The Software IP Report

Anticipation of Software Patent Claims: Arguments Must Be Consistent with Court’s Claim Construction

In a decision instructive on patent claim interpretation and anticipation analysis in software cases, claims directed to “computerized fitness equipment” that “simulates… actual race conditions with other users” were held invalid because as anticipated by prior art. VR Optics, LLC v. Peloton Interactive, Inc, No. 16-cv-6392 (JPO) (S.D.N.Y. Apr. 2, 2020) (patent-in-suit is U.S. Patent No. 6,902,513).

The court noted that “[a]nticipation requires ‘that a single prior art reference disclose each and every limitation of the claimed invention, either expressly or inherently.’” SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1306 (Fed. Cir. 2019). Peloton identified U.S. Patent No. 6,997,852 as a single prior art reference and there was “no dispute that the [‘852] patent discloses all of the independent claims’ limitations, save one.” The disputed independent claim limitation is reproduced here:

logic configured to drive the display in response to both the first and second performance parameters, such that a performance comparison between the    fitness equipment and at least one remote fitness equipment is visually displayed.              

The court had “previously construed the limitation, consistent with its plain and ordinary meaning, to disclose ‘logic configured to drive the display to visually display a difference in performance between the fitness equipment and at least one remote fitness equipment based on a difference between the first and second performance parameters.’”

Peloton argued that the ‘852 patent discloses the “‘difference in performance’ display element” because “it contemplates…‘a display [that] may include a racing track that shows a relative position of each competitor one with another.’” (Alterations in original). The court agreed with Peloton because “‘a visual read indication [that] show[s] where the particular user is in relation to the user or users that are operating the coupled fitness equipment’” is “an exemplar of the ‘performance difference’ limitation…that is materially indistinguishable from that described in the [‘852] Patent.” (Alterations in original).

Further, the court noted that “[a]nticipation is a question of fact, but it nonetheless may be decided on summary judgment if there are no genuine issues of material fact to be decided.”  See Hazani v. U.S. Int’l Trade Comm’n, 126 F.3d 1473, 1477 (Fed. Cir. 1997). The court was not persuaded that a report from VR Optics’ expert created a genuine issue of material fact on this issue. VR Optics’ expert opined that “[b]ecause the prior art shunts the mental burden of the comparison onto a user…the track display falls outside the ambit of the…limitation as construed by the Court, which requires the display of a difference in performance, not merely the display of raw, noncomparative data.” However, the court noted that “‘expert witnesses,’ however, may not ‘offer testimony that conflicts with the Court’s construction of the claim.’”  Plew v. Ltd. Brands, Inc., No. 08-CV-3741, 2012 WL 379933, at *3 (S.D.N.Y. Feb. 6, 2012). The court excluded the expert report because “[a] display of the relative position of each competitor on a simulated track is a spatial representation of the competitors’ relative performance; it is, in short, a performance comparison, just as an ordinal ranking is a numerical representation of the competitors’ relative performance.” Accordingly, the court found that the ‘852 patent disclosed each limitation of the independent claim, and, therefore, the independent claim was anticipated by the ‘852 patent.

Additionally, the court noted that VR Optics failed to “lodge any substantive defense of the validity of the dependent claims” despite Peloton asserting that the ‘852 patent “explicitly discloses each limitation of the ’513 patent’s asserted claims and therefore anticipates and renders these claims invalid.” Accordingly, the court held that the ‘513 patent was invalid because it was anticipated by the ‘852 patent. Therefore, the court granted summary judgment for Peloton.

Lessons for Practice

This case shows the importance of offering evidence and arguments that are consistent with the court’s prior claim constructions. VR Optics chose to defend only one limitation of the independent claim and failed to defend any dependent claims in this case. Instead, as noted by the court “[t]he validity of the patent at the heart of this sprawling, years-long litigation rests, then, on the thin reed of this single [disputed limitation].” Unfortunately for VR Optics, the only evidence they offered to contest anticipation was quickly excluded because the evidence was inconsistent with the court’s prior construction of the disputed claim limitation.