Court Opinion

ID: 4227019
Source: CourtListenerOpinion
Date Created: 2017-12-08 16:01:04.115726+00
Date Added: 2024-06-11T14:15:54.651409
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                  ______________________

                    NOBELBIZ, INC.,
                     Plaintiff-Appellee

                             v.

       GLOBAL CONNECT, L.L.C., T C N, INC.,
               Defendants-Appellants
              ______________________

                   2016-1104, 2016-1105
                  ______________________

    Appeals from the United States District Court for the
Eastern District of Texas in Nos. 6:12-cv-00244-RWS,
6:12-cv-00247-RWS, 6:13-cv-00804-MHS, and 6:13-cv-
00805-MHS, Judge Robert Schroeder III, Judge Michael
H. Schneider.
                ______________________

    ON PETITION FOR REHEARING EN BANC
             ______________________

    RALPH A. DENGLER, Venable LLP, New York, NY, filed
a petition for rehearing en banc for plaintiff-appellee. Also
represented by GIANNA CRICCO-LIZZA; MEGAN S.
WOODWORTH, Washington, DC; WILLIAM A. HECTOR, San
Francisco, CA.

    CLINTON EARL DUKE, Durham Jones & Pinegar, Salt
Lake City, UT, filed a response to the petition for defend-
ants-appellants. Also represented by LYNDON BRADSHAW.
                 ______________________
2                      NOBELBIZ, INC.   v. GLOBAL CONNECT, L.L.C.

     Before PROST, Chief Judge, NEWMAN, LOURIE, DYK,
    MOORE, O’MALLEY, REYNA, WALLACH, TARANTO, CHEN,
            HUGHES, and STOLL, Circuit Judges.
     O’MALLEY, Circuit Judge, with whom NEWMAN and
    REYNA, Circuit Judges, join, dissents from the denial of
             the petition for rehearing en banc.
PER CURIAM.
                          ORDER
    A petition for rehearing en banc was filed by appellee
NobelBiz, Inc., and a response thereto was invited by the
court and filed by appellants Global Connect, L.L.C. and
T C N, Inc. The petition for rehearing was first referred to
the panel that heard the appeal, and thereafter, the
petition for rehearing and response were referred to the
circuit judges who are in regular active service. A poll was
requested, taken, and failed.
      Upon consideration thereof,
      IT IS ORDERED THAT:
      The petition for panel rehearing is denied.
      The petition for rehearing en banc is denied.
   The mandate of the court will issue on December 15,
2017.
                                        FOR THE COURT

    December 8, 2017                    /s/ Peter R. Marksteiner
         Date                           Peter R. Marksteiner
                                        Clerk of Court
  United States Court of Appeals
      for the Federal Circuit
                 ______________________

                   NOBELBIZ, INC.,
                    Plaintiff-Appellee

                            v.

      GLOBAL CONNECT, L.L.C., T C N, INC.,
              Defendants-Appellants
             ______________________

                  2016-1104, 2016-1105
                 ______________________

    Appeals from the United States District Court for the
Eastern District of Texas in Nos. 6:12-cv-00244-RWS,
6:12-cv-00247-RWS, 6:13-cv-00804-MHS, and 6:13-cv-
00805-MHS, Judge Robert Schroeder III, Judge Michael
H. Schneider.
                ______________________

O’MALLEY, Circuit Judge, with whom NEWMAN and
REYNA, Circuit Judges, join, dissenting from the denial of
rehearing en banc.
    The panel majority in this case held that the district
court erred by adopting a plain-and-ordinary-meaning
construction for several non-technical terms, and by
purportedly allowing the parties’ experts and counsel to
make arguments to the jury about what those simple
terms mean. See NobelBiz, Inc. v. Glob. Connect, L.L.C.,
Nos. 2016-1104, 2016-1105, 2017 WL 3044641, at *2–4
(Fed. Cir. July 19, 2017). I agree with Judge Newman,
who dissented from that holding, that the majority erred
2                   NOBELBIZ, INC. v. GLOBAL CONNECT, L.L.C.

by turning what is fundamentally a factual question for
the jury regarding whether the accused systems and
features infringe the patent claims into a legal one for the
court—and ultimately this court—to resolve. 1 See id. at
*4–6 (Newman, J., dissenting). And, by relying on O2
Micro International Ltd. v. Beyond Innovation Technology
Co., 521 F.3d 1351 (Fed. Cir. 2008), to support its holding,
the majority has added to the growing confusion regard-
ing the scope of that decision. In the nearly ten years
since O2 Micro issued, this court has stretched its holding
well beyond the factual circumstances at issue there. In
so doing, we have caused unnecessary difficulties for
district courts, which must manage these already diffi-
cult-enough cases, and have intruded on the jury’s fact-
finding role. It is time we provide much-needed guidance
en banc about O2 Micro’s reach. I dissent from the court’s
order declining the opportunity to do so in this case.
    O2 Micro involved technology related to DC-to-AC
converter circuits for controlling the amount of power
delivered to cold cathode fluorescent lamps used to back-
light laptop screens. Id. at 1354. During the claim con-
struction phase of the case, the parties presented a clear
dispute to the district court regarding the meaning of the
term “only if” in the claim limitation “a feedback control
loop circuit . . . adapted to generate a second signal pulse
signal for controlling the conduction state of said second
plurality of switches only if said feedback signal is above a
predetermined threshold.” Id. at 1356, 1360–61. The
plaintiff asserted that the claims would be understood by
one of ordinary skill in the art to only apply to “the steady
state operation of the switching circuit,” while the defend-
ants argued that the claims apply at all times, with no

    1  I will not repeat the thoughtful points spelled out
in Judge Newman’s panel dissent—I could not state them
more clearly. I do adopt them by reference, however.
NOBELBIZ, INC. v. GLOBAL CONNECT, L.L.C.                  3

exception. Id. at 1360. Thus, the parties disputed “not
the meaning of the words themselves, but the scope that
should be encompassed by th[e] claim language.” Id. at
1361. The district court acknowledged the parties’ dis-
pute but declined to resolve it, giving the term a plain-
and-ordinary-meaning construction instead. Id. This left
the parties to argue about claim scope to the jury. See id.
at 1362 (“O2 Micro also brought the inventor of the pa-
tents-in-suit to testify regarding the meaning of ‘only
if’[.]”).
    The technology at issue here, by contrast, is much dif-
ferent, and, in fact, simpler. The patents relate to a
method for processing a communication between a first
party and a second party. See NobelBiz, 2017 WL
3044641, at *1. The terms at issue—“replacement tele-
phone number,” “modify caller identification data of the
call originator,” and “outbound call”—are less technical
than the term at issue in O2 Micro. And, at least for two
of those terms, the parties did not dispute how a skilled
artisan would understand their scope. Instead, the par-
ties disputed only whether a formal construction was
required. See id. Finally, the expert testimony in this
case reveals that neither expert opined specifically about
the meaning of the claim terms, nor did they contend that
the terms have complex or technical meanings to one of
skill in the art. The experts merely expressed their own
views about whether the allegedly infringing systems
read on those terms. This case is therefore distinguisha-
ble from O2 Micro.
    Beyond this case, O2 Micro has caused difficulties for
courts and litigants alike. O2 Micro’s general rule is easy
enough to state in the abstract: “When . . . parties raise
an actual dispute regarding the proper scope of the[]
claims, the court, not the jury, must resolve that dispute.”
O2 Micro, 521 F.3d at 1360. We have not articulated,
however, what constitutes an “actual dispute” in this
context. While we expect district courts to distinguish
4                   NOBELBIZ, INC. v. GLOBAL CONNECT, L.L.C.

bona fide infringement arguments from those masquerad-
ing as claim construction disputes, we have not provided
the lower courts with effective guidance to do so. As a
result, courts have struggled to strike the delicate balance
between ensuring that they do not permit the jury to
determine claim scope, on the one hand, and ensuring
that they do not encroach upon the constitutionally man-
dated function of the jury to find facts, on the other.
    One court recently expressed frustration over O2 Mi-
cro and the confusion surrounding it, citing to the panel
decision in this case as an example of the “trap” that O2
Micro has set for district courts:
    O2 Micro problems are difficult to evaluate with
    any confidence during pretrial (or trial, for that
    matter) because it is frequently impossible to de-
    lineate between a pure claim construction argu-
    ment and a noninfringement argument.             Yet
    juries are summoned, trials are held, and verdicts
    are reached, only to have the case fall in the O2
    Micro trap on appeal. See, e.g., NobelBiz, Inc. v.
    Glob. Connect, L.L.C., No. 2016-1104, 2017 WL
    3044641 (Fed. Cir. July 19, 2017). Short of hold-
    ing both a jury trial and an identical bench trial in
    every patent case, there is not a clear path around
    O2 Micro.
Huawei Techs. Co. v. T-Mobile US, Inc., No. 2:16-CV-
00052-JRG-RSP, 2017 WL 4070592, at *1 (E.D. Tex. Aug.
29, 2017), adopted, 2017 WL 4049251 (E.D. Tex. Sept. 13,
2017). Without additional guidance from our court,
district courts will continue to fall into this trap.
    Furthermore, our case law has applied O2 Micro in-
consistently. We have, at times, found that when a term
is non-technical and within the ken of an average juror,
there is no actual dispute under O2 Micro, and therefore
no need for court intervention. See, e.g., GPNE Corp. v.
Apple Inc., 830 F.3d 1365, 1371–73 (Fed. Cir. 2016) (find-
NOBELBIZ, INC. v. GLOBAL CONNECT, L.L.C.                   5

ing no O2 Micro violation where the district court declined
to construe the term “pager,” and determining that the
real dispute was about allowing the defendant “to make
certain arguments to the jury”); Summit 6, LLC v. Sam-
sung Elecs. Co., 802 F.3d 1283, 1291 (Fed. Cir. 2015)
(finding that the district court did not err in declining to
construe the disputed term, which was itself “comprised of
commonly used terms; each is used in common parlance
and has no special meaning in the art”); ActiveVideo
Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312,
1326 (Fed. Cir. 2012) (finding that the district court did
not err under O2 Micro in concluding that “superimpos-
ing” claim terms “have plain meanings that do not require
additional construction”); see also Union Carbide Chems.
& Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366,
1377 (Fed. Cir. 2005) (“Because the claim language does
not require a particular form of testing, this inquiry is not
a claim construction question, which this court reviews de
novo. Rather, this court reviews this inquiry as a ques-
tion of fact.”), overruled on other grounds by Cardiac
Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348
(Fed. Cir. 2009).
    At other times, however, we have found that such a
construction leaves the scope of the claims unanswered,
as in this case. See, e.g., NobelBiz, 2017 WL 3044641, at
*2–4; Eon Corp. IP Holdings LLC v. Silver Spring Net-
works, Inc., 815 F.3d 1314, 1319–20 (Fed. Cir. 2016)
(finding that the district court erred by instructing the
jury that the terms “portable” and “mobile” should be
given their plain and ordinary meanings).
    It is unsurprising, therefore, that district courts have
themselves struggled to find a consistent approach for
resolving O2 Micro issues. Compare Unwired Planet,
LLC v. Google Inc., No. 3:12-cv-00504-MMD-VPC, 2014
WL 7012497, at *10–30 (D. Nev. Dec. 12, 2014) (holding
that O2 Micro required the court to reject plain-and-
ordinary-meaning constructions), aff’d in part, 660 F.
6                   NOBELBIZ, INC. v. GLOBAL CONNECT, L.L.C.

App’x 974 (Fed. Cir. 2016), with Unwired Planet, LLC v.
Square, Inc., No. 3:13-cv-00579-RCJ-WGC, 2014 WL
4966033, at *2 (D. Nev. Oct. 3, 2014) (citing O2 Micro for
the proposition that “a district court is not obligated to
construe terms with ordinary meanings, lest trial courts
be inundated with requests to parse the meaning of every
word in the asserted claims”); see also Peter E.
Gratzinger, After O2 Micro: The Court’s Evolving Duty to
Map Words to Things, 32 Santa Clara High Tech. L.J.
141, 142–43 (2015–2016) (noting that, despite the “seem-
ingly simple premise” articulated in O2 Micro, “there is
wide variation in how district courts interpret and im-
plement the duty to resolve claim construction disputes”);
Matthew Chivvis, Patents: When the “Plain and Ordinary”
Meaning Is Neither Plain Nor Ordinary, N.Y. L.J., Aug.
11, 2016, at 1 (“The U.S. Court of Appeals for the Federal
Circuit’s decisions provide conflicting guidance on the
duty to construe a term when the plain and ordinary
meaning is disputed. The lack of a clear rule has allowed
district courts to vary widely in how they handle claim
construction in these circumstances.”).
    Our lack of clarity about the reach of O2 Micro has al-
so led courts to stray from general principles of orderly
case management, making patent litigation needlessly
more expensive and inefficient. Litigants often invoke O2
Micro to justify belated claim constructions presented
long after court-ordered deadlines. See Huawei Techs.,
2017 WL 4070592, at *1 (noting that “one party or anoth-
er argues in virtually every patent case approaching trial”
that the court “must ensure that . . . late-breaking claim
construction dispute[s] [are] not presented to the jury”);
Opticurrent, LLC v. Power Integrations, Inc., No. 2:16-CV-
325, 2017 WL 1383979, at *10 (E.D. Tex. Apr. 18, 2017)
(construing a claim term to avoid “late-breaking disputes
lodged under the guise of” O2 Micro, despite the fact that
the term “has no special meaning other than its plain
meaning”).
NOBELBIZ, INC. v. GLOBAL CONNECT, L.L.C.                  7

    And, even though district courts maintain broad dis-
cretion to manage their dockets, many courts apparently
feel compelled by O2 Micro to resolve such disputes, no
matter how late they are raised and no matter how simple
the question posed for consideration by the jury might
seem. See, e.g., Tyco Healthcare Grp. LP v. Applied Med.
Res. Corp., No. 9:06-CV-151, 2009 WL 1883423, at *1, 9
(E.D. Tex. June 30, 2009) (in view of O2 Micro, allowing
the defendant to modify its proposed construction “long
after the Markman hearing had been conducted”); see also
Pressure Prods. Med. Supplies, Inc. v. Greatbatch Ltd.,
599 F.3d 1308, 1315–16 (Fed. Cir. 2010) (finding that the
district court’s adjustment of a prior construction in
response to cross-examination at trial was consistent with
the trial court’s duty under O2 Micro). District courts’
reading of O2 Micro as preventing them from enforcing
their own deadlines effectively places “sand in the gears of
the overall trial process” and disincentivizes litigants
from crystallizing their disputes early in the case. Packet
Intelligence LLC v. NetScout Sys., Inc., No. 2:16-CV-230-
JRG, 2017 WL 2531591, at *2 n.2 (E.D. Tex. Apr. 27,
2017) (denying plaintiff’s request to add products, in part
because of the effect that a late O2 Micro dispute would
have on the litigation).
    We should clarify the scope of O2 Micro’s reach, and,
at the very least, clarify under what circumstances a
plain-and-ordinary-meaning dispute is an “actual” one
within the meaning of O2 Micro. The fact that parties’
experts might proffer differing definitions of a term’s
plain and ordinary meaning to a jury should not be
enough to justify removing that question from the jury’s
consideration. This case presents the opportunity for us
to clarify the confusion our case law has created. For
these reasons, I respectfully dissent from the denial of
rehearing en banc.