Augme Techs., Inc. v. Yahoo! Inc.

Addressing a district court’s construction of the claim term “embedded” code as code “written into the HTML code of the web page” and the related summary judgment of non-infringement in favor of Yahoo!, the U.S. Court of Appeals for the Federal Circuit affirmed.  Augme Techs., Inc. v. Yahoo! Inc., Case Nos. 13-1121; -1195 (Fed. Cir., June 20, 2014) (Moore, J.).

Augme sued Yahoo! for alleged infringement of two related patents directed towards adding functionality, such as advertisements, to a web page.  The claims at issue recite an “embedded” first code module that “retrieves” or “initiates retrieval” of a second code module containing the code for the added functionality.

In construing the term “embedded” code, the district court expressly excluded “a code module that is retrieved via external linking.”  On appeal, Augme argued that “embedded” code can include “linked code, i.e., code not actually in the web page HTML.”  Applying the principle that different claim terms are presumed to have a different meaning, the Federal Circuit disagreed: “[I]f embedded were construed as including code that is not itself written into the webpage, but is rather linked—retrieved and downloaded—then both the first and second code modules would be embedded according to this definition.  This would render meaningless the distinction between the embedded first code module and the downloaded or retrieved second code module.”  The Federal Circuit added, the “plain and ordinary meaning of embedded code is code written into the HTML code of the web page” and “[c]ode which is incorporated into the web page from another location is not embedded, it is linked.”

After claim construction, the Federal Circuit turned to the question of infringement.  The accused Yahoo! systems, RMX and APT, allow web page publishers to obtain “smart tags” so that a web page can display Yahoo!-distributed advertisements.  The “smart tags” (alleged first code module) are embedded in the web page.  After downloading the web page, the browser executes the smart tag to download “smart code” from the Yahoo! server.  The browser then executes the smart code to request an “imp code” (alleged second code module).  The returned imp code includes an “ad code” that may include an advertisement or be blank.

Augme’s literal infringement argument was that because the embedded smart tag begins a process that ultimately results in retrieval of the imp code, a jury could conclude that this smart tag initiates the retrieval process.”  Rejecting Augme’s position, the Federal Circuit found that in “the accused Yahoo! systems, the embedded smart tag retrieves an intermediary smart code” and concluded that “[b]ecause Yahoo!’s non-embedded smart code initiates retrieval of the alleged second code module, there can be no literal infringement.”

Augme also appealed judgment of no infringement under the doctrine of equivalents (DOE).  Having found that “embedded and linked code are opposites,” the Federal Circuit held that “specific exclusion” applied, precluding Augme from arguing that the combination of the embedded smart tag plus separately retrieved smart code could be equivalent to the embedded first code module.  The Federal Circuit also faulted Augme’s expert’s analysis under the function-way-result test to show equivalence, finding absent any expert testimony regarding whether the combination of the smart tag with smart code functioned in substantially the same “way” as the embedded first code module.