March 6, 2023
Edited by Ryan V. McDonnell; Elizabeth D. Ferrill
The following telephone arguments will be available to the public live. Access information will be available by 9 AM ET each day of argument at: https://cafc.uscourts.gov/home/oral-argument/listen-to-oral-arguments/.
Netflix appeals from a Final Written Decision finding U.S. Patent No. 9,184,920 not unpatentable over several alleged obviousness grounds. Netflix argues that the Board committed several critical legal errors in its claim-construction rulings and the application of those rulings to the prior-art references. The ’920 patent relates to digital video and encryption technology for online video delivery, and the claims require “obtaining encrypted content . . . where the content includes frames of video and at least a portion of a plurality of frames of video are encrypted.” Netflix asserts that the Board implicitly construed this claim term to require a system that obtains whole frames before decryption, which Netflix contends unnecessarily narrows the claim to add an unrecited element and is contrary to the Board’s previous acknowledgement that the claims do not require transmission of whole frames. Further, Netflix contends that the Board erred in finding that an asserted prior-art reference did not disclose the Board’s construction requiring whole frames before decryption.
DivX counters that not only did the Board correctly construe the claim limitations of the ʼ920 patent, but that Netflix also waived any right to argue that the Board erred in construing the claim term. According to DivX, Netflix was on notice of the Board’s understanding of the claims following the Board’s institution, and that Netflix failed to assert its alternative claim-construction theories throughout the Board proceedings. Even if the argument were not waived, DivX argues that the construction was appropriate because the phrase “the content” refers to the “encrypted content” “obtain[ed]” by the playback device, thus limiting “encrypted content” to necessarily “include frames of video.” DivX further argues that Netflix improperly attempts to construe the claim term “at least a portion of a plurality of frames of video are encrypted” to encompass obtaining “portions of frames.” DivX argues that the term “portion” in this context refers to a “portion” of the frame being encrypted, not obtaining content that includes only “portions” of complete video frames. In response to Netflix’s argument regarding the prior-art reference’s disclosure of whole frames, DivX asserts that the prior art never mentions the use of “frames,” contrary to Netflix’s contention that a “scrambled broadcast signal” discloses whole encrypted frames.
Respondents Panduit and Siemon appealed from the Commission’s Final Determination finding that their importation of fiber optic bundle modules induced their customers to infringe multiple patents claiming a fiber optic apparatus that includes fiber optic bundle modules as a component. On appeal, the Respondents contend that the Commission committed legal error in finding that their imported modules satisfied section 1337’s “importation” requirement through induced infringement, despite finding that the imported modules do not directly or contributorily infringe any claim. Specifically, Panduit and Siemon argue that for the asserted apparatus claims, because direct infringement under § 271(a) and contributory infringement under § 271(c) are the only sections that address the making, using, or selling of imported articles that might infringe a patent, the Commission should not have considered inducement under § 271(b), which focuses on actors who infringe. The Respondents also assert that the Commission erred by failing to consider whether there was a nexus between their imported modules and the claims that they were found to infringe.
The ITC, on the other hand, asserts that the Commission properly found that the Respondents induced its customers to infringe the asserted claims because the Federal Circuit’s Suprema case established that a section 1337 violation could be based on importation of an article that induced direct infringement after importation. The ITC further asserts that the Respondents’ own briefing in the proceeding recognized that the “articles that . . . infringe” requirement of section 1337(a)(1)(B) extends to induced infringement and that the Respondents incorrectly suggest that induced infringement of an apparatus claim is an improper “expansion” of Federal Circuit precedent. Finally, the ITC counters that the Respondents’ “nexus” requirement has no support in either ITC or Federal Circuit precedent, and that the concept of a “nexus” is irrelevant to whether an article has been imported.
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