This is a patent infringement case on appeal from the United States District Court for the Eastern District of Virginia. Appellant Amdocs (Israel) Limited ("Amdocs") asserted four related patents against Appellees Openet Telecom, Inc. and Openet Telecom Ltd. (collectively "Openet"), seeking damages and injunctions.
Amdocs and Openet compete in the market for "data mediation software," which helps internet service providers ("ISPs"), such as Verizon and AT & T, track their customer's network usage and subsequently generate bills. When a customer sends an email, surfs the internet, sends a text message, or participates in a video conference, records of this network activity ("network records") are generated at various, disparate locations throughout an ISP's network. Data mediation software collects, processes, and compiles these network records so that network usage can be tracked and billed appropriately.
Before the district court, Openet moved for summary judgment of noninfringement of the four patents. With regard to three of the patents, U.S. Patent Nos. 7,631,065 (the "'065 Patent"), 7,412,510 (the "'510 Patent"), and 6,947,984 (the "'984 Patent"), Openet argued that Amdocs was unable to point to actual infringing use and that the accused products did not practice all claim limitations. The district court granted Openet's motion based on its finding that Amdocs did not raise a genuine question of material fact as to whether the accused devices practiced "completing" or "enhance[ing]" "in a distributed fashion," a requirement which it construed to be common to all asserted claims. We agree with the court's construction of enhancement and completion but we find that Amdocs' documentary evidence describing the structure and operation of the accused product creates genuine factual issues regarding whether the product meets these constructions. Accordingly, for these three patents, we reverse the district court's grant of summary judgment and remand.
The district court also granted summary judgment of noninfringement of the fourth patent, U.S. Patent No. 6,836,797 (the "'797 Patent"). Because this finding is based on an erroneous claim construction, we vacate and remand for determination of infringement under the proper claim construction.
The district court provides the following summary of the patented technology:
Amdocs (Israel) Ltd. v. Openet Telecom, Inc., No. 1:10-cv-910, 2013 WL 265602, at *2 (E.D.Va. Jan. 22, 2013) (citations and footnotes omitted) [hereinafter District Court Op.]. The four patents are related, but each is directed to a different aspect of the subject matter.
As the district court succinctly summarized, "[t]he '065 patent describes the invention's primary function, which is the collection and transformation of network accounting records." Id. at *3. Amdocs asserts independent claims 1, 7, and 13 and dependent claims 4 and 17.
The asserted claims recite:
In relevant part, these 5 claims can be generalized as:
"The '984 patent and the '510 patent, which is a continuation of the '984 patent, describe methods and computer program products for creating reports based on the generated DRs, and for sending alerts based on those reports. The asserted claims also include limitations that describe in detail the core collection and conversion of network usage records." District Court Op. at *3. Amdocs asserts independent claims 1 and 13 and dependent claims 2, 6, and 8 of the '984 Patent, and independent claim 16 and dependent claims 17 and 19 of the '510 Patent.
The asserted '984 Patent claims recite:
The asserted '510 Patent claims recite:
Finally, "[t]he '797 patent has a different focus than the other three patents-in-suit, by concentrating on the structure of the DRs." District Court Op. at *4. Amdocs asserts independent claims 1, 7, and 19 and dependent claims 2 and 8.
The asserted claims recite:
For purposes of this appeal, these 5 asserted claims can be generalized as:
As noted, Amdocs and Openet compete in the market for "data mediation software," which collects, processes, and compiles network records so that network usage can be tracked and billed appropriately. The accused product is Openet's FusionWorks Framework ("Framework"), which it refers to as its "mediation operating system." The Framework is essentially a package of tools, one of which is mediation, provided to customers on an Installation CD. The parties disagree regarding the structure and function of the Framework, including the location of the allegedly infringing code.
According to Openet, the Framework will not perform mediation "without required additional custom software," referred to as "business logic rules" or DataStream Decoder ("DSD") scripts. The DSD scripts are not contained on the Installation CD and must be added later. Openet argues that the Correlation and Transaction Engines ("CTEs") in the Framework "only operate[] according to business logic rules (DSD scripts) that have been written to instruct a particular CTE how to process collected data." Openet does admit that the Framework, once operating, collects network records from throughout an ISP's network and processes them before generating records that the ISP can use to produce bills for its customers.
Amdocs argues that the complete software code for the mediation aspects of the Framework is on the Installation CD. While Amdocs agrees that the CTEs are "rules driven," it asserts that "all of the computer code for recognizing and performing each pre-defined rule is present on the Framework installation CD at the time Openet delivers it to the customer." Amdocs argues that the DSD scripts cannot alter the code already present on the Installation CD. For support, Amdocs points to Openet marketing materials and user guides that describe the operation of the Framework, including details regarding the location and operation of the CTEs.
On August 16, 2010, Amdocs asserted the '797 and '065 Patents against Openet
The district court held combined claim construction and summary judgment proceedings. The parties disagreed about the meaning of the claim terms "enhance," "enhancement," "completing," and "single record represent[ing] each of a plurality of services." In addition, Openet moved for summary judgment of invalidity and noninfringement and Amdocs moved for summary judgment that it had not committed inequitable conduct.
The district court held an initial hearing regarding these motions on July 8, 2011, but did not extensively discuss the substance of claim construction or summary judgment. The court appeared partially frustrated by the lack of clarity of the presentation of the case and, as such, cancelled the trial that was scheduled for later that month. In its place, the district court held a summary judgment hearing on July 25, 2011, where it addressed claim construction and the summary judgment motions at length. On September 27, 2012, the court issued an order granting Openet's motion for summary judgment of noninfringement for all asserted claims and granting Amdocs' motion regarding inequitable conduct. The court did not issue an opinion explaining the bases for its decisions until January 22, 2013.
In its January opinion, the court construed the claim terms noted above and, based upon those constructions, found that Openet did not infringe. Although neither party argued about whether enhancement occurred in a distributed fashion in the briefing or at oral argument, the district court construed "enhance" as "to apply a number of field enhancements in a distributed fashion." District Court Op. at *20. The court also clarified that "in a distributed fashion" meant that the enhancement occurred "close to the source" where the network usage information is collected. Id. at *21. The court next construed "completing" to mean "enhance a record until all required fields have been populated." Id. at *23.
Because neither party argued whether enhancement occurred in a distributed fashion, the court had no briefing or argument on whether the accused products infringed under this claim interpretation. Despite this, the district court found that there were no genuine issues of material fact regarding whether Openet's products "enhance" network records "in a distributed fashion." Accordingly, the court granted summary judgment of noninfringement for the '984, '510, and '065 Patents.
Regarding the '797 Patent, the district court construed a "single record represent[ing] each of a plurality of services" as "one record that includes customer usage data for each of the plurality of services used by the customer on the network." Id. at *25. The district court concluded that, as a matter of law, the aggregate record produced by Openet's products did not meet this limitation.
Amdocs timely appeals, and we have jurisdiction under 28 U.S.C. § 1295(a)(1).
A district court's claim construction is reviewed without deference. See Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272, 1276-77 (Fed.Cir.2014) (en banc); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1451 (Fed.Cir.1998) (en banc).
We apply the law of the regional circuit when reviewing summary judgment decisions. See Lexion Med., LLC v. Northgate Techs., LLC, Inc., 641 F.3d 1352, 1358 (Fed.Cir.2011). The Fourth Circuit reviews
The district court made three claim constructions. First, all asserted claims of the '065 Patent require the use of accounting information to "enhance" a network accounting record. The district court construed "enhance" to mean "to apply a number of field enhancements in a distributed fashion." District Court Op. at *20. The court further clarified that "[i]n this context, `distributed' means that the network usage records are processed close to their sources before being transmitted to a centralized manager." Id. at *10.
Second, the district court construed "completing" in the asserted '510 and '984 Patent claims to mean to "enhance a record until all required fields have been populated," incorporating its construction of "enhance." Id. at *23.
Third, common to all asserted '797 Patent claims is the limitation of "single record represent[ing] each of the plurality of services." The district court construed the term to mean "one record that includes customer usage data for each of the plurality of services used by the customer on the network," with the understanding that the term does not encompass a record that aggregates usage data. Id. at *25.
Amdocs challenges the first and third of these claim constructions. We affirm the district court's construction of "enhance" in the '065 Patent and also the construction of "completing" in the '510 and '984 Patents, to the extent that it incorporates the construction of "enhance." We vacate and modify the district court's construction of "single record represent[ing] each of the plurality of services" in the '797 Patent.
In the district court, Amdocs urged that the term "enhance" be construed in accordance with its plain meaning. Amdocs continues to press its plain meaning argument that "enhance" is "to add information to or modify information in a record." Openet argues that "enhance" is indefinite if given a plain meaning construction, and points to portions of the specification in support of the district court's conclusions.
We agree with the district court. The chief problem with Amdocs' position is that there is no suggestion within the specification of centralized, as opposed to distributed, enhancement. The specification of the '065 Patent repeatedly refers to the "gatherers" as the situs of the enhancement:
In turn, the specification of the '065 Patent distinguishes the gatherers from the Central Event Manager, which "acts as the central nervous system of the system 100, providing centralized, efficient management and controls of the gatherers and the ISMs." '065 Patent 8:12-16. The distributed nature of the gatherers is made clear by the specification:
We therefore affirm the district court's construction of "enhance" as "to apply a number of field enhancements in a distributed fashion."
All asserted claims of the '510 and '984 Patents recite "completing a plurality of data records from the filtered and aggregated network communications usage information, the plurality of data records corresponding to network usage by a plurality of users." The district court construed the term "completing" to mean "enhance a record until all required fields have been populated," incorporating its construction of "enhance" in the '065 Patent to mean "to apply a number of field enhancements in a distributed fashion." District Court Op. at *23. Amdocs does not challenge the district court's construction of "completing," but protests the inclusion of "in a distributed fashion" from the construction of "enhance." Because the district court's construction of "enhance" is correct, we affirm its construction of "completing."
Common to the asserted '797 Patent claims is the limitation of "single record represent[ing] each of the plurality of services." The district court construed the term to mean "one record that includes customer usage data for each of the plurality of services used by the customer on the network." Id. at *25. It understood the term to not encompass a record that aggregates usage data.
Amdocs argues that "[t]he plain language of the claims is ... broad enough to cover both (1) a single record in which usage data for each of a plurality of services is separately represented, and (2) a single record in which usage data for each of a plurality of services is represented in the aggregate."
Openet takes a position similar to that of the district court, arguing that the "'797 patent requires separately recording [collected] data." Both the district court and Openet rely on Figure 6 of the specification, where different services are listed separately:
The core dispute here is over the meaning of the term "represent." While the specification does not discuss representation of a plurality of services, it does teach the representation of a plurality of records:
'797 Patent 4:28-32 (emphasis added). In turn, Figure 7 shows clearly that the separate records 704 can represent the records 702 by aggregation, explicitly using the words "aggregated ... records."
Because the specification shows that the separate record can represent a plurality of records by aggregation, the ordinary artisan would also understand that a separate record can represent a plurality of services by aggregation. Accordingly, we vacate the district court's construction of "single record represent[ing] each of the plurality of services" and substitute it with a plain meaning interpretation.
Based upon its decision that enhancement occurs "in a distributed fashion" and "close to the source" of the network account information, the district court determined that there was "no evidence" of infringement and granted summary judgment in Openet's favor. We disagree. Contrary to Openet's argument, Amdocs need not point to the specific location of the allegedly infringing code to overcome summary judgment. We hold that Amdocs' documentary evidence describing the structure and operation of the accused products creates genuine factual issues regarding whether the products enhance "in a distributed fashion" "close to the source" of the network information.
Amdocs' documentary evidence of infringement includes: marketing presentations and user guides describing the Framework and its operation; citations to source code present on the Installation CD; and citations to DSD scripts. The district court concluded that this evidence did not create a genuine issue of material fact regarding enhancement. First, the court found that two of Openet's marketing presentations were irrelevant to the infringement analysis because Openet prepared these presentations for foreign entities. The court reasoned that, because there can be no infringement based upon activities entirely outside the United States, these presentations could not "constitute evidence of actionable infringement." District Court Op. at *20. Next, the court dismissed Amdocs' citations to allegedly infringing source code on the Installation CD because "the record shows that the cited source code is inoperable without DSD scripts" and the Framework is sold without DSD scripts. Id. at *21. The court also dismissed Amdocs' citation to DSD scripts because it was unaccompanied by expert testimony and because Openet produced expert testimony in opposition.
According to the court, the remaining marketing materials proffered by Amdocs
The district court erred in granting summary judgment to Openet because it improperly deemed Amdocs' foreign presentations irrelevant, incorrectly focused on proof regarding DSD scripts, and failed to make all reasonable inferences supported by the record in favor of Amdocs and, instead, resolved disputed factual issues in Openet's favor.
The district court first erred when it found that the marketing materials presented to foreign entities were irrelevant. While it is true that there can be no infringement of a U.S. patent for solely extra-territorial activities, this does not mean that Openet's description of how the Framework functions is irrelevant simply because it was presented to a foreign entity. Indeed, Openet admits that the Framework described in these marketing materials is the same product that is made and sold in the United States. Thus, the description of the Framework in these materials is relevant to the extent that it sheds light on whether the Framework enhances "in a distributed fashion."
The district court next erred by discounting Amdocs' citations to source code on the FusionWorks installation CD simply because Openet asserts that the Framework is "inoperable without DSD scripts." Id. Even assuming that the Framework does not "operate" without DSD scripts, genuine factual disputes remain regarding enhancement. Simply because a product will not "operate" in a certain condition does not mean that it does not infringe in that condition.
In essence, the parties dispute whether the allegedly infringing code is located only on the installation CD (Amdocs' position) or whether some of the code is contained in the DSD scripts (Openet's position). The district court improperly decided this disputed factual question in Openet's favor by discounting Amdocs' citation
Upon review of this documentary evidence, we find that it sufficiently describes the Framework's function to create a genuine issue of material fact regarding enhancement. In particular, the evidence (including the evidence the district court found irrelevant) establishes genuine factual issues regarding the location and operation of the CTEs in the FusionWorks system. As noted, the district court concluded that the Framework includes a single CTE that stores and processes all network records at a remote location from where they are collected. To the contrary, it is undisputed that the accused products may utilize multiple CTEs. The court also relied, in part, upon its conclusion that the accused system does not generate output records "close to the source" of the network information. But the court's claim construction requires only enhancement to occur "close to the source" of the network records. The generation of an output record occurs after enhancement and may happen away from the source of network records under the court's construction.
The court also improperly concluded that all network records are stored in a central data repository at the CTE before being enhanced. While there is evidence that the Framework sometimes stores network records, there is also ample evidence suggesting that this is an optional mode of operation. For example, the statements relied upon by the court refer to temporarily storing data before it is "aggregated," "correlated," and "consolidated" into an output record. Contrary to the court's conclusion, the statements do not refer to storing data before enhancement. It would be reasonable to infer, given the other evidence on record, that enhancement takes place before the storage and generation of an output record. Indeed, Openet's marketing materials repeatedly emphasize that the network records can be collected and processed in "real time," which would suggest a single, central storage repository is not used because it would delay enhancement. In sum, while we cannot recount all the confidential details here, there is ample evidence on record to create a genuine issue of material fact regarding whether the CTEs are distributed throughout the Framework system and operate in a distributed manner.
Based upon the foregoing, we reverse the court's grant of summary judgment because it incorrectly deemed certain evidence irrelevant, improperly required Amdocs to focus on DSD scripts, and improperly resolved disputed factual issues against Amdocs.
As discussed above, we have corrected the district court's erroneous construction of "single record represent[ing] each of the plurality of services" with a plain meaning construction. We therefore also vacate the summary judgment of noninfringement of the '797 Patent claims and remand for a determination of infringement in the first instance.
No costs.
NEWMAN, Circuit Judge, concurring in part, dissenting in part.
I concur in my colleagues' rulings as to the district court's claim construction and rulings as to the '065, '510, and '984 patents. However, I would affirm the judgment of noninfringement of the '797 patent, for the reasons given by the district court. To the extent that the panel majority holds otherwise, I respectfully dissent.