Mediacom Corp. v. Rates Technology, Inc.

• Decision Date: 16 April 1998
• Docket Number: Civil Action No. 97-10559-WGY.
• Parties: MEDIACOM CORPORATION, Plaintiff, v. RATES TECHNOLOGY, INC., Defendant.
• Court: U.S. District Court — District of Massachusetts

4 F.Supp.2d 17

MEDIACOM CORPORATION, Plaintiff, v. RATES TECHNOLOGY, INC., Defendant.

Civil Action No. 97-10559-WGY.

United States District Court, D. Massachusetts.

April 16, 1998.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Steven M. Bauer, Joseph A. Capraro, Robert N. Feldman, Testa, Hurwitz & Thibeault, Boston, MA, for Plaintiff.

Robert M. Asher, Lee C. Bromberg, Robert L. Kann, Erik P. Belt, Bromberg & Sunstein, Boston, MA, for Defendant.

MEMORANDUM AND ORDER

YOUNG, District Judge.

The plaintiff, MediaCom Corporation ("MediaCom"), commenced this declaratory judgment action seeking a declaration that its Phone Miser product does not infringe patents owned by the defendant, Rates Technology, Inc. ("Rates"). Rates counterclaimed, alleging infringement of both patents.

BACKGROUND

Rates owns two United States Patents Nos. 5,519,769 ("the '769 patent") and 5,425,085 ("the '085 patent"). The '085 patent claims a device for automatically routing telephone calls to the carrier offering the least expensive rates for each particular call. This device is called a "Least Cost Routing Device." Generically, such a device is referred to as a "call rating device." The '769 patent claims a method for automatically updating the database of calling rates used by such a call rating device. The two patents are directed at minimizing telephone costs by optimizing the rates at which each call is placed.

A. Procedure: The Markman Hearing.

The Federal Circuit and the Supreme Court have recently removed any doubt that the construction of patent claims is a question of law for a court to decide. Markman v. Westview Instruments, Inc., 52 F.3d 967, 978-81, 987 (Fed.Cir.1995) (en banc), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). The task of construing claims entirely as matter of law presents some novel challenges to parties and the district courts, however, and thus this case requires some flexibility and experimentation in the adaptation of familiar methods and strategies.

The Markman decisions quickly spawned a new species of proceeding in patent cases — the Markman hearing. See Kenneth R. Amado, Reforming Jury Practice in Patent Cases: Suggestions Towards Learning to Love Using an Eighteenth Century System While Approaching the Twenty-first Century, 78 J. Pat. & Trademark Off. Soc'y 345, 346 (1996) ("Suggestion 1: Since the United States Supreme court Has Affirmed Markman, Pray that Trial Judges Decide Claim Construction Using Pre-Trial Markman Hearings"); James M. Amend, Kirkland & Ellis, Patent Law: a Primer for Federal District Court Judges 11-12 (1998) (unpublished manuscript); David H. Binney & Toussaint L. Myricks, Patent Claim Interpretation After Markman — How Have the Trial Courts Adapted?, 38 Idea 155 (1997) ("Patent Claim Interpretation After Markman"); Steven D. Glazer & Steven J. Rizzi, Markman: The Supreme Court Takes Aim at Patent Juries, J. Proprietary Rights, May 1996, at 2; Gary M. Hoffman & John A. Wasleff, A Tale of Two Court Cases: Markman and Hilton-Davis, Computer Law, June 1996, at 18; William F. Lee, Simona A. Levi-Minzi & Kerry S. Burke, Markman and Its Progeny, in High Technology Law in the Twenty-First Century, Proceedings of the Second Annual High Technology Conference 15, 34-37 (Suffolk Univ. Law School, Sept. 26, 1997) ("Markman and Its Progeny");¹ William F. Lee & Wayne L. Stoner, The Role of Expert Witnesses on Liability Issues in Patent Litigation in Light of Markman v. Westview Instruments in Winning Strategies in 423 Winning Strategies in Patent Litigation 647, 649-86 (Practising Law Institute 1995). These hearings run the gamut from mid-trial sidebar conferences that undergird relevance rulings, see Eastman Kodak Co. v. Goodyear Tire & Rubber Co., 114 F.3d 1547 (Fed.Cir.1997) to virtual mini-trials extending over several days and generating extensive evidentiary records. See Neles-Jamesbury, Inc. v. Fisher Controls, Int'l, 989 F.Supp. 393, 395 (D.Mass. 1998) (Gorton, J.); Thorn EMI North America, Inc. v. Intel Corp., 936 F.Supp. 1186, 1189 (D.Del.1996); Chad Industries, Inc. v. Automation Tooling Systems, Inc., 938 F.Supp. 601, 604 (C.D.Cal.1996); Loral Fairchild Corp. v. Victor Co. of Japan Ltd., 906 F.Supp. 798, 802 (E.D.N.Y.1995), and 911 F.Supp. 76, 79 (E.D.N.Y.1996); Graco Children's Products, Inc. v. Century Products Co., Inc., No. CIV.A. 93-6710, 1996 WL 421966 (E.D.Pa.1996); Ethicon Endo-Surgery v. U.S. Surgical Corp., 900 F.Supp. 172, 173 (S.D.Ohio, 1995), aff'd in part, vacated in part, remanded, 93 F.3d 1572 (Fed.Cir.1996); Elf Atochem North America, Inc. v. Libbey-Owens-Ford Co., Inc. 894 F.Supp. 844, 850 (D.Del.1995); N.D. Cal. R. 16-6 to 16-11. See also Lee's Aquarium & Pet Products, Inc. v. Python Pet Products, 951 F.Supp. 1469 (S.D.Cal.1997); P.A.T., Co. v. Ultrak, Inc., 948 F.Supp. 1506 (D.Kan.1996); Moll v. Northern Telecom, Inc., No. CIV.A. 94-5451, 1996 WL 11355, at *7 (E.D.Pa. Jan.3, 1996); Genentech, Inc. v. Novo Nordisk A/S, 935 F.Supp. 260 (S.D.N.Y.1996), vacated 108 F.3d 1361 (Fed.Cir.1997), reh'g denied (1997), cert. denied ___ U.S. ___, 118 S.Ct. 397, 139 L.Ed.2d 310 (1997).

The characterization of claim construction as matter of law, of course, theoretically permits the resolution of these issues at a relatively early stage in the litigation. "From the standpoint of the litigants, earlier is generally better.... The advantage arises from the fact that many patent cases turn on claim interpretation issues." Patent Claim Interpretation After Markman, supra at 161. Questions regarding the construction of patent claims can now safely be addressed in many circumstances prior to the completion of fact discovery, and certainly before trial. In this case, the Court determined that an early Markman hearing was a salutary mechanism for narrowing the disputed issues and securing prompt disposition of those matters as to which there were no genuine factual disputes.

Implicit in this approach to the Markman hearing is the notion that, like any other determination of a legal rule, such a hearing should take place in the context of conventional motion practice. Only through the use of traditional dispositive motions will the Court remain moored to familiar procedures and standards of decision, and focus on the application of legal rules to discrete factual circumstances. Otherwise, the Court risks crafting elegant, but ultimately useless, statements of claim construction that fail to address the particular controversy before it. Free-standing Markman hearings are of little use in actual litigation and may, indeed, run afoul of the "case and controversy" limitation on judicial power expressed in the Constitution. U.S. Const. art. III, § 2.²

The parties anticipated this Court's need for a procedural vehicle in which to consider their claim construction arguments. MediaCom filed motions for summary judgment based upon its proposed claim constructions; Rates opposed these motions in like manner. As the preceding discussion indicates, the parties' instincts in this regard were sound; indeed, the Rule 56 summary judgment motion is a perfectly appropriate vehicle in which to conduct a Markman hearing. See Markman, 52 F.3d at 981 ("[Pronouncing the meaning of the patent] ordinarily can be accomplished by the court in framing its charge to the jury, but may also be done in the context of dispositive motions such as those seeking judgment as a matter of law.") With these principles in mind, the Court held a Markman hearing—i.e., a hearing on the motions for summary judgment — on December 15, 1997, to afford the parties an opportunity to present arguments directed at the proper construction of the claims contained in the '085 and '769 patents.

Unfortunately, the scheduling of a separate hearing in which to address issues of claim construction appears to have engendered some confusion as to the proper order of analysis in this dispute. In accordance with the model of claim construction laid out in Markman, see 52 F.3d at 978-81, 987, the Court expressly limited argument to the claims, specifications, and prosecution history of the patents in suit,³ declining to entertain any expert testimony, affidavits, or other extrinsic evidence regarding construction of the claims until and unless the Court determined that such evidence would be required.

In so doing, the Court gave practical meaning to the familiar distinction in patent construction between intrinsic and extrinsic evidence, Markman, 52 F.3d at 980-81; Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582-85 (Fed.Cir.1996); the former constituting the public record of the government granted patent monopoly, the latter being of secondary significance and limited utility. The record of the case to this point however, suggests that the parties have conflated such disfavored extrinsic evidence with the helpful, and often necessary, supporting affidavits and other materials contemplated in Rule 56 as the basis for a ruling on summary judgment.

In the ordinary summary judgment motion, the parties seek to persuade the court to apply a legal rule — thus clarifying the rule the Court deems controlling — and at the same time seek to establish the presence or absence of a genuine factual dispute, given the rule applied. Patent infringement analysis should be no different except that, because patent claims often implicate technical or highly specialized knowledge, courts will typically require more assistance than they otherwise do in pronouncing the law (claim construction).⁴ Once the claims have been construed, however, the arguments as to disputes of fact (infringement), proceed in the customary manner. The two questions need not be procedurally separated, but the analytic distinction must be maintained.

Thus there is no reason to receive "expert opinion" by way of affidavits or testimony on the question of claim construction. Indeed, the central teaching of the Supreme Court in Markman was that...