PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT 

 

CELLPORT SYSTEMS, INC., 

 Plaintiff - Appellant/Cross- 

 Appellee, 

v. 

PEIKER ACUSTIC GMBH & CO. KG, 

Defendant - Appellee/CrossAppellant. 

Nos. 13-1029 & 13-1046 

 

Appeal from the United States District Court 

 for the District of Colorado 

(D.C. No. 1:09-CV-01007-RBJ-MJW)

 

Katherine L. Pringle, Friedman, Kaplan, Seiler & Adelman LLP, New York, New York 

(Jennifer P. Krakowsky, Friedman, Kaplan, Seiler & Adelman LLP, and Bradley M. 

Knepper and Todd P. Blakely, Sheridan Ross P.C., Denver, Colorado, with her on the 

briefs), for the Plaintiff–Appellant/Cross-Appellee. 

Timothy P. Getzoff, Holland & Hart, LLP, Boulder, Colorado (Christopher H. Toll, 

Holland & Hart, LLP, Greenwood Village, Colorado, Marcy G. Glenn, Holland & Hart, 

LLP, Denver, Colorado, and Michael P. Manning, Holland & Hart, LLP, Billings, 

Montana, with him on the briefs) for the Defendant–Appellee/Cross-Appellant. 

 

Before LUCERO, SEYMOUR, and TYMKOVICH, Circuit Judges. 

LUCERO, Circuit Judge. 

FILED 

United States Court of Appeals 

Tenth Circuit 

August 5, 2014

Elisabeth A. Shumaker 

Clerk of Court
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 In October 2004, Cellport Systems, Inc. (“Cellport”) and Peiker Acustic GMBH & 

Co. KG (“Peiker”) entered into an agreement concerning Cellport’s technology for the 

hands-free use of cellphones in vehicles. In 2009, Cellport filed suit against Peiker, 

alleging breach of that agreement and seeking royalties for seven Peiker products. The 

district court awarded Cellport royalties on only two of the products, interpreting an 

acknowledgment in the license agreement as “a rebuttable presumption.” Cellport 

appealed, and Peiker filed a conditional cross-appeal. We affirm in part, reverse in part, 

and remand. 

I

 Cellport, a Colorado corporation, designed technology that allows vehicle owners 

to connect different cellphone models to a single hands-free system—typically a docking 

station that charges the phone, connects to a vehicle’s external antenna, and allows the 

phone to be operated in a hands-free manner—through specialized “Pockets.” Peiker, a 

corporation organized under the laws of Germany, develops and sells products for the 

hands-free use of cellphones. In August 2001, Cellport and Peiker entered into an 

agreement granting Peiker a nonexclusive license to intellectual property owned by 

Cellport. That agreement enabled Peiker to manufacture the universal phone systems that 

Cellport invented, and prohibited Peiker from otherwise competing with Cellport. After 

Cellport filed a lawsuit alleging breach of the 2001 agreement, the parties reached an 

interim settlement and came to terms on a second license agreement (the “License 

Agreement”) in October 2004. 
- 3 - 

Pursuant to the License Agreement, Peiker must pay royalties for products that use 

Cellport’s intellectual property. Specifically, royalties are required for each “Docking 

Station,” “Pocket,” or “Universal Mobile Connectivity Product” Peiker sells, as such 

terms are defined by the agreement.1

 

 1

 The License Agreement defines the terms as follows: 

1.5 Docking Station. “Docking Station” means the components of a 

Universal Mobile Connectivity Product, which utilizes Pockets, other than 

the Pocket. The Docking Station interfaces with vehicle resources, such as 

power, radio, antenna and/or other vehicle electronics, either directly or 

otherwise, for example by connecting to a vehicle bust and also interfaces, 

either directly or through a Docking Plate, with a Pocket. When the 

Docking Station interfaces with the Pocket through a Docking Plate, it is 

sometimes referred to as a “TCU” or “telematics control unit.” 

. . . . 

1.13 Pocket. A “Pocket” is an interchangeable component of a Universal 

Mobile Connectivity Product that includes a separate Docking Station. The 

Pocket holds the portable wireless device and establishes connectivity with 

vehicle resources by connecting either to such Docking Station directly or 

through a Docking Plate. 

. . . . 

1.17 Universal Mobile Connectivity Products. “Universal Mobile 

Connectivity Products” means (i) systems, devices or sets of components 

for using portable wireless devices in vehicles, that work with more than 

one make or model of portable wireless device by substituting 

interchangeable Pockets that establish a physical, electrical and/or logical 

interface for the portable device to the remaining components of the 

system, and consisting of a Pocket/Docking Station configuration, 

Pocket/Docking Plate/Docking Station configuration, or Pocket/Docking 

Plate/TCU configuration, which the Parties acknowledge utilize 

technology, designs or architectures covered by one or more of the claims 

included in the Licensed Patents, . . . or (iii) any other systems, devices or 

sets of components for using portable wireless devices in vehicles, or any 

one or more elements or components thereof, which utilize technology, 

designs or architectures covered by one or more of the claims included in 

the Licensed Patents. 
- 4 - 

In 2009, in the Colorado District Court for Boulder County, Cellport again filed 

suit against Peiker. An amended complaint alleged that Peiker breached section 3.1 of 

the License Agreement, which requires Peiker to pay a royalty based on the number of 

products “sold, distributed or delivered,” and section 3.3 of the License Agreement, 

which obligates Peiker to maintain and share with Cellport a complete accounting of the 

products sold, distributed, and delivered. Peiker removed the suit to federal court. 

Before trial, the district court recognized that the parties had “a fundamental 

disagreement about the scope of the” License Agreement. Whereas Peiker argued that 

Cellport could claim royalties under the License Agreement only on products that 

practiced Cellport’s patents, Cellport contended that it was “entitled to royalties on the 

sale of ‘Licensed Products,’” and that no patent infringement analysis was required by the 

contract. 

Cellport asserted breach by Peiker with respect to seven products: the CKII and 

CKIV pockets sold to Daimler, the CKII/CIB system sold to Volkswagen, the CKII/CIB 

system sold to BMW, the CKVI system sold to Audi, the Bluetooth Peiker System 

Connector (“BT-PSC”), and the Snap-in Adaptor/Baseplate system (“SIAB”).2

 The 

district court concluded that a list of relevant patent claims that Cellport also filed 

“defined the battleground of this case so far as the patent issues are concerned.” That list 

includes: 

 

Royalties are also required to be paid for “Uniphones,” but the parties agree that 

Uniphones are not at issue in the present litigation. 

2

 We use the parties’ terminology to refer to these products. 
- 5 - 

1. Claim 9 of United States Patent 6,341,218 entitled “Supporting and 

Connecting a Portable Phone,” issued December 6, 1999. 

2. Claim[s] 8, 9, 10 and 21 of United States Patent 6,377,825 entitled 

“Hands-Free Wireless Communication in a Vehicle,” issued April 23, 2002. 

3. Claims 1, 2, 5, 6, 8, 9, and 12 of European Patent EP 1266456 entitled 

“HANDS-FREE WIRELESS COMMUNICATION IN A VEHICLE.” 

After a bench trial, the district court concluded that Peiker owed Cellport royalties 

on the CKII and CKIV pockets sold to Daimler. It ruled that subsection 1.17(i) of the 

License Agreement, which sets forth a definition of Universal Mobile Connectivity 

Products, applied to the CKII/CIB system made for Volkswagen, following Peiker’s 

concession on the matter. But Peiker, the court determined, could “rebut” the 

acknowledgement in the License Agreement that such products “utilize technology, 

designs or architectures covered by” Cellport’s intellectual property. It concluded that 

Peiker had carried its burden to demonstrate that the system did not practice Cellport’s 

patents. Because the CKII/CIB system sold to BMW was substantially similar to the 

product sold to Volkswagen, the district court stated that it made “no sense to rule one 

way on the Volkswagen product and another on the BMW product.” For the fifth 

product, the CKVI sold to Audi, the district court did not consider whether the product 

fell within subsection 1.17(i), instead finding “Peiker’s evidence that [the product] does 

not use technology covered by any Cellport patent to be persuasive.” 

 As to the two remaining products—the BT-PSC and the SIAB—the district court 

concluded that they did not fall within the meaning of subsection 1.17(i) but could be 

encompassed within subsection 1.17(iii) if Cellport proved that the products infringed 
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Cellport’s patents. The court determined that the BT-PSC lacked the “main set of 

functionalities” contemplated by Cellport’s U.S. Patent 6,377,825 (the “‘825 Patent”) and 

that it did not fall within the scope of European Patent EP 1266456 (the “‘456 Patent”) 

because it did not “perform audio signal processing.” Similarly, the district court refused 

to grant Cellport royalties for the SIAB because that system did not practice the two 

asserted claims of U.S. Patent 6,341,218 (the “‘218 Patent”). 

 Having concluded that Peiker owed Cellport royalties on two of the seven 

products, the district court awarded Cellport pre-judgment interest at the statutory rate, 

rather than the 1.5% per month rate that Cellport sought pursuant to the License 

Agreement. Cellport was awarded $613,443. The district court exercised its discretion 

not to award costs, determining that neither party was the prevailing party as described in 

the License Agreement. 

To the extent the district court found in favor of Peiker, Cellport appeals.3

 Peiker 

cross-appeals, challenging the district court’s conclusion that its royalty obligations did 

not depend on a potential revocation of the ‘456 Patent. 

II 

A

 3

 The resolution regarding the CKII and CKIV Pockets sold to Daimler is not at 

issue on appeal. 
- 7 - 

We must first address Peiker’s motion to transfer this appeal to the United States 

Court of Appeals for the Federal Circuit or, in the alternative, to dismiss it. Peiker argues 

that Cellport’s right to relief necessarily depends on the resolution of a substantial, 

disputed question of patent law, and thus 28 U.S.C. § 1295(a)(1) gives the Federal Circuit 

exclusive jurisdiction. Although § 1295 was amended in 2011, the parties agree that the 

superseded pre-amendment version applies in the present matter. That version vests the 

Federal Circuit with exclusive jurisdiction “of an appeal from a final decision of a district 

court of the United States, . . . if the jurisdiction of that court was based, in whole or in 

part, on section 1338 of this title.” In turn, § 1338(a) confers on the district courts 

exclusive jurisdiction over “any civil action arising under any Act of Congress relating to 

patents.” 

“It is our obligation always to be certain of our subject matter jurisdiction.” Russo 

v. Ballard Med. Prods., 550 F.3d 1004, 1009 (10th Cir. 2008). Section 1338(a) 

jurisdiction extends 

only to those cases in which a well-pleaded complaint establishes either 

that federal patent law creates the cause of action or that the plaintiff’s right 

to relief necessarily depends on resolution of a substantial question of 

federal patent law, in that patent law is a necessary element of one of the 

well-pleaded claims. 

Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809 (1988). “[A] claim 

supported by alternative theories in the complaint may not form the basis for § 1338(a) 
- 8 - 

jurisdiction unless patent law is essential to each of those theories.” Russo, 550 F.3d at 

1009-10 (quotation omitted).4

Cellport’s complaint states claims based on contract law, not patent law. Thus, the 

district court had jurisdiction pursuant to § 1338(a)—and the Federal Circuit has 

exclusive jurisdiction over this appeal—only if Cellport’s “right to relief necessarily 

depends on resolution of a substantial question of federal patent law.” Christianson, 486 

U.S. at 809. Peiker contends that the Federal Circuit has exclusive jurisdiction because 

the License Agreement “expresses the parties’ intent to tie Peiker’s license and royalty 

obligation to Cellport’s patents, and the determination of whether a product is a Licensed 

Product (and thus requires payment of a royalty) requires a determination of whether 

Peiker’s products infringe any of Cellport’s Licensed Patents.”5

 Resolution of the 

 4

 The Federal Circuit looks to constructive amendments to a complaint to 

determine its jurisdiction. See Chamberlain Grp., Inc. v. Skylink Techs., Inc., 381 F.3d 

1178, 1189 (Fed. Cir. 2004); see also Holmes Grp., Inc. v. Vornado Air Circulation Sys., 

Inc., 535 U.S. 826, 829 n.1 (2002) (noting, but not deciding, issue of “whether the 

Federal Circuit’s jurisdiction is fixed with reference to the complaint as initially filed or 

whether an actual or constructive amendment to the complaint raising a patent-law claim 

can provide the foundation for the Federal Circuit’s jurisdiction”). Because Cellport 

contended throughout trial that its claims sounded in contract, we conclude that no 

constructive amendment occurred. We therefore avoid reaching the issue of whether 

Federal Circuit jurisdiction can be based on constructive amendment of a complaint. 

5

 Licensed Patents are defined by reference to a list of “patents and other rights” 

included in a schedule to the License Agreement. Licensed Products are: 

any of Universal Mobile Connectivity Products, Uniphones, Docking 

Stations and Pockets. Licensed Products may incorporate Peiker 

Intellectual Property and other intellectual property as well. It is not 

necessary that Licensee manufacture, sell, distribute or deliver all of the 

elements of a system, device or set of components for using portable 
- 9 - 

jurisdictional issue depends, according to Peiker, on the proper interpretation of sections 

1.17(i) and 3.5 of the License Agreement. Those sections, it argues, require Cellport to 

demonstrate that the products at issue infringe Cellport’s patents. By contrast, Cellport 

contends that the License Agreement does not necessarily require an infringement 

analysis. We review the district court’s interpretation of the contract de novo. Level 3 

Commc’ns, LLC v. Liebert Corp., 535 F.3d 1146, 1154 (10th Cir. 2008). 

 Sections 1.17(i) and 3.5 both contain acknowledgments by the parties. In 

subsection 1.17(i), the “parties acknowledge” that certain items “utilize technology, 

designs or architectures covered by one or more of the claims included in the Licensed 

Patents.” Similarly, in section 3.5, Peiker “acknowledges that” the described products—

“and any substantially similar products and components”—are “Licensed Products, the 

manufacture, sale, distribution or delivery of which would infringe one or more claims of 

the Licensed Patents, and that Royalties are due in respect of any manufacture, sale, 

distribution or delivery of said Licensed Products by” Peiker. The district court 

concluded that the meanings of sections 1.17 and 3.5 are “arguably” ambiguous, and 

suggested that subsection 1.17(i) failed to “explicitly and clearly state” that the 

acknowledgment “could not be challenged.” Construing “subsection 1.17(i) as creating 

what in substance is a rebuttable presumption,” the district court concluded that if a 

product fits within the terms of sections 1.17(i) or 3.5, “it is presumed . . . it is a Licensed 

Product,” but Peiker could “attempt to rebut the presumption by presenting evidence that 

 

wireless devices in vehicles, for any of such elements manufactured, sold, 

distributed or delivered by it to be a Licensed Product hereunder. 
- 10 - 

a given product does not in fact use any technology covered by a Licensed Patent and 

does not infringe a Licensed Patent.” 

 Royalties from a license agreement do not need to be based on the actual use of a 

patent, and can be dictated by the “convenience of the parties.” Zenith Radio Corp. v. 

Hazeltine Research, Inc., 395 U.S. 100, 138 (1969). Peiker argues that because the 

License Agreement says that the royalty payments are “in consideration for [Peiker’s] 

rights under the several patents included in Licensed Patents,” royalty payments can only 

be due on products that actually infringe Cellport’s patents. But that language does not 

prevent the parties from agreeing that a royalty is due on a non-infringing product if 

doing so would benefit the “convenience of the parties.” And we do not see anything in 

the License Agreement that can transform Peiker’s acknowledgments to rebuttable 

presumptions. See I Oxford English Dictionary 108 (2d ed. 1989) (defining 

“acknowledge” as “to recognize or admit as true”). The Colorado Supreme Court has 

held that acknowledgements, when included in a “formal contract,” can be “the best kind 

of evidence.”6

 In re Schofield’s Estate, 73 P.2d 1381, 1383 (Colo. 1937). Because the 

parties acknowledged that all products falling within the terms of 1.17(i) “utilize 

technology, designs, or architectures covered by one or more of the claims included in the 

Licensed Patents,” no infringement analysis is necessary. By its own force, the contract 

requires Peiker to pay royalties on those products included in sections 1.17(i) and 3.5 of 

the License Agreement. Thus, Cellport’s “right to relief” under sections 1.17(i) and 3.5 

 6

 The parties agree that Colorado law governs their dispute to the extent that 

federal patent law does not apply. 
- 11 - 

does not “necessarily depend[] on resolution of a substantial question of federal patent 

law.” Christianson, 486 U.S. at 809. To the extent that Cellport argues other theories in 

the alternative, its reliance on sections 1.17(i) and 3.5 dictates that patent law is not 

“essential to each of [Cellport’s] theories,” Russo, 550 F.3d at 1010 (quotation omitted). 

The complaint states contract claims, and those claims do not necessarily rely on patent 

law. We therefore have jurisdiction, and Peiker’s motion to dismiss or transfer the appeal 

is denied. 

B

 Our jurisdictional conclusion concerning sections 1.17(i) and 3.5 necessarily 

affects our merits decision. Peiker conceded, and the district court concluded, that 

subsection 1.17(i) applied to the CKII/CIB (Volkswagen). Yet applying its interpretation 

that the contract created a “rebuttable presumption,” the district court determined that the 

CKII/CIB (Volkswagen) did not infringe Cellport’s patents and thus that no royalties 

were due. Because it found the CKII/CIB (BMW) was “substantially similar” to the 

Volkswagen product, the court held that royalties were not due on that system either. We 

have already decided that section 1.17(i) of the License Agreement creates a category of 

products on which royalties are due regardless of whether any of Cellport’s patents are 

infringed. Thus Peiker owes Cellport royalties on those products because both products 

fall within the meaning of subsection 1.17(i). Any evidence that Peiker presented to the 

district court that the products did not infringe Cellport’s patents is irrelevant. On 

remand, the district court should calculate the damages due to Cellport for these two 

products. 
- 12 - 

 Additionally, the district court did not rule on whether subsection 1.17(i) applied 

to the CKVI (Audi), concluding simply that the CKVI did not infringe any of Cellport’s 

patents. Again, infringement is irrelevant if a product is covered by the text of 1.17(i). 

We therefore remand for the district court to consider whether royalties are due on the 

product under the terms of the contract. 

III

 Regarding the BT-PSC, Cellport argues that royalties are due pursuant to 

subsection 1.17(i) or, alternatively, subsection 1.17(iii). 

A 

According to Cellport, the BT-PSC is a Docking Station under the License 

Agreement, and not, as the district court concluded, a Docking Plate. If the BT-PSC is a 

Docking Station, then, in combination with a Pocket, it meets the definition of a 

Universal Mobile Connectivity Product contained in subsection 1.17(i) of the License 

Agreement as a “Pocket/Docking Station” configuration. By contrast, if the BT-PSC is, 

as Peiker claims and the district court held, a Docking Plate, the configuration does not 

trigger subsection 1.17(i). The parties also contest the impact on this analysis of 

Cellport’s admission that a predecessor to the BT-PSC, the Peiker System Connector 

(“PSC”), is a Docking Plate. 

“Docking Plates” and “Docking Stations” are defined in the License Agreement as 

follows: 

1.4 Docking Plate. “Docking Plate” means a device or module which is 

configured to hold a Pocket and establish connectivity between the portable 

wireless device held by such Pocket and vehicle resources such as power, 
- 13 - 

audio, antenna and/or other vehicle electronics, either directly or through a 

Docking Station. 

1.5 Docking Station. “Docking Station” means the components of a 

Universal Mobile Connectivity Product, which utilizes Pockets, other than 

the Pocket. The Docking Station interfaces with vehicle resources, such as 

power, radio, antenna and/or other vehicle electronics, either directly or 

otherwise, for example by connecting to a vehicle bus, and also interfaces, 

either directly or through a Docking Plate, with a Pocket. When the 

Docking Station interfaces with the Pocket through a Docking Plate, it is 

sometimes referred to as a “TCU” or “telematics control unit.” 

The district court concluded that the BT-PSC “is simply a more modern version of the 

PSC” which “creates a connection to the cradle or pocket.” Because the BT-PSC “does 

not provide functionalities for the hands free operation of a phone,” the district court 

determined that “it does not ‘interface’ with vehicle resources,” but only “provides 

connectivity to vehicle resources.” Thus, the court determined that the BT-PSC is not a 

Docking Station. 

 The primary difference between the two defined terms is that a Docking Plate 

“establish[es] connectivity between the portable wireless device” and “vehicle resources 

such as power, audio, antenna and/or other vehicle electronics, either directly or through 

a Docking Station,” whereas a Docking Station “interfaces with vehicle resources, such 

as power, radio, antenna and/or other vehicle electronics, either directly or otherwise” 

and “also interfaces, either directly or through a Docking Plate, with a Pocket.” 

Concluding that the BT-PSC did not “interface” with vehicle resources because “the BTPSC does not provide functionalities for the hands free operation of a phone,” the district 

court held that the product is a Docking Plate, not a Docking Station. 
- 14 - 

Cellport argues that the district court ignored the ordinary meaning of the term 

“interface.” “In the absence of contrary manifestation of intent in the contract itself, 

contractual terms that have a generally prevailing meaning will be interpreted according 

to that meaning.” Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1313-14 

(Colo. 1984). Within the context of the agreement, however, a Docking Plate must be 

different from a Docking Station—they are defined separately, can be used in 

combination, and incur different royalty obligations. Thus, “interfac[ing] with vehicle 

resources,” cannot mean the same thing as “establish[ing] connectivity.” See Fibreglas 

Fabricators, Inc. v. Kylberg, 799 P.2d 371, 377 (Colo. 1990) (en banc) (“The principles 

guiding our construction of the . . . agreement require that we give effect to each part of 

the agreement that is capable of rational meaning.”). But see VII Oxford English 

Dictionary 1101 (2d ed. 1989) (defining “interface” as “[t]o connect (scientific 

equipment) with or to so as to make possible joint operation” and “[t]o come into 

interaction with”). 

“When an ambiguity is found to exist and cannot be resolved by reference to other 

contractual provisions, extrinsic evidence must be considered by the trial court in order to 

determine the mutual intent of the parties at the time of contracting.” Pepcol Mfg. Co., 

687 P.2d at 1314. “This extrinsic evidence may include any pertinent circumstances 

attendant upon the transaction, including the conduct of the parties under the agreement.” 

Id. The district court noted that “Cellport has never claimed that Peiker owed royalties 

on the PSC,” the predecessor to the BT-PSC. Because the shift to the BT-PSC “did not 

make a difference in the functionality of the system,” it concluded that the parties’ course 
- 15 - 

of conduct indicated the BT-PSC fell outside the scope of subsection 1.17(i). We cannot 

conclude that the district court’s factual findings are clearly erroneous, and agree that the 

conduct of the parties clarifies that the term “interface,” as used in the License 

Agreement, requires more than the functionalities provided by the PSC and BT-PSC. 

B

Royalties are also due, Cellport contends, under subsection 1.17(iii) of the License 

Agreement because the BT-PSC infringes the ‘456 Patent. In particular, Cellport argues 

that the district court improperly confined the meaning of the term “signal processing” 

based on examples in the patent specifications.7

 The district court concluded that the BTPSC “does not perform audio signal processing, ie., ‘signal processing functions’ such as 

echo cancellation, frequency equalization and noise reduction.” 

“Claim construction is an issue of law we review de novo. . . . On the other hand, 

the determination as to whether the claims, as properly construed, read on the accused 

 7

 Peiker contends that Cellport’s argument regarding the interpretation of “signal 

processing functions” in the ‘456 Patent has been waived because Cellport cannot raise a 

new claim construction dispute after trial. See Conoco, Inc. v. Energy & Envtl. Int’l, 

L.C., 460 F.3d 1349, 1359 (Fed. Cir. 2006) (“[L]itigants waive their right to present new 

claim construction disputes if they are raised for the first time after trial.”). Cellport did 

not request construction of the term below. If a party fails to request construction of a 

claim, it “implicitly concede[s] that the meaning of the terms” in the claim “are clear and 

not in need of construction.” Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1360 

(Fed. Cir. 2004). Cellport asserts that “it is not arguing that the claim needs to be 

construed at all,” but rather that the district court made an error of law and deviated from 

the plain language of the patent. The Federal Circuit in Conoco proceeded to review the 

construction of a term de novo even after a party “waived its right to have that term 

construed” because the district court “explicitly construed the term.” 460 F.3d at 1359. 

Similarly, in the present matter the district court defined “signal processing functions” as 

“audio signal processing.” We therefore review the arguments de novo. 

The district court also determined that the BT-PSC did “not practice the ‘825” 

Patent. That conclusion has not been appealed. 
- 16 - 

device presents an issue of fact which, following a bench trial, we review for clear error.” 

JVW Enters., Inc. v. Interact Accessories, Inc., 424 F.3d 1324, 1329 (Fed. Cir. 2005) 

(quotation omitted). Courts 

do not import limitations into claims from examples or embodiments 

appearing only in a patent’s written description, even when a specification 

describes very specific embodiments of the invention or even describes 

only a single embodiment, unless the specification makes clear that the 

patentee . . . intends for the claims and the embodiments in the specification 

to be strictly coextensive. 

Id. at 1335 (quotation omitted). Nonetheless, the Federal Circuit has “long emphasized 

the importance of the specification in claim construction.” Phillips v. AWH Corp., 415 

F.3d 1303, 1315 (Fed. Cir. 2005) (en banc). “We cannot look at the ordinary meaning of 

the term . . . in a vacuum. Rather, we must look at the ordinary meaning in the context of 

the written description and the prosecution history.” Medrad, Inc. v. MRI Devices Corp., 

401 F.3d 1313, 1319 (Fed. Cir. 2005) (quotation omitted). “[T]here is sometimes a fine 

line between reading a claim in light of the specification, and reading a limitation into the 

claim from the specification.” Bell Atl. Network Servs., Inc. v. Covad Commc’ns Grp., 

Inc., 262 F.3d 1258, 1270 (Fed. Cir. 2001) (quotation omitted). Moreover, “[o]ther 

claims of the patent in question, both asserted and unasserted, can also be valuable 

sources of enlightenment as to the meaning of a claim term.” Phillips, 415 F.3d at 1314. 

We agree with the district court that both of the independent claims identified by 

Cellport from the ‘456 Patent require an interface module that performs signal processing 

functions. Although neither claim defines “signal processing functions,” examples of 

“signal processing” are elsewhere in the ‘456 Patent. For instance, dependent claim 7 
- 17 - 

claims a system “wherein[] said signal processing functions include substantially 

removing noise, acoustic echoes and line echoes from audio signals.” Such examples 

correlate with the district court’s construction of “signal processing functions” as “audio 

signal processing.” However, the Federal Circuit has “frequently” reiterated that “the 

presence of a dependent claim that adds a particular limitation raises a presumption that 

the limitation in question is not found in the independent claim.” Liebel-Flarsheim Co. v. 

Medrad, Inc., 358 F.3d 898, 910 (Fed. Cir. 2004). 

Moreover, although the specifications of the ‘456 Patent refer to signal processing 

in multiple instances, and include references to audio functions, such examples do not 

clearly reflect that they are intended to encompass the breadth of the term “signal 

processing.” See JVW Enters., Inc., 424 F.3d at 1335. To the contrary, the specifications 

offer “[o]ther potential functions of the interface module digital signal processor,” 

including “interfacing the system to other communication devices, such as personal 

Information managers (PIMs), GPS receivers, vehicle communications busses, Bluetooth 

devices, and other devices.” Jeffrey Golden, an expert witness called by Peiker, testified 

that the Bluetooth chip in the BT-PSC performs “a lot of signal processing.” Based on 

this evidence, we cannot agree with the district court that the term “signal processing” 

refers only to “audio signal processing.” We further conclude that the BT-PSC does 

perform “signal processing functions.” 

Because the district court only briefly addressed the relationship between the BTPSC and the ‘456 Patent, we remand to allow the district court to determine whether—
- 18 - 

considering that the BT-PSC performs signal processing functions—the BT-PSC 

practices the ‘456 Patent and to calculate, if necessary, the royalties owed to Cellport.8

IV 

A

 Raising three arguments regarding the SIAB, Cellport initially contends that the 

SIAB falls within the meaning of subsection 1.17(i) because it constitutes a Pocket and 

Docking Station configuration. The district court disagreed, concluding that the 

“Baseplate” is not a Docking Station, but rather “a phone charger, connecting only to the 

vehicle’s power system and to an external antenna if the vehicle has one.” It found that 

the SIAB is “the functional equivalent of a [U]SB cord plugged into the vehicle’s 

cigarette lighter that charges the phone.” Cellport argues that this holding incorrectly 

determined that a Docking Station must have “processing capability.” However, as 

discussed above, a Docking Station must “interface with vehicle resources,” which 

requires that it do more than “establish connectivity.” After reviewing the record, we are 

not convinced that the district court’s factual conclusion that the Baseplate only offers 

connection to the power system and external antenna was erroneous.

B 

Alternatively, Cellport argues that it is entitled to royalties for the SIAB pursuant 

to subsection 1.17(iii) of the License Agreement. It contends that subsection 1.17(iii) 

 8

 In its brief, Cellport argues that the phrase “covered by” in subsection 1.17(iii) of 

the License Agreement does not require an infringement analysis. To the extent the 

argument applies to the BT-PSC, we reject it for the reasons described below. 
- 19 - 

does not require an infringement analysis but instead applies if any portion of a claim was 

featured in a product. 

“[I]t is fundamental,” the district court said, “that if a product does not infringe a 

patent, then the patent holder cannot demand royalties.” We agree, at least with respect 

to the language of subsection 1.17(iii), which (unlike subsection 1.17(i)) contains no 

“acknowledgment” that certain devices utilize covered technology. Substantial authority 

equates “covered by,” the phrase used in subsection 1.17(iii), with infringement. E.g., 

Jang v. Boston Scientific Corp., 532 F.3d 1330, 1331 (Fed. Cir. 2008) (right to payments 

depends on whether devices “were ‘covered by’ (i.e., would have infringed)” patents); 5 

Donald S. Chisum, Chisum on Patents § 16.02[2] (2010) (“One making, using or selling 

matter covered by a patent without authority of the owner infringes regardless of 

knowledge or intent.”).9

 

Although the License Agreement defines “Licensed Patents” to include “patents 

and other rights listed” in a schedule to the agreement, the definition does not preclude 

application of a patent infringement analysis. Rather, the referenced schedule lists only 

patents and patent applications, including “patents issued after the effective date of this 

Agreement to Cellport and covering the same inventions described in the foregoing 

 9

 Peiker’s course of conduct, Cellport contends, reflects that Peiker understood 

subsection 1.17(iii) not to require proof that a product infringed a patent. See E. Ridge of 

Fort Collins, LLC v. Larimer & Weld Irrigation Co., 109 P.3d 969, 974-75 (Colo. 2005) 

(course of conduct in contract interpretation). The district court, however, accepted 

Peiker’s testimony that the relevant conduct was premised on Peiker’s understanding that 

the Snap-in Adaptor infringed a claim in the ‘218 patent that is no longer operative. And 

the district court noted that Cellport later “seems to have agreed” that the Snap-in 

Adaptor did not practice the patent and that Peiker did not owe a royalty on the product. 

The district court’s conclusions are supported by the evidence. 
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patents or patent applications, or improvements or enhancements of the foregoing patents 

or patent applications.” Thus, the “other rights” included in the License Agreement were 

pending or otherwise potential future patents, to which an infringement analysis 

conceivably could be applied. Because that analysis is what the language of the License 

Agreement requires, we do not need to consider whether there is evidence that the SIAB 

features a portion of any claim from Cellport’s patents. 

C 

In addition to its contract arguments, Cellport argues that the district court erred in 

its interpretation and application of the ‘218 Patent. The district court held that the SIAB 

did not infringe claim 9 of the ‘218 Patent on two grounds, and we can affirm on either. 

See Elwell v. Byers, 699 F.3d 1208, 1213 (10th Cir. 2012) (“We can affirm a lower 

court’s ruling on any grounds adequately supported by the record . . . .”). Claim 9 of the 

‘218 Patent specifies that latch members “move from” a “first position to” a “second 

position to secure said interface module to said pocket member.” The district court found 

“that the Snap-in-Adaptor has a single position that moves and returns to its original 

position,” and that the “latch is in the same position regardless whether the Snap-inAdaptor is engaged or disengaged.” 

We are directed to the testimony of two witnesses who stated at trial that the latch 

members have different positions. But one of the witnesses who so testified did so in 

contravention of his deposition testimony, in which he had agreed that the latch members 

are in the same position whether the Snap-in-Adaptor is disengaged or engaged. That 

witness further testified that he had read the district court’s claim construction before 
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changing his position. The district court also had the opportunity to personally witness 

the latching mechanism. We cannot conclude that the district court’s findings were 

“without factual support in the record” and, “after reviewing all the evidence,” we are not 

“left with a definite and firm conviction that a mistake has been made.” Sw. Stainless, 

LP v. Sappington, 582 F.3d 1176, 1183 (10th Cir. 2009). 

V

 With respect to the pre-judgment interest rate awarded, Cellport challenges the 

district court’s application of a statutory rate instead of the 1.5% figure named in the 

Licensing Agreement. The relevant section provides as follows: 

3.4 Audit Rights. At Cellport’s request, Licensee shall give an independent 

auditor, appointed by Cellport, access to all of Licensee’s and its 

Subsidiaries’ accounting and other records relevant to this Agreement at 

least once per calendar year (or more frequently upon Cellport’s request if 

Cellport has reasonable cause to examine such records more frequently) for 

the purpose of verifying royalty payments due to Cellport. Access to such 

accounting records shall be given to such auditor upon reasonable notice at 

a time mutually convenient for the parties hereto. Licensee and its 

subsidiaries shall cooperate fully with Cellport’s and/or its agents 

reasonable requests in the review of such records. All underpayments of 

Royalties shall bear interest at the rate of 1.5% per month from the date due 

to the date paid. Cellport shall bear the expenses of any such audit unless 

the audit reveals an underpayment to Cellport of greater than 5% of the 

amount due for any quarter audited, in which case the Licensee shall pay all 

costs and expenses of the audit. 

(Emphasis added.) According to Cellport, the License Agreement’s reference to the rate 

contains no limitations on its application. As the district court explained, however, the 

sentence is in the middle of a paragraph devoted to Cellport’s right to verify the royalty 

payments it is owed through audits. And we must interpret this provision in its context. 

Cf. Rohn v. Weld Cnty. Bank, 395 P.2d 1003, 1005 (Colo. 1964) (error to interpret words 
- 22 - 

in contract “alone and out of context”). We agree with the district court that the interest 

rate was contractually intended to apply only to accounting disputes. The application of 

the statutory rate was appropriate. 

VI

 Finally, Cellport contends it was error for the district court to deny attorneys’ fees, 

costs, and expenses pursuant to the License Agreement. The License Agreement 

provides that the “prevailing party” in a suit regarding the agreement “shall be entitled to 

recover its reasonable attorney’s fees, costs and expenses in addition to any other 

damages.” The district court determined that neither party was “[t]he prevailing party” 

for purposes of the agreement because Cellport prevailed with respect to two of the seven 

disputed products, and obtained only a small percentage of the damages it sought. We do 

not disagree. Upon remand, however, the balance will have shifted to some extent, and it 

may shift further. We therefore remand to the district court to vacate its previous 

determination and reconsider the award of fees, costs, and expenses given the new terrain 

in the case. 

VII

We turn now to Peiker’s cross-appeal, which challenges the district court’s order 

interpreting the License Agreement to require “the payment of royalties on any sale of 

products utilizing Cellport’s patented technology, wherever the products were made, sold 

or used, so long as any Licensed patent remains in effect.” While the suit was pending in 

the district court, the ‘456 Patent was revoked. The revocation is currently suspended 

because Cellport has sought an appeal. European Patent Convention, Art. (106)(1). 
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Peiker moved the district court for a ruling that the ‘456 Patent was “eliminated from this 

case,” and that Cellport’s right to royalties is limited to the temporal and territorial scope 

of the patents at issue. The district court recognized that the appeal regarding the ‘456 

Patent was pending, but nonetheless ruled on the interpretation of the contract, in a 

manner “consistent with Cellport’s position.” On appeal, Peiker argues that the district 

court’s ruling should be reversed because “if no Licensed Patent applies to a particular 

product, Peiker owes no royalty.” Cellport replies that Peiker’s cross-appeal is not ripe 

because the appeal regarding the ‘456 Patent has yet to conclude. 

“[T]his court is compelled to assure itself that it has subject matter jurisdiction,” 

and ripeness is a “jurisdictional prerequisite.” Friends of Marolt Park v. U.S. Dep’t of 

Transp., 382 F.3d 1088, 1093 (10th Cir. 2004) (quotation omitted). Moreover, “we have 

an independent duty to ensure that the district court[] properly asserted jurisdiction.” 

Qwest Corp. v. Pub. Utilities Comm’n of Colo., 479 F.3d 1184, 1191 (10th Cir. 2007) 

(quotation omitted). “The ripeness doctrine aims to prevent courts from entangling 

themselves in abstract disagreements by avoiding premature adjudication.” Awad v. 

Ziriax, 670 F.3d 1111, 1124 (10th Cir. 2012) (quotation omitted). “[E]ven if all the 

relevant facts regarding a particular legal issue are known or knowable, a court does not 

have jurisdiction to resolve the issue unless that issue arises in a specific dispute having 

real-world consequences.” Columbian Fin. Corp. v. BancInsure, Inc., 650 F.3d 1372, 

1379 (10th Cir. 2011). 

As the district court recognized, Peiker’s request for the interpretation (which 

resulted in a beneficial interpretation for Cellport) was not based on a present conflict. 
- 24 - 

Peiker asks us to find that the district court’s determination was permissible as a pure 

question of law and suggests that failing to address the issue would impose hardship on 

Peiker because its ability to challenge the district court’s determination would be 

contingent on action that may not occur until after the litigation is complete. 

The Supreme Court has commented on the need “to prevent federal-court litigants 

from seeking by declaratory judgment to litigate a single issue in a dispute that must 

await another lawsuit for complete resolution.” Calderon v. Ashmus, 523 U.S. 740, 748 

(1998). In this case, the legal issue at the heart of the cross-appeal has not “taken on 

fixed and final shape.” Pub. Serv. Comm’n v. Wycoff, 344 U.S. 237, 244 (1952). Peiker 

argues that a failure to rule on the matter could result in additional litigation, but neither 

party has demonstrated how the district court’s ruling could have any material effect 

before the end of the ‘456 Patent appeal. We agree with Cellport that the issue is not 

ready for appellate review and further hold that it was not ripe for review by the district 

court. “It is not the role of federal courts to resolve abstract issues of law. Rather, they 

are to review disputes arising out of specific facts when the resolution of the dispute will 

have practical consequences to the conduct of the parties.” Columbian Fin. Corp., 650 

F.3d at 1376. Therefore, we remand the issue to the district court with instructions to 

vacate its judgment on the matter. See id. at 1385. 

VIII

 For the foregoing reasons, we AFFIRM in part, REVERSE in part, and 

REMAND to the district court for further proceedings consistent with this decision. 

Peiker’s motion to dismiss or transfer the appeal is DENIED.