Rembrandt Data Technologies, Lp v. Aol, LLC

673 F. Supp. 2d 420, 2009 U.S. Dist. LEXIS 79610, 2009 WL 4030753
CourtDistrict Court, E.D. Virginia
DecidedAugust 21, 2009
DocketCase 1:08cv1009 (GBL)
StatusPublished
Cited by3 cases

This text of 673 F. Supp. 2d 420 (Rembrandt Data Technologies, Lp v. Aol, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rembrandt Data Technologies, Lp v. Aol, LLC, 673 F. Supp. 2d 420, 2009 U.S. Dist. LEXIS 79610, 2009 WL 4030753 (E.D. Va. 2009).

Opinion

MEMORANDUM ORDER

GERALD BRUCE LEE, District Judge.

THIS MATTER is before the Court on Defendants Canon U.S.A., Inc., Canon Business Solutions, Inc. and Canon Information Technology Services, Inc.’s Motion for Summary Judgment and Defendant DIRECTV’S Motion for Summary Judgment. This case concerns Plaintiff Rembrandt Data Technologies, LP’s allegations that the defendants produce and sell products that contain infringing dial-up modems, as well as the licenses Plaintiff and Defendants’ predecessors in interest were parties to pertaining to this technology, and the validity and/or application of these licenses. There are 5 issues before the Court. The first issue is whether a comparison between the patents-in-suit and the V.34 standards instead of the actual accused products entitles Canon to summary judgment because such a comparison is insufficient for Rembrandt to carry its burden at trial. The second issue is whether an error in claim 3 of the '236 patent constitutes a typographical error that may be corrected by the Court, and if not, whether the patent is fatally flawed for mixing apparatus and method claims. The third issue is, whether subsequent to the divestiture of Rockwell, the license granted in the AT & T-Rockwell agreement belonged to Boeing or New Rockwell, and if it belonged to New Rockwell, whether the modems at issue qualify as “Licensed Products” so as to entitle Canon and DIRECTV to summary judgment under the doctrine of patent exhaustion with respect to the accused modems containing Conexant modems. The fourth issue is whether the set-top boxes used by DIRECTV or the raw modems contained within those set-top boxes constitute the accused devices at issue, and if the set-top boxes are in fact the accused devices, whether the existence of middleware in the set-top boxes precludes a finding of infringement in light of the manner in which the middleware limits the function of the set-top box. The final issue is whether the DIRECTV set-top boxes that contain Silicon Labs modems are authorized to employ the invention encompassed in the '236 and '578 patents by the 1999 PCTel-Paradyne License Agreement.

The Court makes the following findings. First, the Court finds that Canon is not entitled to summary judgment based on the comparison between the patents-in-suit and the V.34 standard generally instead of the accused products specifically, because Rembrandt could have conceivably carried its burden at trial based on circumstantial evidence. Second, the Court holds that the error in claim 3 amounts to more than a mere typographical error, thus precluding editing by the Court, therefore requiring the invalidation of the '236 patent for improperly mixing method and apparatus claims. Third, the Court finds that Canon and DIRECTV are entitled to summary judgment with respect to the accused devices that contain Conexant modems because following the distribution of Old Rockwell, the license was obtained by New Rockwell pursuant to the Plan of Distribution as an asset of the Semiconductor Systems Business, and Conexant was properly sublicensed under the agreement. Fourth, the Court finds that the set-top boxes are the accused devices, not the raw modems, based on an assessment of various statements and submissions made by Rembrandt and that, because the middleware precludes the device from operating in an *423 infringing manner DIRECTV is entitled to summary judgment. Fifth, the Court finds that the PCTel-Paradyne License Agreement covers the accused DIRECTV devices that contain Silicon Labs modems because the patents-in-suit constitute Licensed Paradyne Products under §§ 1.3(b) and 1.5 of the Agreement, and § 2.2 protects downstream customers, third parties involved in a written development agreement with PCTel and said third parties’ downstream customers, and the allegedly infringing code has been identified as PCTel code that was in some part the product of joint development between PCTel and Silicon Labs.

I. BACKGROUND

This matter involves allegations of the infringement of two patents presently owned by Rembrandt — U.S. Patent Numbers 5,311,578 (hereinafter the '578 patent) and 5,251,236 (hereinafter the '236 patent) issued in 1993 and 1994 respectively and originally assigned to AT & T. These patents relate to dial modems. “A dial ‘modem’ is a device used to convert digital data into a signal that can be transmitted over telephone lines, and, when such a signal is received to convert it back into digital form.” (Def.’s Claim Construction Br., 1.) The '578 patent, titled: “Technique for Automatic Identification of a Remote Modem,” claims the use of identification signals of a specified duration or of a “hidden” nature, to assist an originating modem to identify and connect to a remote modem during a standard call establishment procedure. See '578 patent, col. 2:49-52. The '236 patent, titled: “Fractional Rate Modem with Trellis” describes a modem that combines a technique for more rapidly transferring data, called “fractional rate encoding” with another technique for reducing errors in data transmission, called “trellis encoding.” See '236 patent, col. 2:41-44. In the First Amended Complaint, Rembrandt alleges that:

13. The patents asserted in this Complaint cover certain aspects of, at least, the following International Telecommunications Union (ITU) modulation protocols for “Data Communication Over the Telephone Network” (ITU-T V.xx): V.8, V.34, V.90, and V.92.
14. All modems programmed to operate at 288 kbps or higher over the PSTN incorporate the V.34 protocol. All fax modems communicating over the PSTN use the V.34 protocol use the V.34 protocol. All fax modems communicating over the PSTN use the V.34 protocol.
15. All fax-only modems that use the V.34 protocol are covered by the patents identified in Counts II and III below. Any dial modem, other than a fax-only modem, that incorporates the V.8/V.34/ V.90 protocols require the modem to have the structure covered by the product claims of the patents in suit, and to use the methods covered by method claims in suit.

(Am. Compl. ¶¶ 13-15.)

Rembrandt acquired the patents-in-suit in 2006 from Zhone, who purchased them from Paradyne, a former subsidiary of AT & T/Lucent, who had purchased them originally from AT & T. This opinion addresses claims related to only two of the defendants involved in this litigation. According to the First Amended Complaint the Canon Defendants (hereinafter referred to collectively as “Canon”) are “one of the world’s leading manufacturers of plain paper copying machines and digital multifunction devices.” (Am. Compl. ¶ 26.) Rembrandt has alleged that all unlicensed Canon products that contain a dial modem and operate at certain specifications unlawfully infringe the patents asserted in the Complaint. Canon has sought sum *424 mary judgment on the following four grounds: 1) that the Conexant modems contained in the accused Canon devices are licensed; 2) Rembrandt has adduced insufficient evidence to support its allegations at trial; 3) an error in the '236 patent cannot be corrected by the Court and therefore the entire patent is invalid; and 4) that the '236 patent is invalid for indefiniteness based on a failure to disclose the structures that correspond to various functions set forth in the claims.

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673 F. Supp. 2d 420, 2009 U.S. Dist. LEXIS 79610, 2009 WL 4030753, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rembrandt-data-technologies-lp-v-aol-llc-vaed-2009.