February 2013
Inventive Features Repeatedly Emphasized in a Patent Cannot Be Overlooked in Claim Construction
| Judges: Prost, Bryson (author), Wallach |
| [Appealed from E.D. Tex., Chief Judge Davis] |
In Parallel Networks, LLC v. Abercrombie & Fitch Co., No. 12-1227 (Fed. Cir. Jan. 16, 2013), the Federal Circuit affirmed the district court’s claim constructions and SJ of noninfringement, and also affirmed the district court’s denial of a Fed. R. Civ. P. 59(e) motion seeking leave to amend infringement contentions.
Parallel Networks, LLC (“Parallel”) owns U.S. Patent No. 6,446,111 (“the ’111 patent”), which is directed to the use of individualized applets in handheld devices to speed up data transfer. Parallel filed suit against numerous defendants, alleging that the defendants’ websites provided applets in response to user requests in a manner that infringed the ’111 patent. The district court construed certain claim terms that the defendants contended were case dispositive, including the terms “executable applet” and “dynamically generated by the server in response to the request.” Regarding the “dynamically generated” term, the district court adopted the defendants’ construction that an applet that is “dynamically generated by the server in response to the request” is an applet constructed at the server by combining the requisite functional code with the necessary data at the time of and in response to the client request. In each of the accused instrumentalities, at least one of the functional code or necessary data was required for accessing a link, which necessitated a subsequent transmission between the client and the server to combine the data and functionality required for the applet to operate.
Based on this finding and in view of the adopted constructions, the district court granted SJ of noninfringement for various defendants and later severed them from the case. Parallel also filed a Rule 59(e) motion seeking leave to amend its infringement contentions in order to allege infringement against certain defendants based on the district court’s claim construction, which Parallel argued was an unexpected and intervening change in the law. The district court denied the motion. Parallel appealed the district court’s claim constructions, noninfringement rulings, and denial of the Rule 59(e) motion to the Federal Circuit with respect to the severed defendants.
On appeal, the Federal Circuit first addressed the district court’s claim constructions. Agreeing with the district court that the data manipulation service (or functionality) and the particularized data are both necessary components of the applet as it is initially generated and before it is transferred to the client, the Court noted that asserted claim 1 teaches that the applet is “generated” in response to a user request, is “executable” and “operable,” is “associated with” the two “constituent” systems of particularized data and functionality, and is thereafter “to be transferred.” The Court found that, taken together, these terms described a natural progression in the asserted claims: upon receipt of a user request, the server generated an applet with two constituent parts (the functionality and the particularized data). Furthermore, that applet is executable (i.e., capable of being executed and carried out fully and completely) and is then transferred to the client device for execution.
“What purportedly made the [asserted] patent unique and inventive was combining and transmitting the particularized data and functionality ‘as a group’ in order to transfer an ‘executable applet’ and reduce the number of transmissions over the communications link. [The plaintiff] cannot now claim that a limitation that featured so critically in the patent was not, in fact, a part of the invention.” Slip op. at 23.
The Court found that Figure 3 of the ’111 patent depicts this chronology and that the specification substantiates this construction. In particular, the specification noted that “combining the data and functionality at the outset and transmitting them ‘as a group’ facilitates the invention’s key goal of ‘greatly reduc[ing]’ the number of communications over low-speed networks.” Slip op. at 17-18 (alteration in original) (citation omitted). Based on this construction, the Court held that a finding of noninfringement directly followed since each of the accused instrumentalities was missing at least one portion of the functional code or data when the applet, which included only a link for the missing portion, was transferred to the client.
Next, the Court addressed Parallel’s challenge to the district court’s construction of the “dynamically generated” term. Parallel contended that the district court erred in construing “generated by the server” to mean “constructed at the server, by combining,” because “generate” is broader than “combine,” and that the asserted claims require only that the data and the functionality be “associated with” the applet, not combined into a single file with the applet. Id. at 18-19. Rejecting Parallel’s position, the Court explained that the meaning that Parallel urged for the term “associated with” was overly expansive and would effectively rewrite the ’111 patent, as the ’111 patent clearly teaches an applet containing both the data and the functionality when the applet is generated.
The Court then addressed Parallel’s remaining arguments concerning the district court’s constructions. Parallel argued that the term “generated by the server” was incorrectly construed as “generated at the server.” Id. at 20. Recognizing that “by” does not necessarily mean “at,” the Court nonetheless found that Parallel provided no indication as to why the difference between “by” and “at” mattered in this context, as the critical point for the case was that the applet cannot be finalized at the client. The Court also rejected Parallel’s arguments regarding the district court’s construction of “dynamically . . . in response to the request” to mean “at the time of and in response to the request.” Id. at 21. The Court reasoned that although an applet could be generated “in response to” a request even if it were generated at some later point rather than at the exact time of the request, that did not affect the critical requirement that the applet be generated and executable before it is transferred to the client.
The Court also rejected Parallel’s argument against the district court’s construction of “dynamically generated” to require that the data and functionality be transferred to the client in a single transmission. In support of these arguments, Parallel cited to numerous examples in the specification that describe more than one transmission over a communications link. In rejecting these arguments, the Court noted that Parallel conflated two different concepts: (1) the generation of the applet at the server and its transmission to the client; and (2) the operation of the applet after it has been fully transferred to the client. While the ’111 patent claims deal with the former concept, the portions of the specification that Parallel cited to deal only with the latter concept, and the Court therefore found these arguments unpersuasive.
Based on its critique of the district court’s claim construction, Parallel argued that the district court’s infringement analysis was necessarily erroneous. Parallel argued that it does not matter whether the client device needs to make a separate request to receive the associated data or functionality because, in both instances, the constituent system is sufficiently “associated with” the applet. Rejecting Parallel’s position, the Court noted that Parallel admitted that the executable applet must consist of both data and functionality, and that the ’111 patent repeatedly emphasizes that feature. The Court further stated that “[w]hat purportedly made the ’111 patent unique and inventive was combining and transmitting the particularized data and functionality ‘as a group,’” and “Parallel cannot now claim that a limitation that featured so critically in the patent was not, in fact, a part of the invention.” Id. at 23.
Finally, the Court addressed Parallel’s challenge to the district court’s denial of the Rule 59(e) motion. Parallel contended that the district court did not address one of three factors that the Fifth Circuit considers under Rule 59(e)—the need to prevent a “manifest injustice”—and failed to consider four “good cause” factors for allowing amendments to infringement contentions under Local Patent Rule 3-6(b) for the district court. In rejecting Parallel’s arguments, the Court agreed with the district court that Parallel was seeking to amend its infringement contentions to make arguments that could have been made before the entry of SJ, and that the district court’s claim construction was not an intervening change in the law. The Court noted that Parallel chose to pursue a theory that allowed it to accuse a larger number of defendants, and, having lost, “may not now initiate what would amount to a completely new infringement proceeding.” Id. at 24. The Court also found that the need to prevent a “manifest injustice” is a catch-all factor that was already implicit in the district court’s consideration and rejection of Parallel’s motion as a whole. Furthermore, the Court agreed with the district court that Local Patent Rule 3-6(b) was inapplicable, because the adopted claim construction could have been anticipated, and because Parallel had provided no good explanation for its failure to bring its new infringement contentions earlier and thus brought any perceived prejudice on itself.
Accordingly, the Court affirmed the district court’s claim constructions, SJ of noninfringement, and denial of Parallel’s Rule 59(e) motion.
