Court Opinion

ID: 2648928
Source: CourtListenerOpinion
Date Created: 2014-01-13 16:11:49.664445+00
Date Added: 2024-06-11T12:07:02.969009
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                 ______________________

PROVERIS SCIENTIFIC CORPORATION (formerly
   known as Image Therm Engineering, Inc.),
            Plaintiff-Cross-Appellant,

                            v.

               INNOVASYSTEMS, INC.,
                  Defendant-Appellant.
                 ______________________

                    2013-1166, -1190
                 ______________________

    Appeals from the United States District Court for the
District of Massachusetts in No. 05-CV-12424, Judge
William G. Young.
                ______________________

               Decided: January 13, 2014
                ______________________

    SUSAN HANMER FARINA, Proveris Scientific Corpora-
tion, of Marlborough, Massachusetts, argued for plaintiff-
cross-appellant. With her on the brief was VICTOR H.
POLK, JR., Greenberg Traurig LLP, of Boston, Massachu-
setts.

    JOSEPH F. POSILLICO, Fox Rothschild, LLP, of Phila-
delphia, Pennsylvania, argued for defendant-appellant.
With him on the brief was FRANK T. CARROLL.
                ______________________
2          PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.

    Before LOURIE, SCHALL, and PROST, Circuit Judges.
PROST, Circuit Judge.
    Innovasystems, Inc. (“Innova”) appeals from two final
judgments of the U.S. District Court for the District of
Massachusetts holding Innova in contempt of that court’s
May 11, 2007 injunction and awarding sanctions in the
amount of $878,205. Proveris Scientific Corp. (“Proveris”)
cross-appeals the district court’s denial of sanctions for
certain of Innova’s sales. Because we conclude that the
district court erred in failing to construe the disputed
claim language, we vacate the contempt order and re-
mand for claim construction and renewed contempt
proceedings.
                        BACKGROUND
     Proveris is the owner of U.S. Patent No. 6,785,400
(“’400 patent”). The ’400 patent relates to a mechanism
for evaluating aerosol spray plumes. The apparatus
claimed therein is used to observe the delivery of drugs
that are administered through spray devices, such as
inhalers or nasal sprays. The invention involves trigger-
ing a spray plume and collecting data on the plume via an
illumination device and an imaging device.
     Innova previously made and sold a device known as
the Optical Spray Analyzer (“OSA”). In 2005, Proveris
filed a patent infringement lawsuit against Innova, alleg-
ing that the OSA product infringed the ’400 patent.
Innova conceded infringement of claims 3-10 and 13, but
disputed infringement of claims 1-2. The district court
excluded the testimony of Innova’s experts and conse-
quently ruled in favor of Proveris on invalidity. After a
jury trial on the remaining issues, the jury found that
Innova did not infringe claims 1 or 2, and that no damag-
es had been proven. However, based on the conceded
PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.        3

infringement of claims 3-10 and 13, the district court
granted Proveris a permanent injunction prohibiting
Innova from “making, using, selling, offering for sale or
importing into or exporting out of the United States” the
OSA product. We affirmed. Proveris Scientific Corp. v.
Innovasystems, Inc., 536 F.3d 1256 (Fed. Cir. 2008).
    After that time, Innova modified its OSA product and
began selling a new product known as the Aerosol Drug
Spray Analyzer (“ADSA”) that it argues does not infringe
independent claim 3 of the ’400 patent. Innova claims
that the OSA product allowed a user to identify what
range of images he or she wanted to analyze before acti-
vating the spray plume, while the ADSA device requires
the user to first activate the spray plume and then later
determine what range of images he or she would like to
analyze. It contends that this is a significant modification
that renders the ADSA device non-infringing because the
preamble of claim 3 specifies that the image data may be
captured “at a predetermined instant in time.”
    Proveris disagreed with Innova’s interpretation of
that claim language and in March 2010 filed a contempt
motion based on Innova’s manufacture and sale of the
ADSA product. The district court initially scheduled a
Markman hearing to construe the disputed claim term,
but ultimately ruled that, because Innova could have
raised claim construction issues in the underlying in-
fringement action, the court would not construe claim 3 or
import a limitation from the preamble of claim 3. The
district court also said that, because Innova had already
attempted to challenge the validity of claim 3 during the
underlying infringement action, it could not now raise
new invalidity arguments during the contempt proceed-
ings. On the merits, the district court entered a contempt
order against Innova, thereby implicitly finding that the
ADSA product was not more than colorably different from
the infringing OSA product and that it, too, infringed the
’400 patent.
4          PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.

    A bench trial was then held on the issue of sanctions.
The court found that Innova’s violation of the injunction
had been willful and ordered disgorgement of any profits
Innova had acquired from sales of the ADSA product.
Proveris also sought to recover profits from Innova’s sale
of various component parts to overseas locations, but the
district court ruled that those actions did not fall within
the scope of the injunction, so Proveris would have to
establish liability in a separate action before damages
could be awarded for those sales.
   Innova has appealed both the contempt order and the
ensuing sanctions. Proveris has cross-appealed certain
aspects of the district court’s sanctions ruling.
                       DISCUSSION
    In evaluating whether an injunction against contin-
ued infringement has been violated by a newly accused
product, courts must follow the two-step test outlined in
TiVo Inc. v. Echostar Corp., 646 F.3d 869 (Fed. Cir. 2011)
(en banc). First, a party seeking to enforce an injunction
must show that “the newly accused product is not more
than colorably different from the product found to in-
fringe.” Id. at 882. The analysis should focus on “those
aspects of the accused product that were previously
alleged to be, and were a basis for, the prior finding of
infringement, and the modified features of the newly
accused product.” Id. Where one or more of the elements
previously found to infringe has been modified or re-
moved, the court must determine whether that modifica-
tion is significant. Id. If so, the newly accused product is
more than colorably different from the infringing product,
and contempt is not the appropriate remedy. Id. Instead,
a new infringement action must be brought regarding the
newly accused product. If, however, the court concludes
that the differences are not more than colorable, the court
must then go on to the second step and determine wheth-
PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.        5

er the newly accused product in fact infringes the relevant
claims. Id. at 883.
    Because the district court decided contempt based on
the parties’ cross-motions for summary judgment, we
review the contempt ruling de novo. See MeadWestVaco
Corp. v. Rexam Beauty & Closures, Inc., 731 F.3d 1258,
1264 (Fed. Cir. 2013). Summary judgment is appropriate
when, drawing all justifiable inferences in the non-
movant’s favor, there exists no genuine issue of material
fact and the movant is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986). Sanctions awards are reviewed
for an abuse of discretion. TiVo, 646 F.3d at 883.
                 A. Colorable Differences
     Innova argues that the OSA product was admitted to
infringe claim 3 in part because that device had the
ability to specify which images should be captured “at a
predetermined time,” meaning before the spray plume
was activated. And, as explained above, Innova claims to
have removed that feature from the ADSA product. Thus,
following the TiVo analysis, Innova argues that the ADSA
product is more than colorably different from the OSA as
a matter of law.
    Innova’s position is based on a misreading of TiVo.
Even if it were true that this particular feature was a
basis for the prior finding of infringement—a fact that
Proveris disputes 1—TiVo makes clear that the court must

   1    Proveris argues that because Innova conceded in-
fringement of claim 3 by the OSA product, it cannot be
said that Proveris relied on this or any other feature in
establishing infringement. However, that logic would
render it virtually impossible to show that a product is
more than colorably different from an earlier infringing
product, thereby effectively punishing a defendant for
6          PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.

still determine whether that modification was significant.
646 F.3d at 882.
    We conclude that it was not. Indeed, it is not at all
clear from the record whether Innova’s purported change
actually had any effect. In fact, the User Manuals for
both products appear to instruct the user to select the
range of images to be analyzed after the actual spray
event takes place. Compare J.A. 204-05, 227 with J.A.
1054-55, 1099. Based on this evidence, the district court
noted on the record that it was “quite clear” that Innova’s
alleged redesign “was not truly an alteration at all.” J.A.
46-47. But regardless, even if Innova did make some
small changes to the product’s software, a comparison of
the User Manuals demonstrates that the two products are
functionally identical. Thus, we agree with the district
court that the ADSA product is not more than colorably
different from the infringing OSA product.
                     B. Infringement
    After a finding that two products are not more than
colorably different, a district court must go on to deter-
mine whether the newly accused product in fact infringes
the original patent. TiVo, 646 F.3d at 883. In conducting
an infringement analysis, a court must first determine the
meaning of any disputed claim terms and then compare
the accused device to the claims as construed. Wavetronix
LLC v. EIS Elec. Integrated Sys., 573 F.3d 1343, 1354
(Fed. Cir. 2009) (citing Markman v. Westview Instru-
ments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995)). Here, the
district court declined to construe the disputed claim

conceding infringement. To the extent that Innova put on
evidence that it conceded infringement at least in part
because it understood the claim to require a particular
feature, that feature can be said to be “a basis for[] the
prior finding of infringement.” TiVo, 646 F.3d at 882.
PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.       7

language because any arguments about the construction
of claim 3 should have been raised in the underlying
infringement action. 2
    It is true that we have previously held that in con-
tempt proceedings, “out of fairness, the district court is
bound by any prior claim construction that it had per-
formed in the case.” TiVo, 646 F.3d at 883. However,
here, there was no prior claim construction because
Innova had conceded infringement. Thus, it simply
cannot be said that it was the “law of the case” that the
preamble was not a claim limitation. See, e.g., Bass Pro
Trademarks, LLC v. Cabela’s, Inc., 485 F.3d 1364, 1369
(Fed. Cir. 2007) (after defendant admitted infringement
and agreed to be permanently enjoined from future in-
fringement, this court engaged in claim construction in
determining whether a later accused device violated the
injunction). We therefore conclude that the district court
erred by failing to engage in a claim construction analysis
relating to the contempt proceedings.
    Next, we must turn to the question of the proper con-
struction of the disputed claim language. The first ques-
tion we must answer is whether the preamble is properly
construed as importing a limitation into the claim. We
conclude that it is.

   2    The district court judge later stated on the record
that he had in fact construed claim 3 as not importing a
claim limitation from the preamble; however, that ruling
was based on the “law of the case,” not on a substantive
analysis of whether the preamble should in fact be con-
strued as limiting. Thus, as a practical matter it is more
fair to say that the district court declined to construe
claim 3 altogether.
8           PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.

    Claim 3 reads:
    3. An apparatus for producing image data repre-
    sentative of at least one sequential set of images
    of a spray plume, each of the images being repre-
    sentative of a density characteristic of the spray
    plume (i) along a geometric plane that intersects
    the spray plume, and (ii) at a predetermined in-
    stant in time, comprising:
    an illuminator for providing an illumination of the
    spray plume along at least one geometric plane
    that intersects the spray plume; and,
    an imaging device for generating the image data
    representative of an interaction between the il-
    lumination and the spray plume along the at least
    one geometric plane.
’400 patent col. 7 l. 43–col. 8 l. 8.
     A preamble is generally construed to be limiting if it
“recites essential structure or steps, or if it is necessary to
give life, meaning, and vitality to the claim.” NTP, Inc. v.
Research In Motion, Ltd., 418 F.3d 1282, 1305 (Fed. Cir.
2005) (quoting Catalina Mktg. Int’l, Inc. v. Coolsav-
ings.com, Inc., 289 F.3d 801, 808 (Fed. Cir. 2002)). For
example, the preamble may be construed as limiting when
it recites particular structure or steps that are highlight-
ed as important by the specification. Catalina Mktg., 289
F.3d at 808. Additionally, “[w]hen limitations in the body
of the claim rely upon and derive antecedent basis from
the preamble, then the preamble may act as a necessary
component of the claimed invention.” NTP, Inc., 418 F.3d
at 1306 (quoting Eaton Corp. v. Rockwell Int’l Corp., 323
F.3d 1332, 1339 (Fed. Cir. 2003)).
    Both of those considerations support the conclusion
that the preamble is limiting in this case. First, the
specification identifies the invention as producing a
“sequential set of images” and focuses on the ability of the
PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.        9

invention to capture “the time evolution of the spray.”
See, e.g., ’400 patent col. 2 ll. 41-43 (under “Summary of
the Invention,” stating that “the invention provides a
device for producing image data representative of at least
one sequential set of images of a spray plume”); id. col. 4
ll. 4-6 (“The spray data acquisition system of the present
invention provides images of the time-evolution, particle
distribution, and divergence angle of aerosol sprays.”); id.
col. 5 ll. 10-21 (describing how the invention allows a user
“to accurately capture the time evolution of the spray”).
However, the preamble of claim 3 is the only reference in
any independent claim to the inventive concept of captur-
ing a sequence of images in order to characterize the time
evolution of the spray plume. This fact alone is likely
sufficient to support a conclusion that the preamble is
limiting. See Deere & Co. v. Bush Hog, LLC, 703 F.3d
1349, 1358 (Fed. Cir. 2012) (finding that preamble phrase
“rotary cutter deck” was a limitation where the specifica-
tion referred to “the present invention” as “a rotary cutter
deck”); Poly-Am., LP v. GSE Lining Tech., Inc., 383 F.3d
1303, 1310 (Fed. Cir. 2004) (construing preamble as
limiting where it disclosed a “fundamental characteristic
of the claimed invention”).
    Moreover, the claim body itself supports this conclu-
sion. Claim 3 discloses “an imaging device for generating
the image data representative of an interaction between
the illumination and the spray plume along the at least
one geometric plane.” ’400 patent col. 8 ll. 6-8. The
phrase “the image data” clearly derives antecedent basis
from the “image data” that is defined in greater detail in
the preamble as being “representative of at least one
sequential set of images of a spray plume.”
    Thus, reading the patent as a whole, the inventors
clearly relied on both the preamble and the body of claim
3 to define the claimed invention. Accordingly, the pre-
amble of claim 3 should be construed as importing a
limitation into the claim.
10         PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.

     With respect to the proper construction of the disput-
ed language within the preamble, however, we do not
have enough information on the record before us to re-
solve that question. Proveris did not directly address the
proper construction of the language “at a predetermined
instant in time” in its briefing before this court, but
simply incorporated its Markman briefs by reference in
the Appendix. Moreover, because the district court did
not hold a true Markman hearing, we have neither a
hearing transcript nor an opinion to review. Although
claim construction is a question of law, where a district
court has offered no reasoning for us to review, we may
decline to construe the claims in the first instance. See,
e.g., Nazomi Commc’ns, Inc. v. Arm Holdings, PLC, 403
F.3d 1364, 1371 (Fed. Cir. 2005) (remanding for claim
construction because the district court’s analysis “does not
supply the basis for its reasoning sufficient for a meaning-
ful review”); Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785,
791 (Fed. Cir. 1995) (“The entire omission of a claim
construction analysis from the opinion . . . provide[s] an
independent basis for remand.         Because insufficient
findings preclude meaningful review by this court, we
remand.”).
    Thus, we will remand the case to the district court to
determine the proper construction of the disputed claim
language. After construing the claim, the district court
should then go on to re-evaluate whether the ADSA
product in fact infringes claim 3 under the proper con-
struction and therefore constitutes a violation of the
injunction.
                       C. Invalidity
    Innova argues that the preamble was implicitly un-
derstood to be a claim limitation in the underlying in-
fringement proceedings because Proveris premised its
validity argument in part on the fact that certain features
of the preamble could not be found in the prior art. Thus,
PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.         11

once the district court ruled that the preamble was not
limiting, Innova should have been permitted to raise new
invalidity defenses.
   Because we have already concluded that the preamble
should be construed as limiting, this argument is moot.
    However, we note that regardless of what claim con-
struction the district court adopts on remand, Innova is
not entitled to present new invalidity arguments at this
stage. In contrast to claim construction, validity was
disputed in the underlying infringement lawsuit, so
Innova has already had a full and fair opportunity to
present its arguments relating to the invalidity of claim 3.
Indeed, we have previously noted that “[i]n a contempt
proceeding to enforce [an] injunction . . . , the only availa-
ble defense for anyone bound by the injunction was that
the [newly accused product] did not infringe . . . . Validity
and infringement by the original device were not open to
challenge.” Additive Controls & Measurement Sys., Inc. v.
Flowdata, Inc., 154 F.3d 1345, 1350 (Fed. Cir. 1998). 3

    3    This ruling is not in tension with the law of this
court that permits a party to reopen the issue of invalidity
in light of a new claim construction. See Medtronic, Inc. v.
Boston Scientific Corp., 695 F.3d 1266, 1276 (Fed. Cir.
2012) (“The district court’s determination of no invalidity
predicated on its improper claim construction is vacat-
ed.”). The arguments used by Proveris to support validity
in the underlying proceedings, while admittedly premised
in part on language in the preamble, did not turn on the
disputed “at a predetermined instant in time” language.
A new construction of that disputed term would therefore
not affect the district court’s previous invalidity analysis,
and Innova is not entitled to re-litigate that issue.
12         PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.

                       D. Sanctions
    Given our disposition of Innova’s appeal, it is prema-
ture at this juncture to address the issues raised in
Proveris’ cross-appeal relating to sanctions. However, in
the interest of judicial efficiency, we note that, should the
district court again decline to award sanctions for Inno-
va’s overseas sales of certain component parts of the
ADSA product or Innova’s sale of the ADSA product to
Westech Instrument Services Ltd., we discern no error in
those rulings.
    First, with respect to Innova’s overseas sales of com-
ponent parts of the ADSA product, it is undisputed that
liability for shipping component parts overseas is prem-
ised on 35 U.S.C. § 271(f), while the underlying infringe-
ment action here alleged direct infringement by sales of
whole products. Thus, the district court did not err in
concluding that Innova is entitled to a jury determination
of infringement based on these activities before any
damages may be awarded.
    Second, with respect to Innova’s sale to Westech, the
district court appeared to exclude the profits from the
Westech sale based at least in part on its belief that the
sale was conducted overseas—a fact that even Innova
acknowledges is incorrect. However, Proveris pointed out
the district court’s factual error in a motion to correct the
sanctions award and the district court nevertheless de-
clined to modify its order. This is unsurprising, as there
were several other reasons for which the district court
could reasonably have excluded this amount from the
sanctions award, including that there was evidence on the
record that Innova actually lost money on the Westech
sale. Thus, we cannot say that the district court abused
its discretion in excluding profits for the Westech sale
from the sanctions award.
PROVERIS SCIENTIFIC CORP.   v. INNOVASYSTEMS, INC.   13

                       CONCLUSION
     For the foregoing reasons, we vacate the district
court’s contempt order and sanctions award and remand
for further proceedings consistent with this opinion.
             VACATED AND REMANDED