Proveris Scientific Corp. v. Innovasystems, Inc.

Applying the TiVo standard on finding of contempt when an infringer releases a new or modified product, the U.S. Court of Appeals for the Federal Circuit vacated the district court’s contempt order, concluding that a new claim construction was required because a disputed claim term, contested in connection with the product now in issue, had not been construed the previous infringement proceedings.  Proveris Scientific Corp. v. Innovasystems, Inc., Case Nos. 2013-1166; -1190 (Fed. Cir., Jan. 13, 2014) (Prost, J.).

In a previous infringement proceeding, Innovasystems conceded infringement of a claim of Proveris’s patent and the district court entered a permanent injunction against Innovasystems.  Subsequently, Innovasystems released a modified product, which it contended rendered its new device non-‎‎infringing.  Proveris disagreed and filed a ‎motion for contempt of the injunction.  The district court ‎concluded that the modified product was not more than “colorably different” from Innovasystems’ previous product.  Further, Innovasystems’ non-infringement argument relied on a limitation in the preamble of the claim—a limitation that was not construed in the prior infringement action.  The district court found that Innovasystems could not raise new claim construction issues during the contempt proceedings.  Innovasystems appealed.

In reviewing the district court’s contempt order, the Federal Circuit applied the two-step TiVo test, i.e., ‎whether the newly accused product is not more than colorably different from the product found to infringe; and if it is not colorably different, whether the newly accused product in fact infringes the relevant claims.  First, on the “colorably different” issue, the Federal Circuit agreed with the district court that Innovasystems’ modification was not significant.  The Court noted that even though Innovasystems did make some small changes to the product’s software, a comparison of the user manuals showed that the two products were functionally identical.

Next, the Federal Circuit considered whether Innovasystems’ modified product in fact infringed the claim in issue.  The key dispute between the parties was whether Innovasystems’ modified product met a limitation in the preamble of the claim.  The Federal Circuit explained that the district court erred in refusing to construe the ‎disputed claim language, noting that while “the ‎district court is bound by any prior claim construction that it had performed in the ‎case,” here there was no prior claim construction because Innovasystems had ‎conceded ‎infringement.  Therefore, it could not simply conclude as a matter of law that the ‎preamble was ‎not a claim limitation. ‎ Considering the preamble dispute, the Federal Circuit concluded that the preamble was indeed limiting, for the reason that the inventors relied on the preamble to define the invention, and that the body of the claim relied upon and derived antecedent basis from the preamble.  With respect to the proper construction of the disputed claim term within the preamble, however, the Federal Circuit stated that it did not have enough information to resolve the question and remanded the case to the district court for a new claim construction and infringement analysis.  However, the Court noted that Innovasystems would not be entitled to present new invalidity arguments at the contempt stage as ‎ Innovasystems ‎already had a full and fair opportunity to present its invalidity arguments in the previous infringement proceeding.