Simo Holdings Inc. v. Hong Kong Ucloudlink Network Tech. Ltd.

• Decision Date: 05 January 2021
• Docket Number: 2019-2411
• Parties: SIMO HOLDINGS INC., Plaintiff-Appellee v. HONG KONG UCLOUDLINK NETWORK TECHNOLOGY LIMITED, uCloudlink (America), LTD., Defendants-Appellants
• Court: U.S. Court of Appeals — Federal Circuit

983 F.3d 1367

SIMO HOLDINGS INC., Plaintiff-Appellee

v.HONG KONG UCLOUDLINK NETWORK TECHNOLOGY LIMITED, uCloudlink (America), LTD., Defendants-Appellants

2019-2411

United States Court of Appeals, Federal Circuit.

Decided: January 5, 2021

Benjamin Edward Weed, Gina A. Johnson, K&L Gates LLP, Chicago, IL, argued for plaintiff-appellee. Also represented by Peter Soskin, San Francisco, CA; Jeffrey Charles Johnson, Seattle, WA.

John A. Dragseth, Fish & Richardson PC, Minneapolis, MN, argued for defendants-appellants. Also represented by Phillip Goter, James Huguenin-Love ; Oliver Richards, San Diego, CA; Michael T. Zoppo, New York, NY; Jonathan J. Lamberson, White & Case LLP, Palo Alto, CA.

Before O'Malley, Wallach, and Taranto, Circuit Judges.

Taranto, Circuit Judge.

SIMO Holdings Inc. owns U.S. Patent No. 9,736,689, which describes apparatuses and methods that allow individuals to reduce roaming charges on cellular networks when traveling outside their home territory. SIMO sued Hong Kong uCloudlink Network Technology Limited and uCloudlink (America), Ltd. (collectively, uCloudlink) for infringement, alleging that four uCloudlink products came within claim 8 of the '689 patent (as well as dependent claims that present no separate issues on appeal). In cross-motions for summary judgment of infringement, the parties briefed whether claim 8 requires a "non-local calls database" and, if so, whether the accused products had such a database. The district court granted summary judgment to SIMO that uCloudlink was infringing (and denied uCloudlink's motion for summary judgment of noninfringement), concluding that claim 8 does not require such a database. The case went to trial, which, after post-trial proceedings, resulted in a final judgment of $8,230,654 for SIMO.

We reverse. We reject the district court's claim construction and hold that claim 8 requires two or more non-local calls databases. We also conclude that, in responding to uCloudlink's summary-judgment motion, SIMO did not identify a triable issue on the factual question of whether, as uCloudlink asserted, the accused products lack a non-local calls database. We therefore hold that uCloudlink is entitled to summary judgment of noninfringement.

I

A

The '689 patent deals with roaming charges on cellular networks. The patent describes a scenario in which an individual has a cellphone "with a wireless contract with" cellular-service provider "AT&T® in San Francisco" and, when in "London," uses the cellphone to "make[ ] a telephone call from a VODAPHONE® cellular telephone network in London." '689 patent, col. 5, lines 1–6. If the user lacks a cellular-service contract with Vodaphone, the user is likely to incur a "high roaming" fee (charged by Vodaphone to home-network provider AT&T and passed to the user). Id. , col. 5, lines 6–8.

The patent notes that one way the user can avoid the roaming charges involves replacing a physical component of the phone—specifically, replacing the subscriber identity module (SIM) card inside the phone that identifies the phone to an in-reach cellular network. The user can replace the home-network SIM card (an AT&T SIM card, in the above scenario) with a SIM card used for a "local" call on a cellular network in the user's present location (a Vodaphone card in London). Id. , col. 2, lines 46–51. According to the patent, however, "[p]urchasing and swapping-out SIM cards is inconvenient, inefficient, and technically challenging for most subscribers, especially when traveling to multiple foreign countries." Id. , col. 2, lines 51–54. To avoid those difficulties, the '689 patent proposes a different, electronic technique, not involving the swapping out of a SIM card, to have a present-location cellular provider with which the traveling user has no service agreement (Vodaphone, in London) treat the user's cellphone as a local device as if it had such an agreement, rather than as a "foreign" device. Id. , col. 6, lines 56–59 ("By ‘foreign’ it is meant that the wireless communication client 106 (or its SIM card) is not subscribed to the wireless communications network 102.").

Among other things, the '689 patent describes a "wireless communication client" and a "remote administration system." Id. , col. 3, lines 25–50. The client "stores at least a portion of authentication data 530 either on a SIM card and/or in memory 512 as authentication information 532." Id. , col. 14, lines 21–25. The remote administration system "authenticates" devices, "maintains subscriber accounts," "facilitates the rerouting of non-local calls to further provide reduced cost routing," and includes an authentication bank of a "plurality of physical identification modules (e.g. , SIM cards)." Id. , col. 7, lines 1–11; col. 10, line 65, through col. 11, line 2. SIMs generally "store network specific information used to authenticate and identify subscribers on the network." Id. , col. 11, lines 39–40. The SIMs in the authentication bank have the information needed for the wireless communication client to become authenticated (recognized as a local device) by a present-location (local) cellular network. See , e.g. , id. , col. 11, line 39, through col. 12, line 4.

Thus, in one embodiment, a wireless communication client uses authentication data already on a SIM card or stored in the client's memory to connect to a local cellular network, which connects the client to the remote administration system for the purpose of retrieving information that will enable the client thereafter to become authenticated as a local device by a local network (not necessarily the same local network). Id. , col. 17, line 36, through col. 18, line 14. Specifically, the remote administration system, after being connected with the client through the initial local-network connection, verifies the identity of the client and sends it a remote authentication module with SIM information from the authentication bank. Id. The client then uses the new SIM to become authenticated with a present-location cellular network on which the client works as a local device so that the user avoids further roaming charges. Id.

Some embodiments, of particular relevance on appeal, have an additional feature—a "non-local calls database" in the wireless communication client that helps "greatly reduc[e] the cost of [some] call[s]." Id. , col. 16, lines 5–6; fig. 5A. The specification describes how. "The non-local calls database 525 lists various locations, corresponding area codes, and corresponding local dial-in telephone numbers for use when the subscriber wants to make a non-local call when present at a particular location." Id. , col. 15, lines 57–61. "For example, when a user desires to make a non-local call when within a particular location (e.g. , a visiting caller in London wants to call his home office in San Francisco), the client 106 ... is able to determine that the called number is not within the local area, and then dial a local communication server 128 (FIG. 1) at a local number from the list." Id. , col. 15, lines 61–67. The communication server "reroutes the call to the destination using the most suitable route," such as a Voice Over IP route, "thereby greatly reducing the cost of the call." Id. , col. 16, lines 1–6.

Claim 8 of the '689 patent, the only claim whose language is at issue on appeal, recites:

A wireless communication client or extension unit comprising a plurality of memory, processors, programs, communication circuitry, authentication data stored on a subscribed identify module (SIM) card and/or in memory and non-local calls database, at least one of the plurality of programs stored in the memory comprises instructions executable by at least one of the plurality of processors for:

enabling an initial setting of the wireless communication client or the extension unit and a remote administration system;

establishing a data communication link to transmit information among the wireless communication client or the extension unit, and the remote administration system;

establishing a local authentication information request in response to a local authentication request by a local cellular communication network, wherein the local authentication information request comprises information regarding the local authentication request for local authentication information received by the foreign wireless communication client or the extension unit from the local cellular communication network, and wherein the data communication link is distinct from the local cellular communication network;

relaying the local authentication information request to the remote administration system via the data communication link and obtaining suitable local authentication information from the remote administration system via the data communication link;

establishing local wireless services provided by the local cellular communication network to the wireless communication client or the extension unit by sending the local authentication information obtained from the remote administration system to the local cellular communication network over signal link; and

providing a communication service to the wireless communication client or the extension unit according to the established local wireless services.

Id. , col. 25, lines 4–40 (emphasis added).

B

In this case, SIMO has accused uCloudlink of infringing claim 8 through uCloudlink's sales and other actions involving four uCloudlink products: three GlocalMe WiFi hotspot devices (G2, G3, and U2 Series), and the S1 mobile phone.¹ The district court described how the accused products work. See SIMO Holdings Inc. v. Hong Kong uCloudlink Network Technology Ltd. , 376 F. Supp. 3d 369, 374–76 (S.D.N.Y. 2019) ( Summary Judgment Opinion ). There is no dispute over that description material to the issues we decide on appeal.

According to the district court's description, each product can act as a WiFi hotspot, wirelessly providing data to other devices. Id. at 375. Each device when sold has a SIM called a "...