Tuesday, October 11, 2011

CAFC in Absolute Software v. Stealth: "In sum, both experts had the opportunity to provide direct evidence..."

Background of the case:

This is a patent infringement action between companies that sell competing software products designed to track lost or stolen laptop computers, which one company refers to as “LoJack for Laptops.” Each side asserted claims of patent infringement against the other based on their respective software products. Following the parties’ cross-motions for summary judgment, the district court entered summary judgment of non-infringement for each side. See Absolute Software, Inc. v. Stealth Signal, Inc., 731 F. Supp. 2d 661 (S.D. Tex. 2010) (“District Court Decision”). Both sides appeal from this judgment. (...) We conclude, however, that issues of fact preclude granting summary judgment of non-infringement to Stealth. .

Background law:

Determining infringement requires two steps. “First, the claim must be properly construed to determine its scope and meaning. Second, the claim as properly construed must be compared to the accused device or proc- ess.” Carroll Touch, Inc. v. Electro Mech. Sys., Inc., 15 F.3d 1573, 1576 (Fed. Cir. 1993) (citations omitted). The proper construction of a patent’s claims is an issue of Federal Circuit law, and we review a district court’s claim construction de novo. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454–55 (Fed. Cir. 1998) (en banc). To ascer- tain the scope and meaning of the asserted claims, we look to the words of the claims themselves, the specifica- tion, the prosecution history, and any relevant extrinsic evidence. Phillips v. AWH Corp., 415 F.3d 1303, 1315–17 (Fed. Cir. 2005) (en banc).

Infringement, whether literal or under the doctrine of equivalents, is a question of fact. Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998). On appeal from a grant of summary judgment of non-infringement, we determine whether, after resolving reasonable factual inferences in favor of the patentee, the district court correctly concluded that no reasonable jury could find infringement. IMS Tech., Inc. v. Haas Automation, Inc., 206 F.3d 1422, 1429 (Fed. Cir. 2000).

Failure to timely challenge:

On appeal, Stealth argues that Absolute waived its right to challenge the district court’s construction of “global network communication links” by failing to object to the special master’s recommended construction within the deadline established both by rule and by court order. There is no dispute that Absolute failed to challenge the special master’s proposed recommendation within the twenty-day period. Indeed, Absolute’s counsel conceded this fact at oral argument. See Oral Arg. at 10:3 –11:15, available at http://www.cafc.uscourts.gov/oral-argument- recordings/all/absolute.html (“That’s absolutely right, we did not raise that objection within the twenty-day time period, and that was a mistake on our part.”)

Footnote 5:

Twenty-six days after the objections were due, Absolute filed a response to Stealth’s objections. While still not asserting a formal objection to the special mas- ter’s construction of “global network communication links,” Absolute urged the court to modify the construc- tion “slightly” to construe “links” to be IP addresses. We do not find that this belated and imprecise argument preserved Absolute’s objection on this issue. Indeed, Absolute neither cited to nor relied upon this submission in its briefing to this court, asserting instead, and only, that its arguments to the special master were sufficient. In the face of Absolute’s express endorsement of the special master’s construction of this term, we cannot agree that Absolute timely presented its current arguments on the issue to the district court.

Situations to override waiver:

In addition, we otherwise do not find that any of the reasons we have enumerated in the past for considering an argument that was not presented properly below are present in this case. See L.E.A. Dynatech, Inc. v. Allina, 49 F.3d 1527, 1531 (Fed. Cir. 1995) (“An appellate court will consider an issue not presented below only if: (i) the issue involves a pure question of law and refusal to consider it would result in a miscarriage of justice; (ii) the proper resolution is beyond any doubt; (iii) the appellant had no opportunity to raise the objection at the district court level; (iv) the issue presents significant questions of general impact or of great public concern; or (v) the interest of substantial justice is at stake.” (internal quotations and brackets omitted)).

Battle of experts:

Under the district court’s claim construction, if the agent provides the IP addresses of both the agent and host, the agent will satisfy this limitation of the asserted ’758 and ’863 Patent claims. The parties disputed whether the XTool agent provided two IP addresses, and both sides submitted expert declarations on this point. Stealth contended in its briefing that its expert witness, Stealth President Pedro Camargo, stated that “the Stealth agent provides only the IP address of the moni- tored device.” Stealth’s Principal and Response Br. 15 (emphasis added). This is an overstatement of the ex- pert’s declaration. Mr. Camargo makes only a conclusory statement that Stealth does not infringe Absolute’s pat- ents, adding that “the Stealth ‘agent’ provides the IP address of the device; and, an IP address is not a ‘link,’ or a ‘connection’; it is, instead, a ‘node.’” Decl. of Pedro Camargo, JA 090010, ¶ 8. He never explicitly states that Stealth’s agent does not provide the host IP address, nor does he explain what other component of the electronic device supplies it.

The testimony of Absolute’s expert, Gregory Ennis, is also not directly on point. Mr. Ennis only states that the packet generated by the Stealth agent, “when received by the host system, contains both the IP address of the device and the IP address of the Stealth Control Center.” Decl. of Gregory B. Ennis, JA 100028, ¶ 18. He never explicitly states that the agent provides both the agent IP address and the host IP address. Rather, he finishes his discussion with the conclusory statement that “[t]he agent thereby provides the host system with such a [global network communication] link.” Id. In sum, both experts had the opportunity to provide direct evidence regarding how the host IP address comes to be in the message packet that ultimately arrives at the host, but neither one conclusively states whether it is the agent that provides this address.

The error of the district court: The decision fails to draw a reasonable inference in favor of Absolute, the non-moving party, namely that the XTool agent itself provides the host IP address that appears in the message packet. See Ala. Farm Bureau Mut. Cas. Co. v. Am. Fid. Life Ins. Co., 606 F.2d 602, 609 (5th Cir. 1979) (inferences most favorable to the non-moving party must be drawn, and “[s]uch infer- ences may create disputes regarding basic facts or regard- ing facts to be inferred from such facts”).

Use of the term "this invention" in the specification:

It is true that, in some circumstances, a patentee’s consistent reference to a certain limitation or a preferred embodi- ment as “this invention” or the “present invention” can serve to limit the scope of the entire invention, particu- larly where no other intrinsic evidence suggests other- wise. See Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1308 (Fed. Cir. 2007) (“When a patent thus describes the features of the ‘present invention’ as a whole, this description limits the scope of the invention”); Honeywell Int’l, Inc. v. ITT Indus., Inc., 452 F.3d 1312, 1318 (Fed. Cir. 2006) (noting that, “[o]n at least four occasions, the written description refers to [only one particular component] as ‘this invention’ or the ‘present invention’” and finding that the prosecution history does not support a broader scope).
On the other hand, we have found that use of the phrase “present invention” or “this invention” is not always so limiting, such as where the references to a certain limitation as being the “invention” are not uni- form, or where other portions of the intrinsic evidence do not support applying the limitation to the entire patent. See Voda v. Cordis Corp., 536 F.3d 1311, 1320-22 (Fed. Cir. 2008) (although parts of the specification referred to a certain embodiment as the “present invention,” the speci- fication did not uniformly refer to the invention as being so limited, and the prosecution history did not reveal such a limitation); Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1326 (Fed. Cir. 2008) (references to a specific embodiment as “the apparatus of this invention” and “a useful feature of this invention” in the specification “are contradicted by
a number of express statements in the ’609 specification clearly indicating that [the feature at issue] is a feature only of certain embodiments”); Rambus, Inc. v. Infineon Techs. AG, 318 F.3d 1081, 1094-95 (Fed. Cir. 2003) (al- though portions of the written description referred to the term at issue as limiting the claimed invention to a pre- ferred embodiment, “the remainder of the specification and the prosecution history shows that Rambus did not clearly disclaim or disavow such claim scope in this case”).

In this case, the ’269 Patent is more like the patents at issue in Voda, Praxair, and Rambus, in that the specification does not uniformly refer to a one-call-per-time- period limitation as being co-extensive with the entire invention.

Doctrine of equivalents:

Stealth also challenges the district court’s finding that Absolute’s products did not infringe under the doctrine of equivalents. “Infringement under the doctrine of equiva- lents requires that the accused product contain each limitation of the claim or its equivalent.” AquaTex Indus., Inc. v. Techniche Solutions, 419 F.3d 1374, 1382 (Fed. Cir. 2005) (citing Warner-Jenkinson Co., Inc. v. Hilton Davis Chem. Co., 520 U.S. 17, 40 (1997)). An element of an accused product is equivalent to a claim limitation if the differences between the two are insubstantial, a question that turns on whether the element of the accused product “performs substantially the same function in substan- tially the same way to obtain the same result” as the claim limitation. Id. (quoting Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950)).

Rendering a claim term meaningless:

We find no error in that interpretation, especially because Stealth’s proposed construction would render the word “terms” meaningless. See Cat Tech LLC v. Tube- Master, Inc., 528 F.3d 871, 885 (Fed. Cir. 2008) (refusing to adopt a claim construction that would render a claim limitation meaningless). We, therefore, agree with the district court’s construction of this claim term.


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