Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 1 of 46
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
`
`
`)
`
`
`
`
`
`
`)
`
`IN RE: MAXIM INTEGRATED
`)
`
`PRODUCTS, INC. MDL No. 2354
`)
`
`
`
`
`
`
`)
`This Document Relates to: All Actions
`)
`
`
`
`
`
`
`)
`
`
`
`
`
`
`)
`
`
`
`
`
`
`
`
`
`
`
`
`
`MEMORANDUM OPINION
`
`
`Master Docket: Misc. No. 12-244
`MDL No. 2354
`
`Chief Judge Joy Flowers Conti
`
`CONTI, Chief District Judge
`
`
`
`
`
`
`These are patent infringement cases, centralized in this court for coordinated and
`
`consolidated pretrial proceedings by order of the Panel on Multidistrict Litigation. (ECF No. 1.)
`
`Approximately twenty-five separate cases are currently proceeding at the miscellaneous number
`
`assigned to this MDL, 12-mc-244, to which all citations to the record refer. Prior to creation of
`
`the instant MDL, Maxim Integrated Products, Inc. (“Maxim”) sued ten companies in the United
`
`States District Court for the Eastern District of Texas alleging patent infringement, and four
`
`companies brought declaratory judgment actions against Maxim in federal district courts in
`
`Colorado, Kansas and Pennsylvania seeking declarations of non-infringement and invalidity of
`
`the same patents. (Id.) All of these, and the later-joined, cases involve five related patents owned
`
`by Maxim directed to electronically performing secure transactions. Maxim alleges that various
`
`smartphone software applications, or “Apps,” infringe its patents. The companies accused of
`
`infringement, including those that initiated litigation by bringing declaratory judgment actions,
`
`are collectively referred to by this court as the Opposing Parties (“OPs”).
`
`
`
`
`
`Maxim specifically asserts that the OPs infringe five of its patents: United States
`
`Patent Nos. 5,805,702 (the “‘702 Patent”, ECF No. 610 at JX-1), 5,940,510 (the “‘510 Patent”,
`
`ECF No. 610 at JX-3), 5,949,880 (the “‘880 Patent”, ECF No. 610 at JX-5), 6,105,013 (the “‘013
`
`COMPASS EXH. 1017 - Page 1 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 2 of 46
`
`Patent”, ECF No. 610 at JX-7), and 6,237,095 (the “‘095 Patent”, ECF No. 610 at JX-9). These
`
`patents are all related. (ECF No. 691 at 2.) The ‘880 Patent issued from a divisional application
`
`of the ‘510 Patent. (Id.) The ‘702 Patent, ‘013 Patent and ‘095 Patent date back to a common
`
`provisional application and share a substantially similar specification. (Id.) The ‘013 Patent and
`
`‘095 Patent incorporate by reference the ‘510 Patent. The ‘510 Patent and ‘880 Patent
`
`incorporate by reference the ‘702 Patent. (Id.)
`
`
`
`
`
`The parties submitted a joint disputed claim terms chart originally identifying
`
`forty-three terms requiring construction by the court, (ECF No. 580), but later indicated that
`
`eight of the forty-three disputes had been resolved following claim construction briefing (ECF
`
`No. 677-1). Maxim filed an opening claim construction brief (ECF No. 634), to which the OPs
`
`filed a consolidated response (ECF No. 642). Maxim thereafter filed a reply brief. (ECF No.
`
`651.) A subset of the OPs, referred to as the Joining Parties (“JPs”), filed a separate claim
`
`construction brief with respect to a single disputed claim term, i.e., “certificate,” (ECF No. 680),
`
`to which Maxim responded (ECF No. 686). A hearing was held before the Special Master and
`
`the court on September 12, 2013 (the “September Hearing”). (ECF No. 709 (Transcript).)
`
`Following the September Hearing, Maxim filed a supplemental brief with respect to a single
`
`disputed claim term, i.e., “packet.” (ECF No. 687.)
`
`On October 9, 2013, the Special Master filed a Report and Recommendation
`
`(“R&R”) regarding claim construction, (ECF No. 691), which was later modified only as to the
`
`disputed claim term “microcontroller core” to correct a typographical error in the R&R (ECF No.
`
`693). The OPs (ECF No. 704), Maxim (ECF No. 705), and the JPs (ECF No. 713) filed
`
`objections to the Special Master’s R&R and responses to those objections (ECF Nos. 715, 714
`
`
`
`2
`
`COMPASS EXH. 1017 - Page 2 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 3 of 46
`
`and 718, respectively.) The court heard oral argument on the objections to the R&R on
`
`November 13, 2013 (the “November Hearing”). (ECF No. 726 (Transcript).)
`
`The court reviewed the initial claim construction briefing and the briefing on the
`
`objections to the R&R and considered the arguments made and written materials submitted at the
`
`September and November Hearings and is prepared to issue its order on claim construction. In
`
`accordance with the court’s previous order on post-claim construction scheduling, (ECF No.
`
`724), Maxim’s counsel is directed to file a version of that order listing dates certain for the
`
`various deadlines. The court will thereafter set a date for the Daubert hearing and post-discovery
`
`status conference.
`
`I.
`
`LEGAL STANDARDS
`
`
`
`A. Generally Applicable Principles of Claim Construction
`
`
`Claim construction is a matter of law. Markman v. Westview Instruments, Inc.,
`
`52 F.3d 967, 979 (Fed. Cir. 1995). “It is a ‘bedrock principle’ of patent law that ‘the claims of a
`
`patent define the invention to which the patentee is entitled the right to exclude.’” Phillips v.
`
`AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (quoting Innova/Pure Water, Inc. v.
`
`Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115 (Fed. Cir. 2004)). The words of a claim
`
`“are generally given their ordinary and customary meaning,” which “is the meaning that the term
`
`would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as
`
`of the effective filing date of the patent application.” Id. at 1312-13 (citing Vitronics Corp. v.
`
`Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed Cir. 1996)); Innova/Pure Water, 381 F.3d at 1116.
`
`In arriving at this meaning, a court is to look first and foremost to the “intrinsic evidence,” which
`
`consists of the patent’s claim language, the specification and written description, and the
`
`
`
`3
`
`COMPASS EXH. 1017 - Page 3 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 4 of 46
`
`prosecution history, to determine the meaning of disputed claim terms. Phillips, 415 F.3d at
`
`1311-17; Medrad, Inc. v. MRI Devices Corp., 401 F.3d 1313, 1319 (Fed. Cir. 2005). The
`
`specification is the single best guide to the meaning of a disputed term, and is
`
`“usually…dispositive.” Phillips, 415 F.3d at 1315 (quoting Vitronics, 90 F.3d at 1582).
`
`Claim language guides the court’s construction of claim terms. Phillips, 415 F.3d
`
`at 1314. Yet, the “claims cannot enlarge what is patented beyond what the inventor has
`
`described as the invention.” Abbott Laboratories v. Sandoz, Inc., 566 F.3d 1282, 1288 (Fed. Cir.
`
`2009) (citing Biogen, Inc. v. Berlex Labs., Inc., 318 F.3d 1132, 1140 (Fed. Cir. 2003)). The
`
`context in which a term is used not only in the asserted claims, but also in any claims that are not
`
`being asserted in a particular lawsuit, can be highly instructive because “terms are normally used
`
`consistently throughout the patent.” Phillips, 415 F.3d at 1314. “The construction that stays true
`
`to the claim language and most naturally aligns with the patent's description of the invention will
`
`be, in the end, the correct construction.” Renishaw PLC v. Marposs Societa per Azioni, 158 F.3d
`
`1243, 1250 (Fed. Cir. 1998). Differences among claims, such as additional limitations in
`
`dependent claims, can provide further guidance. The doctrine of claim differentiation provides
`
`that the presence of a dependent claim that adds a particular limitation raises a rebuttable
`
`presumption that the limitation in question is not found in the independent claim. Wenger Mfg.,
`
`Inc. v. Coating Mach. Sys., Inc., 239 F.3d 1225, 1233 (Fed. Cir. 2001). Although the doctrine is
`
`at its strongest “where the limitation sought to be ‘read into’ an independent claim already
`
`appears in a dependent claim,” there is still a presumption that two independent claims have
`
`different scope when different words or phrases are used in those claims. Seachange Int’l Inc., v.
`
`C-COR, Inc., 413 F.3d 1361, 1368 (Fed. Cir. 2005) (citing cases). “However, the doctrine, ‘only
`
`
`
`4
`
`COMPASS EXH. 1017 - Page 4 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 5 of 46
`
`creates a presumption that each claim in a patent has a different scope.’” Id. at 1369 (quoting
`
`Kraft Foods, Inc. v. Int’l Trading Co., 203 F.3d 1362, 1368 (Fed. Cir. 2000)).
`
`Claims are always to be read in view of the specification, of which they are a part.
`
`Markman, 52 F.3d at 979. “The person of ordinary skill in the art is deemed to read the claim
`
`term not only in the context of the particular claim in which the disputed term appears, but in the
`
`context of the entire patent, including the specification.” Phillips, 415 F.3d at 1313. Moreover,
`
`“where the ordinary and accustomed meaning of the words used in the claims lack sufficient
`
`clarity to permit the scope of the claim to be ascertained from the words alone” the specification
`
`can provide clarity. Teleflex. Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1325 (Fed. Cir. 2002).
`
`In the specification, a patentee may define his own terms, give a claim term a different meaning
`
`than it would otherwise possess, or disclaim or disavow some claim scope. Id. at 1316.
`
`Although a court generally presumes terms possess their ordinary meaning, this presumption can
`
`be overcome by statements of clear disclaimer, SciMed Life Sys., Inc. v. Advanced
`
`Cardiovascular Sys., Inc., 242 F.3d 1337, 1343-44 (Fed. Cir. 2001), or when the patentee acts as
`
`his own lexicographer. Irdeto Access, Inc. v. EchoStar Satellite Corp., 383 F.3d 1295, 1301
`
`(Fed. Cir. 2004).
`
`“Although the specification may aid the court in interpreting the meaning of
`
`disputed language in the claims, particular embodiments and examples appearing in the
`
`specification will not generally be read into the claims.” Constant v. Advanced Micro-Devices,
`
`Inc., 848 F.2d 1560, 1571 (Fed. Cir. 1988); see also Phillips, 415 F.3d at 1323. Nonetheless, “[a]
`
`claim interpretation that excludes a preferred embodiment from the scope of the claim ‘is rarely,
`
`if ever, correct.’” Globetrotter Software, Inc. v. Elam Computer Grp. Inc., 362 F.3d 1367, 1381
`
`(Fed. Cir. 2004) (quoting Vitronics Corp., 90 F.3d at 1583). Even if a patent describes only a
`
`
`
`5
`
`COMPASS EXH. 1017 - Page 5 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 6 of 46
`
`single embodiment, the claims of the patent must not be construed as being limited to that
`
`embodiment unless the patentee has demonstrated a clear intention to limit the claim scope using
`
`“words or expressions of manifest exclusion or restriction.” Phillips, 415 F.3d at 1323; Liebel-
`
`Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 906 (Fed. Cir. 2004) (citing cases); Teleflex, 299
`
`F.3d at 1327. The purpose of the specification is “to teach and enable those of skill in the art to
`
`make and use the invention” and sometimes, the best way to do that is to provide an example.
`
`Teleflex, 299 F.3d at 1327. Although the Court of Appeals for the Federal Circuit acknowledges
`
`that “the distinction between using the specification to interpret the meaning of a claim and
`
`importing limitations from the specification into the claim can be a difficult one to apply in
`
`practice,” it instructs courts to maintain their focus on how a person of ordinary skill in the art
`
`would understand the claim terms. Id.
`
`
`
`The prosecution history is another tool that supplies the proper context for claim
`
`construction. Home Diagnostics Inc. v. LifeScan, Inc., 381 F.3d 1352, 1356 (Fed. Cir. 2004).
`
`Because the file history “represents an ongoing negotiation between the [United States Patent
`
`and Trademark Office (“PTO”)] and the applicant, rather than the final product of that
`
`negotiation, it often lacks the clarity of the specification and thus is less useful in claim
`
`construction proceedings.” Phillips, 415 F.3d at 1317. Nevertheless, the prosecution history is
`
`intrinsic evidence that is relevant to the determination of how the inventor understood the
`
`invention and whether the inventor limited the invention during prosecution by narrowing the
`
`scope of the claims. Id. Where an applicant limits claim scope during prosecution through a
`
`“clear disavowal of claim coverage, such as an amendment to overcome a rejection,” the well-
`
`established doctrine of prosecution disclaimer “preclud[es] patentees from recapturing through
`
`claim interpretation specific meanings disclaimed during prosecution.” Amgen Inc. v. Hoechst
`
`
`
`6
`
`COMPASS EXH. 1017 - Page 6 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 7 of 46
`
`Marion Roussel, Inc., 314 F.3d 1313, 1327 (Fed. Cir. 2003) (citing York Prods., Inc. v. Central
`
`Tractor Farm & Fam. Ctr., 99 F.3d 1568, 1575 (Fed. Cir. 1996)); Omega Eng’g Inc. v. Raytek
`
`Corp., 334 F.3d 1314, 1323 (Fed. Cir. 2003). By distinguishing the claimed invention over the
`
`prior art, an applicant is indicating what the claims do not cover. Spectrum Int’l v. Sterilite
`
`Corp., 164 F.3d 1372, 1378-79 (Fed. Cir. 1988) (quotation omitted). In order for the doctrine to
`
`apply, however, the prosecution history must show that the patentee clearly, unambiguously and
`
`unmistakably disclaimed or disavowed the proposed interpretation during prosecution in order to
`
`obtain claim allowance. Middleton Inc. v. 3M Co., 311 F.3d 1384, 1388 (Fed. Cir. 2002); Cordis
`
`Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1358 (Fed. Cir. 2003); Schindler Elevator Corp. v.
`
`Otis Elevator Co., 593 F.3d 1275, 1285 (Fed. Cir. 2010).
`
`Phillips rejected any claim construction approach that sacrificed the intrinsic
`
`record in favor of extrinsic evidence, such as dictionary definitions or expert testimony.
`
`Phillips, 415 F.3d at 1319-24. Still, though “less significant than the intrinsic record in
`
`determining the legally operative meaning of claim language,” a court may rely on extrinsic
`
`evidence to “shed useful light on the relevant art.” Id. at 1317 (quotation omitted). Technical
`
`dictionaries and treatises may help the court understand the underlying technology and the
`
`manner in which one skilled in the art might use claim terms, but such sources may also provide
`
`overly broad definitions or may not be indicative of how terms are used in the patent. Id. at
`
`1318. Similarly, expert testimony may aid the court in determining the particular meaning of a
`
`term in the pertinent field, but “conclusory, unsupported assertions by experts as to the definition
`
`of a claim term are not useful.” Id. Generally, extrinsic evidence is “less reliable than the patent
`
`and its prosecution history in determining how to read claim terms.” Id.
`
`
`
`
`
`7
`
`COMPASS EXH. 1017 - Page 7 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 8 of 46
`
`B. Indefiniteness
`
`Patent claims must particularly point out and distinctly claim the subject matter
`
`regarded as the invention. 35 U.S.C. § 112, ¶ 2. Whether a claim meets this definiteness
`
`requirement is a question of law. Amgen Inc. v. F. Hoffman–LA Roche Ltd., 580 F.3d 1340,
`
`1371 (Fed. Cir. 2009); Young v. Lumenis, Inc., 492 F.3d 1336, 1344 (Fed. Cir. 2007). The
`
`primary purpose of the definiteness requirement is to ensure that the claims are written in such a
`
`way that they give notice to the public of the extent of the legal protection afforded by the patent
`
`so that interested members of the public, e.g., competitors of the patent owner, can determine
`
`whether or not they infringe. All Dental Prodx, LLC v. Advantage Dental Prods., Inc., 309 F.3d
`
`774, 779–80 (Fed. Cir. 2002) (citing Warner–Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S.
`
`17, 28–29 (1997)). In other words, “[a] patent holder should know what he owns, and the public
`
`should know what he does not.” Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535
`
`U.S. 722, 731 (2002).
`
`
`
`
`
`An accused infringer must demonstrate by clear and convincing evidence that one
`
`of ordinary skill in the relevant art could not discern the boundaries of the claim based upon the
`
`claim language, the specification, the prosecution history, and the knowledge in the relevant art
`
`in order to meet the “exacting standard” to prove indefiniteness. Halliburton Energy Servs., Inc.
`
`v. M-I LLC, 514 F.3d 1244, 1249-50 (Fed. Cir. 2008). “Only claims ‘not amenable to
`
`construction’ or ‘insolubly ambiguous’ are indefinite.” Id. at 1250 (quoting Datamize, LLC v.
`
`Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed. Cir. 2005)). Where “one skilled in the art
`
`would understand the bounds of the claim when read in light of the specification” the claim is
`
`sufficiently definite. Exxon Research & Eng'g Co. v. United States, 265 F.3d 1371, 1375 (Fed.
`
`Cir. 2001). The ultimate issue is whether someone working in the relevant technical field could
`
`
`
`8
`
`COMPASS EXH. 1017 - Page 8 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 9 of 46
`
`understand the bounds of a claim. Haemonetics Corp. v. Baxter Healthcare Corp., 607 F.3d 776,
`
`783 (Fed. Cir. 2010). Where “the meaning of a claim is discernible, even though the task may be
`
`formidable and the conclusion may be one over which reasonable persons will disagree,” the
`
`claims are sufficiently clear to avoid invalidity on indefiniteness grounds. Exxon Research, 265
`
`F.3d at 1375. This approach “accord[s] respect to the statutory presumption of patent
`
`validity….and…protect[s] the inventive contribution of patentees, even when the drafting of
`
`their patents has been less than ideal.” 35 U.S.C. § 282; Datamize, 417 F.3d at 1347–48.
`
`
`
`II.
`
`CONSTRUCTION OF DISPUTED CLAIM TERMS
`
`For ease of reference, the court addresses the disputed claim terms in the order
`
`that they appear in the R&R, (ECF No. 691), and by reference to the number assigned to the
`
`claim term by the Special Master. The court discusses each disputed claim term, or group of
`
`closely related terms, in a separate section below. Each section begins with an individual claim
`
`construction chart that lists, in the first column, the number assigned to the term by the Special
`
`Master in the R&R. The second column of each chart recites the disputed claim term and makes
`
`parenthetical reference, following the claim term, to the number at which that disputed claim
`
`term appeared in the parties’ joint disputed claim terms chart. (ECF No. 677-1.) Each individual
`
`claim construction chart next includes a column listing the patent number and claim number at
`
`which the disputed claim term is found, followed by this court’s claim construction in the last
`
`column.
`
`The court uses bold typeface where its construction differs from, or adds to, the
`
`Special Master’s recommended construction. In some instances, the court suggests, in footnotes,
`
`curative jury instructions that may be required under certain circumstances. The court does so in
`
`
`
`9
`
`COMPASS EXH. 1017 - Page 9 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 10 of 46
`
`order to recognize that this is an MDL proceeding, and that this court may not preside over the
`
`jury trial in a particular case. By doing so, the court does not indicate that any party is
`
`authorized purposefully to submit evidence or present argument that contradicts this court’s
`
`claim construction. The court, however, includes these curative instructions out of an abundance
`
`of caution and for the purpose of ensuring clarity when the cases centralized here are returned to
`
`their home courts.
`
`
`A. First Claim Construction Chart
`
`R&R#
`1(a)
`1(a)
`1(b)
`1(b)
`
`Term (Chart #)
`“first data” (#12)
`“first data” “second data” (#12)
`“units of exchange” (#34)
`“value datum” (#34)
`
`Patent/Claim
`‘510/1
`‘095/1
`‘880/1
`‘880/1
`
`1(c)
`
`“first portable module” (#13)
`
`
`‘510/1
`
`Construction
`no construction required
`no construction required
`no construction required
`data that can be exchanged [as
`payment] for goods and services,
`the data representing a value for
`money, credit or other items
`no construction required
`
`Very generally, the disputes concerning each of these terms center on whether the
`
`patent claims are limited only to monetary transactions. The court agrees with the Special
`
`Master’s fundamental conclusion that although the ‘880 Patent’s “value datum” term indicates a
`
`monetary, or other credit, transaction, the other terms, and patents, are not so limited.
`
`The OPs object to the Special Master’s conclusion that the terms “first data,”
`
`“second data” and “first portable module” need not be construed, and are not limited to monetary
`
`transactions. (ECF No. 704 at 3-7.) The OPs’ arguments that the ‘095 and ‘510 Patents must be
`
`limited to transactions that involve cash, or cash equivalents, are not persuasive.
`
`
`
`
`
`
`
`10
`
`COMPASS EXH. 1017 - Page 10 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 11 of 46
`
`The Special Master explained that the doctrine of claim differentiation, the
`
`permissive language used in the claims and the rest of the specification, and the file history of the
`
`‘095 Patent demonstrate that the claims of the ‘095 Patent are not limited to cash exchanges.
`
`(ECF No. 691 at 13-14). The court agrees with this analysis and adopts it.
`
`With respect to the ‘510 Patent, the court rejects the OPs’ argument that the
`
`patentees redefined the term “data” to mean “monetary value” because the patent lacks a legally
`
`sufficient clear statement of lexicography. Intellicall, Inc. v. Phonometrics. Inc., 952 F.2d 1384,
`
`1388 (Fed. Cir. 1992); (ECF No. 691 at 14-15.) The OPs’ lexicographer argument is also
`
`contradicted explicitly by the ‘510 Patent’s file history. During prosecution of the ‘510 Patent,
`
`the PTO examiner identified two distinct inventions in the originally filed claims of the ‘510
`
`Patent; one directed toward “a system for communicating data securely,” and one directed
`
`toward “a method for electronically transferring units of exchange.” (ECF No. 610 at JX-4,
`
`244MAX001038-43, 1071.) The “system for communicating data securely” invention became
`
`the ‘510 Patent, while the “method for electronically transferring units of exchange” invention
`
`became the ‘880 Patent. The court cannot conclude that the patentees defined “data” in the ‘510
`
`Patent to mean “monetary value” in the context of this file history. Finally, under controlling
`
`precedent, this court cannot limit the claims of the ‘510 Patent to a preferred embodiment, even
`
`if there is only one, unless the patentee demonstrated a clear intention to limit the claim scope
`
`using “words or expressions of manifest exclusion or restriction.” Teleflex, 299 F.3d at 1327.
`
`Again, in the entire context of the ‘510 Patent, the court cannot conclude that the patentees
`
`demonstrated such a clear intention to limit their claims. Based upon the ‘510 Patent’s
`
`specification and file history, which claims the broader invention directed toward “a system for
`
`
`
`11
`
`COMPASS EXH. 1017 - Page 11 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 12 of 46
`
`communicating data securely,” the court cannot conclude that the ‘510 Patent is limited to
`
`monetary transactions. (ECF No. 691 at 13-14, 15.)
`
`In addition, the incorporation by reference in the ‘510 Patent of the ‘702 Patent
`
`supplies further support for the conclusion that the ‘510 Patent does not manifest an intent to
`
`exclude non-monetary embodiments. (ECF No. 610 at JX-3, 1:7-16.)1 The ‘702 Patent includes
`
`numerous embodiments that are unrelated to monetary transactions. (Id. at JX-1, 4:45-7:50,
`
`13:51-16:19.) For the first time in their objections to the R&R, the OPs argue that the patentees’
`
`statement of incorporation is ineffective and, that, even if it were proper, an incorporated patent
`
`cannot be considered for purposes of construing the terms of the host patent. (ECF No. 704 at 6.)
`
`The court disagrees. As an initial matter, the statement of incorporation in the ‘510 Patent meets
`
`the standards and requirements set forth in the applicable regulations and PTO procedures. 37
`
`C.F.R. § 1.57(c); Manual of Patent Examining & Procedure (MPEP), 6th ed. §§ 608.01(p),
`
`2163.07(b) (Sep. 1995); Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1323 (Fed. Cir. 2012). It
`
`follows that the ‘702 Patent “is as much a part of the [‘510 Patent] as if the text was repeated in
`
`[the ‘510 Patent].” MPEP § 2163.07(b).
`
`None of the decisions cited by the OPs, in either their briefing or in the materials
`
`submitted at the November Hearing, indicate that this court is prohibited from considering the
`
`‘702 Patent in construing the claims of the ‘510 Patent. Young Dental Mfg. Co. v. Q3 Special
`
`Prods., 112 F.3d 1137, 1143 (Fed. Cir. 1997) (distinguishable at least because the court
`
`addressed differing specifications in a parent and continuation-in-part patent); SanDisk Corp. v.
`
`Kingston Tech. Co., 695 F.3d 1348, 1366 (Fed. Cir. 2012) (distinguishable at least because the
`
`court addressed how the disclosure-dedication rule applied to incorporated subject matter);
`
`
`1 Citations to patents are made in the format [column number]:[line number], unless otherwise
`specified.
`
`
`
`12
`
`COMPASS EXH. 1017 - Page 12 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 13 of 46
`
`Modine Mfg. Co. v. ITC, 75 F. 3d 1545, 1552 (Fed. Cir. 1996) (distinguishable at least because
`
`the host patent explicitly replaced value assigned to the term in controversy in the incorporated
`
`patent with a different value); Zenon Env’t, Inc. v. United States Filter Corp., 506 F.3d 1370,
`
`1378-1379 (Fed. Cir. 2007) (distinguishable at least because the court addressed effect of
`
`language of incorporation that was specific, instead of general); Helicos Biosciences Corp. v.
`
`Illumina, Inc., 888 F.Supp. 2d 519, 533 (D. Del. 2012) (not controlling authority and
`
`distinguishable at least because the court addressed effect of incorporated subject matter on
`
`anticipation analysis); Biogen Idec, Inc. v. GlaxoSmithKline LLC, 713 F.3d 1090, 1097 (Fed.
`
`Cir. 2013) (distinguishable at least because prosecution history disclaimer applied). The various
`
`non-monetary embodiments described in the ‘702 Patent can be considered in construing the
`
`terms of the ‘510 Patent and support the conclusion that the ‘510 Patent is not limited to
`
`monetary transactions.
`
`Once the OPs’ arguments in favor of limiting the claims of the ‘510 and ‘095
`
`Patents to monetary exchange transactions are rejected, it follows that the terms “first data,”
`
`“second data” and “first portable module” need no further construction. The jury will be well-
`
`equipped to understand each of these terms as they are used in the context of the asserted claims
`
`of the patents.
`
`The analysis with respect to the terms “value datum” and “units of exchange” in
`
`the ‘880 Patent is different. To be clear at the outset, the OPs have not objected to the Special
`
`Master’s construction of “value datum,” (ECF No. 704), and Maxim has done so only by way of
`
`reference to its initial claim construction briefing, in which it contended that the term need not be
`
`construed at all (ECF No. 634 at 57-59; ECF No. 705 at 8). Maxim does not object to the
`
`Special Master’s failure to construe the term “units of exchange,” (ECF No. 705), and the OPs
`
`
`
`13
`
`COMPASS EXH. 1017 - Page 13 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 14 of 46
`
`do so only by way of a chart incorporating their initial claim construction briefing. (ECF No.
`
`704-1.)
`
`With respect to the term “value datum” the original dispute between the parties
`
`was whether the term must constitute legal tender itself, or merely represent a unit of exchange.
`
`(ECF No. 691 at 16-19.) The Special Master concluded that “value datum” could be a
`
`representation of money, or some other form of credit, but had to be exchangeable for goods or
`
`services. (Id. at 21.) The parties are largely in agreement with the Special Master’s
`
`recommended construction, and the court adopts it, in large part. The record indicates that the
`
`“value datum” must be exchangeable, but need not necessarily be, or represent only, cash, as
`
`opposed to some other form of credit. The court has removed the words “as payment” from the
`
`Special Master’s recommended construction in order to avoid any possible unintended
`
`implication that the term is limited to transactions in which cash is directly exchanged for goods
`
`or services.
`
`The Special Master concluded that the term “units of exchange” need not be
`
`construed because it is found in the preamble and is non-limiting with respect to the subsequent
`
`steps of the method claim. (Id. at 19-20.) The court reviewed the OPs’ original arguments about
`
`the term “units of exchange,” but agrees with the Special Master’s conclusion that the term need
`
`not be construed, for the reasons set forth in the R&R.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`14
`
`COMPASS EXH. 1017 - Page 14 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 15 of 46
`
`B. Second Claim Construction Chart
`
`Term (Chart #)
`“portable module reader that
`can be placed in communication
`with said first portable module”
`(#21)
`
`Patent/Claim
`
`‘510/1
`
`Construction
`
`
`no construction required
`
`
`
`R&R#
`
` 2
`
`
`
`
`
`The Special Master recommended that this term be construed to mean “a device
`
`that can be placed in communication with the first portable module to read data from the portable
`
`module.” (ECF No. 691 at 26-27.) The OPs object to the Special Master’s construction, which
`
`rejects their argument that the phrase “placed in communication with” requires that two items
`
`physically touch or at least be in close proximity to each other. (ECF No. 704 at 16-18.) The
`
`court agrees with the Special Master’s conclusion that the ‘510 Patent does not require proximity
`
`or physical touching of the “first portable module” and the “portable module reader.” The
`
`specifications of the ‘510 Patent and the ‘702 Patent2 describe various ways that these two items
`
`can communicate, which include use of a wireless communication system or a network. (ECF
`
`No. 610 at JX-3, 2:45-58; JX-1, 11:42-59.) The phrase “placed in communication with” is
`
`related to and derivative of those forms of communication, and the OPs failed to convince the
`
`court otherwise.
`
`Although “placed” can indicate physical contact between two items, e.g., “she
`
`placed the glass on the table,” it need not only refer to physical contact; e.g., “the real estate
`
`broker placed the buyers in contact with a reputable contractor.” Notably, the phrase used in the
`
`patents is actually “placed in communication with.” Communication does not inherently require
`
`physical contact or even proximity, and the patents acknowledge and disclose this precise
`
`
`2 The court already determined that the ‘702 Patent is properly incorporated into the ‘510 Patent
`and is relevant to its claim construction. See Section II.A, p. 11-13.
`
`
`
`15
`
`COMPASS EXH. 1017 - Page 15 of 46
`
`

`

`Case 2:12-mc-00244-JFC Document 742 Filed 12/17/13 Page 16 of 46
`
`concept by making reference to networks and wireless systems. The intrinsic record does not
`
`limit the term to forms of communication that require physical contact or proximity.
`
`The court considered the OPs’ prosecution history disclaimer argument, and finds
`
`that the statements referenced do not rise to the level of clear and unmistakable disavowals.
`
`(ECF No. 704 at 18-19.) In order for the doctrine to apply, the prosecution history must show
`
`that the patentee clearly, unambiguously, and unmistakably disclaimed or disavowed the
`
`proposed interpretation during prosecution in order to obtain claim allowance. Schindler
`
`Elevator, 593 F.3d at 1285; Cordis, 339 F.3d at 1358; Middleton, 311 F.3d at 1388. The
`
`November 8, 1998 amendment’s general reference to “locations that have a portable module
`
`reader” and its replacement of “able to communicate with” with “placed in communication with”
`
`do not reflect that the patentees