United States Court of Appeals 

for the Federal Circuit 

__________________________ 

REMBRANDT DATA TECHNOLOGIES, LP, 

Plaintiff-Appellant, 

v. 

AOL, LLC, CAVALIER TELEPHONE, LLC, AND

DIRECTV, INC., 

Defendants, 

and 

HEWLETT-PACKARD COMPANY, CANON U.S.A., 

INC., CANON BUSINESS SOLUTIONS, INC., AND 

CANON INFORMATION TECHNOLOGY SERVICES, 

INC., 

Defendants-Appellees. 

__________________________ 

2010-1002 

__________________________ 

Appeal from the United States District Court for the 

Eastern District of Virginia in case no. 08-CV-1009, Judge 

Gerald Bruce Lee. 

____________________ 

Decided: April 18, 2011 

____________________ 

GEORGE PAZUNIAK, Womble Carlyle Sandridge & Rice, 

PLLC, of Wilmington, Delaware, argued for plaintiff-
REMBRANDT DATA v. AOL 2

appellant. Of counsel were VIRGINIA W. HOPTMAN and 

JAMES MICHAEL LENNON. 

MICHAEL J. SONGER, Crowell & Moring, LLP, of Washington, DC, argued for defendants-appellees. With him on 

the brief was MICHAEL H. JACOBS. 

__________________________ 

Before GAJARSA, LINN, and DYK Circuit Judges. 

GAJARSA, Circuit Judge. 

This is a patent infringement appeal the resolution of 

which depends on the interpretation of whether a license 

exists for the technology at issue. Rembrandt Data Technologies, LP (“Rembrandt”) appeals the district court’s 

decisions regarding contract interpretation, claim construction, and the invalidity of certain claims of United 

States Patent Nos. 5,251,236 (“’236 patent”) and

5,311,578 (“’578 patent”) (collectively, “patents-in-suit”). 

The district court held that because Conexant Systems, 

Inc. (“Conexant”) can trace its rights to a license originally issued to the Rockwell Corporation, Conexant is 

licensed. The district court was correct in this determination. Rembrandt’s right to enforce the patents-in-suit 

against Conexant’s modem chip customers Canon U.S.A., 

Inc., Canon Business Solutions, Inc., and Canon Information Technology Services, Inc. (collectively, “Canon”) and 

Hewlett-Packard Company (“HP”) was, therefore, extinguished by patent exhaustion. See, e.g., Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 638 (2008). 

The district court also correctly granted summary judgment on the invalidity of claims 3-11 of the ’236 patent. 

The district court erred in granting summary judgment 

on the invalidity of claims 1 and 2 of the ’236 patent 

because genuine issues of material fact remained. Thus, 
3 REMBRANDT DATA v. AOL

we affirm-in-part, reverse-in-part, and remand for further 

proceedings consistent with this opinion. 

BACKGROUND

I. 

A. 

Rembrandt is the owner by assignment of United 

States Patent Nos. 5,602,869 (“’869 patent”) and 

5,844,944 (“’944 patent”). In 2008, Rembrandt filed a 

complaint in the Eastern District of Virginia alleging that 

AOL, LLC; Cavalier Telephone, LLC; DIRECTV, Inc.; 

Canon; and HP infringed the ’236, ’578, ’869, and ’944 

patents. On April 30, 2009, Rembrandt stipulated to the 

dismissal with prejudice of the claims regarding the ’869 

and ’944 patents. AOL, LLC; Cavalier Telephone, LLC; 

and DIRECTV, Inc. have been dismissed from this case 

and only Canon and HP remain as appellees. The two 

remaining patents-in-suit claim certain types of computer 

modems and methods of identifying modems. 

A modem is “a communications device that enables a 

computer to transmit information over a standard telephone line.” J.A. 8832. The ’236 patent, entitled “Fractional Rate Modem with Trellis,” issued in 1993 and 

describes a modem utilizing both the “fractional rate 

encoding” technique for more rapidly transferring data 

and the “trellis encoding” technique for reducing errors in 

data transmission. ’236 patent col.2 ll.41-44. Rembrandt 

asserted claims 1-3 and 6-11 of the ’236 patent against 

Canon and HP. The ’578 patent, entitled “Technique for 

Automatic Identification of a Remote Modem,” issued in 

1994 and describes using “hidden” identification signals to 

enable an originating modem to efficiently identify and 
REMBRANDT DATA v. AOL 4

connect to a remote modem. ’578 patent col.2 ll.49-52. 

The ’578 patent has seven claims, each of which was 

originally asserted against Canon and HP. Claims 1-6 are 

no longer being asserted against HP. 

The ’236 and ’578 patents were initially acquired by 

subsidiaries of AT&T Corporation. In 1996, AT&T Corporation underwent a “trivestiture,” creating AT&T, NCR 

Corporation,1 and Lucent Technologies, Inc. (“Lucent”). 

The patents-in-suit were transferred to Lucent. In 1996, 

Lucent spun off Paradyne Corporation (“Paradyne”), 

which became the assignee of the ’236 and ’578 patents. 

In 2005, Paradyne was acquired by Zhone Technologies, 

Inc. (“Zhone”). In 2006, Zhone assigned the patents-insuit to Rembrandt IP Management, LLC, which subsequently assigned the patents to Rembrandt Communications, LP (“Rembrandt Communications”). In 2008, less 

than two weeks before filing suit, Rembrandt Communications assigned the ’236 and ’578 patents to the plaintiffappellant.

The ownership genealogy of the ’236 and ’578 patents 

is documented in the chart below. 

 1 NCR Corporation was initially named the National Manufacturing Company, but NCR is short for the 

National Cash Register Company, which it was renamed 

in 1884. NCR Corporation was acquired in 1991 by AT&T 

Corporation. It was renamed AT&T Global Information 

Solutions in 1994. In 1996, AT&T changed the name back 

to NCR Corporation in preparation for a spin-off. 
5 REMBRANDT DATA v. AOL

B. 

In 1996, Rockwell International Corporation executed 

an agreement for a third party to acquire some of its 

aerospace and defense businesses and reorganized its 

corporate structure. For clarity, we refer to the pre-1996 

reorganization “Rockwell International Corporation” as 

“Old Rockwell” and the post-1996 reorganization “Rockwell International Corporation” as “New Rockwell.” Old 

Rockwell conveyed substantially all of its businesses and 

assets to New Rockwell in the “Agreement and Plan of 

Distribution dated as of December 6, 1996.” (“Rockwell 

Distribution Agreement”) The Rockwell Distribution 

Agreement stated that Old Rockwell “contributes, grants, 

conveys, assigns, transfers and delivers to Newco [(New 

Rockwell)] all the Company’s [(Old Rockwell’s)] right, title 

and interest in and to any and all Assets of the Company 
REMBRANDT DATA v. AOL 6

[(Old Rockwell)],” except for its aerospace and defense 

businesses. J.A. 12986. “Assets” included “agreements, 

leases, contracts . . . licenses, franchises, permits, authorizations and approvals.” J.A. 12979. 

Before its reorganization, Old Rockwell entered into a 

“Patent License Agreement” effective as of October 1, 

1988 with AT&T Corporation. (“1988 License Agreement”). In the 1988 License Agreement, AT&T Corporation and Old Rockwell cross-licensed numerous patents, 

including the patents-in-suit. The 1988 License Agreement was amended by the parties through a 1995 Side 

Letter Agreement granting Rockwell additional rights, 

including sublicensing rights. 

In a letter dated October 17, 1996, Lucent, the licensor of the patents-in-suit following the AT&T Corporation’s trivestiture, acknowledged Rockwell’s 

reorganization and the assignment of Old Rockwell’s 

rights and notification obligations under the 1988 License 

Agreement to New Rockwell. Subsequent to receiving 

Lucent’s letter, New Rockwell made its royalty payments 

to Lucent. In 1998, New Rockwell spun off its Semiconductor Systems unit, including its modem business, to 

Conexant. The licensing of the patents-in-suit is described in the chart below.
7 REMBRANDT DATA v. AOL

II. 

The Telecommunication Standardization Sector of the 

International Telecommunications Union (“ITU”) coordinates protocols for telecommunication. As part of this 

process, it periodically promulgates standards known as 

“Recommendations.” ITU Recommendations regarding 

modems facilitate fast, reliable communication between 

modems from different manufacturers and of different 

types. Manufacturers market their modems as compliant 

with specific ITU Recommendations, such as the V.8, 

V.34, V.90, and V.92 protocols. Although Recommendations are not numbered in chronological order by date of 

adoption, they are designed to be backward compatible, so 

each successive Recommendation is able to implement 

preceding Recommendations. 

Rembrandt argues that the inventions of the ’236 and 

’578 patents are incorporated into the V.34 protocol. In 

its complaint, Rembrandt accuses Canon and HP of 
REMBRANDT DATA v. AOL 8

infringement of the patents-in-suit because they market 

office products containing modem chips capable of implementing the V.34 protocol. All of the accused products 

contain modem chipsets manufactured by Conexant.

III. 

On June 17, 2009, the district court issued multiple 

orders that are challenged in this appeal. First, it entered 

an order construing some claims of the ’236 and ’578 

patents. The district court also held claims 3-11 of the 

’236 patent invalid as indefinite for improperly mixing 

method and apparatus elements. The court denied 

Canon’s motion for summary judgment of noninfringement of the ’578 patent because Rembrandt could 

“conceivably carry its burden at trial based on circumstantial evidence.” J.A. 14322. The district court also 

granted Canon’s motion for summary judgment of exhaustion because Conexant, Canon and HP’s supplier of 

modem chips, was properly sublicensed under the 1988 

License and 1995 Side Letter Agreements, and therefore, 

Rembrandt’s right to enforce the ’236 and ’578 patents 

was extinguished by patent exhaustion. Rembrandt’s 

motion for reconsideration of some of the orders was 

denied. 

The district court subsequently issued an opinion explaining its prior summary judgment orders. Rembrandt 

Data Techs., LP v. AOL, LLC, 673 F. Supp. 2d 420 (E.D. 

Va. 2009). In a footnote, the court stated that the question of whether the claims of the ’236 patent were invalid 

as indefinite for failing to disclose algorithms corresponding to functions set forth in the claims was moot in light of 

its indefiniteness ruling with respect to claims 3-11. Id.

at 428 n.5. Although judgment was entered in Canon’s 

favor on all claims, the court’s holding in its Memoran-
9 REMBRANDT DATA v. AOL

dum Order of August 21, 2009 regarding the improper 

mixing of method and apparatus claims only applied to 

claims 3-11 of the ’236 patent and did not address claims 

1 and 2 of the ’236 patent. On September 2, 2009, Canon 

filed a motion pursuant to Federal Rule of Civil Procedure

59(e) to amend the August 21, 2009 order to address 

claims 1 and 2. The district court granted Canon’s motion, replacing the second sentence in footnote 5 of the 

August 21, 2009 order with the following sentence: “The 

Court also holds that each of claims 1-11 in the ’236 

patent is invalid as indefinite for failing to disclose the 

necessary algorithms for the reasons set forth in its order 

of June 17, 2009.” J.A. 1. Rembrandt timely appealed to 

this court. We have jurisdiction over Rembrandt’s appeal 

pursuant to 28 U.S.C. § 1295(a)(1). 

DISCUSSION

Contract interpretation is a question of law reviewed 

de novo. Lucent Techs., Inc. v. Gateway, Inc., 543 F.3d 

710, 717 (Fed. Cir. 2008). The district court’s grant of 

summary judgment is also reviewed de novo. Koninklijke 

Philips Elecs. N.V. v. Cardiac Sci. Operating Co., 590 F.3d 

1326, 1332 (Fed. Cir. 2010). Summary judgment is appropriate when, drawing all justifiable inferences in favor 

of the non-moving party, there exists no genuine issue of 

material fact and the moving party is entitled to judgment 

as a matter of law. See Fed. R. Civ. P. 56(c); Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). This court 

has stated that “[i]n determining whether there is a 

genuine issue of material fact, the evidence must be 

viewed in the light most favorable to the party opposing 

the motion, with doubts resolved in favor of the opponent.” Ethicon Endo-Surgery, Inc. v. U.S. Surgical Corp., 

149 F.3d 1309, 1315 (Fed. Cir. 1998). When a motion for 

summary judgment is properly supported by documentary 
REMBRANDT DATA v. AOL 10

and testimonial evidence, however, the nonmoving party 

may not rest upon mere allegations or denials of his 

pleadings, but rather, must present significant probative 

evidence to establish a genuine issue of material fact. 

Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). 

I. 

Canon and HP contend that Conexant was sublicensed by New Rockwell. If Conexant, Canon and HP’s 

modem supplier, has a valid license to sell the modem 

chips, Rembrandt’s rights to sue Canon and HP for infringement of the patents-in-suit are exhausted by that 

license. Quanta Computer, 553 U.S. at 638 (holding that 

a licensee’s sale of component computer parts that substantially embodied method patents held by the patentee 

was “authorized” by the patentee and exhausted the 

patentee’s patents). Rembrandt argues that Conexant 

was not sublicensed for two reasons: (1) because New 

Rockwell could not sublicense its rights to Conexant; and 

(2) even if it could, the sublicense does not apply to the 

modem chipsets at issue. Because Conexant is licensed, 

Rembrandt’s rights are exhausted and it cannot recover 

from Canon and HP. The district court properly held as a 

matter of law that New Rockwell could further sublicense 

the patents-in-suit to Conexant. 

Rembrandt first argues that New Rockwell could not 

sublicense its rights to Conexant because it was not 

properly assigned licensing rights from Old Rockwell. 

Under the 1988 License Agreement, Old Rockwell licensed numerous patents, including the patents-in-suit, 

from their original assignee, AT&T Corporation. Rembrandt also contends that the license was not transferable 

from New Rockwell to Conexant without AT&T Corporation’s written consent. 
11 REMBRANDT DATA v. AOL

In the 1995 Side Letter Agreement, AT&T Corporation recognized that Old Rockwell “may at some time in 

the future wish to divest all or part of its business,” and 

provided that “the licenses and rights granted in the 

Agreement may be sublicensed to any future divested 

present business of Rockwell.” J.A. 14373-74. In 1996, 

Old Rockwell reorganized its operations but retained its 

semiconductor business, which included its modem manufacturing unit. As part of the restructuring, Old Rockwell 

divested most of its businesses and assets, including its 

agreements and licenses, to New Rockwell. This included 

its rights and obligations under the 1988 License and 

1995 Side Letter Agreements, including its right to sublicense. 

Rembrandt argues that the license was not properly 

assigned from Old Rockwell to New Rockwell because Old 

Rockwell never obtained AT&T’s written consent for that 

assignment. Rembrandt argues that without AT&T’s 

consent, New Rockwell “could only have acquired, at 

most, the sublicense rights” provided by the 1995 Side 

Letter Agreement. Appellant’s Br. 17. However, the 1995 

Side Letter Agreement stated that “the licenses and 

rights granted in the Agreement may be sublicensed to 

any future divested present business of Rockwell.” J.A. 

14373-74. Thus, further consent by AT&T was unnecessary. Rembrandt’s concern about licenses and rights 

flowing infinitely to subsequent licensees so long as they 

share the name “Rockwell” is misplaced. The extension of 

the license and rights from AT&T or its successors to 

companies related to Rockwell is expressly limited in the 

1995 Side Letter Agreement to divested present businesses of Old Rockwell, which in this case, includes both 

New Rockwell and Conexant. 
REMBRANDT DATA v. AOL 12

In 1998, New Rockwell divested its modem business 

to Conexant and granted it a “royalty-free, world-wide, 

irrevocable, non-exclusive license under all intellectual 

property rights,” including patents “under which the 

Rockwell Group had a right to license” and “which are 

used in the conduct of the business of [Conexant]” at the 

time of divestiture. Canon Mem. Supp. Mot. Summ. J., 

Ex. 6-c, Section 3.11. Rembrandt argues that New Rockwell had no authority to further sublicense Conexant 

because “the law does not recognize any right of a nonexclusive licensee to assign the license or to further sublicense.” Appellant’s Br. 20. 

Rembrandt is generally correct, unless, as here, a contract provides otherwise. The express language of the 

1995 Side Letter Agreement provided that “the licenses 

and rights granted in the Agreement may be sublicensed 

to any future divested present business of Rockwell.” J.A. 

14373-74. Old Rockwell’s rights under the 1988 License 

and 1995 Side Letter Agreements were extended by the 

terms of the 1995 Side Letter Agreement to New Rockwell, and in turn, Conexant. Such sublicensing is effective so long as the sublicensed “future divested business” 

continues to “operate[] as a separately identifiable business” selling “products and services sold by the future 

divested business prior to its divestiture.” J.A. 14373-74.

New Rockwell and Conexant satisfy the 1995 Side Letter 

Agreement because New Rockwell sold V.34 protocolcompliant modem chips prior to spinning off Conexant, 

and Conexant, the “future divested business,” continues 

to manufacture V.34 protocol-compliant modems.

Finally, Rembrandt argues that even if Conexant was 

properly sublicensed, the sublicense does not apply to the 

modem chipsets at issue because they are not the “‘products and services sold by the future divested business 
13 REMBRANDT DATA v. AOL

prior to its divestiture’ – i.e., products and services sold by 

December 1996 when Old Rockwell divested its semiconductor business to New Rockwell.” Appellant’s Br. 23. 

Rembrandt maintains that the district court erred by 

holding that the parties “intended to cover modems generally, not specifically the exact types of modems in 

production at the time of the sublicense and/or divestiture.” 

The 1995 Side Letter Agreement states: 

[T]he licenses and rights granted in the Agreement may be sublicensed to any future divested 

present business of Rockwell . . . only to the extent 

applicable to products and services sold by the future divested business prior to its divestiture. 

J.A. 14374. 

Neither the original 1988 License Agreement nor the 

1995 Side Letter Agreement refers to specific models of 

modems. Rather, these agreements specify product types 

using general, functional terms. Section 1.03 of the 1988 

License Agreement provides Rockwell with a license to 

“make, have made, use, lease, sell, and import Licensed 

Products.” J.A. 14330. The License Agreement defines 

“Licensed Products” as “any product (including any specified combination of other products) or service 

listed . . . under Section 1.01.” J.A. 14349. Section 1.01 

lists general categories, including “data communication 

station systems” and “digital transmission systems.” 

Rembrandt, 673 F. Supp. 2d at 434. Although the 1995 

Side Letter Agreement does not explicitly define “products 

and services,” it requires royalty payments for Old Rockwell’s “Telecom Sales” and “Reportable Products.” J.A. 

14374. The 1995 Side Letter Agreement defines “Telecom 
REMBRANDT DATA v. AOL 14

Sales” generally as “any sales of a business unit reported 

in Rockwell International Corporation’s annual report (as 

of 1994) under ‘Telecommunication’ or its equivalent in 

future reports regardless of a Telecom name change of the 

assignment of any reported business unit to another 

organization within Rockwell.” J.A. 14375. According to 

Old Rockwell’s 1994 Annual Report, Old Rockwell’s 

telecommunications business unit sold modems. Prior to 

New Rockwell’s divestiture of its modem business to 

Conexant, it sold modem chipsets, including V.34 protocol-compliant chipsets. Conexant continues to sell V.34 

protocol-compliant chipsets. Thus, the sublicensing 

conditions in the 1995 Side Letter Agreement are satisfied.

As the district court correctly explained, the term 

“products” covers “modems generally, not specifically the 

exact types of modems in production at the time of the 

sublicense and/or divestiture.” Rembrandt, 673 F. Supp. 

2d at 437. The language of the 1988 License and 1995 

Side Letter Agreements favors a broad interpretation of 

“product,” rather than the narrow one Rembrandt suggests. Conexant’s sublicense thus precludes Rembrandt’s 

recovery against Canon and HP for infringement of the 

’236 and ’578 patents. 

II. 

The district court properly held claims 3-11 of the ’236 

patent invalid for indefiniteness, but incorrectly held 

claims 1 and 2 of the ’236 patent invalid for failure to 

disclose necessary algorithms because there was a genuine issue of material fact regarding the disclosure of the 

specification. 
15 REMBRANDT DATA v. AOL

A. 

Claim 3 of the ’236 patent reads: 

3. A data transmitting device for transmitting signals corresponding to an incoming stream of bits, 

comprising: 

first buffer means for partitioning said stream 

into frames of unequal number of bits and for 

separating the bits of each frame into a first group 

and a second group of bits; 

fractional encoding means for receiving the first 

group of bits of each frame and performing fractional encoding to generate a group of fractionally 

encoded bits; 

second buffer means for combining said second 

group of bits with said group of fractionally encoded bits to form frames of equal number of bits; 

trellis encoding means for trellis encoding the 

frames from said second buffer means; and 

transmitting the trellis encoded frames. 

’236 patent col.6 ll.1-24. 

Claims 4-11 depend on claim 3. The first four elements of claim 3 of the ’236 patent recite apparatus 

elements: buffer means, fractional encoding means, 

second buffer means, and trellis encoding means. ’236 

patent col.6 ll.3-23. The final element is a method: 

“transmitting the trellis encoded frames.” Id. at col.6 l.24. 

This court has held that “reciting both an apparatus and a 

method of using that apparatus renders a claim indefinite 

under section 112, paragraph 2.” IPXL Holdings, L.L.C. 
REMBRANDT DATA v. AOL 16

v. Amazon.com, Inc., 430 F.3d 1377, 1384 (Fed. Cir. 2005) 

(citing Ex parte Lyell, 17 U.S.P.Q.2d 1548 (B.P.A.I. 1990)). 

Applying this doctrine, the district court correctly held 

claim 3 and its dependent claims 4 through 11 invalid for 

indefiniteness.

Rembrandt argues that the phrase “said transmitter 

section” in claims 7 and 8 requires that claim 3, on which 

claims 7 and 8 depend, contain a “transmitter section” 

limitation. Appellant’s Br. 50. Rembrandt requests this 

court to insert “transmitter section for” into the final 

element of claim 3, thereby adding an apparatus and 

rendering the claim valid. Rembrandt contends that the 

addition merely corrects “an obvious administrative or 

typographical error not subject to reasonable debate.” Id.

We have stated that “[t]his court, however, repeatedly 

and consistently has recognized that courts may not 

redraft claims, whether to make them operable or to 

sustain their validity.” Chef Am., Inc. v. Lamb-Weston, 

Inc., 358 F.3d 1371, 1374 (Fed. Cir. 2004). In Novo Industries, L.P. v. Micro Molds Corp., we held that “[a] district 

court can correct a patent only if (1) the correction is not 

subject to reasonable debate based on consideration of the 

claim language and the specification and (2) the prosecution history does not suggest a different interpretation of 

the claims.” 350 F.3d 1348, 1357 (Fed. Cir. 2003). Rembrandt attempts to apply Ultimax Cement Manufacturing 

Corp. v. CTS Cement Manufacturing Corp. to this case. 

587 F.3d 1339 (Fed. Cir. 2009). Ultimax added that this 

determination “must be made from the point of view of 

one skilled in the art.” 587 F.3d at 1353. Ultimax is 

distinguishable because in that case, the court merely 

added a comma to a chemical formula because the plaintiff demonstrated that the “claimed formula C9S3S3Ca(f 

cl)2 ‘corresponds to no known mineral,’ and one of ordi-
17 REMBRANDT DATA v. AOL

nary skill in the art would know that the formula should 

contain a comma” between the “f” and “cl.” Id. Rembrandt seeks to have this court substantively re-draft its 

claims and has not demonstrated that a skilled artisan 

would have read its proposed language into the claim. As 

the district court noted, the correction suggested by 

Rembrandt is “not minor, obvious, free from reasonable 

debate or evident from the prosecution history.” Rembrandt, 673 F. Supp. at 428. This court will not redraft 

Rembrandt’s claim. Claims 3-11 of the ’236 patent are 

invalid. 

B. 

Claims 1 and 2 of the ’236 patent read: 

1. A modem for data transmission at fractional 

data rates comprising: 

transmitter means including: 

buffer meas [sic] for receiving a stream of binary 

data, said buffer means being provided for partitioning said stream into frames of unequal number of bits and separating the bits of each frame 

into a first group and a second group of bits; 

fractional rate encoding means for receiving said 

first group and performing a fractional encoding 

thereon to generate a group of fractionally encoded bits; combining means for combining said 

group of fractionally encoded bits with said second 

groups into frames of equal number of bits; 

trellis encoding means for trellis encoding said 

frames of equal number of bits; and 
REMBRANDT DATA v. AOL 18

a transmitter section for transmitting the trellis 

encoded frames. 

2. The mode of claim 1 wherein said trellis encoding means encodes the bits from said group of 

fractionally encoded bits. 

’236 patent col.5 ll.36-56. 

The district court construed the limitation “fractional 

rate encoding means for receiving said first group and 

performing a fractional encoding thereon to generate a 

group of fractionally encoded bits” as a means-plusfunction element with the following function and structure: 

Function: receiving said first group and performing a fractional encoding thereon to generate a 

group of fractionally encoded bits. 

Structure: The fractional rate converter 18 shown 

in Figure 1 or in Figure 3, including programming 

for both calculating an ideal number of points using the algorithm 2b/f as disclosed in column 4:14-

60 of the ’236 patent and converting a number of 

bits to a different base using the base conversion 

algorithm as described in the [5,103,227] patent 

and incorporated by reference into the ’236 patent. 

J.A. 57. 

The district court also construed the limitation “trellis 

encoding means for trellis encoding said frames of equal 

number of bits” as a means-plus-function element with 

the following function and structure: 
19 REMBRANDT DATA v. AOL

Function: Trellis encoding the frames of equal 

numbers of bits outputted by the combining 

means 

Structure: The trellis encoder 20 shown in Fig. 1. 

J.A. 58. 

The district court erred in construing “fractional rate 

encoding means” and “trellis encoding means” as meansplus-function elements governed by 35 U.S.C. § 112, ¶ 6. 

A claim limitation that “contains the word ‘means’ and 

recites a function is presumed to be drafted in meansplus-function format under 35 U.S.C. § 112, ¶ 6.” NetMoneylN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1366 (Fed. 

Cir. 2008). This presumption can be rebutted if the claim 

limitation itself recites sufficient structure to perform the 

claimed function in its entirety. TI Grp. Auto. Sys.’s (N. 

Am.), Inc. v. VDO N. Am., L.L.C., 375 F.3d 1126, 1135 

(Fed. Cir. 2004) (holding that the term “pumping means” 

in a patent directed to fuel pump assembly technology 

was not a means-plus-function limitation as the limitation 

recited not only a pumping means, but its structure, 

location, and operation). In Cole v. Kimberly-Clark Corp., 

we held that “perforation means” “cannot meet the requirements” of paragraph 6 of section 112 because the 

claim itself defined sufficient structure. 102 F.3d 524, 531 

(Fed. Cir. 1996). When determining whether a claim term 

recites sufficient structure, we examine whether it has an 

understood meaning in the art. Watts v. XL Sys., Inc., 

232 F.3d 877, 880-81 (Fed. Cir. 2000); see also Atmel Corp. 

v. Info. Storage Devices, Inc., 198 F.3d 1374, 1379 (Fed. 

Cir. 1999) (“[T]he ‘one skilled in the art’ analysis should 

apply in determining whether sufficient structure has 

been disclosed to support a means-plus-function limitation.”). 
REMBRANDT DATA v. AOL 20

On appeal, Rembrandt argues that the district court 

erred by granting summary judgment of invalidity of 

claims 1 and 2 of the ’236 patent for failing to disclose an 

algorithm able to perform the recited functions. We agree 

that a genuine dispute of material fact precluded invalidation of claims 1 and 2 of the ’236 patent. The district 

court determined that the “trellis encoding means,” and 

“fractional rate encoding means,” recited in claim 1 of the 

’236 patent, from which claim 2 depends, are means-plusfunction elements. J.A. 57-59. Expert testimony supports 

the conclusion that the limitations themselves convey 

sufficient structure to one of ordinary skill in the art to 

overcome the presumption of treatment under § 112, ¶ 6. 

Rembrandt’s expert testified that the terms “fractional rate encoding means” and “trellis rate encoding” 

were used in publications and published patents in the 

early 1990s, and were self-descriptive to one of ordinary 

skill in the art. J.A. 11875; see, e.g., Lang, G.R., A Leech 

Lattice Modem, IEEE Journal on Selected Areas in Communications, Vol. 7, No. 6 (Aug. 1989); U.S. Patent No. 

4,941,154 entitled “Trellis Coding Method and Arrangement for Fractional Bit Rates” issued on July 10, 1990; 

and U.S. Patent No. 5,113,401 entitled “Block Coding 

Scheme for Fractional-Bit Transmission” issued on May 

12, 1992. The invention claimed by the ’236 patent is the 

novel combination of fractional rate encoding with trelliscoded modulation, two known techniques that were 

widely thought to be “mutually-exclusive” at the time of 

invention. ’236 patent, col.2 l.26. The ’236 patent adopts 

the common meanings of fractional rate encoding in 

column 3 lines 18-21 and 40-44 and trellis encoding in

column 2 lines 41-49 and does not limit them to any 

specific encoders. The phrases “fractional rate encoding” 

and “trellis rate encoding” defined algorithms known to 
21 REMBRANDT DATA v. AOL

skilled artisans in the early 1990s. The parties do not 

dispute this. 

The parties do, however, dispute whether the necessary algorithms for “buffer means” and “combining 

means” were disclosed. Independent claim 1 and dependent claim 2 include a “buffer meas [sic] for receiving a 

stream of binary data, said buffer means being provided 

for partitioning said stream into frames of unequal number of bits and separating the bits of each frame into a 

first group and a second group of bits.” ’236 patent, col.5 

ll.47-50. The district court construed “buffer means” as 

having three functions: receiving data, partitioning the 

data “into frames of unequal numbers of bits,” and “separating the bits of each frame into a first group and a 

second group of bits.” J.A. 56. The “first buffer means” 

was construed to perform two material functions: (1) 

“partition[] said stream [of bits] into frames of unequal 

number of bits”; and (2) “separat[e] the bits of each frame 

into a first group and a second group of bits.” J.A. 58. 

The court determined that the structure performing these 

functions is “buffer 12.” Id. A buffer is only a physical 

piece of memory and the actual partitioning and separating is accomplished by buffer 12 by implementing a 

computer algorithm. 

Rembrandt’s expert testified that the figures, text, 

and table in the ’236 patent disclose a complete algorithm 

for “buffer means” to one skilled in the art. Rembrandt 

argues that Figure 1 of the ’236 patent provides a pictorial algorithm for how a buffer partitions an input data 

stream of seven bits, A1 to A7, into two frames, f1 and f2, 

having three and four bits, respectively. 
REMBRANDT DATA v. AOL 22

The number of bits and frames is provided to the 

buffer (buffer 12 in Figure 1) by the format selector. 

Rembrandt contends that the accompanying text further 

explains how the buffer partitions the incoming bit 

stream into frames containing unequal numbers of bits. 

’236 patent col.3 ll.4-39. The buffer separates the two 

least significant bits from each frame, i.e., A1A2 and A5 A6, 

and sends them to another buffer, buffer 16. Id. at col.3 

ll.36-38. Rembrandt also notes that Column 5, Table 1 

provides examples of how given a bit rate and baud rate, 

different ratios of bits and frames are calculated for use 

by the buffer.

Canon maintains that these elements merely disclose 

the outputs of the algorithm, rather than the algorithm 

itself. Canon argues that the categorization into frames is 
23 REMBRANDT DATA v. AOL

important and Rembrandt offers no evidence of how 

buffer 12 would accomplish the specific functions to meet 

the requirements of the invention or how one of ordinary 

skill in the art could derive the functions from the figure, 

text, or table. In holding claims 1 and 2 invalid when it 

found claims 3 through 11 invalid, the district court did 

not assess whether the testimony of Rembrandt’s expert 

raised a genuine issue of material fact about whether a 

skilled artisan would have known the algorithm necessary to accomplish the described outcomes. 

The parties make similar arguments about whether 

an algorithm for “combining means” was disclosed in the 

’236 patent. Claims 1 and 2 include “combining means for 

combining said group of fractionally encoded bits with 

said second groups into frames of equal number of bits.” 

Id. at col.5 ll.47-50. In Figure 1, buffer 16 performs the 

combining operation. As with the “buffer means,” Rembrandt contends that Figure 1 and the accompanying text 

present a pictorial algorithm of the combining means. 

Appellant’s Br. 60. Rembrandt argues that the figure and 

text explain how to combine the inputs into frames of 

equal numbers of bits. The inputs are the frames from 

buffer 12 and the fractional rate encoder as incorporated 

from the cross-referenced patent application Ser. No. 

588,652, which has since issued as U.S. Patent No. 

5,103,227. 

Rembrandt’s expert testified that there was sufficient 

structure to apprise one of ordinary skill in the art that 

claims 1 and 2 are capable of performing the recited 

function. The expert testified how a buffer orders and 

combines inputs to create an output. For example, if 

buffer 16 of Figure 1 is combining two four-bit inputs to 

create an eight-bit output, the algorithm directs how to 

take a bit, e.g. A1 and make it the first row, the fourth 
REMBRANDT DATA v. AOL 24

column of the output, then take A2 and make that the first 

row, third column of the output, and so on. Rembrandt’s 

expert also opined that the actual mechanism of the 

operation was a simple decision for a skilled artisan. 

Canon argues that the ’236 patent does not disclose how 

buffer 16 performs the combining function because it does 

not address how and in what order to combine fractionally 

encoded bits into particular frames. The parties again 

dispute whether the algorithm for “combining means” 

would be clear to a skilled artisan. 

Drawing all justifiable inferences in favor of Rembrandt, we cannot agree with the district court that 

summary judgment of the invalidity of claims 1 and 2 of 

the ’236 patent was warranted. Based on the expert 

testimony, there are genuine disputes of material fact 

regarding whether the specification discloses algorithms 

for “buffer means” and “combining means.” The indefiniteness analysis the district court used to invalidate 

claims 3-11 of the ’236 patent does not support the invalidation of claims 1 and 2. The district court’s invalidation 

of claims 1 and 2 in its order on November 2, 2009 without any reasoning supporting its decision was erroneous. 

CONCLUSION

We affirm the district court’s decision that because 

Conexant is licensed, Rembrandt’s rights are exhausted 

and it cannot recover from Canon and HP, Conexant’s 

customers. We also affirm the district court’s grant of 

summary judgment on the invalidity of claims 3-11 of the 

’236 patent for indefiniteness. We reverse the district 

court’s grant of summary judgment on the invalidity of 

claims 1 and 2 of the ’236 patent. We remand the case to 

the district court for further proceedings consistent with 

this opinion. 
25 REMBRANDT DATA v. AOL

AFFIRMED-IN-PART, REVERSED-IN-PART, AND 

REMANDED 

COSTS

No costs.