Milliman, Inc. et al v. Gradient A.I. Corp. et al

Filing 134

Judge Nathaniel M. Gorton: MEMORANDUM AND ORDER entered. In accordance with the foregoing, 1) the term "token" means "an identifier associated with an individual that does not reveal the identity of the individual";2 ) the term "server" means "a computer, with a processor and a memory, on a network that provides information in response to requests from another computer"; 3) the term "encryption server" needs no further constru ction;4) the term "similarly encrypted" needs no further construction;5) the term "medical information that characterizes a group" needs no further construction; and6) the term "absent authorization from the individuals in the group / absent authorization from individuals in the group / absent authorization from the group / without the individuals in the group having authorized production of such medical information / has been produced without the individuals in the group having authorized production of such healthcare information that characterizes the group" needs no further construction.So ordered. (Warnock, Douglas)

Case 1:21-cv-10865-NMG Document 134 Filed 01/19/23 Page 1 of 17

United States District Court
District of Massachusetts
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Milliman, Inc., et al.,
Plaintiffs,
v.
Gradient A.I. Corp., et al.,
Defendants.

Civil Action No.
21-10865-NMG

MEMORANDUM & ORDER
GORTON, J.
This action arises from alleged patent infringement and
misappropriation of trade secrets related to the pricing of
group health insurance plans.
Plaintiff, Vigilytics LLC (“Vigilytics”) is the holder of
several patents pertaining to computerized anonymization of
individual health data.

Plaintiffs, Milliman, Inc. and its

subsidiary, Milliman Solutions, LLC (“Milliman” and, together
with Vigilytics, “the plaintiffs”) are the exclusive licensees
of those patents in several fields, including health insurance
underwriting.
In May, 2021, Milliman sued defendants Gradient A.I. Corp.
(“Gradient”) and two of its officers, former Milliman employees
Stanford A. Smith (“Smith”) and Samuel Chase Pettus (“Pettus”
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and, together with Smith and Gradient, “the defendants”)
alleging infringement of six patents (“the Asserted Patents”)
and misappropriation of trade secrets when Gradient developed
its own underwriting services.

Defendants respond that the

patents are based upon abstract ideas and thus are ineligible
for patent protection under 35 U.S.C. § 101.
The parties have submitted six claims of the Asserted
Patents for construction.

The Court convened a Markman hearing

on January 12, 2023, at which counsel argued in favor of their
proposed constructions.

The Court now construes the contested

claims.
I.

Overview of the Patented Technology
Milliman’s complaint alleges infringement of six patents.

They are United States patent numbers 9,118,641 (“the `641
Patent”), 9,323,892 (“the `892 Patent”), 9,665,685 (“the `685
Patent”), 9,965,651 (the `651 patent), 10,109,375 (“the `375
Patent”) and 10,886,012 (“the `012 Patent”).
All of the patents pertain to the anonymization and
transmittal of federally protected healthcare data.

The Health

Insurance Portability and Accountability Act (“HIPAA”) prohibits
health providers from releasing an individual’s protected health
information (“PHI”) without the permission of that individual.
In the absence of such information, it is more difficult for an
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insurance company to estimate accurately the cost to insure a
group of individuals.
To solve that problem, Milliman used the patented
technology to develop its “Curv platform” which provides a third
party such as an insurance company with irreversibly deidentified health information in response to a request for
information regarding a group’s PHI.

The insurance company can

then use that information to generate more accurate actuarial
estimates, thus allowing for more precise pricing of group
health insurance plans.
The Asserted Patents share similar claims and
specifications.

The specifications of the `641, `375 and `012

patents are practically identical, i.e. the `375 patent is a
continuation of the `641 patent, and the `012 patent is a
continuation of the `375 patent.

The `892 patent (and the

continuations thereof, the `685 and `651 patents), adds among
other teaching that the de-identified healthcare data could
include pre- and post-encounter details of individuals with
healthcare facilities.

That information could be beneficial to

a hospital, for example, to assess risk of re-hospitalization or
other medical events.

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II.

Analysis
A.

Principles of Claim Construction

In analyzing a patent infringement case, the Court must 1)
determine the meaning and scope of the patent claims asserted to
be infringed and 2) compare the properly construed claims to the
allegedly infringing device. Markman v. Westview Instruments,
Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc), aff’d, 517
U.S. 370 (1996).

The first step, known as claim construction,

is an issue of law for the court to decide. Id. at 979.

The

second step is determined by the finder of fact. Id.
The Court’s responsibility in construing claims is to
determine the meaning of claim terms as they would be understood
by persons of ordinary skill in the relevant art. Bell Atl.
Network Servs., Inc. v. Covad Commc’ns Grp., Inc., 262 F.3d
1258, 1267 (Fed. Cir. 2001).

The meanings of the terms are

initially discerned from three sources of intrinsic evidence: 1)
the claims themselves, 2) the patent specification and 3) the
prosecution history of the patent. See Vitronics Corp. v.
Conceptronic, Inc., 90 F.3d 1576, 1582–83 (Fed. Cir. 1996).
The claims themselves define the scope of the patented
invention. See Philips, 415 F.3d at 1312.

Claim terms are

generally given their “ordinary and customary meaning,” which is
the meaning that a person skilled in the art would attribute to
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the claim term. See id. at 1312-13.

Even if a particular term

has an ordinary and customary meaning, however, a court may need
to examine the patent as a whole to determine whether that
meaning controls. Id. at 1313 (“[A] person of ordinary skill in
the art is deemed to read the claim term . . . . in the context
of the entire patent . . . .”); see also Medrad, Inc. v. MRI
Devices Corp., 401 F.3d 1313, 1319 (Fed. Cir. 2005) (noting that
a court cannot construe the ordinary meaning of a term “in a
vacuum”).

Ultimately, the correct construction will be one that

stays true to the claim language and most naturally
aligns with the patent’s description of the
invention[.]
Id. at 1316 (citation omitted).
The patent specification is
the single best guide to the meaning of a disputed
term [because it may reveal] a special definition
given to a claim term by the patentee that differs
from the meaning it would otherwise possess [or] may
reveal an intentional disclaimer, or disavowal, of
claim scope by the inventor.
Phillips v. AWK Corp., 415 F.3d 1303, 1314 (Fed. Cir. 2005) (en
banc).

The Court should also consult the prosecution history to

see how the inventor and the PTO understood the patent and to
ensure the patentee does not argue in favor of an interpretation
it has disclaimed. Id. at 1317.

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In the rare event that analysis of the intrinsic evidence
does not resolve an ambiguity in a disputed claim term, the
Court may turn to extrinsic evidence, such as inventor and
expert testimony, treatises and technical writings. Id. at 1314.
Although extrinsic evidence may be helpful in construing claims,
the intrinsic evidence is afforded the greatest weight in
determining what a person of ordinary skill would have
understood a claim to mean. Id. at 1324.
B.

Disputed Claim Terms
1.

token (`892 Patent, claim 11; `685 Patent, claim
7; `651 Patent, claim 7; `375 Patent, claim 7;
`012 Patent, claim 7)

The parties disagree as to whether the first disputed term
requires construction beyond its ordinary meaning.

Milliman

proposes the following construction:
An identifier associated with an individual that does
not reveal the identity of the individual.
Defendants, on the other hand, submit that the Court should
adopt an ordinary meaning construction.
The parties agree that the ordinary meaning of the term
“token” governs.

They dispute whether plaintiffs’ construction,

in fact, provides an ordinary meaning to the jury.

Milliman

contends that its construction is faithful to the intrinsic
evidence, because the patent specifications and claims
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explicitly state that a “token” is associated with an individual
but does not reveal the identity of that individual.

Moreover,

Milliman submits that Gradient’s unembellished ordinary meaning
construction inadequately resolves the parties’ dispute about
claim scope because the term “token” has more than one ordinary
meaning.

Gradient responds that Milliman’s construction

inappropriately adds extraneous limitations, including
“associated with an individual” and “does not reveal the
identity of the individual” that are unsupported by the
intrinsic evidence.
The Court finds that although a person of ordinary skill in
the art (“POSA”) would likely understand the ordinary meaning of
“token” after reading the entire patent, it appreciates
Milliman’s concern as to the jury’s understanding of the term.
See Phillips, 415 F.3d at 1313 (explaining that “a person of
ordinary skill in the art is deemed to read the claim term
. . . . in the context of the entire patent, including the
specification”).

This case will eventually be presented to a

lay jury, and therefore,
[i]t is not enough simply to construe the claims so
that one skilled in the art will have a definitive
meaning. The claims must be translated into plain
English so that a jury will understand.
Control Res., Inc. v. Delta Elecs., Inc., 133 F. Supp. 2d 121,
127 (D. Mass. 2001).

Milliman’s construction does just that to
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enable the jury to apply the construction to determine factual
questions at trial.
Gradient warns that Milliman’s “wordy” construction renders
the claim language superfluous and meaningless.

A “redundant”

construction is, however, acceptable if it is accurate. See VLSI
Tech. LLC v. Intel Corp., 53 F.4th 646, 653 (Fed. Cir. 2022)
(“While a construction that introduces redundancy into a claim
is disfavored, it is not foreclosed [when] intrinsic evidence
makes it clear that the ‘redundant’ construction is correct.”).
When a Court charges the jury, it does not literally replace a
claim term with its construction in the charge, and thus it is
unlikely that the duplicative effect described by Gradient will
be realized.
The Court accordingly will adopt plaintiffs’ proposed
construction because “token” has multiple ordinary meanings and
Milliman’s construction will help the jury’s understanding of
the term.

The first disputed claim will thus be construed as

follows:
An identifier associated with an individual that does
not reveal the identity of the individual.
2.

server (`641 Patent, claim 7; `892 Patent, claim
11; `375 Patent, claim 7; `012 Patent, claim 7)

Next, the parties dispute the construction of “server.”
Milliman proposes the following construction:
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A computer, with a processor and a memory, on a
network that provides information in response to
requests from another computer.
Gradient, however, submits that servers are so ubiquitous in
modern society that its meaning is readily apparent and requires
no construction.
The parties agree that their dispute over this second term
(“server”) presents a similar issue to their dispute over
“token.”

Milliman concedes that the ordinary meaning of

“server” may be clear to a POSA but, citing Control Res., Inc.,
133 F. Supp. 2d at 127, seeks to provide a construction so that
the lay juror can also understand “server” within the scope of
the claims.

Again, Gradient cautions of a duplication problem

were the Court to read in limitations to claims that purportedly
speak for themselves.
Plaintiffs’ proffered definition is, however,
straightforward and innocuous and would help lay jurors
understand a potentially technical term.

Thus, for the reasons

explained in the context of the previously disputed term, the
Court will adopt plaintiffs’ proposed construction.
will thus be construed as:

“Server”

A computer, with a processor and a memory, on a
network that provides information in response to
requests from another computer.

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3.

encryption server (`641 Patent, claim 7; `375
Patent, claim 7; `892 Patent, claim 11)

The parties dispute whether the term “encryption server”
has an ordinary meaning.

Gradient submits that no construction

is necessary, while plaintiffs proffer a construction of:
A “server” that produces “tokens” in response to a
request.
During the Markman hearing, Gradient emphasized that while
Milliman argued for its proposed constructions of “token” and
“server” because a jury would not otherwise understand the
terms, here Milliman defends its construction as necessary for a
computer scientist to understand the term.
Milliman concedes in its opening claim construction brief
that a POSA would understand that an “encryption server” is a
server that performs some sort of encryption.

It explains that

its proposed construction is essential, however, to ensure that
a POSA understands that a hash function could be an encryption
technique according to the Asserted Patents.

Despite that

argument, plaintiffs’ proposed construction for “encryption
server” does not attempt to define or describe “encryption.”
The Court is not therefore convinced that plaintiffs’ proposed
construction would provide any insight to a POSA as to whether
hashing is or is not an encryption technique.

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Plaintiffs’ proposed construction would more likely
confuse, than help, the jury. Bose Corp. v. SDI Techs., Inc.,
828 F. Supp. 2d 415, 424 (D. Mass. 2011), aff’d, 558 F. App’x
1012 (Fed. Cir. 2014) (finding a proposed construction
“unnecessarily confusing”).

“Encryption” is a commonly used

word and, because the Court has adopted Milliman’s proposed
construction for “server,” it sees no reason to further define
it as a “server” that encrypts.

Accordingly, the Court

concludes that no additional construction is needed and it will
adopt the ordinary meaning of “encryption server.”
4.

similarly encrypted (`641 Patent, claim 7; `892
Patent, claim 14; `685 Patent, claim 11; `651
Patent, claim 11; `375 Patent, claim 11; `012
Patent, claim 10)

With respect to “similarly encrypted,” defendants argue the
term is indefinite, while plaintiffs propose the construction:
Generated such that tokens generated from
corresponding information can be compared to one
another to detect a match.
The Court announced during the Markman hearing that it will
defer ruling on defendants’ claims for indefiniteness until
later in the proceedings.

Because indefiniteness would

invalidate the claims entirely, consideration of such a
dispositive effect is more appropriate at the summary judgment
stage of the case. Koninklijke Philips Elecs. N.V. v. Zoll Med.

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Corp., 914 F. Supp. 2d 89, 100–01 (D. Mass. 2012), aff’d sub
nom., 656 F. App’x 504 (Fed. Cir. 2016).
Plaintiffs thus encourage the Court to adopt its proposed
construction in the meantime.

Milliman submits that its

construction is supported by the intrinsic evidence because the
claim language confirms that two sets of tokens are compared to
find matches.

Gradient responds that even if the Court defers

its decision on indefiniteness, plaintiffs’ proposed
construction would create conflict between dependent claims and
independent claims from which they depend that would render the
dependent claims meaningless and cause confusion.

Furthermore,

according to defendants, the Asserted Patents provide no
guidance as to what “similarly encrypted” means, because they do
not define, provide examples, or otherwise describe what does or
does not constitute being “similarly encrypted.”
The Court agrees with Gradient, citing Stanacard, LLC v.
Rebtel Networks, AB, 680 F. Supp. 2d 483 (S.D.N.Y. 2010), that
Milliman’s proposed construction is ambiguous and “would result
in confusion for the jury.”

The Court declines to adopt

plaintiffs’ construction at this juncture.

Rather, the Court

will construe the term “similarly encrypted” to comport with its
ordinary meaning.

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5.

medical information that characterizes a group
(`892 Patent, claim 11; `685 Patent, claim 7)

The parties next dispute the construction of “medical
information that characterizes a group.”

Milliman submits that

the meaning of the term “medical information that characterizes
a group” is plain and construction of the term is unwarranted
because both a POSA and a lay jury would readily understand the
term.

Gradient contends, however, that “medical information”

has a special meaning, and thus proposes:
Information characterizing health status of the group
as a whole.
Defendants’ construction which proffers a special meaning is
based on changes to the continuation-in-part (“CIP”)
specification for the `892 and `685 patents.

Citing Wang

Lab’ys, Inc. v. Am. Online, Inc., 197 F.3d 1377 (Fed. Cir.
1999), Gradient suggests that replacing “medical information”
with “information” in over 30 locations in the CIP and adding
six references to “health status” intentionally shifts the focus
of the invention.

It maintains that its construction reflects

those amendments and appropriately informs a POSA’s
understanding of the claim term.
In response, plaintiffs criticize Gradient for introducing
two limitations, “health status” and “as a whole.”

The Court

agrees that “medical information” is not synonymous with “health
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status” and, in fact, the CIP specification did not replace the
term “medical information” with “health status,” as Gradient
proposes to do here.

Moreover, the intrinsic evidence does not

support the addition of “as a whole.”

The specification

proffers examples where information is provided for a subset of
group members, not the entire group.

Thus, it would be

misleading to add the limitation “the group as a whole.”
The term “medical information that characterizes a group”
is composed of commonly used words that a lay jury is able to
understand.

There is a

heavy presumption in favor of [construing terms
according to] the ordinary meaning of claim
language . . . .
Prima Tek II, L.L.C. v. Polypap, S.A.R.L., 318 F.3d 1143, 1148
(Fed. Cir. 2003).

The Court finds no reason to ignore that

presumption when the claim term is readily understandable.
Therefore, the Court will construe the term “medical information
that characterizes a group” according to its ordinary meaning.

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6.

absent authorization from the individuals in the
group / absent authorization from individuals in
the group / absent authorization from the group /
without the individuals in the group having
authorized production of such medical information
/ has been produced without the individuals in
the group having authorized production of such
healthcare information that characterizes the
group (`641 Patent, claim 7; `892 Patent, claim
11; `685 Patent, claim 7; `651 Patent, claim 7;
`375 Patent, claim 7; `012 Patent, claim 7)

The last disputed terms are a set of five terms that the
parties describe as the “absent authorization” terms.

Milliman

submits that the five terms, although somewhat different, are
comprised entirely of commonly used words that would be readily
understood by a jury and thus require no construction.

Gradient

urges that all five terms be construed as
Authorization was not given to produce the
(healthcare/medical) information in response to the
request.
Gradient’s construction removes a limitation and adds two
new limitations.

First, it removes the claim requirement that

the authorization is absent from the “individuals in the group.”
It addresses Milliman’s concerns about the removal by offering
the alternative construction of
authorization from (the) individuals in the group was
not given to produce the (healthcare/medical)
information in response to the request.
Defendant argues in favor of adding two limitations: “to
produce the (healthcare/medical) information” and “in response
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to the request.”

In support of the second limitation,

defendants contend that, because the patentee added the phrase
“at any time” to the `641 patent during prosecution, a POSA
would understand that where the “absent authorization” term
appears without “at any time” juxtaposed, the information was
solicited “in response to a request.”
The Court has determined that if “at any time” is not
recited in a claim, “in response to a request” should not
automatically be read into the claim.

The Federal Circuit has

reiterated that it is not the district court’s role in
construing claims “to redefine claim recitations or to read
limitations into the claims” but rather to “give meaning to
limitations actually contained in the claims.” See Am.
Piledriving Equip. v. Geoquip, Inc., 637 F.3d 1324 (Fed. Cir.
2011) (emphasis added).
Furthermore, the terms include all non-technical words
without special meanings and thus the Court will not flout the
presumption in favor of construing terms according to their
ordinary meaning. See Prima Tek II, L.L.C., 318 F.3d at 1148.
Accordingly, the Court concludes that no further construction is
needed and it will adopt the ordinary meaning of the five
“absent authorization” terms.

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ORDER
In accordance with the foregoing,
1) the term “token” means “an identifier associated with an
individual that does not reveal the identity of the
individual”;
2) the term “server” means “a computer, with a processor and a
memory, on a network that provides information in response
to requests from another computer”;
3) the term “encryption server” needs no further construction;
4) the term “similarly encrypted” needs no further
construction;
5) the term “medical information that characterizes a group”
needs no further construction; and
6) the term “absent authorization from the individuals in the
group / absent authorization from individuals in the group
/ absent authorization from the group / without the
individuals in the group having authorized production of
such medical information / has been produced without the
individuals in the group having authorized production of
such healthcare information that characterizes the group”
needs no further construction.

So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated: January 19, 2023

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