The Federal Circuit has rejected a GPS equipment manufacturer’s “divided infringement” defense, which sought to escape liability on the theory that certain steps of the asserted method claims had to be carried out by end-users of the accused devices rather than by the manufacturer itself, ruling that every step of the claimed methods was properly construed as reading on an action carried out by the manufacturer. The opinion also addresses the patent owner’s standing to assert one of the patents in view of a co-inventor’s agreement to assign certain inventions to a previous employer, and the patentability of the claimed subject matter under the Federal Circuit’s (pre- Supreme Court) Bilski test. The decision upholds the U.S. International Trade Commission’s finding that various GPS receiver manufacturers violated section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337). SiRF Tech. v. ITC, 601 F.3d 1319 (Fed. Cir. 2010).

Background

Global Locate, Inc. and Broadcom Corp. (collectively, “Global Locate”) initiated the matter by asserting six patents against SiRF and other manufacturers at the ITC. The patents at issue cover Assisted Global Positioning System (“A-GPS”) technology. A-GPS components use receiving stations with unobstructed views of the sky to collect satellite messages. These messages are then transmitted over the Internet or wireless telephone networks to GPS enabled receivers with poor satellite reception.

Global Locate Has Standing to Sue

The Federal Circuit, in an opinion by Judge Dyk, joined by Chief Judge Michel and Judge Clevenger, turned first to the issue of whether Global Locate had standing to assert one of the patents in suit, U.S. Patent No. 6,606,346 (the “‘346 patent”). The issue arose because at the time of the invention’s conception, one of the patent’s named inventors, Charles Abraham, was subject to an “employee inventions agreement” with another company (a predecessor to Magellan Corporation) under which he assigned “‘all inventions . . . which are related to or useful in the business of the Employer . . . and which were . . . conceived . . . during the period of the Employee’s employment, whether or not in the course of the Employee’s employment.’” By the time the ‘346 patent application was filed, however, Abraham had joined Global Locate, to whom the patent was assigned. The accused infringer, SiRF, argued that Magellan was a co-owner of the patent by reason of Abraham’s conception of the invention while employed there, and that Global Locate therefore lacked standing to assert the patent on its own.  

The court explained that the issue of ownership turned on the interpretation of the terms “related” and “useful” in the employment agreement, which was governed by California law. Finding those terms “inherently ambiguous,” the court resorted to extrinsic evidence, namely, “the parties’ own interpretation of this language.” “In June of 2000, Magellan sued Global Locate as well as Abraham personally . . . for trade secret misappropriation.” After Magellan was presented with documents “relating to the conception of the subject matter of the ‘346 patent,” Magellan acknowledged that there was no evidence of trade secret misappropriation. This led the court to conclude that Magellan must have determined that it was not the owner of the invention: “If Magellan and Abraham recognized that Global Locate was the owner of the trade secret rights to the invention, it logically follows that Magellan and Abraham did not think that Magellan was the owner of similar rights that eventually became the subject of the ‘346 patent.” Thus, the court concluded that Global Locate was the sole owner of the ‘346 patent and had standing to sue.

SiRF Directly Infringed the Method Claims at Issue

Next, the Federal Circuit addressed whether SiRF infringed claims 1 and 2 of U.S. Patent No. 6,704,651 (the “‘651 patent”) and claims 1, 2, and 5 of U.S. Patent No. 6,651,000 (the “‘000 patent”). Claim 1 of each patent is representative:

  1. A method of receiving global positioning system (GPS) satellite signals comprising:

receiving satellite ephemeris at a first location;

communication [sic] the satellite ephemeris to a mobile GPS receiver at a second location; and

processing satellite signals received at the mobile GPS receiver using the ephemeris to reduce code and frequency uncertainty in the mobile GPS receiver to improve acquisition sensitivity of the mobile GPS receiver.

‘651 patent, Cl. 1 (emphasis added).

  1. A method of creating and distributing compact satellite orbit models comprising:

receiving satellite signals from at least one satellite and at least one receiving station;

extracting at least a portion of the satellite tracking data from said satellite signal, representing said data in a first format;

transmitting the formatted data to a remote receiver; and

at the remote receiver, representing said formatted data in a second format supported by the remote receiver.

‘000 patent, Cl. 1 (emphasis added).

SiRF argued that it did not infringe because the claims at issue required actions not just by SiRF, but also by its customers and end users of the GPS devices. Under this “divided infringement” theory, SiRF contended that it could not be liable as a sole infringer, but – if at all – only as a joint infringer. It further contended that the requirements for joint infringement set forth in cases such as Muniauction, Inc. v. Thompson Corp., 532 F.3d 1318 (Fed. Cir. 2008), were not satisfied because SiRF did not control or direct the actions of its customers and the devices’ end users. The Federal Circuit never reached the issue of joint infringement because it construed the method claims at issue as reading on the actions of a single party.

The Federal Circuit began by construing the “communicati[ng]” step of claim 1 of the ’651 patent and the “transmitting” step of claim 1 of the ’000 patent. SiRF argued that in order for data to be “communicated” or “transmitted” to a GPS receiver, it “must travel first from SiRF’s server to the servers of its customers (the intermediate distributors and GPS product manufacturers).” SiRF argued that it did not carry out this indirect form of communicating/transmitting. But the court found that “[n]either the claim language nor the patent specification requires that the communication/ transmission be direct.” For instance, the ‘651 patent provides for indirect communication: “The link may be a landline, or other direct communications path . . . . Alternatively, this link may have several parts . . . .” Accordingly, the Federal Circuit interpreted “these limitations as encompassing ‘communicating, whether direct or indirect’ and ‘transmitting, whether direct or indirect.’”

This construction disposed of SiRF’s “divided infringement” theory with respect to these two steps of the claimed methods. The court explained that “under this construction it is clear that SiRF performs the step of communicating/transmitting the files to the end users’ devices because SiRF initiates the process of transmitting and communicating, and the files are actually transmitted to the end users.” The court rejected SiRF’s contention that it could not carry out the “communicating” and “transmitting” steps on its own because, in practice, customers and end users are involved in the communication and transmission of data:

Here, it is true that the “communicat[ing]” or “transmitting” can only occur if the customer forwards the data to the end user and the end user downloads the data. However, the actions of “forwarding” or “downloading” are not required by the claims, and, therefore, the fact that other parties perform these actions does not preclude a finding of direct infringement. By analogy, if a claim for a method of making a telephone call included the limitation: “placing a telephone call to a telephone at a second location,” the fact that the call must first be routed through a switched telephone network, and then eventually to the eventual recipient, would not prevent this claim limitation from being satisfied. Therefore, we conclude SiRF indirectly transmits or communicates the files to the GPS receivers and thereby meets these claim limitations.

With respect to the “processing” and “representing” steps, the parties agreed that those steps take place in the end user’s GPS device. SiRF asserted that it did not perform those steps because end users must initiate the process of downloading data by connecting the device to the Internet and activating an “InstantFix” functionality, and then must enable certain additional features for the files to be transmitted to the receiver. The Federal Circuit rejected this argument as an attempt to read extraneous limitations into the claims. According to the court, neither of the method steps at issue requires “‘enabling’ or ‘activating’ the devices that perform these claim limitations.” “Nor is there a step which requires ‘downloading’ the data into the GPS receiver.” In short, SiRF infringes the ‘651 and ‘000 patents because “its devices and software dictate the performance of the ‘processing’ and ‘representing’ steps.”

Claims Drawn to Patentable Subject Matter

Finally, the Federal Circuit addressed whether claims 1, 2 and 11 of U.S. Patent No. 6,417,801 (the “‘801 patent”) and claim 1 of U.S. Patent No. 6,937,187 (the “‘187 patent”) were directed to patent-eligible subject matter under 35 U.S.C. §101, applying the Federal Circuit’s Bilski test. (The appeal was decided before the Supreme Court’s Bilski opinion). Claim 1 of the ‘801 patent is representative:

  1. A method for calculating an absolute position of a GPS receiver and an absolute time of reception of satellite signals comprising:

providing pseudoranges that estimate the range of the GPS receiver to a plurality of GPS satellites;

providing an estimate of an absolute time of reception of a plurality of satellite signals;

providing an estimate of a position of the GPS receiver;

providing satellite ephemeris data;

computing absolute position and absolute time using said pseudoranges by updating said estimate of an absolute time and the estimate of position of the GPS receiver.

‘801 patent, Cl. 1.

Citing its en banc opinion in Bilski, the Federal Circuit summarized the test for patentable subject matter as follows:

A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” . . . We also held that the machineor- transformation test has a further aspect: “the use of a specific machine or transformation of an article must impose meaningful limits on the claim’s scope to impart patent-eligibility.”

The court noted that “[w]e have defined a ‘machine’ as ‘a concrete thing, consisting of parts, or of certain devices and combination of devices. This includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.’” The SiRF panel found that the claims in question satisfied the “machine-or-transformation” test because both claims were inextricably intertwined with a GPS receiver, a “machine.” The conclusion would likely have been the same had the case been decided after the Supreme Court’s Bilski decision, which affirmed the usefulness of the “machine or transformation” test but cautioned that it is not the exclusive test for patentability under 35 U.S.C. § 101.