800 Adept, Inc. v. Murex Securities, Ltd.

• Decision Date: 29 August 2008
• Docket Number: No. 2007-1356.,No. 2007-1272.,2007-1272.,2007-1356.
• Citation: 539 F.3d 1354
• Parties: 800 ADEPT, INC., Plaintiff-Appellee, v. MUREX SECURITIES, LTD., Murex Licensing Corporation, Targus Information Corporation, and West Corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

539 F.3d 1354

800 ADEPT, INC., Plaintiff-Appellee, v. MUREX SECURITIES, LTD., Murex Licensing Corporation, Targus Information Corporation, and West Corporation, Defendants-Appellants.

No. 2007-1272.

No. 2007-1356.

United States Court of Appeals, Federal Circuit.

August 29, 2008.

Stephen D. Milbrath, Allen, Dyer, Doppelt, Milbrath & Gilchrist, P.A., of Orlando, FL, argued for plaintiff-appellee. With him on the brief were Brian R. Gilchrist and Stephen H. Luther.

William F. Lee, Wilmer Cutler Pickering Hale and Dorr, LLP, of Boston, MA, argued for defendants-appellants. With him on the brief were Lisa J. Pirozzolo and Benjamin M. Stern, and Paul R.Q. Wolfson, of Washington, DC.

Before GAJARSA, Circuit Judge, PLAGER, Senior Circuit Judge, and DYK, Circuit Judge.

PLAGER, Senior Circuit Judge.

This patent case involves technology for routing "1-800" telephone calls to an appropriate service location, e.g., the service provider closest to the customer who placed the call. Plaintiff 800 Adept, Inc. ("Adept") and Defendant Targus Information Corporation ("Targus") sell competing services that are used to route calls made to 800 numbers, and both companies own patents covering systems and methods for call routing. Their customers include owners of 800 numbers, such as Enterprise Rent-A-Car and Pizza Hut, as well as providers of telecommunications "platforms"¹ that route 800 calls for such businesses.

In 2002, Adept sued Targus, its affiliated companies Murex Securities, Ltd. and Murex Licensing Corporation, and its customer West Corporation² in the United States District Court for the Middle District of Florida, alleging that services sold by Targus infringed two patents owned by Adept.³ Adept further alleged that Targus had tortiously interfered with Adept's business relationships by asserting Targus's patents against Adept's customers. Targus filed counterclaims alleging that Adept's call routing services infringed various claims in several Targus patents.⁴

After a 24-day jury trial, the jury's verdict essentially found for plaintiff Adept on all issues. The jury found that Targus willfully infringed the asserted claims of Adept's patents and that Adept did not infringe the asserted claims of Targus's patents. The jury found that all the asserted claims of Targus's patents were invalid and further found that the unasserted claims of Targus's '897 patent and '131 patent were invalid as well. The jury also found Targus liable under state law for tortious interference with Adept's business relationships. The jury awarded Adept $18 million for patent infringement and $7 million on the tortious interference claim.

The trial court entered judgment on the jury verdict, issued a permanent injunction, and awarded enhanced damages of $24 million on the patent infringement claim, bringing the total damages award to $49 million. The trial court also determined that the case was exceptional and therefore Adept was entitled to attorney fees under 35 U.S.C. § 285.

After thorough consideration of all the issues in the case, we conclude that the trial court erred regarding a critical claim construction issue in the Adept patents one that permitted the jury to make incorrect findings. Under the correct claim construction, no reasonable jury could find that Targus infringes the asserted claims of Adept's patents; accordingly, we reverse the trial court's judgment of infringement. For the reasons we shall explain, we also reverse the trial court's judgment for Adept on its tortious interference claim. In light of these determinations, we vacate the trial court's damages award, the permanent injunction, and the judgment with respect to willfulness, enhanced damages, and attorney fees.

Regarding the Targus patents, with two exceptions we affirm the trial court's judgment upholding the jury's verdict that the asserted claims of Targus's patents are invalid; for the reasons we explain, we vacate the invalidity judgment on two of the asserted claims of Targus's patents and remand for a new trial on these claims. Because the validity of the unasserted claims of Targus's patents was not at issue during the trial, we vacate the trial court's invalidity judgment with respect to all of those claims.

BACKGROUND

The patents at issue in this case relate to technology for routing telephone calls made to 800 numbers. Typically when a caller dials an 800 number, the long distance carrier ("LDC") handling the call must identify the 10-digit telephone number, known as a "Plain Old Telephone System" ("POTS") number, to which to route the call. (A POTS number has the form NPA-NXX-XXXX, where NPA is the area code and NXX is the exchange.) If all calls to a particular 800 number are to be routed to a single location, the process is relatively simple. Some businesses, however, advertise a single 800 number but have multiple service locations. When a caller dials the 800 number of one of these businesses, the LDC must have some way to determine the POTS number of an appropriate service location. For example, if the 800 number is for a chain of pizza restaurants, the correct service location could be the closest restaurant or one that delivers within the geographic area in which the caller is located.

Plaintiff Adept owns the '111 patent and its divisional, the '689 patent, both of which claim priority to an application filed on July 31, 1992. The two patents, referred to as the Neville patents, are entitled "Geographically Mapped Telephone Routing Method and System," and have virtually identical written descriptions.⁵ The Neville patents disclose a method for directly routing an 800 call to the appropriate service location based on the caller's 10-digit telephone number (NPA-NXX-XXXX), sometimes referred to as the Automatic Number Identification ("ANI"). The invention involves the construction of a database that assigns a service location POTS number to every potential caller according to geographic criteria provided by the owner of the 800 number. This database can be provided to the LDC, which then routes calls made to the 800 number according to the routing instructions in the database. The process is summarized in the patent's abstract:

A method and system for direct routing of telephone calls made by a caller originating from within specific calling areas to one of a plurality of locations of a second party according to certain criteria established by the second party. This routing is accomplished based on the assignment of latitude and longitude coordinates to a potential caller's location. Once these coordinates are assigned to each of the potential callers, the second party's criteria is applied to assign the potential caller to a second party. Such criteria could be existence within a previously-defined geographic area, a custom defined geographic area, or through calculations such as the shortest distance between coordinate points. Once all such assignments have been made, a database is assembled to be used by a long distance carrier for direct routing of telephone calls from callers to an assigned second party.

'111 patent, abstract (emphasis added).

The '111 patent has five independent claims, and the '689 patent has one independent claim, all of which were asserted by Adept against Targus. Claim 1 and claim 17 of the '111 patent are system claims; claim 9 and claim 29 of the '111 patent are method claims; and claim 41 of the '111 patent and claim 1 of the '689 patent are directed to a method of constructing a database. Claim 29, a method claim, is illustrative of the Adept patent claims:

29. A method for direct routing a telephone call from a first party who has an originating telephone number at a physical location and who dials a telephone number including digits uniquely characteristic to a second party having a plurality of service locations, said method comprising the steps of:

[a] allocating latitude and longitude coordinates to the physical location of all potential first parties;

[b] defining the boundaries of one or more geographical areas which can be of any size and shape according to predetermined criteria, each point along said boundaries being defined by latitude and longitude coordinates;

[c] assigning to the physical location of said potential first parties a telephone number of a service location of a second party that will receive calls originating from within the boundary of a geographic area in which the latitude and longitude coordinates of the physical location of each of said potential first parties lie;

[d] determining the originating telephone number of the first party from which said telephone call is to be routed; and

[e] directly routing said telephone call to a service location of the second party assigned to said originating telephone number of the first party by said step of assigning.

'111 patent, col. 15 ll.19-45 (emphases and paragraph lettering added).

Defendant Targus owns two families of patents referred to as the Moore-Shaffer patents, which, like the Neville patents, disclose various systems and methods for routing 800 calls to an appropriate service location based on the caller's 10-digit telephone number. The first family includes seven patents: the '897 patent; its continuation-in-part, the '131 patent; its continuation-in-part, the '868 patent; and its four continuations, the '608 patent, the '982 patent, the '397 patent, and the '810 patent. The second family includes the '214 patent and its continuation, the '179 patent.

The earliest Moore-Shaffer patent is the '897 patent, which claims priority to an application filed on February 22, 1993. The '897 patent, which issued in 1996, was also the subject of a reexamination request filed by Adept in 1999. The United States Patent and Trademark Office ("PTO") granted the request and in 2001 issued a reexamination certificate, confirming the patentability of all claims.

The '897 patent discloses a database containing two...