In a recent decision reflecting its substantial deference to district courts' application of their own procedural rules, even when the result is termination of the case, the U.S. Court of Appeals for the Federal Circuit affirmed the dismissal of a patent infringement case after plaintiff's elaboration of its infringement theory (in response to a motion for summary judgment) was found to constitute a "new theory," rather than simply a more detailed explanation of its Final Infringement Contentions (FICs). The Federal Circuit noted that what the district court found to be a "new theory" could reasonably have been interpreted as a more detailed explanation of its previously-disclosed theory, but deferred to the district court's finding. Safeclick v. Visa Int'l Serv. Ass'n, CaseNo. 06-1182 (Fed. Cir., Oct. 23, 2006) (Clevenger, S.J.) (non-precedential).
After the claim construction hearing, the plaintiff served its FICs. In its FICs, plaintiff asserted that the claim limitation "private identification code" was met by the password that users must enter to authenticate their identity to an online merchant's computer. In response to defendant Visa's subsequent motion for summary judgment, Safeclick elaborated by explaining that the password entered by the user in the defendant's system is encrypted and that the encrypted version of the password constitutes the "private identification code" recited in the patent claims.
Visa asserted that Safeclick's explanation constituted a "new theory of infringement" not disclosed in its FICs. The district court agreed and refused to permit plaintiff's contention that the encrypted password, rather than the textual password typed by the user, was the private identification code. Finding that the textual version of the password did not fall within the court's interpretation of "private identification code," the district court granted summary judgment for Visa and dismissed the case. In affirming, the Federal Circuit, citing Genentech v. Amgen, held that:
While it might have been reasonable for the district court to interpret Safeclick's latest infringement contentions as a restatement of its earlier infringement contention with a mere change of "scope and clarity," [citation omitted], it was also reasonable for the district court to interpret Safeclick's latest contentions as impermissibly different than its previous contentions. Consequently, we are unable to conclude that the district court erred by adopting one of two reasonable interpretations.
Practice Note:
The district court did not find that Safeclick's "new" theory was unreasonable, inconsistent with its claim interpretation or prejudicial to the defendant. Rather, the court rejected plaintiff's theory solely on the grounds that its introduction into the case violated the local rules. Thus, under Safeclick, if a district court finds that an elaboration, clarification or explanation of what was stated in the FICs reasonably constitutes a "new" theory and refuses to accept it, the Federal Circuit will not disturb that finding, even if the supposedly new theory is otherwise meritorious.Although this decision was designated as non-precedential, it nevertheless serves as a reminder to be as detailed as possible when drafting infringement (or invalidity) contentions prescribed by local patent rules.
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