## United States Court of Appeals for the Federal Circuit

2008-1085

DSW, INC. and DSW SHOE WAREHOUSE, INC., Plaintiffs-Appellants,

v. SHOE PAVILION, INC., Defendant-Appellee. Theodore R. Remaklus , Wood, Herron & Evans, L.L.P., of Cincinnati, Ohio, argued for plaintiffs-appellants. JoAnna M. Esty , Venable LLP, of Los Angeles, California, argued for defendantappellee. Appealed from: United States District Cour t for the Central Dis trict of California Judge Florence-Marie Cooper

## United States Court of Appeals for the Federal Circuit

2008-1085 DSW, INC. and DSW SHOE WAREHOUSE, INC., Plaintiffs-Appellants,

v. SHOE PAVILION, INC., Defendant-Appellee. Appeal from the United States District Court for the Central District of California in case

no. 2:06-CV-06854, Judge Florence-Marie Cooper.

__________ ________________ DECIDED: August 19, 2008

__________________________ Before MAYER, SCHALL and LINN, Circuit Judges

. MAYER, Circuit Judge

. DSW, Inc. and DSW Shoe Warehouse, Inc. (together “DSW”), appeal the judgment of the United States District Court for the Central District of California, granting summary judgment of non-infringement of U. S. Patent No. 6,948, 622 (“’622 patent”) in favor of Shoe Pavilion, Inc. (“Shoe Pavilion ”), and summary judgment of no liability for damages for past infringement of U.S. Patent No. D 495,172 (“’172 patent”) and the ’622 patent, also in favor of Shoe Pavilion. DSW Inc. v. Shoe Pavilion, Inc. , No. 2:06- CV-06854-FMC-SHx (C.D. Cal. Sept. 25, 2007) (“Summary Judgment Order”). Because the trial court erred by (1) construi ng claims 4-6 of the ’622 patent to includethe track and roller configuratio n limitation recited in clai ms 1-3, and (2) misapplying Wine Railway Appliance Co. v. Enterprise Railway Equipment , 297 U.S. 387 (1936), with respect to damages, we vacate and remand. Background DSW owns the ’622 patent, which teac hes a system and method for storing and displaying a large stock of f ootwear for customer self-servi ce. DSW also owns the ’172 patent, which claims an ornamental design fo r a combined product display and stacked product container separator. On May 19, 2006, DSW notified Shoe Pavilion that the then-current shoe display design (“First Design ”) in five of its stores infringed DSW’s ’622 and ’172 patents. Shoe Pa vilion responded to the notic e, and agreed to modify its First Design to avoid infringement. Within seven months of DSW’s notification of infringement, Shoe Pavilion removed all Firs t Design displays from its stores and replaced them with a modified design (“New Design”). On October 27, 2006, DSW filed su it against Shoe Pavilion for patent infringement, alleging that Shoe Pavilion’ s manufacture and use of its New Design footwear displays in seven of its California stores also infringed claims 4-6 of the ’622 patent, and that Shoe Pavilion owed damages for infringement of the ’172 and ’622 patents by the First Design. Shoe Pavilion moved for summary judgment that its New Design footwear displays did not infringe, or, in the alternative, t hat the ’622 patent is invalid, and that it owed no damages fo r infringement by the First Design. With respect to infringement by the Ne w Design, the parties’ dispute turned on whether the language in claims 4-6 1 of the ’622 patent encompasses only methods of

1 Claim 4 provides :

2008-1085 2displaying and storing footw ear that contain track and roller mechanisms connecting display modules to a support base , as described in claims 1-3 2 (the “Track and Roller

A method of displaying and stor ing footwear, comprising: stacking containers of footwear of a first style in a [sic] least one vertical stack, one on top of the other in direct physical contact; stacking containers of footwear of a se cond style in at least one vertical stack, one on top of the other in direct physical contact, said stack of containers of footwear of said second style being located adjacent the stack of containers of footwear of the first style; selectively positioning a generally vertically disposed, horizontally movably positionable stack divider between (i) the at least one stack of containers of the first style and (ii) the at least one stack of containers of the second style of footwear; displaying a sample of f ootwear of the first styl e above the at least one stack of containers of the first style of footwear; and displaying a sample of footwear of the second style above the at least one stack of containers of the second style of footwear. ’622 patent col.8 ll.33-53 (emphasis added to highlight the disputed claim term). Claim 5 provides : The method of claim 4, further comprising: repositioning the divider to adjust the location of a boundary between the stacks of containers of the first and second styles of footwear. ’622 patent col.8 ll.54-57. Claim 6 provides : The method of claim 4, w herein selectively positioning the horizontally movably positionable divider between the stacks of said first and second styles of footwear comprises variably positionab ly supporting the divider from a horizontally disposed support arranged genera lly perpendicular to the divider. ’622 patent col.8 ll.58-63.

2 Claim 1 provides : A footwear display and st ack divider module, adapted to be selectively variably

2008-1085 3supportably positioned on a module support member which extends in a generally horizontal direction, comprising: a footwear display configured to support at least one style of fo otwear and having a rear edge and a lateral edge; a divider disposed adjacent said late ral edge of said display and extending downwardly from said display, said di vider defining a vertical plane; and at least one module connection element disposed adjacent said rear edge of said display, said module connection element configured to selectively engage the module support member at different horizontal positions therealong; said vertical plane being generally perpendi cular to the horizontal direction of the module support member when the module is supported thereby; wherein the module support member compri ses a track and said module connection element includes at least one roller c onfigured to engage the track to thereby slidably suspend the module therefrom. ’622 patent col.7 ll.24-45 (emphasis added). Claim 2 provides in relevant part : A system for displaying and stori ng footwear, the system comprising: at least one horizontally extending module support member; and a plurality of display modules coupled to said module support member . . . . wherein said module support member comp rises a horizontally extending elongated track and each said module connection el ement includes at least one roller configured to engage said track to t hereby slidably suspend said module therefrom with said divider disposed in a generally vertical direction perpendicular to the elongated module support track

. ’622 patent col.7 ll.46-67-co l.8 ll.1-3 (emphasis added). Claim 3 provides in relevant part : A cabinet for displaying and storing footwear, the cabinet comprising: a base; at least one vertical support member extending upwardly from said base; at least one module support member coupled to said vertical support and spaced from said base; and a plurality of display modules coupled to said module support member . . . . wherein said module support member comp rises a horizontally extending elongated track and each said module connection el ement includes at least one roller configured to engage said track to slidably suspend a respective module therefrom, with said divider disposed in a generally vertical direction perpendicular to said track

.

2008-1085 4Limitation”). DSW argued that the trial cour t erred by impermissibly construing claims 4- 6 to contain the Track and Roller Limitati on, notwithstanding the conspicuous absence of claim language evincing such a limitation. Shoe Pavilion argued that DSW disclaimed from the scope of the ’622 pat ent any apparatus, method or system that does not include a track and roller mechanism in the display module. First, the original application’s independent claims , which did not include the Track and Roller Limitation, were rejected as reading on the prior art or as obvious under 35 U. S.C. § 103(a), and were cancelled. Second, the applicat ion’s dependent claims, already containing, inter alia , the Track and Roller Limitation, were obj ected to for relying on the rejected independent claims, and were only appro ved after being amended to read as independent claims. These am ended claims issued as ind ependent claims 1-3 of the ’622 patent. DSW simultaneously added new applic ation claims 15-21, which issued as claims 4-10 of t he ’622 patent. Relying on the specification and the prosecution histor y, the trial court agreed with Shoe Pavilion that method claims 4-6 were not indepe ndent and separately patentable from claims 1-3. Specifically, it found that (1 ) the examiner’s reasons for allowance indicated that t he Track and Roller Limitation was the seminal feature distinguishing the ’622 patent over the prior art, (2) clai ms 4-6 would be invalid as indefinite without the lim itation, and (3) the specificati on describes the invention as a modular footwear display and storage system, and cl aims 1-3 recite a footwear display and stack divider module connected by a module support member containing the Track

’622 patent col.8 ll.4-31 (emphasis added).

2008-1085 5and Roller Limitation. The court also not ed that the preferred embodiment explicitly includes the Track and Roller Limitation. Accordingly, the court construed claims 4-6 to include a footwear display module with vertically disposed horizontally moveable dividers coextensive with the Track and Rolle r Limitation described in claims 1-3, and concluded that because Shoe Pavilion’s New Design lacked the rolling connection element, it did not infri nge the ’622 patent. It grant ed summary judgment of noninfringement in favor of Shoe Pavilion. With respect to damages, the district court found that DSW was not entitled to any damages as a matter of law, because i mmediately upon receipt of DSW’s notice of infringement of the ’172 and ’622 patents by the First De sign, Shoe Pavilion took reasonable steps and timely removed all of the infringing shoe displays. Citing Wine Railway , the trial court granted summary judgment to Shoe Pavilion and stated that no damages for infringement are recoverable by a plaintiff unless the infringing activity continues after notice is provided to the infringer. DSW appeals the trial court’s Summary Judgment Order with respect to Shoe Pavilion’s infringement of the ’622 patent by the New Design, and liability for damages for infringement by the First Design. We have jurisdiction under 28 U.S. C. § 1295(a)(1). Discussion We review the trial court’s grant of summary judgment of non-infringement de

novo

. Netscape Commc’ns Corp. v. Konrad , 295 F.3d 1315, 1319 (Fed. Cir. 2002). Summary judgment is appropriate “if the pleadings, the discovery and disclosure materials on file, and any a ffidavits show that there is no genuine issue as to any

2008-1085 6material fact and that the mov ant is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). We address each of DSW’s challenges in turn.
A. Non-infringement Infringement occurs when a pr operly construed claim of an issued patent covers an accused device. See Markman v. Westview Instruments, Inc. , 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc), aff’d , 517 U.S. 370, 374 (1996). Claim construction is reviewed de novo on appeal. Cybor Corp. v. FAS Techs., Inc. , 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc). The district court erroneously imported t he Track and Roller Limitation directly recited in claims 1-3 into the generally phrased “vertically disposed, horizontally movably positionable stack divider” language of claims 4-6. First, absent contravening evidence from the specificat ion or prosecution history, plain and unambiguous claim language controls the c onstruction analysis. Northern Telecom Ltd. v. Samsung Elecs. Co. , 215 F.3d 1281, 1295 (Fed. Cir. 2000) (“The pl ain and ordinary meaning of claim language controls, unless that m eaning renders the claim unclear or is overcome by a special definition that appears in the intr insic record with reasonable clarity and precision.”) (citation omitted); see also Intervet Am., Inc. v. Kee-Vet Labs, Inc. , 887 F.2d 1050, 1053 (Fed. Cir. 1989) (“[T]his court has consistently adhered to the proposition that courts cannot alter what the patentee has chosen to claim as his invention, that limitations appearing in the specification will not be read into claims, and that interpreting what is meant by a word in a claim ‘is not to be confused with adding an extraneous limitation appearing in the specification, wh ich is improper.’” (quoting E.I. Du Pont De Nemours & Co. v. Phillips Petroleum Co. , 849 F.2d 1430, 1433 (Fed. Cir.

2008-1085 71988))). On its face, the “horizontally mo vably positionable stack divider” disputed language in claims 4-6 means that the vertically dis posed stack dividers must be capable of being moved into different horizontal positions in the footwear display

. Although broad, this claim language is not am biguous. We therefore disagree with the trial court’s decision to intermingle its validity and construction analyses and as a result read into claims 4-6 the Track and Ro ller Limitation of claims 1-3. See Phillips v. AWH Corp. , 415 F.3d 1303, 1327 (Fed. Cir. 2005) (en banc ) (“[W]e have limited the maxim [of construing a claim to preserve its validity] to cases in wh ich ‘the court concludes, after applying all the available tools of claim constr uction, that the claim is still ambiguous.’” (quoting Liebel-Flarsheim Co. v. Medrad, Inc. , 358 F.3d 898, 911 (Fed. Cir. 2004))). 3 Second, as the trial court acknowled ged, nowhere does the prosecution history show an express disclaimer by DSW over a me thod of displaying f ootwear not involving the Track and Roller Limitation. To the c ontrary, the examiner allowed claims 4-6 without objection, concluding that the prior art does not teach or suggest a method of displaying at least two footwear styles usi ng the particular stacking of containers and stack dividers recited in in dependent claim 15 (issued as clai m 4). In contrast, when the examiner allowed amended clai ms 2, 6, and 9 (issued as claims 1-3), she explained that the prior art does not teach or sugg est a footwear display and stack divider containing the Track and Roller Limitation. Neither the cl aim language nor the language of the examiner’s statement of reasons for allowance indicate that the display method recited in claims 4-6 is constrained by the Track and Roller Limitation. See Markman ,

3 We do not offer a view on whether t he proper construction of the claim language renders the method claims at issue obvious.

2008-1085 852 F.3d at 980 (“Although the prosecution hi story can and should be used to understand the language used in the claims, it too cannot ‘enlarge, dimini sh, or vary’ the limitations in the claims.”) (citations omitted). The trial court incorrectly inferred that the word “also” from the examiner’s st atement that “[t]he prior art also does not teach . . . a method of displaying 1 st and 2 nd footwear styles” implied that the latter-discussed method claims depended on the previously-di scussed apparatus claims. Indeed, the examiner’s specific reference to claim 15 (issued as clai m 4) as “independent” directly refutes such a presumption. Third, although the prefe rred embodiment includes a rolling track mechanism, the alternate embodiments include hoo ks, lips, and peg holes to perm it the stack dividers to have horizontally movable positions. Moreov er, when claim language is broader than the preferred embodiment, it is well-settled that claims are not to be confined to that embodiment. E.g. , Phillips , 415 F.3d at 1323 (“[A]lthough the specification often describes very specific em bodiments of the invention, we have repeatedly warned against confining the claims to those embodiments.”). In sum, the trial court did not construe or clarify the meaning of actual words in claims 4-6, but improperly r ead into them a new limitati on not required by the claim language, specification, or prosecution history. Be cause claims 4-6 are unambiguous, contain limitations other than the disputed cl aim term, and are directed to a method for using an apparatus, not to its st ructure or assembly, it was im proper for the trial court to import limitations from the apparatus and syst em claims into the method claims. Shoe Pavilion concedes that its New Design includes st orage and display of vertically stacked boxes of f ootwear, separated by vertically disposed dividers that may

2008-1085 9be selectively positioned through use of a clip on a track. On remand, the trial court should compare the properly construed ’622 patent claims to the New Design to determine whether it infringes.
B. Damages The district court misapplied the standar d expressed by the Supreme Court in Wine Railway , which held that under the predecessor statute to the notice provision of 35 U.S.C. § 287, a patentee who failed to mark his patented articl e with the appropriate patent number could only recover damages for infringement occurring after actual notice was provided the infringer. Wine Ry. , 297 U.S. at 393-94. This court has applied Wine Railway in the current context of Section 287. Tex. Digital Sys., In c. v. Telegenix, Inc. , 308 F.3d 1193, 1219 (Fed. Cir. 2002). The purpo se of the notice requirement is to provide “protection against deception by unmarked patented articles.” Wine Ry. , 297 U.S. at 398. The idea is to pr event innocent infringement. Motorola, Inc. v. United States , 729 F.2d 765, 772 (Fed. Cir. 1984). Wine Railway provides no support for the tr ial court’s summary judgment on damages. The issue here is whether Shoe Pa vilion is liable for damages to DSW for infringement occurring subsequent to receipt of actual notice, and Wine Railway flatly states that a patentee may indeed recover damages for infringement that continues after actual notice is provided. Wine Ry. , 297 U.S. at 393-94. Wi thout a doubt, the law offers an infringer no exception to liability for the time it takes to terminate infringing activities, no matter how expediti ous and reasonable its efforts. See In re Seagate Tech., Inc. , 497 F.3d 1360, 1368 (Fed. Cir. 2007) (en banc) (“Because patent infringement is a strict liabilit y offense, the nature of the o ffense is only relevant in

2008-1085 102008-1085 11 determining whether enhanced damages are wa rranted.”). The trial court therefore erred in concluding that Shoe Pavilion’s reasonable steps and good faith efforts to bring its infringing activity to a timely end equat ed to an immediate cessation. Thus, if the patents at issue are valid, damages are ow ed on the design for the 6-7 months of continued infringement while Shoe Pavilion phased out use of the displays in its stores. Conclusion Accordingly, the judgment of the Unit ed States District Court for the Central District of California is vacated, and the case is remanded for further proceedings in accordance with this opinion.

Costs No costs.

VACATE AND REMAND