Federal Circuit Review - StoneEagle, Vederi, and Ancora Technologies (April 2014)

by Knobbe Martens

Inventor Cannot Use Declaratory Judgment Jurisdiction

In StoneEagle Services, Inc. v. Gillman, Appeal No. 13-1248, the Federal Circuit vacated a declaratory judgment and remanded with instructions to dismiss based on lack of subject matter jurisdiction.

StoneEagle and Gillman collaborated to adapt StoneEagle’s automotive electronic payment system so that it could be used to process health care claims.  StoneEagle filed a patent application for the health care payment system, listing StoneEagle’s owner as the sole inventor.  During a dispute, Gillman allegedly claimed that it was “his patent” and that he “authored it,” apparently referring to his alleged assistance with drafting the patent application.  StoneEagle filed for a declaratory judgment that its owner was the sole inventor and owner of the patent and requested a preliminary injunction based on state law trade secret misappropriation.  The district court issued a preliminary injunction; StoneEagle moved for contempt, arguing that Gillman violated the injunction.  The district court denied the contempt motion and modified the preliminary injunction.  Gillman appealed the district court’s clarification order.

The Federal Circuit observed that determination of a patent’s ownership is a state law issue and therefore does not raise a federal question.  Although the issue of inventorship is a federal question, the Federal Circuit determined that StoneEagle had not alleged a case of actual controversy, as required by the Declaratory Judgment Act and Article III of the Constitution.  StoneEagle only alleged that Gillman claimed that he “authored” or “wrote” the patent and not that he invented it.  Accordingly, the Federal Circuit found that the district court lacked subject matter jurisdiction over the declaratory judgment claim and vacated and remanded with instructions to dismiss.

Summary Judgment that Google’s Street View Does Not Infringe Is Reversed

In Vederi, LLC v. Google, Inc., Appeal No. 13-1057, the Federal Circuit vacated the district court’s claim construction and finding of non-infringement and remanded for further proceedings.

Vederi alleged that Google's Street View infringed several patents on creating synthesized images by combining images acquired by a car-mounted camera.  All asserted claims require "images depicting views of objects in the geographic area, the views being substantially elevations of the objects in the geographic area."  Google argued that the term should be construed as "vertical flat (as opposed to curved or spherical) depictions of front or side views" and that its Street View did not infringe because Street View produces a "spherical projection" made up of images that are curved or spherical, and never flat.  Vederi contended that the term means "front or side views," which broadly covers both curved and flat images.  Vederi cited disclosure in the specification describing creation of a 360-degree panorama using multiple cameras and the use of fish-eye lenses to capture images.  The district court adopted Google's claim construction, noting that the patents did not "disclose[] anything about spherical views" and entered summary judgment of non-infringement on that basis.  Vederi appealed.

Reviewing the claim construction de novo, the Federal Circuit observed that the district court’s ruling relied primarily on an architecture encyclopedia to interpret the meaning of the term "substantially elevations."  The encyclopedia was extrinsic evidence, which should have been given less weight than the intrinsic evidence.  Here, the claim language, the specification, and prosecution history all supported Vederi's construction. The Federal Circuit found that, under Google's construction, the term "substantially" was effectively read out of the claims, which would then exclude the specification’s fish-eye-lens embodiment.  The Federal Circuit also noted that the specification described the use of "vertical flat images" as only a preferred embodiment.  In rejecting Google’s prosecution-history-based argument, the Federal Circuit considered the relevant prior art and noted that the amendment of the claim term from a "non-aerial view" to "substantially elevations" did not disclaim subject matter encompassed by Vederi’s proposed construction.

The Federal Circuit reversed the claim construction, declined Vederi’s request to consider infringement arguments on appeal, vacated the judgment of non-infringement, and remanded.

Apple’s Summary Judgment of Non-infringement is Reversed

In Ancora Technologies, Inc. v. Apple, Inc., Appeal No. 13-1378, the Federal Circuit reversed the district court’s claim construction and summary judgment of non-infringement and affirmed the district court’s conclusion that two terms were not indefinite.

Ancora sued Apple for infringing its method for verifying that a software “program” is appropriately licensed.  The district court construed the term “program” to be limited to application programs, that is, programs requiring an operating system to run, as opposed to operating systems themselves.  Under this construction, Ancora’s patent only covered a method of verifying licenses for applications, not licenses for operating systems.  Ancora stipulated to summary judgment of non-infringement based on this claim construction and appealed to the Federal Circuit.

The Federal Circuit reversed the district court’s claim construction because nothing in the specification or prosecution history was sufficient to displace the ordinary meaning of “program” in the computer context.  A computer program would ordinarily be understood to include any set of instructions for a computer, not just application programs.  Apple pointed to examples in the specification where the term “program” did refer to applications, but the Federal Circuit rejected this evidence because the specification clearly described these examples as non-limiting.  The Federal Circuit also determined that Apple’s examples from the prosecution history were actually describing software performing the claimed method as an application and thus did not have any impact on the proper construction of the term “program” as it relates to what software could be acted on and verified by the claimed method.

Apple cross-appealed the district court’s determination that the terms “volatile” and “non-volatile” were not indefinite.  Even though these terms have clear, well-established meanings in the field of computers, Apple still argued that the specification’s use of “volatile” and “non-volatile” was incompatible with the terms’ ordinary meanings.  The Federal Circuit found that the limited facial inconsistency pointed to by Apple was not enough to displace the plain meaning of these terms.  Further, the Federal Circuit pointed out that, during prosecution, the examiner made clear to the patentee that the ordinary meanings of “volatile” and “non-volatile” applied, and the patentee never objected.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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