05/29/2014

Realtime Data v. Morgan Stanley: Construction of data terminology


 
 
 
 
By: Roy Rabindranath, Contributor
 
TitleRealtime Data, LLC v. Morgan Stanley, No. 13-1092 (Fed. Circ. January 27, 2014) (non-precedential).
Issues
[1] "Realtime [argues] that the district court erred in its construction of three claim terms: [a] “descriptor indicates,” [b] “data field/block type,” and [c] “data stream.” [...]
Realtime Data, LLC at *18 (text added, internal citations omitted).
[2] Realtime argues that the district court erred in granting summary judgment of noninfringement of [various claims in the ‘568, ‘747 and ‘651 patents] by the accused systems because aspects of the Defendants’ Fast System meet the [a] “descriptor indicates,” [b] “data field/block type,” and [c] “data stream” limitations as construed by the court.
Id. at *23-24 (text added).
[3] [Whether] the district court abused its discretion in precluding [Appellant] from asserting infringement under the doctrine of equivalents, applying its local rules in doing so.
Id. at *28 (text added).
Holdings
[1][a] “Although the written description does define the ‘data compression type descriptor’ as ‘any recognizable data token or descriptor that indicates which data encoding technique has been applied to the data,’ the preceding sentence [in the Specification] also teaches that "an appropriate data compression type descriptor is appended to the encoded data block. [Therefore, the court did not unnecessarily add] additional limitations, requiring that the indicator be appended to the encoded data for the purposes of specifying the encoder used.” Realtime Data, LLC at *18 (text added, internal citations omitted). [b] “The district court was correct in concluding that, based on the specifications of the patents, the ‘data field/block type’ term must be tied to some analysis of the content of the data field or block and cannot simply encompass any characteristic or attribute of data. Id. at *20 (text added). [c] “[Finally,] [Realtime is bound to its expert’s description during reexamination proceedings, who] described the process of ‘receiving a data stream’ from an external source as a ‘passive one requiring no control over the characteristics of the received data stream by the receiver.’“ Id. at *21-23 (text added, internal citations omitted).
[2][a] “[The] Defendants' accused Fast systems [do not] meet the ‘descriptor indicates’ limitation by appending both a PMAP and Template ID to the message for purpose of specifying the encoders used to encode that message.” Realtime Data, LLC at *24 (text added). [b] “[Also, the Fast systems] process does not analyze the content of the data block for categorization as one of several different data types, as required by the ‘data field/block type’ claim construction, but simply looks to see whether certain fields in the Template can be encoded to minimize the size of the message. The accused systems thus cannot infringe the claims requiring a ‘data field/block type’ limitation.” Id. at *24-25 (text added, internal citations omitted). [c] [Finally, the evidence was] ‘one sided’ in showing that the accused products received data from internal sources, and the district court thus did not err in concluding that the accused systems did not meet the ‘data stream’ limitation. [In addition, the] parties stipulated that this limitation means that ‘the systems (or method) selects the lossless encoders based on an analysis of content of the data blocks (or data fields).’ […] Realtime cannot now change the construction that it had agreed to in the district court.” Id. at *25-26 (text added, internal citations omitted).
[3] The district court was well within its discretion to preclude Realtime from asserting infringement under the doctrine of equivalents. In asserting its allegations of infringement under the doctrine of equivalents two and a half years into the litigation, Realtime failed to comply with the local rules of both the Eastern District of Texas and the Southern District of New York, which require complete infringement assertions within 10 and 14 days, respectively.
Id. at *29.  
 
 
Procedural HistoryRealtime Data, LLC (“Realtime”) appeals from multiple decisions of the United States District Court for the Southern District of New York, granting motions filed by several companies in the financial services industry (the “Defendants”) for summary judgment of (i) non-infringement of various claims of U.S. Patents 7,417,568 (the “’568 patent”), 7,714,747 (the “’747 patent”), and 7,777,651 (the “’651 patent”), and (ii) invalidity under 35 U.S.C. § 112 of several claims of the ’651 and ’747 patents. […] Additionally, Realtime appeals from the district court’s construction of certain claim terms and its decision to preclude Realtime from asserting infringement under the doctrine of equivalents. […]
Realtime Data, LLC at *11-12.
 
 
 
Legal Reasoning (Lourie, Mayer, and Wallach)
Background
Representative Claim 14A method of compressing a plurality of data blocks to create a compressed data packet in a data stream using a data compression processor, wherein multiple encoders
applying a plurality of lossless compression techniques are applied to data blocks, the method comprising:

receiving a data block;

analyzing content of the data block to determine a data block type;

selecting one or more lossless encoders based on the data block type and a computer file, wherein the computer file indicates data block types and associated lossless encoders;

compressing the data block with a selected encoder utilizing content dependent data compression, if the data block type is recognized as associated with a lossless
encoder utilizing content dependent data compression;

compressing the data block with a selected lossless encoder utilizing content independent data compression, if the data block type is not recognized as associated with
a lossless encoder utilizing content dependent data compression; and

providing a descriptor for the compressed data packet in the data stream, wherein the descriptor indicates the one or more selected lossless encoders for the encoded data block.

Realtime Data, LLC at *13.
[1] Claim Construction
“Descriptor Indicates”Realtime contends that the court added additional limitations, requiring that the indicator be appended to the encoded data for the purposes of specifying the encoder used, limitations that are not required by the claim language or the written description of the patents. The Defendants respond that, in the patented system, the encoder is selected dynamically after determining the type of data being encoded, and therefore it must be appended to the data message to identify what type of encoding was used. We agree with the defendants. Although the written description does define the “data compression type descriptor” as “any recognizable data token or descriptor that indicates which data encoding technique has been applied to the data,” the preceding sentence also teaches that “an appropriate data compression type descriptor is appended to the encoded data block.” […] The district court thus did not err in construing the “descriptor indicates” term [in the various claims of the ‘568, ‘747 and ‘661 patents].
Realtime Data, LLC at *18-19 (text added, internal citations omitted).
“Data field/block type”The Defendants [argue] that the written description and the claim language support the construction of “data field/block type” as being one of several different types of data and that the examples included in the construction of the term are only exemplary and do not narrow the limitation. We also agree with the Defendants on this claim limitation. As the district court recognized, the construction urged by Realtime could encompass “any characteristic or any attribute of data.” […] The district court […] did not unnecessarily limit the types of data for the data field/block type by including the open-ended “other data type” in the construction of the term.
Id. at *19-20 (text added, internal citations omitted).
“Data Stream”The written description of the ‘747 patent describes a “data stream comprising one or more data blocks input into the data compression system….” However, the declarations made by Realtime’s expert, Dr. Modestino, during reexamination of the ‘506 patent also dealt with the meaning of “data stream.” [...] Dr. Modestino described the process of “receiving a data stream” from an external source as a “passive one requiring no control over the characteristics of the received data stream by the receiver [….] Although Dr. Modestino’s declaration dealt, in part with a narrower term “receiving a data stream” the declaration makes clear that a person of ordinary skill would understand that a data stream as disclosed in the written description of the ‘747 patent means a data stream received from an external source. Given this distinction advanced by Realtime’s own expert in the reexamination, the district court did not err by including the external source requirement in the construction of “data stream” in [various claims of the ‘568, ‘747 and ‘651 patents].
Id. at *21-23 (text added, internal citations omitted).
[2] Non-Infringement
“Descriptor Indicates”Realtime first argues that the Defendant’s accused FAST systems meet the “descriptor indicates” limitation by appending both a PMAP and Template ID to the message. However, the FAST system PMAP and Template IDs do not indicate which encoders have been utilized to encode; the Template itself contains that information. The Template is not sent with the message; a set of Templates are known in advance to the FAST systems. The Template is thus not “appended to the encoded data for specifying” an encoder, and the accused systems cannot infringe the claims of the patents requiring this.
Realtime Data, LLC at *24.
“Data Field/Block Type”Realtime further argues that the encoding techniques in the PMAP, which determine whether certain fields of the message are a copy, increment, or default value, meets the data field/block type limitation. Realtime asserts that by categorizing each data field as one of these three possible types, the encoding techniques in the PMA act as content categorization as construed by the district court. […] This process does not analyze the content of the data block for categorization as one of several different data types, as required by the “data field/block type” claim construction, but simply looks to see whether certain field in the Template can be encoded to minimize the size of the message. The accused systems thus cannot infringe the claims requiring a “data field/block” type limitation.
Id. at *24-25 (internal citations omitted).
"Data Stream"Realtime next argues that the accused products submit one or more data blocks from an external source, such as a market server, to the data encoder. The Defendants respond that the evidence at trial showed that the encoding is performed only on data from other components within the accused system and not from an external source. […] The parties stipulated that this limitation means that “the system (or method) selects the lossless encoders based on an analysis of content of the data blocks (or data fields). According to the stipulated claim construction, these decoding claims thus require the selection of an encoder. Realtime cannot now change the construction that it had agreed to in the district court.
Id. at *25-26 (internal citations omitted).
[3] Doctrine of Equivalents
Realtime […] argues that the district court abused its discretion in precluding Realtime from arguing infringement under the doctrine of equivalents, applying its local rules in doing so. We affirm the district court in its decision concerning the doctrine of equivalents. As a general matter, we “defer to the district court when interpreting and enforcing local rules so as not to frustrate local attempts to manage patent cases according to prescribed guidelines. […] The district court was well within its discretion to preclude Realtime from asserting infringement under the doctrine of equivalents. In asserting its allegations of infringement under the doctrine of equivalents two and a half years into the litigation, Realtime failed to comply with the local rules of both the Eastern District of Texas and the Southern District of New York, which require complete infringement assertions within 10 and 14 days, respectively. […] Additionally, because Realtime asserted such contentions after fact discovery had closed, the Defendants were prejudiced from developing adequate discovery and developing theories of noninfringement under the doctrine equivalents. The district court thus did not abuse its discretion by precluding Realtime from asserting infringement allegations under the doctrine of equivalents.
Realtime Data, LLC at *28-29 (internal citations omitted).
Conclusion
We conclude that the district court did not err in construing the disputing claim terms of the patents or in granting summary judgment of noninfringement of the appealed claims based on that construction. Additionally, the court did not err in granting summary judgment of invalidity of the appealed claims under §112 or in or in precluding Realtime from asserting infringement under the doctrine of equivalents.
Realtime Data, LLC at *12. 
 
 
 
 
Editor's Notes
This case also discussed 35 U.S.C. § 112 ¶ 1 written description. For further reading, click here.
 
 
 
 
 
© 2000-2019, Journal of the Patent & Trademark Office Society
Disclaimer & Privacy Policy