Parallel Networks Licensing LLC v. International Business Machines Corporation

Filing 182

MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 3/17/2015. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
PARALLEL NETWORKS
LICENSING, LLC,
Plaintiff,
v.
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
Defendant,

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Civ. No. 13-2072-SLR

Adam W. Poff, Esquire and Monte T. Squire, Esquire of Young Conaway Stargatt &
Taylor, LLP, Wilmington, Delaware. Counsel for Plaintiff. Of Counsel: Douglas
Cawley, Esquire, Christopher Bovenkamp, Esquire, Angela M. Vorpahl, Esquire, Eric S.
Hansen, Esquire, and Leah Bhimani Buratti, Esquire of McKool Smith, PC.
Jack B. Blumenfeld, Esquire and Rodger D. Smith II, Esquire of Morris, Nichols, Arsht &
Tunnell LLP, Wilmington, Delaware. Counsel for Defendant. Of Counsel: John M.
Desmarais, Esquire, Jon T. Hohenthaner, Esquire, Andrew G. Heinz, and William D.
Findlay, Esquire of Desmarais LLP.

MEMORANDUM OPINION

Dated: March 11 , 2015
Wilmington, Delaware

RoW~dge
I. INTRODUCTION
On December 20, 2013, plaintiff Parallel Networks Licensing LLC ("plaintiff') filed
the instant suit alleging infringement of U.S. Patent Nos. 5,894,554 ("the '554 patent")
and U.S. Patent No. 6,415,335 ("the '335 patent") against International Business
Machines Corporation ("defendant"). (D.I. 1) On February 12, 2014, defendant
answered the complaint and counterclaimed for non-infringement and invalidity. (D.I. 9)
On February 20, 2014, plaintiff answered the counterclaims. (D.I. 11) Presently before
the court is defendant's motion for partial judgment on the pleadings. (D.I. 50) The
court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1338(a).

II. STAND ARD OF REVIEW
When deciding a Rule 12(c) motion for judgment on the pleadings, a district court
must view the facts and inferences to be drawn from the pleadings in the light most
favorable to the non-moving party. Green v. Fund Asset Mgmt., L.P., 245 F.3d 214, 220
(3d Cir. 2001 ); Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 406
(3d Cir. 1993). The motion can be granted only if no relief could be afforded under any
set of facts that could be provided. Turbe v. Gov't of the Virgin Islands, 938 F.2d 427,
428 (3d Cir. 1991); see also Southmark Prime Plus, L.P. v. Falzone, 776 F. Supp. 888,
891 (D. Del. 1991 ); Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Ctr., 536
F. Supp. 1065, 1072 (E.D. Pa. 1982) ("If a complaint contains even the most basic of
allegations that, when read with great liberality, could justify plaintiff's claim for relief,
motions for judgment on the pleadings should be denied."). However, the court need
not adopt conclusory allegations or statements of law. In re General Motors Class E

Stock Buyout Sec. Litig., 694 F. Supp. 1119, 1125 (0. Del. 1988). Judgment on the
pleadings will only be granted if it is clearly established that no material issue of fact
remains to be resolved and that the movant is entitled to judgment as a matter of law.

Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290 (3d Cir. 1988).
Ill. DISCUSSION
Both patents-at-issue were placed into reexamination in 2007, during which
plaintiff proposed a variety of amendments to the United States Patent and Trademark
Office ("PTO"). (0.1. 55 at 4) After three ex parte reexamination proceedings, the PTO
issued a reexamination certificate on July 24, 2012 for the '554 patent, stating that
"[c]laims 1-11 are cancelled [and] [n]ew claims 12-49 are added and determined to be
patentable." (0.1. 108, ex. 1 at A19-A21) New claims 12-49, as printed in the
reexamination certificate, were the wrong set of claims. 1 (0.1. 55 at 4) On October 2,
2012, the PTO issued a certificate of correction, replacing claims 12-49 with corrected
claims 12-49.2 (0.1. 108, ex. 1 at A13-A18) The '335 patent was also subject to three

1

For example, claim 12 recited, "[t]he computer-implemented method of claim 1,
wherein intercepting said request consists of determining that a page server should
process the request." (0.1. 108, ex. 1 at A20)
2 Corrected claim 12 recites:
A computer-implemented method for managing a dynamic Web page
generation request to a Web server, said computer-implemented method
comprising the steps of:
routing said request from said Web server to a selected page
server, said selected page server receiving said request and releasing
said Web server to process other requests, wherein said routing step
further includes the steps of intercepting said request at said Web server,
routing said request from said Web server to a dispatcher, and
dispatching, by said dispatcher, said request to said selected page server;
processing said request, said processing being performed by said
selected page server while said Web server concurrently processes said
other requests; and

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ex parte reexamination proceedings, after which the PTO issued a reexamination
certificate on July 17, 2012, cancelling all 29 originally issued claims and adding new
claims 30-85 which, again, were incorrect. (D.I. 108, ex. 2, A43-45) The PTO then
issued a certificate of correction on September 11, 2012, replacing claims 30-85 with
corrected claims 30-85. (Id. at ex. 2, A35-A42)
In the case of an error made by the PTO,§ 254 of the Patent Act provides:
Whenever a mistake in a patent, incurred through the fault of the Patent
and Trademark Office, is clearly disclosed by the records of the Office, the
Director may issue a certificate of correction stating the fact and nature of
such mistake, under seal, without charge, to be recorded in the records of
patents. A printed copy thereof shall be attached to each printed copy of
the patent, and such certificate shall be considered as part of the original
patent. Every such patent, together with such certificate, shall have the
same effect and operation in law on the trial of actions for causes
thereafter arising as if the same had been originally issued in such
corrected form. The Director may issue a corrected patent without charge
in lieu of and with like effect as a certificate of correction.
35 U.S.C. § 254.

dynamically generating a Web page by said selected page server in
response to said request, said Web page including data dynamically
retrieved from one or more data sources; and
wherein dispatching includes:
examining said request to make a selection of which page server
should process said request from among a plurality of page servers that
can each generate said Web page requested by said request;
selecting one of said plurality of page servers to dynamically
generate said Web page;
wherein said selection is based on examining dynamic information
regarding a load associated with each of said plurality of page servers;
and
sending said request to said selected page server based on said
examination.
(D.I. 108, ex. 1 at A13)

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The Federal Circuit has interpreted § 254, explaining that "[t]he certificate of
correction is only effective for causes of action arising after it was issued." Southwest
Software, Inc. v. Harlequin Inc., 226 F.3d 1280, 1294 (Fed. Cir. 2000). Moreover,§§
254 and 255 3 "deal only with the authority of the PTO to make prospectively effective
corrections, and the PTO was given no authority to correct the claims retroactively."
Novo Industries, L.P. v. Micro Molds Corp., 350 F.3d 1348, 1356 (Fed. Cir. 2003). "For
causes of action that arise before the correction becomes effective, the patent must be
considered without the benefit of the certificate of correction." Id. (citing Southwest, 226
F.3d at 1297). In the case at bar, plaintiff has asserted infringement based on the
corrected claims, but seeks damages for infringement occurring prior to the date of
correction by the PTO. Based on the statutory language, plaintiff may not recover
damages prior to the date of correction.
Plaintiff contends that the court should judicially correct the patent claims (as the
PTO did) and apply them retroactively to permit its requested damage award. The
Federal Circuit has specified that "[a]lthough we conclude that Congress intended to
preserve the authority of the district courts to correct errors, we do not think that
Congress intended that the district courts have the authority to correct any and all errors
that the PTO would be authorized to correct under sections 254 and 255." Novo, 350
F.3d at 1357. District courts may correct "obvious minor typographical and clerical
errors in patents," but "major errors are subject only to correction by the PTO." Id.
Therefore,
[i]n some circumstances the district court can correct errors retroactively.
But the district court can correct an error only if the error is evident from

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Providing for corrections of mistakes by the patentee.

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the face of the patent. "A district court can correct a patent only if (1) the
correction is not subject to reasonable debate based on consideration of
the claim language and the specification and (2) the prosecution history
does not suggest a different interpretation of the claims."

Group One, Ltd. v. Hallmark Cards, Inc., 407 F.3d 1297, 1303 (Fed. Cir. 2005) (citing
Novo Industries, 350 F.3d at 1357-58).
In Group One, a printing error by the PTO resulted in the last limitation of a claim 4
reciting "stripping means (36) for separating the ribbon from said mechanical drive
wheel means," instead of "stripping means (36) for separating the ribbon from said
mechanical drive wheel means in order to prevent said ribbon from adversely affecting
operation of said mechanical drive wheel means by adhering to said mechanical drive
wheel means." 407 F.3d at 1302. The Federal Circuit concluded that such error was
"not evident on the face of the patent. The prosecution history disclose[d] that the
missing language was required to be added by the examiner as a condition for
issuance, but one cannot discern what language is missing simply by reading the
patent." Id. at 1303. In H-W Technology, L.C. v. Overstock.com, Inc., 758 F.3d 1329
(Fed. Cir. 2014), the PTO issued a patent, inadvertently omitting an entire limitation of a
claim. 5 Id. at 1333. The Federal Circuit held that the district court properly refused to

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Claim 1 of U.S. Patent No. 5,518,492.
The approved claim 9 recited:
A method for performing contextual searches on an Internet Phone (IP)
phone comprising the steps of:
receiving a command to perform a contextual search;
receiving search criteria from a user of said IP phone;
submitting said search criteria to a server coupled to said IP phone;
and
receiving from said server a list of merchants matching said search
criteria and information regarding each of said merchants in said list;

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correct claim 9 because "the error is not 'evident from the face of the patent.' Claim 9
reads coherently without the missing limitation. Nothing in the surrounding claim
language indicates that the limitation was missing." Id. In contrast, in Hoffer v.
Microsoft Corp., 405 F.3d 1326 (Fed. Cir. 2005), claim 22 of the patent-at-issue recited
"[a] method in accordance with claim 38 .... " Id. at 1331. The patent contained 25
claims and the Federal Circuit concluded that the "error in dependency of claim 22 is
apparent on the face of the printed patent, and the correct antecedent claim is apparent
from the prosecution history." Id.
In the case at bar, the entire set of claims in the certificate of reexamination for
each patent-at-issue was incorrect, requiring an entirely new set of claims to be printed
in the certificate of correction. That the claims in the certificate of reexamination
depended on cancelled claims6 is permitted by PTO rules and, thus, not indicative of an
error. (D.I. 61 at 4; D.I. 49, ex. E, MPEP § 2260.01) Plaintiff argues 7 that claims 28,
29, and 30 of the '554 patent reexamination certificate (printed as dependent on

wherein said user completes a transaction with at least one of
said merchants listed without the need to generate a voice call;
wherein said information received by said user comprises a variety
of offers, wherein said user selects one of said variety of offers associated
with said one of said merchants listed, wherein said selected offer is
transmitted to said one of said merchants listed electronically; and
wherein said user's contact and payment information is not
transmitted to said one of said merchants listed, wherein said user's
contact and payment information is available to said one of said
merchants listed.

The PTO omitted the bolded limitation. H-W Technology, 758 F.3d at 1333.
A theory initially asserted by plaintiff to demonstrate error on the face of the patent.
(D.I. 55 at 10)
7 The court recognizes that such argument is the subject of plaintiff's opposed motion to
correct the briefing, but includes it for completeness. (D.I. 70; D.I. 71 at ex. B at 6)

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cancelled claim 1) contain "obvious errors" because claim 1 refers to "a page server"
and "said page server," and claims 28, 29, and 30 refer to "the plurality of page
servers." 8 (D.I. 71 at ex. Bat 6) Such error, calling into question the antecedent basis
of a limitation, does not put a potential infringer on notice of an error on the face of the
patent that would require an entire new set of claims. That the corrected claims appear
in the prosecution history is also insufficient. 9 H-W Technology, 758 F.3d at 1334
(finding that "evidence of error in the prosecution history alone [is] insufficient to allow
the district court to correct the error."); Linear Tech. Corp. v. Micrel, Inc., 524 F. Supp.
2d 1147, 1154-55 (N.D. Cal. 2005) (The court declined to correct a patent by adding
missing claims, where the text of the amended claims was omitted from the certificate of
reexamination, even though the claims were present in the public record of the
reexamination history. The court explained that "as in Southwest Software, the district
court must look in the prosecution history for the text of the amended claims. The error
in [plaintiff]'s patent cannot be discerned 'simply by reading the patent."'). The error in
the case at bar, the printing of the wrong set of claims, is not "evident from the face of
the patent."
Indeed, it is important to remember that the claims and specification of a patent
serve an important public notice function, apprising others of what is available to them.

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Claims 48-50 of the '335 patent reexamination certificate (printed as dependent on
cancelled claim 1) likewise refer to "the plurality of page servers" and claim 1 referred to
"a page server" and "said page server."
9 Interestingly, the attorney representing plaintiff in the reexamination proceedings
stated that "[i]t appeared that the USPTO had instead printed claims from early in the
reexamination process, although I was never able to determine exactly where in the
reexamination history the USPTO found the claims that it printed in each of the
Reexamination Certificates." (D.I. 87, Fish Deel. at 1J 4)

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See, e.g., Johnson & Johnston Associates Inc. v. R.E. Service Co., Inc., 285 F.3d 1046,
1052 (Fed. Cir. 2002) (citing Mahn v. Harwood, 112 U.S. 354, 361 (1884)) (claims give
notice to the public of the scope of the patent); Superior Fireplace Co. v. Majestic Prods.
Co., 270 F.3d 1358, 1371 (Fed. Cir. 2001 ). While recognizing the harsh result to
plaintiff of the PTO's error, the court concludes that it cannot correct the errors in the
patents-in-suit, therefore, plaintiff may not recover damages for alleged infringement
occurring prior to the issuance of the certificates of correction.

V. CONCLUSION
For the reasons explained above, the court grants defendant's motion for partial
judgment on the pleadings (D.I. 50).

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