The Software IP Report

When Is a Software Patent Case Ripe for Summary Judgment?

Lawyers for patent infringement defendants have a new Federal Circuit case to point to when explaining to frustrated clients why an early summary judgment motion of non-infringement is not always a good expenditure of resources. In Baron Services, Inc. v. Media Weather Innovations, LLC, Nos. 2012-1285, -1443 (Fed. Cir. May 7, 2013), a panel majority of Judges Prost and Dyk, with Judge Reyna dissenting, vacated the district court’s order of summary judgment and award of attorney’s fees in favor of the defendant/appellee, MWI.

Baron, the plaintiff/appellant, had brought suit based on U.S. Patent No. 6,490,525, generally related “to systems and methods for weather reporting and forecasting, and more particularly, to computerized systems and methods for reporting and forecasting real-time weather information.”

At the outset of the case, MWI had resisted Baron’s discovery request for its source code by bringing a motion, subsequently granted by the district court, for a protective order. MWI supported the motion with affidavits from its employees, Fannin and Ritterbusch. After the court granted the motion, the parties “continued to proceed with discovery.” Of relevance was that “Baron noticed depositions of Ritterbusch and Fannin, and MWI served Baron with numerous written discovery requests.”

Baron moved the court for a new scheduling order on the same day its responses to MWI’s discovery requests were due. Although timely served, those responses “objected to defining claim terms as premature in light of the schedule that Baron proposed for the court to adopt.” Baron subsequently served infringement contentions on MWI. Nineteen days later, MWI filed its motion for summary judgment of non-infringement. That motion included a new affidavit by its employee Ritterbusch.

Baron opposed the summary judgment motion by arguing “that summary judgment was premature because the court had not yet construed the terms of the ’525 patent, because it had not yet had the opportunity to review MWI’s relevant source code, and because it had yet to depose Ritterbusch and Fannin.” Baron further argued that MWI’s provisional patent application created “a genuine dispute concerning the material fact whether the accused products ‘analyzed’ weather data from the NWS.” Baron also filed a motion to compel production of MWI’s source code. The district court found this latter motion moot when it granted MWI’s motion.

The Federal Circuit panel majority was persuaded that Baron should have had the opportunity to depose MWI’s employees and examine its source code. The opportunity to examine the source code would have provided Baron with the ability to test its theory that MWI’s provisional patent application showed that MWI did in fact practice ’525 patent claims. Likewise, the opportunity to depose MWI’s employees was important, because “[t]heir affidavits were MWI’s primary evidence to support its motion for summary judgment.”

The majority emphasized that it did not reach the merits of the non-infringement argument. However, it also emphasized that “on remand, . . . the district court should not avoid construing relevant terms in the asserted claims as part of its infringement analysis. A determination of patent infringement, even on summary judgment, requires a two step analysis, the first of which is claim construction.”

In dissent, Judge Reyna began by addressing the merits of MWI’s non-infringement argument, accusing the majority of ignoring that the asserted claim of the ’525 patent could not be asserted based on its “plain language.” Baron had defined the parameters of non-infringement at oral argument, and MWI argued, supported by affidavits, that its system fell outside those parameters. The district court noted “that Baron had not presented any evidence of infringement, by affidavit or otherwise,” and had “concluded that MWI’s unrefuted showing established that it merely passes on alerts and such basic activities could not, as a matter of law, perform the numerous steps recited in the asserted claims.”

The majority, stated Judge Reyna, ignored that Baron had voluntarily narrowed the parameters of infringement, that the summary judgment determination was supported by the evidence, and that the District Court had been frustrated by Baron’s “obstinate and egregious” tactics. In particular, Baron had vexed the district court by ignoring the court’s scheduling order in favor of its own proposed schedule. Further, the court was not obligated to hold a Markman hearing prior to deciding summary judgment.

Regarding Baron’s argument that it needed additional discovery, Judge Reyna thought that “Baron has no absolute entitlement to this discovery given its failure to demonstrate good cause as to why the source code was relevant to the alleged infringement.” Further, disagreeing with the majority, Judge Reyna thought of that Baron could have taken depositions of MWI’s employees had chosen to do so.