Opinion ID: 615097
Heading Depth: 2
Heading Rank: 1

Heading: Absolute's Appeal

Text: Absolute raises three issues on appeal, arguing that: (1) the district court's claim construction of the term global network communication links is erroneous; [4] (2) genuine issues of material fact preclude summary judgment of non-infringement of the '758 and '863 Patents; and (3) genuine issues of material fact preclude summary judgment of non-infringement of the '914 Patent. Although we find that Absolute waived its right to challenge the district court's claim construction by failing to file timely objections to the special master's R & R, we agree that summary judgment of non-infringement as to all three Absolute Patents was improper. We address each issue in turn below.
In his February 8, 2008 report, the special master construed the term global network communication links as the identification of one or more (perhaps less than all) of the connections (either direct or indirect) between two nodes in the Internet (one of the nodes may be the electronic device itself) used to enable data transmission between said electronic device and said host system. JA 040027. The construction therefore defines communication links as the connections between two nodes in the Internet rather than as the nodes, or IP addresses of routers, themselves. On February 28, 2008, Absolute filed timely objections to the special master's report, but it challenged only two portions of the report, neither of which related to the special master's recommended construction of global network communication links. JA 040132. On the same date, Stealth also filed objections, including to the special master's construction of global network communication links. Stealth argued that links should mean IP routers, a position consistent with its proposed construction. JA 040132. The special master ultimately amended its construction of three terms but left the construction of communication links unchanged. The district court adopted the special master's amended R & R. On appeal, Stealth argues that Absolute waived its right to challenge the district court's construction of global network communication links by failing to object to the special master's recommended construction within the deadline established both by rule and by court order. There is no dispute that Absolute failed to challenge the special master's proposed recommendation within the twenty-day period. Indeed, Absolute's counsel conceded this fact at oral argument. See Oral Arg. at 10:3 -11:15, available at http://www.cafc. uscourts.gov/oral-argument-recordings/all/ absolute.html (That's absolutely right, we did not raise that objection within the twenty-day time period, and that was a mistake on our part.) Despite acknowledging that its objection was untimely, Absolute asserts that we should not find waiver because its argument was presented to the district court in the sense that Absolute offered its position prior to the special master's report on claim construction. We do not find Absolute's argument persuasive. A primary purpose of appointing a special master is to narrow the issues before the district court judge to facilitate an efficient and timely resolution of complex or highly-technical issues, such as patent claim construction. See Fed.R.Civ.P. 53 adv. comm. notes (2003 amendments) (The court's responsibility to interpret patent claims, for example, may be greatly assisted by appointing a master who has expert knowledge of the field in which the patent operates; the advantages of initial determination by a master may make the process more effective and timely than disposition by the judge acting alone). Both Rule 53(f)(2) of the Federal Rules of Civil Procedure and the district court's order expressly included a mechanism for parties to file objections and a time limit to do so. It is through these objections that the district court can determine which issues remain in dispute and require the court's attention. Accepting Absolute's argument that its challenge to the special master's claim construction was presented to the district court simply because it was argued to the special master would eviscerate the very purpose of this procedure. Although it is true that Stealth timely objected to the construction of global network communication links, that is irrelevant because it is Absolute, not Stealth, that seeks to raise this issue on appeal. [5] Stealth's objection to the special master's construction differed from that now urged by Absolute. Indeed, Stealth contended that the proper construction should be IP router, which is materially different from the IP address construction Absolute would have us now employ. See Stealth's Principal and Response Br. 54 (Stealth certainly did not agree that a `communication link' could be identified using an IP address of any single node, such as the client's computer. (emphasis in original)). Under these circumstances, we find that Absolute's failure to raise this particular objection, in the face of both Rule 53(f)(2) and a court order setting a specific deadline for the filing of objections, results in waiver of the argument on appeal. See Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420, 1426 (Fed.Cir.1997) ([A]ppellate courts do not consider a party's new theories, lodged first on appeal. . . . In short, this court does not `review' that which was not presented to the district court.); see also Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1344 (Fed.Cir.2001) (citing Sage for the same proposition). We recognize that this court retains discretion to deviate from the general rule of waiver in certain circumstances. See Interactive Gift, 256 F.3d at 1344. We decline to do so here, however, given the careful claim construction procedure the district court established in this case. In addition, we otherwise do not find that any of the reasons we have enumerated in the past for considering an argument that was not presented properly below are present in this case. See L.E.A. Dynatech, Inc. v. Allina, 49 F.3d 1527, 1531 (Fed.Cir.1995) (An appellate court will consider an issue not presented below only if: (i) the issue involves a pure question of law and refusal to consider it would result in a miscarriage of justice; (ii) the proper resolution is beyond any doubt; (iii) the appellant had no opportunity to raise the objection at the district court level; (iv) the issue presents significant questions of general impact or of great public concern; or (v) the interest of substantial justice is at stake. (internal quotations and brackets omitted)).
Absolute argues that, even if we affirm the district court's construction of global network communication links, summary judgment of non-infringement is inappropriate because genuine issues of material fact remain as to whether Stealth's XTool Tracker agent furnishes, supplies, or makes available [6] one or more connections between two nodes on the Internet (i.e., two IP addresses) to the host. The district court found that the XTool Tracker agent furnishes only one IP address to the host and, therefore, does not infringe the '758 and '863 Patents as a matter of law. Because we conclude that there are genuine issues of fact as to whether the XTool Tracker agent also provides a second IP address, and therefore a connection, we conclude that summary judgment of non-infringement on this issue was improper. Under the district court's claim construction, if the agent provides the IP addresses of both the agent and host, the agent will satisfy this limitation of the asserted '758 and '863 Patent claims. The parties disputed whether the XTool agent provided two IP addresses, and both sides submitted expert declarations on this point. Stealth contended in its briefing that its expert witness, Stealth President Pedro Camargo, stated that the Stealth agent provides only the IP address of the monitored device. Stealth's Principal and Response Br. 15 (emphasis added). This is an overstatement of the expert's declaration. Mr. Camargo makes only a conclusory statement that Stealth does not infringe Absolute's patents, adding that the Stealth `agent' provides the IP address of the device; and, an IP address is not a `link,' or a `connection'; it is, instead, a `node.' Decl. of Pedro Camargo, JA 090010, ¶ 8. He never explicitly states that Stealth's agent does not provide the host IP address, nor does he explain what other component of the electronic device supplies it. The testimony of Absolute's expert, Gregory Ennis, is also not directly on point. Mr. Ennis only states that the packet generated by the Stealth agent, when received by the host system, contains both the IP address of the device and the IP address of the Stealth Control Center. Decl. of Gregory B. Ennis, JA 100028, ¶ 18. He never explicitly states that the agent provides both the agent IP address and the host IP address. Rather, he finishes his discussion with the conclusory statement that [t]he agent thereby provides the host system with such a [global network communication] link. Id. In sum, both experts had the opportunity to provide direct evidence regarding how the host IP address comes to be in the message packet that ultimately arrives at the host, but neither one conclusively states whether it is the agent that provides this address. Given this gap in the record, we are left with the following undisputed facts: (1) Stealth's XTool agent provides a message packet to the host system with at least the agent's IP address; and (2) the packet contains the IP addresses of both the agent and the host when it arrives at the host system. Absolute argues that, based on these facts, the next logical inference is that the XTool agent also provides the host IP address. The district court, however, granted Stealth's motion for summary judgment of non-infringement, finding that Absolute's arguments and evidence . . . fail to demonstrate that the XTool agent, as opposed to any other component of a client device, furnishes, supplies, or makes available any `global network communication link. ' District Court Decision, at 671 (emphasis in original). We find the district court's determination on this point erroneous. The decision fails to draw a reasonable inference in favor of Absolute, the non-moving party, namely that the XTool agent itself provides the host IP address that appears in the message packet. See Ala. Farm Bureau Mut. Cas. Co. v. Am. Fid. Life Ins. Co., 606 F.2d 602, 609 (5th Cir.1979) (inferences most favorable to the non-moving party must be drawn, and [s]uch inferences may create disputes regarding basic facts or regarding facts to be inferred from such facts). On these facts, a reasonable jury could find that the same component that provides the agent IP address and sends the packetthe XTool agentalso provides the host IP address that is in that packet when it arrives at the host. Because the evidence of record creates a genuine issue of material fact, we vacate the district court's summary judgment of non-infringement of the '758 and '863 Patents. [7]
Absolute also appeals the district court's grant of summary judgment of non-infringement of the '914 Patent, which was based on its finding that Stealth's XTool Tracker does not meet the contacting . . . without signaling limitation found in claim 4, the only independent claim asserted. It is undisputed that Stealth's XTool Tracker agent does not emit an audible signal when it establishes a connection with the host, but that it does emit a beep at the end of the contact with the host. Decl. of Pedro Camargo, JA 090011, ¶ 14. Based on these facts, the district court found that [t]his claim does not read on Stealth's XTool agent because upon the occurrence of every communication with the host-monitoring system the agent triggers an audible signal at the end of that communication. District Court Decision, at 673 (emphasis in original). On appeal, Absolute argues that there are at least issues of fact as to whether the agent's silence at the beginning of the connection and during communication constitutes contacting . . . without signaling as that term has been construed by the district court. As explained below, we agree with Absolute and vacate the district court's grant of summary judgment on this issue. The district court, in granting judgment of non-infringement, relied heavily on reasoning in the special master's R & R. During claim construction, the parties disputed whether contacting meant only the initiation of a communication or actually encompassed the entire communication, with Absolute arguing for the former interpretation. [8] Finding that there was no clear definition of contacting in the patent, the special master relied on two dictionaries that define the word contacting as to get in touch with; communicate with and to communicate with. JA 040044 (citing American Heritage Dictionary of the English Language 406 (3d ed.1996) and Random House Webster's Unabridged Dictionary 437 (2d ed.2001)). He also noted that, [s]ince there is no clear indication that the patentee intended to limit the use of this word to only the initiation of the communication, I find that the word `contacting' as used in the patent is not so limited. JA XXXXXX-XX. Accordingly, the special master recommended construing the term to mean getting in touch with or communicating with a host monitoring system without signaling (not necessarily through active suppression) the visual or audible user interface. The district court adopted the special master's construction, and neither party challenges the correctness of this claim construction on appeal. Because the district court believed the special master intended to give contacting a broad definition, it rejected Absolute's argument that the Stealth XTool Tracker infringes if it either establishes a connection with the host without signaling or sends information without signaling. According to the district court, an audible signal at any time before the communication terminates is sufficient to avoid the without signaling limitation of the '914 Patent. We disagree with that conclusion for two independent reasons. First, the district court's claim construction is getting in touch with or communicating with, such that the Stealth agent infringes the '914 Patent if it does either. Here, Stealth's own expert admits that the agent does not emit a sound when it establishes a connection with the host, thereby confirming that Stealth's XTool Tracker meets this limitation. Dep. of Pedro Camargo, 92:19-25, JA 100098. Although the special master may have intended to provide a broad definition for contacting, the plain terms of the construction do not comport with that intention. In its response to Absolute's appeal, Stealth effectively asks this court to change or to and in the construction (to read getting in touch with and communicating with), but Stealth neither sought to clarify this construction before the district court nor challenged it on appeal. Stealth cannot rewrite a claim construction it previously endorsed at this late stage of the proceedings. Second, even if we agreed with Stealth that the use of the disjunctive or in the construction meant only that getting in touch with was synonymous with communicating with, there are issues of material fact as to the temporal relationship between the communication and the audible signal the XTool agent emits. For example, if there is a gap between the communication and the XTool agent's audible signal, a fact-finder might reasonably conclude that the communication is sufficiently removed from the signal that the communication is accomplished without signaling. Or, as Absolute contends, a reasonable jury might find that, if the communication with the host is completei.e., that all information to be conveyed to the host system has been conveyedbefore the signal occurs, the signal does not occur during communication, regardless of any meaningful temporal gap between the completion of the communication and the signal. While Stealth argues that the signal always occurs as part of the communication, that is a question of fact to be assessed by the trier of fact. Summary judgment of non-infringement of the '914 Patent, therefore, must be vacated.