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 

 

04-1571, 05-1153 

IP INNOVATION, L.L.C., 

 Plaintiff-Appellant, 

v. 

ECOLLEGE.COM, 

 Defendant-Appellee, 

and 

DIGITALTHINK, INC., 

 Defendant-Appellee, 

and 

DOCENT, INC., 

 Defendant-Cross Appellant. 

___________________________ 

 DECIDED: November 29, 2005 

___________________________ 

Before NEWMAN, RADER, and DYK, Circuit Judges. 

RADER, Circuit Judge. 

On summary judgment, the United States District Court for the Southern 

District of Texas determined that the defendants did not infringe U.S. Patent No. 

4,877,404 (the ’404 patent). Finding no reversible error, this court affirms the 

decision of the district court. 
I. 

On May 29, 2002, IP Innovation, the owner of the ’404 patent, sued 

WebCT and Thomson Learning for infringement of the ’404 patent. IP Innovation 

later amended its complaint to add six additional defendants. Five of the eight

defendants eventually settled. Only eCollege.com, DigitalThink, and Docent (the 

defendants) continued to litigate the case against them. 

Before trial, the district court granted summary judgment of noninfringement to the defendants because the accused products do not satisfy two 

limitations under the court’s claim construction. See IP Innovation, L.L.C. v.

WebCT, Inc., Civil Action No. H-02-2031 (S.D. Tex. Jul. 1, 2004) (Summary 

Judgment Order); IP Innovation, L.L.C. v. WebCT, Inc., Civil Action No. H-02-

2031 (S.D. Tex. Jan. 12, 2004) (First Claim Construction Order); IP Innovation, 

L.L.C. v. WebCT, Inc., Civil Action No. H-02-2031 (S.D. Tex. Feb. 10, 2004)

(Second Claim Construction Order); IP Innovation, L.L.C. v. WebCT, Inc., Civil 

Action No. H-02-2031 (S.D. Tex. Mar. 5, 2004) (Amended Claim Construction 

Order). The district court reached its claim construction after a Markman hearing 

and extensive briefing by the parties, though it provided no explanation in its 

orders for the meaning attributed to the claims. 

After prevailing on summary judgment, the defendants unsuccessfully

moved for attorney fees. IP Innovation, L.L.C. v. WebCt, Inc., Civil Action No. H02-2031 (S.D. Tex. Oct. 4, 2004) (Order Denying Attorney Fees). IP Innovation 

appeals the grant of summary judgment of non-infringement. Docent cross 

04-1571, 05-1153 2 
appeals the denial of attorney fees. This court has jurisdiction under 28 U.S.C. 

§ 1295(a)(1) (2000). 

II. 

This court reviews a district court’s grant or denial of summary judgment 

under the law of the regional circuit. Chamberlain Group, Inc. v. Skylink Techs.,

Inc., 381 F.3d 1178, 1191 (Fed. Cir. 2004). Under the law of the United States

Court of Appeals for the Fifth Circuit, this court reviews the grant or denial of

summary judgment without deference. Condrey v. Suntrust Bank Of Georgia, ---

 F.3d ---, 2005 WL 2857452, at *4 (5th Cir. 2005) (citation omitted). 

In an exceptional case, a court may award attorney fees. See 35 U.S.C. 

§ 285. “Although the determination of whether a case is exceptional is a 

question of fact reviewed for clear error, this court reviews a district court's

decision to award attorney fees in an exceptional case only for abuses of 

discretion.” Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1460 (Fed. Cir. 

1998) (en banc). 

This court reviews a district court’s denial of a motion for sanctions under 

the law of the regional circuit. See Nystrom v. Trex Co., 2005 WL 2218632 (Fed.

Cir. 2005) (citation omitted). The Fifth Circuit reviews the denial of a motion for

sanctions for an abuse of discretion. Test Masters Educ. Serv. Inc. v. Singh, ---

 F.3d ---, 2005 WL 2650945, at *16 (5th Cir. 2005) (citation omitted). 

III. 

Infringement entails a two-step process: “First, the court determines the 

scope and meaning of the patent claims asserted . . . [and second,] the properly 

04-1571, 05-1153 3 
construed claims are compared to the allegedly infringing device.” Cybor Corp., 

138 F.3d at 1454 (citations omitted). “Step one, claim construction, is a question 

of law, that we review de novo. Step two, comparison of the claims to the 

accused device, is a question of fact, and requires a determination that every

claim limitation or its equivalent be found in the accused device.” N. Am. 

Container, Inc. v. Plastipak Packaging, Inc., 415 F.3d 1335, 1344 (Fed. Cir.

2005) (internal citations omitted). 

In Phillips, this court explained: “It is a ‘bedrock principle’ of patent law that 

‘the claims of a patent define the invention to which the patentee is entitled the 

right to exclude.’” Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) 

(en banc) (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 

381 F.3d 1111, 1115 (Fed. Cir. 2004)). Thus, this court’s analysis begins with a 

review of the claim terms which “‘are generally given their ordinary and 

customary meaning.’” Id. (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 

1576, 1582 (Fed. Cir. 1996)). “The inquiry into how a person of ordinary skill in 

the art understands a claim term provides an objective baseline from which to 

begin claim interpretation.” Id. “Importantly, the person of ordinary skill in the art 

is deemed to read the claim term not only in the context of the particular claim in 

which the disputed term appears, but in the context of the entire patent, including 

the specification.” Id. 

In the ’404 patent, the parties dispute the district court’s interpretation of 

two limitations: (1) embedded in a series of interrelated screens (the embedded 

limitation); and (2) operatively connected (the operatively connected limitation). 

04-1571, 05-1153 4 
The embedded limitation appears in all three of the ’404 patent’s independent

claims. Claim 1 is representative: 

1. An interactive computer software system permitting a user to take a 

pre-selected computer course or access a pictorial data base, 

comprising: 

. . . . 

(c) a graphics computer sub-system operatively connected to said host 

computer sub-system, said graphics computer sub-system 

executing said course upon interrogation by said host computer 

sub-system wherein said course includes a series of interrelated 

pictures displayed by said graphics computer sub-system, said 

series of pictures defining a course responsive to input data from

the user and interactively dialoguing with the user as the user 

progresses through said pre-selected course or data base; and 

(d) wherein said pre-selected computer course comprises a distributed 

program embedded in said series of interrelated pictures. 

’404 patent, col. 8, l. 49-col. 9, l. 3 (emphasis added). The district concluded:

In claims 1, 11, and 14 of the ’404 Patent, “embedded in a series of 

interrelated screens” means: 

The patent covers a program whose graphic elements include their 

instructions in a single file for each screen with all of the control 

codes being directly accessible on the consumer screen. 

Amended Claim Construction Order, slip op. at 1 (emphasis added). 

The specification supports the district court’s interpretation. Turning first

to the background section, prior art systems suffered from a saving format that 

was unalterable during the use of the program. ’404 patent, col. 1, ll. 11-15. 

Specifically, “[r]eferences to pictures [in prior art systems] are embedded in the 

control program along with all the other programming codes necessary to create 

a functional course.” Id., col. 1, ll. 40-43 (emphasis added). In contrast: 

The present invention inverts the normal construction of a course.

Where prior art systems embed picture references into a control 

program, thus, producing a large executable file containing 

thousands of programming language command lines, the present

04-1571, 05-1153 5 
invention embeds the control commands necessary to run the 

course into the graphic pictures the author and operator see. 

These control commands are called microscripts, and may be 

visible or invisible graphical elements of the complete picture 

presented to the human operator. 

Id., col. 1, ll. 51-60 (emphasis added). Thus, “the invention . . . execut[es] the 

distributed ‘program’ that is embedded into the numerous pictures or screens, as 

opposed to the more universal ‘compiled’ program [of prior art systems].” Id., col. 

5, ll. 45-50 (emphasis added). These pictures or screens may, in turn, be stored 

on a disk as individual ASCII coded files, though each picture file is to be totally

self-contained such that modification of one does not affect the others. Id., col. 1, 

l. 68-col. 2, l. 3; col. 2, ll. 28-29. 

Thus, the inventor specified that “the invention” requires an association of

command codes with individual pictures or screens. Moreover the invention 

permits alteration of each picture or screen (e.g., by changing the associated 

command codes) without affecting the other pictures or screens. The district 

court properly articulated that the invention’s graphic elements (i.e., pictures and 

screens) must include their own instructions, which allows independent 

modification of each graphic element. 

In addition, the district court also properly determined that the instructions

(i.e., command codes) for a given picture or screen must be stored in a single

file. IP Innovation concedes that the specification only discloses a “single file”

embodiment, see id., col. 1, l. 68-col. 2, l. 3, but argues against importing this 

limitation into the language of the claims. The ’404 patent, however, repeatedly 

uses the phrase “the present invention” or “the invention of the present

disclosure” in describing its inventive features (including the embedded 

04-1571, 05-1153 6 
limitation), rather than the phrase “in the present embodiment” or “in one 

embodiment.” See, e.g., id., col. 1, ll. 51-52; col. 2, ll. 16-20, 53-59, 62-64; col. 3, 

ll. 11, 45-47, 56-60; col. 5, ll. 47-50, 57-58; col. 7, ll. 17-25. In contrast, the ’404 

patent uses the term “embodiment” in reference to non-inventive features, such 

as the graphic monitor and memory components. See, e.g., id., col. 4, ll. 63-66. 

The only other reference to “embodiments” in the ’404 patent is common 

boilerplate language that does not specifically address the inventive features in 

any detail. Id., col. 4, ll. 17-28; col. 8, ll. 43-47. 

Thus, the ’404 patent does not disclose multiple embodiments having 

different implementations of the embedded limitation as suggested by

IP Innovation. Rather, the 404 patent’s narrow characterization of what “the 

invention” covers in reference to the embedded limitation supports a construction 

requiring location of all of the command codes for a given picture or screen within 

a single file. 

Finally, the district court also properly determined that the command 

codes for a given picture or screen must be directly accessible from the computer 

screen. IP Innovation contends that this feature has absolutely no relation to the 

term “embedded.” To the contrary, the ’404 patent states: “[t]he microscript may 

be embedded anywhere in the pixel pattern of the screen.” Id., col. 2, ll. 30-31

(emphasis added). Embedding the microscript in the pixel pattern of the screen 

means that it must be directly accessible without reference to another file. In 

other words, a user need not access another file to obtain the command code 

when it is already present in the pixel pattern of the screen. This discussion in 

04-1571, 05-1153 7 
the specification supports the district court’s requirement that the code be directly 

assessable on the screen. 

The prosecution history confirms the district court’s interpretation. During 

prosecution, the ’404 patent applicant amended the claims to incorporate the 

“embedded” limitation to traverse a prior art rejection. The applicant also 

included remarks that distinguished the claimed invention over prior art touch 

screen displays, which allegedly did not disclose the “MicroScript principle as

disclosed and claimed by the Applicant[.]” Contrasting the claimed invention 

from these prior art displays, the ’404 patent applicant explained: “[t]his invention 

visibly, physically, and electronically connects the button to its command,

embodied as a MicroScript” by embedding the MicroScript code in each picture 

or screen. This explanation reaffirms the district court’s construction requiring 

direct accessibility of the command code. 

In brief, the district court properly construed the embedded limitation to 

mean providing graphical elements (i.e., individual pictures or screens) with 

corresponding instructions (i.e., command code) in a single file for each graphical 

element, such that all of the control codes for a given graphical element are 

directly accessible on the consumer screen. The narrow characterization of the 

invention in the specification and file wrapper do not permit IP Innovation’s

broader interpretation. 

As to the operatively connected limitation, this limitation appears in two of

the ’404 patent’s three independent claims. Claim 1 is representative: 

04-1571, 05-1153 8 
1. An interactive computer software system permitting a user to 

take a pre-selected computer course or access a pictorial data 

base, comprising: 

. . . . 

(c) a graphics computer sub-system operatively connected to said 

host computer sub-system, said graphics computer sub-system

executing said course upon interrogation by said host computer 

sub-system wherein said course includes a series of interrelated 

pictures displayed by said graphics computer sub-system, said 

series of pictures defining a course responsive to input data 

from the user and interactively dialoguing with the user as the 

user progresses through said pre-selected course or data base; 

. . . . 

’404 patent, col. 8, l. 49-col. 9, l. 3 (emphasis added). The district court 

construed the operatively connected limitation to mean “the graphics computer

subsystem communicates with the host computer subsystem through an 

unmediated mechanism.” Amended Claim Construction Order, slip op. at 1. To 

the contrary, the broad language “operatively connected” does not require 

communication through an unmediated mechanism. 

Claims 1 and 11 use the phrase “operatively connected” to describe the 

communications that take place between a graphics computer sub-system and a

host computer sub-system during operation. The claim language does not state 

or suggest, however, that these communications must be done on a nonmediated communication mechanism. While the specification does contemplate 

a non-mediated communication mechanism, see ’404 patent, col. 4, ll. 58-59, the 

particular communication mechanism in any given system has nothing to do with 

the ’404 patent’s improvement over the prior art. In other words, the manner in 

which the host system and the graphics system communicate has no bearing on 

the modification of one picture or screen without affecting the other screens. 

04-1571, 05-1153 9 
This feature was the ’404 patent’s key innovation as outlined in the specification 

and prosecution history. Thus, this court agrees with IP Innovation that the 

operatively connected limitation does not require communication over an 

unmediated communication mechanism. 

Having determined the proper interpretation of the disputed claim

limitations, the analysis shifts to an examination of the accused products. In all 

of the accused products, an HTML file for the first screen is downloaded and 

displayed when a user initiates the program. Once the first screen has been 

displayed, a user then selects a hyperlink to navigate to the next screen, which 

causes the browser to download an HTML file for the next screen and display 

that next screen for the user. These screens may be edited independently, 

without affecting the other screens. Accordingly, IP Innovation contends that

these screens satisfy the embedded limitation as claimed. IP Innovation 

acknowledges, however, that a hyperlink itself is not the actual command code 

located in the HTML file, but submits a hyperlink is a graphical representation of

the command code which can be made visible using a “right click” function that is

analogous to the transcriber function disclosed in the ’404 patent. See ’404

patent, col. 7, l. 62-col. 8, l. 6. 

Contrary to IP Innovation’s contention, the transcriber function disclosed in 

the ’404 patent has nothing in common with the right click function in the accused 

products. Rather, the disclosed transcriber function converts unreadable 

command code to a human readable font. Notably, the command code in the 

’404 patent is still “embedded” in the pixel format of the screen prior to 

04-1571, 05-1153 10 
transcription, albeit in an unreadable format. ’404 patent, col. 7, l. 58-col. 8, l. 15. 

In other words, the code is literally present on the screen but illegible (e.g., 

converted to hash marks or rendered in a color that matches the background 

color). In contrast, the command code in an HTML file is not physically present 

on the screen. Rather, HTML files direct a browser to retrieve various graphic

files and arrange those graphic files in relation to text in generating a screen 

displayed for the user. The generated screen does not actually contain the 

HTML command codes themselves; instead, the generated screen is simply a 

picture created based on the command codes contained in the HTML file. 

By way of analogy, a building does not contain its architectural blueprints

“embedded” thereon. Rather, blueprints determine the location of various pieces 

to assemble the building, similar to the manner in which an HTML file is used to 

create a picture in the accused products. In contrast, IP Innovation’s disclosed 

transcriber is analogous to a magnifying glass used to read the fine print at the 

bottom of a form contract – the text is physically “embedded” thereon, but is

simply so small that it is invisible to the naked eye until “converted” or

“transcribed” to a larger size. For at least this reason, the district court properly 

concluded that the accused products do not satisfy the embedded limitation, and 

thus properly granted summary judgment of no literal infringement. 

In addition, the accused products do not satisfy the embedded limitation 

under the Doctrine of Equivalents (DOE). Rather, because the ’404 patent 

applicant added the embedded limitation and argued this distinction in traversing 

the noted prior art rejection during prosecution, DOE coverage is unavailable.

04-1571, 05-1153 11 
See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 736 

(2002) (narrowing amendment for purposes of patentability); Eagle Comtronics,

Inc. v. Arrow Communication Labs., Inc., 305 F.3d 1303, 1316 (Fed. Cir. 2002) 

(argument-based estoppel); Elkay Mfg. Co. v. EBCO Mfg. Co., 192 F.3d 973, 979 

(Fed. Cir. 1999) (argument-based estoppel). There has been no showing that 

any of the so-called Festo exceptions to prosecution history estoppel applies

here. See Festo Corp., 535 U.S. at 740-41; Festo Corp. v. Shoketsu Kinzoku 

Kogyo Kabushiki Co., 344 F.3d 1359, 1368 (Fed. Cir. 2003) (en banc). Thus, the 

district court properly granted summary judgment of non-infringement under the 

DOE as well. 

Finally, because this court concludes the accused products do not satisfy 

the embedded limitation literally or under the DOE, this court need not address

whether or not the accused products satisfy the operatively connected limitation.

Therefore this court affirms the grant of summary judgment of non-infringement. 

IV. 

In Docent’s cross appeal, Docent alleges the district court abused its 

discretion in denying its motion for attorney fees. Specifically, Docent argues

that it presented the district court with substantial evidence demonstrating the 

baseless nature of IP Innovation’s suit. Docent faults IP Innovation for not 

explaining the nature of its case or its infringement position after receiving 

Docent’s source code. Essentially, Docent argues that IP Innovation should 

have stipulated to non-infringement rather than forcing the defendants to brief the 

04-1571, 05-1153 12 
summary judgment issues. Docent accuses IP Innovation of being a patent “troll” 

that sought to exact a settlement to avoid litigation expenses. 

Contrary to Docent’s position, IP Innovation provided both the trial court 

and this court with a plausible infringement theory under the claim construction 

adopted by the district court and also under IP Innovation’s proposed claim 

construction. While both courts rejected IP Innovation’s theories, they were not

so implausible as to suggest the district court abused its discretion in denying the 

attorney fee award. Moreover, five companies with products similar to the 

defendant’s products took a license to the patented technology, which 

inferentially supports IP Innovation’s argument that it had reasonable grounds

upon which to initially bring suit against Docent. Thus, this record does not 

suggest that the district court abused its discretion in denying Docent’s motion for 

attorney fees. 

V. 

In conclusion, because the district court properly determined that the 

accused products do not satisfy the embedded limitation, this court affirms the 

grant of summary judgment of non-infringement to the defendants. Additionally,

because the district court did not abuse its discretion in denying Docent’s motion 

for attorney fees, this court also affirms the denial of the fee award requested by

Docent. 

04-1571, 05-1153 13