Furnace Brook LLC. v. Aeropostale, Inc., 072211 FEDFED, 2011-1025

Docket Nº:2011-1025
Opinion Judge:Moore, Circuit Judge
Party Name:FURNACE BROOK LLC, Plaintiff-Appellant, v. AEROPOSTALE, INC., DICK'S SPORTING GOODS, INC., AND LEVI STRAUSS & COMPANY, Defendants-Appellees, and BOSTON PROPER, INC., Defendant-Appellee, and NIKE, INC., Defendant-Appellee, and HICKORY FARMS, INC., Defendant-Appellee, and THOMASVILLE FURNITURE INDUSTRIES, INC., Defendant-Appellee.
Attorney:George C. Summerfield, Stadheim & Grear Ltd, of Chicago, Illinois, argued for plaintiff-appellant. With him on the brief were Rolf O. Stadheim, Joseph A. Grear, Keith A. Vogt and Steven R. Pedersen. R. David Donoghue, Holland & Knight LLP, of Chicago, Illinois, argued for all defendants-appellees...
Judge Panel:Before Bryson, Moore, and O'Malley, Circuit Judges O'Malley, Circuit Judge, dissenting.
Case Date:July 22, 2011
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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FURNACE BROOK LLC, Plaintiff-Appellant,

v.

AEROPOSTALE, INC., DICK'S SPORTING GOODS, INC., AND LEVI STRAUSS & COMPANY, Defendants-Appellees,

and

BOSTON PROPER, INC., Defendant-Appellee,

and

NIKE, INC., Defendant-Appellee,

and

HICKORY FARMS, INC., Defendant-Appellee,

and

THOMASVILLE FURNITURE INDUSTRIES, INC., Defendant-Appellee.

No. 2011-1025

United States Court of Appeals, Federal Circuit

July 22, 2011

This disposition is nonprecedential.

Appeal from the United States District Court for the Northern District of Illinois in case No. 09-CV-4310, Judge Virginia M. Kendall.

George C. Summerfield, Stadheim & Grear Ltd, of Chicago, Illinois, argued for plaintiff-appellant. With him on the brief were Rolf O. Stadheim, Joseph A. Grear, Keith A. Vogt and Steven R. Pedersen.

R. David Donoghue, Holland & Knight LLP, of Chicago, Illinois, argued for all defendants-appellees. With him on the brief for defendants-appellee Boston Proper was Michael Grill. On the brief for defendant-appellees Aeropostale, Inc., et al, were Scott J. Bornstein and James J. Decarlo, Greenberg Traurug, LLP, of New York, New York; and for defendant-appellee Nike, Inc., Christopher J. Renk, Audra C. Eidem Heinze and Timothy C. Meece, Banner & Witcofe, Ltd, of Chicago, Illinois; and for defendant-appellee Hickory Farms, Inc., Burton S. Ehrlich and John P. Luther, Ladas & Parry, of Chicago, Illinois; and for defendant appellee, Thomas-ville Furniture Industries, Inc., George Pazuniak, Rat-nerPrestia, of Wilmington, Delaware.

Before Bryson, Moore, and O'Malley, Circuit Judges

OPINION

Moore, Circuit Judge

Furnace Brook LLC (Furnace Brook) appeals the district court's grant of summary judgment that collateral estoppel prevents it from asserting the claims of U.S. Patent No. 5, 721, 832 ('832 patent) against Aeropostale, Inc., et al. (Defendants) in this case. Because our prior decision held that accessing a catalog website over the Internet using a computer or cellular phone does not meet the "telephone terminal" limitation present in the asserted claims, we affirm.

Background

This is not the first time Furnace Brook has appealed a decision involving the '832 patent to our court. In a prior litigation, Furnace Brook sued Overstock.com for infringing claims of the '832 patent. Furnace Brook LLC v. Overstock.com, Inc., 230 F.App'x 984, 986 (Fed. Cir. 2007) (Overstock). In Overstock, as in the present litigation, Furnace Brook accused websites accessed over the Internet by computers and cellular phones of infringing the '832 patent. Id. The district court in Overstock granted summary judgment of noninfringement because, inter alia, the "telephone terminal" limitation, present in claim 1 (and dependent claims 2-4 asserted in this suit), was not met by the accused products. Id.

In the Overstock appeal, Furnace Brook argued that the district court erroneously limited the construction of the term "telephone terminal" to exclude personal computers and cellular phones. We agreed with Furnace Brook that the claimed "telephone terminal" could theoretically include a personal computer or cellular phone, since these devices "are capable" of "communicating over a telephone network." Id. We explained, however, that a "telephone terminal" also "requires a dial-up connection to the catalog server at the other end of the connection." Id. As a result, we held that the telephone terminal limitation, as used in the claim, "requires that the communication link be established over a telephone network by dialing the computer system directly." Id. at 987.

We agreed that simply accessing a website on the Internet—without actually dialing a computer system directly—does not meet the "telephone terminal" limitation. Id. We held that "[t]he district court was therefore correct to hold that those [accused] devices fall outside the literal scope of the claim 1 limitation." Id. Furnace Brook also argued "that the accused devices, when used to access the Internet, are captured by the doctrine of equivalents, even if they are not within the literal scope of claim 1." Id. We noted, however, that Furnace Brook's evidence "did not explain why accessing a computer server over the Internet is equivalent to dialing a computer server over a telephone network." Id. As a result, we held the evidence was insufficient "to create a genuine issue of material fact as to that question" of infringement. Id.

Undeterred by the unfavorable outcome in Overstock, Furnace Brook asserted the '832 patent against Defendants in this case, again espousing a theory that Defendants' online ordering sites infringe claim 1 of the '832 patent. Furnace Brook also asserted claims 2-4 of the '832 patent, all of which depend on claim 1. Of particular importance for this litigation, each of the asserted claims requires the use of a "telephone terminal." The relevant portion of claim 1 is reproduced below (emphasis added):

1. An improved interactive computerized catalog process comprising the steps of:

generating a menu of catalog products and services comprising catalog data available for selective viewing at any user's telephone associated terminal screen,

establishing a selective communication link initiated by a user between said user's telephone terminal and said computer system,

The parties brought cross-motions for summary judgment on whether our decision in Overstock barred Furnace Brook from relitigating the issue of whether online ordering sites accessed through the Internet infringed the '832 patent. After analyzing the Seventh Circuit's collateral estoppel law, the district court noted that "the parties agree that the issue in both [Overstock and this] case[] is whether the accused ordering systems meet the 'telephone terminal' limitation in claim 1 . . . ." J.A. 8. Furnace Brook, however, argued that collateral estoppel did not bar its present claims because it believed our holding of noninfringement in Overstock was based on a construction of the "selective communication link" limitation, which it claims was not previously litigated.

The district court, after considering our prior holding in Overstock, concluded that our determination of nonin-fringement in that case was based on the "telephone terminal" limitation. It explained that "Furnace Brook admits that the limitation 'telephone terminal' was actually litigated before the Federal Circuit." J.A. 10. The district court also "found that the Federal Circuit's construction of 'telephone terminal' and its determination that the accused online ordering system did not satisfy that claim limitation either literally or under the doctrine of equivalents was essential to its decision [in Overstock]." Id. The court noted that "Furnace Brook does not suggest that the online ordering websites in this [instant] case are materially different from the websites at issue in Over- stock.com." Id. In light of its findings and Furnace Brook's concessions, the district court held that Furnace Brook was barred from relitigating the issue of whether accessing a website catalog through the Internet using a cellular phone or personal computer met the "telephone terminal" limitation in the present litigation.

Furnace Brook appeals the district court's decision. We have jurisdiction pursuant to 28 U.S.C. § 1295.

Discussion

We apply the law of the regional circuit when reviewing a district court's application of collateral estoppel. Applied Med. Res. Corp. v. U.S. Surgical Corp., 435 F.3d 1356, 1359-60 (Fed. Cir. 2006). "Collateral estoppel, which is also known as issue preclusion, generally prevents a party from relitigating an issue the party has already litigated and...

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