If it’s Not Legit, You Can’t Admit

By on April 15, 2021
Posted In Patents

The US Court of Appeals for the Federal Circuit affirmed a district court ruling of non-infringement based on the inadmissibility of unauthenticated printouts of source code as evidence. Wi-LAN Inc. v. Sharp Elecs. Corp., Case No. 20-1041 (Fed. Cir. Apr. 6, 2021) (Dyk, J.)

In 2015, Wi-LAN brought two separate patent infringement suits against Sharp Electronics and Vizio, both of which alleged direct and induced infringement of various claims of two Wi-Lan patents. The cases were managed in parallel by the district court, but consolidated on appeal. In both cases, the district court entered a stipulation of non-infringement with respect to one of the patents, which “relates generally to multimedia encoders and specifically [to] an integrated multimedia stream multiplexer,” based on Wi-LAN’s concession that it could not prove infringement under the district court’s construction of two claim terms. On appeal, the Federal Circuit had little difficulty concluding that the district court’s constructions were correct and affirming its ruling of non-infringement.

With respect to the other patent, the district court granted summary judgment of non-infringement, holding that Wi-LAN lacked sufficient admissible evidence to prove direct infringement. The involved patent is directed to “methods to display interlaced video on [a] noninterlaced monitor,” also known as “deinterlacing.” The deinterlacing functions of Sharp and Vizio’s televisions reside on each of the television’s “system-on-chip.” To establish that the source code underlying these deinterlacing functions practiced the patented methods, Wi-LAN filed (and subsequently dismissed without prejudice) additional lawsuits against third-party chip manufacturers from which it obtained source code printouts—purportedly reflecting the implementation of the deinterlacing process in a specified list of chips used in Sharp and Vizio’s televisions—along with declarations from employees of the manufacturers purporting to authenticate the source code printouts. The district court held that the source code printouts were inadmissible and that Wi-LAN therefore had failed to raise a genuine issue of material fact as to non-infringement. On appeal, Wi-LAN presented three theories as to why the district court erred in finding this evidence inadmissible, all of which the Federal Circuit rejected.

First, Wi-LAN argued that the source code printouts constituted a business record and thus were admissible as an exception to the hearsay rule under Federal Rule of Evidence 803(6). Specifically, Wi-LAN argued that it properly authenticated the printouts through the declarations of the chip manufacturers’ employees. The Federal Circuit acknowledged that declarations are typically used at summary judgment as a proxy for trial testimony, but explained that they cannot be used that way unless the witness would also be available to testify at trial. Because Wi-LAN conceded that it did not think it would be able to force the chip manufacturers’ employees to testify at trial, the Court found that the declarations could not be used as a substitute for trial testimony to authenticate the printouts and that the printouts therefore were not properly authenticated pursuant to Rule 803(6)(D).

Wi-LAN also argued that the declarations themselves constituted a business record. Because they were procured specifically for the purpose of litigation, however, the Federal Circuit found that the declarations did not satisfy the requirement that “the record was kept in the course of a regularly conducted activity of a business.” Wi-LAN argued in the alternative that this deficiency in the declarations should not have precluded their use based on the Third Circuit’s view that “the testimony of the custodian or another qualified witness” required under Rule 803(6)(D) “can be met by documentary evidence, affidavits, or admissions of the parties.” The Court rejected this view, explaining that it runs counter to the text of Rule 803(6) and noting that it appears not to have been widely adopted.

Regardless, the Federal Circuit found that Sharp and Vizio had demonstrated a lack of trustworthiness in the source code printouts, pursuant to Rule 803(6)(E), because the source code contained “inconsistent dates in the metadata, copyright, and revisions history as well as added commentary on the printed excerpts,” and Wi-LAN “failed to obtain change logs, file comparisons, or other evidence of code revisions that might clear up the inconsistencies in the code.” The Court concluded that the source code printouts did not qualify as a business record.

Second, Wi-LAN argued that the source code printouts were admissible under Rule 901(b)(4), which permits authentication of a record based on its distinctive characteristics and the like, when such characteristics, “taken together with all the circumstances,” are “sufficient to support a finding that the item is what the proponent claims it is.” The Federal Circuit again pointed to the “dubious circumstances” surrounding Wi-LAN’s procurement of, and the demonstrated lack of trustworthiness in, the source code printouts and ruled that the district court did not abuse its discretion in refusing to treat the printouts as properly authenticated under Rule 901(b)(4).

Third, Wi-LAN argued that the source code printouts were admissible under Rule 703, under which an expert is permitted to base their opinions on otherwise inadmissible facts or data “[i]f experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject.” However, Rule 703 provides that any otherwise inadmissible facts or data relied upon by an expert can be disclosed to the jury “only if their probative value in helping the jury evaluate the opinion substantially outweighs their prejudicial effect.” This argument thus raised two questions: whether the source code printouts themselves were admissible because Wi-LAN’s expert relied upon them, and whether Wi-LAN’s expert testimony relying on the source code printouts was admissible to establish infringement.

The Federal Circuit answered the first question by plainly stating that Rule 703 does not make otherwise inadmissible evidence admissible, and agreeing with the district court’s evaluation that Wi-LAN was attempting to use Rule 703 as a “backdoor” to admit the unauthenticated source code printouts. The Court explained that Rule 703 is inapplicable in circumstances in which an expert adds nothing to the inadmissible evidence other than transmitting it to the jury (as was the case here).

As to the second issue, the Federal Circuit distinguished source code generally—on which experts routinely rely in reaching opinions about infringement—from unauthenticated printouts of source code. The Court found Wi-LAN’s conclusory statement regarding reasonable reliance insufficient, and again ruled that the district court did not abuse its discretion in refusing to admit the source code printouts and declarations as evidence under Rule 703.

Paul Devinsky
Paul Devinsky advises clients on patent, trademark and trademark litigation and counseling, as well as copyright counseling. He is also active in intellectual property (IP) licensing, transactions and due diligence, as well as post-issuance US Patent and Trademark Office (USPTO) proceedings such as reissues and inter partes review, covered business method patent review and post grant review, and appellate (Federal Circuit) advocacy. Read Paul Devinsky's full bio.