that energy at thousand hertz is at .000001 percent or anything like that. In a practical sense, if it is 1% or 2% of where the major energy is, to me that is practically low enough. That is not going to interfere with any operation. We don't have to make it .00001 percent according to mathematical theory. I would like to explain what that eight hundred [Hz] to a thousand [Hz] means if I were to relate that in practical sense in terms of cosine rolloffs or less. Let me explain that. . Do you need a chart? . If I can have some sheets where I can write, please. MR. JONES: Let the record show the witness is marking on Plaintiff's Exhibit 181. THE WITNESS: The way my patent teaches, there is a carrier frequency of 1700 hertz. Then the 1 over T [Nyquist passband] of 800 hertz would be from 1300 hertz to 2100 hertz. Now, when I say a 1-2 thousand hertz of dependable part of the telephone line, I go from 1200 hertz to 2200 hertz. That is specified in the—called out in the patent. Column No. 14, Line 69, 1200 hertz to 2200 hertz. If we want exactly 1%, make sure that the energy over here is 1% , it turns out to be 42.3% rolloff. Now, practically 42.3% rolloff, nobody can design a filter that accurately to make 42.3% rolloff, but I'm just giv- ing you the theoretical limits. What this one does with a voltage limit of point point one, it gives 1% power there. So using 1 over T 800, but putting the limits within thousand hertz, again being practical, not necessarily .0001% , a couple percent or less, you can come up with equating that into cosine rolloff according to Ben- nett and Davey, and it comes out to be maybe 50% or less. Now, Dr. Beam agreed there is some other means of rolloff. If I used a straight line rolloff, | would use the same criteria, make sure there are around a thou- sand hertz there and power level is less than one or two percent, an insignificant amount so that even the line distortion does not come into play, in interference with my operation. A. [X:5832-5838 Whang further testified: Q. o> Is there anything in that claim which makes it so limited that it would not read upon a 1 over T filter with a hundred percent rolloff? Just reading the claim itself, no, but it certainly would not be following my teaching of the patent. Rut the claim does not have any restriction of that nature. is Ghat correct? i hat's correct. Would you look at claim 25 and tell me whether your ate er would be the same with respect to that claim? A. Q. 1-3 The same answer will apply, yes. When you take the claim without the specification, just all by itself, yes. So it’s your belief that somehow limitations should be read into these claims that are expressed not in the claim but in the specifications someplace? . I have to leave that to the judgment of my patent counsel. Now, if we are band limiting or shaping anywhere, whether using cosine rolloff or triangular rolloff, anything, what I'm interested in is do anything but make sure aruund this here (indicating), energy is prac- tically negligible. Now, I would consider negligence to be maybe one percent, two percent or lower, | wouldn't consider 0001 percent or anything like that for all practical sense. Now, if we were just to examine what the hundred percent rolloff would mean in terms of energy at those frequencies, hundred percent rolloff is what Bennett and Davey calls a raised cosine spectrum. It is like a cosine wave except it’s raised so there's no negative, but everything is positive. That’s where the words “raised cosine spectrum™ comes about. And if this is a cosine sort of function. This is a poor [sic, should be “peak” ] amplitude of 1 and that (indi- cating) is .5, and then this would be 400 hertz. 2500 hertz is where that cosine of 90 degrees comes about, and calculating this angle as a sign (sic, should be “sine” ] of 22% degrees and subtracting from .5, what is that amplitude here? It turns out to be—that amplitude at 2200 hertz, a thousand hertz bandwidth turns out to be .308 volts against 1, and that represents about 9.5 percent power, because power happens to be the square of the voltages. The power level around this thousand hertz, if I used one lnundred percent rolloff, is about ten percent 0). 1-4 power. Now, that is sufficient power to interfere with operation if telephone lines start to mess that part of the energy (indicating). That's what the problem is. Now, if I used fifty percent rolloff, which will be steeper rolloff here (indicating), then at the same point, at 2200 cycles, the voltage level is .146. The next one is .146. That is at the fifty percent rollofi. That's hundred percent rolloff (indicating). So perhaps I can write down here, with hundred percent rolloff at 2200 hundred hertz, the voltage level is 0.308, and that's volts, and the power is 9.5 percent. At 50% rolloff, at the same point, sinusoidal calculation gives me 0.146 and a power level of 2.14%. In other words, the power at that point is close to 2%. Now, that is negligible, but even if the telephone line distorts, what comes in here is not going to bother us . Is there anything in the claim or in the specification of the patent which defines the bandwidth in terms of fifty percent rolloff or less, other than the calculations that you went through for us earlier this morning? As I said, I did not even know the cosine rolloff, cither a hundred percent or fifty percent, like defined in Ben- nett and Davey and certainly I would not have been able to put that number down, but | was giving the practical guidelines, which, translated back to Bennett and Davey’s figures, | said, would be fifty percent or less, but certainly that was the information that I did not have at that time. Val. then, you say vour invention really is. as it relates to Bennett and Davey terms, could be expres: ed as a tiiter having a bandwidth expressed in terms of titty nercent or lew rolleff a Lover T lilter. that isc Ceortatl. beennet Claim one hundred percent rollott « *\ tavention. That was old art 1-5 Q. Yet Claims 19 and 25, insofar as their language is ex- pressed, do include, within their scope a one hundred percent rolloff, is that correct? A. If you separate that claim from the specifications altogether, yes. A. [X:5791-5792.” % --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1376%3A2. Public record. Not legal advice.