CAFC pointers on proving lack of “substantial non-infringing uses” in pleading contributory infringement

Le-Nhung McLeland | June 20, 2012

Toshiba Corporation v. Imation Corp.

Jun 11, 2012

Panel:  Dyk, Schall, and Moore.  Opinion by Moore.  Dissent by Dyk.

Summary:

(1)   Grant of summary judgment of non-infringement as to contributory infringement of ‘751 patent affirmed because plaintiff did not meet burden of proof that there was a lack of substantial non-infringing uses.

(2)   Grant of summary judgment of non-infringement as to induced infringement of ‘751 patent vacated because district court erred as a matter of law in holding that the existence of a substantial non-infringing use precludes a finding of induced infringement.

(3)   Grant of summary judgment of non-infringement of ‘966 patent vacated because it was based on erroneous claim construction.

(4)   No clear “take away” on claim construction from discourse between majority and dissent.

Background:

Toshiba sued Imation and seven other manufacturers and distributors of blank recordable DVDs for infringement of two patents, US 5,892,751 and US 5,831,966.  The district court granted summary judgment of non-infringement under both patents.

DVDs are made in several formats, which are governed by technical standards calling for a disc to be organized into three areas: a “lead-in area” containing a test pattern, a “data area”, and a “lead-out” area.  There are two methods for recording data onto a DVD: a “disc-at-once” mode, and a multi-session mode.  The “disc-at-once” mode writes all the data, the lead-in area and the lead-out area in a single session.  The multi-session mode allows data to be added at successive sessions on a single disk.  At any time after data is written on the disk, the user may choose to “finalize” the disk, which adds the lead-in area and the lead-out area to the disk.  A “finalized” DVD can be played in any standardized DVD player or drive.  An “unfinalized” DVD can be played only on the drive with which it was written.

The ‘751 patent

The majority opinion describes the ‘751 patent as being “directed to how data is written onto DVDs.”  The asserted claims require a lead-in area with a test pattern, a data area, and a lead-out area.  Recording a DVD without finalizing it is a non-infringing use since the unfinalized DVD lacks the lead-in area with a test pattern and also lacks the lead-out area.

Contributory Infringement

Noting that Toshiba had the burden to prove the lack of substantial non-infringing uses, the CAFC concluded that Toshiba “failed to introduce evidence sufficient to create a genuine issue of material fact as to whether unfinalized DVDs was not a substantial non-infringing use.”  Notably, “Toshiba presented no survey, expert, or other evidence showing how frequently users choose not to finalize DVDs.  Toshiba did not introduce evidence showing that using unfinalized DVDs is ‘unusual, far-fetched, illusory, impractical, occasional, aberrant, or experimental.’… Toshiba did not introduce evidence showing how often users will later finalize the DVDs….”  (Summary judgment affirmed)

Induced Infringement

To prove induced infringement, the patentee “must show direct infringement, and that the alleged infringer “knowingly induced infringement and possessed specific intent to encourage another’s infringement.” The district court held that the existence of a substantial non-infringing use precludes a finding of induced infringement.  The CAFC said categorically that the district court “erred as a matter of law” on this point, and that the existence of a substantial non-infringing use does not preclude a finding of inducement.

In addition, the CAFC found that “the evidence is sufficient to create a genuine issue of material fact” regarding direct infringement.  Specifically, “[W]e hold there is sufficient evidence such that a “jury in the present case could … reasonably conclude that, sometime during the relevant period … more likely than not one person somewhere in the United States” finalized DVDs or used the disc-at-once mode.”  (Summary judgment vacated)

The ‘966 patent

Claim construction is an issue with respect to claim 1 of the ‘966 patent, which reads:

A recording medium comprising:

at least one recording plane, wherein each recording plane on which data is recorded includes:

a data region in which data is recorded; and

a management region including number-of-recording planes identifying information that represents the number of recording planes of the recording medium and recording-plane identifying information that uniquely identifies that recording plane. (emphasis added)

Claim 1 requires “each recording plane on which data is recorded” to include a “management region” which in turn includes “number-of-recording-planes identifying information that represents the number of recording planes of the recording medium”.  Toshiba accused only single-sided DVDs of infringing the ‘966 patent because in those DVDs “the number of planes on the single side is also the number of planes in the medium as a whole.”

The district court construed the “number-of-recording planes identifying information” to mean “information whose purpose is to identify the number of recording planes on the recording medium.”  Similarly, the district court construed the “recording-plane identifying information that uniquely identifies that recording plane” as “information whose purpose is to identify the recording plane being reproduced.”  Since the purpose of certain bits on the accused DVDs was to identify information for only one side of the disc, the district court found that they do not serve the purpose of identifying information for the disc as a whole, and thus do not infringe. The CAFC agreed with Toshiba that the district court improperly read a “purpose” requirement into claim 1.  “The language of the claim only requires that the information “represents” the number of recording planes or “uniquely identifies” the recording plane.  Finding that there is “no dispute that the accused single-sided, single-layer DVDs have these structural elements”, the CAFC held that the district court erred in its claim construction and in granting summary judgment of non-infringement.

Dissent

Judge Dyk delves into the specification and the prosecution history, and concludes that claim 1 “requires both a number-of-sides identifier and a number-of-layers per side identifier (i.e., whether the disc has one or two layers per side).  He found that “the accused product does not have a number-of-sides identifier and thus does not infringe.”

Claim 1 of the ‘966 patent says nothing about “sides”.  Is a “recording plane” the same as a “side”?  Judge Dyk thinks so, based on the prosecution history, in particular the following statement made by Toshiba in response to a §112 rejection:

“As illustrated in FIG. 2 and as described in the Specification … a number-of-disc-sides identifier 2 and a disc side identifier 3 … must be provided on each side of the disc, i.e., each recording plane—in order for the disk side identifier 3 to serve its purpose of identifying which side is being recorded/reproduced.”  (emphasis added)

Take-Away

Mind your burden of proof when you allege contributory infringement.  Watch what you say to overcome rejections in patent prosecution.

Full Opinion

Patent At Issue #1

Patent At Issue #2

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