Monday, March 13, 2023

Stipulation vacated in Amazon case

The outcome:

In this patent infringement action, the parties entered into a stipulation of non-infringement based on two of the district court’s claim construction rulings. Because the stipulation is ambiguous and therefore defective, we vacate and remand for further proceedings.

In past cases, we have held that stipulated judgments are defective if they are ambiguous in material respects. See Jang v. Bos. Sci. Corp., 532 F.3d 1330, 1335–36 (Fed. Cir. 2008). The stipulated judgment here provides that Amazon does not infringe under the district court’s constructions of “cooperating service provider” and “non-blocking bandwidth.” Under the circumstances of this case, the stipulation does not provide sufficient detail to allow us to resolve the claim construction issues presented on appeal. First, the stipulation does not identify which claims of the ’471 patent remain at issue in this appeal. We have vacated judgments that fail to identify which claims are implicated by the judgment. See Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1342 (Fed. Cir. 2002) (vacating a judgment in part “[b]ecause the district court did not . . . identify the specific claims it held to be infringed under the doctrine of equivalents.”). More importantly, it is unclear whether the judgment requires the affirmance of both “cooperating service provider” and “non-blocking bandwidth,” where the interpretation of cooperating service provider includes the term “non-blocking bandwidth.”4 It is also unclear whether affirmance requires the approval of all aspects of the construction of “cooperating service provider.”

It is unclear whether, under the stipulation, Amazon prevails on infringement if either construction is correct or only if both are correct. At oral argument, it became apparent that the parties have significant disagreements as to the effect of the stipulation—disagreements that render it impossible for this court to review the judgment. AlterWAN asserts that the judgment of non-infringement rests solely on the district court’s construction of “non-blocking bandwidth,” a term which appears both independently and in the district court’s construction of “cooperating service provider.” AlterWAN argues that the district court’s construction requires bandwidth to be available to the customer at all times, even when the Internet is inoperable. Because no system can provide such a service, Amazon cannot infringe. At oral argument, AlterWAN took the position that the “sole reason” Amazon does not infringe under the claim constructions at issue is because of the exclusion of the caveat they had sought at claim construction (“while the network is operational”). This is so because “if the internet goes down, it doesn’t provide service.” Oral Arg. at 0:30–1:14; see also Oral Arg. at 31:02– 19 (“Q: Let’s adopt your construction of non-blocking bandwidth, which doesn’t have that limitation, it only requires that . . . available when the internet is operable, okay? Is your view that they infringe under that claim construction? A: Yes, Your Honor.”). In AlterWAN’s view, the core issue on appeal is whether the district court erred by failing to add the qualifier “while the network is operational” to its construction of “non-blocking bandwidth.”


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