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Creative License: Fair Use Defense Paints Over Infringement Battle

by | Oct 3, 2024 | ,

Affirming the application of the fair use defense to copyright infringement, the US Court of Appeals for the Fifth Circuit determined that a district court’s sua sponte invocation of a fair use defense to parallel trademark claims was harmless error. The Court also affirmed that the district court did not abuse its discretion in awarding attorneys’ fees based on the prevailing party standard for copyright claims. Keck v. Mix Creative Learning Ctr., L.L.C., Case No. 23-20188 (5th Cir. Sept. 18, 2024) (Jones, Smith, Ho, JJ.)

Michel Keck, a multimedia artist, sued Mix Creative Learning Center, a Texas-based art studio, for copyright and trademark infringement after Mix Creative sold art kits featuring Keck’s dog-themed artwork and a brief biography, intended for at-home learning during the pandemic. Keck had registered her Dog Art series (in the form of decorative works) with the US Copyright Office and her name as a trademark with the US Patent & Trademark Office. Keck claimed that Mix Creative’s art kits violated her rights. After receiving notice of the lawsuit, Mix Creative promptly ceased selling its kits.

Following discovery, both parties filed cross-motions for summary judgment. The district court granted summary judgment in favor of Mix Creative on Keck’s copyright claim, finding fair use, and also granted summary judgment on the trademark claim sua sponte, as both parties had agreed that the fair use defense applied to both claims. The district court further awarded Mix Creative more than $100,000 in attorneys’ fees and costs, although it declined to hold Keck’s attorneys jointly and severally liable.

Keck appealed, challenging the copyright fair use finding and the district court’s sua sponte application of the fair use defense to the trademark claim. Mix Creative challenged the district court’s refusal to hold Keck’s attorneys jointly and severally liable for fees.

The Fifth Circuit affirmed the district court’s application of the fair use defense to Keck’s copyright claims. The Court focused on the first and fourth factors of the fair use defense (respectively, the purpose and character of the use and the effect of the use on the potential market for or value of the original work), noting that the courts typically give these two factors special attention.

On the first factor, the Fifth Circuit found Mix Creative’s use to be transformative. Although Mix Creative is a commercial enterprise, the art kits served an educational purpose, distinct from the decorative purpose of Keck’s original works. As a result, the likelihood of Mix Creative’s kits serving as a substitute for Keck’s original works in the market was low.

The fourth factor also favored Mix Creative, as the Fifth Circuit found no evidence that Mix Creative’s kits would harm the market value of Keck’s original decorative works. In fact, the Court suggested that the kits might enhance Keck’s reputation and sales by providing her with free advertising. Furthermore, Mix Creative operated in a different market (educational rather than decorative), and Keck had not demonstrated any history of selling derivative works for children’s art lessons. The [...]

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A New Vision: Collateral Estoppel Doesn’t Extend to Related Claims

by | Sep 19, 2024 |

The US Court of Appeals for the Federal Circuit reversed a district court order excluding expert validity testimony based on collateral estoppel stemming from an inter partes review (IPR) proceeding of a related patent, finding that an unpatentability decision in an IPR does not collaterally estop a patentee from making validity arguments about related claims in a district court litigation. ParkerVision, Inc. v. Qualcomm Inc., Case Nos. 22-1755; 24-2221 (Fed. Cir. Sept. 6, 2024) (Lourie, Mayer, Stark, JJ.)

This case has a long and complicated history. In 2011, ParkerVision sued Qualcomm for alleged infringement of eight patents related to wireless communications technology. In October 2013, a jury returned verdicts rejecting Qualcomm’s invalidity defense, finding 11 claims across four patents to be infringed by Qualcomm, and awarded $172 million in damages to ParkerVision.

In June 2014, the district court granted Qualcomm’s motion for a judgment as a matter of law on noninfringement, which the Federal Circuit affirmed in late 2015. Meanwhile, ParkerVision filed a second case against Qualcomm in May 2014 alleging infringement of 11 more patents. That case was stayed in favor of a Section 337 investigation that ParkerVision filed against Qualcomm at the International Trade Commission.

Qualcomm then filed 10 petitions for IPR, six of which targeted one of ParkerVision’s patents. While the challenged apparatus claims of that patent were found unpatentable during the IPR, the challenged method claims survived. The district court statutory stay (during the Commission proceeding) was lifted in December 2018. Prior to trial, the district court granted Qualcomm’s Daubert motions seeking to exclude ParkerVision’s expert’s testimony on invalidity due to collateral estoppel arising from the IPRs, and the expert’s testimony on infringement for being unreliable. The district court granted Qualcomm’s motion for summary judgment of noninfringement based on its finding that the asserted claims were materially similar to the claims from the first case. ParkerVision appealed.

In July 2024, after the briefing was completed and the Federal Circuit held oral argument, the Court dismissed the appeal for lack of appellate jurisdiction and returned it to the district court because Qualcomm’s invalidity counterclaims had not been adjudicated. The parties then filed a joint motion at the district court seeking entry of a final judgment, which was granted in August 2024. ParkerVision appealed again.

The Federal Circuit reinstated ParkerVision’s initial appeal and reversed the district court’s determination. On the summary judgment of noninfringement, the Court rejected the collateral estoppel finding because the district court failed to conduct claim construction to determine whether the scope of the claims was the same as in the first case. As for the district court’s exclusion of expert validity testimony due to the IPRs, the Federal Circuit concluded that because of the different legal standards for proving invalidity (preponderance versus clear and convincing), a finding underlying an unpatentability decision in an IPR does not collaterally estop a patentee from making validity arguments regarding related claims in district court litigation.

Finally, the Federal Circuit concluded that the district court had abused its discretion [...]

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Rebel Libertarians Aren’t at Liberty to Violate Lanham Act

by | Sep 5, 2024 |

In a case that required the US Court of Appeals for the Sixth Circuit to articulate the boundary between the Lanham Act and the First Amendment when the trademark in question is the name of a political party, the Court found that the Lanham Act can constitutionally apply to use of the mark and that the defendants were improperly using the mark as a source identifier. Libertarian Nat’l Comm. Inc. v. Saliba, et al., Case No. 23-1856 (6th Cir. Aug. 28, 2024) (Cole, Gibbons, Readler, JJ.)

The Libertarian National Committee (LNC) owns the trademark LIBERTARIAN PARTY. Party bylaws of the LNC provide a licensing regime that authorizes recognized state affiliates, such as the Libertarian Party of Michigan, to use the LNC’s mark as a source identifier.

In 2022, two top officers of the Libertarian Party of Michigan resigned, and the third most senior member, Andrew Chadderdon, became acting chair of the Michigan affiliate. Chadderdon’s promotion sparked a dispute within the affiliate over the rightful leadership of the group. The dissenting members of the affiliate voted to remove him from the executive committee and voted themselves onto the committee. The Libertarian Party Judicial Committee determined that this replacement by the dissenting members violated the bylaws. It reinstated Chadderdon and voided the executive appointments, including those of the dissenting members, that resulted from the vote. However, the dissenting members (the defendants in this case) regarded themselves as the rightful executive board members of the Libertarian Party of Michigan. Despite being told to stop using LNC’s trademarks, the defendants continued to use them to hold themselves out as the official Libertarian Party of Michigan.

The LNC sued the defendants in federal court, bringing various claims of trademark infringement, and moved for a preliminary injunction barring them from continuing to use the LNC’s mark, which the district court granted. The defendants appealed.

The primary question before the Sixth Circuit was whether the defendants’ use of the LNC mark to “solicit party donations, fill out campaign finance paperwork, advertise events, and espouse political platform positions and commentary falls within the scope of the Lanham Act.” The defendants relied on the Sixth Circuit’s 2003 decision in Taubman Co. v. Webfeats to argue that their use of the LNC mark was political speech and therefore fell outside the ambit of the Lanham Act, which regulates commercial speech. Taubman concerned Webfeats’s use of a shopping mall’s trademark in domain names by the creator of a “fan site” and later a “gripe site.” Because Webfeats’s use of the mark was not to designate source but to comment on the trademark holder, it was protected expression.

The Sixth Circuit found Taubman to be inapposite, however. Citing the Supreme Court’s 2023 holding in Jack Daniel’s Properties, the Sixth Circuit pointed out that the defendants used the LNC’s mark “to designate the source of their political services as affiliated with the LNC” and thus implicated the core concern of trademark law: use of a mark as a source identifier.

The Sixth Circuit [...]

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Getting to the Core of It: Assignment Clause Is Ambiguous

by | May 30, 2024 |

The US Court of Appeals for the Federal Circuit vacated and remanded a district court’s grant of summary judgment, finding that the language used in an invention assignment clause was subject to more than one reasonable interpretation (i.e., ambiguous) and thus remand was necessary for further fact finding. Core Optical Tech., LLC v. Nokia Corp., Case Nos. 23-1001; -1002; -1003 (Fed. Cir. May 21, 2024) (Dyk, Taranto, JJ.) (Meyer, J., dissenting).

Core Optical filed complaints against three groups of defendants alleging patent infringement. The lead defendant, Nokia, moved for summary judgment, arguing that Core Optical did not have standing to bring the patent infringement suit. Nokia argued that by virtue of an invention assignment clause in an employment-related agreement signed in 1990, the inventor, Dr. Core, had assigned the patent rights to TRW, his employer at the time of the invention. In the agreement, Dr. Core “agreed to disclose to TRW and automatically assign to TRW all of his inventions that ‘relate to the business or activities of TRW’ and were ‘conceived, developed, or reduced to practice’ during his employment with TRW.” Nokia argued that by virtue of that earlier assignment, the subsequent assignment to Core Optical was ineffective. The agreement had a carveout from the assignment for inventions “developed entirely on [Dr. Core’s] own time” that was unrelated to his work for TRW. According to Nokia, based on the assignment, Core Optical did not have standing to assert the patent. The district court agreed and granted Nokia’s motion for summary judgment. Core Optical appealed.

The Federal Circuit reviewed the district court’s grant of summary judgment de novo, following Ninth Circuit and California law relating to the underlying contract dispute and related factual determinations. Under California law, the “fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties” (citing City of Atascadero v. MLPF&S (1998)). In granting summary judgment, the district court had held that the 1990 invention assignment agreement’s carveout did not encompass Dr. Core’s PhD research, which undisputedly led to the invention claimed in the patent. That finding was based in part on the TRW fellowship program that supported and enabled Dr. Core’s PhD work. However, Core Optical presented evidence that “Dr. Core was careful not to work on his PhD research while ‘on the clock’ at TRW and not to use TRW equipment, facilities, or supplies when working on his PhD research.”

The Federal Circuit disagreed with the district court that the matter was subject to resolution on summary judgment. The Court agreed with Core Optical that the “entirely-own-time” phrase did not unambiguously express a mutual intent to designate all the time Dr. Core spent performing his PhD research as his own time or, as Nokia argued, to indicate that some of the time Dr. Core spent performing his PhD research was partly TRW’s time (as the district court held). The Federal Circuit walked through the undisputed facts, including that Dr. Core sought funding from TRW for his PhD research and [...]

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Unclean Hands Aren’t Just for Toddlers

by | Apr 25, 2024 |

In an action involving manufacturers of a self-sealing dining mat for toddlers, the US Court of Appeals for the Federal Circuit affirmed a district court’s finding that the defendants were barred from obtaining relief on their counterclaims under the unclean hands doctrine, thereby vacating the district court’s other findings on inequitable conduct, obviousness, attorneys’ fees and costs. Luv N’ Care, Ltd. et al. v. Laurain et al., Case No. 22-1905 (Fed. Cir. Apr. 12, 2024) (Reyna, Hughes, Stark, JJ.)

Luv N’ Care and Nouri E. Hakim (collectively, LNC) filed suit against Lindsey Laurain and Eazy-PZ (EZPZ), asserting various claims for unfair competition under the Lanham Act and Louisiana law. LNC also sought declaratory judgment that EZPZ’s design patent was invalid, unenforceable and not infringed. After the suit was filed, the US Patent & Trademark Office (PTO) issued Laurain a utility patent directed toward self-sealing dining mats. Laurain subsequently assigned her rights to EZPZ, which then asserted counterclaims for utility patent, design patent and trademark infringement.

Following discovery, the district court granted LNC’s motion for summary judgment, finding all claims of EZPZ’s utility patent as obvious in view of three prior art references. EZPZ moved for reconsideration, which the district court denied, indicating that a “ruling providing further reasoning will follow in due course.” Before any such ruling issued, the PTO issued an ex parte reexamination certificate confirming the patentability of the utility patent claims two days before the district court’s bench trial began.

EZPZ did not provide this reexam certificate to the district court prior to the bench trial. During the bench trial, the district court found that EZPZ had not committed inequitable conduct but that EZPZ’s litigation conduct constituted unclean hands. After the district court entered judgment, EZPZ moved for reconsideration of summary judgment based on the ex parte reexamination certificate. The district court denied this motion and found that the evidence did not compel alteration of the prior ruling that the utility patent was invalid. It also denied LNC’s motion for attorneys’ fees and costs. EZPZ appealed.

The Federal Circuit affirmed the unclean hands determination but vacated the district court’s rulings on inequitable conduct, invalidity, attorneys’ fees and costs. As to unclean hands, the Court reasoned that EZPZ failed to disclose patent applications related to the utility patent until well after the close of discovery and dispositive motion practice. EZPZ also blocked LNC’s efforts to discover Laurain’s prior art searches by falsely claiming that she had conducted no such searches and that all responsive documents had been produced. It further found that EZPZ witnesses, including Laurain and EZPZ’s former outside counsel, repeatedly gave evasive testimony during depositions and at trial. The Court affirmed the district court’s determination that EZPZ’s misconduct bore an immediate and necessary connection to EZPZ’s claims for infringement because the undisclosed material was directly relevant to the development of LNC’s litigation strategy and undermined LNC’s ability to press its invalidity and unenforceability challenges. The Court found no clear error in the district court’s reasoning that [...]

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Late Expert Report Dooms Copyright Case

by | Apr 18, 2024 |

The US Court of Appeals for the Sixth Circuit weighed in for a third time on an eight-year copyright battle, this time finding that a district court did not abuse its discretion in excluding the plaintiff’s proposed expert or granting summary judgment to the defendant with respect to a copyright claim related to software. RJ Control Consultants, Inc., et al. v. Multiject, LLC, et al., Case No. 23-1591 (6th Cir. Apr. 3, 2024) (Siler, Cole, Mathis, JJ.)

This case concerns a copyright infringement claim filed by Paul Rogers through his company RJ Control Consultants (RJC) against his former friend Jack Elder, sole owner of Multiject. Multiject engineers and sells industrial accessories related to plastic injection molding. Rogers developed technical diagrams and software source code for a rotary turntable control system for Multiject. After Elder obtained copies of the code and drawings, he fired Rogers and hired a different company, RSW, to implement the technology. Rogers obtained copyright registrations for the code and drawings and filed suit against Elder, Multiject and RSW for copyright and trademark infringement, as well as certain state law claims.

The district court granted summary judgment to the defendants on RJC’s copyright infringement and trademark infringement claims and declined to exercise supplemental jurisdiction over the state law claims. RJC appealed the dismissal of its copyright infringement claim. In December 2020, in RJ Control I, the Sixth Circuit affirmed the decision regarding the technical drawings but reversed and remanded the copyright claim to the district court, finding that the software technology was complex and required an expert to answer material questions related to the functionality of the code.

On remand, the district court established deadlines for expert disclosures and for filing dispositive motions and motions challenging experts. Both parties timely served expert disclosures in which they identified the names of their respective experts, but neither side produced an expert report with their disclosures.

In April 2021, the district court extended the discovery and motions deadlines but not the expert disclosure deadline. The defendants moved to exclude RJC’s expert on the grounds that RJC failed to properly disclose the expert because RJC did not produce an expert report. The defendants also filed motions for summary judgment. The district court granted the defendants’ motions, finding that RJC “failed to put forth any expert evidence that identifies any specific portions of the code that they claim are protectible.” RJC appealed.

The Sixth Circuit dismissed the second appeal for lack of appellate jurisdiction, finding that the district court’s decision was not final because the court had not disposed of Multiject and Elder’s counterclaim (RJ Control II). The case was remanded again. On remand, the district court dismissed the then-pending counterclaim. RJC appealed again.

RJC argued that the Sixth Circuit lacked jurisdiction to decide RJ Control I, just as it did in RJ Control II, because at that time the counterclaim remained pending in district court. The Court agreed and vacated its decision in RJ Control I, but then affirmed [...]

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Taking the High Road: Ambiguity Regarding “Versions” of Beer Precludes Summary Judgment

by | Apr 4, 2024 |

The US Court of Appeals for the Second Circuit affirmed a district court’s summary judgment denial and determination that the definition of “beer” (which encompassed “other versions and combinations” of beer and malt beverages) in a trademark licensing agreement was ambiguous. Cerveceria Modelo de Mexico, S. de R.L. de C.V. v. CB Brand Strategies, LLC, Case No. 23-810 (2d Cir. Mar. 25, 2024) (Cabranes, Wesley, Lohier, JJ.) (nonprecedential).

In 2013, Modelo granted Constellation Brands a perpetual sublicense to use Modelo’s trademarks for Corona and Modelo to sell “beer” in the United States. The sublicense defined “beer” as “beer, ale, porter, stout, malt beverages, and any other versions or combinations of the foregoing, including non-alcoholic versions of any of the foregoing.” Several years later, Constellation launched Corona Hard Seltzer and Modelo Ranch Water, both of which are flavored alcoholic seltzers derived from fermented sugar.

Modelo sued Constellation in 2021, alleging that Constellation’s sales of the “Corona” or “Modelo” branded hard seltzers violated the sublicensing agreement because the license for use of the marks on “beer” did not encompass sugar-based hard seltzers. Modelo moved for summary judgment, which the district court denied after determining that the agreement’s definition of “beer” was ambiguous. At trial, the jury found that Modelo had failed to show that the seltzers were not “beer” under the sublicense definition. Modelo appealed.

Modelo asserted that the district court erred in denying summary judgment, arguing that the agreement’s definition of “beer” was unambiguous and challenged the district court’s jury instructions and exclusion of certain evidence at trial.

The Second Circuit agreed that the term “beer” as used in the agreement was ambiguous. The Court noted that a motion for summary judgment in a contract dispute generally may only be granted when the relevant language has a definite meaning and is unambiguous. Modelo argued that the sublicense plainly excluded the hard seltzers because they were not “beer,” “malt beverages,” or versions or combinations of either. Modelo contended that the term “versions” was limited to beverages with characteristics in common with “beer” and “malt beverages” and would not include “malt-free,” “hops-flavorless” hard seltzers.

The Second Circuit assumed for purposes of the opinion that the plain and ordinary meaning of “beer” and “malt beverages” excluded seltzers but reasoned that Corona Hard Seltzer and Modelo Ranch Water could plausibly be understood as a “version” of either. The Court found Modelo’s limited view of the term “versions” unpersuasive, given that the sublicense allowed for “nonalcoholic versions” of beer and malt beverages, even though dictionary definitions uniformly define “beer” as containing alcohol. Because each party’s reading of “versions” was at least plausible, the Court concluded that the relevant contract language was ambiguous and affirmed the district court’s summary judgment denial.

Modelo also argued that the district court failed to instruct the jury that undefined words should be given their plain and ordinary meaning and improperly instructed the jury to ignore dictionary definitions. The Second Circuit rejected this argument, noting that the instructions properly informed the jury [...]

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All That Glitters: Use of Registered Mark To Describe Watch Color Was Fair Use

by | Mar 28, 2024 |

The US Court of Appeals for the Second Circuit affirmed a district court’s grant of summary judgement to a luxury-watchmaker defendant, holding that its use of a registered and incontestable trademarked term was fair use because it was used descriptively and in good faith. Solid 21, Inc. v. Breitling U.S.A., Inc., Case No. 22-366 (2d Cir. Mar. 14, 2024) (Wesley, Sullivan, JJ.) (Park, J., dissenting). The case is notable for its analysis of the fair use defense’s good faith prong, which, as the Second Circuit majority notes, “is not litigated frequently.” This was also the element that provoked Judge Park’s dissent, who argued that the majority’s analysis attempts to resolve factual disputes about Breitling’s intentions that should, instead, go to a jury.

“Red gold” and “rose gold” are terms used to describe a gold-copper alloy that causes gold to have a pinkish hue. Sellers of men’s watches sometimes prefer the term “red gold” because “rose gold” sounds effeminate. Solid 21 is a luxury watch and jewelry business that sells a collection of jewelry and watches under the RED GOLD mark, which was registered in 2003 and now has incontestable status. Breitling is a Swiss company that makes and sells luxury watches, some of which it advertises as available in “red gold,” among other color choices. Solid 21 filed a trademark infringement suit against Breitling, alleging that its use of the term “red gold” was “likely to cause confusion, reverse confusion, mistake, and/or deception as to the source” of Breitling’s watches. Breitling moved for summary judgment on the grounds that the term “red gold” was generic, and the trademark registration was invalid, or alternatively, that its use of the term fell under the Lanham Act’s fair use defense, which allows use of a protected mark to describe one’s goods so long as the use is in good faith and not used as a mark.

Initially, the district court denied Breitling’s motion for summary judgment, finding that Breitling could have used terms like “rose gold” to describe its products and thus did not satisfy the descriptive use requirement. However, on reconsideration, the district court decided that the mere existence of alternative terms for the alloy did not preclude summary judgment, and that Breitling’s materials showed clearly that it was using the term “red gold” descriptively to indicate hue. The district court also found that Breitling satisfied the good faith element, even if Breitling was aware of Solid 21’s RED GOLD mark. Solid 21 appealed.

The Second Circuit affirmed, finding that Breitling’s advertising materials clearly showed that it used the term “red gold” as a descriptor for color and not as a mark. The Court rejected the argument that this conclusion as to descriptive use was undermined by the availability of the term “rose gold” as an alternative descriptor and pointed out that Solid 21 bears the risk of some consumer confusion in choosing to trademark a descriptive term that describes a color of metal. Finally, the Court found that Breitling’s use of [...]

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Patenting Web Advertising? Ask Alice, I Think She’ll Know

by | Mar 14, 2024 |

In a wide-ranging opinion, the US Court of Appeals for the Federal Circuit affirmed the district court’s grant of summary judgment of invalidity for lack of patent eligible subject matter under 35 U.S.C. § 101 with respect to claims directed to web-based advertising. Chewy, Inc. v. International Business Machines, Corp., Case No. 22-1756 (Fed. Cir. March 5, 2024) (Moore, Stoll, Cunningham, JJ.)

Chewy filed suit against International Business Machines (IBM) seeking a declaration that Chewy’s website did not infringe multiple patents related to web-based advertising. IBM responded by filing infringement counterclaims. After claim construction and discovery, the district court granted Chewy’s motions for summary judgment of invalidity for lack of patent eligible subject matter with regard to the asserted claims of one patent and noninfringement of the asserted claims of a second patent.

The claims of the first patent relate to providing a targeted advertisement from an “information repository” to a user based on the user’s internet search. In affirming the district court, the Federal Circuit first determined that, under Alice step 1, “[t]he claims broadly recite correlating advertisements with search results using a generic process.” The Court noted that the claims “merely recite the concept of identifying advertisements based on search results, without any specificity as to how this is accomplished,” and are directed to “the abstract idea of identifying advertisements based on search results.”

Turning to Alice step 2, the Federal Circuit found that the claims used a generic database and conventional processing steps, and “claimed use of a conventional repository for storing advertisements and associated search results in a well-known way.” Because “the claims recite the generic process for obtaining search results from a search query and using the search results to identify advertisements,” they failed under Alice step 2 and did not claim patent eligible subject matter under § 101.

Regarding the second asserted patent, the district court construed the claim term “selectively storing advertising objects at a store established at the reception system” as requiring the “advertising objects” to be “pre-fetched” and retrieved before the user requested a page on a website. Because it was undisputed that “Chewy retrieves advertisements in response to a user requesting a page” and not before, the district court ruled that Chewy’s website did not meet this claim limitation. Looking to the intrinsic claim construction evidence, the Federal Circuit held that the district court’s claim construction was amply supported by the specification and prosecution history and affirmed the district court’s grant of summary judgment of noninfringement. Of note, the Court explained that the specification made multiple references to pre-fetching as being part “of the present invention” and therefore limited the scope of the claims.

With respect to one asserted claim of the second patent, which did not include the limitation at issue, the district court found that Chewy’s website did not practice the limitation of “establishing characterizations for respective users based on the compiled data” because “the record undisputedly showed they deliver advertisements based on the page the user is currently viewing, [...]

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Espresso Yourself: When Prosecution History as a Whole Doesn’t Demonstrate Clear, Unmistakable Disclaimer

by | Jan 4, 2024 |

The US Court of Appeals for the Federal Circuit reversed and remanded a district court’s claim construction and related summary judgment rulings after determining that the district court erred in construing a claim term by improperly limiting the plain and ordinary meaning of the term. K-fee System GmbH v. Nespresso USA, Inc., Case No. 22-2042 (Fed. Cir. Dec. 26, 2023) (Taranto, Clevenger, Stoll, JJ.)

K-fee filed a lawsuit against Nespresso alleging infringement of three K-fee patents directed toward coffee machine portion capsules that use a barcode. The district court issued a claim construction order construing the term “barcode,” which was present in every asserted claim. In the claim construction order, the district court characterized the dispute as “whether statements made by K-fee System GmbH . . . before the EPO [European Patent Office] concerning the meaning of ‘barcode’ should influence the plain and ordinary meaning of that limitation in these proceedings.”

In the EPO, Nespresso’s foreign affiliate had challenged the validity of K-fee’s related European patent, and K-fee had responded seeking to distinguish a particular piece of prior art (Jarisch/D1). Because the statements made to the EPO were submitted to the US Patent & Trademark Office during prosecution of the asserted patents, the district court analyzed the statements as part of the intrinsic record. The district court concluded that K-fee had “argued strenuously before the EPO for a particular ‘plain and ordinary meaning,’ which excluded ‘bit codes’—codes made up of two binary symbols.” Based on the EPO submissions, the district court construed the claim term “barcode” to:

its plain and ordinary meaning (i.e., a code having bars of variable width, which includes the lines and gaps), the scope of which is understood by the clear and unequivocal statements K-fee made to the EPO (i.e., the scope of barcode does not include the type of bit code disclosed in Jarisch/D1).

Based on that construction of “barcode,” Nespresso moved for summary judgment of noninfringement. It argued that its accused products operated identically to Jarisch capsules, which K-fee distinguished before the EPO, since both use a machine-readable code with only two binary symbols. The district court agreed. When applying its construction at summary judgment, the district court clarified that using “the type of bit code disclosed in Jarisch” … means “a binary code containing only ‘0s’ and ‘1s.’” Thus, the district court read K-fee’s EPO statements “to mean that a barcode must ‘contain more than only two binary symbols’ and, by extension, that any code that contains only two binary symbols could not be a barcode.” Because the court found that “there was no dispute that Nespresso’s accused products used a code having only two symbols,” it granted Nespresso’s motion for summary judgment of noninfringement. K-fee appealed.

Considering the issue de novo, the Federal Circuit reviewed K-fee’s statements to the EPO in context and disagreed “that the ordinary meaning of ‘barcode’ excludes ‘bit codes’ (in some sense, two-value codes) or even bit codes of ‘the type . . . disclosed in Jarisch’ to [...]

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