Court Opinion

ID: 210504
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:08:08+00
Date Added: 2024-06-11T09:07:11.170526
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals for the Federal Circuit

                                         2006-1620

                            AUTOMED TECHNOLOGIES, INC.,

                                                        Plaintiff-Appellant,

                                              v.

                                      MICROFIL, LLC
                                  and WILLIAM GEROLD,

                                                        Defendants-Appellees.

       Sharon R. Barner, Foley & Lardner LLP, of Chicago, Illinois, argued for plaintiff-
appellant. With her on the brief were Marianne C. Holzhall and Michael R. La Porte.

      Eugene J. Rath III, Price, Heneveld, Cooper, DeWitt & Litton, LLP, of Grand Rapids,
Michigan, argued for defendants-appellees. With him on the brief was Steven L.
Underwood.

Appealed from: United States District Court for the Northern District of Illinois

Judge Samuel Der-Yeghiayan
                       NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit

                                       2006-1620

                          AUTOMED TECHNOLOGIES, INC.,

                                                       Plaintiff-Appellant,

                                            v.

                                    MICROFIL, LLC

                                and WILLIAM GEROLD,

                                                       Defendants-Appellees.

                           __________________________

                               DECIDED: July 16, 2007
                           __________________________

Before MAYER, Circuit Judge, CLEVENGER, Senior Circuit Judge, and LINN, Circuit
Judge.

Opinion for the court filed by Circuit Judge LINN. Opinion dissenting in part filed by
Circuit Judge MAYER.

LINN, Circuit Judge.

      AutoMed Technologies, Inc. (“AutoMed”) appeals from the grant by the United

States District Court for the Northern District of Illinois (“district court”) of summary

judgment of non-infringement by William Gerold (“Gerold”) and Microfil, LLC

(collectively, “Microfil”) of AutoMed’s U.S. Patents No. 6,449,927 (“’927 patent”) and No.

6,742,671 (“’671 patent”), AutoMed Techs., Inc. v. Microfil, LLC, No. 04-CV-5596 (N.D.

Ill. Jan. 18, 2006) (“Infringement Opinion”), and of the award of nominal damages

against Microfil for a previously adjudicated breach of contract claim, AutoMed Techs.,
Inc. v. Microfil, LLC, No. 04-CV-5596 (N.D. Ill. June 7, 2006) (“Contract Damages

Opinion”). Because one of the accused products lacks a “vibratory dispenser,” and

because AutoMed failed to provide a proper basis for calculating damages beyond the

nominal award, we affirm-in-part; because we have clarified the proper construction of

the claim term “controller,” we vacate-in-part and remand for further proceedings

consistent with this opinion.

                                  I. BACKGROUND

       It is undisputed that Gerold, along with his consulting company, worked for

AutoMed and its predecessor to design a commercial embodiment of AutoMed’s ’927

and ’671 patents, now known as the AutoMed QuickScript® system.           After Gerold

completed his work with AutoMed, he designed what would become the first generation

of Microfil systems, the Microfil 219 and 107 systems (collectively the “219/107

Systems”). In response, AutoMed sued. Gerold and Microfil then developed a second

generation system, referred to as the auger-based system (“Auger System”). AutoMed

accused both systems of infringing various claims of both the ’927 and ’671 patents and

accused Gerold of breaching his non-employee security agreement. The district court

entered summary judgment of non-infringement for Microfil on both systems for all of

the asserted claims and against Microfil on AutoMed’s breach of contract claim. The

district court awarded nominal damages of one dollar on the contract claim. AutoMed

appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

2006-1620                              2
                                      II. DISCUSSION

                                   A. Claim Construction

         AutoMed appeals the district court’s constructions of the terms “controller” and

“vibratory dispenser,” over which we exercise plenary review. Markman v. Westview

Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370

(1996); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998) (en

banc).     Additionally, Microfil disputes the district court’s construction of the terms

“container” and “canister.”

                                           1. “Controller”

         The district court construed the term “controller” to mean “a single control system

[that] regulates the entire process.” In so doing, the district court rejected AutoMed’s

preferred construction of “a device or system that regulates a process or another

device” as inconsistent with the specification. AutoMed Techs., Inc. v. Microfil, LLC, No.

04-CV-5596, slip op. at 17-18 (N.D. Ill. Oct. 26, 2005) (“Claim Construction Opinion”).

In applying this construction, the district court then held that “multiple controllers . . .

coordinated by a master computer” could not constitute a single control system.

Infringement Opinion, slip op. at 8. In effect, the district court’s application treated the

“single control system” as referring to a single control device. Id. (emphasis added).

AutoMed argues that the district court erred by limiting “controller” to a single control

device, while Microfil urges us to adopt a definition from a technical dictionary, which

defines “controller” as “[a] module or specific device which operates automatically to

regulate a controlled variable or system.” Charles J. Sippl, Microcomputer Dictionary 85

(2d ed. 1981). Microfil misrepresents this definition in its brief, however, by introducing

2006-1620                                 3
the modifier “single” before “module or specific device,” and by ignoring the first

definition listed, which recites “[a]n element or group of elements . . . .”          See id.

(emphasis added). The cited dictionary definition does not limit the term “controller” to a

device as distinguished from a group, collection, or system of devices.

       We agree with the district court’s initial construction, with the clarification that the

“controller” need not be limited to a single device, as applied by the district court and

asserted by Microfil. We see no basis in the intrinsic record to warrant reading the term

“controller” to be limited to a single device or to any particular hardware or software.

The specifications of the ’671 and ’927 patents support a broad interpretation of

“controller.” While the specifications differ in some respects, these differences are not

material to our analysis here; we rely on text common to both specifications. Moreover,

“the same term or phrase should be interpreted consistently where it appears in claims

of common ancestry.” Epcon Gas Sys., Inc. v. Bauer Compressors, Inc., 279 F.3d

1022, 1030 (Fed. Cir. 2002). The specifications disclose at least two structures that

perform control functions: a “controller 180,” which apparently controls only the rate of

vibration; and a “control system 80,” which seems to control many aspects of the entire

process. Compare, e.g., ’927 patent col.8 ll.51-59, with id. col.11 ll.43-46.

       Unfortunately, the specifications fall short of clarity in outlining the exact functions

and details of the control system software and hardware. Even though the relationship

between these structures is not entirely clear from the written description, what is

unmistakable is that no single device is disclosed which performs or is capable of

performing all of the functions recited in claim 1 of the ‘927 patent, namely, to receive a

patient’s prescription information and to control the entire apparatus, including the

2006-1620                                 4
vibratory dispenser, the container transport assembly, and the vial transport assembly.

See ’927 patent claim 1. To the contrary, the patents describe only in general terms the

control of several distinct systems and processes. E.g., ’927 patent col.8 ll.1-2 (drive

unit vibration); id. col.10, ll.58-62 (vial transport); id. col.11, ll.47-63 (patient entry

process). With all due respect to the view expressed in the dissent, a construction of

the term “controller” to be “a single module or specific device which operates

automatically to regulate a controlled variable or system,” as argued by Microfil, would

fly in the face of the specification and would engraft onto the claims an unwarranted

limitation. See Phillips v. AWH Corp., 415 F.3d 1303, 1322-23 (Fed. Cir. 2005) (en

banc) (cautioning that dictionary definitions cannot be used to “contradict any definition

found in or ascertained by a reading of the patent documents” (quoting Vitronics Corp.

v. Conceptronic, Inc., 90 F.3d 1576, 1584 n.6 (Fed. Cir. 1996))).           Without a clear

indication from the patentee that a single device must control these varied functions, it is

improper to limit the term “controller” to a single device rather than a single system.

Accordingly, while we affirm the district court’s initial construction of “controller” to mean

a “single control system that regulates the entire process,” we clarify that the controller

need not be limited to a single device, nor to any particular hardware or software.

                                     2. “Vibratory Dispenser”

       The district court construed “vibratory dispenser” as “a device that uses vibration

in order to dispense medication, and not a device that merely assists in the dispensing,”

thereby rejecting AutoMed’s proposed construction, “a dispenser that uses vibration to

aid in the dispensing function.” Claim Construction Opinion, slip op. at 18-19. Microfil

argues that under the district court’s construction, vibration must be the exclusive force

2006-1620                                 5
causing the dispensing of medication.        Microfil thus attempts to exclude devices

requiring the assistance of gravity from the scope of the claims. AutoMed challenges

Microfil’s interpretation of the district court’s construction and maintains that vibration

need not be the sole force used to dispense medication.

       We agree with the district court’s construction, but clarify that to the extent

Microfil reads it to require the use of vibration alone to dispense pills, it is incorrect.

Nothing in the language of the claims or the specifications indicates that the term

“vibratory” should be interpreted to mean “vibratory only.” Even Microfil has previously

admitted that the claimed dispenser requires gravity—in addition to vibration—to

effectively dispense pills. See Br. Supp. Defs.’ First Mot. for Partial Summ. J. for Non-

Infringement (Dckt. No. 47) at 10.       The preferred embodiments corroborate this

admission; both specifications indicate that internal ramps position pills to be dispensed

through a gate on the bottom of the container or canister, which opens to allow pills to

drop out during the vibratory dispenser’s operation.          This precludes any claim

construction wholly excluding the role of gravity. See Vitronics Corp. v. Conceptronic,

Inc., 90 F.3d 1576, 1583 (Fed. Cir. 1996).         Thus, we affirm the district court’s

construction with the clarification that natural forces—including gravity—are not

excluded from the dispensing process.

                                  3. “Container” and “Canister”

       As an alternative basis for affirmance, Microfil challenges the district court’s

construction of “container” and “canister,” as “any suitable design that allows dispensing

of countable oral solid drugs.” Claim Construction Opinion, slip op. at 17. Microfil

contends that these terms, which the parties agree are synonymous, should be limited

2006-1620                                6
to a unitary structure. AutoMed counters that nothing in the intrinsic record compels this

narrow construction. Having considered the claims, the written description, and the

figures of the ’927 and ’671 patents, we agree with the district court’s refusal to read in

this additional limitation. See ’927 patent, col.6 ll.15-17 (“The canister may be of any

suitable design that allows dispensing of countable oral solid drugs within an automated

drug dispensing system.”); ’671 patent, col.6 ll.17-19 (same). We accordingly affirm the

district court’s construction of these terms.

                                      B. Infringement

       “We review a district court’s grant of summary judgment of non-infringement

without deference.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355,

1369 (Fed. Cir. 2006). The district court based its non-infringement determination on

the absence from the accused systems of structure corresponding to the “controller”

limitation. The district court so ruled by incorrectly applying its “single control system”

construction of the term “controller” to a specific device and by failing to recognize that

several of the asserted claims lack the “controller” limitation completely. However, we

affirm the summary judgment of non-infringement with respect to Microfil’s Auger

System on the alternate ground that AutoMed has failed to raise a genuine issue of

material fact that the Auger System includes a “vibratory dispenser.” Accordingly, we

vacate the summary judgment of non-infringement on the “controller” limitation, and

provide guidance to the district court in revisiting this issue on remand. See Ecolab, Inc.

v. Envirochem, Inc., 264 F.3d 1358, 1370 (Fed. Cir. 2001).

       Under the clarified interpretation of “controller,” discussed supra, the district court

must consider on remand AutoMed’s contentions that Microfil’s separate controller

2006-1620                                 7
modules and master control program comprise a “single control system.”              Microfil

admitted at oral argument that its various controllers comprise a single system, see Oral

Arg.   at   25:42-25:55,   27:00-27:30,       available   at   http://www.cafc.uscourts.gov/

oralarguments/mp3/06-1620.mp3, and argued for non-infringement based on its multi-

component design.     As discussed previously, however, nothing in the ’927 or ’671

patents indicates that the inventor intended to exclude modular or multi-component

systems, and we do not limit “controller” to a single device. Although Microfil contends,

for example, that its systems comprise multiple autonomous controllers and not “a

single control system that regulates the entire process,” such arguments implicate

factual questions.   For these reasons, the summary judgment of non-infringement

based on the “controller” limitation cannot stand.

       Moreover, the district court did not address the complete absence of the

“controller” limitation from asserted claims 12-17, 19-20, 22, and 24-26 of the ’671

patent. This variation in claim language gives rise to a presumption of differing claim

scope, one which was not disputed by Microfil prior to oral argument, and one which is

further bolstered by the addition of the “controller” limitation in dependent claim 21. See

Phillips, 415 F.3d at 1314-15 (discussing claim differentiation doctrine). We also note

that claim 27 of the ’671 patent, which recites “the controller,” appears to be mistakenly

dependent on claim 20, in which this term finds no antecedent basis. See NTP, Inc. v.

Research In Motion, Ltd., 418 F.3d 1282, 1306 (Fed. Cir. 2005) (construing claim term

employing definite article “the” as requiring an antecedent basis). Because claim 21—

and not claim 20—recites a “controller” limitation, perhaps claim 27 was intended to

depend from claim 21. However, we leave to AutoMed any corrective action it deems

2006-1620                                 8
necessary. The district court erred as to these asserted claims by entering summary

judgment of non-infringement based solely on a claim limitation not recited therein.

       Microfil presents an alternative ground for affirmance—the lack of a “vibratory

dispenser” in the accused systems. We disagree as to the 219/107 Systems. The

219/107 Systems indisputably use vibration to dispense pills. Microfil itself refers to the

“original [Microfil] systems [as] using vibration,” Appellee Br. at 27, and has admitted

that “Microfil’s [219/107 Systems] use gravity, in addition to vibration, to cause the

dispensing of pills,” id. at 15 (emphasis added); see also id. at 3. Not only do we

disagree with Microfil’s alternative ground for affirmance, it would appear that, in the

absence of other facts not apparent from the record as presently developed, Microfil’s

admission with respect to the “vibratory dispenser” limitation, and the absence of any

“controller” limitation in claims 12-17, 19-20, 22, and 24-26 of the ’671 patent would

support a conclusion of infringement of those claims by the 219/107 Systems.

Nonetheless, we leave it to the district court to address this issue in the first instance on

remand. We also leave it to the district court to assess infringement of the remaining

claims by the 219/107 Systems in light of our clarifications to the claim constructions.

       As to the Auger System, Microfil makes no concessions regarding vibration, and

AutoMed fails to provide evidence to support its claim that the Auger System uses

vibration to dispense pills. The 2005 Microfil patent application cited by AutoMed as

descriptive of the Auger System makes no reference to vibration, and AutoMed’s expert

offered little more than speculation regarding the capability of the system to be

configured to vibrate pill containers. Telemac Cellular Corp. v. Topp Telecom, Inc., 247

F.3d 1316, 1330 (Fed. Cir. 2001) (“[T]hat a device is capable of being modified to

2006-1620                                 9
operate in an infringing manner is not sufficient, by itself, to support a finding of

infringement.”); see also Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052, 1080

(Fed. Cir. 2005) (holding expert speculation insufficient to defeat summary judgment).

AutoMed’s assertion that Microfil’s own expert characterized the motion of the Auger

System as vibration is unsupported by the record. At best, Microfil’s expert testified only

that the Auger System could be configured to cause vibration. Because AutoMed failed

to make a showing sufficient to establish a genuine issue of material fact as to the

existence of vibration in the Auger System, and because every claim asserted by

AutoMed from both the ’927 and ’671 patents includes a limitation requiring a “vibratory

dispenser,” we affirm the district court’s summary judgment of non-infringement of both

the ’927 and ’671 patents with respect to Microfil’s Auger System. See E-Pass Techs.,

Inc. v. 3Com Corp., 473 F.3d 1213, 1222 (Fed. Cir. 2007) (citing Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986)).

                                  C. Contract Damages

      Following a grant of summary judgment of breach of contract against Gerold, the

district court granted AutoMed a permanent injunction barring Gerold from disclosing

AutoMed’s confidential information, but awarded only nominal damages in the amount

of one dollar. Contract Damages Opinion, slip op. at 8-10. The district court was not

persuaded that AutoMed had demonstrated any monetary harm resulting from Gerold’s

breach, particularly in light of its findings that Gerold contributed to the QuickScript®

project in exchange for compensation paid by AutoMed and its predecessor; that

AutoMed alleged no lost sales as a result of Gerold’s breach; and that Gerold’s contract

lacked a non-compete clause. Id., slip op. at 9-10. AutoMed appeals the nominal

2006-1620                               10
damages award and relies on Olympia Hotels Corp. v. Johnson Wax Development

Corp., 908 F.2d 1363 (7th Cir. 1990), for the proposition that reimbursement of

consideration paid for a broken promise is an acceptable measure of damages where

the plaintiff cannot establish lost profits. AutoMed thus seeks reimbursement for the

entire amount of compensation paid to Gerold and his company under the contract.

Microfil argues in response that AutoMed failed to establish any correlation between the

amount paid to Gerold for his services and any subsequent harm suffered as a result of

Gerold’s breach.

       We review the nominal damages award for breach of contract for clear error.

Okaw Drainage Dist. v. Nat’l Distillers & Chem. Corp., 96 F.3d 1049, 1051 (7th Cir.

1996) (applying Illinois law and recognizing the “broad discretion” of the district court).

Because AutoMed provided no basis for quantifying any damages suffered as a result

of the breach of contract, we find no clear error on the part of the district court in

entering an award of only nominal damages. See Midwest Software, Ltd. v. Willie

Washer Mfg. Co., 630 N.E.2d 1088, 1105 (Ill. App. Ct. 1994) (“If a party proves that it

has the right to damages but fails to provide a proper basis for computing those

damages, only nominal damages may be awarded.”).

       AutoMed failed to establish the monetary extent, if any, of its injury, much less to

justify reimbursement of the full contract price AutoMed or its predecessor paid to

Gerold for his work in developing AutoMed’s QuickScript® system.           See Ustrak v.

Fairman, 781 F.2d 573, 578 (7th Cir. 1986) (stating that nominal damages alone suffice

“if only the fact and not the extent of injury is proved.”). AutoMed provides only the fact

that it had previously compensated Gerold (or perhaps his company) to justify a larger

2006-1620                               11
award. Unlike Olympia Hotels, however, where the breach went to the heart of the

contracted services, and a partial refund of the contract price could make the plaintiff

whole, see 908 F.2d at 1366, 1372 (holding that breach of contract by hotel

management firm based on its failure to “use its best efforts to make the hotel a

success” could justify a “refund [of] a portion of the management fees that [the plaintiff]

had paid under the contract”), the breach here was ancillary to the primary purpose of

the contract. AutoMed provides no basis to quantify any harm suffered as a result of

the breach, much less correlate this harm to the compensation paid under the contract.

Because we find no clear error in the district court’s award of nominal damages, we

affirm.

                                     III. CONCLUSION

          For the foregoing reasons, we affirm-in-part as to the district court’s nominal

damages award for breach of contract and as to summary judgment of non-infringement

by Microfil’s Auger System. We vacate-in-part the district court’s summary judgment of

non-infringement of Microfil’s 219/107 Systems, and remand for further proceedings

consistent with this opinion.

                                              COSTS

          No costs.

2006-1620                                12
                       NOTE: This disposition is nonprecedential

 United States Court of Appeals for the Federal Circuit
                                        2006-1620

                           AUTOMED TECHNOLOGIES, INC.,

                                                          Plaintiff-Appellant,

                                             v.

                        MICROFIL, LLC and WILLIAM GEROLD,

                                                          Defendants-Appellees.

MAYER, Circuit Judge, dissenting-in-part.

       I would affirm the trial court’s grant of summary judgment of noninfringement of

U.S. Patent No. 6,449,927 (“’927 patent”). The ’927 patent requires a single controller

to receive a patient’s prescription information and control the entire apparatus, including

the vibratory dispenser, the container transport assembly, and the vial transport

assembly. See ’927 patent claim 1. Allowing multiple controllers to perform these

functions under the guise of a single control unit or system disregards the claim

requirement that a single “controller” be used. Because the accused devices do not

have a single controller that performs the required functions, and AutoMed

Technologies, Inc. did not pursue a doctrine of equivalents argument before the trial

court, Microfil, LLC does not infringe the ’927 patent.