Patent Case Summaries October 4, 2013

Federal Circuit Patent Case Summaries for the Week Ending October 4, 2013

The following is a summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit for the week ending October 4, 2013. Rich Seeger and Kirk Bradley prepared this edition.  


Case Summaries

Litigation Practice and Procedure: Prior Adjudication: Issue Preclusion
Claim Interpretation: Means-Plus-Function

TecSec, Inc. v. International Business Machines Corp., et al., No. 12-1415 (Fed. Cir. (E.D. Va.) Oct. 2, 2013). Opinion by Linn, joined by Moore. Dissenting opinion by Reyna.

The Federal Circuit affirmed-in-part and reversed-in-part the district court’s claim constructions after determining that a prior affirmance without opinion did not preclude TecSec from challenging the district court’s constructions in this second appeal involving different defendants. In the Federal Circuit’s prior affirmance without opinion under Rule 36, the court affirmed the district court’s judgment that a defendant did not infringe the asserted patents based on two independent grounds, one of which did not require the asserted claims to be construed. Thus, the mandate rule did not bar TecSec from challenging the district court’s claim construction.

TecSec sued International Business Machines Corp. (“IBM”) and other defendants for infringement of three TecSec patents related to a method and system for providing security in a data network: U.S. Patent Nos. 5,369,702; 5,680,452; and 5,898,781. Early in the case, the district court severed TecSec’s claims against IBM and stayed proceedings against the non-IBM defendants. The district court granted IBM’s motion for summary judgment of noninfringement based on two independent grounds: (1) no direct or indirect infringement based on TecSec’s failure of proof, and (2) TecSec’s failure to show that IBM’s systems met the claim limitations as the claims were construed by the district court. TecSec appealed, and the Federal Circuit affirmed the district court’s judgment without opinion pursuant to Rule 36.

On remand, the non-IBM defendants’ proceedings resumed. TecSec stipulated that it could not prove infringement by the non-IBM defendants under the claim construction adopted by the district court during the proceedings with IBM. Based on TecSec’s stipulation, the district court entered judgment of noninfringement. TecSec appealed, disputing the district court’s construction of several claim terms, including terms drafted in means-plus-function format. The defendants challenged TecSec’s right to appeal and asserted that, under the mandate rule and the doctrine of collateral estoppel, the Federal Circuit’s prior Rule 36 judgment precluded TecSec from re-raising its claim construction arguments.

The Federal Circuit held that neither the mandate rule nor the doctrine of collateral estoppel precluded TecSec from raising its claim construction arguments. The mandate rule did not bar TecSec from challenging the district court’s claim construction because the prior Rule 36 decision did not articulate a basis for affirmance, let alone discuss claim construction. On that record of summary affirmance, it could not be concluded that the Federal Circuit expressly or by necessary implication decided the claim construction issues in the IBM appeal. Likewise, the Federal Circuit held that collateral estoppel did not preclude TecSec’s challenge because claim construction was neither actually determined by, nor critical and necessary to, the Federal Circuit’s summary affirmance in the earlier appeal.

The Federal Circuit then addressed the claim construction disputes, ruling as to one term that the prosecution history warranted a narrow construction for one claim phrase, overcoming TecSec’s claim differentiation argument. As to a second term, the court ruled that the district court erred in limiting encrypted data to objects in multimedia form. The Federal Circuit also determined that the claim terms “system memory means” and “digital logic means” do not invoke § 112, ¶ 6, because those skilled in the art would have understood these terms to disclose specific structure. As to fourteen computer-implemented means-plus-function terms, which the district court had concluded lacked sufficient corresponding structure in the specification, the Federal Circuit disagreed. The court ruled that the specification discloses sufficient structure by disclosing specific software products and how to use those products to implement the claimed functions. The court noted that, “[s]hort of providing source code, it is difficult to envision a more detailed disclosure.” The court thus affirmed-in-part, reversed-in-part, and remanded the district court’s judgment.

In a dissenting opinion, Judge Reyna stated that entertaining TecSec’s appeal gave TecSec a second bite at the claim construction apple and undermined the utility of Rule 36. Specifically, the same claim terms, same constructions, same arguments, and same summary judgment order were previously reviewed by the Federal Circuit, and TecSec offered no new evidence against the non-IBM defendants. Judge Reyna further stated that the claim construction issues were “actually decided” in the IBM appeal because the court’s precedent required both construction of claims and evaluation of the evidence to determine a failure of proof to reach a single noninfringement judgment. Judge Reyna also stated that the claim construction issues were “critical and necessary to the judgment” because the district court actually determined the claim construction issues in the earlier case and the Federal Circuit necessarily decided those issues as well. At a minimum, according to Judge Reyna, the claim construction issues were critical and necessary to the affirmance of the district court’s summary judgment decision. 

http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1415.Opinion.9-30-2013.1.PDF  

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Claim Interpretation: Generally
Litigation Practice and Procedure: ITC Practice and Procedure: Domestic Industry

Microsoft Corp. v. International Trade Commission, et al., Nos. 12-1445, -1535 (Fed. Cir. (I.T.C.) Oct. 3, 2013). Opinion by Taranto, joined by Rader and Prost.

Affirming-in-part and reversing-in-part the International Trade Commission’s (“Commission”) determination of noninfringement and no domestic industry, the Federal Circuit held that substantial evidence supported the Commission’s finding that Microsoft failed to establish a domestic industry for two patents. The court also determined that the Administrative Law Judge (“ALJ”) had properly construed a claim term in a third patent and, thus, affirmed the determination of noninfringement. The court reversed and remanded the ALJ’s ruling of noninfringement for a fourth patent because the ALJ had imported unwarranted limitations into the claims.

Microsoft filed a complaint in the Commission against Motorola Mobility, LLC (“Motorola”), alleging that Motorola violated section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, (“section 337”) by importing mobile phones and tablets that infringe four of Microsoft’s patents: U.S. Patent Nos. 6,578,054 (“the ’054 patent”); 6,826,762 (“the ’762 patent”); 7,644,376 (“the ’376 patent”); and 5,664,133 (“the ’133 patent”). To make the domestic industry showing, Microsoft relied on mobile devices allegedly loaded with the Microsoft Windows mobile operating system, in which Microsoft had invested substantial resources in the United States.

The Commission found no infringement of all four patents. The Commission also found no violation of the ’054, ’762, and ’376 patents based on Microsoft’s failure to prove that the mobile devices on which Microsoft relied actually implemented the ’054, ’762, and ’376 patents. Microsoft appealed the Commission’s determinations.

As to the ’054 patent, the sole issue raised by Microsoft on appeal was whether the Commission properly construed the claim term “resource state information.” Finding that the term “state” is so general on its face that it begs for clarification from the specification regarding what aspect of the resource is to be identified, the Federal Circuit ruled that the specification made clear, consistent with the invention’s function of synchronizing, that “resource state information” must provide information about the comparative recentness of a particular version of a resource. Finding no error in the ALJ’s construction of “resource state information,” the court affirmed the Commission’s determination of noninfringement.

The Federal Circuit then affirmed the Commission’s determination that the accused products did not violate section 337 because Microsoft had not proven a domestic industry for the ’376 and ’762 patents. Although there was no question about the substantiality of Microsoft’s investment in its operating system or about the importance of that operating system to mobile phones on which it runs, a patentee must also prove that its substantial domestic investment, such as research and development, relates to an actual article that practices the asserted patent. For the ’376 and ‘762 patents, there was substantial evidence to support the Commission’s determination that Microsoft had failed to meet the domestic industry requirement, as Microsoft did not offer sufficient evidence to prove that (1) the specific code actually installed and run on a particular third-party mobile device automatically registered notification requests that indicated when the clients should receive notifications as required by the ’376 patent, and (2) any third-party mobile device implemented a hardware-dependent driver layer as required by the ’762 patent. The evidence Microsoft’s expert relied on was the source code and driver-layer code that Microsoft provided to third-party mobile-phone manufacturers; the expert never analyzed the code actually installed and run on a particular third-party mobile device. As a result, the Federal Circuit determined that the ALJ could plausibly find that Microsoft lacked sufficient evidence about how client applications and drivers on actual “articles” operated.

Regarding the ’133 patent, the Federal Circuit ruled that the ALJ incorrectly imposed extraneous limitations on several claim elements. Under a proper construction, the accused products directly infringed the ’133 patent. However, because the Commission rejected direct infringement and did not reach a determination as to indirect infringement, the court remanded the case to the Commission to address indirect infringement in the first instance. 

http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1445.Opinion.10-1-2013.1.PDF  

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