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IP Alert: Federal Circuit Holds Courts Must Resolve Disputed Claim Scope

March 2, 2016

On February 29, 2016, the U.S. Court of Appeals for the Federal Circuit reversed an Eastern District of Texas jury verdict because the district court improperly allowed the jury to determine the plain and ordinary meaning of two disputed patent terms. The case, Eon Corp. IP Holdings LLC v. Silver Spring Networks, Inc., is significant because it reaffirms the need for district courts to explicitly construe disputed claim terms in patent litigation.

At issue in the case were three patents, with certain claims requiring “portable” or “mobile” subscriber units. Defendant Silver Springs provides electric watt-hour utility meters that were accused of infringing by their use of two-way wireless communication. Silver Springs argued that “portable” and “mobile” should be construed as “capable of being easily and conveniently moved from one location where the subscriber unit is operable to a second location where the subscriber unit is operable, and designed to operate without a fixed location (emphasis added).” Plaintiff EON argued that neither “portable” nor “mobile” needed construction. The district court agreed with EON and refused to formally construe these disputed terms, notwithstanding the parties’ dispute over whether the claims required subscriber units that actually have to move, or that are merely capable of moving.

The accused Silver Springs meters were designed to be permanently mounted on a building. At trial, the parties’ experts offered competing interpretations of the disputed terms. Defendant Silver Spring’s expert testified that the terms required that a subscriber unit could be “easily moved from one location to another,” while Eon’s expert testified that the terms merely meant that a subscriber unit must be “capable of being easily moved . . . but not that it actually has to move.” Unconstrained by any definition of the disputed terms, the jury sided with Eon’s expert and found that the accused meters infringed the asserted patents.

Citing O2 Micro International, Ltd. v. Beyond Innovation Technology Co., the Federal Circuit held that the district court’s duty at the claim construction stage is to resolve actual disputes about claim scope that have been raised by the parties. The appeals court held that the Eastern District of Texas failed to resolve the disputed scope of the “portable” and “mobile” terms, thereby improperly leaving the dispute for the jury to decide. The Federal Circuit noted that the context of the claims at issue governs the need for construing the claims, notwithstanding the so-called plain and ordinary meaning of the terms, and held that it was legal error to leave the question of claim scope unanswered

The Federal Circuit further held that no remand was necessary, because the proper construction of “portable” and “mobile” in the context of the asserted patents meant that no reasonable jury could have found that Silver Spring’s meters infringe. The Federal Circuit noted that the patent specification differentiated “portable” and “mobile” units from “fixed” and “stationary” units, and that one purpose of the invention was to allow continuous communication even when subscriber units move across cell boundaries. Thus, the Federal Circuit determined that the claimed “portable” and “mobile” units must be “easily transported between different locations in a house, office, car, or throughout a cell territory.” In contrast, the accused utility meters were bolted to the building and not intended to be moved from building to building.

In dissent, Judge Bryson disagreed with the majority’s claim construction, asserting that the ordinary dictionary definition of the disputed terms was correct in the context of the patent. He would have construed the claims to require only that the subscriber units be “capable of being moved,” and that no special definition should be applied. He further asserted that the remedy for the district court’s failure to construe the claims should be a new trial, rather than judgment as a matter of law.

This decision emphasizes the importance of claim construction in patent litigation and highlights the risk of arguing that terms should be given no construction in favor of their plain meaning.

For more information on this decision, please contact Fitch Even attorney David A. Gosse, author of this alert.

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