Berkeley*IEOR v. W.W. Grainger Inc. et al
Filing
279
MEMORANDUM Opinion. The disputed claim terms have the meaning set out in this Memorandum Opinion. It is so ordered. Signed by the Honorable Charles P. Kocoras on 6/14/2022. Mailed notice(vcf, )
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BERKELEY*IEOR d/b/a B*IEOR,
Plaintiff,
v.
TERADATA OPERATIONS, INC.,
Defendant.
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17 C 7472
MEMORANDUM OPINION
CHARLES P. KOCORAS, District Judge:
The Court is tasked with the construction of disputed claim terms in United States
Patent Nos. 7,596,521 (the “’521 patent), 7,882,137 (the “’137 patent”), and 8,612,316
(the “’316 patent”) (collectively, the “patents-in-suit”). Having reviewed the written
submissions and heard arguments, the Court construes the disputed terms as follows.
BACKGROUND
The patents-in-suit share a common application and specification and claim
methods for calculating object level profitability. The parties have identified seven
disputed terms. The parties also dispute the definition of a person of ordinary skill in
the art (“POSITA”).
The majority of the disputed terms can be found in claims 1, 3, and 4 of the ’521
patent. Claim 1 of the ’521 patent reads as follows (with the disputed terms noted):
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1. A process for determining object level profitability in a computer,
comprising the steps of:
[Limitation 1] providing a relational database management system
operable in association with a computer;
[Limitation 2] preparing information to be accessed electronically through
the relational database management system;
[Limitation 3] establishing, in the relational database, rules for processing
the prepared information;
[Limitation 4] using the relational database management system to
independently calculate at least one marginal value of profit for each
object being measured using established rules as applied to a selected set
of prepared information;
[Limitation 5] using the relational database management system to
calculate a fully absorbed profit adjustment value for each object being
measured; and
[Limitation 6] combining the at least one marginal value of profit and the
fully absorbed profit adjustment value to create a measure for object level
profitability.
(JA 000028–29).
Claim 3 of the ’521 patent reads (with the disputed term noted):
3. The process of claim 1, wherein the preparing step further includes the
step of calculating opportunity values of funds used or supplied by each
object being measured.
(JA 000029).
Claim 4 of the ’521 patent reads (with the disputed term noted):
4. The process of claim 1, wherein the establishing step includes the steps
of providing the information necessary to select objects, and performing
the correct profit calculus.
(JA 000029).
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Additionally, Claim 1 of both the ’137 and ’316 patents reference a
“computerized profit database having profit information”—another disputed term. (JA
000060, 000091).
The Court conducted a Markman hearing where each party was allowed to
explain its proposed construction of the disputed terms and answer questions from the
Court concerning their respective positions. It is now ready to rule on the construction
of the disputed terms.
LEGAL STANDARD
The construction of a patent claim, “including terms of art within its claim, is
exclusively within the province of the court.” Markman v. Westview Instruments, Inc.,
517 U.S. 370, 372 (1996). In general, claim terms are given the meaning they would
have to a person having ordinary skill in the art at the time of the patent’s effective
filing date. See Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir. 2005) (en
banc). To determine what a person having ordinary skill in the art would understand a
term to mean, the Court first considers the intrinsic evidence, which includes claim
language, the patent’s specification, and the patent’s prosecution history. See Unique
Concepts v. Brown, 939 F.2d 1558, 1561 (Fed. Cir. 1991). The intrinsic evidence forms
the public record of what the patentee claimed, and the public is entitled to rely on this
record to determine a patent’s scope. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d
1576, 1583 (Fed. Cir. 1996).
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When considering the intrinsic evidence, the Court first looks at the language of
the claim or claims in which the term appears. Phillips, 415 F.3d at 1314. Claim
language supplies information about the meaning of a term through the context and
relationship to other claims. Id. And because terms are usually used consistently, a
term in one claim of the patent can provide insight into its meaning when used
elsewhere. Id.
Next, the Court looks at the specification, which clarifies the claim language. Id.
at 1315. “The terms must be read in view of the specification, of which they are a part”
because “they are part of a fully integrated written instrument.” Id. (cleaned up). The
specification, therefore, is both highly relevant to and often dispositive of a term’s
meaning. Id. However, the specification is not without pitfalls—limitations found
within it cannot be read into claims that do not contain the same limitations. See
Golight, Inc. v. Wal-Mart Stores, 355 F.3d 1327, 1331 (Fed. Cir. 2004).
Finally, the Court looks at the patent’s prosecution history. A patentee can act
as a lexicographer, but he or she must do so in the written description or prosecution
history with “reasonable clarity, deliberateness, and precision.” Id. at 1332. The
prosecution history can clarify a term’s definition and must be consulted to determine
whether the patentee gave a special meaning to a term or disclaimed aspects of the
invention. See generally id. at 1331–33.
If there remain ambiguities after considering the intrinsic evidence, the Court
may look to extrinsic evidence. See Phillips, 415 F.3d at 1317. Extrinsic evidence
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includes dictionaries, learned treatises, and expert and inventor testimony. Id. The
Court may also consider extrinsic evidence, especially technical dictionaries, if the
Court finds it useful to understand technical terms of art. Id. However, extrinsic
evidence is “less significant than the intrinsic record in determining the legally
operative meaning of claim language.” Id. (cleaned up). Additionally, extrinsic
evidence cannot contradict claim language that is unambiguous from the intrinsic
evidence. Id. at 1324. With these principles in mind, we now examine the disputed
terms.
DISCUSSION
The parties identified seven disputed terms. They also dispute the definition of
a POSITA as it pertains to the patents-in-suit. We address each disputed term in turn.
I.
Term 1: “comprising the steps of”
For the first disputed term—“comprising the steps of”—the parties specifically
dispute whether the steps must be performed in a specific order. Teradata argues that
the inherent logic of the steps must be performed sequentially and in the order of the
claim. Berkeley, on the other hand, argues that the customary meaning of “steps” means
that the steps can be done in any order and that the steps in Claim 1 invoke the special
patent law meaning of the word “comprising.”
a. Berkeley’s Proposed Construction
Berkeley proposes the plain and ordinary meaning, that is, “non-sequential
steps.” Berkeley argues the construction of “comprising the steps of” by invoking the
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customary meaning of the word “comprising” in patent law. Further, Berkeley argues
the steps of Limitation 2 of the ’521 patent do not depend on Limitation 1. Limitation
2 teaches “preparing the information,” but does not specify whether this step must be
performed using the relational database management system or with a separate system’s
software before the electronic access is made from the relational database.
b. Teradata’s Proposed Construction
Teradata proposes “comprising the following steps to be performed in the
specific order set forth herein.” Teradata argues the plain language of the claims at
issue both recite order and dictate a progression as a matter of logic. Teradata asserts
it is not arguing that “comprising” needs to be construed; instead, Teradata’s position
is that the independent claims must be logically construed to require the disclosed steps
to be performed in sequence, not that the term “comprising” connotes such a
requirement.
c. The Court’s Conclusion
We adopt Berkeley’s proposed construction, the plain and ordinary meaning.
“Unless the steps of a method actually recite an order, the steps are not ordinarily
construed to require one.” Interactive Gift Exp., Inc. v. Compuserve, Inc., 256 F.3d
1323, 1342 (Fed. Cir. 2001) (citing Loral Fairchild Corp. v. Sony Corp., 181 F.3d 1313,
1322 (Fed. Cir. 1999) (stating that “not every process claim is limited to the
performance of its steps in the order written”). However, such a result can ensue when
the method steps implicitly require that they be performed in the order written. See
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Loral, 181 F.3d at 1322 (stating that “the language of the claim, the specification and
the prosecution history support a limiting construction[, in which the steps must be
performed in the order written,] in this case”). But in this case, nothing in the claim or
the specification here directly or implicitly requires such a narrow construction. 1
II.
Term 2: “to independently calculate”
Terms 2, 3, and 4 are related. With Term 2, the parties dispute Teradata’s
inclusion of the word “simultaneously” in its proposed construction.
a. Berkeley’s Proposed Construction
Berkeley proposes “running in the relational database management system the
corresponding formulas for ‘at least one marginal value of profit,’ where one calculation
does not depend on the other.”
Berkeley contends the ordinary meaning of
“independently” is not “simultaneously” doing independent tasks; rather, independently
ordinarily means one object is not dependent upon another. Because “independently”
and “simultaneously” are not interchangeable, Berkeley argues, the addition of the word
“simultaneously” to the claim language improperly introduces a limitation not present
in the patent. Berkeley also notes that the word “and” in the sequential list of profit
calculations, if read with the word “simultaneously,” would contradict the preceding
words “at least one.”
This Order should not be read, however, to exclude the possibility the claim limitations themselves do not
require a specific order of steps.
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b. Teradata’s Proposed Construction
Teradata proposes “simultaneously running in the relational database
management system the corresponding formulas for ‘at least one marginal value of
profit,’ where one calculation does not depend on the other.” Teradata focuses on the
fact the specification twice emphasizes “[t]he simultaneous use of these five analytical
frameworks makes possible a detailed level of profit calculation.”
c. The Court’s Conclusion
We find Teradata’s addition of “simultaneously” improperly adds a limitation.
Although the patented invention describes performing the independent calculations
simultaneously in an embodiment, there is no necessity to do so, and no such limitation
is recited. The claims intentionally provide direction to perform the independent
calculations simultaneously, sequentially, or if necessary, not perform some of them at
all. We therefore adopt Berkeley’s proposed construction of “running in the relational
database management system the corresponding formulas for ‘at least one marginal
value of profit,’ where one calculation does not depend on the other.”
III.
Term 3: “at least one marginal value of profit”
Term 3—“at least one marginal value of profit”—is a continuation of the
previous term.
a. Berkeley’s Proposed Construction
Berkeley proposes “the difference between an object’s marginal revenue and the
marginal cost of producing that object.” Berkeley says Teradata attempts to limit the
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scope of the claim by necessarily incorporating all five separate profit values (net
interest, other revenue, direct expense, and provisioning), when each independently is
one marginal value of profit.
b. Teradata’s Proposed Construction
Teradata proposes “each [of] the Net Interest, Other Revenue, Direct Expense,
and Provisioning calculations.” Teradata argues its construction is supported by the
intrinsic record, as “the specification repeatedly makes clear that the marginal value of
profit is determined by five distinct factors.” According to Teradata, Berkeley’s
construction provides no real meaning, for simply constricting one marginal value of
profit to mean the difference marginal revenue and marginal cost does nothing more
than restate the limitation. Teradata further contends Berkeley’s construction expressly
omits the key marginal profit calculations that form the bedrock of the claimed process.
c. The Court’s Conclusion
We adopt Berkeley’s proposed construction of “the difference between an
object’s marginal revenue and the marginal cost of producing that object.” Teradata’s
construction exceeds “one value” and attempts to limit the scope of the claim by
necessarily incorporating all five separate profit values.
IV.
Term 4: “for each object being measured”
The next disputed term is “for each object being measured.” The disagreement
between Teradata and Berkeley is what that object should be: according to Teradata, it
should be each of the smallest components of a business on which profit could be
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measured. Berkeley construes the term to mean the smallest components on which
profit is being measured.
a. Berkeley’s Proposed Construction
Berkeley proposes “For each of the smallest common component of profit being
measured.” Berkely primarily relies on the specification to support its construction.
Namely, it points to the same passage that is cited by Teradata, which notes that
“through a consistent application of measures to a class of business entities which
represent the smallest common component of profit desired—Profit Object.”
b. Teradata’s Proposed Construction
Teradata proposes “for each of the smallest common component of a business on
which profit can be measured.” Teradata asserts that Berkeley and Teradata previously
agreed upon the construction of this term in the context of the ’316 patent, and that
because the usage is similar between the ’316 patent and the ’521 patent (the patent
currently at issue), this should bind the Court in construing the ’521 language. Unlike
the other six terms in dispute, Teradata appears to argue that the construction of the
term “for each object being measured” in the ’316 patent should dictate the construction
of the ’521 claim—the representative patent at issue. To support its broad interpretation
of “for each object being measured,” Teradata juxtaposes the language of the claim,
“for each object being measured,” with the specification, which defines the “profit
object” as the “smallest common component of a business on which profit can be
measured.”
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c. The Court’s Conclusion
The weight of the evidence favors Berkeley’s construction of the term “for each
object being measured” to mean “for each object smallest common component of profit
being measured” because the text of the claim itself supports this construction, as does
the specification and the prosecution history of the ’521 patent. The text, combined
with the specification, indicate that the term must mean only the objects’ profit actually
being measured, not the infinite and indefinite of any object’s profitability which could
be measured. Accordingly, we adopt Berkeley’s proposed construction of “For each of
the smallest common component of profit being measured.”
V.
Term 5: “computerized database having profit information”
The next disputed term is “computerized database having profit information.”
a. Berkeley’s Proposed Construction
Berkeley proposes the ordinary and customary meaning, which is a “computer
database having profit information.” Berkeley argues Teradata’s incorporation of the
five profit measures is not needed, leads to more confusion, and is a semantic
incorrection. Berkeley says Teradata’s construction improperly narrows the claims to
an embodiment, and further argues the plain and ordinary meaning of the term can be
discerned by dictionary definitions.
b. Teradata’s Proposed Construction
Teradata proposes “a computerized database that contains at least the following
five profit measures: Net Interest, Other Revenue, Direct Expense, Provisioning,
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Indirect Expense.” Teradata argues there is no generally accepted or plain meaning for
“profit database” as distinct from any other database, nor is there any plain meaning for
“profit information” as generally accepted in the art or common parlance. This,
Teradata says, shows that the term as a whole leaves too much room for interpretation
to the point that, without guidance and definition from the specification, it lacks any
real meaning.
c. The Court’s Conclusion
The Court agrees with Berkeley’s proposed construction. The term is selfexplanatory. As Berkeley points out, the database is where the results are stored; it is
the relational database management system that “runs” or executes computations.
VI.
Term 6: “opportunity values for funds used or supplied”
The next disputed term is “opportunity values for funds used or supplied.” This
limitation is present in independent Claims 1 of both the ’137 and ’316 patents, and
dependent Claim 3 of the ’521 patent.
a. Berkeley’s proposed construction
Berkeley proposes “the cost for funds used or revenue for funds supplied.”
Berkeley argues that Teradata improperly narrows the term by offering a meaning that
is specific to only one industry and conflates a single embodiment as the claim.
Berkeley also says its construction provides a clearer definition that even a layperson
can understand.
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b. Teradata’s Proposed Construction
Teradata proposes “funds transfer pricing (funds transfer treatment rates).”
Teradata says the specification does not expressly address “opportunity values,” which
is not a term of art typically understood by one of skill in the art.
c. The Court’s Conclusion
We adopt Berkeley’s construction, “the cost for funds used or revenue for funds
supplied.” This construction is simpler and more easily understood, whereas Teradata’s
proposed construction “muddies the disputed term, rather than giving it clarity.”
Berkeley’s construction is supported in the specification.
VII. Term 7: “performing the correct profit calculus”
The seventh disputed term is “performing the correct profit calculus.”
In
construing the term, the parties focus on Claim 1 and Claim 4 of the ’521 patent.
a. Berkeley’s Proposed Construction
Berkeley proposes either the plain and ordinary meaning, or “a correct method
of computation of profit which combines financial measurement techniques with nonmodeled data and calculation parameters.” Berkeley argues a POSITA can reasonably
ascertain the meaning of the term in Claim 4 of the ’521 patent given the scope of the
claims and context of the specification. Specifically, Claim 4 limits Claim 1 by
directing a POSITA to select and calculate the correct profit measures, or “rules,” from
Claim 1. Claim 1 provides a correct calculation when completed and Claim 4 relates
to the “correct profit calculus” in a narrower circumstance than Claim 1. Claim 4 recites
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performing “the establishing step” of Claim 4 correctly after selecting the objects used
in the process.
b. Teradata’s Proposed Construction
Teradata argues the term is indefinite and also lacks an antecedent basis.
Teradata contends that Claim 1, from which Claim 4 depends, does not make any
mention of a “correct profit calculus,” yet Claim 4 requires an understanding of the
“correct profit calculus.” Because the term has no antecedent basis in the independent
claim, Teradata says, Claim 4 cannot meaningfully narrow the scope of the independent
claim.
Teradata further asserts the claim is invalid as ambiguous on its face because the
claim requires “the correct profit calculus” without providing any guidance as to what
distinguishes a correct calculus from an incorrect one. Teradata argues the limitation is
entirely subjective, rendering it invalid as a matter of law.
c. The Court’s Conclusion
“[A] patent is invalid for indefiniteness if its claims, read in light of the
specification delineating the patent, and the prosecution history, fail to inform, with
reasonable certainty, those skilled in the art about the scope of the invention.” Nautilus,
Inc. v. Biosign Instruments, Inc., 572 U.S. 898, 901 (2014). We agree with Teradata
and find the term indefinite.
VIII. Person of Ordinary Skill in the Art
Finally, the parties dispute the definition of a POSITA.
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a. Berkeley’s Proposed Definition
Berkeley proposes the following:
“A person of ordinary skill in the art should have at least a master’s degree
in computer science, accounting, or management information systems
with at least two years of experience in accounting or financial software
and their applications to relational database management systems. A
person with less education but more relevant practical experience may
also meet this standard.”
Berkeley emphasizes the importance of the master’s degree as well as experience
in the applications of relational database management systems because the relational
database management system is so critical to the invention. Without this experience,
Berkeley says, a person would not really understand what the inventor meant or
understand the invention itself. Berkeley argues its POSITA definition takes into
account the sophistication of the technology and the educational level of active workers
in the field: the technology pertaining to the patents-in-suit is extremely sophisticated,
and the financial and actuarial formulas are not taught until graduate level or postcollege certifications.
b. Teradata’s Proposed Definition
Teradata proposes the following:
“A person of ordinary skill in the art would have at least a bachelor’s
degree in computer science, accounting, or management information
systems, or a similar field with at least two years of experience in
accounting or finance software, or a person with a master’s degree in
computer science, accounting, or management information systems, or a
similar field with a specialization in accounting or finance software. A
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person with less education but more relevant practical experience may
also meet this standard.”
Teradata argues Berkeley’s proposed definition is far too restrictive, so much so
that it actually excludes the inventor of the patents-in-suit from being considered a
POSITA.
Berkeley concedes Mr. Lepman does not have a master’s degree but
emphasizes the vast amount of relevant practical experience Mr. Lepman has.
c. The Court’s Conclusion
The Federal Circuit has advised that the “[f]actors that may be considered in
determining the level of skill in the art include: (1) the educational level of the inventors;
(2) the type of problems encountered in the art; (3) prior art solutions to those problems;
(4) the rapidity with which innovations are made; (5) sophistication of the technology;
and (6) education level of active workers in the field.” Env’tl Designs, Ltd. v. Union
Oil Co. of Cal., 713 F.2d 693, 696 (Fed. Cir. 1983). “These factors are not exhaustive
but are merely a guide to determining the level of ordinary skill in the art.” Daiichi
Sankyo Co. Ltd. v. Apotex, Inc., 501 F.3d 1254, 1256 (Fed. Cir. 2007). Further, a
POSITA must be determined by looking at the field as a whole, rather than just the
inventor of the patented device. “The actual inventor’s skill is irrelevant to the inquiry.”
Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 454 (Fed. Cir. 1985).
The Court agrees with Berkeley’s proposed definition of a POSITA. Experience
in the applications of relational database management systems is critical. Moreover,
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Berkeley’s definition is not as restrictive as Teradata claims, for it explicitly leaves
room for “a person with less education but more relevant practical experience.”
CONCLUSION
For the reasons set forth above, the disputed claim terms have the meaning set
out in this Memorandum Opinion.
It is so ordered.
Dated: June 14, 2022
________________________________
Charles P. Kocoras
United States District Judge
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