Netscape Communications Corp. v. VALUECLICK, INC.

Decision Date29 January 2010
Docket NumberNo. 1:09cv225.,1:09cv225.
Citation684 F. Supp.2d 699
PartiesNETSCAPE COMMUNICATIONS CORP., Plaintiff, v. VALUECLICK, INC., et al., Defendants.
CourtU.S. District Court — Eastern District of Virginia

Robert Leo Burns, II, Nicholas James Nugent, Umar Arshad, Finnegan Henderson Farabow Garrett & Dunner LLP, Reston, VA, Charles Brandon Rash, Philip A. Riley, Finnegan Henderson Farabow Garrett & Dunner LLP, Washington, DC, for Plaintiff.

Sheila Mary Costin, Amy Sanborn Owen, Cochran & Owen LLC, Vienna, VA, Philip James Meitl, Bryan Cave LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

T.S. ELLIS, III, District Judge.

In this patent infringement suit, plaintiff claims that defendants1 wilfully infringed, and continue to infringe, U.S. Patent No 5,774, 670 ("the '670 patent"), colloquially known as the "Internet cookies patent." At issue are the parties' various motions for summary judgment. More precisely, the parties filed cross-motions as to the following issues:

(i) that the '670 patent is invalid pursuant to 35 U.S.C. § 102(b), commonly referred to as the "on-sale bar," which prohibits a patent applicant from obtaining a patent where the claimed invention was on sale more than one year prior to application; and
(ii) that plaintiff has waived its right to enforce the '670 patent.

In addition, plaintiff moves for partial summary judgment as to the following defenses:

(i) the invalidity defense of public use pursuant to 35 U.S.C. § 102(b), which prohibits a patent applicant from obtaining a patent where the claimed invention was in public use more than one year prior to application;
(ii) the invalidity defense that the patented invention was anticipated by prior art publications and patent applications pursuant to various provisions of 35 U.S.C. § 102;
(i) the invalidity defense of nonjoinder or misjoinder of named inventors pursuant to 35 U.S.C. § 102(f);
(iv) the equitable defense of equitable estoppel; and
(v) the defense of federal preemption of defendants' state law counterclaims of intentional misrepresentation or fraud, negligent misrepresentation or constructive fraud, and unfair competition.

Finally, defendants move for summary judgment as to the following issues:

(i) the invalidity defense that '670 patent claims 9, 10, and 14 are fatally indefinite under 35 U.S.C. § 112, which requires claims to state particularly and distinctly the subject matter claimed as the invention;
(ii) the equitable defense of laches;
(iii) non-infringement of '670 patent claims 1-8 under any claim construction;
(iv) non-infringement of all '670 patent claims under defendants' proposed Markman claim constructions; and
(v) willful infringement.

The parties' various motions have been fully briefed and argued, and are now ripe for resolution.

I.

The '670 patent claims "a method and apparatus for transferring state information between a server computer system and a client computer system." '670 Patent Abstract. Prior to this invention, http clients and http servers interacted in a "stateless environment," which prevented an http server from recognizing that it had responded to prior requests made by an http client. Thus, in essence, a server would essentially meet the client anew each time a client requested a file from the server. The subject of the '670 patent—commonly known as Internet "cookies technology"—claims a method of transferring and storing state information on an http client such that an http client would have "memory" of its requests to a specific http server, and concomitantly, an http server would have "memory" of the requests it had received and to which it had responded.

The '670 patent contains twenty-six claims. Claim 1, upon which claims 2-8 depend, describes the general method of transferring and storing state information in four distinct steps:

A method of transferring state information between an http server and an http client, said method comprising the steps of:
requesting a file on said http server from said http client; transmitting said file from said http server to said http client; transmitting a state object from said http server to said http client; and storing said state object on said http client.

Importantly, steps 1 and 2 are indisputably part of the prior art and are neither innovative nor unobvious; steps 3 and 4—that is, the transfer and storage of a cookie—comprise the claimed invention that purports to address the http protocol's heretofore statelessness.2 Building on this general four-step process, claims 2-8 further define the method of transferring state information by (i) identifying additional attributes of the state object, and (ii) specifying particular sequences of, or prerequisites to, transmission and retransmission of state information.

While claims 1-8 describe the method of transferring state information, claims 9-10 and 14-26 describe the various computer systems capable of executing the claimed method.3 Specifically, claim 9 describes a computer readable medium on an http client that contains executable program instructions that perform the claimed method. Similarly, claim 10 provides the counterpart to claim 9 in describing a computer readable medium on an http server that is capable of performing the claimed method. Claim 14, then, lists the requirements of an http client computer system—namely, a processor, memory coupled to the processor, and a computer readable medium containing executable program instructions—capable of performing the claimed method. Finally, claims 15-26 apply the attributes and special conditions found in claims 2-8 to the computer systems described in claims 9, 10, and 14.

As often occurs in patent infringement suits, the parties disputed the meaning of a number of patent claim terms. Accordingly, following full briefing and oral argument, the disputed terms were construed in accordance with Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). See Netscape I, 684 F.Supp.2d 678, 1:09cv225. Relevant to the disposition of the various motions at bar are the following claim term constructions:

"file," as used in claims 1, 9, 10, and 14: "electronically stored or transmitted information or data."
"state object," as used in claims 1, 9, 10, and 14: "data having a predetermined structure that specifies state information."
"state information" as used in claims 1, 9, 10, and 14: "information, such as a cookie, that specifies an identity, a characteristic, or a condition of a client and/or a server."
• The steps of claim 1 should be construed, as follows: (i) request for a file by the http client; (ii) transfer of the file from the http server to the http client; (iii) transfer of the state object from the http server to the http client; and (iv) storage of the state object by the http client.

Id. at 698.

II.4

The following undisputed material facts are pertinent to the various motions at bar:

1. Plaintiff, the assignee and sole owner of the '670 patent, is a Delaware corporation with its principal place of business in Virginia. Plaintiff is a wholly-owned subsidiary of AOL, L.L.C ("AOL"). See Am. Answer ¶ 1.
2. Defendants ValueClick, Inc., Mediaplex, Inc., FastClick, Inc., Commission Junction, Inc., and MeziMedia are Delaware or California corporations with their principal places of business in California. Defendant Web Clients, L.L.C. is a Delaware limited liability company with its principal place of business in Pennsylvania. Defendants are related business entities; ValueClick, Inc. wholly-owns the other defendants, which operate as ValueClick's subsidiaries. They provide online marketing services, including advertising campaigns, to business segments in the United States. See Am. Answer ¶¶ 2-8, 13.
3. In 1994, MCI Communications Corp. ("MCI") began developing an online shopping mall known as "marketplaceMCI," which was to consist of four components: (i) an MCI-branded Web browser; (ii) a Web server designed to integrate the other components; (iii) a "Merchant server," used by various sellers to "receive and fill orders and, depending on merchant circumstances, to aid in the billing and charging process"; and (iv) various back-end systems allowing MCI to provide technical support and maintain merchant accounts. See Defs.' Attach. 2 ¶ 6.5 MCI developed some of the marketplaceMCI software in-house and contracted with other vendors, such as Netscape, to develop and program other aspects of marketplaceMCI. See id.
4. On August 10, 1994, plaintiffs representatives met with MCI personnel to consider whether Netscape could provide MCI with software for marketplaceMCI. See id.; Defs.' Ex. 8, at 63. Specifically, MCI sought technology that would allow the transfer and processing of online customer order, billing, and shipping information. This required that servers interact with client computers in a non-stateless environment. Defs.' Attach. 2 ¶ 8; Defs.' Ex. 9, at 111. During the meeting, plaintiff initially proposed software technology that involved storing state information on a server; MCI rejected this proposal and instead specified that state information was to be stored on client computers. Although the parties dispute whether certain technological requirements were discussed,6 the parties agree that, at a minimum, there was a general understanding by the end of the August 10, 1994 meeting that any product sold to MCI required client storage of state information. See, e.g., Defs.' Ex. 4, at 96-99; Defs.' Ex. 5, at 61-62; Defs.' Ex. 19, at 101; PL's Statement of Disputed Facts ¶¶ 3-6 ("Netscape agrees only ... that Netscape would design and develop a web browser product and a server software product that would store state information on the client side as opposed to the server side."). This MCI requirement—that is, the storage of state information on a client computer following transmission of a file and state information—is indistinguishable from claim 1's four-step method.
5.
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