Judges: Lourie, Dyk (author), O’Malley (District Judge sitting by designation)

[Appealed from M.D. Florida, Judge Pizzo]

In PODS, Inc. v. Porta Stor, Inc., No. 06-1504 (Fed. Cir. Apr. 27, 2007), the Federal Circuit reversed the district court’s finding of patent infringement, holding that the district court had erred in its claim construction, that no literal infringement occurred under the correct construction, and that prosecution history estoppel barred a finding of infringement under the DOE. The Court also reversed the district court’s grant of JMOL on copyright infringement and remanded the case for a new trial on this issue. PODS, Inc. (“PODS”) and Porta Stor, Inc. (“Porta Stor”) provide storage containers to customers, who either use the containers for on-site storage or fill the containers for storage in a warehouse or delivery to another location. PODS sued Porta Stor, alleging that Porta Stor’s apparatus for lifting, handling, and transporting containers infringed U.S. Patent No. 6,071,062 (“the ’062 patent”), of which PODS is the assignee. The claims of the ’062 patent are directed to an apparatus for lifting, handling, and transporting a container, and a method for lifting a storage container from a transport vehicle. In addition, PODS alleged copyright infringement, claiming that Porta Stor copied its rental agreement.

Claims 1 and 32 of the ’062 patent require that “the carrier frame . . . is capable of being lowered around the container.” The parties had agreed that the terms “carrier frame” and “around” in claims 1 and 32 required “an apparatus that uses a four-sided or rectangular-shaped carrier frame.” Slip op. at 7. On appeal, Porta Stor argued that it was an error for the district court to construe the terms “carrier frame” and “around” in claim 29 differently than in claims 1 and 32. The Federal Circuit agreed, reasoning that absent an indication from the specification or prosecution history, there is a presumption that the same terms appearing in different portions of the claims should have the same meaning. The Court noted that PODS did not provide any evidence that the term “carrier frame” in claim 29 had any meaning other than the meaning agreed upon in claim 1. In addition, the ’062 patent specification only disclosed four-sided embodiments. Moreover, during prosecution, PODS distinguished the ’062 patent from the prior art on the basis that it claimed a rectangular-shaped frame. The Court thus concluded that the term “carrier frame” in claim 29 requires a rectangular or four-sided shape.

With respect to the term “around,” the Federal Circuit held that because the term “carrier frame” necessarily requires a four-sided structure, the term “around” requires the frame to surround the container on all sides. This construction is confirmed by the ordinary meaning of the term “around,” which is defined in this context as a boundary on all sides of an object that encircles or encloses it.

PODS had conceded that Porta Stor’s product did not literally read on claim 1, because the accused device is a U-shaped or open-ended carrier frame. In light of the construction of claim 29 in accordance with claim

1, the Court held that Porta Stor’s product also did not literally infringe claim 29 and that the district court had erred in finding infringement of that claim. The Court also found that PODS was barred from asserting infringement of claims 1 and 32 by equivalents because of its arguments during prosecution that the prior art lacked a rectangular-shaped frame. Although PODS argued that it was not necessary to use the rectangular shape of the frame to distinguish the prior art, the Federal Circuit explained that “‘[c]lear assertions made during prosecution in support of patentability, whether or not actually required to secure allowance of the claim, may also create an estoppel,’ . . . because ‘[t]he relevant inquiry is whether a competitor would reasonably believe that the applicant had surrendered the relevant subject matter.’” Id. at 15 (citations omitted). The Court thus concluded that the district court had erred in finding that Porta Stor’s device infringed claims 1 and 32 under the DOE.

On the issue of copyright infringement of PODS’s rental agreement, the Court found that it was not clear from the evidence whether PODS’s outside counsel was the sole author of the rental agreement or whether the outside counsel and PODS’s employees jointly created the work. In order to show that it owned the copyright to the rental agreement as a “work for hire,” PODS was required to show that its employees participated in jointly creating the agreement. Because it was unclear whether PODS’s employees had contributed to creating the rental agreement, the Court found that the district court had erred in granting JMOL in PODS’s favor and remanded the case on this issue.