Court: District Court, D. Delaware; March 31, 2014; Federal District Court
On August 8, 2011, Technology Innovations, LLC (T1) filed a patent infringement lawsuit against Amazon.com, Inc., alleging violations of U.S. Patent Nos. 5,517,407 ('407 patent) and 7,429,965 ('965 patent). Amazon responded with a motion to dismiss and a motion for sanctions regarding the '407 patent, both of which were denied by the court on April 25, 2012. Following this, Amazon filed an answer with affirmative defenses and counterclaims, including a request for costs and attorney fees. T1 subsequently amended its complaint to remove all allegations concerning the '407 patent. T1, a New York-based LLC with its principal place of business in Florida, owns the '965 patent, while Amazon, a Delaware corporation headquartered in Seattle, manufactures and sells the accused products. The court is currently considering Amazon's motions for summary judgment on the invalidity and non-infringement of the '965 patent, along with T1's cross-motion for partial summary judgment asserting no invalidity of the '965 patent. Additionally, Amazon has filed a motion to exclude the testimony of Dr. Conte and Mr. McCourt. Jurisdiction is established under 28 U.S.C. §§ 1331 and 1338(a).
The standards for summary judgment require the moving party to demonstrate that no genuine dispute exists regarding any material fact, supported by specific evidence from the record. If the moving party meets this burden, the nonmoving party must present specific facts indicating a genuine issue for trial. The court will favor the nonmoving party in drawing reasonable inferences and will not weigh evidence or make credibility determinations. To challenge a summary judgment motion, the nonmoving party must provide more than mere assertions or allegations.
The existence of a factual dispute alone does not prevent a properly supported motion for summary judgment; a genuine dispute requires evidence adequate for a reasonable jury to favor the nonmoving party. Summary judgment may be granted if evidence is merely colorable or not significantly probative. A party seeking summary judgment must demonstrate the absence of evidence for an essential element of the opposing party's case, which bears the burden of proof at trial.
Claim construction is a legal matter, centering on intrinsic evidence, including claims, specifications, and prosecution history, as these form the primary source of the meaning of disputed claim language. Claims should be interpreted from the perspective of someone skilled in the relevant art at the time of invention, starting with the claims themselves and focusing on their language throughout the process. Unless there is an express intent to assign a different meaning to terms, they are assumed to have their ordinary meaning, while also being read in conjunction with the specification and prosecution history, which is often the best guide for interpreting terms.
The definiteness requirement under 35 U.S.C. § 112 mandates that claims distinctly point out the claimed invention. Determining claim indefiniteness is a legal conclusion based on the court's interpretation of patent claims, assessing whether a skilled person can understand the claim's bounds in light of the specification. A claim is indefinite if it is "insolubly ambiguous," meaning it cannot be construed. Only claims that cannot be meaningfully interpreted or are inherently ambiguous are deemed indefinite.
The '965 patent, titled “Apparatus for the Display of Embedded Information,” was filed on May 18, 2001, and issued on September 30, 2008, claiming priority to provisional application no. 60/205,451. It describes technology for embedding and displaying digital information within a document substrate. T1 claims that Amazon's Kindle products infringe several claims of this patent, specifically independent claim 1 and dependent claims 3, 5, 7, and 18.
Claim 1 outlines an apparatus consisting of a permanently embedded substrate, a digital recording medium for information storage, and an updateable flexible substrate display on an exposed surface, capable of displaying at least two colors based on signals from the recording medium. Amazon contests the validity of the patent, asserting that the claims are indefinite under 35 U.S.C. § 112 due to conflicting requirements: an “apparatus” that includes a “substrate” and the condition that the apparatus must be “permanently embedded” within that substrate, which is seen as contradictory.
T1 argues that these conditions are not mutually exclusive and suggests that the term “apparatus” in the preamble should not require construction, viewing it as a general description. It asserts that this term is limiting as it provides the necessary antecedent for “the apparatus” referenced later in the claim body. Amazon counters, citing precedent that a preamble may not be limiting if the claim body sufficiently describes a complete invention, but highlights that if the preamble is not limiting, the term would lack an antecedent basis, rendering it indefinite.
Amazon argues for the invalidity of claim 1 on the grounds of indefiniteness, asserting that it fails to clarify what the applicant considers as his invention, a requirement for definiteness. The precedent case, Allen Engineering Corp. v. Bartell Industries, illustrates this point, where a claim was deemed indefinite because it misaligned with the inventor's specification. The Federal Circuit emphasized that it is not their role to amend claims but to assess if they distinctly outline the inventor's intentions as per 35 U.S.C. 112. In the current case concerning the '965 patent, the specification and prosecution history reveal that the applicant faced a rejection under Section 112 because the term “permanently embedded” lacked adequate description for someone skilled in the art. In response, the applicant argued that the concept of embedding was sufficiently disclosed, referencing Figures 1-3 to illustrate potential methods of embedding memory devices within a substrate. Despite this, it is apparent that the claim's language does not align with the inventor's intent, as it describes an apparatus as embedded in a substrate that is simultaneously defined as part of the apparatus. Consequently, claim 1 is ruled invalid due to its failure to distinctly inform the public of what the inventor regarded as his invention.
Amazon contends that the claims in question are inherently contradictory and thus “insolubly ambiguous,” preventing the clear definition of the invention's metes and bounds. Citing the case Virtual Solutions, LLC v. Microsoft Corp., Amazon argues that the claims require two contradictory conditions to be simultaneously true. Specifically, the claims stipulate that "position information" must be both part of and used separately from a "physical characteristic signal." Further supporting its position, Amazon references the case M2M Solutions, LLC v. Sierra Wireless America, Inc., where a claim required a “monitoring device” to operate both remotely and locally, leading the court to conclude that the term was not constructible due to the inherent conflict.
Additionally, Amazon critiques the term “a substrate into which the apparatus is permanently embedded,” asserting that the term does not alter meaning within the claim context. The analogy drawn between a “letter” and its “envelope” illustrates the logical inconsistency, as it would imply something is enclosed within itself, which is physically impossible. The court agrees with Amazon, determining that claim 110 is not amenable to construction and thus invalid. Consequently, Amazon's motion for summary judgment declaring the '965 patent invalid is granted, while Tl’s cross-motion for partial summary judgment of no invalidity is denied.
The '407 Patent, titled “Device for including enhancing information with printed information and method for electronic searching thereof,” was filed on June 30, 1994, and issued on May 14, 1996. It pertains to a method of electronically enhancing printed materials. Tl accused Amazon's Kindle of infringing claim 24 of this patent.
On April 25, 2012, the court denied Amazon's motions to dismiss and for Rule 11 sanctions but indicated that it would reconsider sanctions if Tl's assertions were found to lack merit post-discovery. Following this, Amazon filed its answers and counterclaims, requesting costs and attorney fees. Tl responded by seeking to amend its complaint, which was granted on March 27, 2013, leading Tl to withdraw all allegations of infringement related to the '407 patent and assert non-liability.
The court allowed Amazon to seek attorney fees under 35 U.S.C. § 285 and acknowledged that Amazon could raise its counterclaims in support of its fees motion. In response to Amazon's counterclaim for sanctions due to the frivolous nature of Tl's claims regarding the '407 patent, Tl moved to dismiss this counterclaim, which the court granted on August 15, 2013. However, the court noted that there were grounds for considering Rule 11 sanctions against Tl for its ongoing assertion of the patent until May 30, 2012.
The court required Tl to justify the propriety of its patent assertion under Rule 11(b), to which Tl responded by claiming it conducted a reasonable pre-suit investigation. Amazon contended that Tl's actions exemplified abusive litigation practices that burden the courts and significantly increase defense costs.
Rule 11 of the Federal Rules of Civil Procedure permits sanctions for claims made for improper purposes, frivolous claims, unsupported allegations, or wrongful denials of factual claims.
In patent litigation, Rule 11 sanctions are governed by the law of the regional circuit. The Third Circuit assesses violations of Rule 11 based on whether conduct is "objectively reasonable under the circumstances." A proper pre-suit investigation requires counsel to compare the accused product against the asserted claims and to conduct an objective evaluation of the claim terms in relation to the accused device. In a relevant case, the court found a complaint objectively unreasonable when the defendant’s proposed claim construction conflicted with the specification’s explicit definition.
TI Tl claims it performed an objectively reasonable pre-suit investigation, asserting only one claim of the '407 patent against a single product in accordance with Rule 11. TI Tl contends that Amazon's claim construction is erroneous and cites the specification of the '407 patent, including the definition of “book,” to support its infringement allegations. TI Tl asserts that claim 24 was compared with the Kindle by both counsel and a technical expert, supported by a claim chart illustrating the alignment between the claim limitations and the accused product. To demonstrate its reasonable pre-suit investigation, TI Tl provides a timeline showing that attorney Nelson E. Brestoff was retained on April 21, 2011, to lead the defense of TI Tl’s patents, and engaged experienced patent attorney Edward W. Goldstein. Goldstein coordinated with local counsel Richard Herrman shortly before filing the Delaware complaint. TI Tl maintains that a thorough pre-suit investigation was conducted approximately three months prior to the filing.
The investigation involved key figures including Michael Weiner, the inventor of the '407 patent, and Warren Woodford, a technology consultant with extensive experience. Tl contends that its complaint demonstrates a thorough examination of claim 24 of the '407 patent, detailing key terms and their interpretations. Weiner defined "printed work" as any configuration for direct human perception and specified "book" to include various printed formats, not limited to traditional books, but also maps and Braille. The patent describes "enhancements" as additional text, graphics, and sounds, contingent upon digital storage capabilities, and outlines methods for providing enhancements like dictionaries and translations for printed works. Tl argues that the Kindle infringes claim 24, supported by a detailed claim chart prepared by Woodford.
In contrast, Amazon claims that Tl has not justified its infringement claim under Rule 11(b) and seeks sanctions, asserting that Tl's position is baseless. Amazon cites that the '407 patent specification states digital information is "non-printed" and disclaims "electronic books." Amazon further argues that Tl's pre-filing investigation does not validate its claim construction and emphasizes that declarations from lawyers and consultants cannot prove Tl's good faith or reasonable analysis. Amazon points out the inconsistency in Tl's argument that a Kindle qualifies as a "book" with "printed pages," given the patent's characterization of digital information. Additionally, Amazon notes that Tl received multiple warnings about potential sanctions and withdrew the '407 patent in April 2013, over two years after its initial assertion.
Amazon identified the term “book” from the '407 patent as a disputed limitation for construction during the Markman hearing. Amazon proposed the term to mean “paper-based media,” while T1 argued it encompasses not only conventional books but also other forms of printed information. The claim asserted against Amazon’s Kindle, particularly Claim 24, describes a book featuring integral machine-readable memory accessible by various computers, comprising printed pages, enhancing information stored in memory attached to the book, a connector for external devices, and machine operating instructions for the computing device.
The patent specifies that the term “book” includes “not only conventional books, but other forms of printed information that could be read directly by users,” leading the court to adopt T1’s broader construction. Nevertheless, the court concurs with Amazon that the invention pertains solely to printed materials and does not encompass electronic books. The claim emphasizes the requirement for “pages of printed information” and “enhancing information” that is permanently attached to the book. The specification clarifies that the invention is an “enhanced book” that combines printed material with additional digital content, emphasizing that “printed information” refers specifically to conventional book pages. Therefore, the court finds that the claimed book cannot apply to the Kindle, an electronic reading device.
The patentee aimed to address issues with existing printed and electronic indices for printed publications, emphasizing that electronic books do not enhance printed publications. The patent includes figures illustrating a traditional book format. Previous cases, such as Site Update Solutions, LLC v. Accor North America, Inc. and Raylon, LLC v. Corn-plus Data Innovations, Inc., highlight instances of frivolous claim construction and the importance of aligning claim language with intrinsic evidence. In Raylon, a misinterpretation of a display's pivoting requirement led to a ruling against the plaintiff, while Eovr-Net affirmed that terms like “documents” and “files” were specifically defined, rejecting broader interpretations. The court recognized that although claim construction positions can vary, some may be so unreasonable as to merit sanctions under Rule 11. In the current case, the court found T1's broad definition of “printed” to be excessively wide and unsupported by the specification, concluding that T1's pre-suit investigation was not objectively reasonable. Consequently, the court granted Amazon's motion for summary judgment of invalidity and denied T1's motion for partial summary judgment. Other motions by Amazon were deemed moot, and an appropriate order will follow.
On March 31, 2014, the court issued an order regarding various motions related to a patent dispute involving Amazon and TI. Key rulings include:
1. Amazon's motion for summary judgment declaring the patent invalid is granted.
2. Amazon's motion for summary judgment on non-infringement is denied as moot.
3. TI's motion for partial summary judgment asserting no invalidity is denied.
4. Amazon's motion to exclude the testimony and evidence from Dr. Conte and Mr. McCourt is also denied as moot.
5. Amazon is required to submit a detailed accounting of its reasonable attorney fees and costs by April 14, 2014.
The order highlights a dispute over the construction of the term "apparatus" in the claims, referencing precedent from Saffran v. Johnson and Allen Engineering Corp. v. Bartell Industries. TI argued that the term should encompass limitations within the claim, but the court noted that a claim must maintain sufficient clarity, and it is not the court's role to rectify drafting errors made by the patentee. TI's shifting arguments regarding the consistency of claim terms were deemed incompatible with legal standards and the public notice function inherent in patent law. The term "comprising" is acknowledged as a critical phrase indicating inclusivity in patent claims.
A substrate is defined as permanently embedded, a digital recording medium, and a flexible substrate display. The court has deemed independent claim 1 invalid due to indefiniteness, rendering dependent claims invalid as well. Amazon contests that the term “permanently embedded” is indefinite and argues the claims do not meet the utility requirement under § 101 or the enablement requirement under § 112. However, the court does not address these points as the claim's invalidity has been determined on other grounds under § 112.
Tl's argument regarding the word "apparatus," which was highlighted by the Patent Office during claims allowance, is rejected. The motion stems from Tl's litigation history with Amazon concerning the '407 patent. In December 2010, Tl sued Amazon in Texas, but Amazon's counsel suggested dropping the case, claiming no legitimate reading of the patent applied to any Amazon product. Tl dismissed the case voluntarily in August 2011 without serving a complaint and filed a new complaint immediately after.
Tl disputes the court's previous order, asserting that the dismissal was not due to a belief in non-infringement by the Kindle but rather a strategic decision to pursue the current case. The court acknowledged that an interpretation of the '407 patent suggests a memory device linked to printed material, but stated that any characterizations would not be binding during the claim construction phase.
Amazon cites an article by Chief Judge Rader on litigation abuse, suggesting that abusive tactics include distortions of patent claims to raise legal costs. Tl contends that Amazon's Rule 11 motion is based on an overly narrow interpretation of the term "book," which Amazon no longer asserts, shifting instead to "paper-based media."
In the '407 Patent, the term "book" is defined broadly to include not only traditional books but also various printed media such as maps, newspapers, and unbound publications, along with forms like Braille. Amazon contends that T1's reliance on declarations over intrinsic evidence indicates bad faith in asserting the patent, referencing Raylon, LLC v. Complus Data Innovations, Inc. The amended complaint was filed on March 27, 2013, and a statement of non-liability followed on April 2, 2013. Amazon distinguishes a Kindle as an electronic book reader rather than an electronic book itself. The patent’s figure description illustrates a device containing printed work and integrated technology to enhance the information access, providing digital content in formats like text, sound, and graphics. The invention aims to address the limitations of printed materials, which restrict the volume of information based on the book's size, despite the preference for printed formats among readers.
