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Federal Circuit Rejects Limiting Claim Construction, Choosing Instead to Give Effect to Each Claim Term

March 07, 2012

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Last Month at the Federal Circuit - April 2012

Judges: Rader, Linn, Moore

[Appealed from: E.D. Va., Judge Friedman]

In Digital-Vending Services International, LLC v. The University of Phoenix, Inc., No. 11-1216 (Fed. Cir. Mar. 7, 2012), the Federal Circuit vacated the district court’s SJ of noninfringement with respect to some patent claims, affirmed with respect other claims, and remanded for further proceedings.

The three patents-in-suit, U.S. Patent Nos. 6,170,014 (“the ’014 patent”), 6,282,573 (“the ’573 patent”), and 6,606,664 (“the ’664 patent”) are directed to regulating access to content delivered through a computer network. All three trace their ancestry to U.S. Application No. 09/272,221 (“the ’221 application”) and share the same specification.

Digital-Vending Services International, LLC (“Digital-Vending”) brought suit against The University of Phoenix, Inc. and Apollo Group, Inc. (collectively “Phoenix”), Capella Education Company (“Capella”), and Walden University, Inc. (“Walden”) for infringement of all three patents. Digital-Vending, Capella, and Walden entered into a settlement agreement while Phoenix filed a SJ motion for noninfringement following the district court’s claim construction ruling. Digital-Vending filed a motion for “clarification,” seeking reconsideration of the district court’s construction of the term “registered user.” The district court granted Phoenix’s motion for SJ, denied Digital-Vending’s motion, and entered judgment in favor of Phoenix. Digital-Vending appealed.
On appeal, the Federal Circuit addressed Digital-Vending’s challenges to the district court’s claim construction. The Court first rejected Digital-Vending’s attempt to argue a new construction for the phrase “content managed by the architecture” that was not presented to the district court. “Because Digital-Vending’s newly proposed construction . . . is substantially different in scope from the construction it sought below,” the Court held that it would not “review an argument not presented first to the trial court.” Slip op. at 7.

The Federal Circuit next considered the term “registration server,” which was included in each asserted claim except claims 13-22 of the ’573 patent. Digital-Vending challenged the district court’s construction, which required the registration server to be free of content managed by the architecture. The Court reviewed the claim language, the specification, and prosecution history and determined that the district court erred in its construction.

First, the Federal Circuit noted that many of the claims specifically require the registration server to be free of content managed by the architecture, while other asserted claims merely require a registration server, without stating this additional limitation. The Court stated that “[i]f ‘registration server’ were construed to inherently contain the ‘free of content managed by the architecture’ characteristic, the additional . . . language in many of the asserted claims would be superfluous. . . . [and] is thus contrary to the well-established rule that ‘claims are interpreted with an eye toward giving effect to all terms in the claim.’” Id. at 8 (internal citation omitted). The Court further analogized the claim language to that in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), where the Court rejected the contention that the term “baffles” inherently meant objects made of steel when a claim also referred to “steel baffles.”

Second, while parts of the specification described the registration server as being free of managed content, the Court determined that those references referred to one of the inventions claimed in the patent—a computer architecture for protecting content (claims 23-37 of the ’573 patent)—and not the second invention claimed—methods for protecting content (claims 1-22 of the ’573 patent). Referring to the claim language, the Court noted that the “architecture” claims explicitly require the registration server to be free of managed content, whereas the “method claims” do not. Further, the Court found that the specification was consistent in referring to the two inventions differently such that the inventors did not disclaim the full coverage to which they were entitled with respect to the method claims.

Third, the Federal Circuit determined that the prosecution history did not provide “any basis for reading . . . [the additional] limitation into the stand-alone phrase ‘registration server.’” Id. at 11. While the applicants argued four differences between the claims and a prior art reference to overcome an examiner’s rejection, the Court determined that “[w]hen the inventors’ statements ‘are considered in the context of the prosecution history as a whole, they simply are not clear and unmistakable enough to invoke the doctrine of prosecution history disclaimer.’” Id. at 13 (citation omitted).

Next, the Federal Circuit rejected Digital-Vending’s challenge of the district court’s construction of the term “registered user” because Digital Vending had stipulated to the term’s construction. Thus, the Court found that “[b]y stipulating to the construction that the district court adopted, Digital-Vending waived its right to challenge this construction on appeal.” Id. at 14 (citation omitted). The Court also noted that Digital-Vending did not challenge the district court’s denial of its motion for reconsideration as another basis for finding waiver.

Additionally, while Digital-Vending requested that the Court construe the term “server,” the Federal Circuit declined. The Court noted that the district court had not construed the term nor relied on the term in its SJ decision, and Digital-Vending did not present any reason to deviate from the general rule that an appellate court should not consider an issue not ruled upon by the district court.

Finally, the Federal Circuit determined that because of the district court’s erroneous claim construction with respect to the term “registration server,” Digital-Vending was not required to show that Phoenix’s registration server is free of content managed by the architecture. Further, the Court declined Phoenix’s invitation to affirm on an alternative basis dependent on the construction of the term “server” because, as noted above, the district court had not construed the term. Accordingly, because Digital-Vending only challenged the district court’s grant of SJ based on erroneous claim construction and did not challenge the SJ finding of noninfringement under the district court’s construction, the Court held that the district court’s construction of “registration server” for all claims other than claims 1-22 of the ’573 patent was harmless error, and affirmed the grant of SJ with respect to those claims. With respect to claims 1-22 of the ’573 patent, however, the Federal Circuit vacated the district court’s SJ finding and remanded for further consideration in light of the Court’s new construction.

Judge Moore dissented-in-part with respect to the majority’s decision, because she would have affirmed the district court’s SJ of noninfringement with respect to claims 1-22 of the ’573 patent. In Judge Moore’s view, “[t]his case presents one of the rare instances where a patentee clearly disavowed claim scope through limiting language in the specification.” Moore Dissent at 1. Judge Moore noted that while “[t]he plain and ordinary meaning of the term ‘registration server’ does not require that the server be free of content managed by the architecture. But the patentee disavowed the full scope of this claim term with its repeated statements in the specification to the contrary.” Id. at 2. Further, Judge Moore did not accept the majority’s explanation that those statements did not refer to the claimed methods, because when discussing the methods, the specification refers to “the registration server 108,” which is the same registration server referred to in the specification’s discussion of the “architecture” claims. While Judge Moore agrees that claim language should not be rendered superfluous, “when faced with a clear case of disavowal and a claim differentiation argument, the court must always hold that the clear and unmistakable disavowal trumps.” Id. at 6.