Versata Software, Inc. et al v. Internet Brands, Inc. f/k/a CarsDirect.com et al

Filing 175

MEMORANDUM AND ORDER. Signed by Judge William C. Bryson on 1/4/2012. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

VERSATA SOFTWARE, INC., f/k/a
TRILOGY SOFTWARE, INC.; and
VERSATA DEVELOPMENT GROUP, INC.,
f/k/a TRILOGY DEVELOPMENT GROUP,
INC.
Plaintiffs,
v.
INTERNET BRANDS, INC., f/k/a
CARSDIRECT.COM, INC.,
AUTODATA SOLUTIONS COMPANY,
and AUTODATA SOLUTIONS, INC.
Defendants.

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CIVIL ACTION No. 2:08-cv-313-WCB

MEMORANDUM AND ORDER
This is a claim construction ruling in a patent infringement case. The parties
disagree about the construction of four terms that are used in the two patents in suit, U.S.
Patent Nos. 7,130,821 (“the ’821 patent”) and 7,206,756 (“the ’756 patent”). The parties
have provided the Court with briefing in the form of the plaintiffs’ opening claim
construction brief (Dkt. No. 118), the defendants’ responsive claim construction brief
(Dkt. No. 121), and the plaintiffs’ claim construction reply brief (Dkt. No. 130). The
Court has also had the benefit of the argument of counsel at a claim construction hearing
held on December 19, 2011. The Court construes the four disputed terms as indicated
below.

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I. “Automatically Generate”
The first term about which the parties disagree is the term “automatically
generate” (or “automatically generated”), which appears in all of the asserted claims of
the ’821 patent.
The abstract of the’821 patent describes the patented invention as a “method of
comparing products” that includes “selecting a first configuration representing a first
product with a first attribute, selecting a second configuration representing a second
product with a second attribute, and displaying the first attribute and the second
attribute,” with the first attribute being defined in the first configuration and the second
attribute being defined in the second configuration. The asserted claims of the ’821
patent include claims to a method (independent claim 1 and its dependent claims 2, and
8), claims to a computer system (independent claim 10 and its dependent claims 11 and
17), and claims to a computer program product (independent claim 19 and its dependent
claims 20 and 26).
Claim 1 is representative. It reads as follows:
1. A method of comparing products wherein at least one of the
products is automatically generated, the method comprising:
receiving data from a first computer system, wherein the received
data includes product configuration data;
processing the received data with a second computer system to
generate a first product configuration;
providing data to the first computer system to allow the first
computer system to display the first product configuration;
receiving an auto-generate request, separate from the received
data, from the first computer system to automatically generate a second
product configuration that is comparable to the first product configuration,
wherein the auto-generate request includes data representing criteria to

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establish a basis for comparability between the first product configuration
and the second product configuration;
processing the auto-generate request with the second computer
system to automatically generate the second product configuration in
accordance with the criteria to establish a basis for comparability between
the first product configuration and the second product configuration; and
providing data to the first computer system to allow the first
computer system to display the first and second product configurations
and allow comparison of features of the first and second product
configurations.
The specification of the ’821 patent describes the claimed invention by reference
to a method and system for comparing products with respect to their configurations and
features.

The specification first describes a computer-based system for comparing

products by selecting both a “first configuration,” i.e., a first product with a first attribute,
and a “second configuration,” i.e. a second product with a second attribute. The system
displays the two attributes “so that the potential buyer can easily compare the two
products’ features.” ’821 patent, col. 5, ll. 50-56.
The specification then describes the operation of the system to compare productrelated information for two automobiles. ’821 patent, col. 9, line 66, through col. 10, line
60. It provides an example under which the user can select the make, model, and trim for
two automobiles that the user wishes to compare.

In the example given in the

specification, the product information regarding the two automobiles is arranged to
facilitate comparison of the respective features of the designated automobiles. Id. at col.
10, ll. 42-54. In addition, the example allows the user to vary the product-related
information being compared by selecting a different make, model, and trim for either of
the two displayed automobiles. Id. at col. 10, ll. 55-60.

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In the passage most pertinent to the disputed claim construction issues before the
Court, the specification states that the user can cause the server “to automatically
generate information concerning an automobile that is comparable to that for which
information is displayed [in the location where product-related information for the first
automobile is recited].”

’821 patent, col. 10, ll. 62-67.

To initiate that mode of

operation, the user selects “a criteria [sic] by which to seek a comparable automobile.
The criteria can include, for example, price and/or features.” Id., col. 10, line 67, through
col. 11, line 3.
A later portion of the specification describes in detail the method of comparing
products “wherein at least one of the products is automatically generated.” ’821 patent,
col. 12, ll. 35-65. In the case of “automatic generation,” the specification explains, “data
is received from a first computer system [such as the user’s computer], wherein the
received data includes product configuration data [such as the make, model, and trim of
an automobile].” Id. at col. 12, ll. 42-44. The data is then “processed with a second
computer system to generate a first product configuration.” Id. at col. 12, ll. 45-46. That
data is then “provided to the first computer system to allow the first computer system to
display the first product configuration.”

Id. at col. 12, ll. 47-49. “[A]n auto-generate

request, separate from the received data is received from the . . . first computer system to
automatically generate a second product configuration that is comparable to the first
product configuration.” Id. at col. 12, ll. 49-53. The auto-generate request includes data
“representing criteria to establish a basis for comparability between the first product
configuration and the second product configuration.” Id. at col. 12, ll. 53-56. The autogenerate request is then processed by the second computer system “to automatically

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generate the second product configuration in accordance with the criteria to establish a
basis for comparability between the first product configuration and the second product
configuration.” Id. at col. 12, ll. 56-61. Data is then “provided to the first computer
system to allow the first computer system to display the first and second product
configurations and allow comparison of features of the first and second product
configurations.” Id. at col. 12, ll. 62-65.
In plain English, that passage means that the user sends the system information
about the configuration of a product such as an automobile; the system identifies a
product having that configuration and provides that configuration for display on the
user’s computer; the user then requests that the system generate a second product
configuration based on a user-supplied criterion or criteria for comparison, such as
another automobile comparable to the first in price and/or in designated features; the
system then generates the second configuration and makes the two configurations
available for display on the user’s computer in a way that enables the user to compare
them.
The plaintiffs argue that the proper construction of the claim term “automatically
generate,” as used in the phrase “automatically generate a second product configuration”
is “causing a server to automatically generate a second product configuration wherein the
user has selected none of the product-related information for the second product.” The
defendants argue that the term should be construed to mean “causing a server to generate
or vary product information” for a second product. Neither proposed construction fully
accords with the manner in which the term “automatically generate” is used in the
specification or the claims.

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The defendants’ proposed construction is too broad, because it would apply to
any process in which the user causes the second computer system to generate productrelated information for the second product, even if the user designates all of the
parameters of the second product. Such a process would not constitute “automatic
generation” of the second product configuration, as that term is used in the patent. The
key element in the “automatic generation” mode, as described in the specification, is that
the computer system does not rely on the user to specify both of the configurations that
are to be compared (in the example, the make, model, and trim of both automobiles).
Rather, the system independently selects a product configuration for the user to compare
with the first product configuration that the user has already selected.
The plaintiffs’ proposed construction, by contrast, is too narrow. According to
the plaintiffs, in the “automatic generation” mode the user does not select any of the
“product-related information for the automatically generated [second] product
configuration.” While the plaintiffs’ use of the term “product-related information” is a
possible source of confusion, what is clear from both the claim language and the
specification is that when the user of the system initiates the automatic generation
function by initiating an “auto-generate request,” the user provides data (referred to as
“criteria to establish a basis for comparability”) that enables the system to automatically
generate a second product configuration that is comparable to the first product
configuration. The claim language embodies that concept by providing (1) that the autogenerate request “includes data representing criteria to establish a basis for comparability
between the first product configuration and the second product configuration,” ’821
patent, col. 13, ll. 26-29, and (2) that the second product configuration is generated “in

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accordance with” those criteria, id. at col. 13, ll.32-34. The specification uses similar
language to describe the function of the data referred to as the “criteria to establish a
basis for comparability” between the two product configurations, noting that the second
product configuration is “generated in accordance with” those criteria. Id. at col. 12, ll.
54-61. The specification further provides that to effect the automatic generation of a
second product configuration in the case of the automotive example, the system user
selects “a criteria [sic] by which to seek a comparable automobile.” Id. at col. 10, line
62, through col. 11, line 2. It is therefore incorrect (or at least confusing) to say, as the
plaintiffs argue, that in the automatic generation mode the user does not select any
product-related information for use in generating the second product configuration, that
“allowing a user to provide product-related information would read the word ‘automatic’
out of the construction of” the claims (Versata’s Opening Claim Construction Br. at 10),
and that “comparison criteria are not product-related information that results in a product
configuration” (id. at 11).
A second, more minor, objection to the plaintiffs’ proposed claim construction is
that it is limited to server-based systems.

The claim language is not so limited.

Moreover, while one of the descriptions of the automatic generation mode in the
specification makes reference to a server, see ’821 patent, col. 10, line 63, the other
description does not, but instead refers more generally to a “second computer system,” id.
at col. 12, ll. 57-58. Because the former appears to refer to an embodiment rather than
the invention as a whole, the Court will use the broader term in its construction.
In light of the above analysis of the portions the claims and the specification of
the ’821 patent, the Court construes the claim limitation “automatically generate a second

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product configuration” to require that the computer system generate the second product
configuration in response to a request from the user and in accordance with comparison
criteria provided by the user.
II. “Comparison Criteria” and “Criteria Upon Which To Automatically Generate”
Although the parties disagree about the proper interpretation of the terms
“comparison criteria” and “criteria upon which to automatically generate,” the dispute on
that issue focuses on the use of the term “automatically generated” in connection with the
use of those terms. The dispute over those terms therefore largely overlaps with the
dispute over the meaning of the term “automatically generate” discussed above.
The plaintiffs argue that the terms “comparison criteria” and “criteria upon which
to automatically generate” mean “data used to cause a server to automatically generate a
second product configuration wherein the user has selected none of the product-related
information for the automatically generated product and where the product-related
information for the automatically generated product is comparable to product-related
information for a first product.” The defendants argue that the terms mean “data used to
cause a server to generate or vary product-related information for a second product,
where the product-related information for the second product is comparable to productrelated information for a first product.”
Consistent with the Court’s analysis above, the Court construes the term
“comparison criteria” or “criteria” to refer to the product-related information provided by
the user that the computer system uses to generate the second product configuration and
to facilitate comparisons between the first and second product configurations.

The

plaintiffs’ contention that the user may not have selected any “product-related

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information” for the automatically generated product is, at minimum, confusing in light
of the clear indication in the ’821 patent that the user supplies the criteria that form the
basis for the generation of the second product configuration.
The specification states that in the “auto-generate” mode, the user “select[s]
criteria by which to seek a comparable automobile.” ’821 patent, col. 11, ll. 1-2. The
system uses that data provided by the user, which represents “criteria to establish a basis
for comparability” between the first and second configurations, “to automatically
generate a second product configuration that is comparable to the first product
configuration.” Id. at col. 12, ll. 51-56.
The claim language is to the same effect. As noted, it provides that the second
product configuration generated by the system “is comparable to the first product
configuration,” and that the user’s auto-generate request “includes data representing
criteria to establish a basis for comparability” between the two product configurations.
’821 patent, col. 13, ll. 23-28.

Thus, the system generates the second product

configuration “in accordance with the criteria [chosen by the user] to establish a basis for
comparability between the first product configuration and the second product
configuration.” Id. at col. 13, ll. 31-35. Based on the specification and the claim
language, the Court concludes that in the “automatic generation” mode, the second
computer system generates a second product configuration that is comparable to the first
product configuration, and it does so in accordance with criteria supplied in the autogenerate request that establish the basis for comparing the first and second product
configurations.

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The plaintiffs argue that the comparison criteria “are not used directly as product
information data for the second product configuration,” but instead are simply “metrics
for generating a second product configuration from a first product configuration.”
(Plaintiffs’ Claim Construction Reply Br. at 6).

Putting the same point somewhat

differently, the plaintiffs argue that a “product configuration is ‘automatically generated’
if it is created based on comparison criteria and not based on product configuration data
or product-related information provided by the user” (Versata’s Opening Claim
Construction Br. at 12).
The Court finds the plaintiffs’ argument unpersuasive.

The plaintiffs

acknowledge that a product configuration can be “automatically generated” even if it is
based on comparison criteria, but they insist that the term “comparison criteria” does not
encompass product-related information. The problem with the plaintiffs’ argument is
that the claims require the system to automatically generate a second product
configuration “that is comparable to the first product configuration” and to do so “in
accordance with the [comparison] criteria to establish a basis for comparability.” ’821
patent at col. 13, ll. 23-32. To generate a second product that is “comparable to” the first
product, the system must know what criterion of comparability is to be used and must
have information about the first product vis-à-vis that criterion.

Thus, to use the

automotive example, if the system is asked to automatically generate a second vehicle
that is comparable to the first vehicle and the system is advised that the comparison
criterion is price, the system must have information about the price of the first vehicle in
order to generate a vehicle that is “comparable” to the first vehicle with respect to price.

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To that extent, the claimed method and system employ “product-related information,” as
that term is ordinarily understood, even in the automatic generation mode.
III. “Associated With An Identification Code Corresponding to Said User”
The third and fourth of the four disputed claim terms relate to the second patent at
issue in this case, the ’756 patent.
The ’756 patent is entitled, “System and Method for Facilitating Commercial
Transactions Over a Data Network.” The abstract explains that the claimed method,
computer system, and computer program products are designed to facilitate comparison
price shopping over a network such as the Internet, and that the information regarding a
product that is stored on a server includes the offered price data for the product. The
three asserted claims of the ’756 patent are similar, except that they relate, respectively,
to a method (claim 1), a computer system (claim 10), and a computer program storage
means (claim 19). Claim 1, which is representative, reads as follows:
1. A method, employing a browser in data communication over a
network with a server, for determining a price of a product, said method
comprising:
providing information concerning said product for display in a
browser window, said information including a first offered price of said
product;
receiving information from said browser indicating an agreement
by a user of the browser of said first offered price for said product;
storing product related information including said first offered
price, wherein said product is configured with multiple features, said
stored product related information includes said features of said product
and said stored product related information is associated with an
identification code corresponding to said user of the browser;
receiving a purchase request associated with said identification
code, wherein the purchase request indicate an agreement to purchase said
product for said first offered price;

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prior to responding to said purchase request, determining if an
event has occurred prior to receiving said purchase request to cause
modification of the first offered price, wherein the event that caused
modification of the first offered price is unrelated to any data received
from said user subsequent to storing said product related information; and
changing said first offered price of said product to a second offered
price of said product in response to said event that caused modification of
the first offered price.
The plaintiffs urge that the phrase “associated with an identification code
corresponding to said user,” should be construed to mean “related to an identification
code for said user.” The defendants argue that the phrase should be construed to mean
“stored in an address space of a server, where the address space is associated with a
unique identifier, including a user-name and password, corresponding to said user.” The
Court concludes that the plaintiffs’ construction is insufficiently specific to be of
assistance to the finder of fact, while the defendants’ construction is too restrictive.
The specification makes clear that the product-related information pertaining to a
particular user is stored in the server and linked to the identification code corresponding
to that user. Moreover, while the specification refers to the use of a user name and
password—a frequent kind of identification code—the claim language does not mandate
that the identification code consist of user name and password, but permits the use of
some other type of identification code. Accordingly, the Court construes the phrase
“associated with an identification code corresponding to said user” to mean stored in the
server and linked to an identification code for the user, such as a user name and/or
password.

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IV. “Changing Said First Offered Price of Said Product to a Second Offered Price
of Said Product in Response to Said Event”
The parties disagree about the meaning of the last limitation of each of the
asserted claims of the ’756 patent. The defendants argue that the phrase “changing said
first offered price of said product to a second offered price in response to said event”
refers to the server “changing the price at which a product was offered to a different price
in response to an event.” The plaintiffs submit that the Court should simply adopt what
the plaintiffs regard as the plain meaning of the phrase. In their argument, however, the
plaintiffs have made clear that they regard “changing” the price to include updating the
price even when the amount of the price is not altered by the “event” that caused the
server to update the price.
The Court construes the phrase “changing said first offered price of said product
to a second offered price in response to said event that caused modification of the first
offered price” to refer to what is ordinarily understood to be a “change” in the first
offered price, i.e., a modification of the price from a previous price to a different price,
which occurs in response to an event that causes the price to be modified. Thus, a
“change” in price refers to an alteration in the price from what it previously was.
The claim language virtually compels such an interpretation. Not only does the
claim language refer to “changing” the price, which suggests an alteration from the
previous price, but it adds that the change is made “in response to [an] event that caused
modification of the first offered price.” The use of the term “modification” reinforces the
natural meaning of the limitation, as “modification” means a change or alteration from a
previous state.

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The specification supports that common-sense interpretation of the claim
language, explaining that the stored price of the product “is maintained in the absence of
a predefined system event” that could lead to the modification of the price. ’756 patent,
col. 12, ll. 10-21.

The specification adds that “changes in any of the information

associated with the [stored] product-related information” can also “result in modification
of the price stored at the server.” Id. at col. 12, ll. 21-25. The specification describes a
system in which the stored offered price is changed in response to an event that causes
the offered price to be modified; if the event does not cause the offered price to be
modified, i.e., changed to a different price, there is no “changing [of] said first offered
price of said product to a second offered price of said product.”
Although there were initially more terms in dispute in this case, the parties have
narrowed their disagreements as to claim construction to the four terms addressed above.
Because the remaining claim terms are no longer in dispute, the Court will not address
any of those terms at this time.
SIGNED this 4th day of January, 2012.

____________________________________
WILLIAM C. BRYSON
UNITED STATES CIRCUIT JUDGE

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