Personal Audio LLC of Texas who won a case against Apple on one patent front this past July is back in court with a new filing. The jury in the first trial sided with Personal Audio against Apple, but a post trial judgment ruled against their second key patent. Personal Audio is back with a vengeance to prove that their second patent was indeed infringed by Apple by pointing to iOS and Apple's own marketing regarding playlists for which they have no patents for, states the company. The lawsuit drags in the new iPhone 4S, iPod touch and the iOS 5 operating system which was just released. This is a very long and detailed report that goes into some of the history of this case and presents some fascinating details brought up in court testimony. If you're a legal buff or professional, it's definitely an interesting weekend read. Updated

An Overview of the Initial Case Won by Personal Audio

In Personal Audio, LLC v. Apple Inc., Case Number 9:09-CV-00111-RC ("Personal Audio v. Apple I"), Personal Audio sued Apple for infringement of United States Patent No. 7,509,178, entitled "Audio Program Distribution and Playback System" ("the '178 patent"). The Court construed the independent claims of the '178 patent to require the claimed player to send a request to initiate the downloading of one or more audio files and a sequencing file. At trial, Apple moved under Rule 50(a) for judgment as a matter of law on this issue. The Court reserved ruling, and the jury found that Apple's iPod classic, mini, and nano products infringed the '178 patent under the doctrine of equivalents. The jury relied on evidence that the accused devices send an "I'm here" signal when connected via a USB cable to a computer running iTunes, and that the "I'm here" signal is equivalent to a request to initiate the data transfer. The jury also found that the tried products infringed United States Patent No. 6,199,076, entitled "Audio Program Player Including a Dynamic Program Selection Controller" ("the '076 patent"). The jury awarded a lump-sum royalty of $8 million in damages. Immediately following the verdict, the Court granted Apple's Rule 50(a) motion for judgment as a matter of law that the tried products do not infringe the '178 patent under the doctrine of equivalents. The Court held there was insufficient evidence that the "I'm here" signal is equivalent to a request sent by the player to initiate the data transfer. The Court did not vacate the jury's finding that Apple also infringed the '076 patent.

The Ruling that Personal Audio Didn't Agree with

The court documents states that "Over Personal Audio's objection, the Court has interpreted the jury's lump-sum royalty award on the '076 patent as a "fully paid up license for all past and future sales of Apple products that incorporate the patented technology." The Court also stayed a second lawsuit Personal Audio filed, Personal Audio, LLC v. Apple Inc., Case Number 9:11-CV-00120-RC, in which Personal Audio asserts that different Apple products—including iPod nano generation 6, iPhone 4, and iPad 2—infringe the '076 patent. Even under the Court's reasoning, however, the purported license can only apply to the '076 patent. A jury cannot award damages on a patent that is not infringed, such as the '178 patent.

According to Personal Audio's documented legal Complaint against Apple, they state that "Apple therefore does not have a license, actual or implied, to use the technology claimed in the '178 patent."

The complaint goes on to state that "On October 12, 2011, Apple released its new iOS 5 operating system. iOS 5 is compatible with various generations of the iPod touch, iPhone, and iPad devices that Apple sells or previously sold to its customers. On October 14, 2011, Apple began offering for sale and selling the iPhone 4S, specifically loaded with iOS 5. The iOS 5 operating system includes a new data transmission feature—Wi-Fi Sync—that provides Apple devices loaded with iOS 5 with the capability to synchronize content with an iTunes computer over a wireless network. An Apple device will send a request to initiate the synchronization over the wireless network. The device will synchronize audio files, playlists, and other data with a server computer running iTunes. The Wi-Fi Sync feature allows an iPod touch, iPhone, or iPad running iOS 5 to download audio program files and a sequencing file from a server computer upon a request from the player. These devices no longer need to attach to a server computer running iTunes with a USB cable for day-to-day syncing."

Personal Audio Reviews Key Segments of the Initial Trial in their Current Complaint

Judge Ron Clark presided over Personal Audio v. Apple I, a patent infringement case in which Personal Audio asserted the '178 patent—the same patent at issue in this lawsuit. In Personal Audio v. Apple I, Personal Audio alleged that Apple infringed the '178 patent by selling the iPod classic generations 1 through 6, iPod mini generations 1 and 2, iPod nano generations 1 through 5, iPhone, iPhone 3G, iPhone 3GS, and iPad. Apple raised defenses of non-infringement, invalidity (anticipation, obviousness, written description, enablement, and best mode), unenforceability (inequitable conduct, equitable estoppel, and prosecution laches), laches, and failure to mark.

The Court appointed Dr. Frank Shipman as a technical advisor in Personal Audio v. Apple I. Dr. Shipman is a professor of computer science at Texas A&M University. Dr. Shipman analyzed the '178 patent, the parties' pertinent briefs, and relevant declarations as part of his duties as a technical advisor. Dr. Shipman assisted the Court in understanding the technology involved in the '178 patent from the point of view of one skilled in the art.

During Personal Audio v. Apple I, the Court issued multiple orders construing claim language of the '178 patent. On December 21, 2010, the Court issued an order construing the non-means-plus-function terms of the '178 patent. On January 31, 2011, the Court issued a second order construing the means-plus-function terms of the '178 patent. The Court held that claim limitations of claims 1, 6, 13, and 14 reciting "a processor for" were in means-plus function form. The Court identified physical structure and multi-part software algorithms that corresponded to each determined means-limitation function.

The Court also presided over a ten-day jury trial between Personal Audio and Apple. At trial, Apple asserted that claims 1, 6, 13, and 14 of the '178 patent were invalid as anticipated and obvious. Specifically, Apple asserted that claims 1, 6, 13, and 14 were anticipated by the DAD486x Digital Audio Delivery System Operation Manual, version 6.0A ("DAD Manual"), and DAD486x system. Apple also asserted that claims 1, 6, 13, and 14 of the '178 patent were rendered obvious by numerous combinations of the DAD Manual, DAD486x system, Sound Blaster 16 User's Guide for Windows 95, "Architecting Personalized Delivery of Multimedia Information" by S. Loeb, Opcode Musicshop Manual, Sony Discman, and Windows 95 Resource Kit.

The jury rejected Apple's anticipation and obviousness defenses and found claims 1, 6, 13, and 14 of the '178 patent valid. The jury further found that Apple infringed claims 1, 6, 13, and 14 of the '178 patent by selling the iPod classic, mini, and nano.

The remainder of Apple's defenses were either withdrawn or dismissed by the Court. Apple withdrew its equitable estoppel defense in December 2010. Apple withdrew its prosecution laches and most of its inequitable conduct allegations on July 4, 2011. At trial, the Court held as a matter of law that Apple failed to establish its written description and marking defenses. The Court also found that Apple abandoned its enablement and best mode defenses. The Court held that Apple failed to establish inequitable conduct.

At the close of Personal Audio's case-in-chief in Personal Audio v. Apple I, Apple moved for judgment as a matter of law that the products accused in that suit did not infringe the '178 patent. The Court granted this motion post-trial, finding that the accused products did not meet the "downloading" limitation of the independent claims of the '178 patent, and therefore did not infringe the '178 patent. According to the Court, the accused products did not meet the "downloading" limitation because they did not have a capability equivalent to sending a request from the player initiate downloading: