Alcohol Monitoring Systems, Inc. v. Actsoft, Inc. et al

Filing 335

ORDER granting in part and denying in part 332 Defendants' Supplemental Renewed Motion for Summary Judgment. By Judge Philip A. Brimmer on 10/25/11.(pabsec)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 07-cv-02261-PAB
(Consolidated with 08-cv-01226)
ALCOHOL MONITORING SYSTEMS, INC.,
Plaintiff,
v.
ACTSOFT, INC.,
OHIO HOUSE MONITORING SYSTEMS, INC., and
U.S. HOME DETENTION SYSTEMS AND EQUIPMENT, INC.,
Defendants.

ORDER

This matter comes before the Court on Defendants’ Supplemental Renewed
Motion for Summary Judgment on Claim Step (E) [Docket No. 332]. The motion is fully
briefed and ripe for disposition.
I. BACKGROUND
Plaintiff Alcohol Monitoring Systems Inc. is the owner of U.S. Patent No.
5,220,919 (“’919 patent”). Docket No. 85 at 3-4. Plaintiff alleges that defendants
ActSoft, Inc., Ohio House Monitoring Systems, Inc., and U.S. Home Detention Systems
and Equipment, Inc. infringe the ’919 patent by making, selling, offering to sell, or
importing the House Arrest Solution device (“HAS”), a competing product. Docket No.
85 at 4-7.
On April 27, 2009, this Court issued an Order Regarding Claim Construction
[Docket No. 196], which construed the claim at issue here, namely Claim 14(e).

Plaintiff appealed the Order and the Court’s ruling on defendants’ summary judgment
[Docket No. 241]. On January 24, 2011, the Federal Circuit affirmed in part and
reversed in part as to the construction of Claim 14. See Alcohol Monitoring Sys., Inc. v.
ActSoft, Inc., 414 F. App’x 294, 299-300 (Fed. Cir. 2011).
The ’919 patent is entitled the “Blood Alcohol Monitor” and discloses a method of
operating a portable device that securely attaches to a human subject and monitors
alcohol levels expelled through a subject’s skin. Alcohol Monitoring Sys., 414 F. App’x
at 295. The device is designed to monitor the consumption of alcohol in individuals
under house arrest or in alcohol rehabilitation programs. Id. The patent application
entitled “Blood Alcohol Monitor” was filed on August 23, 1991 and was assigned Patent
Application Serial No. 07/748,976. Docket No. 319 at 4. The ’919 patent was issued
on June 22, 1993. Id. On August 15, 1997, the ’919 patent was assigned to plaintiff.
Docket No. 85 at 4.
Claim 14 of the ’919 patent describes:
A method for monitoring the percentage of blood alcohol content of a human
subject, said method comprising the steps of:
(a)

securely attaching an alcohol measurement device to the human subject
using an attachment device;

(b)

storing an error indication if the human subject tampers with said
measurement device or an error occurs within said measurement device;

(c)

measuring a percentage of alcohol expelled through the subject’s skin into
said measurement device and storing a measurement result;

(d)

repeating steps (b) and (c) until a predetermined amount of time expires;

(e)

transmitting each of said measurement results and each of said tamper
and error indications to said monitoring station; and
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(f)

repeating steps (b) through (e).

Docket No. 104-4 at 19.
On May 19, 2003, Jeffrey Hawthorne, one of the listed inventors on the ’919
patent and the co-founder and Chief Technology Officer for plaintiff, and others1 filed
another patent application entitled “Method and Apparatus for Remote Blood Alcohol
Monitoring,” which was assigned Patent Application Serial No. 10/441,940 (“’940
application”). Docket No. 305-3 at 2. This application issued on December 9, 2008 as
U.S. Patent No. 7,462,149 (“’149 patent”). Docket No. 305-2 at 2. Similar to the ’919
patent, the ’149 patent disclosed a device and methods of operating a device to monitor
a subject’s blood alcohol levels. Docket No. 305-2 at 16.
During the prosecution of the ’940 application, the Patent and Trademark Office
(“PTO”) rejected some of the application’s claims as obvious under 35 U.S.C. § 103(a).
Docket No. 305-3 at 6. The PTO relied on the ’919 patent and the Payne reference to
find that the prior art obviated the proposed claims. Id. To overcome the PTO’s
objections, Hawthorne amended the claims of the ’940 application to include a
requirement that the transmission of data occur “without active participation by the
human subject [the wearer]” and distinguished the ’919 patent from the ’940 application
based on the difference between active and passive participation of the wearer to
effectuate data transmission. Docket No. 305-3 at 7. In the proposed amendment,
Hawthorne argued:
“Periodically, typically once per day, the subject connects a serial interface 108
1

For ease of reference, the Court will refer to the listed inventors for the ’940
application as “Hawthorne.”
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between the monitor 102 and a base system 104. When this connection is
made, the monitor 102 transfers all the readings, tamper, error indicators, and
other data, taken since the last connection into the base system 104 where they
are stored.” (Col. 5, lines 36-42.) Without the subject physically connecting the
monitor device to the base unit via a cable, no readings can be transmitted to the
base unit. Applicant claims in amended independent claims 1 and 21 that the
transmission of readings from the monitor device to the modem requires no
active participation by the subject.”
Docket No. 305-3 at 7-8 (emphasis in original).
Despite plaintiff’s arguments, the PTO rejected the proposed claims as obvious
because of the ’919 patent, the Payne reference, and the Klein reference. Docket No.
305-3 at 8. In an attempt to distinguish the ’919 patent from the ’940 application,
Hawthorne provided several other amendments to the PTO. Docket No. 305-3 at 1518. With each proposed amendment, Hawthorne maintained the position that the ’919
patent and the ’940 application were dissimilar because the ’919 patent “requires active
participation by the human subject to affect the transfer of the data” while the ’940
application transmits data without active participation by the human subject. Docket
No. 305-3 at 12.
The PTO finally accepted Hawthorne’s proposed amendments and issued a
notice of allowance for the ’149 patent. Docket No. 305-2 at 1. In the relevant claims,
the ’149 patent discloses the transmission of data “through a first communication link
without active participation by the human subject.” Docket No. 305-2 at 25.
II. DEFENDANTS’ ARGUMENTS
Despite the fact that the Federal Circuit has already construed Claim 14(e),
defendants argue that, under principles of prosecution history estoppel and judicial
estoppel, plaintiff should not be permitted to argue a different construction of Claim
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14(e) than plaintiff proffered to the PTO as part of the ’940 patent application process.
Docket No. 332 at 4-6. Defendants claim that the Federal Circuit’s opinion in this case
does not foreclose the consideration of this evidence because these facts were never
presented to this Court or the Federal Circuit. Docket No. 327 at 4. Additionally,
defendants contend that, until very recently, they were unaware of these facts because
they were never disclosed by plaintiff. Id.
Defendants assert that, unlike Claim 14(e) of the ’919 patent, the HAS device
does not require the active participation of the wearer to effectuate data transfers.
Docket No. 332 at 6. Defendants state that data transfers with the HAS device only
require a mobile phone which uses Bluetooth technology to wirelessly transfer data. Id.
at 6. As a result, defendants claim that, since the HAS device does not require the
active participation of the wearer, it cannot infringe the ’919 patent literally or under the
doctrine of equivalents. Id. at 6. Consequently, defendants state that they are entitled
to summary judgment because there are no genuine issues of fact as to infringement.
Plaintiff counters by stating that the Federal Circuit has already interpreted Claim
14(e) of the ’919 patent and therefore the Federal Circuit’s interpretation is binding as
the law of the case. Docket No. 323 at 3-4. Plaintiff states that defendants’ attempt to
limit Claim 14(e) to transmissions that require “the active participation of the [wearer]” is
unconvincing because it is not apparent from the patent’s intrinsic evidence. Id. at 4.
Moreover, plaintiff argues that prosecution history estoppel is not applicable to the facts
of this case because statements made during the prosecution of a later, unrelated
patent cannot be used to interpret and/or limit an earlier, already issued patent. Id. at
4-5.
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III. ANALYSIS
A. Prosecution History Estoppel
Defendants appear to have abandoned their arguments regarding prosecution
history estoppel. See Docket No. 327 at 2 n.1 (“The applicability of prosecution history
estoppel need not be reached here, however, as facts are undisputed and the
requirements for judicial estoppel clearly satisfied.”). Nevertheless, the Court will review
defendants’ arguments in the event defendants have not abandoned such argument.
Prosecution history “constitutes a public record of the patentee’s representations
concerning the scope and meaning of [a patent claim].” Hockerson-Halberstadt, Inc. v.
Avia Group Int’l, Inc., 222 F.3d 951, 957 (Fed. Cir. 2000). Prosecution history estoppel
is a recognized defense to infringement. See Warner-Jenkinson Co. v. Hilton Davis
Chemical Co., 520 U.S. 17, 30 (1997). Prosecution history estoppel can apply to a
narrowing amendment which is made for any reason related to the statutory
requirements for a patent, to amendments made to overcome prior art, and to
arguments made during prosecution that show a clear and unmistakable surrender of
subject matter. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S.
722, 735-37 (2002). Prosecution history estoppel serves to limit the doctrine of
equivalents by denying equivalents to a claim limitation whose scope was narrowed
during patent prosecution for reasons related to patentability. Pioneer Magnetics, Inc.
v. Micro Linear Corp., 330 F.3d 1352, 1356 (Fed. Cir. 2003).
However, prosecution history estoppel does not apply to statements made during
the prosecution of a subsequent, nonfamilial patent. Tex. Digital Sys. v. Telegenix, Inc.,

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308 F.3d 1193, 1211 (Fed. Cir. 2002). In the absence of a formal relationship or
incorporation, statements made in front of the PTO from a later, unrelated patent
prosecution cannot be used to interpret an earlier issued patent. Pfizer, Inc. v. Ranbaxy
Labs. Ltd., 457 F.3d 1284, 1290 (Fed. Cir. 2006); Goldenberg v. Cytogen, Inc., 373
F.3d 1158, 1167-68 (Fed. Cir. 2004) (finding that statements in another patent or its
prosecution history are irrelevant to claim construction “[a]bsent a formal relationship or
incorporation during prosecution” of the patent at issue). The fact that a particular
patent may have the same inventor does not make that patent a continuation or a
continuation-in-part of the earlier patent. Abbott Labs. v. Dey, L.P., 287 F.3d 1097,
1105 (Fed. Cir. 2002); see In re Berg, 140 F.3d 1428, 1435 n. 7 (Fed. Cir. 1998) (noting
that two applications filed by the same inventor were not related by “continuation,
continuation-in-part” and that filing two separate applications implied that “each
application is independent and patentably distinct.”).
In this case, it is undisputed that the ’919 patent and the ’149 patent are not
continuations or continuations-in-part of one another. Moreover, the simple fact that the
’919 patent and the ’149 patent share an inventor does not render the two patents
familial patents. See In re Berg, 140 F.3d at 1435. Defendants’ arguments rest solely
on the fact that the ’919 patent is incorporated by reference into the ’149 patent. See
Docket No. 305-3 at 3 (“[U.S. Patent No. 5,220,919 and European Patent No. EPO
623001B1] both are hereby incorporated herein by reference.”). However, although the
’919 patent was incorporated by reference into the ’149 patent, such incorporation
simply makes the statements regarding the ’919 patent part of the intrinsic record of the

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’149 patent. See Goldenberg, 373 F.3d at 1168 (statements from another patent’s
prosecution may be used if they have a formal relationship or are incorporated during
the prosecution of the patent at issue). Thus, the ’919 patent may be used in
construing the terms of the ’149 patent, but the ’149 patent’s prosecution history may
not be used to construe the ’919 patent. Therefore, because there is no formal
relationship between the ’919 patent and the ’149 patent, the Court finds that
prosecution history estoppel does not apply to plaintiff’s statements made during the
prosecution of the ’149 patent.
B. Judicial Estoppel
Judicial estoppel is based upon protecting the integrity of the judicial system by
“prohibiting parties from deliberately changing positions according to the exigencies of
the moment.” See Bradford v. Wiggins, 516 F.3d 1189, 1194 (quoting New Hampshire
v. Maine, 532 U.S. 742, 749-50 (2001)). Though there is no precise formula, in order to
determine whether to apply judicial estoppel, courts typically inquire as to whether: “1) a
party’s later position is clearly inconsistent with its earlier position; 2) a party has
persuaded a court to accept that party’s earlier position, so that judicial acceptance of
an inconsistent position in a later proceeding would create the perception that either the
first or second court was misled; and 3) the party seeking to assert the inconsistent
position would derive an unfair advantage if not estopped.” Mathews v. Denver
Newspaper Agency LLP, 649 F.3d 1199, 1209 (10th Cir. 2011). “Because of the harsh
results attendant with precluding a party from asserting a position that would normally
be available to the party, judicial estoppel must be applied with caution.” Lowery v.

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Stovall, 92 F.3d 219, 224 (4th Cir. 1996).
Defendants assert that plaintiff should be judicially estopped from asserting that
Claim 14(e) does not require the active participation of the wearer because such
position: (1) would be inconsistent with the position plaintiff took in front of the PTO; (2)
would create the perception that either the PTO or this Court was misled; and (3) would
give plaintiff an unfair advantage during the trial in this case. Defendants assert that
judicial estoppel is equally applicable in cases where the first proceeding was an
administrative one rather than a proceeding in front of a district court. See Lampi Corp.
v. American Power Prods., Inc., 228 F.3d 1365, 1377 (Fed. Cir. 2000) (finding that,
under Seventh Circuit law, the doctrine of judicial estoppel applied to previous
statements made to the PTO); Mathews, 649 F.3d at 1209 (finding that judicial estoppel
applied to previous statements made during Social Security Administration hearings);
AT&T Corp. v. Beehive Telephone Co., Inc., 2010 WL 376668, *14 (D. Utah Jan. 26,
2010) (finding that plaintiff was judicially estopped from altering testimony given to the
FCC); Analog Devices, Inc. v. Linear Tech. Corp., 479 F. Supp. 2d 202, 212 (D. Mass.
2007) (applying judicial estoppel to arguments made to the PTO). The Court agrees
that judicial estoppel may be based on statements made in administrative proceedings.
Mathews, 649 F.3d at 1209; Beehive, 2010 WL 376668, at *14.
The first judicial estoppel factor mentioned in Mathews is that a party’s later
position is clearly inconsistent with its earlier position. Mathews, 649 F.3d at 1209. In
this case, it is undisputed that the Federal Circuit never addressed the question of
whether transmission at Claim 14(e) requires the active participation of the wearer.

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Alcohol Monitoring Sys., 414 F. App’x at 299-300; Docket No. 327 at 4. Additionally,
the parties have not raised this issue before now. However, the fact that such
arguments have not been previously raised does not preclude the application of judicial
estoppel in this case. First, defendants claim that they only recently became aware of
the statements at issue regarding Claim 14(e), which claim is not disputed by plaintiff.
Thus, the law of the case does not preclude judicial estoppel. See Lacks Indus., Inc. v.
McKechnie Vehicle Components USA, Inc., 300 F. App’x 904, 907 (Fed. Cir. 2008)
(finding that courts may depart from the law of the case when new and different
material is discovered that was not presented in the prior litigation). Second, while
defendants’ argument is anticipatory given that plaintiff has not offered such a
construction of Claim 14(e) in this case, plaintiff has had the opportunity to deny that it
intends to do so during trial. Plaintiff, however, has not made such a disclaimer. Thus,
there appears to be a proper basis for defendants’ motion. Therefore, judicial estoppel
could apply should plaintiff assert a position that is contrary to the positions plaintiff2
took in front of the PTO.
As to the second Mathews factor, the Court determines whether a court or an
administrative agency accepted a party’s earlier position. 649 F.3d at 1209.
Defendants assert that the PTO granted the ’149 patent because of plaintiff’s
representations regarding the distinction between active and passive participation of the
wearer. See Docket No. 327 at 3 (“[the PTO] ultimately allowed the claims of the ’919
2

Plaintiff does not argue a lack of identity between the positions Hawthorne took
in regard to the ’940 application and positions plaintiff may now take in regard to Claim
14(e). As a result, it has waived such argument. Moreover, given Mr. Hawthorne’s
position at plaintiff, there is no inequity in finding such identity.
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patent to issue based at least in part on these arguments.”). Plaintiff’s response does
not dispute this assertion or otherwise address the issue of judicial estoppel. As a
result, the Court will assume that plaintiff’s representations to the PTO about Claim
14(e) were one of the reasons that the PTO approved the ’149 patent.
With regard to the last factor, whether plaintiff would derive an unfair advantage
if it were not estopped from changing positions, plaintiff persuaded the PTO to accept
its argument that the ’919 patent required the “active participation” of the wearer in
order to effectuate transfer. Based at least in part on this representation, the PTO
issued the ’149 patent. Allowing plaintiff to alter its position would give plaintiff the
unfair advantage of retaining the ’149 patent while pursuing an infringement claim
based on a position inconsistent with the prior successful position. See Mathews, 649
F.3d at 1209-10.
Accordingly, the Court rules that plaintiff is judicially estopped from asserting a
construction or interpretation of Claim 14(e) of the ’919 patent that is inconsistent with
the position that plaintiff took in front of the PTO regarding the ’149 patent.
C. Summary Judgment
Summary judgment is appropriate when there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law.
Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281, 1286 (Fed. Cir. 2007).
In making the determination, the court views the record in the light most favorable to the
non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
Despite the application of judicial estoppel, there remains a genuine question of

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fact as to whether a jury could find that wireless transmission via Bluetooth technology
is the equivalent of transmission through the connection of a cable. Thus, defendants
have failed to show that they are entitled to summary judgment.
IV. CONCLUSION
Accordingly, it is
ORDERED that Defendants’ Supplemental Renewed Motion for Summary
Judgment on Claim Step (E) [Docket No. 332] is GRANTED in part and DENIED in
part.

DATED October 25, 2011.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

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