Tm Patents v. International Business Machines

• Decision Date: 08 November 1999
• Docket Number: No. 97 Civ. 1529(CM).,97 Civ. 1529(CM).
• Citation: 72 F.Supp.2d 370
• Parties: TM PATENTS, L.P and TM Creditors, L.L.C., Plaintiff, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of New York

72 F.Supp.2d 370

TM PATENTS, L.P and TM Creditors, L.L.C., Plaintiff, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant.

No. 97 Civ. 1529(CM).

United States District Court, S.D. New York.

November 8, 1999.

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Stephen B. Judlowe and Dennis J. Mondolino, Hopgood Calimafde Kalil & Judlowe LLP, New York City, for plaintiffs.

Christopher A. Hughes and Christopher K. Hu, Morgan & Finnegan, New York City, for defendant.

OPINION AND ORDER FOLLOWING MARKMAN HEARING

McMAHON, District Judge.

Plaintiffs TM Patents, a Delaware limited partnership formed under the Plan of Reorganization of Thinking Machines Corporation ("Thinking Machines") for the purpose of recovering for infringement of the corporation's patents, and TM Creditors, a Delaware limited liability corporation that represents the interests of the bankrupt's unsecured creditors, are shared successors-in-interest to the patent estate of Thinking Machines, a developer and manufacturer of computers and computer peripheral equipment. Plaintiffs commenced this action against defendant IBM, alleging that certain IBM products infringed three of TM's patents: Patent No. 5,202,979 (the '979 patent); Patent No. 4,899,342 (the '342 patent); and Patent No. 5,212,773 (the '773 patent). The first two patents relate to technologies for storage of data in computers and the detection and correction of errors in such data; the third deals with a strategy for routing communications in massively parallel processors.

The matter is before the Court for construction of the three patents in suit, as required by Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). After extensive briefing, the parties presented their respective contentions concerning patent construction in light of intrinsic evidence to the Court at a hearing conducted September 8 and 9, 1999. The hearing was attended by, inter alia, Professor Jack Lipovski, who had previously been appointed as the Court's disinterested expert and technical advisor. (See Order dated July 21, 1999.) The September hearing was limited to issues of intrinsic evidence because, in determining the meaning of the patent claims, the Court must first examine such evidence — including the claims themselves, the specification, and the prosecution history — and determine whether it can derive an unambiguous construction of the claim language from those sources. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed.Cir.1996). As Judge Conner of this Court recently observed, "If this intrinsic evidence permits an unambiguous construction of the claim language, the Court need not, and indeed should not, consider extrinsic evidence, such as testimony from expert witnesses as to special meanings which the terms of the claims have for those skilled in the art." Evans Medical Ltd. v. American Cyanamid Company, 11 F.Supp.2d 338, 347 (S.D.N.Y.1998) (citing Vitronics, 90 F.3d at 1585), aff'd, Nos. 98-1440, 98-1459, 1999 WL 594310 (Fed.Cir. Aug. 9, 1999). Extrinsic evidence should only be relied upon where necessary to resolve an ambiguity in a disputed claim term. See CVI/Beta Ventures, Inc. v. Tura, L.P., 112 F.3d 1146, 1153 (Fed.Cir.1997).

Finding the intrinsic evidence sufficient for Markman purposes, the Court construes the patents as set forth below.

A. The '342 Patent

The first patent in suit is a patent for a computer system that has as one of its properties the ability both to detect and to correct errors in data that is stored in the computer. The salient features of the system are its use of an error correction code ("ECC") that has the capacity not just to detect errors in data but to correct them as well, and spare disk drives that "back up" the corrected data, so that there are always two copies in the system.

The disk storage array described in the specifications for the '342 patent consists of 32 dedicated data disks and 7 dedicated ECC disks. In addition, there are 3 spare disks in the array. The disk storage array is connected to a computer by a 64-bit bus, or conductor, along which data is transmitted. The bus is in turn connected to a specialized bus adapter, including an ECC generation circuit, within the array. The bus adapter is thus connected to the disk drive. During transmission of data to the disk array, a 64-bit wide data stream enters the adapter and is split into two 32-bit groups. Each of these 32-bit groups is transmitted to the ECC generation chip to generate a 7-bit ECC. Thereafter, each block of 32 bits and the accompanying ECC bits are sent to all 39 disks in the array through 39 shift registers (computer hardware elements designed to perform shifting of the data contained within them). Data is stored in what is referred to as "bit-striped mode," meaning that one bit of each of the 32-bit groups of data is stored separately on each of the 32 disk drives.

The 32 data bits and ECC bits are sent together from all 39 disks in the array via the shift registers to a specialized bus adapter, where, using the data and error correction code, the ECC generation circuit chip performs an error detection and correction function on the data bits and delivers the corrected data to the computer. If there is a disk drive failure, the corrected data can be accessed from the spare disk.

The claims in the '342 patent that require construction are Claims 1, 6, 7 and 10.

1. Collateral Estoppel Effects from the EMC Action

TM's suit against IBM is not the first infringement action to reach the stage of a Markman hearing in a federal District Court. In 1997, TM also sued a competitor of IBM, EMC Corporation, in a case heard by Chief Judge William G. Young in the United States District Court for the District of Massachusetts. See TM Patents v.. EMC Corp., Civil Action No. 98-10206 (D.Mass. Jan. 27, 1999). The case went to trial earlier this year. Immediately prior to the trial, Chief Judge Young held a Markman hearing, at which he was asked to construe some, but not all, of the claims disputed in this Court. Judge Young did so, after a two day hearing. IBM asserts that TM is either collaterally or judicially estopped to relitigate the claims that Judge Young construed — with which constructions IBM (a non-party to the EMC action) is in substantial (though not total) agreement. TM argues that Judge Young's rulings, while correct in many respects and perhaps persuasive in others, ought not be accorded former adjudication effect, because the EMC action settled during trial, and because Judge Young's rulings were not sufficiently "final" to be deemed preclusive.

IBM is correct. While this raises an issue of first impression, I conclude that Judge Young's resolution of the meaning of certain disputed patent terms following a Markman hearing, at which TM had a full and fair opportunity to litigate the meaning of those terms, is binding on the Plaintiffs in this action.

Collateral estoppel forecloses litigants from contesting matters that were actually litigated and decided in a previous action. See Blonder-Tongue Lab. Inc. v. University of Illinois Foundation, 402 U.S. 313, 329, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). Four elements must be met for collateral estoppel to apply. First, the issues raised in both proceedings must be identical. Second, the relevant issues must have actually been litigated and decided in the prior proceeding. Third, the party to be estopped must have had a full and fair opportunity to litigate the issues in that prior proceeding. And fourth, resolution of the issues must have been necessary to support a valid and final judgment on the merits. See Central Hudson Gas & Elec. Corp. v. Empresa Naviera Santa, 56 F.3d 359, 368 (2d Cir.1995).

The parties before me agree that the first and third of those four elements are met in this case. They disagree, however, as to whether the second and fourth have been satisfied. Since in this particular case, the fourth element (finality) subsumes the second (actually decided), I will address them together.

As to the fourth element, TM notes that the dispute between it and EMC concerning the meaning of certain terms in the '342 patent was never reduced to a final judgment, because the matter was settled before the jury had returned its verdict on the question of infringement. TM adopts the simple and straightforward position that no final, appealable judgment means no finality for collateral estoppel purposes. Unfortunately for TM, that is not the law in this Circuit (or any other, for that matter). Since Judge Friendly's seminal opinion in Lummus Co. v. Commonwealth Oil Ref. Co., 297 F.2d 80, 89 (2d Cir.1961), it has been settled that a judgment that is not "final" in the sense of 28 U.S.C. § 1291 can nonetheless be considered "final" in the sense of precluding further litigation of issues that were actually determined in such a judgment. Whether a ruling is sufficiently final turns on "such factors as the nature of the decision (i.e., that it was not avowedly tentative), the adequacy of the hearing, and the opportunity for review." See id. As Judge Friendly observed, "`Finality' in the context here relevant may mean little more than that the litigation of a particular issue has reached such a stage that a court sees no really good reason for permitting it to be litigated again." Id.; see also Zdanok v. Glidden Co., Durkee Famous Foods Div., 327 F.2d 944, 955 (2d Cir. 1964); Metromedia Co. v. Fugazy, 983 F.2d 350, 366 (2d Cir.1992).

The Lummus principle is illustrated by Georgakis v. Eastern Air Lines, Inc., 512 F.Supp. 330 (E.D.N.Y.1981). In Georgakis, the plaintiff, who was injured in an airplane crash while traveling with the defendant airline, sought summary judgment on the airline's affirmative defense that the case was covered by the Warsaw Convention, which would have limited the plaintiff's damages to $75,000. In a prior case arising out of the same...