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SJ of Noninfringement Affi rmed Where Providing a Communications Link Required Providing Customers with Internet Access

08-1263
December 09, 2008
Zhu, Shaobin

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Last Month at the Federal Circuit - January 2009

Judges: Bryson, Linn, Prost (author)

[Appealed from: W.D. Wis., Chief Judge Crabb]

In Netcraft Corp. v. eBay, Inc., No. 08-1263 (Fed. Cir. Dec. 9, 2008), the Federal Circuit affirmed the district court’s grant of SJ of noninfringement of U.S. Patent Nos. 6,351,739 (“the ’739 patent”) and 6,976,008 (“the ’008 patent”) after affirming claim construction of the phrase “providing a communications link through equipment of the third party.”

Netcraft Corporation (“Netcraft”) is the assignee of the ’739 and ’008 patents, which are directed to Internet billing methods. The ’739 and ’008 patents claim priority to the same parent patent—U.S. Patent No. 5,794,221 (“the ’221 patent”)—and share a common specification. Netcraft sued eBay, Inc. (“eBay”) and PayPal, Inc. (“PayPal”) for infringement of the ’739 and ’008 patents. Each asserted claim of the ’739 and ’008 patents recites the phrase “providing a communications link through equipment of the third party.”

In construing this phrase, the district court noted that, although the claims do not define “communications link,” the specification makes clear that the invention requires that the third party provide Internet access to the customer.

Moreover, the district court concluded that the phrase “communications link” is the only part of the claim that could incorporate this requirement. Accordingly, the district court construed the phrase “providing a communications link” as requiring “providing customer access to the internet.” The district court also determined that it was unnecessary to consider the prosecution history when the patent itself was clear. Because the parties agreed that eBay and PayPal do not provide Internet access to customers, the district court granted eBay and PayPal’s motion for SJ of noninfringement.

On appeal, Netcraft first argued that the ordinary meaning of “communications link” was broader than the district court’s construction, and that neither the claim language nor the ordinary meaning supported the requirement that the third party must provide Internet access. The Federal Circuit disagreed because it was not construing the term standing alone. Rather, the Court considers the claim terms in light of the entire patent. Based on a reading of the common specification in its entirety, as well as the cited prosecution history, the Court concluded that the claim limitation “providing a communications link through equipment of the third party” required providing customers with Internet access.

In support of this conclusion, the Federal Circuit found that the “Summary of the Invention” section of the ‘739 patent repeatedly refers to “the present invention” and also mentions that “[t]he provider creates access to the Internet for the customer through the provider’s equipment.” The Court agreed with Netcraft that “use of the phrase ‘the present invention’ does not ‘automatically’ limit the meaning of claim terms in all circumstances, . . . . ” Slip op. at 7. The Court, however, also agreed with the district court for several reasons that the repeated use of the phrase “the present invention” in the specification described the invention as a whole and that the prosecution history does not warrant a contrary result. First, the Court found that the specification, including the Abstract, consistently describes the invention in terms of a third party providing Internet access to customers. The Court also found that every embodiment disclosed in the patents requires that the third party provide Internet access to customers. Finally, the Court found that the district court’s construction was supported by the language of the phrase at issue, which requires that the “communications link” be provided “through equipment of the third party.”

The Federal Circuit next considered Netcraft’s claim differentiation arguments based on claim 6 of the ’739 patent. Claim 6 depends from claim 1 and recites that “the third party is an Internet access provider, a cable television company, a telephone company, or a company offering financial services.” Netcraft argued that if claim 1 were limited to third parties providing Internet access, claim 6 would be redundant in listing an “Internet access provider” as a possible third party. Netcraft also argued that within claim 6, the differentiation between Internet access providers and the other possible third parties (i.e., a cable television company, a telephone company, or a financial services company) was inconsistent with requiring that all third parties provide Internet access. The Court, however, found that the “Summary of the Invention” section suggests a new business opportunity for companies, including financial services companies, that involves the provision of Internet access. Accordingly, the Court rejected Netcraft’s claim differentiation arguments.

The Federal Circuit next considered the parties’ arguments based on the prosecution history, but concluded that the cited prosecution history lacks the clarity of the specification with regard to the meaning of the claim terms at issue. Thus, while the Federal Circuit agreed with Netcraft that the district court should have considered the prosecution history when construing the claims, the Court concluded that its failure to do so was harmless error because the Court reached the same result on appeal after having considered it.

Finally, because the Federal Circuit concluded that the phrase “providing a communications link through equipment of the third party” requires providing customers with Internet access, it affirmed the district court’s grant of eBay and PayPal’s motion for SJ of noninfringement.