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WILLIAM L. ANTHONY, JR. (State Bar No. 106908) 
ERIC L. WESENBERG (State Bar No. 139696) 
HEIDI L. KEEFE (State Bar No. 178960) 
ORRICK, HERRINGTON & SUTCLIFFE LLP 
1000 Marsh Road 
Menlo Park, CA 94025 
Telephone: (650)614-7400 
Facsimile: (650) 614-7401 


STEVEN R. ALEXANDER (admitted Pro Hoc Vice) 

KRISTIN L. CLEVELAND (admitted Pro Hac Vice) 

JAMES E. GERINGER (admitted Pro Hac Vice) 

JOHN D. VANDENBERG 

KLARQUIST SPARKMAN. LLP 

One World Trade Center, Suite 1600 

121 S.W. Sahnon Street 

Portland, OR 97204 

Telephone: (503) 226-7391 

Facsimile: (503) 228-9446 

Attorneys for Defendant and Counterclaimant, 
MICROSOFT CORPORATION 


UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF CALIFORNM. 
OAKLAND DIVISION 

INTERTRUST TECHNOLOGIES CASE NO: C 02 0647 SBA 

CORPORATION, a Delaware corporation. 

Plaintiff, MICROSOFT CORPORATION'S FIRST 

AMENDED ANSWER AND 
V. COUNTERCLAIMS 

MICROSOFT CORPORATION, a 
Washington Corporation, 

Defendant. 


MICROSOFT CORPORATION, a 
Washington corporation, 

Coimterclaimant, 

V. 

INTERTRUST TECHNOLOGIES 
CORPORATION,, a Delaware corporation, 

Counter-Defendant. 


NaCROSOFT CORPORATION'S FIKST 
AMENDED ANSWER AND COUNTERCLAIMS 
CASE NO. C 02-0647 SBA 


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Defendant Microsoft Gorporation ("Microsoft") answers the Complaint of LiterTrust 
Technologies Corporation ("InterTrust") as follows: 

1 . Microsoft admits that the Complaint purports to state a cause of action under the 
patent laws of the United States, 35 United States Code, §§ 271 and 281. Microsoft denies that it 
has infi-inged or now infringes the patent asserted against Microsoft in the Complaint. Microsoft 
denies any and all remaining allegations of paragraph 1 of the Complaint. 

2. Microsoft admits that the Complaint purports to state a cause of action over which 
this Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). 

3. Microsoft admits, for purposes of this action only, that venue is proper in this 
judicial district. Microsoft denies any and all remaining allegations of paragraph 3 of the 
Complaint. 

4. Upon information and beUef, Microsoft admits the allegations of paragraph 4 of 
the Complaint. 

5. Microsoft admits the allegations of paragraph 5 of the Complamt 

6. Microsoft admits, for purposes of this action only, that it transacts business in this 
judicial district. Microsoft denies any and all remaining allegations of paragraph 6 of the 
Complaint. 

7. Microsoft admits that on its face the title page of U.S. Patent No. 6,157,721 ("the 
'721 Patent") states that it was issued December 5, 2000, is entitled "Systems and methods using 
cryptography to protect secure computing environments," and lists "InterTrust Teclmologies 
Corp." as the assignee. Microsoft denies that the '721 Patent was duly and lawfiiUy issued. 
Microsoft fiirther denies, or lacks information or belief sufficient to admit or deny any and all 
remaining allegations of paragraph 7 of the Complaint. 

8. Microsoft repeats and reasserts its responses to paragraphs 1 -7 of the Complaint, 

as if fully restated herein. 

9. Microsoft admits that the Complaint purports to state a cause of action under 
35 U.S.C. §§ 271 and 28 1 . Microsoft denies that it has infringed or now infringes the patent 


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MICXOSOFT CORPORATION'S FIRST 
AMENDED ANSWER AND CXJUNTERCLAIMS 
CASE NO. C 02-0647 SBA 


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asserted against Microsoft in the Complaint. Microsoft denies any and all remaining allegations 
of paragraph 9 of the Complaint. 

1 0. Microsoft denies, or lacks information and belief sufficient to admit or deny as to 
InterTrust's claim as to any and all allegations of paragraph 10 of the Complaint. 

11. Microsoft denies any and all allegations of paragraph 1 1 of the Complaint. 

12. Microsoft denies any and all allegations of paragraph 12 of the Complaint. 

13. Microsoft denies any and all allegations of paragraph 13 of the Complaint. 

14. Microsoft denies any and all allegations of paragraph 14 of the Complaint 

AFFIRMATIVE AND OTHER DEFENSES 
Further answering the Complaint, Microsoft asserts the following defenses. Microsoft 
reserves the right to amend its answer with additional defenses as fiirther information is obtained. 

First Defense; Noninfringement of the Asserted Patent 

15. Microsoft has not infringed, contributed to the infringement of, or induced the 
infringement of U.S. Patent No. 6,157,721 ("the '721 Patent"), and is not liable for infiingement 
thereof 

16. Any and all Microsoft products or actions that are accused of infringement have 
substantial uses that do not infringe and therefore cannot induce or contribute to the infringement 
of the '721 Patent, 

Second Defense; Invalidity of the Asserted Patent 

17. On information and belief, the '72 1 Patent is invalid for failing to comply with the 
provisions of the Patent Laws, Title 35 U.S.C., including without limitation one or more of 
35U.S.C. §§ 102, 103 and 112. 

Third Defense; Unavailability of Relief 

18. On information and belief. Plaintiff has failed to plead and meet the requirements 
of 35 U.S.C. § 271(b) and is not entitled to any alleged damages prior to providing any actual 
notice to Microsoft of the '72 1 Patent. 


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MICROSOFT CORPORATION'S HRST 
AMErrOED ANSWER AND COUNTERCLAIMS 
CASE NO. C 02^647 SBA 


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Fourth Defense: Unavailability of Relief 

19. On information and belief, Plaintiff has failed to plead and meet the requirements 
of 35 U.S.C. § 284 for enhanced damages and is not entitled to any damages prior to providing 
any actual notice to Microsoft of the '721 Patent, and any alleged infringement thereof. 

Fifth Defense: Unavailability of Relief 

20. On information and belief, Plaintiff has failed to plead and meet the requirements 
of 35 U.S.C. § 287, and has otherwise failed to show that it is entitled to any damages. 

Sixth Defense: Prosecution History Estoppel 

21 . Plaintiffs alleged cause of action for patent infringement is barred under the 
doctrine of prosecution history estoppel, and Plaintiff is estopped from claiming that the *721 
Patent covers or includes any accused Microsoft product or method. 

Seventh Defense: Dedication to the Public 

22. Plaintiff (and its predecessors in interest) has dedicated to the public, and 
abandoned, all methods, apparatus, and products (a) disclosed in U.S. Patent No. 5,940,504 and 
not literally claimed therein, (b) disclosed in U.S. Patent No. 5,892,900 and not literally claimed 
therein, (c) disclosed in U.S. Patent No. 5,917,912 and not literally claimed therein, (d) disclosed 
in U.S. Patent No. 5,920,861 and not literally claimed therein, (e) disclosed in U.S. Patent No. 
5.982,891 and not literally claimed therein, (f) disclosed in the '721 Patent and not literally 
claimed therein, (g) disclosed in U.S. Patent No. 6,185,683 Bl and not literally claimed therein, 
and/or (h) disclosed in U.S. Patent No. 6,253,193 Bl and not literally claimed therein, and is 
estopped from claiming infringement by any such public domain methods, apparatiis, and 
products. 

Eighth Defense: Use/Manufacture Bv/For United States Government 

23. To the extent that any accused product has been used or manufactured by or for the 
United States, Plaintiffs claims and demands for relief are barred by 28 U.S.C. § 1 498. 

Ninth Defense: License 

24. To the extent that Plaintiffs allegation of infringement is premised on the alleged 

MICROSOFT CORPORATION'S HRST 
AMENDED ANSWER AND COUNTERCLAIMS 
A CASE NO. C 02-0647 SBA 


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use, sale, or offer for sale of a product that was manufactured by or for a licensee of InterTrust 
and/or provided by or to Microsoft to or by a licensee of InterTrust, such allegation is barred 
pursuant to license. 

Tenth Defense: Acguiescence 

25. Plaintiff has acquiesced in at least those acts of Microsoft that are alleged to 
infringe the '721 Patent. 

Eleventh Defense; Laches 

26. Plaintiff s claims for relief are barred, in whole or in part, by the equitable doctrine 
of laches. 

Twelfth Defense; Inequitable Conduct 

27. The '721 Patent claimis are unenforceable due to inequitable conduct, including 
those acts and failures to act set forth in Count m of Microsoft's Counterclaims, set forth below. 

Thirteenth Defense; Unenforceability 

28. The claims of the '721 Patent are unenforceable due to unclean hands, inequitable 
conduct and misuse and illegal extension of the patent right, including those acts and failures to 

act set forth in Count IV of Microsoft's Counterclaims, set forth below. 

COUNTERCLAIMS 
COUNT I - DECLARATORY 
JUDGMENT OF NONINFRINGEMENT 

1. This action arises under the patent laws of the United States, Title 35 U.S.C. §§ 1, 
etseq. This Court has subject matter jurisdiction over this counterclaim under 28 U.S.C. §§ 1338, 
2201, and 2202. 

2. Microsoft Corporation ("Microsoft") is a Washington corporation with its 
principal place of business in Redmond, Washington. 

3. On information and belief, Plaintiff /Counterclaim Defendant InterTrust 
Technologies Corporation ("InterTrust") is a Delaware corporation with its principal place of 
business in Santa Clara, California. 


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MICROSOFT CORPORATION'S HRST 
AMENDED ANSWER AND COUNTERCLAIMS 
CASE NO. C 02-0647 SBA 


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4. InterTrust purports to be the owner of U.S. Patent No. 6,157,721 ("the '721 
Patent"). 

5. InterTrust alleges that Microsoft has mfringed the * 721 Patent. 

6. InterTrust issued a press release on February 7, 2002. The press release stated that 
InterTrust had filed a lawsuit against Microsoft for patent infringement. The press release 
specificed that InterTrust "alleges infringement by Microsoft's 'Plug and Play' Driver 
Certification Program." 

7. Microsoft's certification of hardware drivers has not infringed, either directly or 
indirectly, any claim of the '721 Patent, and Microsoft is not liable for infringement thereof. 

8. An actual controversy, within the meaning of 28 U.S.C. §§ 2201 and 2202, exists 

between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to the 

infringement or noninfringement of the '721 Patent. 

COUNT n - DECLARATORY 
JUDGMENT OF INVALroiTY OF THE '721 PATENT 

9. Microsoft repeats and realleges paragraphs 1-5 of its Counterclaims, as if fully 
restated herein. 

1 0. The ' 72 1 Patent, and each claim thereof, is invahd for failing to comply with the 
provisions of the Patent Laws, including one or more of 35 U.S.C. §§ 102, 103 and 1 12. 

11. An actual controversy, within the meaning of 28 U.S.C. §§ 2201 and 2202, exists 

between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to whether 

the claims of the '721 Patent are valid or invalid. 

COUNT m - DECLARATORY JUDGMENT 
OF UNENFORCEABILITY OF THE '721 PATENT 

12. Microsoft repeats and realleges paragraphs 1-5 of its Counterclaims, as if fiilly 
restated herein. 

13. Claims 1-43 of the '721 Patent application (SN 08/689,754), and claims 1-41 of 
the '721 Patent, were not and are not entitled to the benefit of any application filing date prior to 
August 12, 1996, under 35 U.S.C. § 120 or otherwise. 


MICROSOFT CORPORATION'S FIRST 
AMENDED ANSWER AND COUNTERCLAIMS 
.g. CASE NO. C 02-0647 SBA 


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14. United States Patent No. 5,91 0,987 ("the '987 Patent") issued on Jime 8, 1999, 
from a continuation of an application filed on February 13, 1995. 

15. The '987 Patent is prior art to claims 1-8, 10-29, and 3 1-43 of the '721 Patent 
application (SN 08/689,754). 

16. The '987 Patent is prior art to claims 1-41 of the '721 Patent under 35 U.S.C. 
§ 102(e). 

17. The '987 Patent was material to the patentability of claims 1-8, 10-29, and 31-43 
of the '721 Patent application (SN 08/689,754). 

1 8. One or more of the '721 Patent applicants knew, while the '721 Patent application 
(SN 08/689,754) was pending, of the '987 Patent. 

1 9. On information and belief, one or more of the attorneys who prosecuted or assisted 
in prosecuting the '721 Patent application (SN 08/689,754) knew, while that application was 
pending, of the '987 Patent. 

20. The applicants for the '721 Patent did not cite the '987 Patent to the Patent Office 
as prior art to any of claims 1 -43 of the '721 Patent application (SN 08/689,754). 

21 . The applicants for the '721 Patent did not cite to the Patent Office as prior art to 
any of claims 1-43 of the '721 Patent application (SN 08/689,754) any reference having flie same 
or substantially the same disclosure as the '987 Patent. 

22. The '987 Patent is not merely cvmiulative over any reference cited as prior art 
during the prosecution of the '72 1 Patent application (SN 08/689,754). 

23. On information and belief, one or more of the '721 Patent applicants believed, 
while the '721 Patent application (SN 08/689,754) was pending, that the '987 Patent was material 
to the patentability of one or more of claims 1-8, 10-29, and 31-43 of the '721 Patent application 
(SN 08/689,754), but, with deceptive intent, failed to disclose that reference as prior art to the 
Patent Office. 


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MICROSOFT CORPORATION'S FIRST 
AMENDED ANSWER AND COUNTERCLAIMS 
CASE NO. C 02-0647 SBA 


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24. The '721 Patent is unenforceable due to the inequitable conduct of the '721 Patent 
applicants and/or agents before the Patent aiid Trademark Office in connection with the '721 
Patent application (SN 08/689,754). 

25. An actual controversy, within the meaning of 28 U.S.C. § § 2201 and 2202, exists 
between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to whether 

the claims of the '721 Patent are enforceable. 

COUNT IV - DECLARATORY 
.nJPGMENT OF UNENFORCEABILITY 

26. Microsoft repeats and realleges paragraphs 1-5 and 12-24 of its Counterclaims, as 

if fiilly restated herein. 

27. In prosecuting, marketing, and enforcing various related patents, including the 
'721 Patent, hiterTrust has engaged in a pattern of obfuscation as to the scope of the patents, the 
prior art to the patents, and the alleged "inventions" of the patents. For example, InterTrust has 
accused non-infringing products of infringement, has buried Patent Office Examiners with a 
collection of more than 400 references, many of which were not related to the particular claims in 
issue, and has buried the Examiners with hundreds or thousands of pages of redundant, verbose, 
unclear text, effectively prohibiting a real comparison of the alleged "invention" versus the prior 
art. This pattern of intentional conduct constitutes an abuse of the patent system, unclean hands, 
misuse and illegal extension of the patent right, rendering the '721 Patent unenforceable, as well 
as invalid under Section 112. 

28. An actual controversy, within the meaning of 28 U.S.C. §§ 2201 and 2202, exists 
between Microsoft, on the one hand, and InterTrust, on the other hand, with respect to whether 
the claims of the '721 Patent are enforceable. 

PRAYER FOR RELIEF 
WHEREFORE, Microsoft prays for the following relief: 

A. The Court enter judgment against InterTrust, and dismiss with prejudice, any and 
all claims of the Complaint; 


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MICROSOFT CORPORATION'S FIRST 
AMENDED ANSWER AND COUNTERCLAIMS 
CASE NO. C 03-0647 SBA 


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DECLARATION OF SERVICE VIA ELECTRONIC MAIL AND U,S. MAIL 

I am more than eighteen years old and not a party to this action. My place of 
employment and business address is 1000 Marsh Road, Menlo Park, California 94025. 
On April 12, 2002, 1 served: 

MICROSOFT CORPORATION'S FIRST AMENDED ANSWER AND 
COUNTERCLAIMS 

By transmitting a copy of the above-listed document(s) in PDF form via electronic mail Michael 
H. Page at mhp@kvn.com, Christopher P. Isaac at chris.isaac@fmnegan.coin, Stephen E. 
Taylor at staylor@tcolaw.com and James E. Geringer atjames.geringer@klarquist.com and 
also by placing true and correct copies of the above documents in an envelope addressed to: 


John W. Keker, Esq. 
Michael H. Page, Esq. 
KEKER & VAN NEST, LLP 
710 Sansome Street 
San Francisco, California 94111 
Tel. No. 415-391-5400 
Fax No. 415-397-7188 
Email: jwk@kvn.com 
Email: mhp@kvn.com 

Attorneys for Plaintiff 
INTERTRUST TECHNOLOGIES 
CORPORATION 

Stephen E. Taylor, Esq. 

TAYLOR & CO. LAW OFHCES 

1050 Marina Village Parkway, Suite 101 

Alameda, CA 94501 

Tel. No. 510-865-9401 

Fax No. 510-865-9408 

Email: staylor@tcolaw.com 

Attorneys for Plaintiff 
INTERTRUST TECHNOLOGIES 
CORPORATION 


Christopher P. Isaac, Esq. 

FINNEGAN, HENDERSON, FARABOW, 

GARRETT & DUNNER ULP 

1300 L Street, N.W. 

Washington, DC 20005-3314 

Tel. No. 202-408-4000 

Fax No. 202-408-4400 

Email: chris.isaac@finnegan.com 

Attorneys for Plaintiff 
INTERTRUST TECHNOLOGIES 
CORPORATION 


John D. Vandenberg, Esq. 

James E. Geringer, Esq. 

KLARQUIST, SPARKMAN, LLP 

One World Trade Center 

121 S. W. Salmon Street, Suite 1600 

Portland, Oregon 97204 

Tel. No: 503-226-7391 

Fax No: 503-228-9446 

Email: john.vandenberg@klarquist.com 

Email : j ames.geringer @ klarquist.com 

Attorneys for Defendant and 
Counterclaimant, MICROS OFT 
CORPORATION 


/// 


DECLARATION OF SERVICE VU ELECTRONIC MAIL 
AND TJ.S. MAIL - CASE NO. C 02-0647 SBA (MEJ) 


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and sealing the envelope, affixing adequate first-class postage and depositing it in the U.S. mail 
at Menlo Park, California. 

Executed on April 12, 2002 at Menlo Park, California. 

I declare under penalty of perjury that the foregoing is true and correct. 


Print Name 


Signature 


DECLARATION OF SERVICE VU ELECTRONIC MAIL 
AND U.S. MAIL - CASE NO. C 02-0647 SBA (MEJ)