Billingnetwork. Com v. Cerner Physician Practice

Citations: 509 F. Supp. 2d 1172; 2007 WL 879409Docket: 6:04-cv-01515

Court: District Court, M.D. Florida; March 21, 2007; Federal District Court

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Defendants' Amended Motion for Summary Judgment is partially granted and partially denied, while Plaintiff's Motion for Partial Summary Judgment of Infringement is denied. Defendants' Motion to Strike Portions of Richard Krumholz's Declaration is denied as moot. The case involves Plaintiff, assignee of U.S. Patent No. 6,374,229, which pertains to an integrated internet-facilitated billing and data processing system. Plaintiff alleges that Defendants' Intuition PM system infringes Claim 1 of the '229 patent, specifically the "browser-based" electronic billing system. Claim 1 outlines a system involving secure access to a database via an ISP, with specific functionalities for data entry, billing, and real-time access. The Court previously construed the patent claims in a Markman Order. Both parties seek summary judgment, asserting there are no genuine disputes regarding the claim limitations in the Accused System, with Defendants also seeking a ruling on the validity of the patent. The Court will first consider the Defendants' Motion for Summary Judgment as it is crucial to the infringement claim.

Summary judgment is appropriate when the evidence, including pleadings, depositions, and affidavits, demonstrates no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law, as established in Celotex Corp. v. Catrett. A material fact is one that could influence the case's outcome under applicable law, while a genuine issue exists if a rational fact finder could side with the nonmoving party. All evidence must be viewed favorably toward the nonmoving party. In patent cases, the moving party can satisfy its burden in summary judgment by showing the absence of evidence of infringement, compelling the nonmoving party to provide specific facts indicating a genuine issue for trial. The plaintiff's evidence must be significantly probative. The court does not weigh evidence but assesses whether sufficient evidence exists for a reasonable fact finder to find for the nonmoving party.

In infringement cases, the claim construction is a legal question preceding the factual analysis of whether the accused device infringes the construed claims. Summary judgment is permissible if no reasonable fact finder could find infringement. Literal infringement requires the accused device to embody every claim element. Courts must grant summary judgment if there are no genuine issues of material fact that would allow a reasonable fact finder to find all claim limitations present in the accused device.

To establish literal infringement, the patentee must demonstrate that the accused device includes all limitations specified in the asserted claims; failure to meet even one limitation negates the claim of infringement. For infringement under the doctrine of equivalents, it must be shown that any differences between the claimed invention and the accused product are insubstantial, or that they perform similar functions in similar ways with similar results for each limitation of the patented item. This doctrine must be assessed on a claim element basis rather than the invention as a whole.

In the context of the '229 patent, the term "browser-based subscriber" is defined as someone who pays for access to a service to remotely access, view, and enter data via a software application that displays web pages. The distinction between browser-based and direct access subscribers lies in how they access data; browser-based users rely on an internet service provider and a website, while direct access users connect through a direct access server (Citrix).

Regarding literal infringement, defendants argue that users of the Accused System do not use a browser to access remotely stored data, which the plaintiff disputes, asserting that users indeed utilize a browser for access. However, the court finds no genuine issue of material fact that supports the plaintiff’s claim. Although evidence suggests that users may use a browser to access the Accused System, there is no evidence indicating that it is necessary for viewing and entering remotely stored data. Testimony from defendants' expert indicates that a browser is only used initially to install a Citrix client, while the plaintiff’s expert claims a browser is required for accessing the system. This conflicting testimony leads to a genuine issue of material fact regarding the necessity of a browser for connecting to the Accused System, but the plaintiff fails to demonstrate that users utilize a browser to directly view and enter data in that system.

Plaintiff's argument primarily addresses the general use of a browser to access the Accused System, without establishing its role in data entry. Several documents cited by Plaintiff suggest that the system is "accessed" via browser-based subscribers, but do not demonstrate that a browser is necessary for viewing or entering data. Plaintiff relies on testimony and documents, including a letter from Defendant Vital Works, Inc. and depositions from experts, but none provide evidence linking browser usage to data entry. For instance, the definition of "Application Service Provider" (ASP) presented by Plaintiff's expert does not imply a need for a browser for data entry, affirming that access can occur without local execution. Additionally, a deposition from Kyra Brown mentions that ASPs typically host applications accessed via a browser but does not confirm browser usage for entering data. The evidence presented does not establish that references to ASP or the required software, including Internet Explorer and Citrix ICA ActiveX Client, indicate that browsers are necessary for data entry in the Accused System. Testimony from Krumholz about a Defendants’ employee stating the system is "browser-based" only indicates access via a URL and does not address data entry functionality. Overall, the Plaintiff has not substantiated its claims regarding the necessity of a browser for entering data in the Accused System.

Krumholz's testimony regarding a Defendants' employee's statement lacks probative value for determining if the Accused System qualifies as having "browser-based subscribers," as there is no evidence the employee understood the Court's specific definition of the term. The testimony suggests that the reference to "browser-based" stemmed from using a URL for login rather than ongoing browser use for data entry and viewing. The Plaintiff's assertion that a document from "VitalWorks Intuition PM Reports Guide August 2003" shows Defendants' admission of browser-based access is insufficient. Although Shames testified that a browser is a "necessary component" for printing reports, this does not address whether a browser is used for data entry within the system. Notably, Shames indicated that he did not use a browser to enter data; the screens were not web pages but rather application pages accessed through Citrix. Despite Shames's opinion that a user is browser-based if they access the system via the internet and ISP, this view contradicts the Court's definition of "browser-based subscriber," which differentiates between browser-based and direct access as outlined in the relevant patent specification. Furthermore, Defendants' witnesses clarified that a browser is only needed to download the Citrix client, not for using the Accused System. Consequently, the Plaintiff's references to "ASP" and "browser" fail to provide adequate evidence for a reasonable conclusion that users of the Accused System are engaging with a software application that displays web pages for accessing, viewing, and entering data remotely.

Plaintiff's expert testimony indicates that the Accused System does not utilize a browser for data entry, leading the Court to determine that Plaintiff cannot demonstrate literal infringement of Claim 1 due to the absence of this claim limitation. Under the doctrine of equivalents, the distinction between a browser-based subscriber and one using Citrix to access data is deemed substantial, preventing a finding of equivalence that would undermine the claim limitation. The Court emphasizes that a browser-based subscriber must access and enter data via a browser, contrasting with the direct access method through Citrix. Plaintiff's expert's assertion that using a browser generally qualifies as "browser-based" does not align with the specific distinctions outlined in the '229 patent specification. Consequently, even with favorable evidence for Plaintiff, there is no basis for concluding that the Accused System meets the browser-based subscriber requirement, resulting in a legal determination of non-infringement regarding Claim 1 of the '229 patent. Additionally, Plaintiff has not provided sufficient evidence to challenge the means-plus-function limitations, reinforcing the Court's stance on non-infringement. For such limitations to apply, the accused system must employ identical or equivalent structures and perform the same functions as described in the patent, which Plaintiff failed to demonstrate.

The Court interpreted two means-plus-function limitations in Claim 1 during the Markman Order. The "means for providing electronic transfer" was defined to function as providing electronic transfer of billing and data entry forms to a browser-based subscriber upon request, along with data returned to a corresponding subscriber area and entered into a database server. The structure for this function involves a computer system that transfers data forms from a PC to various components, including the database server and subscriber area, and returns completed forms back to the database server.

The "means for providing real time electronic viewing" was defined as allowing instantaneous electronic viewing and query access of data and billings stored in the database server by browser-based subscribers. The corresponding structure also involves a similar computer system programmed for transferring query forms and returning accessed information to the subscriber PC.

Defendants contended that the Plaintiff could not prove the same function was performed in the Accused System since it allegedly does not transfer forms as required and does not have forms residing on the same device as the database. However, the Court found that the Plaintiff provided sufficient evidence to raise a genuine issue of material fact regarding these claims. Testimonies from Shames indicated that forms were associated with the database server and that the Accused System included tools for creating forms as part of the database server. Additionally, Krumholz's declaration confirmed that the Accused System allowed for electronic transfer and access to claims forms, demonstrating the completion of the claim entry process.

The excerpt details the findings regarding the functionality and structure of the Accused System in relation to specific legal claims. It highlights that the system can display data in various formats (by patient, provider, date) through query-type access, supporting real-time electronic viewing as confirmed by Krumholz's declaration. However, the Plaintiff failed to demonstrate that the Accused System satisfies the "browser-based subscriber" limitation, which is critical for establishing that it performs the same functions as the claimed means-plus-function limitations. 

Furthermore, even if a genuine issue existed regarding functionality, the Plaintiff did not provide sufficient evidence to meet the structural requirement. Shames's supplemental report asserts that the Accused System includes a structure performing the relevant function but does not specify that it contains the necessary components as defined by the Court. He generalizes the structure as the "overall product" and its components, including software, database, and communication protocols, without identifying specific elements. Shames indicated that he could provide more specifics if given requested documents but ultimately stated that the specific structure would not impact the determination of whether the function is being performed. In summary, the Plaintiff's failure to meet both functional and structural requirements undermines their claims against the Accused System.

The excerpt addresses the inadequacies in the testimony of Shames regarding the Accused System and its compliance with a means-plus-function limitation. Shames does not assert that the Accused System includes the specific structure or algorithm defined by the Court, particularly regarding the process of transferring query forms and accessing information. Instead, he describes the Accused System as containing fundamental elements like software, a database, and internet communications but admits he could not identify specific elements due to a lack of documentation. He suggests that if the Accused System performs the function, it meets the means-plus-function limitation, regardless of the structure.

However, the Plaintiff does not argue that Shames' testimony provides a structural comparison but rather relies on a functional analysis, citing the WMS Gaming case. The court in WMS Gaming established that to prove literal infringement, a patentee must show the accused device employs structure that is identical or equivalent to that disclosed in the patent while performing the identical function. Furthermore, the means-plus-function limitation requires a structural comparison between the accused device and the patent's specification. 

The excerpt emphasizes that despite the Plaintiff's argument that a functional analysis suffices in cases involving computer-implemented algorithms, the WMS Gaming decision highlighted the necessity of a structural analysis alongside functional analysis to establish infringement. The court did not eliminate the need for structural comparisons when evaluating means-plus-function claims.

The Court finds that the Plaintiff cannot establish literal infringement of the means-plus-function limitations because the Accused System lacks identical structure to the patented device. While functional elements are included in the Court's construction, they do not equate to the structure required. The Plaintiff's expert failed to conduct a structural analysis comparing the Accused System to the Court's construed algorithms, instead claiming such a comparison is unnecessary. As a result, the Plaintiff cannot demonstrate that the Accused System contains equivalent structure either. The standard for determining equivalence requires that differences between the accused device's structure and the disclosed structure be insubstantial, which has not been established by the Plaintiff. The expert did not identify any relevant algorithm in the Accused System that performs the required functions, leading to a lack of evidence regarding the existence of structural equivalents. Finally, the Court also evaluates whether the means-plus-function limitations are satisfied under the doctrine of equivalents, which allows for broader interpretation beyond literal claims. However, the Plaintiff must still provide evidence for a reasonable fact finder to conclude that the Accused System infringes under this doctrine.

Under 35 U.S.C. § 112, paragraph 6, an accused device must perform the identical function as specified in the claim element for literal infringement. However, the doctrine of equivalents allows for infringement if the accused device performs a function that is substantially the same. The court referenced cases like WMS Gaming and Interactive Pictures Corp. to illustrate that a lack of identical function does not automatically negate the possibility of equivalence. In this case, the court found no literal infringement due to the absence of a "browser-based subscriber" limitation and a lack of structural equivalence in the accused system. The plaintiff's expert did not identify any algorithm in the Accused System that could perform the asserted function, leading to a conclusion that no genuine issue of material fact existed regarding equivalent structures or functions. 

Additionally, the court noted that the plaintiff admitted to having no supporting facts for a claim of indirect infringement under 35 U.S.C. § 271(b) or (c), and provided no evidence for its assertion that the defendants were indirectly infringing by supplying the Accused Product. Therefore, the court granted summary judgment of no indirect infringement, as the underlying claim of direct infringement had already been dismissed.

Lastly, although the court ruled in favor of the defendants on the infringement issue, it acknowledged that the defendants' counterclaim regarding the patent's validity still required consideration.

A patent is presumed valid under 35 U.S.C. § 282, requiring a party claiming invalidity to prove it by clear and convincing evidence, as established in multiple cases. Defendants argue that the Plaintiff's '229 patent is invalid due to anticipation under 35 U.S.C. § 102 and obviousness under 35 U.S.C. § 103. Specifically, they contend that Claim 1 of the '229 patent is anticipated by prior art, citing 35 U.S.C. § 102(g), which states that a patent may be denied if the invention was made by another inventor who did not abandon or conceal it. Anticipation requires that a single prior art reference discloses all elements of the claimed invention as arranged in the claim. The initial burden is on the challengers to provide evidence of prior art; if met, the burden shifts to the patentee to demonstrate any suppression or concealment of the prior invention. Defendants assert that the publicly available ZirMed system from September 1999 contains all features of Claim 1, supported by testimonial evidence from ZirMed's executive, which must be corroborated. The Plaintiff counters that they have not presented evidence of suppression or concealment and argue that the Defendants have not proven the existence of a single prior art reference that meets all limitations of the '229 patent.

Plaintiff contends that Defendants have not demonstrated the ZirMed system meets the claim limitation requiring a database server to produce billing invoices and statements for both clients and customers. The Court's Markman Order clarified that this phrase necessitates the database server to generate separate billing invoices and statements for both categories. The ZirMed patent application indicates that data entered by healthcare providers is formatted for submission to multiple third-party payers. Fielding's initial declaration states that by September 19, 1999, the ZirMed.com system could produce and send claims and invoices to payors, such as insurance companies. However, his subsequent declaration clarifies that the ZirMed system at that time did not produce invoices or billing statements for individual patients.

Defendants argue that Claim 1 is invalid due to obviousness under 35 U.S.C. § 103, which stipulates that a patent cannot be granted if the differences from prior art would be obvious to a person of ordinary skill in the field. The determination of obviousness involves factual inquiries regarding the prior art, the skill level in the field, differences from the claims, and secondary considerations like commercial success and long-felt need. Defendants assert their evidence on these factual issues is uncontroverted, yet neither party addresses secondary considerations like commercial success or evidence of copying. Defendants' argument for obviousness relies on prior art systems, P5 and ClaimsNet, which allegedly show sending invoices to patients. The '229 patent application was filed on October 20, 1999, and was not in use before this date.

Whicker indicates that the ClaimsNet SEC and prospectus filing occurred on December 11, 1998. The Plaintiff contends that Defendants cannot prove the ClaimsNet system was publicly available prior to the '229 patent's filing date, thus rendering it non-prior art. The Plaintiff references Karl Spurlock's 30(b)(6) deposition, where he could not recall when in 1999 users could process claims without installing the Citrix WinFrame Client. A person of ordinary skill in the art is defined as someone reasonably skilled in the applicable field. Defendants cite Whicker's Supplemental Expert Report, which asserts that it would have been obvious for someone skilled in the art to perform certain functions at the time the Billingnetwork patent application was submitted. The Plaintiff does not provide evidence to counter this claim but argues that significant differences exist between the P5 system and the '229 patent. Defendants maintain that sending invoices to patients was well-known before Billingnetwork's application, supported by the P5 patent, which discusses sending invoices to patients when insurers pay only part of a claim. Defendants also reference Whicker’s expert report on the P5 system's claim limitations. The Plaintiff argues that the P5 system fails to teach the specific limitation regarding a "database server producing billing invoices" as described in the '229 patent. The Plaintiff highlights that the P5 specification implies that application software is executed on a local access terminal rather than remotely. For obviousness claims that arise from combining elements across references, there must be a suggestion or motivation for skilled individuals to make such combinations, along with a reasonable expectation of success. Defendants argue that the motivation for sending invoices relates to payment assurance for physicians, a point they assert is disclosed in the P5 patent and other prior art. Due to insufficient discussion on the invalidity issue, the Defendants' Motion for Summary Judgment regarding invalidity is denied without prejudice, with permission for the parties to submit supplemental briefs focused on this issue.

Initial briefs are limited to fifteen pages and must be filed by April 30, 2007. Response briefs are due ten days later and cannot exceed ten pages. The court has granted summary judgment of non-infringement in favor of the Defendants, resulting in the denial of the Plaintiff's Motion for Partial Summary Judgment of Infringement (Dkt. 128). The Defendants sought to strike portions of Krumholz's declaration and deposition testimony, claiming they did not adequately address the required browser-based access and the algorithm of means-plus-function structures. However, the motion to strike is denied as moot. The court's conclusion orders that the Defendants' Amended Motion for Summary Judgment (Dkt. 127) is granted in part and denied in part, the Plaintiff's Motion for Partial Summary Judgment (Dkt. 128) is denied, and the Defendants' Motion to Strike Krumholz's declaration (Dkt. 116) is also denied as moot. The court also notes that the '229 patent specification requires browser-based subscribers to use a browser for data entry and clarifies distinctions between direct access subscribers and browser-based technology.

Intuition PM is accessed through a Citrix client, and the plaintiff contends that Brown's declaration should be disregarded as it contradicts his deposition testimony; however, the court finds that Brown's deposition does not provide the necessary evidence for the plaintiff's claims. The plaintiff referenced the same evidence in their Motion for Partial Summary Judgment to argue that defendants' system meets the "browser-based subscriber" requirement. Testimony from Shames indicates uncertainty about Citrix's capability to locate or display web pages, and the plaintiff has not provided any expert opinion supporting the notion that using Citrix instead of a browser constitutes a minor difference. Shames also asserted that the accused system involves a PC-type computer that connects to a database server, fulfilling the claim requirements. No unresolved discovery issues were identified by the plaintiff, nor did they address the specific algorithm interpreted by the court in their infringement motion. The court referenced a previous case that affirmed the necessity for a computer-implemented means-plus-function term to be limited to the structure disclosed in the specification and its equivalent corresponding structure. The plaintiff's argument regarding an improper page limit due to Exhibit U is rendered moot because the court allows additional arguments on the validity issue. The defendants claim that the P5 patent and Claimsnet publication invalidate Claim 1 under 35 U.S.C. § 102 but did not elaborate due to space limitations. Fielding's declaration notes that ZirMed was the first to offer web-based claims data entry and filing, with the first electronic medical claim filed in September 1999, and also includes a rejected U.S. provisional patent application. The plaintiff argues that the ZirMed system fails to meet certain claim limitations, yet did not address the court's construction of these terms during their infringement argument.