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November 8, 1999


The opinion of the court was delivered by: McMAHON, District Judge.


The matter is before the Court for construction of the three patents in suit, as required by Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). After extensive briefing, the parties presented their respective contentions concerning patent construction in light of intrinsic evidence to the Court at a hearing conducted September 8 and 9, 1999. The hearing was attended by, inter alia, Professor Jack Lipovski, who had previously been appointed as the Court's disinterested expert and technical advisor. (See Order dated July 21, 1999.) The September hearing was limited to issues of intrinsic evidence because, in determining the meaning of the patent claims, the Court must first examine such evidence — including the claims themselves, the specification, and the prosecution history — and determine whether it can derive an unambiguous construction of the claim language from those sources. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed.Cir. 1996). As Judge Conner of this Court recently observed, "If this intrinsic evidence permits an unambiguous construction of the claim language, the Court need not, and indeed should not, consider extrinsic evidence, such as testimony from expert witnesses as to special meanings which the terms of the claims have for those skilled in the art." Evans Medical Ltd. v. American Cyanamid Company, 11 F. Supp.2d 338, 347 (S.D.N.Y. 1998) (citing Vitronics, 90 F.3d at 1585), aff'd, Nos. 98-1440, 98-1459, 1999 WL 594310 (Fed.Cir. Aug. 9, 1999). Extrinsic evidence should only be relied upon where necessary to resolve an ambiguity in a disputed claim term. See CVI/Beta Ventures, Inc. v. Tura, L.P., 112 F.3d 1146, 1153 (Fed.Cir. 1997).

Finding the intrinsic evidence sufficient for Markman purposes, the Court construes the patents as set forth below.

A. The '342 Patent

The first patent in suit is a patent for a computer system that has as one of its properties the ability both to detect and to correct errors in data that is stored in the computer. The salient features of the system are its use of an error correction code ("ECC") that has the capacity not just to detect errors in data but to correct them as well, and spare disk drives that "back up" the corrected data, so that there are always two copies in the system.

The disk storage array described in the specifications for the '342 patent consists of 32 dedicated data disks and 7 dedicated ECC disks. In addition, there are 3 spare disks in the array. The disk storage array is connected to a computer by a 64-bit bus, or conductor, along which data is transmitted. The bus is in turn connected to a specialized bus adapter, including an ECC generation circuit, within the array. The bus adapter is thus connected to the disk drive. During transmission of data to the disk array, a 64-bit wide data stream enters the adapter and is split into two 32-bit groups. Each of these 32-bit groups is transmitted to the ECC generation chip to generate a 7-bit ECC. Thereafter, each block of 32 bits and the accompanying ECC bits are sent to all 39 disks in the array through 39 shift registers (computer hardware elements designed to perform shifting of the data contained within them). Data is stored in what is referred to as "bit-striped mode," meaning that one bit of each of the 32-bit groups of data is stored separately on each of the 32 disk drives.

The 32 data bits and ECC bits are sent together from all 39 disks in the array via the shift registers to a specialized bus adapter, where, using the data and error correction code, the ECC generation circuit chip performs an error detection and correction function on the data bits and delivers the corrected data to the computer. If there is a disk drive failure, the corrected data can be accessed from the spare disk.

The claims in the '342 patent that require construction are Claims 1, 6, 7 and 10.

1. Collateral Estoppel Effects from the EMC Action

TM's suit against IBM is not the first infringement action to reach the stage of a Markman hearing in a federal District Court. In 1997, TM also sued a competitor of IBM, EMC Corporation, in a case heard by Chief Judge William G. Young in the United States District Court for the District of Massachusetts. See TM Patents v.. EMC Corp., Civil Action No. 98-10206 (D.Mass. Jan. 27, 1999). The case went to trial earlier this year. Immediately prior to the trial, Chief Judge Young held a Markman hearing, at which he was asked to construe some, but not all, of the claims disputed in this Court. Judge Young did so, after a two day hearing. IBM asserts that TM is either collaterally or judicially estopped to relitigate the claims that Judge Young construed — with which constructions IBM (a non-party to the EMC action) is in substantial (though not total) agreement. TM argues that Judge Young's rulings, while correct in many respects and perhaps persuasive in others, ought not be accorded former adjudication effect, because the EMC action settled during trial, and because Judge Young's rulings were not sufficiently "final" to be deemed preclusive.

IBM is correct. While this raises an issue of first impression, I conclude that Judge Young's resolution of the meaning of certain disputed patent terms following a Markman hearing, at which TM had a full and fair opportunity to litigate the meaning of those terms, is binding on the Plaintiffs in this action.

Collateral estoppel forecloses litigants from contesting matters that were actually litigated and decided in a previous action. See Blonder-Tongue Lab. Inc. v. University of Illinois Foundation, 402 U.S. 313, 329, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). Four elements must be met for collateral estoppel to apply. First, the issues raised in both proceedings must be identical. Second, the relevant issues must have actually been litigated and decided in the prior proceeding. Third, the party to be estopped must have had a full and fair opportunity to litigate the issues in that prior proceeding. And fourth, resolution of the issues must have been necessary to support a valid and final judgment on the merits. See Central Hudson Gas & Elec. Corp. v. Empresa Naviera Santa, 56 F.3d 359, 368 (2d Cir. 1995).

The parties before me agree that the first and third of those four elements are met in this case. They disagree, however, as to whether the second and fourth have been satisfied. Since in this particular case, the fourth element (finality) subsumes the second (actually decided), I will address them together.

As to the fourth element, TM notes that the dispute between it and EMC concerning the meaning of certain terms in the '342 patent was never reduced to a final judgment, because the matter was settled before the jury had returned its verdict on the question of infringement. TM adopts the simple and straightforward position that no final, appealable judgment means no finality for collateral estoppel purposes. Unfortunately for TM, that is not the law in this Circuit (or any other, for that matter). Since Judge Friendly's seminal opinion in Lummus Co. v. Commonwealth Oil Ref. Co., 297 F.2d 80, 89 (2d Cir. 1961), it has been settled that a judgment that is not "final" in the sense of 28 U.S.C. § 1291 can nonetheless be considered "final" in the sense of precluding further litigation of issues that were actually determined in such a judgment. Whether a ruling is sufficiently final turns on "such factors as the nature of the decision (i.e., that it was not avowedly tentative), the adequacy of the hearing, and the opportunity for review." See id. As Judge Friendly observed, "`Finality' in the context here relevant may mean little more than that the litigation of a particular issue has reached such a stage that a court sees no really good reason for permitting it to be litigated again." Id.; see also Zdanok v. Glidden Co., Durkee Famous Foods Div., 327 F.2d 944, 955 (2d Cir. 1964); Metromedia Co. v. Fugazy, 983 F.2d 350, 366 (2d Cir. 1992).

The Lummus principle is illustrated by Georgakis v. Eastern Air Lines, Inc., 512 F. Supp. 330 (E.D.N.Y. 1981). In Georgakis, the plaintiff, who was injured in an airplane crash while traveling with the defendant airline, sought summary judgment on the airline's affirmative defense that the case was covered by the Warsaw Convention, which would have limited the plaintiff's damages to $75,000. In a prior case arising out of the same crash brought by a different passenger, the court had granted summary judgment against the airline, dismissing the Warsaw Convention defense. The passenger in Georgakis invoked collateral estoppel. Rejecting the airline's argument that the interlocutory nature of the earlier decision precluded application of collateral estoppel, the court noted that collateral estoppel "does not require a judgment `which ends the litigation . . . and leaves nothing for the court to do but execute the judgment,' . . . but includes many dispositions which, although not final in that sense, have nevertheless been fully litigated." Id. at 334 (quoting Zdanok, 327 F.2d at 955).

The parties have not called my attention to any case in which a court has applied collateral estoppel to bar relitigation of claims construction issues decided at a prior Markman hearing, and I have not located any such decisions. Nonetheless, that proposition seems self-evident.

Markman ushered in a new regime in patent claims construction. Prior to the Federal Circuit's ruling in 1995, disputes concerning the meaning of patent claims were submitted to a jury along with questions about validity and infringement. Thus, until there was a final judgment after a jury verdict, there was no construction of claims, see, e.g., Tol-O-Matic, Inc. v. Proma Produkt-Und-Marketing Gesellschaft, m.b.H., 945 F.2d 1546 (Fed.Cir. 1991), and hence, no finality for collateral estoppel purposes. However, after Markman, claim construction became a separate legal issue, for determination by the Court. The parties frequently litigate the meaning of those limitations prior to the trial, as occurred in both EMC and this case, so that the Court can instruct the jury on the meaning of the patent at the outset of the case. Moreover, the Court limits itself to construing that which is necessary to the resolution of the questions of infringement and validity. The jury is not free to override the Court's construction of the disputed terms. It is hard to see how much more "final" a determination can be.

The facts of the EMC case bear out this interpretation. The Massachusetts court was required to construe any disputed terms in the '342 patent for the jury. Prior to the trial in EMC, Judge Young held a two day hearing, at which both parties were ably represented — TM by the very same lawyers who represent it in the instant action. The parties identified certain claim limitations on whose meaning they could not agree, and Judge Young heard whatever evidence he thought necessary to interpret those limitations. He then issued a very thorough ruling, disposing of all disputed issues. After ruling, he entertained reargument and made several modifications. He then read his ruling to the jury on the first day of trial, in a preliminary jury instruction. Judge Young used the claim construction to guide his evidentiary rulings. He also gave the jurors copies of what he had read, so that they could refer to his construction during the course of the trial. The jurors were not free to adopt a contrary construction of the patent claims in suit, and they were so advised.

A verdict would not have changed anything about Judge Young's Markman rulings. Nothing more remained to be adjudicated; nothing more remained to be decided on the issue of claim construction. The application of the claim to the product was immaterial to the finality of Judge Young's determinations. Thus, under Lummus and its progeny, the results of the Markman hearing in the EMC action were sufficiently "final" to permit application of collateral estoppel — even though the matter to which they were necessary was never reduced to a final judgment after verdict. See also Restatement (Second) of Judgments § 13, comment e (1980) ("A judgment may be final in a res judicata sense as to part of an action although the litigation continues as to the rest."); Sherman v. Jacobson, 247 F. Supp. 261, 268 (S.D.N.Y. 1965) (noting that a judgment "may be final as to some matters, even though the litigation continues as to others").*fn1

It bears noting that one of the Supreme Court's rationales for upholding the Federal circuit's ground-breaking decision in Markman was the promotion of uniformity in the meaning to be given to a patent claim. See Markman, 517 U.S. at 390-91, 116 S.Ct. 1384. Even prior to Markman, the Federal Circuit had held that determination of the scope of a patent claim in a prior infringement action could have collateral estoppel effect against the patentee in a subsequent case. See Pfaff v. Wells Elec. Inc., 5 F.3d 514, 517-18 (1993). After Markman, with its requirement that the Court construe the patent for the jury as a matter of law, it is inconceivable that a fully-litigated determination after a first Markman hearing would not be preclusive in subsequent actions involving the same disputed claims under the same patent. The nature of the Markman proceeding is such that finality is its aim.

TM contends that Judge Young's determinations were "avowedly tentative" for several reasons. None is persuasive.

First, Judge Young expressed the view that he was "shaky" about several of his conclusions, and indicated that they were "subject to revision." (Joint Appendix on the Issues of Collateral Estoppel and Claim Construction at A 14-15.) Of course, a Court does not vitiate the collateral estoppel effect of a ruling by expressing some doubt about its conclusions. See Restatement (Second) of Judgments § 13, comment g ("The test of finality . . . is whether the conclusion in question is procedurally definite and not whether the court might have had doubts in reaching the decision"); United States v. McGann, 951 F. Supp. 372, 380-81 (E.D.N.Y. 1997). However, Judge Young made these statements while inviting the parties to move for reconsideration if they disagreed with his constructions (a procedure this Court is not inclined to emulate). The parties accepted his invitation — in particular, TM asked for reconsideration of several issues that all parties believe are key to the question of infringement. Notably, Judge Young ceased to feel "shaky" after further briefing and argument, telling the parties, "You've got the claim construction, you're going to have to live with it." (A 23-23.1.)

Plaintiffs next argue that the Markman constructions were never reviewed by a higher Court — a not insignificant proposition when nearly 40 percent of claims constructions are changed or overturned by the Federal Circuit. See Cybor Corp. v. FAS Technologies., Inc., 138 F.3d 1448, 1476 (Fed.Cir. 1998) (Rader, J., dissenting). However, the only reason Judge Young's conclusions were not reviewed on appeal is that the case was settled. A party who cuts off his right to review by settling a disputed matter cannot complain that the question was never reviewed on appeal. The Markman rulings were not vacated as part of the settlement. They therefore remain preclusive. See Hartley v. Mentor Corp., 869 F.2d 1469, 1472-73 (Fed.Cir. 1989); Wellons, Inc. v. T.E. Ibberson Co., 869 F.2d 1166, 1169 (8th Cir. 1989); Siemens Med. Sys., Inc. v. Nuclear Cardiology Sys., Inc. 945 F. Supp. 1421, 1436 (D.Colo. 1996); Ossman v. Diana Corp., 825 F. Supp. 870, 878 (D.Minn. 1993).*fn2

Fourth, TM argues that a Markman adjudication cannot be preclusive prior to verdict because there is no requirement that a Court construe the claims in suit prior to giving its final instruction to the jury. Indeed, it appears to be the practice in at least one federal district court to hold the Markman hearing during the trial, with the Court issuing its ruling when it instructs the jury at the close of the case. See, e.g., Johns Hopkins Univ. v. Cellpro, 894 F. Supp. 819, 826 (D.Del. 1995). Of course, if Judge Young had followed such a procedure, then there would be no issue preclusion from the EMC case. But he did not. He held a two day hearing, following which he issued a ruling construing the claims. He then heard reargument and fine-tuned his ruling, telling the parties to "live with it." He read the ruling to the jury and handed each juror a copy. The fact that he could have done otherwise does not vitiate the preclusive effects of what he actually did. Had Judge Young followed the Delaware procedure and announced his Markman ruling at the close of the evidence, only to see the case settle while the jury was deliberating, I have no doubt that his views about the meaning of the disputed claims would be just as preclusive as if they had been announced prior to trial. The fact that the judge makes the ruling is sufficient under Lummus; when he does so is irrelevant.

The cases TM cites for the proposition that the collateral estoppel effects from claim construction should be narrowly limited to matters that were essential to a judgment (of validity or infringement) — cases such as Jackson Jordan, Inc. v. Plasser Amer. Corp., 747 F.2d 1567 (Fed. Cir. 1984); A.B. Dick Co. v. Burroughs Corp., 713 F.2d 700 (Fed.Cir. 1983); and Studiengesellschaft Kohle v. Eastman Kodak Co., 616 F.2d 1315 (5th Cir. 1980) — are inapplicable in the post-Markman era, at least when the district court holds a special pre-trial hearing, as Chief Judge Young did in the EMC case. These authorities were decided at a time when patent claims were construed during jury deliberations. It therefore made perfect sense to limit the collateral estoppel effects emanating from a jury's judgment on issues of validity and infringement to matters of claim construction that were necessarily comprehended in the verdict. That rule makes no sense when a court, acting as a matter of law, draws binding conclusions about the meaning of disputed patent terms for the benefits of the litigants and the jurors. Even the one post-Markman case cited by TM for this proposition, Phonometrics, Inc. v. Northern Telecom, Inc., 133 F.3d 1459 (Fed.Cir. 1998), is not inconsistent with the principle adopted by this Court. Although the Phonometrics case was decided after Markman, it followed an earlier decision that was not given preclusive effect and was decided several years before Markman. See Intellicall, Inc. v. Phonometrics, Inc., 952 F.2d 1384 (Fed. Cir. 1992).

Finally, TM argues that a recent Federal Circuit case, Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259 (Fed.Cir. 1999), worked a change in the law and demonstrated that some of Judge Young's rulings were erroneous. To that extent, TM contends, collateral estoppel ought not be applied, since it would be clear error to give preclusive effect to a ruling that was entered prior to "a significant change in the legal atmosphere." Bingaman v. Department of the Treasury, 127 F.3d 1431, 1437-38 (Fed.Cir. 1997), citing Commissioner v. Sunnen, 333 U.S. 591, 600, 68 S.Ct. 715, 92 L.Ed. 898 (1948).

TM is correct about the legal principle, but incorrect when it asserts that Odetics worked a change in the law. The Odetics opinion cited above was the eighth and most recent in the protracted Odetics litigation. In that decision, the Federal Circuit did not address the issue of claim construction, as TM asserts, but rather reviewed the trial court's infringement decision, notably, its comparison of the accused product with the previously construed patent claim (construed under the means-plus-function limitation). The claim limitation was construed in an earlier decision, Odetics, Inc. v. Storage Tech. Corp., 1997 WL 357598 (Fed.Cir. Jun. 25, 1997). Thus, the recent Odetics ruling did not work any change in the law with respect to that issue, although the decision will prove relevant to some of the issues of construction on claims that are not subject to collateral estoppel.

If "finality" in the collateral estoppel context "mean[s] little more than that the litigation of a particular issue has reached such a stage that the court sees no really good reason for permitting it to be litigated again," Lummus, 297 F.2d at 89, I see no reason to permit TM a second chance to litigate the meaning of the claims previously construed by Judge Young. Therefore, I hold that collateral estoppel forecloses TM from relitigating the meaning of limitations (ii), (iii), (vii) and (viii) of Claim 1, and the corresponding limitations (i), (iii) and (iv) of Claim 7, see infra at part 2(c). The other claims in dispute before me were not disputed in Massachusetts, and TM is free to argue for any interpretation of those limitations here. And, of course, IBM is not precluded from litigating anything at all. So there is plenty for this Court to decide from scratch.

Finally, I have to observe that this issue of collateral estoppel, which has taken on a life of its own in this action (no doubt due to my preoccupation with it), is of marginal practical importance, because I agree with just about everything Judge Young did when he construed the claims in the EMC action. Nonetheless, I have no doubt that collateral estoppel would apply against TM on the previously litigated claims even if I thought everything Judge Young decided was wrong. This does not, however, mean that I agree with all the "gloss" that IBM puts on certain key rulings by Judge Young, a point which I discuss further below.

IBM has relied upon two other issue preclusion theories, judicial estoppel and party admissions under Fed.R.Evid. 801(d). It is not necessary for me to reach those arguments, although I do note that IBM's invocation of judicial estoppel is improper, as that doctrine applies only to inconsistent factual positions, not to issues of law. See Bates v. Long Island RR Co., 997 F.2d 1028, 1037 (2d Cir. 1993); TLC Beatrice Int'l Holdings, Inc. v. CIGNA Ins. Co., 1999 WL 33454 at *7 (S.D.N.Y. Jan.27, 1999).

2. Construction of the Disputed Claims in the '342 Patent

Before going to the individual disputed claims, I observe that the '342 patent does not seem to me a particularly difficult patent to construe. For the most part, the words are clear and unambiguous and can be given their plain meaning. My reading of Judge Young's decision is that he did precisely that, and I have no fundamental disagreement with any of his conclusions.

Most of what IBM asks me to overlay onto Judge Young's prior construction of Claim 1 (which is where the disputed issues arise) derives from the patent specification. IBM takes the position that the only invention disclosed in the patent application was the preferred embodiment, in all its detail. However, IBM overlooks settled rules of patent construction that are discussed below. Absent an indication that the plain terms of the patent were not intended to control, I decline to follow IBM's suggested approach to interpretation of the claims.

(a) Claim No. 1 (Independent Claim): Disputed Limitations

(i) 1. A multi-unit memory system comprising:

This claim, which was not disputed before Judge Young, means precisely what the words say. "A multi-unit memory system" is "a" (that is to say, one, or a single) system that uses two or more data storage memory units. Of course, the fact that the patent claims "a" system does not mean that IBM or some other party would escape liability for infringement by constructing two or three or even more such multi-unit memory systems and somehow linking them together or causing them to operate together.

There is no reason to read anything further into the very simple words used by the claimant. There is no mention of a "single array" in the patent claim, and I decline to adopt IBM's suggestion that I read such a limitation into the claim, applying the settled principle of patent construction that the language of the claim defines its scope, see Mantech Environmental Corp. v. Hudson Environmental Servs., Inc., 152 F.3d 1368, 1373 (Fed.Cir. 1998), and that the words of a claim are to be construed in accordance with their ordinary meaning to persons in the relevant field of technology, unless it appears that the inventor used them otherwise. See Bell Communications Research, Inc., v. Vitalink Communications Corp., 55 F.3d 615, 620 (Fed.Cir. 1995). In particular, claims are not to be limited or construed by reading in extraneous words from written descriptions or specifications that are not contained in the claims themselves. See Laitram Corp. v. NEC Corp., 163 F.3d 1342, 1347 (Fed.Cir. 1998). This rule is not inconsistent with the principle that claims should be construed in light of the patent specification, see, e.g., Bell Communications, 55 F.3d at 620, but simply recognizes that the claims of a patent are not limited to the preferred embodiment that is described in the specifications. See Ekchian v. Home Depot, Inc., 104 F.3d 1299, 1303 (Fed.Cir. 1997).

Throughout this proceeding, IBM has contorted the plain meaning of words and phrases used in the patent claims themselves by referring to the written description, including the specifications and the embodiment disclosed therein. In construing this patent (and, indeed, all three patents), I have adopted the principle that, where the language of the claim is clear and unambiguous, I will read nothing additional into it. If this means that the patent turns out to be invalid (which is a decision for the jury, not for the Court), then so be it. Although courts are to construe claims so as to sustain a patent's validity where possible, see ACS Hosp. Systems, Inc. v. Montefiore Hosp., 732 F.2d 1572, 1577 (Fed.Cir. 1984), courts are nonetheless bound to follow the other rules of construction discussed above. See id.

  (ii) . . . an error correction code generation
  circuit which generates for each block of data to be
  stored in said memory system an error correction
  code, . . .
  (iii) . . . each block of data comprising a first
  plurality of digits and each error correcting code
  comprising a second plurality of digits from which at
  least one digit of error may be detected and
  corrected in the block of data . . .

This is the first claim that is affected by collateral estoppel from Judge Young's decision. In the EMC case, Judge Young construed this claim language as follows: "[Error correction code generation circuit] means a single integrated circuit which generates the claimed error correction code . . . Data, as I have already said, is information. Here, the data is in the form of digits. A block of data, as used in this phrase, means a group of data bits which may be corrected by another group of bits called error correction bits. The data is information to be stored in the computer." (A 17.)

This construction, relying as it does on the plain meaning of the words used in the claims limitation, is plainly correct. The only arguably unclear term used by Judge Young is his definition for the phrase "error correction code circuit," which he defined as a "single integrated circuit which generated the claimed error correction code." (A 17.) The words "single integrated circuit" do not appear in the claim, and TM urges that Judge Young erred in so limiting its claim.

Putting to one side the fact that TM is collaterally estopped to challenge Judge Young's ruling, TM is simply incorrect. The limitation refers to "an" — i.e., one — error correction code circuit. In other words, the literal language of the claim calls for one circuit that generates an error correction code. The patent specification discloses that this circuit was a single integrated circuit — that is, ". . . an interconnected array of active and passive elements integrated with a single semiconductor substrate or deposited on the substrate by a continuous series of compatible processes, and capable of performing at least one complete electronic circuit function." McGraw Hill Dictionary of Scientific and Technical Terms (3d. ed. 1984). Judge Young did not err when he restricted the claim in limitation (ii) to error correction code circuits that generated the correcting digit via a single integrated circuit.

That said, I can think of ways to phrase parts of the interpretation that might be easier for a jury to understand, and I do not understand the doctrine of collateral estoppel to require me to quote Judge Young verbatim. I will, therefore, rephrase it as follows:

    The multi-unit memory system I have just described
  contains a single integrated circuit that is called
  the error correction code circuit. What does this
  circuit do? It generates — that is, it creates —
  something called an error correction code, which is a
  group of mathematically interrelated bits. It creates
  one of these ...

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