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Industry Standard Incorporated by Reference in the Specification Treated as Intrinsic Evidence for Claim Construction Purposes

July 07, 2006
McAnulty, Timothy P.

Decision icon Decision

Last Month at the Federal Circuit - August 2006

Judges: Michel, Newman, Mayer (author)

[Appealed from: N.D. Cal., Judge Wilken]

In LG Electronics, Inc. v. Bizcom Electronics, Inc., Nos. 05-1261, -1262, -1263, -1264, -1302, -1303, -1304 (Fed. Cir. July 7, 2006), the Federal Circuit affirmed-in-part, reversed-in-part, and vacated-inpart the district court’s grant of SJ of noninfringement of five patents. Specifically, the Court reversed the district court’s holding that the system claims in all but one patent were
exhausted. The Court also found genuine issues of material fact over licensing agreements and errors in claim construction precluded the district court’s grant of SJ of noninfringement.

LG Electronics, Inc. (“LGE”) authorized Intel Corporation (“Intel”) to sell microprocessors and chipsets to Bizcom Electronics, Inc. and others (“the defendants”) under a licensing agreement. Intel informed the defendants that the agreement did not authorize them as purchasers to combine the products with non-Intel products. LGE brought suit against the defendants asserting that the combination of products with other non-Intel computer components infringed U.S. Patent Nos. 4,918,645 (“the ’645 patent”); 5,077,733 (“the ’733 patent”); 4,939,641 (“the ’641 patent”); 5,379,379 (“the ’379 patent”); and 5,892,509 (“the ’509 patent”). The district court granted SJ of noninfringement of each patent. It determined that there was no implied license to any defendant, but that, with the exception of the ’509 patent, LGE’s rights in any system claims were exhausted. The district court also found that LGE was contractually barred from asserting infringement of the ’509 patent against defendants. Moreover, the district court found the ’645, ’733, and ’379 patents not infringed under its claim construction to the accused methods and devices.

On appeal, the Federal Circuit affirmed the district court’s grant of SJ of no implied license because Intel’s sales of the licensed products did not warrant an inference of a license and, regardless of any noninfringing uses, Intel expressly informed the defendants that Intel’s license agreement did not extend to combining the purchased products with non-Intel products.

The Court, however, reversed the district court’s grant of SJ of patent exhaustion for the system claims because Intel’s customers were expressly prohibited from infringing LGE’s patents. The Court noted that the patent exhaustion doctrine is triggered by an unconditional sale and does not apply to an expressly conditional sale or license, that LGE’s authorization to Intel to sell its products expressly disclaimed granting a license that allowed purchasers from combining products purchased from Intel and non-Intel products, and the agreement required Intel to inform its customers of this limitation, which Intel did. The Court applied similar reasoning in affirming the district court’s granting of SJ that the method claims were not exhausted.

Regarding the ’509 patent, the district court had granted SJ of noninfringement because a provision in a contract between LGE and Microsoft barred LGE from suing Microsoft’s licensees. The Federal Circuit reversed because genuine issues of material fact exist as to whether defendants fell within the protection of this contract provision. The defendants assemble computers for original equipment manufacturers (“OEMs”) who have licenses with Microsoft. The Court determined that whether each defendant is a Microsoft licensee depends upon the license agreement between Microsoft and the OEMs, and between the OEMs and the defendants. The Court further noted that although one defendant was an OEM and, therefore, within the scope of the provision, interpretation of the contract language required further factual considerations to determine whether the defendant was protected by the contract.

The Court also reversed the district court’s claim interpretation for the ’509 patent because it improperly construed the claim term “control unit” as a means-plus-function limitation. The Court noted that the claim limitation did not use the term “means” and also recited sufficient structure to remove the term from the ambit of § 112, ¶ 6. Furthermore, the Court affirmed the district court’s interpretation of the claim term “image processing system” as not requiring multiple displays. The Court noted that the claim language does not include such a limitation and statements in the prosecution history relied on by defendants did not compel reading such a limitation into the claim.

Regarding the ’645 patent, the Court reversed the district court’s grant of SJ of noninfringement because the district court improperly required that strobe signals travel over the system bus, which the claims did not require. Nor did the specification suggest such a limitation, concluded the Court. Although defendants relied on statements in the prosecution history to support such a limitation, the Court held that “[w]hile we agree that this and other statements in the prosecution history lack ideal clarity, we do not find that they rise to the level of disclaiming or limiting the scope of the express claim language.” Slip op. at 13. The Court also held that the district court misconstrued the claim term “requesting agent” because it failed to give proper weight to the industry standard, which was incorporated by reference into the specification. Although the Court agreed with the district court that the patentee did not act as his own lexicographer but merely incorporated the industry standard as a preferred embodiment, the Court nevertheless held that the standard was relevant in determining the meaning of the claim term to one of ordinary skill in the art and is treated as intrinsic evidence for claim construction purposes.

Regarding the ’733 patent, the Court vacated the district court’s grant of SJ of noninfringement, finding genuine issues of material fact as to whether the accused products perform the step of “counting a number of accesses by the device to the bus.” The Court noted that LGE presentedsufficient expert testimony in support of its position regarding the operation of defendants’ devices to avoid SJ.

Regarding the ’641 patent, the Court reversed the district court’s grant of SJ of noninfringement because the district court improperly read limitations from the specification into two claims. Regarding the ’379 patent, the Court reversed the district court’s grant of SJ of noninfringement of two claims because the district court imported a limitation into the clearly recited function of a means-plus-function claim term. With regards to a third claim, the Court found that the district court improperly applied the “all limitations rule” to preclude the DOE as a matter of law. The claim required performing “all” write requests before a particular event. The Court concluded that if substantially all or nearly all write requests were performed by the accused devices before the particular event, then the DOE would be fully applicable without vitiating the claim language. Therefore, the Court concluded that a genuine issue of material fact existed as to whether the accused device could function as an equivalent.