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Hospital TV

By Gary Odom and Jordan Kuhn

Zenith has a couple patents (5,495,301; 5,502,513) for TV remote controls for hospital room use. Zenith sued PDI for infringement. PDI won a summary judgment of prior art invalidity on claim 1 of '301, and non-infringement on both patents. Zenith appealed. Herein a reminder that practicing the prior art does not prove anticipation.

Zenith Electronics v. PDI Communication Systems (CAFC 2007-1288, -1321)

Safety concerns necessitate hardwired, not wireless, TV remote controls in hospitals.

Due to various safety and business considerations, wireless remote control devices are not used to control televisions in hospital rooms. First, the electrostatic discharge associated with wireless remote controls cannot be risked near supplies of oxygen. Second, the signals transmitted by wireless remote controls are susceptible to interference from fluorescent lights. Finally, there are increased costs associated with battery replacement and lost wireless remote controls. For these reasons, hospital televisions are typically controlled using hardwired remote control devices placed near the patient. These devices also include internal speakers by which television audio is delivered to the patient and, thus, are interchangeably referred to as "pillow speakers."

Zenith got its patents from using the analog system to deliver digital pillow speakers.

By the late 1980s, pillow speakers were generally connected to televisions in hospital rooms via three wires. Over these three wires (1) power was supplied to the pillow speaker, (2) audio signals were transmitted to the pillow speaker, and (3) control signals were transmitted to the television. However, control functionality was limited due to the fact that existing systems utilized analog control signals. The invention of the patents-in-suit enabled the transmission of encoded digital control signals from the pillow speaker to the television receiver over the existing three-wire interfaces installed in hospital rooms. Advantageously, the improved digital pillow speakers--like their analog precursors--continued to receive power from the television and did not require an internal source of power (i.e., a battery).

Three companies: Curbell Electronics, MedTek, and Crest Electronics, manufactured compatible digital pillow speakers under license from Zenith. In 2003, PDI began marketing a compatible 20-inch LCD TV, whereupon Zenith sued.

Regarding '301 claim 1 prior art anticipation:

Claim 1 requires that the invention's multi-function control signal encoder--the integrated circuit within the pillow speaker responsible for encoding and transmitting the digital control signals--receive "operating power" from the television receiver.

The RCA J20525 television in combination with the Curbell 205-E digital pillow speaker were prior art. The issue was whether they were anticipatory. The argument was over what comprised "operating power."

On appeal, Zenith argues that the district court misconstrued the term "operating power." Zenith contends that the RCA J20525 television was incapable of supplying "operating power" to the Curbell 205-E pillow speaker. That is because the J20525 television could supply a maximum of 0.48 milliamperes (mA) of current, while the encoder chip in the 205-E pillow speaker required at least 5 mA to operate. According to Zenith, Curbell surmounted this obstacle by incorporating into the design of the 205-E a large capacitor--essentially a storage tank that slowly accumulated electrical charge received from the television and that, in turn, provided the charge to the encoder chip as required. Zenith thus maintains that, while the J20525 television may have supplied "power" to the 205-E pillow speaker, it did not provide "operating power." Instead, Zenith argues that "operating power" was supplied by the pillow speaker's capacitor, which functioned like a battery.

PDI argued, and the courts agreed, that, because the J20525 TV was the sole source of power for the 205-E pillow speaker, it did supply the claimed "operating power."

Nothing in the patent's claims or written description suggests a departure from the disputed term's ordinary meaning: an amount of power that is sufficient to enable the operation of the multi-function control signal encoder. Nor has Zenith pointed to anything contrary in the patent's prosecution history. Like the district court, we can find no requirement "that the operating power must come directly from the television or in full and continuous strength from the television." Id. at 11.

Zenith argued that PDI had failed to document public use, and that the prior art combo was enabled. That had the CAFC roll out the case law carpet.

"A person shall be entitled to a patent unless . . . the invention was . . . in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States." 35 U.S.C. § 102(b) (2000). Determining whether a patent claim is invalid for prior public use under section 102(b) requires comparing the claim to the alleged public use. "Section 102(b) may bar patentability by anticipation if the device used in public includes every limitation of the later claimed invention . . . ." Netscape Commc'ns Corp. v. Konrad, 295 F.3d 1315, 1321 (Fed. Cir. 2002) (citations omitted). Contrary to Zenith's arguments, however, we note that the public use itself need not be enabling. See In re Epstein, 32 F.3d 1559, 1568 (Fed. Cir. 1994) ("Beyond this 'in public use or on sale' finding, there is no requirement for an enablement-type inquiry."). Rather, we must simply determine whether the public use related to a device that embodied the invention. See J.A. LaPorte, Inc. v. Norfolk Dredging Co., 787 F.2d 1577, 1583 (Fed. Cir. 1986) ("[O]ur precedent holds that the question is not whether the sale, even a third party sale, 'discloses' the invention at the time of the sale, but whether the sale relates to a device that embodies the invention." (emphasis in original)).

Anticipation is a question of fact. Gen. Elec. Co. v. Nintendo Co., Ltd., 179 F.3d 1350, 1353 (Fed. Cir. 1999). Anticipation may be resolved on summary judgment if there is no genuine issue of material fact. Trintec Indus., Inc. v. Top-U.S.A. Corp., 295 F.3d 1292, 1294 (Fed. Cir. 2002). In reviewing summary judgment of invalidity for anticipation, we determine de novo whether the evidence in the record raises a genuine issue of material fact. Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1327 (Fed. Cir. 2001). Summary judgment is proper if no reasonable jury could find that the patent is not anticipated. Id.

The appeals court agreed with the district court, not seeing any issues of fact, nor that a reasonable juror would find otherwise. PDI had experts testify who knew their history on the topic. '301 claim 1 invalidity by prior public use affirmed.

The non-infringement finding was predicated upon an implied license.

Next, we consider the district court's grant of summary judgment that the '301 patent is not infringed due to the existence of an implied license. The implied license defense is typically presented "when a patentee or its licensee sells an article and the question is whether the sale carries with it a license to engage in conduct that would infringe the patent owner's rights." Jacobs v. Nintendo of Am., Inc., 370 F.3d 1097, 1100 (Fed. Cir. 2004). In that setting, this court has set forth two requirements for the grant of an implied license. Met-Coil Sys. Corp. v. Korners Unlimited, Inc., 803 F.2d 684, 686 (Fed. Cir. 1986). "First, the equipment involved must have no noninfringing uses." Id. (citing Bandag, Inc. v. Al Bolser's Tire Stores, Inc., 750 F.2d 903, 924 (Fed. Cir. 1984)). "If there is no noninfringing use, it may be reasonable to infer that there has been 'a relinquishment of the patent monopoly with respect to the article sold.'" Jacobs, 370 F.3d at 1100 (citing United States v. Univis Lens Co., 316 U.S. 241, 249 (1942)). "Second, the circumstances of the sale must 'plainly indicate that the grant of a license should be inferred.'" Met-Coil, 803 F.2d at 686 (quoting Bandag, 750 F.2d at 925).

The CAFC considered the non-infringing usage issue moot, because there was an express license that did not distinguish between infringing and non-infringing use.

Although the parties place a great deal of emphasis on whether the pillow speakers manufactured by Curbell, MedTek, and Crest are capable of noninfringing uses, that question is irrelevant in the context of this case. To be sure, establishing the absence of noninfringing uses is a prerequisite in the typical implied license case, where the question is whether a license is implied "by virtue of a sale of nonpatented equipment used to practice a patented invention." Met-Coil, 803 F.2d at 686 (emphasis added). Here, however, the license is not merely implied by virtue of the sale of pillow speakers by Curbell, MedTek, and Crest. Instead, the implied license that customers obtain to use the pillow speakers according to the method of the '301 patent is derived from the express licenses between Zenith and those manufacturers.

The appeals court considered this case similar to Jacobs v. Nintendo, where there was a broad express license as well.

It is clear from these express agreements that Zenith granted the manufacturers a license to make and sell any pillow speaker unit the use of which would otherwise infringe the '301 patent. As was the case in Jacobs, there is thus no reason to determine whether there are noninfringing uses for the pillow speakers.

Here, the license agreements between Zenith and the pillow speaker manufacturers achieve a clear, broad grant of patent rights. There are no restrictions embodied in the operative, binding provisions of the agreements. In that context, we do not think that Zenith's evidence of intent is limiting. Cf. Hewlett-Packard Co. v. Repeat-O-Type Stencil Mfg. Corp., Inc., 123 F.3d 1445, 1453 (Fed. Cir. 1997) (With respect to repair rights, finding that "a seller's intent, unless embodied in an enforceable contract, does not create a limitation on the right of a purchaser to use, sell, or modify a patented product as long as a reconstruction of the patented combination is avoided. A noncontractual intention is simply the seller's hope or wish, rather than an enforceable restriction.").

PDI had gotten the district court to also declare '513 anticipated, but the CAFC did not agree. PDI had not met its burden of showing anticipation of every claim limitation.

It is true that a party opposing summary judgment "must . . . set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e)(2). However, that is only true where the movant's "motion for summary judgment is properly made and supported"--i.e., where the movant has otherwise established entitlement to judgment as a matter of law. Id. "A non-movant need not always provide affidavits or other evidence to defeat a summary judgment motion. If, for example, the movant bears the burden and its motion fails to satisfy that burden, the non-movant is 'not required to come forward' with opposing evidence." Saab Cars USA, Inc. v. United States, 434 F.3d 1359, 1368 (Fed. Cir. 2006) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 160 (1970) (citing the advisory committee's note to Federal Rule of Civil Procedure 56(e))).

PDI had argued that it was merely practicing the prior art. That is not sufficient to invalidate a patent.

[A]nticipation cannot be proved by merely establishing that one "practices the prior art." In Tate Access Floors, Inc. v. Interface Architectural Resources, Inc., 279 F.3d 1357 (Fed. Cir. 2002), we explained that the defense of noninfringement cannot be proved by comparing an accused product to the prior art:

Our law requires patent challengers to prove invalidity by clear and convincing evidence. Where an accused infringer is clearly practicing only that which was in the prior art, and nothing more, and the patentee's proffered construction reads on the accused device, meeting this burden of proof should not prove difficult. Nevertheless, accused infringers are not free to flout the requirement of proving invalidity by clear and convincing evidence by asserting a "practicing prior art" defense to literal infringement under the less stringent preponderance of the evidence standard.

Id. at 1367. Likewise, mere proof that the prior art is identical, in all material respects, to an allegedly infringing product cannot constitute clear and convincing evidence of invalidity. Anticipation requires a showing that each element of the claim at issue, properly construed, is found in a single prior art reference. "[I]t is the presence of the prior art and its relationship to the claim language that matters for invalidity." Id. Here, there has been no such showing.

'513 invalidation vacated and remanded.

The same arguments PDI had successfully used for non-infringement of '301 fell apart for '513, because there was no express license agreement for '513 as with '301. District court ruling vacated.

PDI cross-appealed losing on its charge of inequitable conduct. The district court had washed out the inequitable conduct charge in light of the invalidity finding, but the CAFC ruled "game on," reinstating investigation of the charge.

It is clear that a finding of noninfringement does not moot a counterclaim for inequitable conduct. Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1348 (Fed. Cir. 2005) ("[A] counterclaim questioning . . . enforceability of a patent raises issues beyond the initial claim for infringement that are not disposed of by a decision of non-infringement." (citations omitted)).

Remanded.

Full post as published by The Patent Prospector on April 17, 2008 (boomark / email).