MICHAEL W. FITZGERALD, District Judge.
This patent action is before the Court on three Motions for Summary Judgment filed by Defendants eClinicalWorks, LLC and Pulse Systems, Inc. (Docket Nos. 35, 36, 37). Pulse Systems and eClinical-Works separately move for summary judgment of non-infringement (Docket Nos. 35, 37) and jointly move for summary judgment of invalidity of the subject patent (U.S. Patent No. 5,682,526 or the "`526 Patent"). (Docket No. 36). The Court held a hearing on the Motions on August 20, 2013, at with counsel for all parties appeared and offered argument. Having considered the parties' submissions and arguments, the Court GRANTS Defendants' Motions for Summary Judgment of Non-Infringement and DENIES AS MOOT Defendants' Motion for Summary Judgment of Invalidity.
In deciding these Motions under Rule 56, the Court applies Anderson, Celotex, and their Ninth Circuit progeny. Fed. R.Civ.P. 56(a); Anderson v. Liberty Lobby,
Plaintiffs allege three claims for relief against Defendants for direct patent infringement, indirect patent infringement, and contributory infringement. (Docket No. 1). The Court previously issued a Claim Construction Order in a related case after briefing and argument by all parties. (CV 11-10122-MWF (PLAx), Docket No. 96). For jurisdictional reasons, the related case was dismissed, re-filed as two cases, and consolidated as the present action (CV 11-10122-MWF (PLAx), Docket No. 134), but the Court's Claim Construction Order remains binding on the parties. (Docket No. 41-15).
Motions for reconsideration may only be brought on the grounds of "(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision." Local Rule 7-18. Defendants refer in passing to new facts but do not attempt to meet the high standard embodied in Local Rule 7-18.
With the disputed claims fully construed in a separate proceeding, the Court need only address the legal arguments of the parties.
At the hearing, Plaintiffs' counsel narrowed the scope of the Court's inquiry considerably by clarifying that Plaintiffs only intend to pursue their allegations that Defendants directly infringed Claim 1 of the `526 Patent.
It is well-settled law in the Federal Circuit that selling infringing software does not constitute
This theory of infringement departs from Plaintiffs' previously articulated contentions. The Complaint accuses Defendants of making and selling infringing software, referring to certification as
In spite of this background, the Court would not, and does not, now say that the newly articulated theory is outside the bounds of the operative Complaint such that Plaintiffs are barred from relying on it. Rather, the Court finds that there is simply no basis for finding a genuine issue of material fact to be decided under any theory of infringement articulated
The `526 Patent teaches sequential methods since certain steps of each independent claim rely on the occurrence of immediately preceding steps within that claim. For example, step (b) of Claim 1 occurs "in response to step (a)". (`526 Patent, 12:48-51). Because certain steps of each independent claim can only be performed in response to the execution of other, previous steps within that particular claim, the steps must occur sequentially, as dictated by the patented method, in order to find an act of direct infringement. As a result, it is Plaintiffs' burden to show a genuine issue of material fact whether the steps of the claimed methods were not just performed, but performed in the order dictated by the `526 Patent.
Although testing and demonstrative exhibition can constitute infringing use, Plaintiffs have not pointed to any genuine issues of material fact that render the purported infringement anything but hypothetical. Plaintiffs have not identified evidence from which it could be concluded or inferred that Defendants actually performed each sequential step of any independent method taught by the `526 Patent. See Harris, 417 F.3d at 1256 (finding that plaintiff did not show "that the claimed method is actually carried out, rather than simulated" when tested by a defendant); see also Aristocrat, 709 F.3d at 1363 (no evidence that testers performed each step of infringing process); cf. Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317 (Fed. Cir.2009) (finding sufficient to withstand summary judgment expert testimony that certain known testing and demonstrations constituted direct infringement). Here, as in Harris, Plaintiffs fail to raise any question of fact whether Defendants' actually completed each sequential step of the claimed methods as a user, rather than simulating their own programs or performing the steps out of order.
The disposition of Defendants' Motions for Summary Judgment of Non-Infringement requires either granting or denying Plaintiffs' request in order to determine the contents of the factual record from which a dispute may arise. Having considered the matter, the Rule 56(d) request is DENIED.
Plaintiffs' pending Motions to Compel are untimely under the Court's Scheduling Order, which sets April 8, 2013 as the discovery cut-off date. (CV11-10122 (Docket No. 24)). This deadline was the last day on which any hearing on a motion to compel fact discovery could be heard.
Nonetheless, it is apparent that all parties were confused about the meaning of the discovery cut-off date. (See, e.g., Docket No. 97). In light of the potential ambiguity evidenced by the parties' manifest confusion, the Court would not be prepared to deny Plaintiffs' Rule 56(d) request on the basis of Rule 16 alone. But independent and compelling justifications for denial exist beyond the Rule 16 violation.
Defendant eClinicalWorks objected to this Request for Production as irrelevant, overbroad, and unduly burdensome, but agreed to produce responsive documents to the extent they existed. The Court would sustain eClinicalWorks' objections as to over breadth and burden since the Request for Production, read literally, requires any document pertaining to the accused software whatsoever, unlimited by allegations of infringement and unbounded as to time. Defendant Pulse did not object but stated its search for responsive documents remained ongoing. In spite of Defendants' non-committal responses, Plaintiffs did not meet and confer with eClinicalWorks about responsive documents until July 22, 2013. The meet and confer with Pulse did not occur until August 6, 2013.
Plaintiffs' contention that Defendants operated under a continuing duty to produce responsive material is unavailing because, given Plaintiffs' shifting theories of infringement, there is no basis for concluding that Defendants were aware of the responsiveness of the documents, if any,
Because the Rule 56(d) request is denied, Plaintiffs are awaiting no further discovery that could provide additional support for their position or raise genuine issues of material fact. The record before the Court is complete.
Without additional discovery, Plaintiffs rely solely on the expert reports of Dr. Richard Cooper and the fact that Defendants admittedly test their software to argue that mere execution of source code resulted in direct infringement. (Docket No. 41-20, 41-21, 41-26, 41-27). This argument is analytically flawed because direct infringement requires not just isolated performance of steps of a method patent, but step-by-step sequential performance where a sequence is demanded by the claimed method. Plaintiffs have missed at least one analytical phase — they fail to identify evidence tending to show that testing the accused software actually meant practicing the methods taught by the `526 Patent. See generally Aristocrat, 709 F.3d at 1348.
Plaintiffs also fail to counter Defendants' point that place holder data is used to test the accused software, as opposed to data pertaining to "a particular patient" or "for a specific patient" as required by the `526 Patent. At the hearing, the parties focused their arguments on whether the language of Claim 1 requires data associated with a real-world patient, as opposed to data pertaining to a fictitious character, but the deficiency in Plaintiffs' position on this question is even more fundamental: Plaintiffs have not identified evidence that Defendants' internal testing uses data associated with any patient, real or invented. There is no evidence in the record to suggest that internal testing met the more general patient requirement in the first place.
The crucial question on the direct infringement claim, therefore, is whether the CCHIT test scripts require a demonstrator to perform each sequential step of Claim 1. Defendants assert that Plaintiffs
While it is undisputed that the accused software is CCHIT certified, Plaintiffs do not point to any evidence indicating that the procedures required for CCHIT certification result in performance of the methods taught by the `526 patent in the claimed manner, i.e. in the order prescribed by the `526 Patent. (See, e.g., Ex. A to eClinicalWorks Reply (Docket No. 76-1)).
Notably, Plaintiffs' expert does not offer any analysis regarding whether the CCHIT procedures read on Claim 1 in sequence. (See, e.g., Amended Report at ¶ 18.11 (explaining relevant legal standard without discussing sequence)); ¶¶ 36.1-36.7 (pulling isolated citations from the CCHIT procedures to show that elements of Claim 1 are present). Instead, Dr. Cooper identifies disparate sections of the CCHIT test scripts that purportedly infringe portions of the claims taught by the `526 patent. But as eClinicalWorks notes, Dr. Cooper "fails to cite a single sequential arrangement of test scripts that, when performed in order, would infringe the steps of any claim of the `526 Patent." (Reply at 19). It is not that he attempts and fails. Rather, his analysis is simply consistent with his recited view of the law that all elements need to be present, omitting any discussion of sequence. There is no discussion about the order of the CCHIT procedures and no opinion offered regarding how their execution infringes each step of Claim 1 sequentially.
Lacking an expert opinion as to sequence, Plaintiffs expect the Court to cobble together different portions of their expert reports to reach its own conclusion on chronology, arguing that this haphazard assessment shows that the steps of Claim 1 were
Delving into the CCHIT procedures cited by Dr. Cooper, however, it is apparent that the only complete chronological procedures offered by Plaintiffs do not sequentially correspond with the ordered steps of the claimed method. These are procedures 1.62 through 1.64. (See Docket No. 68-3 at 28-30). Performance of CCHIT procedures 1.62 through 1.64 does not necessarily result in direct infringement of Claim 1 the `526 Patent for a number of reasons:
This deficiency is further highlighted by the fact that that no evidence is offered to show that the CCHIT test scripts require a demonstrator to "create" new parameters rather than select parameters from pre-existing lists for inclusion in the patient record. The CCHIT test script excerpts do require that compliant software allow users to modify parameter result values and parameters, but nothing supports a conclusion that users must be enabled to design patient hierarchies in the sense that demonstrators create parameters when needed. For example, the procedures Dr. Cooper relies on to show that a CCHIT demonstrator must "create" parameters actually requires the demonstrator only to select or modify parameters or generate result values. (Amended Report ¶ 36.2.3).
According to Plaintiffs' argument, performance of these CCHIT procedures in order results in direct infringement of Claim 1. A close analysis of Dr. Cooper's opinions, however, reveals otherwise. The Court must reiterate that Dr. Cooper did not look at the CCHIT procedures in sequence. Instead, he listed each step of each claim in the `526 Patent (for the most part) and pulled quotes from throughout the CCHIT procedures to show that each step was performed. He did not identify the CCHIT test script excerpts by their specific procedure numbers. This complicates and undermines the usefulness of his
The steps of Claim 1 simply do not match a sequential performance of the cited CCHIT procedures:
Step of Claim 1 Allegedly Sequential Corresponding CCHIT Procedure A method in a computer system for designing None for the entirety of the preamble but under the control of a user, a patientCCHIT procedure 1.63 is cited for the proposition information hierarchy, the hierarchy containing that "[t]he CCHIT certified 2011 Ambulatory a plurality of parameters including a bulatory HER test script shows that the linked-from parameter having a linked-from dosage (Result value of a linked-from parameter possible result value that is linked to one or of a medication is linked to the weight more linked-to parameters, the method (linked-to parameter) of the patient." comprising the steps of: (Amended Report ¶ 36.1.9). (a) receiving an instruction from the user toCCHIT procedure 1 .64. (Amended Report create a new parameter within the patient ¶ 36.2.3). information hierarchy; (b) in response to step (a), creating a new None specifically listed in the Amended Report parameter within the patient information but it is possible to infer that Dr. hierarchy; Cooper again cites toCCHIT procedure 1.64. (Amended Report ¶ 36.2.3). (c) receiving an instruction from the user toCCHIT procedure 1.64 (Amended Report specify a plurality of indicated possible result ¶ 36.3.2);CCHIT procedure 1 .63. (Amended values for the new parameter; Report ¶ 36.3.4). (d) in response to step (c), specifying theCCHIT procedure 1.64. (Amended Report indicated possible result values as possible ¶ 36.4.1). result values of the new parameter; (e) receiving an instruction from the user toCCHIT procedure 1.63. (Amended Report link an indicated linked-from possible result ¶ 36.5.3). value among the possible result values of the new parameter to one or more indicated linked-to parameters contained within the patient information hierarchy; (f) in response to step (e), within the patientCCHIT procedure 1 .63 (Amended Report information hierarchy, linking the indicated ¶ 6.6.3);CCHIT procedure 1 .64. linked-from possible result value to the indicated (Amended Report ¶ 36.6.5). linked-to parameters, such that the new parameter is a linked-from parameter, and such that, when the new parameter is displayed for a particular patient, if the new parameter has the linked-from possible result value, the linked-to parameters are displayed in conjunction with the new parameter.
At the very least, Dr. Cooper's analysis suggests that CCHIT procedure 1.63 must be performed out of order to directly infringe on step (e) of Claim 1 of the `526 Patent. Consequently, assuming that either Defendant performed the CCHIT procedures in their internally-numbered sequence, no direct infringement would result because the method taught by Claim 1 would not be performed as specified by the `526 Patent.
Moreover, in their Oppositions and at oral arguments, Plaintiffs conflated steps
At the hearing, Plaintiffs cited A.B. Dick, Co. v. Burroughs Corp., for the proposition that intervening steps do not defeat a finding of direct infringement. 713 F.2d 700, 703 (Fed.Cir.1983) ("It is fundamental that one cannot avoid infringement merely by adding elements if each element recited in the claims is found in the accused device."). It is true that one cannot add a step to avoid infringement, but one also cannot cite disjointed and disparate steps from an accused method to prove direct infringement. See E-Pass Techs., 473 F.3d at 1222 ("In contrast, the evidence here shows, at best, that the Palm defendants taught their customers each step of the claimed method in isolation. Nowhere do the manual excerpts teach all of the steps of the claimed method together, much less in the required order."). As a result, any citation to distant CCHIT procedures cannot cure the deficiencies noted by the Court.
Plaintiffs also accurately note that circumstantial evidence can be used to resist a motion for summary judgment on direct infringement. See Vita-Mix, 581 F.3d at 1326 (reversible error to require direct evidence of direct infringement). In this case, however, the circumstantial evidence presented by Plaintiffs does not support an inference of infringement, it only supports a possibility that infringement could have occurred. But the fact of infringing capability is insufficient to survive Defendants' Motions because the methods claimed by the `526 Patent are not limited to teaching bare capacity. See Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1329 (Fed.Cir.2010) ("Unless the claim language only requires the capacity to perform a particular claim element, we have held that it is not enough to simply show that a product is capable of infringement; the patent owner must show evidence of specific instances of direct infringement."). Nor are ipse dixit statements by experts sufficient to avoid summary judgment. See, e.g., Parallel Networks, LLC v. Abercrombie & Fitch Co., 704 F.3d 958, 969 (Fed.Cir.2013) (finding Dr. Cooper's analysis conclusory in an unrelated case). Beyond being non-sequential, Dr. Cooper's conclusions are unreasoned and the cited procedures do not appear to have a logical nexus to the claimed steps of the `526 Patent. Dr. Cooper's conclusions with regard to the occurrence of testing and infringing uses of the software are similarly unsubstantiated.
Accordingly, Plaintiffs fail to identify a genuine issue of material fact as to direct infringement.
In light of binding Federal Circuit case law, Plaintiffs must show a genuine issue of material fact regarding an underlying act of direct infringement, which means sequential performance of each step taught by the `526 Patent, as the Court explained above. See E-Pass Techs., 473 F.3d at 1222 (plaintiff's evidence did "not demonstrate that [defendant] actually performed or induced anyone to perform all of the steps of the claimed method, much less that it did so in the necessary order."). Teaching one's clients each step of a patented method in isolation is not sufficient. Id.
Plaintiffs have not identified a single purchaser of Defendants' software who is alleged to have performed any of the steps of the claimed methods. Instead, Plaintiffs once again argue that infringing capability is sufficient. (See Plaintiffs' Statement of Genuine Disputes of Material Fact Regarding Defendants' Motions for Summary Judgment of Non-Infringement at ¶ 48) (Docket No. 64)). Although they cite Dr. Cooper's conclusion that "various source code routines ... when invoked and executed, performed the steps of the asserted claims," Plaintiffs do not show that the codes were necessarily invoked or executed by any party or non-party. (Id.).
Plaintiffs similarly fail to show circumstantial evidence tending to support a finding of direct infringement, even accepting as true Dr. Cooper's conclusions about the accused software's functionality. In sum, there is no evidence in the record and no basis for inferring that an underlying act of direct infringement ever occurred. There is only a speculative proposition that someone, at some point may have invoked the source code in an infringing way. This is insufficient to survive Defendants' Motions for Summary Judgment on the indirect theories of infringement because those theories depend on a predicate act direct infringement, which cannot be based merely on infringing capability. See Fujitsu Ltd., 620 F.3d at 1329; see also E-Pass Techs., 473 F.3d at 1222 ("Accordingly, it requires too speculative a leap to conclude that any customer actually performed the claimed method.").
Because there are no genuine disputes of material fact and there are no inferences to be drawn in Plaintiffs' favor, Defendants are entitled to summary judgment on the indirect infringement claims.
Accordingly, the Motions for Summary Judgment of Non-Infringement are GRANTED.
The Court need not reach Defendants' Motion for Summary Judgment on Invalidity. The Motion is therefore DENIED AS MOOT. (Docket No. 36).
The Magistrate Judge is directed to DENY AS MOOT the pending Motions to Compel scheduled for hearing on September 16, 2013. (Docket Nos. 91, 93).
The Court ORDERS the Clerk to treat this Order, and its entry on the docket, as an entry of judgment. Local Rule 58-6.
IT IS SO ORDERED.