Rothschild Connected Devices v. Coca-Cola Company

• Court: Court of Appeals for the Federal Circuit
• Decided: May 18, 2020
• Docket: 19-1825
• Status: Unpublished

Opinion

Case: 19-1825 Document: 51 Page: 1 Filed: 05/18/2020

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

ROTHSCHILD CONNECTED DEVICES INNOVATIONS, LLC, Plaintiff-Appellant

v.

COCA-COLA COMPANY, Defendant-Appellee ______________________

2019-1825 ______________________

Appeal from the United States District Court for the Northern District of Georgia in No. 1:16-cv-01241-TWT, Judge Thomas W. Thrash, Jr. ______________________

Decided: May 18, 2020 ______________________

JOHN C. CAREY, Carey, Rodriguez, Greenberg & Paul, LLP, Miami, FL, argued for plaintiff-appellant.

ALAN SHANE NICHOLS, Alston & Bird LLP, Atlanta, GA, argued for defendant-appellee. Also represented by ANA (NAH EUN) KIM. ______________________ Case: 19-1825 Document: 51 Page: 2 Filed: 05/18/2020

Before PROST, Chief Judge, DYK and O’MALLEY, Circuit Judges. PROST, Chief Judge. Rothschild Connected Devices Innovation, LLC (“RCDI”) sued Coca-Cola Company (“Coca-Cola”), alleging that Coca-Cola’s Freestyle beverage dispensers infringe in- dependent claim 11, and various claims depending on claim 11, of U.S. Patent No. 8,417,377 (“the ’377 patent”). After construing relevant claim limitations, the district court granted Coca-Cola’s motion for summary judgment of non- infringement. More specifically, the district court con- cluded that the Freestyle dispensers did not have the claimed “user interface module.” See ’377 patent claim 11. The district court also dismissed the case as to the asserted dependent claims by virtue of its “inherent authority to manage the affairs of its cases.” Rothschild Connected De- vices Innovations, LLC v. Coca-Cola Co., 389 F. Supp. 3d 1169, 1178–79 (N.D. Ga. 2019) (“Summary Judgment Opinion”). RCDI appealed. For the reasons below, we vacate and remand for further proceedings. BACKGROUND I The Freestyle is a line of beverage dispensers by Coca- Cola. Users can employ the dispenser’s touchscreen (part of the “Blister” interface) to scroll through and select vari- ous drink choices. Users can also interact with the dis- penser via the Freestyle phone application (“the Freestyle app”). With the Freestyle app, users can connect to the rel- evant servers to register their identities and customized beverage preferences (e.g., equal mix of Coca-Cola and Sprite). Then, users can approach a Freestyle dispenser and scan, with their phone in conjunction with the Free- style app, a QR code displayed by the Blister touchscreen. This scan prompts the Freestyle app to connect to the Case: 19-1825 Document: 51 Page: 3 Filed: 05/18/2020

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relevant servers to retrieve the user’s preferred beverages for dispensing. II RCDI owns the ’377 patent, which relates in relevant part to a beverage dispenser that can receive a user’s iden- tity and, on the basis of previously stored beverage prefer- ences for that user, dispense the user’s preferred beverage. Claim 11, the asserted independent claim, recites: 11. A beverage dispenser comprising: at least one compartment containing an element of a beverage; at least one valve coupling the at least one com- partment to a dispensing section configured to dis- pense the beverage; a mixing chamber for mixing the beverage; a user interface module configured to receive an[] identity of a user and an identifier of the beverage; a communications module configured to transmit the identity of the user and the identifier of the bev- erage to a server over a network, receive user gen- erated beverage product preferences based on the identity of the user and the identifier of the bever- age from the server and communicat[e] the user generated beverage product preferences to the con- troller; and the controller coupled to the communication mod- ule and configured to actuate the at least one valve to control an amount of the element to be dispensed and to actuate the mixing chamber based on the user generated beverage product preferences. ’377 patent claim 11 (emphasis added). Case: 19-1825 Document: 51 Page: 4 Filed: 05/18/2020

III RCDI sued Coca-Cola, alleging that Coca-Cola’s Free- style dispensers infringe claim 11 and various dependent claims of the ’377 patent. The district court construed “user interface module” as “a component of the beverage dispenser that enables direct communication between a user and the dispenser.” Rothschild Connected Devices In- novations, LLC v. Coca-Cola Co., No. 16-1241, 2017 WL 5410867, at *5 (N.D. Ga. Nov. 13, 2017) (“Markman Opin- ion”). RCDI contended that the claim term should be con- strued as “a component that enables communication be- tween a user and a dispenser.” J.A. 458. The district court disagreed. The court noted that, unlike RCDI’s proposed construction, the court’s construction requires the user in- terface module to physically be a component of the bever- age dispenser.” Id. The court explained that “[a] beverage dispenser ‘com- prising’ parts such as a mixing chamber, valves, and a user interface module is most naturally read to physically be made up of these different parts.” Id. Moreover, the court reasoned, “the components of the system that are not phys- ically part of the dispenser, such as the network and the server, are not described by the claim to be parts that ‘com- prise’ the beverage dispenser. Instead, they are described in relation to the parts that are physically comprising the beverage dispenser.” Id.; see also Summary Judgment Opinion, at 1182 n.96 (explaining that “[a] component that is not inside of the casing of the dispenser, but nonetheless sits immediately outside of the dispenser and is connected by tubing—such as the bag-in-a-box carton of high fructose corn syrup—could reasonably be considered a physical component of the apparatus”). RCDI further argued that the word “direct” should not be included in the construc- tion, but the district court disagreed, again noting that the Case: 19-1825 Document: 51 Page: 5 Filed: 05/18/2020

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user interface module must physically be part of the dis- penser. Id. Coca-Cola subsequently moved for summary judgment of noninfringement, which the district court granted. Sum- mary Judgment Opinion, at 1172. This motion turned on claim 11’s limitation that the dispenser comprise “a user interface module configured to receive an[] identity of a user and an identifier of the beverage.” In RCDI’s view, although a user might not be able to communicate his or her identity and beverage preferences to the dispenser via the Blister touchscreen, the Freestyle dispenser meets the claim limitation because the Blister’s controller neverthe- less receives that information. More specifically, the user’s phone initiates a process in which such information is sent to, among other components, the Blister interface’s control- ler. Therefore, in RCDI’s view, the Blister interface is con- figured to receive that information (albeit not via a user’s interaction with the Blister interface itself), which is all that’s required by claim 11. The district court disagreed with RCDI and explained: The “user interface module” requirement is not sat- isfied by any component that enables direct com- munication between the user and the dispenser. Instead, the direct communication must include the user’s identity and the beverage identifiers. This is because the claim describes the module as configured to receive an identity of a user and an identifier of the beverage. Id. at 1189. In the district court’s view, RCDI’s infringe- ment theory—that “a user can communicate with the dis- penser via the internet by using the Freestyle app on a cellular phone”—involved indirect communication. Id. at 1190. As an initial matter, although “physically touching the [Blister] touchscreen interface is undoubtedly a form of ‘direct communication,’” the court concluded that RCDI “has not provided evidence that the Freestyle Dispenser Case: 19-1825 Document: 51 Page: 6 Filed: 05/18/2020

permits a user to provide his or her identity and beverage identifiers via the Blister touchscreen.” Id. (emphasis added). Rather, the evidence established only “that a user can use the [Blister] touchscreen to choose a drink from a pre-selected list of beverage options.” Id. Furthermore, the district court explained: The specification describes several ways that a user would directly communicate his or her iden- tity to the user interface module, which is physi- cally part of the dispenser. This identity can be communicated, for example, by an RFID card, on a magnetic swipe card, or by a code that is wirelessly transferred from a cellular phone or mobile device when such a device ‘is within range of the dis- penser.’ [’377 patent col. 7 ll. 31–38 (emphasis added).] It then explains that communications may be in the form of a keyboard, magnetic reader, voice recognition, WiFi communication, RFID com- munication, Bluetooth, or any other type of commu- nication that may in the future be practiced. However, given the previous descriptions of the user interface module, it becomes clear that these are direct communications with the dispenser, and not communications over the Internet, cellular net- work, or some other network. Thus, a user could use Bluetooth technology to communicate directly with the dispenser, or a local WiFi network to com- municate directly with it. However, communica- tions over the cellular network to a server would not be direct. Id. at 1192. Turning to the dependent claims, the court exercised its “inherent authority to manage the affairs of its cases” to “preclude [RCDI] from asserting any of the dependent claims,” due to RCDI’s “consistent refusal to identify the dependent claims that it would assert.” Id. at 1178–79. Case: 19-1825 Document: 51 Page: 7 Filed: 05/18/2020

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RCDI appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1). DISCUSSION On appeal, RCDI argues that the district court erred in granting summary judgment of noninfringement. RCDI contends that the district court erroneously construed the term “a user interface module” and that, under the proper construction, the district court’s grant of summary judg- ment of noninfringement should be vacated. RCDI also ar- gues that the district court abused its discretion in exercising its “inherent authority to manage the affairs of its cases” to grant Coca-Cola summary judgment of nonin- fringement as to the asserted dependent claims. We discuss these issues in turn. I “The proper construction of a patent’s claims is an issue of Federal Circuit law.” Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1228 (Fed. Cir. 2011). Where, like here, “the district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the pa- tent’s prosecution history), the judge’s determination will amount solely to a determination of law,” which we review de novo. Teva Pharms. USA, Inc. v. Sandoz, Inc., 574 U.S. 318, 331 (2015). Claim terms “are generally given their ordinary and customary meaning,” i.e., “the meaning that the term would have to a person of ordinary skill in the art in ques- tion at the time of the invention.” Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir. 2005) (internal quotation marks and citations omitted). “[T]he claims themselves provide substantial guidance as to the meaning of particu- lar claim terms.” Id. at 1314. “[T]he 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, Case: 19-1825 Document: 51 Page: 8 Filed: 05/18/2020

including the specification.” Id. at 1313. Although claim terms are interpreted in the context of the entire patent, it is improper to import limitations from the specification into the claims. Id. at 1323. “[T]he line between construing terms and importing limitations can be discerned with rea- sonable certainty and predictability if the court’s focus re- mains on understanding how a person of ordinary skill in the art would understand the claim terms.” Id. The district court construed “user interface module” to mean “a component of the beverage dispenser that enables direct communication between a user and the dispenser.” Markman Opinion, at *5. Coca-Cola defends this construc- tion on appeal. RCDI asks us to instead construe the term to mean “a component that enables communication be- tween a user and a dispenser.” We disagree with both con- structions and construe “user interface module” to mean “a component the user interacts with to communicate with the dispenser.” RCDI’s proposed construction reads out the term “in- terface” in “user interface module.” Indeed, almost any component—for example, a processor, or even a power cord—can in its own way help to enable communication be- tween a user and a dispenser. But processors and power cords are not interfaces. Our interpretation gives proper meaning to the term interface by requiring the user inter- face module to be a component that the user interacts with to effectuate communication with the dispenser, not merely a component that enables such communication. 1

1 We note that, in its briefing, RCDI appears to ad- mit that a proper construction of “user interface module” would be “any interface the user interacts with to com- municate with the dispenser.” See Appellant’s Reply 13– 14. Case: 19-1825 Document: 51 Page: 9 Filed: 05/18/2020

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Our claim construction is supported by the specifica- tion, which explains that the “user interface module” facil- itates “communication between the user and the dispenser” via components the user must interact with to convey in- formation. ’377 patent col. 6 l. 64–col. 7 l. 4; see also id. col. 7 ll. 4–7 (explaining that the user interface module “in- clude[s] a display screen” that facilitates interaction with the user by “relay[ing] messages”). Although the specifica- tion broadly defines the types of communication technolo- gies the user interface module can exploit, see, e.g., id. at col. 7 ll. 43–49, this does not negate the requirement that the user interface module be a component the user inter- acts with to communicate with the dispenser. In addition to rejecting RCDI’s proposed construction, we also reject the district court’s claim construction. We address each of the relevant differences between our con- struction and the district court’s in turn. A RCDI argues that the district court erred in requiring that the user interface module physically be part of the dis- penser. We agree. Claim 11 recites a beverage dispenser “comprising” a number of components, including “a user interface mod- ule.” Claim 11 does not, however, recite how the user in- terface module is connected to the additional components of the dispenser, much less that the user interface module must be physically connected to any or all of these addi- tional components. As discussed previously, the district court inferred a physical connection between the components “comprising” the claimed dispenser (e.g., the “user interface module,” the “communications module,” and the “mixing chamber”) by comparing those components to the ones that interact with the dispenser (e.g., the “server” and the “network”). But in general, a patent claim reciting an apparatus “comprising” Case: 19-1825 Document: 51 Page: 10 Filed: 05/18/2020

various components merely means that the apparatus “in- clud[es] but is not limited to” those components. See CIAS, Inc. v. Alliance Gaming Corp., 504 F.3d 1356, 1360 (Fed. Cir. 2007); see also Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 811 (Fed. Cir. 1999); Ga.-Pac. Corp. v. U.S. Gypsum Co., 195 F.3d 1322, 1327–28 (Fed. Cir. 1999). Importantly, such language, standing alone, does not gen- erally specify how the claimed components are connected. And in this case, although claim 11 further recites that the beverage dispenser’s communication module communi- cates with a server over a network, that limitation says nothing about how the dispenser’s “user interface module” connects to the additional components of the beverage dis- penser. Accordingly, the district court erred in concluding that the claimed user interface module must be physically part of the dispenser. B RCDI also contends that, in construing “user interface module” to require enabling direct communication between the user and the dispenser, the district court erroneously limited the types of communication technologies that fall under the scope of claim 11. The district court provided little explanation in its Markman opinion and order as to the precise meaning of “direct communication” in the adopted construction. See Markman Opinion, at *5. In its Summary Judgment opinion and order, however, the dis- trict court made clear that, for user interface modules with touch screens, “physically touching” the touchscreen inter- face is a form of direct communication. Summary Judg- ment Opinion, at 1189. A user could also use “Bluetooth technology to communicate directly with the dispenser, or a local WiFi network to communicate directly with it.” Id. at 1192. However, communications “over a cellular net- work to the dispenser are [not] ‘direct.’” Id. at 1190. In essence, the district court appears to have interpreted Case: 19-1825 Document: 51 Page: 11 Filed: 05/18/2020

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claim 11 to require the user interface module to enable communication between a user and the dispenser via com- munication technologies that operate at close range. See also id. at 1192 (highlighting the specification’s statement that the user interface module can enable communications via the user’s mobile device when “such a device ‘is within range of the dispenser.’” (quoting ’377 patent col. 7 ll. 31– 38 (emphasis added by district court)). Moreover, the dis- trict court appears to have further limited the types of per- missible communications to those that follow a particular path and sequence. See, e.g., Summary Judgment Opinion, at 1191–92. RCDI argues that these aspects of the district court’s claim construction are erroneous because claim 11 is not limited to communication technologies that operate at short distances or via a particular path. Appellant’s Br. 25. We agree. Claim 11 recites “a user interface module configured to receive an[] identity of a user and an identifier of the bev- erage.” Claim 11 does not include any language regarding the permissible communication technologies or paths the user interface module can employ to enable communication between the user and the dispenser, much less any lan- guage differentiating between the user’s pressing a touchscreen, transmitting the information over Bluetooth, or transmitting the information over a cellular network. Our interpretation of claim 11 is bolstered by the specifica- tion, which broadly states that “[t]he user interface module 416 will enable communications between the user and dis- penser via . . . any . . . type of communication now known or practiced in the future that will allow the user to identify themselves and/or input information to the beverage dis- penser. ’377 patent col. 6 l. 64–col. 7 l. 4 (emphasis added). Accordingly, although the “user interface module” must be a component that a user interacts with to communicate with the dispenser, neither the ’377 patent’s claims nor its Case: 19-1825 Document: 51 Page: 12 Filed: 05/18/2020

specification limit such interaction to specific wireless com- munication technologies or paths. C RCDI further argues that the district court erred in concluding that the “direct communication between the user and the dispenser . . . must include the user’s identity and the beverage identifiers.” See Summary Judgment Opinion, at 1189; Appellant’s Br. 32–36; Appellant’s Reply 2. We agree. As explained previously, claim 11 does not require the user interface module to enable “direct communication” be- tween the user and the dispenser, at least as defined by the district court. Claim 11 does require that the user be able to interact with the user interface module to communicate with the dispenser. Indeed, the primary purpose of the user interface module is to facilitate the communication of information between the user and the device. See, e.g., ’377 patent col. 6 l. 64–col. 7 l. 4 (“The user interface module 416 will enable communications between the user and dis- penser . . . .”). Claim 11 merely recites an example of such information. Although user interfaces must invariably be configured to receive information via a user’s interaction with the interface—indeed, that’s what makes a compo- nent an interface for users—here this communication is not restricted in the manner in which it occurs, and may come from various alternative routes, including through other modules. See, e.g., id. col. 6 l. 65–col. 7 l. 4 (stating that such communications can be “via . . . any . . . type of com- munication now known or practiced in the future that will allow the user to identify themselves and/or input infor- mation to the beverage dispenser”); id. col. 7 ll. 32–37 (“In one embodiment, the identity code may be transferred to the user’s computer where the user may download the code to a mobile device,” which “will wirelessly transfer the code to the user interface module 416 and/or the communication module 414 . . . .”). Nor does claim 11 require that such Case: 19-1825 Document: 51 Page: 13 Filed: 05/18/2020

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communication actually occurs. All the claim requires is that the user interface module be “configured to” receive the user and beverage identifiers. II RCDI argues that the district court abused its discre- tion in exercising its inherent authority to dismiss the case as to the dependent claims. We agree. The district court’s analysis rests on a faulty premise: that RCDI consistently refused to identify the dependent claims it was asserting. In fact, on March 17, 2016—fewer than five months into the case and before the case was transferred from the Southern District of Florida to the Northern District of Georgia—RCDI disclosed the asserted dependent claims in its proposed amended complaint. J.A. 356; see also J.A. 348–58; J.A. 131–44. Although this mo- tion was not ruled on for many months, that delay was through no fault of RCDI. Indeed, on October 2016, after the case was transferred to the Northern District of Geor- gia, RCDI moved for a new schedule and status conference; in this motion, RCDI notified the court of RCDI’s pending motion to amend the complaint and stated that “the pro- posed First Amended Complaint . . . specifically identifies the asserted dependent claims of the ’377 patent.” J.A. 725. Subsequently, in response to Coca-Cola’s interrogatory re- questing identification of the asserted claims, RCDI re- ferred to its identification of the asserted claims in the proposed amended complaint. J.A. 3920–22. Furthermore, in email correspondence in early 2018, RCDI yet again re- iterated that it was only asserting the claims identified in the proposed amended complaint, and further volunteered to “streamline” the case by dropping some of those claims. J.A. 3831. On these facts, we disagree with the district court that RCDI refused to identify the asserted dependent claims, and we conclude that the district court abused its Case: 19-1825 Document: 51 Page: 14 Filed: 05/18/2020

discretion in dismissing the case as to the asserted depend- ent claims on this basis. 2 CONCLUSION We have considered the parties’ remaining arguments and find them unpersuasive. For the foregoing reasons, we reverse the district court’s claim construction of “user in- terface module,” vacate the district court’s entry of sum- mary judgment of noninfringement, and remand for further proceedings. 3 RCDI raised a number of discovery- related issues on appeal. On remand, we expect that the district court will hold a new case management conference concerning discovery. REVERSED-IN-PART, VACATED-IN-PART, AND REMANDED COSTS Costs to appellant.

2 Coca-Cola argues that any error by the district court is harmless because “RCDI did not provide conten- tions for its dependent claims,” and “[o]n this basis,” the district court “would have granted summary judgment of non-infringement for the dependent claims.” Appellee’s Br. 42. We decline to resolve this dispute in the first instance and leave it for the district court to address on remand. 3 RCDI contends that, on remand, both the Blister touchscreen and the Freestyle app on a user’s phone can each satisfy the “user interface module” limitation. We note that, even under our construction, RCDI’s phone app theory might present additional hurdles with regard to in- fringement. See, e.g., Centillion Data Sys., LLC v. Qwest Commc’ns Int’l, Inc., 631 F.3d 1279, 1286–87 (Fed. Cir. 2011); Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1310–11 (Fed. Cir. 2005).