Media Rights Techs., Inc. v. Capital One Fin. Corp.

• Decision Date: 04 September 2015
• Docket Number: No. 2014–1218.,2014–1218.
• Citation: Media Rights Techs., Inc. v. Capital One Fin. Corp., 800 F.3d 1366, 116 U.S.P.Q.2d 1144 (Fed. Cir. 2015)
• Parties: MEDIA RIGHTS TECHNOLOGIES, INC., Plaintiff–Appellant v. CAPITAL ONE FINANCIAL CORPORATION, Capital One Bank (USA), N.A., Capital One, N.A., Defendants–Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

800 F.3d 1366

116 U.S.P.Q.2d 1144

MEDIA RIGHTS TECHNOLOGIES, INC., Plaintiff–Appellant

v.CAPITAL ONE FINANCIAL CORPORATION, Capital One Bank (USA), N.A., Capital One, N.A., Defendants–Appellees.

No. 2014–1218.

United States Court of Appeals, Federal Circuit.

Sept. 4, 2015.

Byron Leroy Pickard, Sterne Kessler Goldstein & Fox, PLLC, Washington, DC, argued for plaintiff-appellant. Also represented by Robert Greene Sterne, Jonathan M. Strang, Jon Wright; Daniel Luke Geyser, McKool Smith, P.C., Dallas, TX; Courtland L. Reichman, Redwood City, CA.

Robert A. Angle, Troutman Sanders LLP, Richmond, VA, argued for defendants-appellees. Also represented by Dabney Jefferson Carr, IV, George A. Somerville, Nicholas Richard Klaiber ; Douglas Salyers, Atlanta, GA.

Before O'MALLEY, PLAGER, and TARANTO, Circuit Judges.

Opinion

O'MALLEY, Circuit Judge.

Media Rights Technologies, Inc. (“Media Rights”) appeals the district court's decision to grant judgment on the pleadings that all claims of U.S. Patent No. 7,316,033 (the “'033 Patent”) are invalid for indefiniteness. Because the trial court correctly determined that the term “compliance mechanism,” which is a limitation in every single claim, is a means-plus-function term that lacks sufficient structure, we affirm.

Background

On April 19, 2013, Media Rights filed suit against Capital One Financial Corporation; Capital One Bank (USA), N.A.; and Capital One, N.A. (collectively, “Capital One”) in the United States District Court for the Eastern District of Virginia, alleging infringement of the '033 Patent. The '033 Patent is entitled “Method of Controlling Recording of Media” and is generally directed to methods, systems, and computer readable media related to the prevention of unauthorized recording of electronic media. '033 Patent, Abstract. Specifically, the '033 Patent prevents unauthorized recording via a compliance mechanism, which diverts incoming media content protected by law or agreement from being output from a system in order to stop the illegal copying or sharing of that content.

Claim 1 is illustrative of the invention, and it recites:

A method of preventing unauthorized recording of electronic media comprising:

Activating a compliance mechanism in response to receiving media content by a client system, said compliance mechanism coupled to said client system, said client system having a media content presentation application operable thereon and coupled to said compliance mechanism;

Controlling a data output pathway of said client system with said compliance mechanism by diverting a commonly used data pathway of said media player application to a controlled data pathway monitored by said compliance mechanism; and

Directing said media content to a custom media device coupled to said compliance mechanism via said data output path, for selectively restricting output of said media content.

'033 Patent col. 36:19–34 (emphases added).

After the filing of the complaint, the case proceeded normally and the district court scheduled a Markman hearing for fall 2013. On the same day it filed its opening claim construction brief, Capital One also filed a motion for judgment on the pleadings that the '033 Patent was invalid under 35 U.S.C. §§ 101 and 112(b). Because the motion largely turned on claim construction, the district court heard argument on the motion for judgment on the pleadings the same day as the Markman hearing. See Media Rights Techs., Inc. v. Capital One Fin. Corp., No. 1:13–cv–00476 (Oct. 1, 2013), ECF No. 51.

Upon consideration, the district court issued a decision, concluding that (1) the terms “compliance mechanism” and “custom media device” are indefinite and, (2) because every claim of the '033 Patent contained both terms, all of the claims of the '033 Patent, claims 1–27, are invalid. Media Rights Techs., Inc. v. Capital One Fin. Corp., No. 1:13–cv–00476, 2013 WL 6506176, at *1, 2013 U.S. Dist. LEXIS 176475, at *2 (E.D.Va. Dec. 9, 2013). Specifically, with respect to the “compliance mechanism” term, the district court first noted that the parties disputed whether this term was a means-plus-function term. Id. at *2–3, 2013 U.S. Dist. LEXIS 176475, at *8. Because the term did not use the word “means,” Media Rights argued that it was not a means-plus-function term, while Capital One disagreed. The district court found that the claim language itself stated that the “compliance mechanism” was activated in response to the client system receiving media content, that it controlled a data output path, and that it monitored a controlled data pathway. Id. at *3, 2013 U.S. Dist. LEXIS 176475, at *10. Because this language only describes how the components of invention are combined and the functions performed by the “compliance mechanism,” without suggesting anything about the structure of the mechanism itself, the district court determined that the claim language did not recite sufficient structure for the “compliance mechanism” term. Id. Thus, the district court concluded that the “ ‘compliance mechanism’ must be a means-plus-function term.” Id. at *3–4, 2013 U.S. Dist. LEXIS 176475, at *10–11.

Having concluded that the term is a means-plus-function term, the district court next considered what functions it performs, and then determined what structure identified in the specification performs these functions.Id. at *3–4, 2013 U.S. Dist. LEXIS 176475, at *11. The district court concluded that “compliance mechanism” performs four functions:

(1) “controlling a data output of [the] client system ... by diverting a commonly used data pathway of [the] media player application to a controlled data pathway” (Claim 1);

(2) monitoring the controlled data pathway (Claims 1, 10 and 19);

(3) “managing an output path of [the] client system ... by diverting a commonly used data pathway of [the] media player application to a controlled data pathway” (Claim 10); and

(4) “stop[ping] or disrupt[ing] the playing of [the] media content at [the] controlled data pathway when said playing of said media file content is outside of [the] usage restriction applicable to said media file” (Claims 10 and 19).

Id. (quoting '033 Patent at col. 36–37).

The court found that a term from the written description—the “copyright compliance mechanism 300”—generally discloses the structure of a “compliance mechanism,” and that “copyright compliance mechanism 300” includes “one or more coder/decoders, one or more agent programs, and one or more skins, but not instructions, a user ID generator, system hooks, a wave shim, or a custom media device driver.” Id. at *4–5, 2013 U.S. Dist. LEXIS 176475, at *14. The district court found that this description did not constitute a sufficiently definite structure. Id. at *6, 2013 U.S. Dist. LEXIS 176475, at *18. Specifically, it determined that, although the structure included various components, only one—the skins—provided some idea as to how the compliance mechanism achieves its functions. The district court focused on the fact that, while the specification identified various components of a possible structure, Media Rights disclaimed that all those components, or even any specific subsection of them, are necessary to perform the recited functions. Because the structure for computer-implemented functions must be an algorithm, and the specification here failed to describe “an algorithm whose terms are defined and understandable,” the district court determined that the “compliance mechanism” term is indefinite. Id. at *5–6, 2013 U.S. Dist. LEXIS 176475, at *17–18 (quoting Ibormeith IP, LLC v. Mercedes–Benz USA, LLC, 732 F.3d 1376, 1381 (Fed.Cir.2013) ).

The district court also concluded that the term “custom media device” is indefinite. Id. at *7–8, 2013 U.S. Dist. LEXIS 176475, at *25. Looking at the specification, the court noted that it was unclear whether “custom media device” was hardware or software. For example, in one embodiment, the specification stated that the device can emulate a custom media device driver, which is considered hardware, while, in another embodiment, the “custom media device” is equated to a custom media device application, i.e. software. Id. at *6, 2013 U.S. Dist. LEXIS 176475, at *20–21. Further complicating matters was the lack of clarity as to what “custom” means. Id. at *6, 2013 U.S. Dist. LEXIS 176475, at *21. At the Markman hearing, Media Rights attempted to define “custom” as being specific to the particular media content, and cited to the specification's discussion of “custom media player” for support. The district court found this argument unconvincing, however, explaining that “custom media device” cannot be equated with “custom media player” because the player is not required for every embodiment of the invention, while the “custom media device” is. Id. at *7–8, 2013 U.S. Dist. LEXIS 176475, at *24–25. Additionally, the district court found that it would be improper to equate the two because “custom media player” is defined only as an application in the specification, whereas “custom media device,” according to Media Rights, also encompasses a driver.Id. at *7–8, 2013 U.S. Dist. LEXIS 176475, at *25. Because “the bounds of the term ‘custom media device’ ” are unclear, the district court concluded that the term “custom media device” is indefinite. Id.

Because these two indefinite terms, “compliance mechanism” and “custom media device” are included in every claim, the court concluded that the entire patent is invalid. Given this conclusion, the district court declined to reach Capital One's § 101 argument. Id. at *7–8, 2013 U.S. Dist. LEXIS 176475, at *25–28. The district court then entered final judgment in favor of Capital One.

Media Rights timely appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

Discussion

On appeal, Media Rights argues that the district court erred when it determined that both “compliance mechanism” and “custom media device” are invalid for indefiniteness. A patent must “conclude with one or more claims...