Rembrandt Data Technologies v. AOL et al (CAFC 2010-1002) precedential; Gajarsa (author), Linn, Dyk

The legal handshake -

Contract interpretation is a question of law reviewed de novo. Lucent Techs., Inc. v. Gateway, Inc., 543 F.3d 710, 717 (Fed. Cir. 2008). The district court's grant of summary judgment is also reviewed de novo. Koninklijke Philips Elecs. N.V. v. Cardiac Sci. Operating Co., 590 F.3d 1326, 1332 (Fed. Cir. 2010). Summary judgment is appropriate when, drawing all justifiable inferences in favor of the non-moving party, there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). This court has stated that "[i]n determining whether there is a genuine issue of material fact, the evidence must be viewed in the light most favorable to the party opposing the motion, with doubts resolved in favor of the opponent." Ethicon Endo-Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1315 (Fed. Cir. 1998). When a motion for summary judgment is properly supported by documentary and testimonial evidence, however, the nonmoving party may not rest upon mere allegations or denials of his pleadings, but rather, must present significant probative evidence to establish a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).

The ownership chain ran from AT&T to Lucent to Paradyne to Zhone to Rembrandt. The licensing web went between AT&T, Lucent, Rockwell ("new" and "old," owing to corporate reorg), and Conexant.

Canon and HP contend that Conexant was sublicensed by New Rockwell. If Conexant, Canon and HP's modem supplier, has a valid license to sell the modem chips, Rembrandt's rights to sue Canon and HP for infringement of the patents-in-suit are exhausted by that license. Quanta Computer, 553 U.S. at 638 (holding that a licensee's sale of component computer parts that substantially embodied method patents held by the patentee was "authorized" by the patentee and exhausted the patentee's patents). Rembrandt argues that Conexant was not sublicensed for two reasons: (1) because New Rockwell could not sublicense its rights to Conexant; and (2) even if it could, the sublicense does not apply to the modem chipsets at issue. Because Conexant is licensed, Rembrandt's rights are exhausted and it cannot recover from Canon and HP. The district court properly held as a matter of law that New Rockwell could further sublicense the patents-in-suit to Conexant.

Independent claim 3, and dependents 4-11 were invalid under §112 ¶2 for mixing claim types: 3 claimed a data transmitting device with three different means, ending with a process step "transmitting..." Rembrandt cried like a baby to patch the hole in the prosecutor's head for drafting bad claims.

Rembrandt requests this court to insert "transmitter section for" into the final element of claim 3, thereby adding an apparatus and rendering the claim valid. Rembrandt contends that the addition merely corrects "an obvious administrative or typographical error not subject to reasonable debate." Id.

We have stated that "[t]his court, however, repeatedly and consistently has recognized that courts may not redraft claims, whether to make them operable or to sustain their validity." Chef Am., Inc. v. Lamb-Weston, Inc., 358 F.3d 1371, 1374 (Fed. Cir. 2004). In Novo Industries, L.P. v. Micro Molds Corp., we held that "[a] district court can correct a patent only if (1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a different interpretation of the claims." 350 F.3d 1348, 1357 (Fed. Cir. 2003).

Claims 3-11 of the '236 patent are invalid.

Claims 1 and 2 were squirrelly too - easily construed for means-plus-function claims, but not.

The district court erred in construing "fractional rate encoding means" and "trellis encoding means" as means-plus-function elements governed by 35 U.S.C. § 112, ¶ 6. A claim limitation that "contains the word 'means' and recites a function is presumed to be drafted in means-plus-function format under 35 U.S.C. § 112, ¶ 6." NetMoneylN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1366 (Fed. Cir. 2008). This presumption can be rebutted if the claim limitation itself recites sufficient structure to perform the claimed function in its entirety. TI Grp. Auto. Sys.'s (N. Am.), Inc. v. VDO N. Am., L.L.C., 375 F.3d 1126, 1135 (Fed. Cir. 2004) (holding that the term "pumping means" in a patent directed to fuel pump assembly technology was not a means-plus-function limitation as the limitation recited not only a pumping means, but its structure, location, and operation). In Cole v. Kimberly-Clark Corp., we held that "perforation means" "cannot meet the requirements" of paragraph 6 of section 112 because the claim itself defined sufficient structure. 102 F.3d 524, 531 (Fed. Cir. 1996). When determining whether a claim term recites sufficient structure, we examine whether it has an understood meaning in the art. Watts v. XL Sys., Inc., 232 F.3d 877, 880-81 (Fed. Cir. 2000); see also Atmel Corp. v. Info. Storage Devices, Inc., 198 F.3d 1374, 1379 (Fed. Cir. 1999) ("[T]he 'one skilled in the art' analysis should apply in determining whether sufficient structure has been disclosed to support a means-plus-function limitation.").

§112 ¶1 entered in, for enablement. Fact foiled summary judgment.

On appeal, Rembrandt argues that the district court erred by granting summary judgment of invalidity of claims 1 and 2 of the '236 patent for failing to disclose an algorithm able to perform the recited functions. We agree that a genuine dispute of material fact precluded invalidation of claims 1 and 2 of the '236 patent. The district court determined that the "trellis encoding means," and "fractional rate encoding means," recited in claim 1 of the '236 patent, from which claim 2 depends, are means-plus-function elements. J.A. 57-59. Expert testimony supports the conclusion that the limitations themselves convey sufficient structure to one of ordinary skill in the art to overcome the presumption of treatment under § 112, ¶ 6.

Drawing all justifiable inferences in favor of Rembrandt, we cannot agree with the district court that summary judgment of the invalidity of claims 1 and 2 of the '236 patent was warranted. Based on the expert testimony, there are genuine disputes of material fact regarding whether the specification discloses algorithms for "buffer means" and "combining means." The indefiniteness analysis the district court used to invalidate claims 3-11 of the '236 patent does not support the invalidation of claims 1 and 2. The district court's invalidation of claims 1 and 2 in its order on November 2, 2009 without any reasoning supporting its decision was erroneous.

The conclusion -

We affirm the district court's decision that because Conexant is licensed, Rembrandt's rights are exhausted and it cannot recover from Canon and HP, Conexant's customers. We also affirm the district court's grant of summary judgment on the invalidity of claims 3-11 of the '236 patent for indefiniteness. We reverse the district court's grant of summary judgment on the invalidity of claims 1 and 2 of the '236 patent. We remand the case to the district court for further proceedings consistent with this opinion.