Fantasy Sports Properties, Inc. v. sportsline.com, Inc., and Yahoo! Inc., Defendant-Cross and Espn/starwave Partners (Doing Business as Espn Internet Ventures and Eiv Ventures)
Docket: 01-1217
Court: Court of Appeals for the Federal Circuit; June 14, 2002; Federal Appellate Court
Fantasy Sports Properties, Inc. appeals the United States District Court for the Eastern District of Virginia's summary judgment ruling that found no infringement of its U.S. Patent 4,918,603 by defendants SportsLine.com, Inc., Yahoo! Inc., and ESPN/Starwave Partners. The court had previously granted summary judgment favoring Yahoo! and ESPN on different grounds, with Yahoo! cross-appealing the denial of its attorney fees. The Federal Circuit affirmed the lower court’s rulings regarding Yahoo! and ESPN, stating they did not infringe the patent. However, the court identified a genuine issue of material fact concerning the potential infringement by SportsLine's Commissioner.com product. Consequently, the appellate court vacated the summary judgment against SportsLine and remanded the case for further proceedings. The patent in question involves a method for playing a fantasy football game, where players manage teams based on the performance of actual football players and score points according to various game statistics.
Claim 1 of the '603 patent is the sole independent claim under scrutiny, detailing a computer system for fantasy football that includes mechanisms for establishing franchises, drafting players, selecting rosters, trading players, and scoring based on actual game performances, with specific provisions for bonus points awarded to certain player positions. The dispute in this case focuses on the 'bonus points' limitation. Fantasy filed a lawsuit against several defendants, claiming infringement of the patent through their fantasy football games. Yahoo! sought summary judgment, asserting its game did not meet the 'bonus points' requirement. The district court defined 'bonus points' as additional points awarded beyond normal scoring for specific plays, concluding that Fantasy had disclaimed any games awarding extra points for distance or yardage when it added the 'bonus points' limitation.
Consequently, the court ruled that Yahoo!'s game did not infringe the patent, as it only awarded points equivalent to actual game scores, excluding additional yardage points. Following this, ESPN and SportsLine also filed motions for summary judgment, with the court refining its definition of 'bonus points' to include points awarded for unusually difficult scoring plays. The court found that ESPN's game did not infringe since it did not grant extra points for unconventional scoring plays. Similarly, SportsLine’s games were ruled non-infringing as they only provided points based on yardage. Additionally, the court determined that SportsLine's Commissioner.com product was not a fantasy football game but a tool for managing leagues, negating any direct infringement. Fantasy's claim of contributory infringement was also dismissed due to insufficient evidence of actual infringement by users. Yahoo! later requested attorney fees, which the court denied, stating that Yahoo! failed to show the case was exceptional under 35 U.S.C. § 285.
The court found that Fantasy's interpretation of the '603 patent concerning Yahoo!'s fantasy football products was flawed but not frivolous enough to warrant a Rule 11 violation. Fantasy is appealing the district court's summary judgment of noninfringement against multiple defendants, while Yahoo! is cross-appealing the denial of its attorney fees and seeking to strike certain evidence submitted by Fantasy on appeal. Jurisdiction is established under 28 U.S.C. § 1295(a)(1).
Summary judgment is deemed appropriate when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. The evidence must be viewed in favor of the nonmoving party, with all reasonable inferences drawn accordingly. The appellate court reviews summary judgment de novo, examining both the construction of patent claims and their comparison to the allegedly infringing device.
The infringement determination involves a two-step process: first, the court interprets the patent claims, and second, compares those claims to the accused product. Claim construction is a legal issue subject to de novo review, whereas infringement determination, whether literal or under the doctrine of equivalents, is a factual issue.
Fantasy argues for a broad interpretation of the 'bonus points' limitation, suggesting it includes any additional points awarded beyond standard scoring. They assert that the term 'bonus' refers to anything given in addition to the usual amount and that prior art does not limit this definition. Fantasy also cites the specification indicating that 'bonus points' can be awarded for non-scoring plays.
In contrast, the defendants contend that 'bonus points' should be interpreted as additional points awarded only for scoring plays when a player is out of position. They maintain that the prosecution history reveals a clear interpretation of 'bonus points' that excludes certain scoring methods discussed in a 1987 article, which Fantasy conceded during prosecution.
Defendants argue that the term 'bonus points' should be interpreted to apply only to additional points awarded for unusual scoring plays, rather than any non-scoring statistics like total yardage. They emphasize that the specification and prosecution history clarify this interpretation, overriding the doctrine of claim differentiation. The specification indicates that 'computerized football points' include points for touchdowns, field goals, and additional bonus points based on play difficulty.
The term 'bonus points' is thus defined as points awarded for scoring plays beyond those awarded in a real football game. The prosecution history reveals that Fantasy explicitly relinquished broader interpretations of 'bonus points' that would align with methodologies in a 1987 article on fantasy football. This article describes various scoring methods, including those for total yardage, which were rejected by the examiner as prior art. The examiner acknowledged that while certain claims were rejected due to their reliance on concepts from the 1987 article, claims containing the 'bonus points' limitation were allowed, leading to the issuance of claims 1-3 of the '603 patent after Fantasy amended them as recommended by the examiner.
The examiner determined that Fantasy's use of a computer for fantasy football games and the grouping of players was either known in the art or obvious. The rejection of claim 10 indicates that the combination of these elements with Fantasy's interpretation of 'bonus points' was deemed unpatentable. Fantasy accepted these rejections by canceling claims lacking the 'bonus points' limitation, thus cannot later argue that the combination rendered its invention patentable. Fantasy disclaimed interpretations of 'bonus points' that include scoring methods from a 1987 article, limiting claim terms to exclude disclaimed interpretations during prosecution.
Fantasy's assertion that the specification broadly defines 'bonus points' to include non-scoring plays is unconvincing. The relevant portion of the specification must be understood in context, emphasizing that 'bonus points' relate to scoring plays. The specification clarifies that 'bonus points' apply to specific unusual scoring events. Consequently, 'bonus points' are interpreted as additional points for unusual scoring plays, not typical scoring events.
Fantasy's claim differentiation argument is also rejected, as the presumption that each claim has different scopes is negated by Fantasy's disclaimer during prosecution. Thus, 'bonus points' must retain the same scope across all claims of the '603 patent.
In conclusion, 'bonus points' are characterized as additional points awarded for unusual scoring plays. Despite relying on its interpretation of 'bonus points' for its infringement argument, Fantasy contends that genuine material fact issues exist that prevent summary judgment of noninfringement concerning the defendants' products, even under the district court's claim construction.
Interpretation of the term 'bonus points' is central to the analysis of whether summary judgment was correctly granted regarding the defendants' products under the '603 patent.
1. **Yahoo!**: Fantasy claims that Yahoo! Sports Fantasy Football infringes the patent due to awarding 'miscellaneous points' for out-of-position scores. Yahoo! argues that it does not award additional points beyond the standard six for a touchdown and that 'miscellaneous points' simply denote an unusual play without altering scoring. The court agrees with Yahoo!, concluding that Fantasy has not established any genuine issue of material fact regarding infringement, thereby affirming the district court's summary judgment of non-infringement.
2. **ESPN**: Fantasy alleges ESPN's game infringes the patent by awarding bonus points based on scoring type. ESPN counters that its game awards the same points for touchdowns irrespective of player position, which aligns with actual game scoring. The court supports ESPN's position, stating that it does not award additional points beyond standard touchdowns, leading to a conclusion of non-infringement and affirmation of the district court's summary judgment.
3. **SportsLine**: Fantasy concedes that SportsLine's games do not infringe under the district court's interpretation. However, it contests the summary judgment regarding the Commissioner.com product, arguing that it could be configured to award bonus points for out-of-position scoring, referencing a declaration from a product specialist. SportsLine argues that Commissioner.com is not a directly infringing product but a customizable tool for users to manage their own leagues. The court's analysis indicates that the Commissioner.com product's nature as modifiable software does not meet the direct infringement criteria.
SportsLine contends that Fantasy did not establish any underlying direct infringement necessary for a finding of contributory infringement regarding the '603 patent. The court determined that the district court mistakenly granted summary judgment concerning the Commissioner.com product, as genuine factual disputes remain regarding its potential infringement. While the court disagreed with Fantasy's interpretation of a prior case, Intel, it concurred that the Commissioner.com product requires evaluation under a direct infringement framework. The Intel case involved a memory chip with programmable features, where the defendant claimed that mere capability to be modified for infringement did not equate to infringement itself. However, the court ultimately found that the device did infringe, emphasizing that the language of the patent claims and the characteristics of the accused product are crucial for determining infringement.
In this case, the relevant claim pertains to a 'computer for playing football,' which encompasses software that executes fantasy football game functions. The claim specifically includes requirements like a mechanism for awarding bonus points for unusual scoring plays. The court clarified that software functions are pre-defined in code, which must enable users to activate these features without needing to modify the underlying code. Thus, for the '603 patent to be infringed, the software must inherently allow users to award bonus points for atypical plays without any alterations to the code.
An infringing software must incorporate the 'means for scoring bonus points' regardless of its activation status. SportsLine claims that the Commissioner.com product cannot infringe directly because it is not a 'computer for playing football,' as defined by the claims. However, the evidence shows that the Commissioner.com product is software that allows users to play fantasy football online. Advertising materials for the product highlight its functionality as a utility for running a fantasy football league and emphasize user-friendly setup with a 'Scoring Wizard' feature that permits various scoring configurations, including position-specific scoring.
The conclusion is that the Commissioner.com product qualifies as software on a 'computer for playing football,' capable of directly infringing the '603 patent. SportsLine's argument that infringement cannot occur because the product is not controlled by SportsLine but by the users is rejected. The patent claims do not stipulate that the game must be operated by a specific entity; they only require the software to enable awarding 'bonus points.' Additionally, the product's advertisements clarify that users set their own league rules while utilizing SportsLine's online resources.
Lastly, SportsLine presents an argument requiring further fact-finding regarding the ability to award points for out-of-position scoring for kickers in fantasy football games created with the Commissioner.com product. SportsLine's Vice President claims that scoring variations for kickers are limited to additional points for field goals, while a declaration from Mr. Elliott indicates he could configure the scoring system to award kickers for touchdowns, although he did not detail the method.
The appeal centers on whether the Commissioner.com product allows for the awarding of 'bonus points' to kickers, a key factual dispute that prevents a conclusive finding of legal infringement. Consequently, the district court's grant of summary judgment of noninfringement is vacated, and the case is remanded for further determination on this issue through direct infringement analysis.
Yahoo!'s motion for attorney fees and costs is denied by the district court, which found that Fantasy conducted a reasonable pre-filing investigation, contrary to Yahoo!'s claims. Yahoo! could not show that Fantasy's interpretation of 'bonus points' was unreasonable, nor was it proved that this case was exceptional enough to warrant attorney fees. Additionally, Yahoo!'s motion to strike a January 15, 1999 letter is deemed moot as it is unnecessary for the decision on attorney fees.
The court affirms the district court's findings that Yahoo!'s and ESPN's products do not infringe the '603 patent. However, the court vacates the decision regarding SportsLine's Commissioner.com product, indicating that the district court erred in concluding no infringement occurred. Thus, the appellate court affirms in part, vacates in part, and remands for further proceedings.
