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Corus Realty Holdings, Inc. v. Zillow Group, Inc.

United States District Court, W.D. Washington, Seattle

July 2, 2019

CORUS REALTY HOLDINGS, INC., Plaintiff,
v.
ZILLOW GROUP, INC., et al., Defendants.

          CLAIM CONSTRUCTION ORDER

          JAMES L. ROBART, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This is an order on claim construction in a patent infringement action involving U.S. Patent No. 6, 636, 803 (“the Patent”), entitled “Real-Estate Information Search and Retrieval System.” (See Compl. (Dkt. # 1) ¶ 1; see also Id. ¶ 16, Ex. A (“'803 Patent”).) Plaintiff Corus Realty Holdings, Inc. (“Corus”) asserts that Defendants Zillow Group, Inc. (“Zillow Group”), Zillow, Inc. (“Zillow”), and Trulia, LLC (“Trulia”) (collectively, “Defendants”) directly infringe upon and induce and contribute to the infringement of the Patent. (Compl. ¶¶ 42-44.) The parties dispute the construction of six claim terms. (See Jt. Cl. Chart (Dkt. # 35-1).) The court has reviewed the parties' claim construction briefs (Pl. Br. (Dkt. # 36); Defs. Br. (Dkt. # 37); Pl. Resp. (Dkt. # 41); Defs. Resp. (Dkt. # 44); Pl. Supp. Br. (Dkt. # 48); Defs. Supp. Br. (Dkt. # 49)), all materials filed in support of and in opposition to the claim construction briefs, the relevant portions of the record, and the applicable law. The court also heard from counsel at a Markman hearing[1] on June 14, 2019. (See Min. Entry (Dkt. # 46).) Being fully advised, the court construes the disputed terms as set forth below.

         II. BACKGROUND

         The Patent covers systems and methods that use digital technology to locate property and provide information in connection with a real-estate transaction (“the Invention”). (See, e.g., '803 Patent at ¶ 1[2] 4:4-6.) The Invention operates on a digital device-such as a web-enabled cell phone, laptop, tablet, or desktop computer-and is displayed on that device's screen. As shown in Figure 3, the Invention displays information about residential property in a particular area that is offered for sale, lease, or rent, which can help real-estate agents and property buyers in the home buying process. (Id. at B1 4:7-12.) The Invention is also a “mobile data terminal”-such as a web-enabled cell phone, laptop, or tablet-which may be used as a tool by real-estate agents and buyers for displaying the system and method. (Id. at Bl 4:12-15.)

         (Image Omitted)

         The Invention has two embodiments. In the first embodiment, the Invention is a "stand-alone data terminal" equipped with a map generation unit, a storage unit, a processor, and a display. (Id. at B1 4:16-30.) The map generation unit generates a map of an area of interest, the storage unit stores property information, and the processor integrates the data from these two units for presentation on the terminal's display. (See Id. at Bl 4:31-5:43.) The Invention also produces selectable property icons on the digital map, which, upon selection by the user, provide real estate information about that property from sources such as a multiple listing service ("MLS"). (Id. at Bl 4:16-5:18; PI. Br. at 6.) The first embodiment is depicted in Figures 1 and 2.

         (Image Omitted)

         (Image Omitted)

         The second embodiment of the Invention is "not a stand-alone data terminal, but rather is a mobile terminal connected to a location-positioning system via a communications link." ('803 Patent at ¶ 6:45-59.) In addition to the map generation unit, storage unit, processor, and display of the first embodiment, the second embodiment also has a location data receiver that can specify the current position of the terminal in the digital map. (Id.) In some variations of the second embodiment, the mobile terminal (i.e., the web-enabled cell phone) connects to "a remote storage device" such as "a remote server connected to a network such as the Internet or a database." (Id. at B110:1-6.) This feature allows the Invention to provide updated property information from resources such as MLS. (Id. atBl 10:1-16.) The second embodiment is depicted in Figures 4 and 5.

         (Image Omitted)

         The parties dispute the meaning of six claim terms:

1. "cellular-based location data";
2. "a map generation unit for generating a digital map covering an area of interest, wherein said area of interest is obtained from the cellular-based location data";
3. "a storage unit for storing property information which includes multiple listing service (MLS) data comprising a location, a market price and a market status of an item of property in said area of interest";
4. “a processor for determining information needed to display a property icon for the item of property at the location of the item of property on said digital map, and for determining information needed to display property information about the item of property of the property icon upon selection of the property icon”;
5. “wherein said property information is obtained from a remote data source and a database stored on said data-enabled mobile phone”; and 6. “wherein said property information is obtained from a remote data source and stored in a database on the mobile computing device.”

(See Jt. Cl. Chart at 2-34.)

         The court now construes these claims as described below.

         III. ANALYSIS

         A. Law on Claim Construction

         The court is solely responsible for construing patent claims. Markman, 517 U.S. at 372. The court construes claims as a matter of law, although the court may make subsidiary factual findings regarding extrinsic evidence. Teva Pharm. USA, Inc. v. Sandoz, Inc., --- U.S. ---, 135 S.Ct. 831, 836-38, 840-42 (2015). In practice, executing the Markman mandate means following rules that rank various sources of evidence of the “true” meaning of claim terms. See Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (en banc).

         Intrinsic evidence, which includes the patent and its prosecution history, is the primary source from which to derive a claim's meaning.[3] Id. at 1314. The court's task is to determine the “ordinary and customary meaning” of the terms of a claim in the eyes of a person of ordinary skill in the art on the filing date of the patent. Id. at 1313 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996)). In its review of intrinsic evidence, the court should begin with the language of both the asserted claim and other claims in the patent. Id. at 1314; see also Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004) (“[C]laim construction analysis must begin and remain centered on the claim language itself.”).

         The court must read claim language in light of the remainder of the patent's specification. Phillips, 415 F.3d at 1316 (explaining that “the specification necessarily informs the proper construction of the claims”). The specification acts as a “concordance” for claim terms and is thus the best source beyond the claim language for understanding those terms. Id. at 1315. The inventor is free to use the specification to define claim terms as he or she wishes, and the court must defer to the inventor's definitions. Id. at 1316 (“[T]he inventor's lexicography governs.”). The court should “rely heavily” on the specification in interpreting claim terms. Id. at 1317. The court should not, however, commit the “cardinal sin” of claim construction-impermissibly reading limitations from the specification into the claims. Id. at 1320 (citing SciMed Life Sys. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1340 (Fed. Cir. 2001)). Additionally, although the patent's prosecution history is also intrinsic evidence, it is generally “less useful for claim construction purposes” than the specification.[4] Phillips, 415 F.3d at 1317. Because the prosecution history documents an invention's evolution from application to the issuance of the patent, it usually “lacks the clarity of the specification.” Id.

         Finally, the court can consider extrinsic evidence, “including expert and inventor testimony, dictionaries, and learned treatises.” Id. (citing Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995), aff'd, 517 U.S. 370 (1996)). For a variety of reasons, extrinsic evidence is usually “less reliable than the patent and its prosecution history” as a source for claim interpretation. Id. at 1318. The court thus need not admit extrinsic evidence, but may do so at its discretion. Id. at 1319.

         B. Means-Plus-Function Claim Limitations

         Means-plus-function claiming occurs when a claim term is drafted in a manner that invokes 35 U.S.C. § 112(f) (formerly 35 U.S.C. § 112, ¶ 6), which states:

An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

35 U.S.C. § 112(f); Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1347 (Fed. Cir. 2015). In other words, “[a] means-plus-function limitation recites a function to be performed rather than definite structure or materials for performing that function. Such a limitation must be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” Lockheed Martin Corp. v. Space Sys./Loral, Inc., 324 F.3d 1308, 1318 (Fed. Cir. 2003) (internal citations omitted). “Whether certain claim language invokes § 112, ¶ 6 is an exercise in claim construction and is therefore a question of law.” See Inventio AG v. ThyssenKrupp Elevator Ams. Corp., 649 F.3d 1350, 1356 (Fed. Cir. 2011), overruled on other grounds by Williamson, 792 F.3d 1339.

         The Federal Circuit explains the means-plus-function analysis as follows:

The overall means-plus-function analysis is a two-step process. Naturally, there is some analytical overlap between these two steps. In the first step, we must determine if the claim limitation is drafted in means-plus-function format. As part of this step, we must construe the claim limitation to decide if it connotes “sufficiently definite structure” to a person of ordinary skill in the art, which requires us to consider the specification (among other evidence). In the second step, if the limitation is in means-plus-function format, we must specifically review the specification for “corresponding structure.” Thus, while these two “structure” inquiries are inherently related, they are distinct.

Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1296 (Fed. Cir. 2014), overruled on other grounds by Williamson, 792 F.3d 1339.

         At step one, in determining if § 112(f) applies, the “essential inquiry” is “whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure.” Williamson, 792 F.3d at 1348 (citing Greenberg v. Ethicon Endo-Surgery, Inc., 91 F.3d 1580, 1583 (Fed. Cir. 1996)). If a disputed claim term does not recite the word “means, ” a rebuttable presumption arises that the term is not a means-plus-function term. Id. at 1348-49. The challenger can overcome this presumption by demonstrating, by a preponderance of the evidence, that the claim term fails to “‘recite sufficiently definite structure' or else recites ‘function without reciting sufficient structure for performing that function.'” See Id. (quoting Watts v. XL Sys., Inc., 232 F.3d 877, 880 (Fed. Cir. 2000)); Advanced Ground Info. Sys., Inc. v. Life360, Inc., 830 F.3d 1341, 1347 (Fed. Cir. 2016). In determining whether a term recites sufficient structure, the court examines whether the term has “an understood meaning in the art.” Apex Inc. v. Raritan Computer, Inc., 325 F.3d 1364, 1372 (Fed. Cir. 2003). “In the absence of sufficient evidence, the presumption stands.” Id. at 1373. The court conducts this analysis “under the traditional claim construction principles, on an element-by-element basis, and in light of evidence intrinsic and extrinsic to the asserted patents.” Zeroclick, LLC v. Apple Inc., 891 F.3d 1003, 1007 (Fed. Cir. 2018).

         The court notes the tension in this analysis. At step one, the court must “look to the specification, prosecution history, and relevant external evidence” to determine if a claim term connotes sufficiently definite structure to a person of ordinary skill in the art such that § 112(f) does not apply. See Apple, 757 F.3d at 1296. The court only gets to step two if a claim term, in light of the intrinsic and extrinsic evidence, does not connote sufficiently definite structure. Then, at step two, the court goes back to the specification to look for “corresponding structure”-the same specification that the court found lacked sufficiently definite structure at step one. See Id. The dissent in Apple Inc. v. Motorola, Inc. explains this analytical muddle:

In effect, what the majority has done is imported the second step of the analysis (where you define the scope of a means-plus-function claim term based on the corresponding structure in the specification) into the first step (where you identify whether the term is drafted in means-plus-function format). The majority's analysis implies that so long as a claim term has corresponding structure in the specification, it is not a means-plus-function limitation. But such a rule would render every means-plus-function claim term indefinite. Under the majority's approach, a term would only be deemed a means-plus-function limitation if it has no corresponding structure-an absurd result that would eviscerate means-plus-function claiming.

Apple, 757 F.3d at 1335 (Prost, J., dissenting). Defendants have highlighted this aspect of Apple's dissent throughout these proceedings, asserting that the court should only consult the “claim language” at step one. (See, e.g., Defs. Supp. Br. at 4-8.) Indeed, Defendants argue that this is the analysis the Federal Circuit has employed all along, even though the Federal Circuit expressly says otherwise. (See id.)

         The court appreciates Defendants' concern, as well as the difficulty in separating steps one and two in a meaningful way. However, the Federal Circuit has squarely addressed this issue, even if it has not clarified the analysis. For example, the majority in Apple responded to the dissent's argument and acknowledged that, although the structure inquiries at steps one and two are “inherently related, they are distinct.” 757 F.3d at 1296. Thus, the majority explained, while looking at the intrinsic and extrinsic evidence at step one “may be similar to looking for corresponding structure in the specification [at step two], our precedent requires it when deciding whether a claim limitation lacking means connotes sufficiently definite structure to a person of ordinary skill in the art.” Id. at 1296-97. Further, courts have been following this framework despite Defendants' argument to the contrary. See, e.g., Williamson, 792 F.3d at 1350-51 (consulting the specification and prosecution history in finding that “distributed learning control module” did not connote sufficient structure to avoid § 112(f) application); Inventio, 649 F.3d at 1358-59 (relying on both the claim language and the written descriptions to determine that “modernizing device” is not a purely functional limitation); Avocent Huntsville, LLC v. ZPE Sys., Inc., No. 17-CV-04319-WHO, 2018 WL 4677437, at *9 (N.D. Cal. Aug. 23, 2018) (examining “the claim language, [and] the specification” to determine that “management module” and “management application” are drafted in means-plus-function format).

         As members of the Supreme Court have had occasion to recently rearticulate, “[a]dherence to precedent ‘is a foundation stone of the rule of law.'” Knick v. Twp. of Scott, Pa., No. 17-647, 2019 WL 2552486, at *20 (June 21, 2019) (Kagan, J., dissenting) (quoting Michigan v. Bay Mills Indian Cmty., 572 U.S. 782, 798 (2014)); see also Franchise Tax Bd. of Cal. v. Hyatt, 587 U.S. ---, ---, 139 S.Ct. 1485, 1504-06 (2019) (Breyer, J., dissenting). Further, ignoring precedent demands a “special justification- over and above the belief that the precedent was wrongly decided.” Kimble v. Marvel Entm't, LLC, 576 U.S. ---, ---, 135 S.Ct. 2401, 2409 (2015) (internal quotation marks omitted). Defendants have not offered a “special justification” for altering the means-plus-function test, but rather state-incorrectly-that the cases already apply their preferred analysis. Defendants are mistaken and, although the court appreciates their intellectual venture, the court declines their invitation to ignore the law.

         C. Disputed Terms

         1. cellular-based location data

         The claim term “cellular-based location data” appears in Claims 1, 14, and 30 of the Patent. ('803 Patent at ¶ 11:26-33, 2:47-53; 4:34-37, 4:57-59.) Claim 1 is representative of how the Patent uses the term: “A method of generating and displaying a digital map of current market information to prospective buyers about residential real-estate property in a geographical area of interest on a data-enabled mobile phone configured to obtain cellular-based location data, comprising: obtaining said area of interest from the cellular-based location data . . . .” (Id. at C11:26-33; see also Id. at C1 2:47-53, 4:34-37, 4:57-59.)

         The parties propose the following constructions of the claim term “cellular-based location data”:

         Corus's Proposed Construction: “location data based on a cellular positioning system capable of tracking the position of a device in an area of interest.” (Pl. Br. at 12.)

         Defendants' Proposed Construction: “data relating to a cellular-based positioning system used to determine the location of a device.” (Defs. Br. at 16.)

         The court construes this claim term as “location data from a cellular-based positioning system capable of tracking the position of a device in an area of interest.” See Bancorp Servs., LLC, v. Sun Life Assurance Co. of Canada (U.S.), 687 F.3d 1266, 1274 (Fed. Cir. 2012) (holding that “a district court may construe the claims in a way that neither party advocates” (citing Exxon Chem. Patents, Inc. v. Lubrizol Corp., 64 F.3d 1553, 1555 (Fed. Cir. 1995))). This construction reflects the parties' agreement that the term refers to location data from a cellular (or cellular-based) positioning system. (See Pl. Br. at 12; Defs. Br. at 16.) This construction also reflects the definition of location data that is provided in the Patent's specification, which explains that cellular-based location data must be “capable of tracking the position of an object in an area of interest.” ('803 Patent at ¶ 1 3:8-18.)

         First, the language of the asserted claims supports construing the term to mean “tracking” as opposed to Defendants' proposed construction of “determining.” See Phillips, 415 F.3d at 1313 (explaining that the court should begin with the language of both the asserted claim and other claims in the patent). Claim 30 describes a “code section for receiving cellular-based location data of a current location of the mobile computing device in said area of interest.” ('803 Patent at ¶ 1 4:34-37, 4:57-59 (emphasis added).) The “current location” language implies that the Invention updates the location of the device-i.e., tracking-as the device moves through the area of interest.

         Second, the specification supports this construction. In one embodiment of the Invention:

[T]he terminal is equipped with a receiver for acquiring location data from an external positioning system, which may be satellite-based, cellular-based, or any other type capable of tracking the position of an object in an area of interest. Preferably, the receiver is a GPS [Global Positioning System] receiver linked to the data terminal processor.

('803 Patent at ¶ 1 3:8-18.) The structure of this sentence implies that location data that is “cellular-based” must be “capable of tracking the position of an object in an area of interest.”

         Defendants refute this reading and argue that the catch-all reference to “any other type capable of tracking the position of an object in an area of interest” does not apply to “cellular-based.” (Defs. Resp. at 7.) Defendants cite Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., --- U.S. ---, 139 S.Ct. 628 (2019), in which the Supreme Court construed part of the America Invents Act (“AIA”), 35 U.S.C. § 102, which precludes a person from obtaining a patent if the claimed invention was “. . . in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” Helsinn, 139 S.Ct. at 633-34; 35 U.S.C. § 102(a)(1); (Defs. Resp. at 7-8.) In Helsinn, the court determined that the “or otherwise available to the public” phrase did not modify “on sale.” Helsinn, 139 S.Ct. at 633-34. The Court cited many factors in reaching its conclusion.

         The Court noted that the statute in effect prior to passage of the AIA included the same “public use or on sale” language but did not include the “or otherwise available to the public” phrase. Id. at 632. Further, the Court referenced the “substantial body of law interpreting § 102's on-sale bar” that focused on whether an invention had been sold, not whether that sale was public. Id. at 633. The Court further presumed that when Congress passed this section of the AIA that only added the “or otherwise” phrase, “it adopted the earlier judicial construction” of “on sale.” Id. at 633-34. Considering all of this, the Court concluded that the addition of “or otherwise available to the public” phrase “is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term ‘on sale.'” Id. at 634 (citation omitted).

         As evidenced by the Supreme Court's extensive discussion in Helsinn, the most natural reading of a sentence that includes a catch-all phrase at the end is that the phrase modifies what comes before it. Otherwise, it would have been unnecessary for the Court to so thoroughly justify a different reading. Here, in contrast, the court is not constrained by a “substantial body of law” interpreting “cellular-based location data” or previous enactments of the term that did not include the catch-all phrase “or any other type capable of tracking the position of an object in an area of interest.” The court therefore adopts the natural reading of this specification: ...


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