relatively smaller origin free wheel sprocket to a relatively larger destination free
wheel sprocket, which comprises:

First rotating said shift actuator a sufficient amount to take up
substantially all of the cumulative lost motion in said derailleur
mechanism and said cable means; and then rotating said shift
actuator a further amount so as to move the bicycle chain at least
substantially the distance between the centers of said origin and
destination sprocket.

SRAM argues that the undisputed facts demonstrate that the AD-II devices infringe all
elements of Claim 16, when the term “shift actuator” is given its ordinary meaning as required by

SunRace, 336 F.3d at 1307-08.

As an initial matter, AD-II argues that SRAM’s refiling of the claims based on the
reexamined ‘291 patent is premature under the terms of the Stipulation. AD-II is wrong.
Paragraph 8 of the Stipulation provides that if the Federal Circuit “does not affirm the claim
construction” in SunRace, then SRAM may elect to refile its claim with respect to the
reexamined ‘291 patent within 60 days of any of the following events:

(a) if the Federal Circuit remands an issue or issues of claim construction to the

district court and the SunRace litigation resumes as a result of that ruling, then

SRAM may elect to refile its claim against AD-II after the district court in the

resumed SunRace litigation construes the relevant claims of the reexamined ‘291
patent;

(c) if the Federal Circuit construes the relevant terms of the reexamined ‘291

patent and no issues of claim construction remain for the district court, then

SRAM may elect to refile its claim against AD-II within 60 days following the
issuance of the Federal Circuit’s mandate in conjunction with that appeal.

AD-II argues that SunRace simply reversed ‘the district court’s construction of the term

“shift actuator,” and then remanded for the district court to construe the term anew, therefore

triggering subsection (a) of paragraph 8 of the Stipulation. That position is incorrect. The


F.3d 916 (Fed. Cir. 2004), for the first time, strongly suggests that each defense must be pleaded
separately.

Once again, AD-II’s reading of the relevant case law is incorrect. University of Rochester
clearly states that, “ in addition, and most significantly, our precedent clearly recognizes a
separate [from the enablement and best mode] written description requirement.” Id. at 922.
Indeed, when discussing the three requirements of § 112, { 1, the court, citing In re Alton, 76
F.3d 1168, 1172 (Fed. Cir. 1996), noted that although there is often significant overlap between
the three requirements, they are nonetheless independent of each other. Id. at 921. Moreover, as
University of Rochester makes clear, the Supreme Court in 2002 had acknowledge the written
description requirement as distinct not only from the best mode requirement, but also from
enablement. Id. (citing Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722,
736 (2002)). Thus, University of Rochester lends no support for AD-II’s mistaken belief that its
enablement defense encompassed its written description defense, and provides no justification
for its failure to raise the defense in its initial pleadings.

Finally, leave to amend should be denied where, as here, the amendment would be futile.
See Foman v. Davis, 371 U.S. 178, 182 (1962). As noted, the Federal Circuit in SunRace
reviewed the written description and found nothing lacking. Indeed, the Federal Circuit firmly
and specifically rejected the notion that the ‘291 patent is limited to a shifter using cams -- the
very proposition AD-II seeks to advance in the instant case. SunRace, 336 F.3d at 1305.

Accordingly, AD-II’s motion to amend is denied.



SunRace court “recognize[d] that the written description does not explicitly address the claim
method,” instead focusing “exclusively on the gear shifting systems themselves,” 336 F.3d at
1315, unless the method claimed in Claim 16 is limited to the operation of the apparatus
disclosed in the specification, claim is invalid under § 112, { 1 because the method is not enabled
by the specification.

This argument was raised and rejected by the Federal Circuit in SunRace. “[N]Jothing in
the written description indicates that the invention is exclusively directed toward cams or
suggests that systems not employing cams are outside the scope of the invention. Thus, while it
is clear that the patentee was primarily focused on an embodiment of his invention using a cam,
nothing in the patent limits the claim to that embodiment.” Id. At 1305. Therefore, it is clear
that the Federal Circuit regarded the written description as sufficient to satisfy 1. The written
description provides sufficient detail so that one skilled in the art can make and use the invention.
It need not do more. An applicant is not required to describe every possible future embodiment

of his invention. Id. At 1305; Rexnord Corp. v. Laitram Corp., 274 F.3d 1336, 1344 (Fed. Cir.

2001).

Next, AD-II argues that if Claim 16 is construed to read on all shifters, including those
without cams, the claim is invalid as reading on some unspecified prior art. Therefore, AD-II
asserts, because claims must be construed to preserve their validity, either the “cable control
means” of Claim 16 requires the use of special cable connecting to a cam as described in the
specification, or the entire claim must be construed as a step-plus-function claim under 35 U.S.C.

§ 112, 4 6.



SunRace court reversed the district court’s construction and held that “the ordinary meaning of

the term shift actuator controls. . ..” SunRace, 336 F.3d at 1307-08. The district court had
already held, and the parties had agreed, that the ordinary meaning of the term shift actuator is “a
mechanism that controls the changing of gears.” Id. at 1301-02. It was that definition that the
Federal Circuit determined should apply. Id. at 1307-08. The court then remanded to the district
court for proceedings consistent with its opinion, meaning that the district court should continue
the case with the term shift actuator construed as a mechanism that controls the changing of
gears. Therefore, subparagraph (c) of the Stipulation applies, and SRAM’s refiling is timely.

Next, AD-II argues that despite the plain wording of Claim 16 and the Federal Circuit’s
opinion in SunRace, any construction of the claim that is not limited to the particular cam
mechanism disclosed in the specification’s description of the preferred embodiment renders the
claim invalid for two reasons: (1) the claim fails to mect the enablement requirement of § 112, {
1; or (2) the claim must be construed as a step-plus-function claim under § 112, | 6, which would
incorporate the cam mechanism, or would be invalid as reading on prior art. AD-II is wrong on
both arguments.

35 U.S.C. § 112, [| dictates that a patent specification shall contain:

a written description of the invention, and of the manner and process of making it

and using it, in such clear, concise, and exact terms as to enable any person skilled

in the art to which it pertains, or with which it is mostly connected, to make and

use the same, and shall set forth the best mode contemplated by the inventor of

carrying out his invention. so

This paragraph contains three separate requirements: (1) the written description

requirement; (2) the enablement requirement; and (3) the best mode requirement. AD-II’s first

argument focuses on the enablement requirement. Specifically, AD-II argues that because the



of said origin and destination sprockets. Claim 16 also describes the acts taken to implement the
steps: (1) rotating the shift actuator a sufficient amount to take up substantially all of the
cumulative lost motion; and (2) rotating the shift actuator a further amount so as to move the
bicycle chain. Because the claim contains step plus function with acts, § 112, | 6 is not
implicated. Id.

Finally, AD-II argues that even if Claim 16 is construed broadly as the Federal Circuit has

required in SunRace, summary judgment of infringement is inappropriate because there remains

a question of fact as to whether AD-II’s shifters take up “substantially all of the cumulative lost
motion” in the cable control means and derailleur in step 1. Unfortunately for AD-II, it own
expert, SRAM’s expert, and AD-II Fed. R. Civ. P. 30(b)(6) deponent have all indicated that AD-
II devices performed the method described in step'1, albeit without a cam. Accordingly, because
AD-U’s devices satisfy all elements of Claim 16 on the reexamined ‘291 patent, SRAM’s motion
for summary judgment of infringement is granted.

I. AD-II’s Motion to Amend

After SRAM moved for summary judgment, AD-II moved to amend its pleadings to add
a defense that the ‘291 patent was invalid for failure to comply with the written description
requirement of § 112,41. AD-II’s excuse for seeking leave at such late date is that it “believed
that its pending defense of invalidity for failure to satisfy the enablement requirement
encompassed the written description defense, based on prior Federal Circuit authority indicating
that the purpose of the written description is to provide enabling disclosures. AD-II argues that

the Federal Circuit’s recent opinion in University of Rochester v. G.D. Searle & Co. Inc., 358



‘Minute Order Form (0697)

United States District Court, Northern District of Illinois

Name of Assigned Judge Robert W. Gettleman Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 00 C 6675 DATE July 20, 2004
CASE SRAM Corp. v AD-II Engineering, Inc.
TITLE

[In the following box (a) indicate the party filing the motion, e.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.)

(11)

MOTION:

DOCKET ENTRY:

(1) Oo Filed motion of [ use listing in “Motion” box above.]

(2) im} Brief in support of motion due

3) Oo Answer bricf to motion due___. Reply to answer brief due.

(4) a Ruling/Hearingon_ set fort

(5) a Status hearing set for 8/3/04, at 9:00 a.m.

(6) o Pretrial conference[held/continued to} [set for/re-set for]on__—_setfor_ at

(7) Oo Trial{set for/re-set for]on__at

(8) a (BenclvJury trial] [Hearing] held/continued to__at

(9) i) This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOPRCP4(m) OGeneral Rule21 OFRCP41(aX1) CO FRCP41(a)(2).

a0) «= [Other docket entry]

Memorandum opinion and order entered. Accordingly, SRAM’s motion for summary
judgment of infringement is granted and AD-II’s motion to amend is denied.

@ = [For further detail sec order attached to the origirial minute order.]

No notices required, advised in open court,

No notices required.

Notices mailed by judge’s staff.
Notified counsel by telephone.

Docketing to mail notices.

Mail AO 450 form pty initiate

Copy to juulge/magistrate judge.

date mailed notice

Hoi Md 02 Vit Nol
id

Date/time received in
central Clerk's Office mailing deputy initials

courtroom
GDs deputy’s
initials



CONCLUSION

For the reasons set forth above, SRAM’s motion for summary judgment of infringement
is granted and AD-II’s motion to amend is denied. This matter is set for a report on status on
August 3, 2004, at 9:00 a.m.

ENTER: July 20, 2004

Glan Gig

Robert W. Gettleman
United States District Judge

10



This argument fails on a number of accounts. First, AD-II fails to identify a single prior
art reference that it contends invalidates Claim 16. As SRAM notes, at least 90 prior art
references were considered during the reexamination process, and the patent examiner
determined Amended Claim 16 to be valid over all of them. Additionally, the Federal Circuit
reviewed the prosecution history and explained why Claim 16 was valid over the prior art,
without any cam mechanism requirement. SunRace, 336 F.3d at 1300-01.

Moreover, Claim 16 cannot be considered a step-plus-function claim pursuant to § 112,
6. Even the case on which AD-II relies, 0.1. Corp. v. Tekmar Co., 115 F.3d 1576, 1582-83
(Fed. Cir. 1997), fails to support its argument. 35°U.S.C, § 112 6 provides that:

An element in a claim for a combination may be expressed as a means or step for

performing a specified function without the recital of the structure, material or acts in

support thereof, and such claims shall be construed to cover the corresponding structure,
material, or acts described in the specification and equivalents thereof.

In discussing the meaning of this paragraph, and the terms used therein, O.I. Corp. states
(id. (emphasis in original), that:

the word ‘means’ clearly the refers to the generic description of an apparatus

element, and the implementation of such a concept is obviously by structure or

material. We interpret the term ‘steps’ to refer to the generic description of

elements of a process, and the term ‘acts’ to refer to the implementation of such

steps. This interpretation is consistent with the established correlation between

means and structure. In this paragraph, structure and material go with means, acts

go with steps. Of course, as we have indicated, § 112, {| 6, is implicated only

when means plus function without definite structure are present, and that is

similarly true with respect to steps, that the paragraph is implicated only when

steps plus function without acts are present.

In the instant case, as AD-II’s own brief (p. 11) admits, “steps plus function with acts are

present.” Claim 16 describes the steps: (1) taking up substantially all of the cumulative lost

motion; and (2) moving the bicycle chain at least substantially the distance between the centers


After SRAM’s summary judgment motion was fully briefed, AD-II moved to amend its
pleading, seeking to add a defense of invalidity of the ‘291 patent for failure to meet the written
description requirement of 35 U.S.C. § 1291. The court stayed ruling on the summary judgment
motion until AD-II’s motion to amend was fully briefed. Both motions are now fully briefed
and, for the reasons set forth below, SRAM’s motion for summary judgment is granted and AD-
Ii’s motion to amend is denied.

DISCUSSION’

I. SRAM’s Motion for Summary Judgment

SRAM has moved for summary judgment of infringement on Claim 16 of its reexamined
‘291 patent. The ‘291 patent “contains both method and apparatus claims related to gear-shifting
on multi-speed bicycles through the use of a shift actuator that is designed to effect precise
control over the movement of the derailleur.” SunRace, 336 F.3d at 1299. The apparatus claims
include the limitation of a “hand grip shift actuator cam means” or a “hand grip shift actuator
indexing cam means.” Id. The method claims of the reexamined ‘291 patent, including Claim
16, make no reference to a cam. Id.

Claim 16, as found in the reexamined ‘291 patent, provides:

In a bicycle derailleur gear shifting system having a rear derailleur shifting

mechanism, a shift actuator rotatably mounted on a bicycle handle bar generally

coaxially of the handlebar, said shift actuator being mounted on and engaged over

an outside of the handle bar inboard of a fixed hand grip on an end of the

handlebar, and contro! cable means operatively connecting said actuator to said
shifting mechanism, a method of performing down-shifting events from a

'A discussion of the history of the litigation between SRAM and AD-II and a description
of the devices and patents in question can be found in this court’s opinion granting summary
judgment of infringement to SRAM on its ‘000 patent. SRAM Corp. v. AD-II Engineering, Inc.,
252 F. Supp.2d 712 (N.D. Ill. 2003).


Corp., Case No. C00-03217VRW(N.D. Ca. 2001), narrowly construing the term “shift actuator”
as used in Claim 16 of the reexamined ‘291 patent as “a mechanism for controlling the changing
of gears that contains a cam configured with a series of lobes and volleys that rotates so as to
engage a cam follower.”

Because it is undisputed that AD-II’s devices:in question do not contain a cam and thus
do not infringe under that construction, the parties entered into the Stipulation dismissing the
claims based on the reexamined ‘291 patent while SRAM pursued its appeal in SunRace. Under
that Stipulation, SRAM reserved the right to refile its claims against AD-II within 60 days
following the issuance of the Federal Circuit’s mandate in SunRace “if the Federal Circuit
construes the relevant terms of the reexamined ‘291 patent and no issues of claim construction
remain for the district court.”

On July 17, 2003, the Federal Circuit reversed the district court in SunRace, and
construed the term “shift actuator” in the ‘291 patent to mean “a mechanism that controls the
changing of gears.” SunRace Root Enterprises Co., Ltd. v. SRAM Corp., 336 F.3d 1298, 1302,
1307-08 (Fed. Cir. 2003). Consistent with the terms of the Stipulation, SRAM has refiled its
claim that AD-II’s devices infringe Claim 16 of the reexamined ‘291 patent. SRAM thereafter
moved for partial summary judgment of infringetitent of Claim 16. AD-I[ contested, arguing first
that SRAM’s refiling of its claim was premature under the terms of the Stipulation, second that
once properly construed Claim 16 must be limited to the apparatus disclosed in the specifications
or it is invalid, and third that there are material issues of fact as to when and how AD-II’s shifters
take up “lost motion” and whether the shifters have the “control cable means” required by Claim

16.



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

SRAM CORPORATION,
Plaintiff,
ve

AD-II ENGINEERING, INC.,

Defendant.

AD-I ENGINEERING, INC.,

Plaintiff,
v.
SRAM CORPORATION,
Defendant.

eS SSS SS SS SS SS SSS

EASTERN DIVISION

No. 00 C 6675

Judge Robert W. Gettleman

No. 01 C 0062

bickeErEg

YUL 2 1 2094

MEMORANDUM OPINION AND ORDER

In these consolidated cases, SRAM Corporation sued defendant AD-II Engineering, Inc.,

for infringement of two patents: No. 5,662,000 (the “000 patent”) and U.S. Patent

Reexamination Certificate B 1 4,900,291 (the “reexamined ‘291 patent”). AD-II sued SRAM for

a declaration of non-infringement, tortious interference with prospective business relations,

unfair competition and violation of the Lanham Act, and violations of the Illinois Uniform

Deceptive Trade Practices Act, and Illinois common law. On July 28, 2002, the parties entered

into a Stipulation for entry of final judgment and dismissal of claims (“Stipulation”) relating to

the reexamined ‘291 patent based upon a ruling in SunRace Roots Enterprise Co., Ltd. v. SRAM

i