Williamson - A split panel reverses a ruling on claim construction and a determination of invalidity for indefiniteness, and remands for a decision as to whether products such as Microsoft's Office Live Meeting and Citrix's GoToMeeting infringe. The majority determines that the district court's narrow construction was inconsistent with the intrinsic evidence and rules that "distributed learning control module" should not be construed as a means plus function clause.
Azure - The dismissal of defendant Tri-County is affirmed for lack of standing, finding that Tri-County had effectively assigned the patent to Azure. However, in a split decision, the majority vacates the judgment of noninfringement because the court improperly construed the term "MAC address."
Williamson v. Citrix Online, LLC, Microsoft Corp., Adobe Systems, Inc., Webex Communications, Inc., Cisco Systems, Inc., and IBM Corp., et al., Fed. Cir. Case 2013-1130 (November 5, 2014)
The '840 patent describes methods and systems for "distributed learning" that utilize industry standard computer hardware and software linked by a network to provide a classroom or auditorium-like metaphor—i.e., a "virtual classroom" environment. An audience member's computer is used to display the presentation and can be used to communicate with the presenter and other audience members.
The independent claims of the patent include the following phrases, the construction of the italicized words being at issue on appeal:
creating a graphical display representative of a classroom;
creating a graphical display illustrating controls for selecting first and second data streams;
a distributed learning control module for receiving communications transmitted between the presenter and the audience member computer systems and for relaying the communications to an intended receiving computer system and for coordinating the operation of the streaming data module.
Construction of the "graphical display" limitations
The majority rules that the district court erred in construing this phrase as requiring a "pictorial map." First, the claim language itself contains no such "pictorial map" limitation. While the specification discloses examples and embodiments where the virtual classroom is depicted as a "map" or "seating chart," nowhere does the specification limit the graphical display to those examples and embodiments. The Circuit has repeatedly cautioned against limiting the claimed invention to preferred embodiments or specific examples in the specification. Here, there is no suggestion in the intrinsic record that the applicant intended the claims to have the limited scope determined by the district court. To the contrary, the embodiments and examples in the specification of classroom metaphors relating to "maps" are consistently described in terms of preference.
Construction of the phrase "distributed learning control module"
The majority rules that the district court erred in concluding that "distributed learning control module" is a means plus function claim term. Section 112, para. 6, provides that "an element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof." As stated in many Circuit opinions, the failure to use the word "means" in a claim limitation creates a rebuttable presumption that § 112, para. 6 does not apply. This presumption is a strong one that is not readily overcome. To rebut this strong presumption, it must be demonstrated that skilled artisans, after reading the patent, would conclude that the claim limitation is so devoid of structure that the drafter constructively engaged in means plus function claiming. A claimed expression cannot be said to be devoid of structure if it is used in common parlance or by persons of skill in the pertinent art to designate structure, even if the term covers a broad class of structures and even if the term identifies the structures by their function.
Technical dictionaries, which are evidence of the understandings of persons of skill in the technical arts, may inform whether claim terms connote structure. Moreover, in circumstances in which a structure-connoting term is coupled with a description of its operation, sufficient structural meaning generally will be conveyed to persons of ordinary skill in the art. In making this assessment, it is important to consider the claimed expression as a whole, and not merely any single word, as well as its surrounding textual context.
The court here failed to give weight to the strong presumption that § 112, para. 6, did not apply based on the absence of the word "means." The Circuit has seldom held that a limitation not using "means" must be considered to be in means plus function form, and the circumstances must be unusual to overcome the presumption. Moreover, in determining that the strong presumption was overcome, the district court erred: (1) in failing to appreciate that the word "module" has a number of dictionary meanings with structural connotations; (2) in placing undue emphasis on the word "module" apart from the claimed expression "distributed learning control module"; and (3) in failing to give proper weight to the surrounding context of the rest of the claim and the supporting text of the specification in reaching the conclusion that the drafter employed means plus function claiming.
The court, in characterizing the word "module" as a mere nonce word, failed to appreciate that the word "module" has understood dictionary meanings as connoting either hardware or software structure to those skilled in the computer arts. Definitions cited by the panel include: "packaged functional hardware unit designed for use with other components," a "part of a program that usually performs a particular function of related functions," a "self-contained hardware or software component that interfaces with a larger system," a "programming or specification construct that defines a software component," or a "component of a hardware system that can be subdivided."
The court also failed to consider the claimed expression "distributed learning control module" as a whole. The adjectival modifiers "distributed learning control" cannot be ignored and serve to further narrow the scope of the expression as a whole. Here, the "distributed learning control module" is claimed as a part of the definite structure "distributed learning server" and "receives communications transmitted between the presenter and the audience member computer systems," "relays the communications to an intended receiving computing system," and "coordinates the operation of the streaming data module." These claimed interconnections and intercommunications support the conclusion that one of ordinary skill in the art would understand the expression "distributed learning control module" to connote structure.
The specification further explains that the distributed learning control module operates as a functional unit of the distributed learning server and coordinates the operation of the streaming data module through input from the presenter computer system. While the specification describes the claimed phrase in a high degree of generality, in some respects using functional expressions, it is difficult to conclude that it is devoid of structure.
Judge Ryna's dissent
While the majority is correct that the claims of the patent do not require a pictorial map, the majority has adopted a construction that ignores a critical limitation. The specification and prosecution history make clear that the "graphical display representative of a classroom" terms are properly construed as requiring a visually depicted virtual classroom.
As to "distributed learning control module," the majority finds structure where none exists. Here, "distributed learning control module" does not connote sufficiently definite structure, and thus, the term is governed by § 112, para. 6. In place of using the term "means," this claim limitation uses "module." The claim limitation then recites three functions performed by the distributed learning control module: (1) receiving communications transmitted between the presenter and the audience member computer systems and (2) for relaying the communications to an intended receiving computer system and (3) for coordinating the operation of the streaming data module." This claim limitation is in the traditional means plus function format, with the minor substitution of the term "module" for "means." The claim language explains what the functions are, but does not disclose how the functions are performed. In this case, the term "module" is a "nonce" word, a generic word inherently devoid of structure.
Comment: The issue of whether a claim phrase should be interpreted as means plus function language continues to be the basis of precedential opinions of the Circuit. Less than a month ago in Bosch, LLC v. Snap-On, Inc., 2014 U.S. App. LEXIS 19671 (Fed. Cir.), the presumption against interpreting a phrase as means plus function was overcome as to "program recognition device" and "program loading device." The cases of Elcommerce.com., Inc. v. SAP, 564 Fed. Appx. 599 (Fed. Cir. 2014) and Chicago Board Options Exchange, Inc. v. Intl. Securities Exchange, LLC, 748 F.3d (Fed.Cir. 2014) both dealt with whether there was adequate disclosure in the specification to support means plus function language in the claims.
Azure Networks, LLC and Tri-County Excelsior Foundation v. CSR PLC,, Qualcomm Inc., Broadcom Corp., and Marvell Semiconductor, Inc., et al., Fed. Cir. Case No. 2013-1459 (November 6, 2014)
The '129 patent passed through many hands of ownership, and was eventually acquired by Azure, which sought local charities to join in patent enforcement activities. Ultimately Azure partnered with Court Appointed Special Advocates, which formed Tri-County, a Texas nonprofit corporation. In 2010, Azure donated to Tri-County multiple patents and patent applications, including the application that would issue as the '129 patent. A few weeks after the donation, Tri-County and Azure entered into an "Exclusive Patent License Agreement," which transferred back to Azure certain rights in the '129 patent. Tri-County retained other rights, including the right to practice the patent and to receive a percentage of litigation and licensing proceeds.
Tri-County and Azure filed suit together against the Appellees, who sought to dismiss Tri-County, arguing that the transfer to Azure constituted an assignment for purposes of standing, leaving TriCounty with no rights to sue as co-plaintiff. The district court agreed, and this appeal followed.
The Patent Act governs standing to sue for infringement, and provides that only the patentee and its successors are entitled to bring an action for infringement. A party is a patentee if it holds legal title to the patent, either by issuance or assignment. When a patentee transfers rights, the party that has been granted all substantial rights under the patent is considered the owner regardless of how the parties characterize the transaction that conveyed those rights. In that event, the transferee is treated as the patentee and has standing to sue in its own name. And whichever party has all, or substantially all, rights in the patent alone has standing to sue for infringement.
To determine whether an exclusive license is tantamount to an assignment, the panel states that it must ascertain the intention of the parties to the license agreement and examine the substance of what was granted. The parties' intent alone is not dispositive. We must also consider a non-exhaustive list of rights for determining whether a licensor has transferred "all substantial rights" to the licensee, including: (1) the nature and scope of the right to bring suit; (2) the exclusive right to make, use, and sell products or services under the patent; (3) the scope of the licensee's right to sublicense; (4) the reversionary rights to the licensor following termination or expiration of the license; (5) the right of the licensor to receive a portion of the proceeds from litigating or licensing the patent; (6) the duration of the license rights; (7) the ability of the licensor to supervise and control the licensee's activities; (8) the obligation of the licensor to continue paying maintenance fees; and (9) any limits on the licensee's right to assign its interests in the patent. .
The parties do not dispute that the Agreement transferred to Azure an exclusive license to practice the '129 patent. Also critical to the panel's inquiry is that the Agreement granted Azure the exclusive right to enforce and defend the '129 patent. In determining the nature of a transfer of rights, the Circuit has repeatedly recognized that a key factor has often been where the right to sue for infringement lies. It is not uncommon for a licensor to transfer to its licensee the exclusive right to enforce the patent. But significant to this case, Tri-County reserved no right to have control over, to veto, or to be notified of any of Azure's licensing or litigation activities. Retaining control of these activities is also critical to demonstrating that a patent has not been effectively assigned to the licensee.
Rather than retaining any control over litigation activities, Tri-County has a strict duty under the Agreement to "join Azure as a party and cooperate with Azure in any patent infringement suit, if desirable to address a legal issue," such as standing. Tri-County must join "at Azure's request," and after joinder, "Azure would maintain full and absolute control over any such patent infringement suit, including settlement of any related claims or causes of action." Tri-County's joinder "would be limited solely to cooperation and that which is necessary to address the legal issue." As the district court recognized, nothing about this structure indicates that Tri-County has control over any aspect of litigation. Azure's exclusive right to sue, exclusive license, and freedom to sublicense are factors that strongly suggest that the Agreement constitutes an effective assignment.
Tri-County's right to monitor whether Azure breaches any of its obligations does not amount to the type of control that the Circuit has found indicative of ownership. Tri-County does not have the right to veto any of Azure's decisions. Tri-County does not even have the right to receive notice before Azure acts. Nor does Tri-County have the obligation to maintain the patent; maintenance lies with Azure. It is true that Tri-County may terminate the Agreement if Azure breaches its obligations, but Tri-County does not explain—nor can we envision—how a general good-faith requirement that inures to the financial benefit of both parties, with nothing more, would allow Tri-County to trump Azure's unilateral rights and exert control over Azure's licensing or litigation decisions.
Tri-County contends that, in addition to its termination rights, the Agreement automatically terminates two years before the patent expires, leaving Tri-County a reversionary interest in the patent. Although Tri-County may optionally extend the Agreement in one-year increments, it argues that, in general, agreements that terminate before patent expiration leave the licensor with a substantial interest in the patent.
After weighing all the factors, we agree with the district court that Azure acquired significant rights under the '129 patent, including the right to enforce, to license, to control the licensing and litigation, to sublicense, to practice exclusively, and to maintain the patent. Tri-County's economic interests, limited termination rights, and unfixed reversionary interest with only a very limited amount of time remaining on the patent do not demonstrate that it retained ownership. The balance of factors establishes that Tri-County transferred all substantial rights in the '129 patent to Azure, making Azure the effective owner for purposes of standing.
Construction of "MAC Address"
Claim 14 defines a hub device for use within a personal area network. Claim 43 depends from claim 14 and introduces the disputed "MAC address" term:
43. The hub device according to claim 14, wherein the hub device is configured such that a plurality of MAC addresses is capable of being used for identification in association with the first peripheral device.
There is a "heavy presumption" that claim terms "carry their accustomed meaning in the relevant community at the relevant time." The district court, however, construed "MAC address" narrowly as a local address generated by the hub, even though the ordinary and customary meaning included either local or universal MAC addresses. Departure from the ordinary and customary meaning is permissible only when the patentee has acted as his own lexicographer or disavowed claim scope in the specification or the prosecution history.
The claims use "MAC address" consistently with the well-understood industry meaning: to identify a unique device. The specification also refers to the term as an identifier for a device. At the time of invention, MAC addresses could be assigned either universally, i.e., the manufacturer of the device creates the unique identifier for the device, or locally, i.e., a network device, like the hub device of the '129 patent, creates the unique identifier for a given device, like the peripheral devices in the '129 patent. The relevant dispute here is whether the claimed "MAC address" should be read narrowly, as a device identifier that can only be generated locally by the hub device, thereby excluding the "universal" type MAC address created by the manufacturer of the device. The panel sees no reason to limit this established term of art to only hubgenerated addresses. Although there is no specific reference to universally generated MAC addresses in the specification, using a term the same way in all disclosed embodiments is not by itself sufficient to redefine a term of art. The specification must have sufficient clarity to put one reasonably skilled in the art on notice that the inventor intended to redefine the claim term.
Judge Mayer's dissent
Judge Mayer dissents as to construction of "Mac address." According to Judge Mayer, the specification repeatedly and unambiguously indicates that the term refers to an address that is assigned to a peripheral device by a hub device. The patent neither contemplates nor enables any other method of network communication. The decision to jettison the trial court's claim construction is predicated almost exclusively on a purported industry definition of the term "Media Access Control address," but that term is found nowhere in the '129 patent.
Even assuming that the term "MAC address" is ambiguous and could potentially be construed to cover addresses assigned to a device at the time of manufacture, such a construction would render the asserted claims invalid. To expand the definition of MAC address to include addresses assigned at the time of manufacture would permit the '129 patent to encompass a network that the inventors neither contemplated nor adequately described. See Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014) ("A patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.").
Azure cannot have it both ways. If the term "MAC address" is properly construed to refer only to addresses assigned to peripheral devices by a hub device, then the accused products do not infringe. If, on the other hand, the term is broadly and unreasonably expanded to cover addresses assigned at the time of manufacture, then the asserted claims are invalid.
Comment: Usually in licensor-licensee standing cases, the licensor or the exclusive licensee brings suit alone, and the court needs to decide whether the licensor has transferred away enough rights to divest it of the right to sue. This case was different in that the licensor and licensee brought the action together. Therefore, the inquiry was whether Tri-County transferred all substantial rights to Azure and, if so, whether Tri-County may nonetheless join in the infringement action. Normally the defendant is not going to care if an additional plaintiff is named but Tri-County was what tied the action to the Eastern District of Texas, where Azure would like to have the case heard. Now it will be interesting to see if defendants/appellants are able to get the case transferred to another venue.