08
Jul
By Eric Schweibenz
Further to our May 23, 2011 post, on June 24, 2011, ALJ Gildea issued the public version of the Initial Determination (“ID”) (dated May 20, 2011) in Certain Digital Set-Top Boxes and Components Thereof (Inv. No. 337-TA-712).  Due to the size of the ID, please see part 1 here and part 2 here.

By way of background, the Commission instituted this investigation on April 15, 2010.  The Complainants are Verizon Communications Inc. and Verizon Services Corp. (collectively, “Verizon”) and the Respondent is Cablevision Systems Corp. (“Cablevision”).

According to the ID, Cablevision violated Section 337 in the “sale for importation, the importation into the United States, the sale for importation, or the sale within the United States after importation” of certain digital set-top boxes and components thereof (the “Accused Products”) by reason of infringement of claim 13 of U.S. Patent No. 6,381,748 (the ‘748 patent).  ALJ Gildea further determined that Cablevision did not violate Section 337 in connection with claim 38 of U.S. Patent No. 5,666,293 (the ‘293 patent), claim 14 of U.S. Patent No. 5,635,979 (the ‘979 patent), claim 14 of U.S. Patent No. 6,367,078 (the ‘078 patent), and claim 5 of U.S. Patent No. 7,561,214 (the ‘214 patent).

ALJ Gildea further determined that there is a domestic industry that practices the ‘748 patent, but none that practice the ‘293, ‘979, ‘078, and ‘214 patents.

JURISDICTION

Cablevision set out two arguments challenging the Commission’s jurisdiction: (1) Cablevision was not the importer of record and (2) the Accused Products did not download the allegedly infringing functional features until after importation.

ALJ Gildea determined that Cablevision’s first argument was not dispositive of the jurisdiction issue.  ALJ Gildea established jurisdiction over Cablevision on two alternative grounds: (1) Cablevision was “sufficiently involved” with the importer of record’s manufacturing and importation of the Accused Products and (2) Cablevision re-imported the Accused Products after they were sent abroad for repairs.

ALJ Gildea rejected Cablevision’s second argument by referring to Order No. 30 which rendered the argument an incorrect application of law because “jurisdiction does not need to be determined by reference to the site of first infringement.”  Additionally, ALJ Gildea held that at least some of the Accused Products had downloaded the allegedly infringing features prior to being sent abroad for repair; therefore, the alleged infringement did in-fact occur before Cablevision re-imported the Accused Products. 

CLAIM CONSTRUCTION

The ‘293 and ‘979 Patents

As to the ‘293 and ‘979 patents, the only disputed claim term was “network interface module,” which the parties agreed should have the same meaning for both patents.  The parties also agreed that the term had no ordinary or customary meaning at the time of invention and, therefore, the specifications provided the best evidence for how the claim term should be defined. 

Cablevision argued for a claim construction that included a “plug in” limitation.  Verizon and the Commission Investigative Staff (“OUII”) believed that the term was intended to generally cover “electronic circuitry” without any “plug in” limitation.  ALJ Gildea agreed with Cablevision in concluding that the term “network interface module” included “a plug in unit of electronic circuitry to a digital entertainment terminal for connecting to a communication network.”

The ‘748 Patent

ALJ Gildea construed three terms in the ‘748 patent: (1) “data processing network information,” (2) “first interactive element,” and (3) “second interactive element.”

Data processing network information

ALJ Gildea adopted, as undisputed, Verizon’s and OUII’s claim construction for the first term because Cablevision failed to set forth a position in its initial post-hearing brief.  Consequently, ALJ Gildea construed “data processing network information” to mean “information from a network that must be transformed for display on a television.”

First interactive element

ALJ Gildea interpreted the term “first interactive element”, as proposed by Verizon, to mean “an element for user selection.”  ALJ Gildea found that the adopted definition and explicit claim language sufficiently conveyed the “interactive” and “not suitable for display on a television” limitations proposed by Cablevision and the OUII.   

Second interactive element

ALJ Gildea construed the term “second interactive element,” to mean “another element for user selection.”  ALJ Gildea rejected Cablevision’s proposed limitations as redundant given the adopted definition and explicit claim language.  ALJ Gildea similarly rejected Verizon’s proposed language, “different from”, as unnecessary because it was already included in the explicit claim language.

The ‘078 Patent

ALJ Gildea construed four terms in the ‘078 patent: (1) “first channel control switch,” (2) “second channel control switch,” (3) “numerically sequential navigation,” and (4) “content based navigation.”

Central to construction of all four claim terms was the definition of “navigation.”  Verizon argued that “navigation” should be broadly construed to encompass browsing the onscreen guide without changing the channel.  Cablevision and the OUII disagreed and stated that “navigation” between channels should be limited to changing the channel.  ALJ Gildea agreed with Verizon and found that “navigation” permitted broader activity such as browsing or scrolling within the program listings.  ALJ Gildea supported his finding by (1) comparing claims that used “navigation” to other claims that explicitly recited a channel changing limitation, (2) noting that the specification did not explicitly limit “navigation” to channel changing, and (3) citing the prosecution history to confirm the applicant’s intent which focused on a broad form of navigation.

First channel control switch and Second channel control switch

Accordingly, ALJ Gildea defined “first channel control switch” as “a first type of signal for navigation between channels” and “second channel control switch” as “a second type of signal for navigation between channels.”

Numerically sequential navigation and Content based navigation

With respect to the last two claim terms “numerically sequential navigation” and “content based navigation,” ALJ Gildea understood the terms to mean “navigation between the next higher or lower numbered channel” and “navigation between channel based on content,” respectively.

The ‘214 Patent

ALJ Gildea construed four claim terms in the ‘214 patent: (1) “anchor channel,” (2) “multiplexed channel associated therewith,” (3) “sequential navigation,” (4) “first channel control switch signal,” and (5) “second channel control switch signal.”

Anchor channel

Cablevision sought a definition of “anchor channel” that would require the channel to originate from a common broadcast provider.  Verizon and the OUII argued that the specification expressly defined the “anchor channel” and, therefore, the explicit definition should be adopted without any limiting language.  ALJ Gildea once again agreed with Verizon and the OUII and held the term to mean “a channel of a video distribution system which at least one other channel associated therewith.”

Multiplexed channel associated therewith

Cablevision again tried to limit the language of “multiplexed channel associated therewith.”  Unconvinced, ALJ Gildea rejected Cablevision’s proposed claim construction and adopted the explicit definition included in the specification which stated that “(at least one) multiplexed channel associated therewith” meant “‘at least one’ other channel corresponding to said ‘at least one of the anchor channels.’”

Sequential navigation

The parties disagreed over the scope of the term “navigation.”  Mirroring their arguments regarding “navigation” in the ‘078 patent, Verizon argued that the term should be broadly defined to encompass browsing while Cablevision and the OUII asserted that the scope should be limited to changing channels.  Unlike the conclusion reached in the ‘078 patent, ALJ Gildea found that the ‘214 patent specification and prosecution history required adopting the channel changing limitation proposed by Cablevision and the OUII.  As a result, ALJ Gildea defined the term to mean “changing from one channel to the next available channel.”

First channel control switch signal and Second channel control switch signal

With regard to the terms “first channel control switch signal” and “second channel control switch signal,” Verizon and Cablevision again argued for broad and narrow claim constructions, respectively.  In defining both terms given their plain and ordinary meaning, ALJ Gildea understood “first channel control switch signal” to mean “a first type of signal from changing from one of the plurality of anchor channels to the next available anchor channel” and “second channel control switch signal” to mean “a second type of signal from changing from the at least one multiplexed channel to the next available multiplexed channel.”

INFRINGEMENT DETERMINATION

The ‘293 and ‘979 Patents

With respect to direct infringement, Verizon conceded that none of the Accused Products literally infringed the network interface module’s “plug in unit of electronic circuitry” limitation; rather, Verizon argued that all the Accused Products infringed both patents under the doctrine of equivalents. 

Regarding literal infringement, ALJ Gildea agreed that none of the Accused Products literally infringed the “plug in unit of electronic circuitry” limitation. As per the doctrine of equivalents, ALJ Gildea determined that the Accused Products failed to satisfy all three aspects of the function-way-result test. Accordingly, ALJ Gildea held that the Accused Products did not infringe the asserted claims of either the ‘293 or ‘979 patents. 

The ‘748 Patent

Cablevision and the OUII argued that the “first interactive element” limitation was not satisfied because the raw data, when retrieved over the network, was in a user selectable format.  ALJ Gildea rejected Cablevision and the OUII’s argument as an attempted “indirect reiteration of an untimely claim construction position.”  Agreeing instead with Verizon’s assertion that the Accused Products, when used in conjunction with Cablevision’s iO Photos, Optimum Autos/Homes, MSG varsity, and News 12 services, literally infringed the asserted claim of the ‘748 patent, ALJ Gildea held that the Accused Products, when used in conjunction with the enumerated Cablevision services, infringed the asserted claim of the ‘748 patent. 

The ‘078 Patent

Regarding direct infringement, ALJ Gildea concluded that all of the Accused Products with the “browse by theme” feature literally infringed the asserted claim of the ‘078 patent.  ALJ Gildea dismissed Cablevision’s and the OUII’s argument that the Accused Products did not satisfy the “second channel control switch” limitation because it relied on an assertion already rejected during claim construction.

As to induced infringement, ALJ Gildea held that “Cablevision knew or should have known that [it was inducing infringement] by providing its customers with the Accused Products along with written and on-screen instructions on how to use the [“browse by theme” feature].”  Thus, ALJ Gildea concluded that Cablevision had induced infringement of the asserted ‘078 patent claim with respect to the accused SMT-C5320 and Cisco 4200, 4250, and 8300 models (“Listed Models”). 

With respect to contributory infringement, ALJ Gildea found that Cablevision satisfied all the elements of contributory infringement: (1) Cablevision imported and re-imported the Listed Models, (2) the Listed Models had no substantial non-infringing uses, and (3) the Listed Models directly infringed the asserted ‘078 patent claim. Accordingly, ALJ Gildea concluded that Cablevision contributed to the infringement of the assert ‘078 patent claim.

The ‘214 Patent

Verizon argued that the Accused Products, when combined with two interactive features, MSG varsity and the iO channels, directly infringed the asserted ‘214 patent claim.  Cablevision and the OUII on the other hand asserted that the neither of the interactive features, when used in conjunction with the Accused Product, directly infringed the asserted ‘214 patent claim.  ALJ Gildea ruled that the MSG varsity interactive feature failed to meet the “sequential navigation” limitation because the user navigated across a variety of informational elements; therefore, ALJ Gildea concluded that the Accused Products directly infringed the asserted claim of the ‘214 patent only when combined with the iO channels.

With respect to induced infringement, ALJ Gildea found that Cablevision knew of the ‘214 patent, advertised the iO channels to its customers, and provided on-screen indicators that instructed users on how to use the iO channels.  For that reason, ALJ Gildea concluded Cablevision induced infringement of the asserted ‘214 patent claim with respect to the Listed Models.

As to contributory infringement, Cablevision and the OUII argued that Cablevision did not contribute to the infringement of the asserted ‘214 patent claim because the Accused Products, taken together, had substantial non-infringing uses.  ALJ Gildea noted that the argument misplaced its focus on the Accused Products when and the proper focus was the infringing item.  Specifically, ALJ Gildea found that the portion of the Accused Products that implemented the infringing iO channels had no substantial non-infringing uses. Thus, ALJ Gildea held that Cablevision contributed to the infringement of the ‘214 patent claim.

VALIDITY

The ‘293 and ‘979 Patents

ALJ Gildea first addressed the parties’ disagreement over priority dates.  ALJ Gildea held that the asserted prior art, Time-Warner Cable’s Full Service Network (“FSN”), had a priority date earlier than the effective dates of the ‘293 and ‘979 patents because FSN had been “conceived and publicly disclosed, and had not been abandoned, suppressed or concealed,” prior to the effective date of either patent.

Cablevision argued that both the ‘293 and ‘979 patents were invalid as being anticipated by prior art disclosed in FSN.  ALJ Gildea found that FSN did not disclose the “network interface module” limitation which was common to both the ‘293 and ‘979 patents, nor did it disclose the “non-volatile memory” limitation of the ‘979 patent.  Further, ALJ Gildea rejected Cablevision’s argument that the “non-volatile memory” limitation, even if not disclosed in FSN, was obvious to a person skilled in the art.  Accordingly, ALJ Gildea concluded that neither the ‘293 patent nor the ‘979 patent were invalid as anticipated by FSN.

Cablevision also argued that the ‘979 patent was invalid for lack of written description because the specification failed to sufficiently describe delivery of application software over a broadcast channel.  ALJ Gildea determined that the specification “adequately disclosed to a person of ordinary skill that there are multiple methods for effecting delivery of the software.” Therefore, ALJ Gildea concluded that the evidence failed to show by clear and convincing evidence that the asserted ‘979 patent claim was invalid for lack of written description.

The ‘748 Patent

Cablevision argued that the asserted claim of the ‘748 patent was invalid because it was anticipated by both U.S. Patent No. 5,918,013 (‘013 patent) and U.S. Patent No. 6,034,689 (‘689 patent).  ALJ Gildea determined that Cablevision’s expert witness testimony failed to provide clear and convincing evidence that the asserted prior art patents disclosed all of the ‘748 patent’s limitations. Thus, neither the ‘013 patent nor the ‘689 patent anticipated the asserted claim of the ‘748 patent.

The ‘078 Patent

Cablevision argued that the asserted claim of the ‘078 patent was anticipated by U.S. Patent No. 5,850,218 (‘218 patent).  In opposition, Verizon argued that the ‘218 patent was not prior art and that the ‘218 patent failed to disclose all the limitations of the ‘078 patent claim.  ALJ Gildea determined that Verizon failed to prove that the ‘078 patent was entitled to a priority date before the filing date of the ‘218 patent because the inventors of the ‘078 failed to exert reasonable diligence in reducing the invention to practice.  As to anticipation, ALJ Gildea found that the ‘218 patent failed to disclose the “second control channel” limitation.  Consequently, ALJ Gildea held that the ‘218 failed to anticipate the asserted claim of the ‘078 patent. 

The ‘214 Patent

Cablevision argued that U.S. Patent No. 5,633,683 (‘683 patent) anticipated the asserted ‘214 patent claim. Verizon countered by stating that the ‘683 patent failed to disclose the ‘214 patent’s “anchor channel” and “first channel control switch signal” limitations.  ALJ Gildea found that the ‘683 patent disclosed the “anchor channel” limitation but failed to disclose the “first channel control switch signal” limitation.  Accordingly, ALJ Gildea concluded that the ‘683 patent failed to anticipate the asserted ‘214 patent claim.

DOMESTIC INDUSTRY

In a previous order, Order No. 33, ALJ Gildea held that Verizon had satisfied the economic prong of the domestic industry requirement with respect to all the asserted patents.  See our February 3, 2011 post for more details.  As to the technical prong, ALJ Gildea determined that only the ‘748 patent was practiced by Verizon’s products and, therefore, the ’293, ‘979, ‘078, and ‘214 patents all failed to satisfy the technical prong to the domestic industry requirement.

REMEDY AND BONDING

With respect to remedy, ALJ Gildea recommended that if the Commission finds a violation of Section 337, it should issue a limited exclusion order. 

Based on Verizon’s undisputed evidence that Cablevision maintained “commercially significant inventories of the Accused Products,” ALJ Gildea recommended that if the Commission finds a violation, it should also issue a cease and desist order. 

Lastly, ALJ Gildea rejected Verizon’s arguments for 100 percent bond because they amounted to nothing more than “unsworn attorney argument[s].”  Instead, ALJ Gildea recommended that no bond be imposed during the Presidential review period.

* Thomas Yebernetsky is a summer associate at Oblon Spivak
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