Foreign Marketing Materials Relevant to Patent Infringement
In Amdocs Ltd. v. Openet Telecom, Inc. (Fed. Cir. 2014) the United States Court of Appeals for the Federal Circuit recently reversed the District Court for the Eastern District of Virginia in a case between competitors in the so called data mediation software industry. The case involves Amdocs Israel Limited (Amdocs), which sued Openet Telecom, Inc. (Openet) for patent infringement of multiple patents Amdocs owns relating to data mediation. Data mediation software is software that helps internet service providers, such as Verizon and AT&T, track customer’s network usage and generate bills. Specifically, the infringement suit concerned U.S. Patent Nos. 7,631,065 (the ’065 patent”), 7,412,510 (the ’510 patent”), 6,947,984 (the ’984 Patent”), and 6,836,797 (the ’797 patent”).
The opinion of the court summarizes the technology disclosed in the patents as follows. “[w]hen a customer sends an email, surfs the internet, sends a text message, or participates in a video conference, records of this network activity… are generated at various, disparate locations throughout an ISP’s network. Data mediation software collects, processes, and compiles these network records so that network usage can be tracked and billed appropriately.”
The system covered by the patents is geared toward solving accounting and billing problems encountered by network service providers such as Verizon or AT&T. To these companies, the problem arises from the bandwidth requirements of customers of their different services (i.e. email, voice, text, streaming, etc.) that share a common network. “Because some services require more bandwidth than others, network service providers would like to price their available bandwidth according to a user’s needs, for example by billing business customers according to their used bandwidth at particular qualities of service.” Amdocs patented system collects usage data records and “transforms them into a format suitable for accounting.”
The lower court granted Openet’s motion for summary judgment for non-infringement, finding that Amdocs had not raised a genuine question of material fact, and agreeing with Openet’s position that Amdocs was unable to point to an actual infringing use and that the accused products did not practice all claim limitations.
Once appealed, the Federal Circuit largely agreed with the lower court’s claim construction, but disagreed with the lower court’s determination that Amdocs had not presented a genuine question of fact. Specifically, the Federal Circuit found that Amdocs’ documentary evidence describing the structure and operation of the accused product created factual issues regarding whether the product meets the constructed language.
The crux for overturning the lower court’s opinion was the lower courts determination that foreign documents concerning marketing presentations by Openet, were irrelevant to the infringement analysis because Openet prepared these presentations to foreign entities. The lower court reasoned that because there can be no infringement based upon activities entirely outside the United States, these presentations could not “constitute evidence of actionable infringement.” The Federal court disagreed.
“While it is true that there can be no infringement of a U.S. patent for solely extra-territorial activities, this does not mean that Openet’s description of how the framework functions is irrelevant simply because it was presented to a foreign entity.”
Since Openet had admitted that the description on those foreign documents or marketing materials described the same product made and sold in the United States, the Federal Circuit held such materials relevant to the extent that the materials provided the court an insight into the question of infringement.
Other grounds for reversal included the lower court’s requirement that Amdocs focus on aspects of the subject matter, with which the Federal Circuit disagreed, having to do with the code’s location. The district court had also granted summary judgment of non infringement of a fourth patent, which the Seventh Circuit vacated, citing erroneous claim construction.
Saul Acherman
JAFARI LAW GROUP®, INC.