United States: SJ Order Prior To Claim Construction, Review Of Accused Product’s Source Code, And Deposition Of Defendant’s Employees Vacated As Premature

In Baron Services, Inc. v. Media Weather Innovations, LLC, Nos. 12-1285, -1443 (Fed. Cir. May 7, 2013), the Federal Circuit vacated and remanded the district court's finding of SJ of noninfringement and attorneys' fees because the district court's SJ order was premature.

Baron Services, Inc. ("Baron") owns U.S. Patent No. 6,490,525 ("the '525 patent"), which generally relates to systems and methods for weather reporting and forecasting, and more particularly to computerized systems and methods for reporting and forecasting real-time weather information. Baron filed suit against Media Weather Innovations, LLC ("MWI"), alleging that MWI's WeatherCall programs infringed the '525 patent.

MWI moved for SJ of noninfringement based on its belief that the only service that MWI offers its subscribers is to forward National Weather Service warnings, and Baron conceded that such warnings do not infringe any claim of the '525 patent. Baron argued that SJ was premature because (1) the district court had not yet construed the terms of the '525 patent; (2) Baron had not yet had the opportunity to review MWI's relevant source code; and (3) Baron had yet to depose MWI employees. Baron also argued that there was a genuine dispute concerning the material fact whether the accused products practiced a certain claim term because the description of MWI's WeatherCall programs in a provisional application contradicted statements in affidavits submitted by MWI employees.

The district court agreed with MWI, finding that MWI had submitted unrefuted evidence that its service does not perform numerous steps of the '525 patent, while Baron's opposition to SJ consisted only of asserting that MWI "is lying." Slip op. at 8-9 (citation omitted). Shortly after prevailing on SJ, the district court granted MWI's motion for attorneys' fees pursuant to 35 U.S.C. § 285. Baron appealed.

On appeal, the Federal Circuit held that it was improper for the district court to have refused Baron's request to delay ruling on MWI's SJ motion until Baron had the opportunity to access MWI's source code and depose its employees. "Under Federal Rule of Civil Procedure 56(d), a party opposing a summary judgment motion may request that a district court delay ruling on the motion in order to obtain additional discovery without which 'it cannot present facts essential to justify its opposition.'" Id. at 9-10 (quoting Fed. R. Civ. P. 56(d)). Applying regional circuit precedent, the Federal Circuit held that the district court "should grant requests under Rule 56(d) 'when the party opposing the [summary judgment] motion has been unable to obtain responses to his discovery requests' and the discovery sought would be essential to opposing summary judgment and 'relevant to the issues presented by the motion for summary judgment.'" Id. at 10 (alteration in original) (quoting Snook v. Trust Co. of Ga. Bank of Savannah, N.A., 859 F.2d 865, 870 (11th Cir. 1988)).

Under the circumstances here, the Federal Circuit ruled that the district court's grant of SJ to MWI was premature because, as Baron explained in its briefing and during the SJ hearing, MWI's source code could show that the accused devices met several of the limitations of the asserted claims. The Court explained that an examination of the source code would have enabled Baron to determine if MWI's noninfringement position was correct—which Baron believed to not be the case given the disclosures in the provisional patent application produced by MWI describing the accused products. The Court also found that Baron's opportunity to depose the MWI witnesses was equally important to Baron's ability to adequately oppose SJ because the witnesses possessed personal knowledge of the functionality of the accused products, and affidavits submitted by the witnesses were MWI's primary evidence to support its motion for SJ. On these facts, the Court held that the district court abused its discretion by denying Baron's request under Rule 56(d) to delay ruling on MWI's SJ motion and remanded the case to the district court for further proceedings consistent with its opinion.

Judge Reyna dissented, stating that the majority took the unusual course of vacating an SJ determination that is supported by the record evidence based on the premise that the district court failed to manage procedure and discovery in accordance with Baron's case management expectations, which the district court held to be unreasonable and obstructive. He agreed that parties generally should be permitted to develop the record, obtain claim construction, and engage in discovery prior to consideration of SJ, but explained that, in his view, a party should not be permitted to escape SJ through deliberate trial strategies. In Judge Reyna's view, the district court is endowed with broad discretion to decide the manner it will run a case. Thus, he found that the district court's case management was not an abuse of discretion, and that the record evidence supported the entry of SJ.

Judges: Dyk, Prost (author), Reyna (dissenting)

[Appealed from N.D. Ala., Judge Johnson]

This article previously appeared in Last Month at the Federal Circuit, June 2013

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