Amdocs (Israel) Ltd. v. Openet Telecom, Inc.

In an appeal of a lower court’s summary judgment of no infringement of four patents, the U.S. Court of Appeals for the Federal Circuit reversed the lower court’s judgment on three of the patents and vacated a claim construction and remanded the case as to the fourth patent, finding that certain documentary evidence was relevant and created genuine factual issues of infringement.  Amdocs (Israel) Ltd. v. Openet Telecom, Inc., Case No. 13-1212 (Fed. Cir., Aug., 1, 2014) (Reyna, J.) (Newman, J., concurring-in-part and dissenting-in-part).

The four asserted patents were all directed to “data mediation software,” which tracks customer network usage.  In its summary judgment motion, Openet argued that Amdocs was unable to point to actual infringing use and that the accused products did not practice all claim limitations.  Amdocs’ documentary evidence of infringement included marketing presentations and user guides describing operation of the allegedly infringing software, citations to source code and citations to installation scripts associated with the software.  For three of the four asserted patents, the district court found that this evidence did not create a genuine issue of material fact regarding a key claimed feature.

The district court found that two of Openet’s marketing presentations were irrelevant to the infringement analysis because Openet prepared these presentations for foreign entities.  The court reasoned that, because there can be no infringement based upon activities entirely outside the United States, these presentations could not “constitute evidence of actionable infringement.”  The Federal Circuit rejected the analysis of the district court, acknowledging that no infringement could be found for solely extra-territorial activities, but holding that these activities are still relevant to a domestic infringement analysis.  In any case, it was noted that the same product described in the foreign materials was sold in the United States.

The district court also discounted the significance of the source code because the software allegedly would not “operate” without certain installation scripts.  Noting that the allegedly infringing software also would not “operate” without electricity or a computer, the Federal Circuit stated: “Even assuming that the [software] does not ‘operate’ without [installation] scripts, genuine factual disputes remain regarding [infringement]. Simply because a product will not ‘operate’ in a certain condition does not mean that it does not infringe in that condition.”  Even if the software does not “operate” in a particular condition, making, using or selling the allegedly infringing software may still infringe the asserted claims.

Based on the above, the Federal Circuit found that the documents created a genuine issue of material fact and reversed the lower court’s summary judgment of non-infringement.

For the fourth asserted patent, the Federal Circuit held that the district court erroneously construed “single record represent[ing] each of the plurality of services.”  The district court construed this term to mean “one record that includes customer usage data for each of the plurality of services used by the customer on the network,” with the understanding that the term does not encompass a record that aggregates usage data.  The Federal Circuit focused on the narrow interpretation by the district court of term “represent” to not include a record that aggregates usage data.  Analyzing the specification, the Federal Circuit found that it did not define representation or discuss the representation of the claimed “plurality of services.”  The specification does, however, teach the “representation” of a plurality of records, both in the text and figures.  Because of this, an ordinary artisan would also understand that a separate record can also represent a plurality of services by aggregation.  Judge Newman dissented from this holding.

Based on the above, the Federal Circuit vacated the claim construction for the fourth patent and remanded for determination of infringement under the proper claim construction.