United States: References To Documentary Evidence In Lieu Of Source Code Are Sufficient To Create Genuine Issue Of Material Fact

In Amdocs (Israel) Ltd. v. Openet Telecom, Inc., No. 13-1212 (Fed. Cir. Aug. 1, 2014), the Federal Circuit affirmed-in-part and vacated-in-part the district court's claim construction findings and vacated the district court's grant of SJ of noninfringement.  

Amdocs (Israel) Limited ("Amdocs") owns U.S. Patent Nos. 7,631,065 ("the '065 patent"); 7,412,510 ("the '510 patent"); 6,947,984 ("the '984 patent"); and 6,836,797 ("the '797 patent") (collectively "the asserted patents").  The asserted patents are directed to data mediation software, which helps Internet service providers track customer usage and generate bills.  Openet Telecom, Inc. and Openet Telecom Ltd. (collectively "Openet") make and sell Openet's FusionWorks Framework ("Framework"), which Openet refers to as its "mediation operating system."  Slip op. at 14. 

Amdocs filed suit against Openet, alleging infringement of the asserted patents by the Framework.  The district court construed the claim terms "enhance," "enhancement," "completing," and "single record represent[ing] each of [the] plurality of services."  Id. at 15-16 (first alteration in original).  Openet moved for SJ of noninfringement and invalidity, and Amdocs moved for SJ that it had not committed inequitable conduct.  The district court granted Openet's motion for noninfringement and granted Amdoc's motion regarding inequitable conduct.  Amdocs appealed.

"Simply because a product will not 'operate' in a certain condition does not mean that it does not infringe in that condition.  Here, the Framework may not operate without DSD scripts (or, indeed, without a computer or electricity) but making, using, or selling the installation CD may still, as a factual matter, infringe the asserted claims."  Slip op. at 25 (footnote omitted).

On appeal, the Federal Circuit first addressed the claim constructions of the term "enhance" in the '065 patent and the term "completing" in the '510 and '984 patents.  For the term "enhance," the Court affirmed the district court's construction that "enhance" means "to apply a number of field enhancements in a distributed fashion."  Id. at 17-18 (citation omitted).  The Court also considered the district court's clarification that "'distributed' means that the network usage records are processed close to their sources before being transmitted to a centralized manager."  Id. at 18 (citation omitted).  The Court rejected Amdocs's argument that the "enhance" term should be given its plain and ordinary meaning, instead finding that there was no suggestion in the specification of centralized enhancement, as opposed to distributed enhancement in the district court's construction.  To support this conclusion, the Court examined several portions of the '065 patent's specification, finding that it described distributed data gatherers and repeatedly recited advantages of the distributed enhancement.  The Court therefore held that the district court did not err in reading "in a distributed fashion" and "close to the source" requirements into the term "enhance."  Id.  at 21.

Next, the Court affirmed the district court's construction of "completing" in the '510 and '984 patents, rejecting Amdocs's argument that the district court erred to the extent the construction included "in a distributed fashion" from its construction of "enhance."  Id.  Because the Court affirmed the district court's construction of "enhance," it also affirmed the construction of "completing."  Id.

The Court then considered the construction of "single record represent[ing] each of the plurality of services" in the '797 patent and found that the district court erred in its construction.  Id. at 21-23 (alteration in original).  The Court explained that the district court's construction included "one record that includes customer usage data for each of the plurality of services used by the customer on the network," but did not include a record that aggregates usage data.  Id. at 21 (citation omitted).  The Court noted that the parties' dispute was over the meaning of the term "represent," and explained that although the specification of the '797 patent did not discuss representing a plurality of services, it did teach representing a plurality of records.  Because the specification showed that separate records could represent a plurality of records by aggregation, the Court concluded that the person of ordinary skill would have also understood that separate records could also represent a plurality of services by aggregation.  The Court therefore vacated the district court's construction and substituted the plain meaning.

The Court next turned to infringement of the '065, '510, and '984 patents, and reversed the district court's grant of SJ of noninfringement.  The Court found that the district court first erred in determining that Openet's marketing materials presented to foreign entities were irrelevant to the infringement analysis.  Acknowledging that solely extraterritorial activities do not infringe a U.S. patent, the Court noted that Openet had admitted that the Framework described in the foreign materials was the same product that it made and sold in the United States.  The Court therefore concluded that the foreign materials were relevant to the infringement analysis.  The Court next found that the district court erred by discounting Amdocs's citations to source code of the FusionWorks installation CD, based on Openet's assertion that the Framework was "inoperable without DSD [DataStream Decoder] scripts" that were not contained on the CD.  Id. at 25.  The Court explained that simply because a product will not "operate" without a certain condition does not mean that the product does not infringe.  Id.  Noting that the parties disputed whether the allegedly infringing code was located on the installation CD or whether some of the code was contained in the DSD scripts, the Court determined that the district court had improperly decided a disputed factual question in Openet's favor by discounting Amdocs's citation to the code present on the CD and by requiring expert evidence related to the DSD scripts.  The Court also explained that Amdocs was entitled to establish genuine factual issues by relying on documentary evidence, without necessarily identifying the precise location of the allegedly infringing code.  After reviewing the evidence, the Court concluded that the documents created a genuine issue of material fact regarding the location and operation of certain components of the FusionWorks system.  For these reasons, the Court reversed the district court's grant of SJ of the '065, '510, and '984 patents.

Lastly, the Court vacated the grant of SJ of the '797 patent, which was based on the district court's erroneous construction of "single record represent[ing] each of the plurality of services," and remanded for a determination of infringement.

For the above reasons, the Court affirmed the constructions of "enhance" and "completing"; vacated the construction of "single record represent[ing] each of the plurality of services"; reversed the grant of SJ of noninfringement of the '065, '510, and '984 patents; and vacated and remanded the grant of SJ of noninfringement of the '797 patent.

Judge Newman concurred-in-part and dissented-in-part.  Judge Newman concurred with the majority regarding the '065, '510, and '984 patents, but would have affirmed SJ of noninfringement of the '797 patent for the same reasons as the district court.

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