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Fresh From the Bench: Precedential Patent Cases From the Federal Circuit

June 6, 2016

Overview

Ruckus v. IWS – Innovative Wireless Solutions wrote demand letters to dozens of hotels and coffee shops, contending that they were infringing patents issued to IWS by providing WiFi Internet access using routers sold by Ruckus and Cisco ("Ruckus"). Ruckus stepped in to defend their customers, filing a declaratory judgment action. As to non-infringement, Ruckus successfully argued that its wireless equipment does not infringe the patents because the patents are limited to wired rather than wireless communications. IWS appeals the non-infringement judgment but a majority of a divided panel affirms the claim construction in which the term "communications path" was construed to be limited to wired rather than wireless communications.

IWS's argued that "communications path" has an ordinary meaning which encompasses both wired and wireless communications, but the majority finds no intrinsic or extrinsic evidence to support IWS's position that this is the way the term would have been understood by a person of ordinary skill at the time of invention. First, the title of the patents indicates that they are directed to "Communicating Information Packets Via Telephone Lines." Second, the specification describes "this invention" as one "particularly concerned" with "two wire lines such as telephone subscriber lines." Third, every embodiment described in the specification utilizes a telephone wire. According to the panel, though these descriptions in the specification do not expressly exclude wireless communications, they do not include them, and they discourage that understanding. Further, IWS did not present any extrinsic evidence showing that "communications path" was a term of art or otherwise understood to include wireless communications at the time of invention.

In dissent, Judge Stark of the Delaware District agrees there is no extrinsic evidence to support the IWS argument that the plain and ordinary meaning of "communications path" to a person of skill included wireless communications. However, rather than supporting affirmance, he feels the judgment should be vacated and remanded for the district court to decide whether to provide the parties an opportunity to present extrinsic evidence.

Comment: It is unfortunate for IWS that the prosecuting attorney wasn't as careful drafting the specification as he or she was in developing the claims. Moreover, once the attorney realized that claims were going to be allowed broadly claiming a "communications path," the specification should have been amended to delete the severely limiting language cited in the opinion. Addition of references to "wireless communications" would likely have been rejected as new matter but there is no reason why references to "communications path" could not have been substituted for references to "telephone lines," "wire lines," and "wired connections," particularly when reference is being made to "the invention." This would not have helped IWS respond to the inevitable enablement argument, but it would have strengthened IWS's infringement case. This case also demonstrates that we always should submit extrinsic evidence to support our constructions so as not to fall prey, as IWS did here, to the argument on appeal that no such evidence existed.

Warsaw Orthopedic v. NuVasive – This case returns to the Circuit on vacatur and remand from the Supreme Court, for further consideration in light of Commil v. Cisco. The issue to be decided here was whether there was substantial evidence to support the jury verdict that Warsaw and a related Medtronic company (collectively "MSD") induced infringement of NuVasive's '236 patent directed to a method for detecting the presence of a nerve during surgery. MSD's knowledge of the '236 patent is undisputed. The panel concludes that MSD's infringement position was objectively unreasonable and that the jury, based on this evidence, could reasonably have concluded that MSD had knowledge (or was willfully blind to the fact) that its NIM-Eclipse device meets the limitations of the claims of the '236 patent. A reasonable jury could therefore have inferred that MSD must have known, or was willfully blind to the fact, that doctors using the device infringe those claims.

In its analysis, the panel first notes the holdings of Commil USA, LLC v. Cisco Systems, Inc., 135 S. Ct. 1920 (2015) and GlobalTech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) that proof of induced infringement requires not only knowledge of the patent but also proof the defendant knew the induced acts were infringing.Commil reaffirmed the statement in Global-Tech that willful blindness can satisfy the knowledge requirement for active inducement, even in the absence of actual knowledge. Global-Tech also held that knowledge of infringement can be inferred from circumstantial evidence.

The opinion then reviews the claim construction of the district court and concludes that the jury was properly instructed as to the meaning of the claim language. The panel then reviews MSD's present arguments as to claim construction and concludes that they are inconsistent with the patent and the prosecution history. Moreover, the panel rules that MSD's present construction is inconsistent with the construction that MSD itself propounded before the district court. According to the opinion, "MSD's effort at this late stage amounts to a request for a revised claim construction that it never sought."

Judge Reyna concurs, but disagrees with the analysis, stating, "The opinion's analysis suggests that any time a defendant's products are found to directly infringe, the plaintiff has sufficiently established the defendant's intent to induce infringement. This proposition conflicts with Global-TechCommil, and our caselaw."

Ruckus Wireless, Inc. v. Innovative Wireless Solutions, LLC, Fed. Cir. Case 2015-1425, -1438 (May 31, 2016)

In April 2013, IWS commenced a litigation campaign against several dozen hotels and coffee shops in Texas. IWS alleged that each defendant infringed by providing WiFi Internet access to its customers using off-the-shelf WiFi equipment sold by Ruckus and Cisco ("Ruckus"). Ruckus responded by filing for declaratory judgment of invalidity and non-infringement in the Western District of Texas. On the issue of non-infringement, Ruckus argued that its wireless equipment does not infringe the patents because they are limited to wired rather than wireless communications.

The patents concern techniques for providing access to a local area network (LAN) from a relatively distant computer. A LAN is a group of computers connected by a shared short-range transmission medium and configured to communicate using a given LAN protocol. When two computers on the LAN transmit onto the medium concurrently, they create interference known as a "collision," and the concurrent communications may be lost. To deal with these collisions, a LAN protocol may define a contention scheme. For instance, in a "collision detection" scheme, a transmitting computer that detects a collision waits for a given period before reattempting the transmission. "Carrier Sense Multiple Access with Collision Detection" (CSMA/CD) is an IEEE standard LAN protocol that uses collision detection.

The further apart two devices are on a LAN, the longer it takes transmissions between those devices to traverse the transmission medium. When the devices are sufficiently far apart, the long transmission delays may render collision detection ineffective. Consequently, it is not practical to use LAN protocols with collision detection over long distances, such as those spanned by telephone lines.

The patents describe an approach by which a computer may communicate with a LAN over the long distances covered by telephone lines. The inventors propose using a collision avoidance scheme rather than a collisiondetection scheme. Under the avoidance scheme, a "master" modem in the LAN dictates the timing of one-way communications between the master modem and a "slave" modem in the distant computer. Although the patents only describe connecting the master and slave modems over physical wires, such as a telephone line, the claims recite that the two modems are connected via a "communications path." The patents make no mention of wireless communication.

The central dispute during claim construction was whether the recited "communications path" captures wireless communications or is limited to wired communication. The district court adopted the latter view by construing "communications path" to mean "communications path utilizing twisted-pair wiring that is too long to permit conventional 10BASE-T or similar LAN (Local Area Network) interconnections." Based on the district court's construction, the parties stipulated jointly to a final judgment of non-infringement. IWS appeals the construction limiting the term "communications path" to wired communication.

The Majority Affirms the Construction of "Communications Path" to Exclude "Wireless"

The words of a claim are generally given their ordinary and customary meaning, which is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention. Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). The ordinary meaning may be determined by reviewing various sources, such as the claims themselves, the specification, the prosecution history, dictionaries, and any other relevant evidence. Ultimately, the only meaning that matters in claim construction is the meaning in the context of the patent. Trs. of Columbia Univ. v. Symantec Corp., 811 F.3d 1359 (Fed. Cir. 2016). Legal error arises when a court relies on extrinsic evidence that contradicts the intrinsic record. See Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 790 F.3d 1329 (Fed. Cir. 2015).

IWS argues that the district court erred by importing the wired limitation into the claims. IWS's argument relies on the assumption that "communications path" has an ordinary meaning which encompasses both wired and wireless communications, but we see no intrinsic or extrinsic evidence to support that position. To the contrary, the intrinsic record militates powerfully against that understanding. First, the title of the patents indicates that they are directed to "Communicating Information Packets Via Telephone Lines." Second, the specification describes "this invention" as one "particularly concerned" with "two wire lines such as telephone subscriber lines." Third, every embodiment described in the specification utilizes a telephone wire, and when the specification clarifies that the full breadth of the invention is not limited to the expressed embodiments, it declares only that the patents may also reach any wired connection. Though these statements do not expressly exclude wireless communications from the meaning of "communications path," they do not include it, and they discourage that understanding. Further, IWS did not present—nor did the district court consult—any extrinsic evidence, such as dictionaries, trade literature, expert testimony, or any other evidence showing that "communications path" was a term of art or otherwise understood to include wireless communications at the time of invention.

Considering the claims as a whole provides no additional clue that "communications path" includes wireless communications. Though several dependent claims limit the communications path to a "two-wire telephone subscriber line" or a "two wire line," we agree with Ruckus that these dependent claims could merely exclude other types of wired communications paths disclosed in the specification, such as coaxial cable. The doctrine of claim differentiation—which encourages us to construe independent claims more broadly than their dependent claims—therefore does not necessarily suggest that the "communications path" recited in the independent claim encompasses wireless communications. We also have no evidence that the underlying purpose and disclosed solution of the Terry patents might evoke wireless communication in the mind of a skilled artisan. IWS presents no evidence that the inability to execute collision detection protocols over long distances was a problem in wireless communication or that collision detection was even used in that context. We therefore have no reason to believe that the purpose of the patents would have implicated wireless communications within the meaning of "communications path."

The canons of claim construction provide additional reason to limit the scope of the claims to wired communication. If, after applying all other available tools of claim construction, a claim is ambiguous, it should be construed to preserve its validity. Because the specification makes no mention of wireless communications, construing the instant claims to encompass that subject matter would likely render the claims invalid for lack of written description. See Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473 (Fed. Cir. 1998) (holding that a claim "may be no broader than the supporting disclosure"). The canon favoring constructions that preserve claim validity therefore counsels against construing "communications path" to include wireless communications.

Accordingly, we affirm the court's claim constructions and judgment of noninfringement based thereon.

Chief Judge Stark's Dissent

The dispositive issue in this case is whether a person of ordinary skill in the art at the time of the invention of the Terry patents would understand the "plain and ordinary" meaning of the disputed claim term, "communications path," to include wireless communications. If wireless communications are not within the scope of the patent claims, then the judgment of non-infringement must be affirmed. However, if the properly construed claims include wireless embodiments, then this case should proceed.

In affirming the district court's conclusion that wireless communications are outside the scope of the claims, the majority emphasizes that there is no extrinsic evidence to support the "assumption" of the patentee, Innovative Wireless Solutions ("IWS"), that the plain and ordinary meaning of "communications path" to a person of skill in the art at the pertinent time included wireless communications. I agree that the record lacks this extrinsic evidence.

However, rather than supporting affirmance, I believe that the majority's view requires this court to vacate the judgment of non-infringement, and the claim construction order on which it is based, and remand for the district court to decide whether to provide the parties an opportunity to present extrinsic evidence. Two factors persuade me that this is the proper approach.

Warsaw Orthopedic, Inc. v. NuVasive, Inc., Fed. Cir. Case 2013-1576, -1577 (June 3, 2016)

The vacated decision began as a patent infringement suit by Warsaw Orthopedic and a related company, Medtronic Sofamor Danek USA, Inc., ("MSD") against NuVasive, which counterclaimed for infringement of its own '236 patent. MSD petitioned for certiorari on the basis that our court did not correctly apply the test for induced infringement. MSD contended that while the jury had been properly instructed as to the standard of induced infringement set out in Commil USA, LLC v. Cisco Systems, Inc., 135 S. Ct. 1920 (2015), NuVasive failed to prove that MSD had the requisite knowledge to induce infringement.

Commil, like GlobalTech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011), held that proof of induced infringement requires not only knowledge of the patent but also proof the defendant knew the induced acts were infringing. Commil, in reaffirming Global-Tech, also necessarily reaffirmed that willful blindness can satisfy the knowledge requirement for active inducement, even in the absence of actual knowledge. Global-Tech also held that knowledge of infringement can be inferred from circumstantial evidence.

The '236 patent is directed to a method for detecting the presence of and measuring distance to a nerve during surgery. The patented method requires sending a series of electrical pulses that gradually increase in strength until a pulse reaches sufficient strength to elicit a nerve response. The "stopping" step of claim 1 requires "increasing the intensity level of said stimulus signal until said predetermined neuro-muscular response is elicited by said stimulus pulse and stopping the emission of said stimulus signal immediately after said predetermined neuromuscular response is detected."

The district court concluded that the "stopping" step—specifically, the claim term, "stopping the emission of said stimulus signal immediately after said predetermined neuro-muscular response is detected"—did not need to be construed and consequently did not provide the jury with any construction. In determining whether MSD's NIM-Eclipse device met the "stopping" step, the jury was required to apply the plain meaning to a person of ordinary skill in the art at the time of the invention.

MSD's Proposed Claim Construction Is Unreasonable and Is Inconsistent with Its Prior Positions

We conclude that there was substantial evidence that MSD's infringement position was objectively unreasonable and that the jury, based on this evidence, could reasonably have concluded that MSD had knowledge (or was willfully blind to the fact) that it was infringing. The central premise of MSD's non-infringement position is that it reasonably construed narrowly the "stopping" limitation of the claims of the '236 patent to require a complete termination of emission of any and all electrical pulses. But, on its face, claim 1 requires "stopping the emission of said stimulus signal immediately after said predetermined neuro-muscular response is detected." That is, claim 1 requires stopping a particular kind of signal, "said stimulus signal," and does not require stopping any and all electrical signals emitted by the device. The jury was properly instructed to construe "stimulus signal" according to the district court's construction to mean "an electrical signal for eliciting a neuromuscular response."

The language of claim 1 clearly requires stopping the emission not of any or all stimulus signals but of one particular stimulus signal: "said stimulus signal," the signal that triggered a response from the nerve being probed. MSD's claim is that the "stopping" limitation requires total cessation of any and all electrical stimulus pulses emitted by the nerve-monitoring device. This theory is clearly inconsistent with the construction of "said stimulus signal" that MSD itself propounded. MSD's effort at this late stage amounts to a request for a revised claim construction that it never sought. That is improper. Claim construction is, of course, ultimately a question of law that must be left to the court, not the jury.

There Is Substantial Evidence to Support the Conclusion that MSD Must Have Known that Doctors Using the Device Would Infringe the Claims

Turning to the issue that is properly before us, undisputed evidence before the jury showed that, immediately after nerve stimulation, the NIM-Eclipse reduced the strength of the electrical stimulus pulses it emitted to a level that was not capable of stimulating the nerve that had provided the neuromuscular response. In other words, the "said stimulus signal" emitted by the NIM-Eclipse was stopped immediately after the neuromuscular response was detected. The record shows that "said stimulus signal" as construed by the court "stops" immediately after the response is detected, just as the claims of the '236 patent require.

Given the strength of the evidence NuVasive presented, a reasonable jury could have concluded that MSD must have known that its NIM-Eclipse device "stopped" emitting "said stimulus signal" immediately after that signal elicited a neuromuscular response. MSD's knowledge of the '236 patent is undisputed. As such, under these circumstances, a reasonable jury could have concluded that MSD's non-infringement position was objectively unreasonable and that MSD must have known that NIM-Eclipse meets the limitations of the claims of the '236 patent. A reasonable jury could therefore have inferred that MSD must have known, or was willfully blind to the fact, that doctors using the device infringe those claims.

We again affirm the district court's judgment with respect to direct and indirect infringement of the '236 patent. We also affirm the district court's award of an ongoing royalty to be paid by MSD to NuVasive for post-verdict sales of the NIM-Eclipse device, and reinstate our earlier judgment with respect to NuVasive's infringement of MSD's patents.

Judge Reyna's Concurrence

While I concur in the result reached by this court, I do not believe Commil opens the door for this court to assess the reasonableness of a defendant's non-infringement position that is based on a claim construction that a defendant failed to raise, or that was not before the jury. In this case, MSD proposed no construction for the "stopping" limitation, arguing that the limitation has a plain meaning to one of ordinary skill in the art. I would resolve this case on this basis.

If the question before us is whether the jury had sufficient evidence to find that MSD induced infringement, such as circumstantial evidence showing that MSD was willfully blind, our analysis should discuss that evidence. But, the only evidence the opinion cites as showing MSD's intent to induce infringement is evidence that MSD's device itself directly infringed. I find it difficult at best to say that the jury necessarily decided that MSD's "claim construction" was unreasonable, as the opinion seems to do. Of note, the jury was not presented with the claim construction briefing that the court here relies on in its analysis criticizing MSD's claim construction.

In Global-Tech, the evidence demonstrated defendant's willful blindness. The opinion here cites no similar evidence. The opinion's analysis suggests that any time a defendant's products are found to directly infringe, the plaintiff has sufficiently established the defendant's intent to induce infringement. This proposition conflicts with Global-TechCommil, and our caselaw.

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