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Claim Construction Leaves Most Claims Noninfringed and Invalid

01-1069
March 04, 2002
Strauss Ph.D., William L.

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Last Month at the Federal Circuit - April 2002

Judges: Schall (author), Mayer, and Lourie

In Display Technologies, Inc. v. Paul Flum Ideas, Inc., No. 01-1069 (Fed. Cir. Mar. 4, 2002) (nonprecedential decision), the Federal Circuit affirmed the district court’s SJ that certain claims of U.S. Patent No. 5,645,176 (“the ’176 patent”) assigned to Display Technologies, Inc.(“Display”) were invalid as either anticipated by or obvious over the prior art and that certain claims of the ’176 patent were not infringed by Paul Flum Ideas, Inc.’s (“Flum”) beverage dispenser. However, the Federal Circuit vacated the district court’s holding that claims 2 and 3 of the ’176 patent were obvious and remanded for further proceedings on that issue.

The ’176 patent is directed to a gravity-fed dispenser for beverage bottles or cans in a refrigerated display case. As embodied by claim 1, the dispenser allows a customer to view part of the bottle or can through an aperture, which is defined by the fronts of the two sidewalls of the dispenser, the top of the front of the track on which the containers rest, and the bottom of a front member spaced above the track. In one embodiment, exemplified by claims 2 and 3, the front member is disposed forward of the front of the track. In a second embodiment, exemplified by claims 14-16 and 21- 26, the sidewalls of the dispenser extend below the track and provide notches for the “telescopic receipt” of the front and back members of a support shelf in the display case. These notches permit the dispenser to be attached to different-size shelves.

Display alleged that a dispenser manufactured by Flum infringed claims 1-4, 7-11, 14-17, and 21- 26 of the ’176 patent. After construing the term “aperture” to refer to a two-dimensional rectangular opening, in a first decision, the district court held that claim 1 of the patent was anticipated and found that the Flum device differed from the telescoping mechanism of the ’176 patent and, therefore, did not infringe claims 21-26 of that patent.

In a second decision, the district court held that claims 4 and 10 of the ’176 patent were also invalid as anticipated and that claims 2-4, 7-11, and 17 were invalid as obvious. The district court also found that the Flum dispenser did not infringe claims 14-16 of the ’176 patent.

On appeal, Display challenged the district court’s construction of the claim term “aperture.” Referring to the specification, Display asserted that an “aperture” must be a three-dimensional opening, not the two-dimensional opening of the district court’s definition.

The Federal Circuit disagreed, observing that the specification refers to the aperture as generally rectangular in outline and states that the full quadrant displayed has “typically an area of about 10 square inches.” The Federal Circuit agreed with the district court that this language was consistent with a two-dimensional, but not with a three-dimensional “aperture.” The Court also affirmed the holding that claims 4, 7-11, and 17 were invalid, since the only argument regarding these claims that Display made on appeal was that the district court had misconstrued the term “aperture.”

As to claims 2 and 3, however, the Federal Circuit found fault with the district court’s failure to consider whether the commercial success of Display’s rack could be attributed to the increased visibility of the lead item resulting from the position of the forward member, which created a genuine issue of material fact that precluded SJ that claims 2 and 3 were obvious.

Finally, Display challenged the district court’s SJ that the Flum rack did not infringe claims 14-16 and 21-26 of the ’176 patent, which require means for “telescopic receipt” of the supporting rack. On appeal, Display argued that the bottom of the Flum dispenser had four recesses that could engage front or back support rods on the underlying support rack. According to Display, these recesses could function to telescopically receive the underlying support rack and, therefore, the Flum dispenser literally infringed. Flum countered that the purpose of the recesses was to allow the user to break off portions and, thereby, adjust the size of the dispenser. Moreover, it was unclear whether the recesses would engage a rod or simply slip off it.

The Federal Circuit rejected Display’s argument as merely a conclusory assertion unsupported by any evidence to suggest that the recesses serve any functions other than those advanced by Flum and affirmed the SJ of noninfringement.