In re Katz Interactive Call Processing Patent Litig..Ronald A. Katz

• Decision Date: 22 April 2011
• Docket Number: 2009–1451,2009–1468,Nos. 2009–1450,2010–1017.,2009–1469,2009–1452,s. 2009–1450
• Citation: 639 F.3d 1303
• Parties: In re KATZ INTERACTIVE CALL PROCESSING PATENT LITIGATION.Ronald A. Katz, Technology Licensing LP, Plaintiff–Appellant,v.American Airlines, Inc., Defendant–Appellee,andFedex Corporate Services, Inc., Fedex Corporation, Fedex Customer Information Services, Inc., and Federal Express Corporation, Defendants–Appellees,andDHL Express (USA), Inc., DHL Holdings (USA), Inc., and Sky Courier, Inc., Defendants–Appellees,andU.S. Bancorp and U.S. Bank National Association, Defendants–Appellees,andTime Warner Cable, Inc., Time Warner Entertainment Company, L.P., Time Warner N.Y. Cable LLC, AOL, LLC, CompuServe Interactive Services, Inc., Netscape Communications Corp., Charter Communications Entertainment I LLC, Charter Communications Holding Company LLC, Charter Communications Operating LLC, and Charter Communications, Inc., Defendants,andCSC Holdings, Inc. (now known as CSC Holdings, LLC), Cablevision Systems Corporation, Cablevision Systems New York City Corporation, Cablevision of Brookhaven, Inc., Cablevision of Connecticut Corporation, Cablevision of Hudson County, Inc., Cablevision of Litchfield, Inc., Cablevision of Monmouth, Inc., Cablevision of New Jersey, Inc., Cablevision of Oakland LLC, and Cablevision of Rockland/Ramapo LLC, Defendants–Appellees,andTDS Metrocom LLC, TDS Telecommunications Corporation, and United States Cellular Corporation, Defendants.
• Court: U.S. Court of Appeals — Federal Circuit

639 F.3d 1303

97 U.S.P.Q.2d 1737

In re KATZ INTERACTIVE CALL PROCESSING PATENT LITIGATION.Ronald A. Katz, Technology Licensing LP, Plaintiff–Appellant,

v.American Airlines, Inc., Defendant–Appellee,andFedex Corporate Services, Inc., Fedex Corporation, Fedex Customer Information Services, Inc., and Federal Express Corporation, Defendants–Appellees,andDHL Express (USA), Inc., DHL Holdings (USA), Inc., and Sky Courier, Inc., Defendants–Appellees,andU.S. Bancorp and U.S. Bank National Association, Defendants–Appellees,andTime Warner Cable, Inc., Time Warner Entertainment Company, L.P., Time Warner N.Y. Cable LLC, AOL, LLC, CompuServe Interactive Services, Inc., Netscape Communications Corp., Charter Communications Entertainment I LLC, Charter Communications Holding Company LLC, Charter Communications Operating LLC, and Charter Communications, Inc., Defendants,andCSC Holdings, Inc. (now known as CSC Holdings, LLC), Cablevision Systems Corporation, Cablevision Systems New York City Corporation, Cablevision of Brookhaven, Inc., Cablevision of Connecticut Corporation, Cablevision of Hudson County, Inc., Cablevision of Litchfield, Inc., Cablevision of Monmouth, Inc., Cablevision of New Jersey, Inc., Cablevision of Oakland LLC, and Cablevision of Rockland/Ramapo LLC, Defendants–Appellees,andTDS Metrocom LLC, TDS Telecommunications Corporation, and United States Cellular Corporation, Defendants.

Nos. 2009–1450

2009–1451

2009–1452

2009–1468

2009–1469

2010–1017.

United States Court of Appeals, Federal Circuit.

Feb. 18, 2011.Rehearing and Rehearing En Banc Denied April 22, 2011.*

Frank V. Pietrantonio and Jonathan G. Graves, Cooley Goodward Kronish LLP, of Reston, VA, argued for plaintiff-appellant. With them on the brief were Nathan K. Cummings; Stephen C. Neal and Lori R.E. Ploeger, of Palo Alto, CA.Mark A. Perry, Gibson, Dunn & Crutcher LLP, of Washington, DC, argued for all defendants-appellees. With him on the brief were Josh A. Kevitt, of New York, NY and David A. Segal, of Irvine, CA; and Adam T. Bernstein, CSC Holding, LLC, of Bethpage, NY, for CSC Holding, et al.Mike McKool, Jr., McKool Smith, P.C., of Dallas, TX, for defendant-appellee American Airlines, Inc. With him on the brief were Peter J. Ayers and Joel L. Thollander, of Austin, TX.Kara F. Stoll, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, for defendants-appellees FedEx Corporation Services, Inc., et al. With her on the brief were Jason W. Melvin; and Jeffrey A. Berkowitz and James J. Boyle, of Reston, VA; and E. Chris Cherry, FedEx Corporation, of Memphis, TN.Christopher S. Ruhland, Orrick, Herrington & Sutcliffe LLP, of Los Angeles, CA, for defendant-appellee DHL Express (USA), Inc. With him on the brief were Edwin V. Woodsome, Jr.; and Matthew H. Poppe, of Menlo Park, CA, and Mark J. Shean, of Irvine, CA.Jonathan R. Spivey, Foley & Lardner LLP, of Chicago, IL, for defendants-appellees U.S. Bancorp et al. With him on the brief were Gregory S. Norrod and Scott R. Kaspar; and George E. Quillin, of Washington, DC.Before NEWMAN, LOURIE, and BRYSON, Circuit Judges.BRYSON, Circuit Judge.

In this multi-district litigation patent case, the plaintiff Ronald A. Katz Technology Licensing LP (“Katz”) appeals from final judgments entered by the United States District Court for the Central District of California in a group of consolidated cases. The judgments held numerous claims from Katz's patent portfolio either invalid or not infringed. We affirm in part, vacate in part, and remand.

I

Katz owns a number of patents on interactive call processing systems and call conferencing systems. The 14 patents that Katz asserts in this appeal all relate to interactive call processing systems. The patents fall into four groups; the patents in each group share a common specification.

The first group of patents, referred to as the “Statistical Interface” group, covers a telephonic interface system for acquiring data from a large group of callers and using that data to identify some subset of the group.¹ See, e.g., ' 863 patent, col. 1, 11. 52–64. The claimed system can be used in connection with a variety of telephone-based operations, such as “an auction sale, a contest, a lottery, a poll, a merchandising operation, a game, and so on.” ' 863 patent, col. 2, 11. 18–19.

The second group of patents, referred to as the “Conditional Interface Plus” group, covers “a telephonic-computer interface system” that can handle a large number of calls and direct them either to live-operator stations or to computer-operated stations.² ' 285 patent, col. 2, 11. 3–8. The claimed system is designed to avoid the “sometimes complex and burdensome” interfaces presented to callers that can result in ineffective screening, misdirection of calls, and cumbersome delay. Id., col. 1, ll. 60–62.

The third group of patents, referred to as the “Dual Call Mode” group, covers a telephone call processing system for receiving and processing calls relating to a game or contest format, in which the system has means for neutralizing the advantages in the game or contest that would otherwise be obtained by repeat callers.³ ' 120 patent, col. 2, 11. 62–66. The preferred embodiment described in those patents uses different procedures for qualifying the caller to participate in the game depending on whether the caller has dialed an 800 number, a 900 number, or an area code number. Id., fig. 2.

The last patent, U.S. Patent No. 6,335,965 (“the '965 patent”), referred to as the “Voice–Data” patent, claims a telephone-computer interface system that is designed to receive and identify both digital signals and voice signals from callers. '965 patent, col. 2, ll. 20–23, 28–29.

In 1997, Katz asserted many of the same patents in an action brought against AT & T Corporation in the United States District Court for the Eastern District of Pennsylvania. The parties settled that action. In 2001, Verizon Communications Inc. filed a declaratory judgment action against Katz in the United States District Court for the Central District of California. The parties settled that action after claim construction and summary judgment rulings. Between 2005 and 2006, Katz filed 25 separate actions in federal district courts in the Eastern District of Texas and the District of Delaware. The Judicial Panel on Multidistrict Litigation transferred all the cases to the Central District of California for coordinated pretrial proceedings before Judge R. Gary Klausner, who had presided over Verizon's declaratory judgment suit. Across all 25 actions, Katz asserted a total of 1,975 claims from 31 patents against 165 defendants in 50 groups of related corporate entities (“defendant groups”). Katz has subsequently filed 28 additional actions that have also been assigned to Judge Klausner. This appeal arises from the initial 25 actions.

Several groups of defendants asked the district court to limit the number of asserted claims to be addressed in the litigation. One group proposed that Katz initially select 40 claims per action and then narrow the number of selected claims to 20 per action after discovery. Katz countered with a broader proposal to initially select 50 claims per defendant group and then narrow the number of selected claims to 20 per defendant group after discovery. Katz did not question the need to limit the number of claims in order to make the case manageable.

Choosing a middle ground between the two proposals, the district court ordered Katz initially to select no more than 40 claims per defendant group, and after discovery to narrow the number of selected claims to 16 per defendant group. The court further directed that the total number of claims to be asserted against all defendants could not exceed 64 (eight claims for each unique specification including four specifications not at issue in this appeal). However, the court added a proviso that the limitations on the numbers of claims were not immutable. The proviso permitted Katz to add new claims if they “raise[d] issues of infringement/validity that [were] not duplicative” of previously selected claims. Katz added new claims to exceed a total of 64 across all the actions, but the number of claims did not exceed 16 per defendant group.⁴

Instead of selecting additional claims and seeking to show that those claims raised non-duplicative issues of infringement or validity, Katz moved the court to sever and stay the non-selected claims. Katz contended that the court's requirement that it select particular claims violated its due process rights because the court's order could result in decisions having a preclusive effect on non-selected claims regardless of whether those claims presented distinct issues of invalidity or infringement. The court denied Katz's motion. The court held that Katz's rights under the unselected claims were protected by the proviso that Katz could add new claims if it could show that the new claims raised non-duplicative issues of validity or infringement.

The defendants then jointly moved for summary judgment on the issues of anticipation, obviousness, written description, and indefiniteness. The defendants also moved individually for summary judgment on case-specific grounds. In response to those motions, the district court held all the claims selected against the appellees to be either invalid or not infringed by the appellees' accused devices. The court then entered final judgments in favor of the appellees. The related actions against other defendants are still pending in the district court.

II

Katz appeals the district court's decision not to sever and stay the unselected claims. Katz contends that by entering final judgments in these cases without severing and staying the unselected claims, the district court divested Katz of its rights in the unselected claims without due process. Katz argues that the court's judgments may have preclusive effects in any subsequent actions on the unselected claims and that due...