Wednesday, January 16, 2013

Parallel Networks loses its appeal at CAFC

In the case Parallel Networks vs. Abercrombies & Fitch and many others ,
Parallel lost its appeal at the CAFC.

The CAFC noted:

Despite the many issues raised on appeal, this case reduces, as the district court ruled, to a fairly simple analysis. First, as to claim construction, we agree with the district court that the data manipulation service (or functionality) and the particularized data are both neces- sary components of the applet as it is initially generated and before it is transferred to the client. Asserted claim 1 describes an “executable applet” that is both “dynamically generated by the server in response to the request” and “operable to be transferred over the communications link to the client device.” See ’111 patent, col. 17, ll. 54-65. The claim further describes the applet’s two “constituent” systems as the data and the functionality. Id. In other words, the claim teaches that the applet is “generated” in response to a user request, is “executable” and “operable,” is “associated with” the two “constituent” systems of particularized data and functionality, and is thereafter “to be transferred.”

Such a reading comports with the ordinary meaning of the patent’s key terms.

Parallel was doomed:

A finding of non-infringement follows directly from this analysis. Parallel concedes that, for each of the accused websites, “[i]t is undisputed that the client device must receive both the associated functional code and data to execute the applet.” And Parallel also concedes that each of the accused instrumentalities is missing at least one portion of the functional code or data when the applet is transferred to the client because the applet includes only a link. Those admissions doom Parallel’s claims because we construe the asserted claims of the ’111 patent to require that the applet be executable or operable when it is generated and before it is first transmitted to the client, which means it must include both the particular- ized data and the functionality. Because the accused websites do not contain every claim limitation, they do not literally infringe.

The CAFC would not re-write the patent:

If Parallel’s position were adopted, it would permit the broad term “associated with” to effectively rewrite the patent.

Parallel did not make out well in footnote 2:

We also reject Parallel’s related argument that the district court’s use of “combine” rather than “generate” was error because the specification notes that the applet can be generated in “a variety of ways,” including “by combining various predefined units.” Parallel’s argument is a non-sequitur, as it does not address the fact that generating the applet requires combining data and functionality, even if the generation may use predefined units of data or templates customized based on the data.

Figure 3 is invoked in footnote 3:

Parallel is clearly wrong to maintain that an applet can predate the client request. As the district court held, an applet cannot predate the request if it is to be generated “in response to” that request. Parallel’s attempt to sidestep that problem by arguing that the applet may be generated using templates or prewritten proce- dures does not change the fact that the applet itself must be generated at the time of or after the client request, even if some of its elements existed before the request was made. Figure 3 forecloses any argument to the contrary.

Parallel's expert did not make out well:

Indeed, the analysis of Parallel’s expert, Dr. Richard Cooper, highlights the fundamental problem with Parallel’s position. Dr. Cooper explained that, in each of the accused systems, the client device is instructed that “the combined data and the functional code are needed for the applet to execute and how to obtain that needed infor- mation.” The fact that the client needs to “obtain” information in order to execute, however, confirms that no “executable” or “operable” applet is generated and then transferred from the server to the client, as the patent requires. Dr. Cooper’s ipse dixit statements that, in his opinion, “it is irrelevant on this ‘combining’ issue whether the data and functional code are actually listed within the HTML or whether the data and functional code are listed by a link in the HTML,” are not sufficient to avoid sum- mary judgment. See, e.g., Arthur A. Collins, Inc. v. N. Telecom Ltd., 216 F.3d 1042, 1046-48 (Fed. Cir. 2000).

As to Rule 59(e):

We agree with the district court that Parallel is seeking to amend its infringement contentions in order to make arguments that could have been made before the entry of summary judgment, a tactic that the district court correctly held to be improper. See, e.g., Templet v. HydroChem Inc., 367 F.3d 473, 478-79 (5th Cir. 2004).


Requiring the formality of an addition- al sentence to that effect is unnecessary, and Parallel cites no Rule 59 cases in support of its argument. That is unsurprising, as courts frequently deny Rule 59(e) mo- tions without discussion, and such dispositions are not treated as legally erroneous because they are summary in nature. See, e.g., Boone v. Citigroup, Inc., 416 F.3d 382, 387 n.6 (5th Cir. 2005) (“The district court also summarily denied a rule 59(e) motion to reconsider the denial of remand.”); Hinojosa v. Brown, 129 F. App’x 915, 916 (5th Cir. 2005) (same).


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