Fresh From the Bench: Recent Patent Cases From the Federal Circuit
Amdocs – In a split decision the Circuit reverses the granting of a motion for summary judgment of noninfringement as to four patents in suit. The panel finds issues of fact as to the first three patents based on its conclusion that certain evidence should not have been excluded, and that the district court improperly resolved factual issues against the non-moving party. The majority disagrees with the court as to claim construction on the fourth patent.
In Re Nokia – In a prior appeal the Circuit said Nokia could not address an issue raised on appeal, but instructed that the issue be presented to the Commission on remand. The Commission ruled the issue had been waived so refused to permit consideration. In a split decision the majority denies mandamus to Nokia, but the dissent couches this in terms of the Commission "defying this court's order."
Amdocs (Israel) Limited v. Openet Telecom, Inc., et al., Fed. Cir. Case 2013-1212 (August 1, 2014)
Amdocs and Openet compete in the market for "data mediation software," which helps internet service providers such as Verizon and AT&T track their customer's network usage and subsequently generate bills. When a customer sends an email, surfs the internet, sends a text message, or participates in a video conference, records of this network activity are generated at various, disparate locations throughout an ISP's network. Data mediation software collects, processes, and compiles these network records so that network usage can be tracked and billed appropriately.
Appellant Amdocs asserted four related patents against Openet, and Openet moved for summary judgment of noninfringement. With regard to three of the patents, Openet argued that Amdocs was unable to point to actual infringing use and that the accused products did not practice all claim limitations. The district court granted Openet's motion based on its finding that Amdocs did not raise a genuine question of material fact as to whether the accused devices practiced "completing" or "enhancing" "in a distributed fashion," a requirement which it construed to be common to all asserted claims.
Construction of "enhance"
All of the asserted claims of the '065 Patent require the use of accounting information to "enhance" a network accounting record. The district court construed "enhance" to mean "to apply a number of field enhancements in a distributed fashion." The court further clarified that "in this context, ‘distributed' means that the network usage records are processed close to their sources before being transmitted to a centralized manager." Amdocs argues that the plain meaning of "enhance" is "to add information to or modify information in a record." Openet argues that "enhance" is indefinite if given a plain meaning construction, and points to the specification in support of the district court's conclusions. The panel concludes that the problem with Amdoc's position is that there is no suggestion in the specification of centralized, as opposed to distributed, enhancement.
Amdocs argues that including "in a distributed fashion" in the construction of "enhance" is an impermissible importation of limitations from the specification into the claims. But the specification repeatedly recites the advantages of distributed enhancement. According to the panel, the district court properly concluded that the embodiments define the outer limits of the claim term and did not err in reading the "in a distributed fashion" and the "close to the source" of network information requirements into the term "enhance."
Construction of "completing"
The asserted claims of the '510 and '984 Patents recite "completing a plurality of data records from the filtered and aggregated network communications usage information, the plurality of data records corresponding to network usage by a plurality of users." The district court construed the term "completing" to mean "enhance a record until all required fields have been populated," incorporating its construction of "enhance" in the '065 Patent to mean "to apply a number of field enhancements in a distributed fashion." Amdocs protests the inclusion of "in a distributed fashion" from the construction of "enhance." Because the district court's construction of "enhance" is correct, the panel affirms the court's construction of "completing."
Construction of "Single Record Representing Each of the Plurality of Services" in the '797 Patent Claims
Common to all asserted '797 Patent claims is the limitation of "single record representing each of the plurality of services." The district court construed the term to mean "one record that includes customer usage data for each of the plurality of services used by the customer on the network," with the understanding that the term does not encompass a record that aggregates usage data.
Amdocs argues that the plain language of the claims is broad enough to cover both (1) a single record in which usage data for each of a plurality of services is separately represented, and (2) a single record in which usage data for each of a plurality of services is represented in the aggregate. Openet takes a position similar to that of the district court, arguing that the '797 patent requires separately recording collected data.
The core dispute here is over the meaning of the term "represent." While the specification does not discuss representation of a plurality of services, it does teach the representation of a plurality of records: The panel concludes that because the specification shows that the separate record can represent a plurality of records by aggregation, the ordinary artisan would also understand that a separate record can represent a plurality of services by aggregation. The Circuit thus vacates the district court's construction of "single record representing each of the plurality of services" and substitutes it with a plain meaning interpretation.
Infringement of the '065, '510, and '984 Claims
Based upon its decision that enhancement occurs "in a distributed fashion" and "close to the source" of the net- work account information, the district court determined that there was no evidence of infringement and granted summary judgment in Openet's favor. The panel disagrees. Contrary to Openet's argument, Amdocs needs not point to the specific location of the allegedly infringing code to overcome summary judgment. According to the panel, Amdocs' documentary evidence describing the structure and operation of the accused products creates genuine factual issues regarding whether the products enhance "in a distributed fashion" "close to the source" of the network information.
The panel rules that the district court first erred in granting summary judgment to Openet because it improperly deemed Amdocs' foreign presentations irrelevant. The marketing materials presented to foreign entities are in fact relevant because Openet admits that the Framework described in these marketing materials is the same product that is made and sold in the United States.
Secondly, the court incorrectly focused on proof regarding DSD scripts, and failed to make all reasonable inferences supported by the record in favor of Amdocs and, instead, resolved disputed factual issues in Openet's favor. The district court improperly discounted Amdocs' citations to source code on the FusionWorks installation CD simply because Openet asserts that the Framework is "inoperable without DSD scripts." Even assuming that the Framework does not "operate" without DSD scripts, genuine factual disputes remain regarding enhancement. Simply because a product will not "operate" in a certain condition does not mean that it does not infringe in that condition.
The district court also improperly concluded that all network records are stored in a central data repository at the CTE before being enhanced. While the panel cannot recount all the confidential details here, the panel concludes that there is ample evidence on record to create a genuine issue of material fact regarding whether the CTEs are distributed throughout the Framework system and operate in a distributed manner.
Based upon the foregoing, the panel reverses the court's grant of summary judgment as to the first three patents because it incorrectly deemed certain evidence irrelevant, improperly required Amdocs to focus on DSD scripts, and improperly resolved disputed factual issues against Amdocs.
Infringement of the '797 Claims
As discussed above, the panel corrected the district court's erroneous construction of "single record representing each of the plurality of services" with a plain meaning construction. A majority of the panel therefore vacates the summary judgment of noninfringement of the '797 Patent and remands for a determination of infringement in the first instance.
Judge Newman dissents in part because she would affirm the judgment of noninfringement of the '797 patent, for the reasons given by the district court.
This opinion provides a helpful analysis of the use of "plain meaning" in claim construction. In the construction of "enhance," the panel finds no support in the specification for what might otherwise be considered the plain meaning of the term. With respect to the construction of "single record …" the panel determines that the specification needs to be clear in order to override the plain meaning of a claim term.
In its review of the granting of a motion for summary judgment of noninfringement, the opinion shows how difficult it is for either party to prevail in a motion as to either infringement or noninfringement where the technology is complicated and there is a substantial amount of evidence submitted.
In Re Nokia, Fed. Cir. Case 2014-133 (July 24, 2014)
This 19 U.S.C. § 1337 case comes to the Circuit for a second time. On the first appeal, the Circuit reversed an order of the ITC, finding infringement and remanded the matter for additional proceedings. On remand, the Commission determined that petitioners had waived any argument that the scrambling codes in their accused systems are not transmitted as required by the patent claims in the underlying investigation. Asserting that the decision on remand unlawfully deviates from the Circuit's mandate, petitioners seek a writ of mandamus to compel the Commission to address their noninfringement argument.
Although mandamus is an available remedy to enforce compliance with a prior mandate, according to the majority nothing in the Circuit's prior decision compelled the Commission to address the petitioners' noninfringement contention. The language cited by petitioners in the original opinion simply explained that, as to an issue they sought to raise as an alternative ground for affirmance, that issue could not be addressed by the Circuit court, as it was not the rationale of the agency's decision on appeal. Petitioners were free to raise the issue, if they chose to do so, on remand. But that did not mandate that the Commission could not consider whether the issue had been preserved for review. To the extent that petitioners seek to challenge the merits of the Commission's waiver determination, those arguments can be raised on appeal after judgment. The majority therefore denies the petition for mandamus.
Judge Newman dissents.
On the initial appeal of the decision of the ITC, this panel referred to Nokia's argument that "there can be no infringement in this case because the scrambling codes in the Nokia system are not transmitted," and ruled: "That issue, if Nokia wishes to raise it again before the Commission, may be raised on remand." The Commission refused to permit Nokia to present the issue, defying this court's order. My colleagues on this panel ratify that action, erasing the plain words that the issue "may be raised on remand."