Poweroasis, Inc. v. T-Mobile Usa, Inc.

• Decision Date: 11 April 2008
• Docket Number: No. 2007-1265.,2007-1265.
• Citation: 522 F.3d 1299
• Parties: POWEROASIS, INC. and PowerOasis Networks, LLC, Plaintiffs-Appellants, v. T-MOBILE USA, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

522 F.3d 1299

POWEROASIS, INC. and PowerOasis Networks, LLC, Plaintiffs-Appellants, v. T-MOBILE USA, INC., Defendant-Appellee.

No. 2007-1265.

United States Court of Appeals, Federal Circuit.

April 11, 2008.

Sibley P. Reppert, Lahive & Cockfield LLP, of Boston, Massachusetts, argued for plaintiffs-appellants. With him on the brief was William A. Scofield, Jr.

William F. Lee, Wilmer Cutler Pickering Hale and Dorr LLP, of Boston, Massachusetts, argued for defendant-appellee. With him on the brief were David B. Bassett and Amr O. Aly, of New York, New York.

Before NEWMAN, SCHALL, and MOORE, Circuit Judges.

MOORE, Circuit Judge.

PowerOasis, Inc. and PowerOasis Networks, LLC (PowerOasis) appeal the United States District Court for the District of New Hampshire's grant of summary judgment that claims 15, 18, 31, 35, 38, 40, and 49 (asserted claims) of U.S. Patent Nos. 6,466,658 ('658 patent) and 6,721,400 ('400 patent) are invalid as anticipated under 35 U.S.C. § 102(b). In reaching its decision, the district court concluded that none of the asserted claims of the two patents were entitled, under 35 U.S.C. § 120, to the benefit of the filing date of PowerOasis's original application because the earlier application did not provide a written description of the invention claimed in the asserted patents, as required by 35 U.S.C. § 112. We affirm the grant of summary judgment of invalidity with respect to all asserted claims.

BACKGROUND

The two PowerOasis patents at issue, the '658 patent and the '400 patent (PowerOasis patents), are directed to vending machines that sell telecommunications access. The PowerOasis patents contain virtually identical specifications. The stated purpose of the PowerOasis patents is to provide a "vending machine" that enables a customer to connect a laptop to a telecommunications channel. The '658 and '400 patents list filing dates of November 6, 2001 and October 15, 2002, respectively. The '658 and '400 patents stem from a series of continuation and continuation-in-part applications. The first application in the patent chain (Original Application) was filed on February 6, 1997 and ultimately issued as U.S. Patent No. 5,812,643 ('643 patent). PowerOasis does not assert the '643 patent in this litigation.

PowerOasis filed a continuation application on September 18, 1998 (which was later abandoned), and on June 15, 2000, it filed a continuation-in-part application (2000 CIP Application), which issued as U.S. Patent No. 6,314,169 ('169 patent). The '169 patent is not asserted by PowerOasis in this litigation. The 2000 CIP Application added considerable new language to the specification, which the district court characterized as "substantial new matter." PowerOasis, Inc. v. T-Mobile USA, Inc., No. 05-cv-42-PB, 2007 WL 962937, at *2 (D.N.H. Mar. 30, 2007).

PowerOasis subsequently filed the two applications that led directly to the two patents asserted in this suit: first the '658 patent, then the '400 patent. PowerOasis sued T-Mobile for patent infringement alleging that T-Mobile's wireless "HotSpot Network"¹ infringes claims 15, 18, 31, 35, 38, 40, and 49 of both PowerOasis patents. Each of the asserted claims depends from independent claim 1, which is not asserted by PowerOasis. Except for minor variations in the language of the independent claims that do not relate to the issues on appeal, the language of the asserted claims is identical in both PowerOasis patents. Independent claim 1 recites:

1. A vending machine for vending telecommunications channel access to a customer, said vending machine comprising:

a payment mechanism for obtaining information from the customer to initiate a vending transaction;

a customer interface for indicating the status of said vending machine;

an electronic circuit for determining when the vending transaction is completed;

a telecommunications channel access circuit adapted to be connected to at least one external telecommunications channel for enabling access to the at least one external telecommunications channel at the beginning of a vending transaction and disabling access at the end of the vending transaction;

a telecommunications channel access connector connected to said telecommunications channel access circuit for enabling connection to an external telecommunications device of the customer; and

a control unit having a device for receiving payment information from the customer and for controlling said electronic circuit and said telecommunications channel access circuit.

The parties had agreed that "customer interface" is "an interface that enables information to be passed between a human user and hardware or software components of a system," but disagreed about the location of the customer interface. PowerOasis argued that the "customer interface" may occur on a customer's laptop. T-Mobile argued that the customer interface must be located on the vending machine itself. Relying entirely on new language added to the 2000 CIP application, the district court adopted PowerOasis's proposed construction that the claim term "customer interface" encompasses an interface that is located on the customer's laptop.

In light of the district court's construction of "customer interface," T-Mobile filed a motion for summary judgment that the asserted claims were anticipated by the MobileStar Network. It is undisputed that prior to June 15, 1999, MobileStar Networks, Inc. (a company acquired by T-Mobile in 2002) developed, deployed, publicly used, and offered for sale the MobileStar Network, which was a high-speed wireless data network that connected users to the Internet. It is also undisputed that prior to June 15, 1999, the MobileStar Network contained all of the same features that form the basis of PowerOasis's allegation that the T-Mobile HotSpot Network infringes its patents. T-Mobile argued, therefore, that this public use, sale, and offer for sale more than one year prior to the June 15, 2000 filing date of the 2000 CIP Application² constituted § 102(b) prior art which anticipated the PowerOasis patents. 35 U.S.C. § 102(b). PowerOasis responded by claiming its asserted claims should have the benefit of priority going all the way back to the filing date of its Original Application (February 6, 1997) which would antedate the MobileStar Network.

On summary judgment, the district court determined that the asserted claims were not entitled to the priority date of the Original Application because the written description of the Original Application did not support the later issued claims. The district court noted that, to arrive at the broad construction it accorded the "customer interface," it relied "exclusively" on the new matter that was added to the 2000 CIP Application. PowerOasis, 2007 WL 962937, at *8. Because the district court concluded that the '658 and '400 patents are not entitled to the effective filing date of the Original Application, the district court granted the motion for summary judgment of invalidity. This appeal followed.

DISCUSSION

We review the grant of summary judgment de novo. Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371, 1377 (Fed. Cir.2007). Summary judgment is not appropriate if the dispute about a material fact is "genuine," that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

PowerOasis appeals two aspects of the district court's summary judgment determination. First, PowerOasis argues that the district court erred when it placed the burden of proof on PowerOasis to show that it is entitled to the priority date of the Original Application. Second, PowerOasis argues that the district court erred in concluding that the disclosure of the Original Application does not provide a written description adequate to support the asserted claims of the '658 and '400 patents. See 35 U.S.C. § 112 ¶ 1. PowerOasis contends that, at a minimum, there is a genuine issue of material fact which prevents summary judgment of invalidity. We consider each issue in turn.

I. Burden of Proof

It is well established that a patent is presumed valid, and "the burden of persuasion to the contrary is and remains on the party asserting invalidity." Ralston Purina Co. v. Far-Mar-Co, Inc., 772 F.2d 1570, 1573 (Fed.Cir.1985). The district court acknowledged a challenged patent is entitled to a presumption of validity, but questioned whether the presumption of validity extends to the question of priority. The district court concluded that "when a dispute arises concerning whether a CIP patent is entitled to priority to the date of the original application and the Patent Office has not addressed the issue, the burden of proof ordinarily should rest with the party claiming priority to the date of the original application." PowerOasis, 2007 WL 962937, at *8. Accordingly, the district court held that PowerOasis had the burden of proving that it is entitled to claim priority to the filing date of the Original Application. Id.

PowerOasis contends that the party asserting invalidity must always bear the burden of proof as to whether claims in a patent application are entitled to the priority date of a parent application. PowerOasis relies on this court's decision in Ralston for support of its position that the party attacking validity bears the burden to show that claims stemming from a CIP application are not entitled to an earlier filing date. In short, PowerOasis argues the presumption of validity should include a presumption that claims in a CIP are all entitled to the earliest effective filing date.³ In Ralston, both the U.S. Patent and Trademark Office (PTO) and the Board of Patent Appeals and Interferences (Board) made a priority determination. Ralston Purina Co. v. Far-Mar-Co., Inc., 586 F.Supp. 1176, 1189, 1212 (D.Kan.1984). Ralston involved an appeal related to U.S. Patent No. 3,940,495, which...