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www. NYLJ.com
Thursday, March 24, 2016
Volume 255—NO. 56
Expert Analysis
Patent and Trademark Law
Federal Circuit Addresses
Patent Infringement
T
here are many keys to establishing liability in a patent case,
including defending one’s patent
against invalidity and unenforceability attacks. But the determinative question of infringement, should the
dispute reach trial, is typically the issue
the fact-finder will decide first, before all
others. And, in the last several weeks, the
U.S. Court of Appeals for the Federal Circuit
(CAFC) reminded all practitioners and parties that proving patent infringement, even
though this threshold question need only
be established by a preponderance of the
evidence, is no easy task.
In four separate decisions, the CAFC
either affirmed findings of non-infringement
or reversed findings of infringement. This
article reports on those decisions, and specifically the issue of patent infringement and
the importance of claim construction.
‘Nuance v. ABBYY’
On Feb. 22, 2016, the CAFC affirmed
the district court’s entry of judgment
that defendant ABBYY did not infringe
three separate patents owned by plaintiff
Nuance.1 On appeal, Nuance argued, among
other issues, that the district court erred
in construing certain claim terms from one
of those patents, U.S. Patent No. 6,038,342
(“the ‘342 patent”).
The ‘342 patent is directed to OCR technology used to translate images of text in
a scanned document into a format where it
can be searched or edited. One of the claims
Robert C. Scheinfeld is the partner-in-charge of the New
York office of Baker Botts and the head of its intellectual
property group in New York.
By
Robert C.
Scheinfeld
at issue required “an optical recognition system having a feature analysis process for
identifying an unknown character.”
Although the parties agreed that the
words “identifying” and “recognizing” should
have the same meaning, they differed on
construction. Nuance submitted that “identifying” is “a simple word that is used every
Proving patent infringement, even
though this threshold question need
only be established by a preponderance
of the evidence, is no easy task.
day and there is no indication that the inventors intended to use this term differently
from its commonly understood meaning.”
ABBYY initially proposed that “identifying”
had a special meaning and referred only
to “identification by template matching
and feature analyses.” The district court
agreed with Nuance that “identifying” means
“identifying.”
During discovery, summary judgment
briefing and pretrial, the parties still disputed the term’s meaning. Nuance’s expert
asserted that the accused classifier, which
produces a list of grapheme guesses, qualified as “identifying” but ABBYY’s expert disagreed, saying that the classifier does not
“identify a character” but instead generates
guesses of graphemes with associated
confidence values. Consequently, Nuance
sought additional claim construction guidance from the court, which having already
held two claim construction hearings,
declined.
At trial, the district court adopted the
“plain and ordinary meaning [as] ‘to establish the identity of.’” On appeal, Nuance
complained that the district court failed
to address this crucial claim construction
issue in violation of O2 Micro Int’l v. Beyond
Innovation Technology Co.,2 requiring district
courts to do just that—to resolve determinative claim construction issues.
But the Federal Circuit disagreed:
We disagree. At the Markman hearing,
the district court found in Nuance’s
favor by adopting the plain and ordinary meaning of the term “identifying.”
The fact that shortly before trial Nuance
became dissatisfied with its own proposed construction and sought a new
one does not give rise to an O2 Micro
violation.3
In essence, the Federal Circuit held
Nuance to its original proposed construction and saw no error in the district court’s
clarification before trial. Indeed, because it
was far from clear that the jury would have
concluded differently without the district
court’s clarification, Nuance was not entitled
to a new trial.
‘Apple v. Samsung’
In the long-running dispute between
Apple and Samsung, the CAFC, on Feb. 26,
2016,4 handed Apple a resounding defeat,
at least with regard to its utility patents,5
vacating a $119.6 million damages award
previously in its favor. Among many other
Thursday, March 24, 2016
rulings,6 the CAFC addressed infringement by (1) reversing the district court’s
denial of Samsung’s JMOL (judgment
as a matter of law) of non-infringement;
(2) affirming the district court’s judgment of
non-infringement of two of Apple’s patents;
and (3) with regard to Samsung’s patents,
affirming judgments of non-infringement
of one patent and infringement of another.
Effectively, Apple lost regarding all five of
the patents it asserted, and Samsung won
on only one patent, discussed below.
Non-Infringement of Apple’s Patents.
The CAFC concluded that three of Apple’s
patents were not infringed, U.S. Patent Nos.
5,946,647, 6,847,959, and 7,761,414 (the ‘647,
‘959 and ‘414 patents, respectively).
The ‘647 patent covers software to detect
“structures,” such as a phone number, in
text, and to turn those structures into links,
thus allowing a user to “click” on the structure to take an action (such as making a
phone call) rather than having to copy and
paste the structure into another application. Required by the patent’s claims is an
“analyzer server” for “detecting structures
in the data, and for linking actions to the
detected structures.” The CAFC had construed this term to mean: “a server routine
separate from a client that receives data
having structures from the client.”
With this construction, Apple needed to
prove that Samsung’s devices include a piece
of software that runs separately, receives
data from a client application, performs
“detecting” and “linking” steps, and then
returns that data to the client application.
This, Apple could not do. All Apple could
show was that the Samsung software “has
access to the code and it goes to the code
where it is and uses it there.” Apple could
not show that the accused software library
programs in the Samsung phone were standalone programs that run separately. As a
result, there was no infringement.
The ‘959 patent is directed to “universal
search” and specifically a method for locating information from a plurality of locations
“which include the Internet and local storage media.” The Samsung search function,
however, does not search the Internet, but
rather blends data previously retrieved from
a Google server and a local database. Apple
argued that the “plain meaning of the claim
ought to cover searching information previously downloaded from the Internet.” The
CAFC disagreed, emphasizing that Apple’s
argument required additional claim construction, beyond plain and ordinary meaning, which Apple for the first time raised
an appeal. As such, the court affirmed noninfringement.
Similarly, the CAFC found that substantial evidence supported the jury’s finding
of non-infringement of Apple’s ‘414 patent.
Here, the issue was whether Samsung’s
device incorporated “synchronous” features claimed in Apple’s patent. Generally,
Apple’s patent claims addressed the ability to synchronize data between multiple
devices (e.g., to “synchronize” a contact created on an iPhone to another device, such
as an iPad, without any user interaction).
In the long-running dispute between
Apple and Samsung, the Federal Circuit,
on Feb. 26, handed Apple a resounding
defeat, at least with regard to its utility
patents, vacating a $119.6 million damages award previously in its favor.
The claims, however, specifically required
at least three different synchronization
software components—“three pieces of
software that will synchronize three different data classes, such as contacts, calendar,
and email.” The parties did not dispute that
Samsung’s phones had two such components, but disputed whether Samsung’s
phones were “configured to synchronize”
for a third (email).
Again, Apple argued that the plain and
ordinary meaning of “configured” allowed
for indirect causes of synchronization, like
the Samsung email software. But the CAFC
disagreed, stating (in agreement with the
district court) that Apple was effectively
seeking a post-trial construction “despite
never requesting such a construction
before.” This the court would not allow,
finding non-infringement.
Samsung’s Patents. The CAFC split on
the Samsung patents, finding one (U.S.
Patent No. 5,579,239, the ‘239 patent) not
infringed but finding another (U.S. Patent
No. 6,226,449, the ‘449 patent) infringed.
The ‘239 patent is directed to “remote
video transmission,” requiring “means for
transmission of…captured video over a cellular frequency” and specifically, according
to the district court’s construction, “software” performing a “software sequence.”
Samsung’s argument on appeal was limited
to claim construction, and that the district
court’s construction requiring software (as
opposed to just hardware) was error. But the
CAFC affirmed, stating that the term “transmission” implies communication from one
unit to another and that hardware alone
“does nothing without software instruction
telling it what to do.” According to the CAFC,
the specification clearly supported the district court’s construction and, therefore,
affirmed.
The ‘449 patent was the sole patent on
appeal—for either party—that survived a
non-infringement challenge, resulting in a
$158,400 damage award to Samsung. This
patent was directed to a digital camera, with
the disputed claims including three limitations at issue on appeal, namely whether
Apple’s phones included: (1) a “compressor” (for compressing digital signals) and
a “decompressor” (for decompressing the
compressed data); (2) a “list” of moving and
still image signals; and (3) a recording circuit
that records each of the image signals with
“classification data.”
The jury found that all these limitations
were met. First, a “single Apple design chip”
contained the “circuitry that performs both
compressing methods.” Second, Apple’s
products containing a “camera roll” which,
displaying an array of thumbnails, effectively
qualified as the required “list.” Third, Apple’s
“albums” qualified as the required “classification data.” As a result, the CAFC affirmed
the judgment of infringement.
‘Eon Corp. v. Silver Spring’
On Feb. 29, 2016,7 the CAFC again vacated
a jury verdict, this time reversing an award
of almost $13 million and its accompanying
judgment of infringement against defendant
Silver Spring. Patentee Eon asserted three
patents, two of which the district court
found to be infringed. Like the Nuance and
Apple cases discussed above, at the heart
of the Federal Circuit’s reversal here, was
claim construction.
Thursday, March 24, 2016
Eon’s patents relate to two-way interactive
communications between local subscribers
and a base station, typically occurring with
broadcast television programs, pay-per-view
services, or to remote locations such as
poolside or in a basement, or when heavy
subscriber activity or traffic, especially during a live event, makes timely transmission
difficult. The patents describe overcoming
such heavy traffic or jamming problems by
using synchronously timed communications
(to overcome the jamming problems), and
by adding local remote receivers throughout
a base station area (to overcome the inability
of low-power subscriber units to reach the
base station).
All of the claims at issue require that the
subscriber units be either “portable” or
“mobile.” During claim construction, patentee Eon argued that neither term needed
construction, and that both could simply
be given their plain and ordinary meaning.
Defendant Silver Spring argued otherwise,
seeking a construction that did not cover
fixed or stationary products that are only
theoretically capable of being moved.
The district court, however, disagreed,
saying that because their meanings were
clear in the context of the claims, and that
defendant was “asking for nothing the plain
and ordinary meaning of the terms cannot
do on their face to distinguish from ‘stationary’ or ‘fixed,’” further construction was
unnecessary.
At trial, however, the experts disputed
the meanings of “portable” and “mobile.”
Eon’s expert went as far as saying that the
terms included anything that is moveable,
even a house—which would necessarily have covered the accused subscriber
units which were electric watt-hour utility
meters that are attached to the exterior
walls of buildings. The jury and district
court agreed.
The Federal Circuit, however, reversed,
finding that the district court should have
construed the terms and that, as properly
construed, there was no infringement. The
CAFC re-stated the principles governing
disputed terms:
[A] district court’s duty at the claim
construction stage is, simply, the one
that we described in O2 Micro and many
times before: to resolve a dispute about
claim scope that has been raised by the
parties.8
Given these principles, according to
the CAFC, the district court should have
construed the terms consistent with the
patent’s specification that the “portable”
and “mobile” units are low-power, batteryoperated units that are easily transported
between different locations in a house,
office, car or throughout a cell territory.
As a result, there could be no infringement
by defendant’s fixed devices.
‘Ultimatepointer’
On March 1, 2016, the CAFC affirmed
another judgment of noninfringement and,
in so doing, affirmed the district court’s
claim construction ruling that was central
to the parties’ dispute.9 Ultimatepointer
asserted U.S. Patent No. 8,049,729 (the
‘729 patent), which is generally directed to
a gaming device and, more specifically, to
an apparatus for controlling a feature on a
computer-generated image, the apparatus
being a handheld device including an image
sensor and processor. The dispute centered
on the construction of “handheld device,”
and whether Nintendo’s Wii remote qualified
as a handheld device, as that term should
be construed.
At claim construction below, Nintendo
proposed, and the district court accepted,
that handheld device should mean a “handheld direct pointing device.” On appeal, the
CAFC agreed, but needed to address specifically the patent owner’s argument objecting to incorporating limitations from the
specification into the claims.
According to the CAFC, “handheld devices” needed to include the concept of “direct
pointing” because the patent’s specification
made clear that it was the “indirect pointing”
feature and associated problems of the prior
art that the claimed invention was seeking
to overcome, justifying the narrowing of the
term. The CAFC recognized that “repeated
derogatory statements” can indicate that the
criticized technologies were not intended
to be within the scope of the claims. Plus,
here, that the title of the invention referenced “direct pointing” did not help the
patentee’s cause.
Accordingly, the CAFC required that the
handheld device be a “direct pointing”
device, which the Wii system simply did not
include. Thus, there was no infringement.
Conclusion
Clear from the above cases is this: If the
infringement question rises or falls based
on how a particular claim term is construed,
the parties should make every effort to get
that term construed, before trial, at the claim
construction phase of the proceeding, and
without reliance on “plain and ordinary”
meaning especially when reliance on a
term’s ordinary meaning may leave room
for ambiguity or would not resolve the parties’ dispute. Of course, every case is different, with different facts and terms, but
if the parties work together to narrow the
issues, and to clarify the dispute, everyone
will be better off.
••••••••••••••••
•••••••••••••
1. No. 2014-1629, -1630 (Fed. Cir. Feb. 22, 2016).
2. 521 F.3d 1351 (Fed. Cir. 2008).
3. Id. (citations omitted); Markman v. Westview Instruments, 517 U.S. 370 (1996).
4. No. 2015-1171, -1195, -1194 (Fed. Cir. Feb. 26, 2016).
5. As recently as Monday, March 21, 2016, the U.S.
Supreme Court agreed to hear Samsung’s appeal of a
$400 million judgment that Apple won stemming from
its design patents. Samsung’s petition was based on
its belief that awarding entire profits in design patent
cases is exorbitant and improperly excessive.
6. The CAFC also found two of Apple’s patents invalid as obvious.
7. No. 2015-1237 (Fed. Cir. Feb. 29, 2016).
8. Eon Corp. IP Holdings v. Silver Spring Networks
(citations omitted).
9. No. 2015-1297 (Fed. Cir. March 1, 2016).
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