Gradient Enters., Inc. v. Skype Techs. S.A., Skype, Inc.

GRADIENT ENTERPRISES, INC., Plaintiff, v. SKYPE TECHNOLOGIES S.A., SKYPE, INC., Defendants.

10-CV-6712L

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

September 22, 2015

DECISION AND ORDER

Plaintiff, Gradient Enterprises, Inc. ("Gradient") commenced this patent infringement action against defendants Skype Technologies S.A. ("Skype S.A.") and Skype, Inc. (collectively "Skype"). Gradient owns U.S. Patent No. 7,669,207 ("the patent" or "'207 patent"), which was issued in 2010 for a "Method for Detecting, Reporting and Responding to Network Node-Level Events and a System Thereof." The claimed invention relates generally to technology concerning computer networks, as explained in more detail below.

In the original complaint, Gradient pleaded three causes of action, seeking damages and injunctive and declaratory relief, based on allegations of direct, induced and contributory infringement. In March 2012, the Court issued a decision and order, 848 F.Supp.2d 404 (familiarity with which is assumed), granting defendants' motion to dismiss, on the ground that the complaint did not contain detailed-enough allegations to state a facially valid claim. The Court dismissed the complaint without prejudice, and granted plaintiff leave to file an amended complaint complying with federal pleading rules and standards. Id. at 410.

Plaintiff then filed an amended complaint (Dkt. # 38). The amended complaint asserts five causes of action, for (1) direct infringement, (2) induced infringement, (3) contributory infringement,(4) injunctive relief, and (5) declaratory relief. The first three causes of action all seek money damages, in an unspecified amount.

The meaning of certain claims of the patent are in dispute. Pursuant to the Court's scheduling order (Dkt. #110), the parties have submitted briefs addressing those claim terms. The Court has also conducted a so-called "Markman hearing" to aid the Court in determining the meaning of the disputed terms. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff'd, 517 U.S. 370 (1996)).

BACKGROUND

I. The Patent

Simply to recite the claims of the '207 patent will provide little guidance to the average reader, unfamiliar with computer programming. As stated in the "Summary" section of the patent, it describes a "system for detecting, reporting and responding to network node-level occurrences on a network-wide level," including "one or more first mobile agents," each of which "is hosted by one of a plurality of nodes in the network." '207 patent col. 1, lines 44-49. The patent further describes a "method and a program storage device readable by a machine and tangibly embodying a program of instructions executable by the machine" for performing certain functions, which are summarized in equally technical language occupying a further eleven lines of text. Id. lines 55-67.

In relatively plain English, the claimed invention relates to a purported improvement for computer security within computer networks. As the patent explains, "[c]urrent network security systems [such as virus scanners and intrusion detection systems] are primarily insular," meaning that "they lack the capability and inherent architecture to address attacks from a group perspective." Id. lines 24-29. The problem with such a system, according to the patent, is that if a single server within the system is compromised, "a malicious entity may gain control of the entire system." Id. lines 35-36.

The patent states that the claimed invention addresses these problems "by distributing control of a network throughout the nodes [i.e., connected computers, see § III (J), infra] of the network ... ." Id. col. 2 lines 2-3. In short, the patent describes a "fault tolerant" system in which, "[e]ven if every node is disabled," the system will be able to restore itself to a protected state. Id. at lines 14-16.

At any given time, the patent states, one "controlling mobile agent" (the definition of which will be addressed below) will pass on information to the rest of the network about "events" (such as a virus attack) that might affect the entire system. If the controlling mobile agent is rendered unavailable, another mobile agent will take over that "controlling" role. Thus, the system is designed to decentralize control over a computer network, such that the system will continue to function, in a protected state, no matter what happens to individual nodes within the system.

The patent contains three independent claims, each of which is followed by twelve dependent claims. The first independent claim, Claim 1, is a method claim. The second independent claim, Claim 14, covers a computer-readable medium. The third independent claim, Claim 27, is a system claim. In general, these types of claims respectively relate to a method for performing certain tasks, a medium containing program code for performing that method, and a system for performing that method. See Alice Corp. v. CLS Bank Int'l, ___ U.S. ___, 134 S.Ct. 2347, 2353 (2014) (briefly describing these three types of claims).

II. 35 U.S.C. § 112(f)

A. General Principles

Before undertaking an analysis of the specific claims at issue, the Court must address Skype's contention that some of the claims of the '207 patent are invalid for indefiniteness based on 35 U.S.C. § 112(f).¹ That section provides that

[a]n element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

Claims covered by this provision are commonly referred to as "means plus function" claims. As explained by the Court of Appeals for the Federal Circuit, this statute "allows a patentee to express an element of a claim as a means for performing a specified function. In exchange for using this form of claiming, the patent specification must disclose with sufficient particularity the corresponding structure for performing the claimed function and clearly link that structure to the function." Triton Tech of Texas, LLC v. Nintendo of America, Inc., 753 F.3d 1375, 1378 (Fed. Cir. 2014) (citations omitted). See also Noah Systems, Inc. v. Intuit Inc., 675 F.3d 1302, 1311 (Fed. Cir. 2012) ("A structure disclosed in the specification qualifies as a 'corresponding structure' if the specification or the prosecution history 'clearly links or associates that structure to the function recited in the claim'") (quoting B. Braun Med., Inc. v. Abbott Labs., 124 F.3d 1419, 1424 (Fed. Cir. 1997)).

Under 35 U.S.C. § 112(f), "a means-plus-function clause is indefinite if a person of ordinary skill in the art would be unable to recognize the structure in the specification and associate it with the corresponding function in the claim." Noah Systems, 675 F.3d at 1312 (internal quote omitted). "The amount of detail that must be included in the specification depends on the subject matter that is described and its role in the invention as a whole, in view of the existing knowledge in the field of the invention." Typhoon Touch Techs., Inc. v. Dell, Inc., 659 F.3d 1376, 1385 (Fed. Cir. 2011).

In the case at bar, Skype contends that the system claims, i.e., Claim 27 and its dependent claims, are invalid under § 112(f) because the patent fails to disclose adequate structurecorresponding to the claimed function. Specifically, Skype asserts that the patent is deficient because it does not disclose any particular algorithm for performing the recited function.

In response to defendants' motion, Gradient has argued that it is premature for the Court to decide issues relating to the patent's validity. At the Markman hearing, counsel for plaintiff opined that "it's premature on this record to decide that issue," and that "at this point in this Court on this issue I do not believe that it is appropriate for the Court to weigh in and say claim 27 is invalid under 112(6)." Transcript ("Tr.") (Dkt. #130), at 17, 19-20.

Plaintiff's assertion notwithstanding, issues relating to claim validity can, and often are, decided in the context of claim construction. See, e.g., Williamson v. Citrix Online, LLC, ___ F.3d ___, 2015 WL 3687459 (Fed. Cir. 2015) (affirming judgment of invalidity under 35 U.S.C. § 112 as to some patent claims, rendered by district court in its claim construction order); Triton Tech., 753 F.3d 1375 (affirming district court decision ruling, issued in context of claim construction, that patent was invalid because it disclosed no algorithm for performing claimed computer-based function); see also Cyberfone Systems, LLC v. CNN Interactive Group, Inc., 558 Fed.Appx. 988, 992 n.1 (Fed. Cir. 2014) (stating that there is no requirement that the district court engage in claim construction before making a validity determination under 35 U.S.C. § 101).

Although Skype has not moved for a judgment of patent invalidity, its claim construction papers raise issues that bear upon the validity of the system claims. While there may be situations when it makes more sense to defer deciding matters going to patent validity until after disputed claims have been construed, to attempt an artificial separation of the issues in this case would serve no useful purpose. Issues concerning claim validity are frequently intertwined with claim construction issues, as they are here, and cannot be easily or usefully separated. See ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509, 517 (Fed. Cir. 2012) ("indefiniteness [under § 112] is a question of law and in effect part of claim construction"); see also Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir.1999) ("if the only claim construction that is consistent with the claim's language and the written description renders the claim invalid, then ... the claim is simply invalid").See also EON Corp. IP Holdings LLC v. AT & T Mobility...