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Rates Tech. Inc. v. Broadvox Holding Co., LLC

United States District Court, S.D. New York

January 28, 2014

RATES TECHNOLOGY INC., Plaintiff,
v.
BROADVOX HOLDING COMPANY, LLC, CYPRESS COMMUNICATIONS OPERATING COMPANY, LCC, AND ABC COMPANIES, 1 TO 10, Defendants

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For RTI: Milton Springut, Esq., Tal S. Benschar, Esq., Springut Law PC, New York, NY; Scott Spencer, Esq., Scott Spencer Law, New York, NY.

For Broadvox: Keith D. Nowack, Esq., Andriy Roman Pazuniak, Esq., Carter Ledyard & Milburn LLP, New York, NY; George Pazuniak, Esq., Pazuniak Law Office LLC, Wilmington, DE; Alexander Gertsburg, Esq., Law Office of Alexander Gertsburg, Macedonia, OH.

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OPINION AND ORDER

Shira A. Scheindlin, U.S.D.J.

I. INTRODUCTION

Rates Technology Inc. (" RTI" ) brings this action against Broadvox Holding Company, LLC, its named subsidiary, Cypress Communications Operating Company, LLC, and its unnamed subsidiaries or affiliates, ABC Companies 1 to 10 (collectively, " Broadvox" ), for infringing two of RTI's telecommunications patents: United States Patent No. 5,425,085 (the " '085 Patent" ) and United States Patent No. 5,519,769 (the " '769 Patent" ).[1]

On December 27, 2013, the Court held a Markman hearing. The parties have agreed upon the meaning of three terms in claim 1 of the '085 Patent and two terms in claim 1 of the '769 Patent.[2] The parties dispute the meaning of nine terms in claim 1 of the '085 Patent and five terms in claim 1 of the '769 Patent.[3] For reference, I have included a list of the constructions I have adopted at the end of this Opinion.[4]

II. BACKGROUND

A. The Invention

RTI has provided products and services in the telecommunications field for thirty years.[5] RTI designs and manufactures technologies including private pay telephones, call cost rate chips, and least-cost-routing chips.[6] On June 13, 1995, the Patent and Trademark Office (" PTO" ) issued the '085 Patent, designating RTI as the

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sole assignee.[7] The claimed invention relates to the routing of calls based on cost.[8] Broadvox Holding provides IP-based information services to approximately three hundred wholesale carriers, businesses, and enterprise retail customers.[9] On May 21, 1996, the PTO issued the '769 Patent to RTI.[10] The claimed invention relates to a method for updating a database in a telephone routing system.[11] In two 1998 decisions, Judge William Young of the District Court of Massachusetts construed several of the claims disputed here.[12] Several years later, the patents were returned to the PTO for reexamination, where the claims were reconsidered in light of prior art.[13] While the reexaminations did not affect claim 1 of the '769 Patent, RTI added limitations to claim 1 of the '085 Patent to overcome the prior art.[14]

B. Claim Language

The full text of claim 1 of the '085 Patent, with the disputed phrases emphasized, follows:

A device for routing telephone calls along a least cost route originating from a first telephone to a second telephone having an associated telephone number via a network having a plurality of alternate communication switch paths corresponding to different carriers which can be chosen to route the call and normally providing a current to said first telephone when said first telephone is in use, comprising:
[I] a housing forming an enclosure and comprising first jack means for connection to said first telephone, and second jack means for connection to said network;
[ii] switch means operatively connected to said first jack means for disconnecting said first telephone from said network during routing of a telephone call from said first telephone ;
[iii] means operatively connected to said switch means for generating a current through said switch means to the first telephone corresponding to a current provided by said network, when the first telephone is disconnected from said network by said switch means ;
[iv] database means for storing billing rate parameters for determining a least cost communication path for call corresponding to said telephone number;
[v] means operatively connected to said switch means for detecting and storing said telephone number originating from the first telephone ;
[vi] means for addressing said database means for identifying a plurality of communication switch

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paths to said second telephone and the cost rate of each path ;

[vii] means actuated subsequent to the detection of said telephone number originating from said first telephone for comparing the cost rate of each path so as to determine a least cost route ; and
[viii] means operatively connected to said switch means and said second jack means for generating a number sequence corresponding to a desired carrier so that said call is routed through said second jack means to the selected communication path and carrier to establish a switched connection between said first telephone and said second telephone.[15]

The full text of claim 1 of the '769 Patent, with the disputed phrases emphasized, follows:

A method for updating a database that stores billing rate parameters for a call rating device used for cost determinations for a calling station, comprising the steps of:
[I] connecting at a predetermined time and date via a data transfer line the call rating device to a rate provider having billing rate parameters for a plurality of calling stations;
[ii] transmitting over the data transfer line indicia identifying the call rating device and the date and time of the last update of the billing rate parameters;
[iii] verifying if billing parameters should be updated ; and
[iv] transmitting from the rate provider to the call rating device the updated billing rate parameters when the rate provider determines that an update is required.[16]

The parties agree on the construction of the following phrases:

TABLE 1[17]

'085 Patent, Claim 1

Term/Phrase

Agreed Upon Construction

1. " device"

The term should not be a limitation of the

claim.

2. " first jack means for

First jack for connection to said first

connection to said first

telephone.

telephone"

3. " second jack means for

Second jack for connection to said network.

connection to said

network"

'769 Patent, Claim 1

Term/Phrase

Agreed Upon Construction

1. " a data transfer line"

a data transfer line (or path to transfer data)

2. " indicia identifying the

indicia identifying call rating device and the

call rating device and the

date and time of the last update of the billing

date and time of the last

rate parameters.

update of the billing rate

parameters"

The parties dispute the construction of the following phrases:

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TABLE 2 [18]

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'085 Patent, Claim 1

Term/Phrase

RTI's Proposed

Broadvox's Proposed

Construction

Construction

1. " a housing

One or more housings

A unitary physical

forming an enclosure

forming one or more

structure that includes a

and comprising"

enclosures

first jack for connection to

Comprising is a

a first telephone and a

transition term

second jack for

linking the preamble

connection to a network

to the body of the

claim.

2. " switch means

switch operatively

This is a means-plus-function

operatively

connected to said first

element, whose

connected to said

jack for disconnecting

construction is governed

first jack means for

said first telephone

by 35 U.S.C. § 112(f).

disconnecting (as

from said network

The structure of the

defined below) said

during routing of a

" switch means" is the " 2

first telephone from

telephone call from

Form C switch." It is

said network during

said first telephone

referenced in the '085

routing of a

Patent as item 36, and is

telephone call from

described at col. 3 ll. 51-64,

said first telephone"

and Fig. 2.

3. " disconnecting"

Ordinary meaning

Interruption of the

should control. In the

electrical circuit between

context of

the telephone and the

specification and

network -- the breaking

prosecution history,

or opening -- of the

term should be

electrical circuit between

construed as

the telephone jack and the

" disconnecting the

network

communication such

as signaling"

4. " means

Current source

This is a means-plus-function

operatively

operatively connected

element, whose

connected to said

to said switch for

construction is governed

switch means for

generating a current

by 35 U.S.C. § 112(f).

generating a current

through said switch to

The structure of the

(as defined below)

the first telephone

" means" is the structure

through said switch

corresponding to a

shown in the Fig. 2

means to the first

current provided by

drawing as connecting

telephone

said network, when

item 38, as well as the

corresponding to a

the first telephone is

structure of item 38.

current provided by

disconnected from

said network, when

said network by said

the first telephone

switch

is disconnected from

said network to said

switch means"

5. " means for

Current source for

This is a

generating a current"

generating a current

means-plus-function

element, whose

construction is governed

by 35 U.S.C. § 112(f).

The structure of the

" means" is the structure

shown in the Fig. 2

drawing as connecting

item 38, as well as the

structure of item 38.

6. " means

Detecting and storing

This is a means-plus-function

operatively

logic (e.g., routine or

element, whose

connected to said

subroutine)

construction is governed

switch means for

operatively connected

by 35 U.S.C. § 112(f).

detecting and storing

to said switch for

The structure of the

said telephone

detecting and storing

" means operatively

number originating

said telephone

connected to said switch

from the first

number originating

means for detecting and

telephone"

from the first

storing said telephone

telephone

number originating from

the first telephone" is a

combination of: " the

DTMF tone detector 88"

for detecting a telephone

number, and an unknown

and indefinite structure for

" storing said telephone

number originating from

the first telephone."

7. " means for

Database addressing

This is a means-plus-function

addressing said

logic (e.g., routine or

element, whose

database means for

subroutine) for

construction is governed

identifying a

addressing said

by 35 U.S.C. § 112(f).

plurality of

database means for

The structure of the

communication

identifying a plurality

" means for addressing

switch paths to said

of communication

said database means for

second telephone and

switch paths to said

identifying a plurality of

the cost rate of each

second telephone and

communication switch

path"

the cost rate of each

paths to said second

path

telephone and the cost rate

of each path" is the

algorithm at col. 6 ll. 7-47

and Fig. 5.

8. " means actuated

Comparing logic

This is a means-plus-function

subsequent to the

(e.g., routine or

element, whose

detection of said

subroutine) actuated

construction is governed

telephone number

subsequent to the

by 35 U.S.C. § 112(f).

originating from said

detection of said

The element " means

first telephone for

telephone number

actuated subsequent to the

comparing the cost

originating from said

detection of said

rate of each path so

first telephone for

telephone number

as to determine a

comparing the cost

originating from said first

least cost route"

rate of each path so as

telephone for comparing

to determine a least

the cost rate of each path

cost route.

so as to determine a least

cost route" is not

described in the

specification and,

therefore, this claim term

is indefinite.

9. " means

logic (e.g. routine or

This is a means-plus-function

operatively

subroutine)

element, whose

connected to said

operatively connected

construction is governed

switch means and

to said switch and

by 35 U.S.C. § 112(f).

said second jack

said second jack for

The structure is the

means for generating

generating a number

combination of a tone

a number sequence

sequence

generator with a crystal

corresponding to a

corresponding to a

oscillator (which

desired carrier so

desired carrier so that

generates the number

that said call is

said call is routed

sequence), and an analog

routed through said

through said second

switch (so that " call is

second jack means to

jack to the selected

routed through said

the selected

communication path

second jack means to the

communication path

and carrier to

selected communication

and carrier to

establish a switched

path . . ." ).

establish a switched

connection between

connection between

said first telephone

said first telephone

and said second

and said second

telephone.

telephone"

'769 Patent, Claim 1

Term/Phrase

RTI's Proposed

Broadvox's Proposed

Construction

Construction

1. " at a

at a predetermined

The time and date for

predetermined time

time and date

calling the rate provider

and date"

are selected a substantial

period in advance of the

call

2. " call rating

call rating device

This is a means-plus-function

device"

element, whose

construction is governed

by 35 U.S.C. § 112(f).

An identifiable physical

component having the

function of receiving rate

information from a rate

provider over a data

transfer line, incorporating

the rate information and

thereafter managing calls

over the least cost routing

route.

3. " transmitting over

transmitting over the

conveying information

the data transfer

data transfer line

over the same wire

line"

operatively connected to a

call rating device on one

end and a phone network

on the other

4. " verifying if

verifying if billing

the rate provider, based on

billing rate

rate parameters

the information received

parameters should be

should be updated

from the call rating

updated"

device, verifies if the

billing rate parameters of

the call rating device

should be updated

5. " transmitting from

transmitting from the

the rate provider, based on

the rate provider to

rate provider to the

the information received

the call rating

call rating device

from the call rating

device"

device, transmits the

billing rate parameters to

the call rating device

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III. APPLICABLE LAW

Analysis of a patent infringement claim involves two steps: (1) construction of the terms of the asserted claims and (2) determination of whether the accused device infringes the claims, as construed.[19] Claim construction is a question of law,[20] the purpose of which is to determine what is covered by an asserted claim. In other words, " [t]he construction of claims is simply a way of elaborating the normally terse claim language in order to understand and explain, but not to change, the scope of the claims." [21]

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The Federal Circuit has made clear that " there is no magic formula or catechism for conducting claim construction." [22] Thus, courts must be mindful that " applying [the substantive precepts of patent claim interpretation] to the facts of a case can be . . . perplexing, particularly where precepts can be in opposition to one another and district judges cannot always tell which one(s) apply in a particular case." [23] As such, the Federal Circuit has provided district courts with some guidance:

[T]he ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as of the effective filing date of the patent application. . . . [This inquiry] provides an objective baseline from which to begin claim interpretation. . . . Importantly, the person of ordinary skill in the art is deemed to read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification.[24]

To determine how a person skilled in the art understands a disputed claim term, courts should look to publicly available sources, including intrinsic evidence -- such as " the words of the claims themselves, the remainder of the specification, the prosecution history" -- and " extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art." [25]

A. Intrinsic Evidence

The Federal Circuit views intrinsic evidence as " a more reliable guide to the meaning of a claim term than are extrinsic sources." [26] Thus, district courts should use the intrinsic record as " the primary tool to supply the context for interpretation of disputed claim terms." [27]

1. Claim Language

Although there is no rigid formula to claim construction, " [j]udicial interpretation must begin with and remain focused upon the 'words of the claims themselves . . . to define the scope of the patented invention.'" [28] On occasion, " the ordinary meaning of claim language as understood by a person of skill in the art" will be so apparent from the claim language itself that no further inquiry is needed.[29] However, even when the terms in a claim are self-explanatory, " [t]he context in which a term is used in the asserted claim can be highly instructive." [30]

2. The Specification

In addition to the claim itself, a patent is required by statute to " ...


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