Phonometrics, Inc. v. Northern Telecom Inc.

• Citation: 45 USPQ2d 1421,133 F.3d 1459
• Decision Date: 15 January 1998
• Docket Number: No. 96-1469,96-1469
• Parties: PHONOMETRICS, INC., Plaintiff-Appellant, v. NORTHERN TELECOM INC., and United Telephone Company of Florida, Defendants-Appellees, and Sprint Corporation, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1459

133 F.3d 1459

45 U.S.P.Q.2d 1421

PHONOMETRICS, INC., Plaintiff-Appellant, v. NORTHERN TELECOM INC., and United Telephone Company of

Florida, Defendants-Appellees,

and

Sprint Corporation, Defendant-Appellee.

No. 96-1469.

United States Court of Appeals,

Federal Circuit.

Jan. 15, 1998.

Rehearing Denied Feb. 11, 1998.

John P. Sutton, Bryan Hinshaw Cohen & Barnet, San Francisco, California, argued for plaintiff-appellant. With him on the brief was Lance D. Reich.

Marvin S. Gittes, Cobrin Gittes & Samuel, New York, New York, argued for defendants-appellees Northern Telecom, Inc., et al. With him on the brief was David A. Jacobs.

Kevin J. Murray, Kenny Nachwalter Seymour Arnold Critchlow & Spector, Miami, Florida, argued for defendant-appellee Sprint Corporation. With him on the brief was Harry R. Schafer.

Before MICHEL, CLEVENGER, and BRYSON, Circuit Judges.

MICHEL, Circuit Judge.

Phonometrics, Inc. appeals from a summary judgment and certain other final orders of the United States District Court for the Southern District of Florida in Phonometrics, Inc. v. Northern Telecom Inc., No. 93-6561-CIV-RYSKAMP (S.D. Fla. June 28, 1996). The district judge granted summary judgment of noninfringement of Phonometrics's U.S. Patent No. 3,769,463 (the " '463 patent") in favor of Northern Telecom Inc. ("NTI") and United Telephone Company of Florida ("United"), dismissed as moot NTI's and United's counterclaims of patent invalidity and unenforceability, and granted Sprint Corporation's ("Sprint's") motion to dismiss for lack of personal jurisdiction. Phonometrics appeals all three orders. This appeal was submitted for our decision following extended oral argument on this and two companion cases on December 4, 1997. ¹ Because the district judge's construction of the claims in the '463 patent was proper, his entry of summary judgment of noninfringement under the doctrine of equivalents was correct. Furthermore, his decision to dismiss the counterclaims as moot was within his discretion. Finally, because his interpretation of the Florida long-arm statute was correct, and because Sprint, a Kansas corporation, had no presence and took no action in Florida, his dismissal of Sprint as a defendant was appropriate. We therefore affirm.

BACKGROUND

Phonometrics sued NTI and United on July 8, 1993, alleging that they infringed the '463 patent originally issued to Phillip Graham and Lawrence Reich on October 30, 1973. ² Phonometrics filed an amended complaint The '463 patent claimed a computer device designed for use, for example, in hotels, to track the length and cost of long distance telephone calls made from individual hotel rooms. The device enabled hotel operators to bill guests for their correct share of long distance use without making a separate inquiry for "time and charges" of each individual call from an AT & T operator. Specifically, claim 1 of the '463 patent, the only independent claim, recites the following:

in June 1994, in which it named Sprint as an additional defendant.

An electronic solid state long-distance telephone call cost computer apparatus for computing and recording the cost of each long-distance telephone call initiated from a given calling telephone, actuated by the lifting and replacement of the calling telephone to operate switch means coupled to the calling telephone, and further actuated by a call-completion signal generated in the telephone system when a called party answers at a called telephone, the computer apparatus comprising:

call timing means for timing the duration of each completed call;

settable charge selector means for storing initial fixed charge data for a given predetermined initial call interval and incremental charge data for subsequent additional predetermined incremental call intervals;

call cost register means, including a digital display, for providing a substantially instantaneous display of cumulative call cost in dollars and cents;

and computer circuit means, coupled to said switch, to said timing means, to said charge selector means, and to said call cost register means, for automatically recording, in the call cost register means, the cost of each long-distance call made from the calling telephone, said computer circuit means comprising:

reset means for resetting said timing means and said call cost register means immediately upon occurrence of said call-completion signal;

initial cost transfer means initiating operation of said call timing means and for applying the complete initial fixed charge data from said charge selector means to said call cost register means substantially instantaneously upon resetting of said call timing means and said call cost register;

incremental cost transfer means for applying the complete incremental charge data from said charge selector means to said call cost register means substantially instantaneously upon completion of timing out the initial call interval by said call timing means and for again applying the complete incremental charge data from said charge selector means to said call cost register means substantially instantaneously upon completion of timing out of each incremental call interval following said initial call interval;

and termination means for interrupting operation of said computer apparatus, with the cumulative call cost held in and displayed by said call cost register means, upon operation of said switch by replacement of the calling telephone.

Col. 8, II. 24-68, col. 9, II. 1-8 (emphasis added). Phonometrics has neither manufactured any products nor granted any licenses under the '463 patent, its sole asset. It has, however, brought dozens of infringement actions, many of which were stayed before the Southern District of Florida pending disposition of this appeal.

NTI, a Delaware corporation, manufactures and sells telephone switching equipment, including Private Branch Exchanges ("PBXs") and Key Service Units ("KSUs"), across the country and in Florida, where it sells to customers directly and through United. A PBX is a high speed telecommunications switching system designed to interconnect a large number of individual telephone lines to each other and to the public telephone network through a central location. A KSU is similar to a PBX but is smaller in size and scale. United is a Florida corporation providing telephone service and selling telephone equipment, including equipment Phonometrics alleged that NTI's PBXs and KSUs manufactured and sold during the relevant period infringed the '463 patent under the doctrine of equivalents. ³ NTI and United responded by filing a counterclaim, alleging that the '463 patent was invalid and unenforceable. NTI and United then filed a motion for summary judgment of noninfringement and an alternative motion for summary judgment of patent invalidity for failure to disclose the best mode. The district court concluded that no genuine dispute of material fact existed, and therefore that a decision on the motion for summary judgment of noninfringement was proper. After construing claim 1 of the '463 patent, the judge concluded that the accused devices manufactured by NTI and sold by NTI and United did not infringe the '463 patent because none of the accused devices contained call timing means, settable charge selector means, call cost register means, reset means, or initial cost transfer means as specifically required by claim 1 of the '463 patent or their functional equivalents. The district judge therefore granted the motion for summary judgment in favor of NTI and United, and dismissed their counterclaims as moot. ⁴

manufactured by NTI, in the state of Florida.

Meanwhile, in response to the amended complaint filed by Phonometrics naming Sprint ⁵ as an additional defendant based on the allegation that United is a Sprint subsidiary, Sprint filed a motion to dismiss for lack of personal jurisdiction under Florida's long-arm statute. The district court, construing Florida law, concluded that Phonometrics had failed to present a prima facie case to show that the court had jurisdiction over Sprint. Specifically, the court held that Sprint established that it does not control United and that it had no offices, employees, or agents in Florida itself, and neither manufactures nor sells equipment in Florida, nor otherwise conducts business there, and Phonometrics could provide no evidence to refute these facts. The district court therefore dismissed the claim against Sprint on March 29, 1996, for lack of personal jurisdiction.

ANALYSIS

I.

Summary judgment is properly granted in cases where there is no genuine issue of material fact, and the party requesting summary judgment can show it is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). In considering whether the district court's decision to grant summary judgment was proper, we must determine for ourselves whether any genuine dispute of material fact exists. See Vas-Cath, Inc. v. Mahurkar, 935 F.2d 1555, 1560, 19 USPQ2d 1111, 1114 (Fed.Cir.1991) (citing C.R. Bard, Inc. v. Advanced Cardiovascular Sys., 911 F.2d 670, 673, 15 USPQ2d 1540, 1542-43 (Fed.Cir.1990)).

Phonometrics contends that evidence demonstrating genuine disputes of material fact was presented to the district judge but ignored. Although an infringement analysis usually involves both issues of law and questions of fact, summary judgment of noninfringement may still be proper. See Nike Inc. v. Wolverine World Wide, Inc., 43 F.3d 644, 646, 33 USPQ2d 1038, 1039 (Fed.Cir.1994); Chemical Eng'g Corp. v. Essef Indus., Inc., 795 F.2d 1565, 1571, 230 USPQ 385, 389 (Fed.Cir.1986). A good faith dispute about the meaning and scope of asserted claims does not, in and of itself, create a genuine dispute to preclude summary judgment in patent cases. See Lantech, Inc. v. Keip Mach. Co., 32 F.3d 542, 546, 31 USPQ2d 1666, 1670 (Fed.Cir.1994).

Although Phonometrics's disagreement with the district judge's construction of the '463 patent may raise a...