NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not citable as precedent. It is a public record. 

## United States Court of Appeals for the Federal Circuit

05-1203 SHUFFLE MASTER, INC., Plaintiff-Appellee,

v. VENDINGDATA CORPORATION, Defendant- Appellant.

___________________________ DECIDED: December 27, 2005

___________________________ Before MAYER, Circuit Judge , FRIEDMAN, Senior Circuit Judge , and BRYSON, Circuit Judge

. Opinion for the court filed by Circuit Judge BRYSON. Dissenting opinion filed by Circuit Judge MAYER.

BRYSON, Circuit Judge

. This is an appeal from the gr ant of a preliminary injunction in a patent case. The United States District Court for the District of Nevada ruled for the patentee, Shuffle Master, Inc., and entered a preliminary in junction barring the appellant VendingData Corporation from selling its accused produc t, a playing card shuffling machine. Shuffle Master, Inc. v. VendingData Corp. , No. CV-S-04-1373-JCM (LRL) (D. Nev. Dec. 7, 2004). Although the scope of our review of orders granting or denying motions for05-1203 2 preliminary injunctions is narrow, we conclude that, in light of the critical importance of claim construction to the outcome here, the district court should have provided an explicit claim construction before enteri ng its injunctive or der. We therefore vacate the order enjoining VendingData from selling its accused product and remand to the district court for further proceedings. I Shuffle Master owns U.S. Pat. No. 6, 655,684 (“the ’684 patent”), which is entitled “Device and Method for Forming and Delivering Hands from Randomly Arranged Decks of Playing Cards.” Only claim 20 of the ’ 684 patent is at issue here. Shuffle Master alleges that one of VendingDat a’s automatic shufflers, t he PokerOne, infringes that claim. VendingData contends that the PokerOne does not fa ll within the scope of the claim, as properly construed. Automatic card shufflers, which have been available for some time, deliver hands of randomly mixed playing cards. Claim 20 of the ’684 patent recites a particular method for delivering shuffled hands, which comprises: providing at least one deck of playing cards; forming at least one set of cards within the apparatus from the at least one deck of playing cards; delivering to a delivery tray from the at least one set of cards within the apparatus a first individual set of randomly mixed playing cards for a game; delivering the first individual se t of randomly mixed playing cards from the delivery tray of the apparatus, with all cards in the first individual set delivered at the same time, and t hen providing a second individual set of randomly mixed playing cards into the delivery tray. For present purposes, the crit ical claim limitation is t he one that recites “forming at least one set of cards within the apparatus from the at least one deck of playing cards.” Before the district court, V endingData contended that the PokerOne does not05-1203 3 form a “set of cards within the apparatus” within the meaning of that phrase in the asserted claim. VendingData offered evidence that the Po kerOne operates by randomly ejecting cards from an unshuffled deck to form an “int ernal stack” within the apparatus. The random ejection process continues until the internal stack cont ains at least 21 cards. When the number of cards required for at l east two hands of the game that is being played have been collected in the internal sta ck, the device begins t he dealing process. The PokerOne deals by delivering cards to t he output tray, one-by-one from the bottom of the internal stack, until a complete hand is formed in the output tr ay. When that first hand of cards is removed from the output tray, the dealing process begins again, and new cards are delivered, one-by- one from the bottom of the inte rnal stack, to the output tray to form a second hand. After each hand of cards is removed from the output tray, additional cards are ejected from the unshuffled de ck into the internal stack, while at the same time new cards are delivered to the output tray to form another hand. Shuffle Master argued to the district cour t that the internal stack formed in the PokerOne falls within the limitation requiring t hat “at least one set of cards [be formed] within the apparatus.” In its papers opposing the motion for a preliminary injunction, VendingData argued that the specification and the prosecution history make clear that the internal stack formed within the PokerO ne device does not read on that limitation, because the “set of cards” limitation covers only a set of cards constituting a single hand or a part of a hand. Consequently , according to VendingData, the internal stack is not a “set of cards,” because no hands or portions of hands are formed ther e. Instead, cards simply accumulate in the internal stack unt il the stack contains at least 21 cards, and05-1203 4 the dealing process does not begin until the number of cards in the internal stack is equal to at least two hands of cards. T he hands, according to VendingData, are formed for the first time when cards are deliv ered, one-by-one, to the output tray. In making its claim construction argument in the district court, VendingData referred to the portion of the specification in which the patentee de scribed the operation of the claimed shuffler. According to the specification, the device described in Shuffle Master’s patent randomly places cards into sl ots or compartments. Each of those slots or compartments, according to the specification, “may therefore be identified and treated to receive individual hands of defi ned numbers of randomly selected cards or the slots may be later directed to deliver i ndividual cards into a separate hand forming slot or tray.” ’684 patent, col. 4, ll. 62-65. In the first ca se, “a hand of cards is removed as a group from an individual slot.” Id. col. 4, ll. 66-67. In the second case, “each card defining a hand is removed from more than one compartment (where one or more cards are removed from a slot), and the individual cards are combined in a hand-receiving tray to form a randomized hand of cards.” Id. col. 4, line 67 through col. 5, line 4. VendingData also relied on the prosecuti on history to support its proposed construction of the “set of cards” limit ation. VendingData ar gued that the patentee restricted the method to “forming hands inside the unit.” In particular, VendingData noted that in response to a rejection by t he patent examiner, the patentee stated that claim 20 requires sets of cards to be form ed within the apparatus and requires individual hands to be formed from those sets, “either with one set of cards being a complete hand or by sets of cards being combined to form a complete hand.”05-1203 5 Following arguments by counsel regar ding the request for a preliminary injunction, the district cour t issued an injunction barring the sale of the Poker One. Although the question of the proper construction of claim 20 wa s clearly in dispute, the court did not address the claim construc tion arguments made by VendingData and did not provide an explicit constr uction of the critical claim language. Rather, the court simply concluded that Shuffle Master was likel y to succeed on the merits in proving that the operation of the PokerOne infringes Shu ffle Master’s rights under claim 20 of the ’684 patent. The district court also found t hat Shuffle Master was likely to succeed on the merits in proving that t he ’684 patent is valid, that Shuffle Master showed that the effect of sales of the PokerOne would result in irreparable harm to Shuffle Master, and that the public interest in protecting patent rights supported the issuance of a preliminary injunction. VendingData subsequently made requests for modification and clarification of the preliminary injunction order. VendingData also requested a stay of the injunction pending appeal. In its request for a stay, Vendi ngData argued that the district court had failed to construe the critical language of claim 20 and that its failure to do so undermined its conclusion that the operation of the PokerOne likely infringed the claim. The district court denied each of those r equests. A panel of this court, however, granted a stay of the injunc tion pending the disposition of the appeal, noting that the district court had failed to construe the claim. II As its principal ground for appeal, VendingDat a asserts that this case turns on the proper construction of the lim itation that requires the formation of “at least one set of05-1203 6 cards within the apparatus.” Accordingly, VendingData contends, the district court’s failure to provide any explicit construction of that claim language r enders the preliminary injunction improper. A Shuffle Master argues at t he outset that VendingData did not preserve its present argument that the district court should have conducted at least a preliminary claim construction. We have reviewed the parties’ submissions to the district court, and we conclude that VendingData adequat ely preserved its argument on that point. First, VendingData featured its claim construction argument in its papers in opposition to the preliminary injunction. Second, in its motion to the distri ct court for a stay of the preliminary injunction order, f iled approximately three weeks a fter the original order was entered, VendingData complained that the district court “did not analyze any specific claim or claim element of the patent.” Th ird, VendingData made t he same point in its reply memorandum to the district cour t in support of its motion for a stay. 1 From our review of the record, including those pleadings, it is evident that the definition of the term “set of cards” play ed a prominent role in the proceedings. In particular, VendingData made it clear that the outcome of the case would likely depend on the court’s construction of claim 20. V endingData raised the claim construction issue

1 In support of its argument that VendingData waived its right to contest the district court’s failure to conduct an adequate cl aim construction, Shuffle Master points to VendingData’s submission of a proposed or der in the injunction proceedings. The submission of such an order does not constitute a waiver of challenges to the propriety of entering the injunction. The order simply reflect ed VendingData’s understanding of the grounds for the court’s ruling. In any event, when it submitted a proposed order granting the injunction, VendingD ata stated that it “reserve[d] its right to challenge” the court’s findings of fact and conclusions of law “at a later time.”05-1203 7 prior to the court’s ruling and protested the inadequacy of the court’s claim construction after the ruling. For that reason, we do not agree with Shu ffle Master that VendingData has waived its right to raise on appeal the distri ct court’s failure to provide a sufficient construction of the claim language. B We have held that a district court does not have to conduct a comprehensive and final claim construction in a preliminary injunction proceeding. Sofamor Danek Group, Inc. v. DePuy-Motech, Inc. , 74 F.3d 1216, 1221 (Fed. Cir. 1996). Similarly, it is not necessary for a court to conduct an explicit cl aim construction if the claim construction issue is a simple one that needs no analysis, or in which there is no reasonable ground for dispute as to claim meaning. Toro Co. v. Deere & Co. , 355 F.3d 1313, 1322 (Fed. Cir. 2004). However, a district court in a preliminary injunction proceeding has the duty to determine whether the movant is likely to prevail on the merits, and if that question turns on a contested issue of claim constr uction, the court must give the claim construction issue the attention necessary to determine the likelihood of success. In this case, the dispute over the meaning of the “set of cards” limitation is central to determining whether Shuffle Master is likely to prevail on the merits of its infringement claim. The district court was therefor e required to provide some form of claim construction, even if abbreviated, preliminary, or tentative. Shuffle Master argues t hat the phrase “at least one set of cards within the apparatus” means any number of cards that serve as the source from which the apparatus delivers hands to the delivery tray. Under that construction, it appears likely that the PokerOne device would infringe, since the internal stack in the PokerOne forms05-1203 8 within the device and serves as the source from which dealing begins after the collection reaches a size equal to two hands of cards of the game being played. On the other hand, VendingData argues t hat the “set of cards wit hin the apparatus” must be construed to refer to a set consisting of no more than one hand of cards. Under that interpretation, it appears likely that the Po kerOne device would not infringe, since the internal stack accumulates cards until it c ontains at least two hands of cards before dealing begins. Thus, resolution of the claim construction issue fram ed by the parties is of critical importance to the issue of infringement. Seizing on the fact that the dealing pr ocess in the PokerOne device begins as soon as the internal stack contains the number of cards needed for two hands, Shuffle Master contends that the Po kerOne therefore operates in accordance with claim 20, even under VendingData’s proposed constructi on, because the PokerOne “forms two hands of cards within the apparat us as the source for the delivery of the first and second hands of cards to the tr ay.” In other words, Shuffle Master argues that the PokerOne device infringes even under Vendi ngData’s proposed claim construction (or at least the construction put forth before the district cour t). That, however, does not appear likely to be the case. In the court below, VendingData argued t hat claim 20 requires “that a hand (or partial hand) of cards be formed inside the shu ffler from a deck of cards” and that “no hands are formed within the PokerOne.” VendingData further argued that the PokerOne “does not form a hand (or partial hand) until the number of cards required for a hand have been delivered one-at-a-time to the exte rnal output tray.” In other words, under VendingData’s proposed construction t he PokerOne likely does not infringe05-1203 9 because no hand or hands are act ually formed within the apparatus; the accumulation of a number of cards equal to two hands is not the same as the formation of a hand or hands within the device. Accordingly, in t he absence of any claim construction by the district court we cannot accept Shuffle Mast er’s argument that t he dispute over claim construction is immaterial to t he outcome of this case and that Shuffle Master is likely to succeed on the merits regardless of which claim construction is ultimately adopted. While claim construction is a question of law, the district court’s analysis is important to the process of claim constructi on, and in this context, as in others, we decline to construe the claim wit hout the guidance of the distri ct court’s construction. See Nazomi Commcns., Inc. v. Arm Holdings, PLC , 403 F.3d 1364, 1371 (Fed. Cir. 2005) (“This court’s review of a district court’s claim construction, albeit without deference, nonetheless is not an independent analysis in the first instance. Moreover, in order to perform such a re view, this court must be furnished ‘sufficient findings and reasoning to permit meaningful appellate scrutiny.’”); Anchor Wall Sys., Inc. v. Rockwood Retaining Walls, Inc. , 340 F.3d 1298, 1311 (Fed. Cir . 2003) (“In order to review the court’s finding of noninfringemen t, we must know what meaning and scope the district court gave to the asserted claims.”); Gechter v. Davidson , 116 F.3d 1454, 1460 (Fed. Cir. 1997) (vacating and remanding decis ion of the Board of Patent Appeals and Interferences because it failed to “set forth . . . specific findings of fact and conclusions of law adequate to form a basis fo r . . . review”; noting that “[c]laim construction must . . . be explicit, at leas t as to any construction disputed by [the] parties”); Graco, Inc. v. Binks Mfg. Co. , 60 F.3d 785, 791 (Fed. Cir. 1995) (“entire omission of a claim construction analysis from the opinion . . . provide[s] an independent05-1203 10 basis for remand”). We therefore vacate the preliminary injunction and remand this case to the district court for further proceedings consistent with this opinion.NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not citable as precedent. It is a public record. 

## United States Court of Appeals for the Federal Circuit

05-1203

SHUFFLE MASTER, INC., Plaintiff-Appellee,

v. VENDINGDATA CORPORATION, Defendant-Appellant.

MAYER, Circuit Judge , dissenting. While I agree that trial courts should prov ide an express claim construction, I do not believe this case requires vacatur and re mand. Instead, because the trial court would not have abused its discretion in granting the preliminary injunction under either party’s proposed claim construc tion, I would affirm. We have recognized that the lack of an ex press claim construction by the trial court may require a remand in certain circumstances. See Graco, Inc. v. Binks Mfg. Co. , 60 F.3d 785, 791 (Fed. Cir. 1995). Howeve r, common sense dictates that if a likelihood of infringe ment is established under both parties’ proposed constructions, then the trial court did not abus e its discretion in granting t he preliminary injunction, solong as all other cr iteria were met. * Cf. Toro Co. v. Deere & Co. , 355 F.3d 1313, 1322 (Fed. Cir. 2004) (affirming an in fringement finding in the abs e n c e of an express claim construction becaus e no claim c onstruction was offered that would avoid infringement); Optical Dis c Corp. v. Del Mar Avion i cs , 208 F.3d 1324, 1334 n.4 (Fed. Cir. 2000) (reviewing a noninfringement judgment on the merits based on a claim construction inferentially set forth by the tr ial court). Here, bearing in mi nd that the appl ication of the claims to the accused device is a question of fact upon which we afford deference to the trial court, Bai v. L & L Wings , 160 F.3d 1350, 1353 (Fed. Cir . 1998), I believe a finding of likelihood of infringement under either party’s proposed claim constructi on is fully supported. It is clear from the evidence, as the court concedes, ante at 6-7, that Shuffle Master establis hed a likelihood of infringe ment under its own proposed c o nstruction. The dis puted contention, however, is whether infringement was s hown to be likely unde r VendingData’s proposed constr uction. VendingData contends that “a set of cards” means “a discrete hand or part of a hand.” Under that cons truction, however, the trial court could have determined that the internal stack consisted of multiple sets, wherein each set consisted of no more than one hand of cards. This determination is possible since the c l aims clearly allow more than one set of c a rds within the appar atus. See U.S. Patent No. 6,655, 684 claim 20 (requiring “ at least one set of cards within the apparatus” (emphasis added)). Although the se ts are not physically divided, they ar e

* Although the trial c ourt must independently c onstrue t he claims and may reject either party’s proposed claim construc tion, it appears that the only possib l e constructions here are those alternatives argued by the parties.

05-1203 2arranged or organized in the internal stack. ** Moreover, requiring that the sets be physically separated, such as placed into slots or trays as in the embodiment disclosed in the specification, would am ount to reading a clai m limitation into t he claims from the specification. See P h illips v. A W H Corp. , 415 F.3d 1303, 1323 (Fed. Cir. 2005) (“[A]lthough the specification often describes very spec ific embodiments of the invention, we hav e repeatedly warned agai nst confining the claims to those embodiments.” (citati ons omitted)). This under standing is further supported by the fact that the Poker O ne recognizes each set within the int e rnal stack as separate and distinct. In particular, the PokerOne deliv ers the first set, which is a single hand of cards, from the in ternal stack to the output tray. After the first hand is removed from the output tray, a second set, whic h also constitutes a single hand of cards, is deliv ered to the output tray. Therefore, a factual determination by the trial court that the PokerOne is likely to infringe under VendingData’s construction is not reversible error. Finally, despite VendingData’ s arguments to the contrary, I belie ve that Shuffle Master sufficiently es tablis hed the remaining criteria necessar y for a preliminar y injunction, including irreparable harm. In particular, Sh uffle Master presented evidenc e that its commercial product under the patent accounts for 50% of its business and that VendingData sought to significa ntly decrease pricing. This evidence is s u fficient to

** After the trial cour t is sued its injunction, the m agistrate conduct e d a claim construction analys is and is sued his recommendations to the district court. VendingData Corp. v. Shuffle Master, Inc. , No. 04-1373 (D. Nev. Sept. 26, 2005) (Report & Recommendation). Although t hese recommendati ons were n o t before the trial court when iss u ing the preliminary injunction and hav e not yet been accepted by the trial court, it is worth noting that the parties appear to have agreed that “forming” means “create” where “create” includes “a rr anging,” “organizing,” and “ordering.” Id. at 4 n.1.

05-1203 3support a f i nding of irreparable harm and t he re maining factors are not ch allenged on appeal. Therefore, bearing in mind that “[t]he decis ion to gr ant a preliminary injunction is within the sound discretion of the district court,” Ranbaxy Pharms., Inc. v. Apotex, Inc. , 350 F.3d 1235, 1239 (Fed. Cir. 2003) (cit ations omitted), I dissent.

05-1203 4