Medgraph, Inc. v. Medtronic, Inc.

843 F.3d 942

121 U.S.P.Q.2d 1007

MEDGRAPH, INC., Plaintiff–Appellant

v.MEDTRONIC, INC., Defendant–Appellee

2015-2019

United States Court of Appeals, Federal Circuit.

Decided: December 13, 2016

Dariush Keyhani , Meredith & Keyhani, PLLC, New York, NY, argued for plaintiff-appellant.

Wayne M. Barsky , Gibson, Dunn & Crutcher LLP, Los Angeles, CA, argued for defendant-appellee. Also represented by Katherine Quinn Dominguez , New York, NY.

Before Lourie, Plager, and Taranto, Circuit Judges.

Lourie, Circuit Judge.

Medgraph, Inc. ("Medgraph") appeals from the decision of the United States District Court for the Western District of New York, dismissing with prejudice Medgraph's claims of infringement of U.S. Patent 5,974,124 ("the '124 patent") and U.S. Patent 6,122,351 ("the '351 patent") (collectively, the "asserted patents") against Medtronic, Inc. ("Medtronic"). See Medgraph, Inc. v. Medtronic, Inc. , 111 F.Supp.3d 346, 348 (W.D.N.Y. 2015) ("Decision "). For the reasons that follow, we affirm.

BACKGROUND

Medgraph owns by assignment the asserted patents, directed to a method for improving and facilitating diagnosis and treatment of patients, whereby data relating to "medically important variable[s]," for example, blood sugar levels of a diabetic patient, measured from a patient's body, are uploaded onto a computer and transmitted to a central storage device, from which they can be accessed remotely by medical professionals treating the patient. See, e.g. , '124 patent col. 3 ll. 35–46.

Claims 1–15 of the '124 patent are method claims. Claim 1 is representative and reads as follows:

1. A method for improving and facilitating diagnosis and treatment of patients having medical conditions requiring long-term profiles of specific variables, said method including the steps of

using at least one measuring device, periodically taking a measurement of at least one medically important variable that has been identified for a patient from a body of said patient;

ensuring said patient is separated from said at least one measuring device after taking each said measurement;

inputting said at least one medically important variable as raw data into a primary computer system after said step of ensuring said patient is separated and recording said raw data in a mass storage device integrated with said primary computer system;

compiling said raw data as data for said patient using the primary computer system, said data representing a history of values for said at least one medically important variable for said patient;

receiving a request for data of one of said patients from by [sic ] a medical practitioner that is treating said one of said patients; and

outputting requested data for said one of said patients in the form of at least one of a chart and a graph to said medical practitioner;

said step of inputting comprising one of

transferring said raw data to a remote computer comprising an ordinary general purpose personal computer, then transferring said raw data to said primary computer;

telephoning an automatic telephone interface and employing one of speech recognition and touch-tone recognition software to input said raw data into said primary computer; andtelephoning a live receptionist, speaking the raw data to said live receptionist for entry into said primary computer.

Id . col. 7 ll. 13–50.

The '351 patent, which is a continuation-in-part of the '124 patent, sets forth a single, similar claim, with differences that are not relevant to this appeal.

Claim 16 of the '124 patent is the corresponding system claim, and reads in relevant part:

16. A system for improving and facilitating diagnosis and treatment of patients having medical conditions requiring long-term profiles of at least one predetermined medically important variable, comprising ...

means for inputting said at least one predetermined medically important variable as raw data into a primary computer comprising software and hardware enabling said primary computer system to operate as at least one of a web server, a dial-up host, a network server, and a telephone answering and data collection device whereby raw data can be communicated from a remote computer proximate a patient comprising an ordinary general purpose personal computer and from an ordinary telephone wherein data is transmitted as one of spoken data and touch-tone data; ...

means to transmit said requested data in the form of at least one of a chart and graph generated from said data from said primary computer to a remote computer proximate said practitioner whereby said primary computer is one of a web server, a dial-up host, and a network server and means to transmit said requested data by facsimile through a fax-modem integrated with said primary computer....

'124 patent col. 10 ll. 24–40, 53–60 (emphases added).

Medtronic manufactures and markets a variety of integrated diabetes management solutions, including the CareLink® Therapy Management System for Diabetes, which integrates CareLink Personal Therapy Management Software ("CareLink Personal") for patients and CareLink Pro Diabetes Therapy Management Software ("CareLink Pro") for healthcare professionals (collectively, the "CareLink System"). The CareLink System allows patients to upload data relating to management of their diabetes, including blood glucose readings, to Medtronic's central computer server, where the data are collected and stored in a database so that the patients can keep an online record of the information, and/or share the information remotely with a healthcare provider.

In December 2009, Medgraph sued Medtronic in the United States District Court for the Western District of New York, alleging infringement of all claims of the '124 patent. In October 2010, Medgraph filed an amended complaint to assert that Medtronic also infringed claim 1 of the '351 patent. This appeal arises in part from the fact that Medgraph's suit coincided with a multi-year process of judicial reconsideration by this court sitting en banc and by the Supreme Court of the relevant governing law, in a series of five appellate decisions, which the parties refer to as "the Akamai cases."

A year after Medgraph's complaint was filed, this court issued Akamai I , where we held that direct infringement of a method claim requires a single party to perform every step of the claimed method and that there can only be joint infringement where the acts of another are attributable to the accused infringer through either an agency relationship or a contractual obligation.

Akamai Techs., Inc. v. Limelight Networks, Inc. , 629 F.3d 1311, 1318–19 (Fed. Cir. 2010) (" Akamai I ").

In August 2012, Medtronic filed a motion for summary judgment of noninfringement of all claims of the asserted patents, based on, inter alia , the grounds that: (1) the CareLink System does not infringe any of the method claims of the asserted patents because those claims require performance of certain steps by patients and doctors in addition to those performed by Medtronic; and (2) the CareLink System does not infringe claim 16 of the '124 patent because that claim, if properly construed, requires a system that includes both telephonic and computer (e.g. , Internet) communication.

Two days after Medtronic filed its motion, this court issued Akamai II , an en banc decision, in which we overruled and vacated the panel decision in Akamai I . Akamai Techs., Inc. v. Limelight Networks, Inc. , 692 F.3d 1301, 1306 (Fed. Cir. 2012) (en banc) (per curiam) (" Akamai II "). In Akamai II , we left direct infringement standards in place without reconsidering them, but provided an independent inducement basis for divided infringement liability. Akamai II , 692 F.3d at 1317–18. As a result of that decision, Medtronic filed an amended motion for summary judgment, taking Akamai II into account. Medgraph submits on appeal that, "in response to Akamai II , [it] was compelled to forego its claim of direct infringement and rely, instead, upon a claim for indirect infringement under a theory of inducement." Appellant's Br. 10.

After the district court held a hearing on Medtronic's summary judgment motion, the Supreme Court issued Akamai III , reversing Akamai II on the issue of induced infringement and remanding the case to this court for possible reconsideration of the standard of divided direct infringement. Limelight Networks, Inc. v. Akamai Techs., Inc. , ––– U.S. ––––, 134 S.Ct. 2111, 2120, 189 L.Ed.2d 52 (2014) (" Akamai III "). The parties filed supplemental briefs to discuss the effect of Akamai III on Medtronic's motion for summary judgment.

The district court awaited a decision from this court on remand from Akamai III before ruling on Medtronic's motion. On May 13, 2015, a divided panel of this court issued Akamai IV , where we again rejected direct infringement liability for Limelight—as had the initial panel in Akamai I —reasoning that Limelight did not "direct or control" its customers to perform the claimed steps, that its customers were not agents of or contractually obligated to Limelight, and that Limelight's customers were not acting in a "joint enterprise" with Limelight whereby each member could be charged with the acts of the others. Akamai Techs., Inc v. Limelight Networks, Inc. , 786 F.3d 899, 915 (Fed. Cir. 2015) (" Akamai IV ").

On June 29, 2015, the district court in this case issued a decision granting summary judgment of no infringement, applying the law on direct infringement liability as it then stood. In its decision, the district court noted that the legal standard governing direct infringement after Akamai IV was the same as under Akamai II , which had caused Medgraph to withdraw its claim of direct infringement because "more than one person, i.e., the patient or doctor, neither of whom is an agent of or under contractual obligation to Medtronic, is required to perform all of the steps of the method claims...." Decision , 111 F.Supp.3d at 356 (internal quotation marks omitted). Thus, the district court concluded...