Info-Hold, Inc. v. Muzak LLC , 783 F.3d 1365 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
INFO-HOLD, INC.,
Plaintiff-Appellant
v.
MUZAK LLC,
Defendant-Appellee
______________________
2014-1167
______________________
Appeal from the United States District Court for the
Southern District of Ohio in No. 1:11-cv-00283, Judge
Timothy S. Black.
______________________
Decided: April 24, 2015
______________________
DANIEL JOSEPH WOOD, Info-Hold, Inc., Cincinnati,
OH, JAMES L. KWAK, Standley Law Group LLP, Dublin,
OH, argued for plaintiff-appellant.
BARRY EASTBURN BRETSCHNEIDER, Baker & Hostetler
LLP, Washington, DC, argued for defendant-appellee.
Also represented by MICHAEL EDWARD ANDERSON,
BRIDGET SPRINGER MERRITT; JOHN FRANK MURPHY, Phila-
delphia, PA; KEVIN W. KIRSCH, Cincinnati, OH.
______________________
Before REYNA, WALLACH, and TARANTO, Circuit Judges.
2 INFO-HOLD, INC. v. MUZAK LLC
REYNA, Circuit Judge.
This case comes before us on appeal of numerous rul-
ings unfavorable to Info-Hold, Inc. (“Info-Hold”), owner of
U.S. Patent No. 5,991,374 (the “’374 patent”), the sole
patent in the dispute. Info-Hold asserted the ’374 patent
against Muzak LLC (“Muzak”) and Applied Media Tech-
nologies Corporation (“AMTC”) in separate lawsuits
before the same judge in the United States District Court
for the Southern District of Ohio. Those suits led to
separate appeals, which were argued on the same day
before the same panel. We address the issues raised in
Info-Hold’s appeal in the AMTC suit in a separate opin-
ion.
Following claim construction, the district court grant-
ed summary judgment to Muzak that, notwithstanding
infringement, Info-Hold was not entitled to reasonable
royalty damages, and that Muzak did not induce in-
fringement of the ’374 patent. For the reasons set forth
below, we reverse the grant of summary judgment of no
damages for infringement, we vacate the summary judg-
ment of no induced infringement, and we affirm the
district court’s construction of the sole claim term in
dispute.
BACKGROUND
The ’374 patent is directed to systems, apparatuses,
and methods for playing music and messages (e.g., adver-
tisements) through telephones and public speaker sys-
tems. Playback order of the music and message tracks is
set on a remote server. The remote server generates and
sends control signals to message playback devices, telling
them to access and play back tracks in a specified order.
One use of the disclosed technology involves directing the
output of the message playback devices to a public ad-
dress system at retail stores, so customers can hear the
music and advertisements while shopping. The output of
the message playback device can also be directed to a
INFO-HOLD, INC. v. MUZAK LLC 3
music-on-hold (“MOH”) system, which plays the tracks
over the telephone to callers who are on hold. The inven-
tor of the patent, Joey C. Hazenfield, assigned the patent
to Info-Hold in exchange for a 5 percent royalty on sales of
products embodying the patent’s technology. (“Hazenfield
Assignment”).
Prior to the filing of the suit against Muzak, a third-
party requester initiated an ex parte reexamination of the
’374 patent. To overcome prior art during reexamination,
Info-Hold amended several independent claims by adding
the limitation “when a caller is placed on hold” to specify
the timing of track playback. Info-Hold argued to the
examiner that, after the addition of the limitation “when
a caller is placed on hold,” the claims were patentable
because the prior art “fails to teach, or even suggest, a
music-on-hold-compatible telephone system or playing
messages or generating signals when callers are placed on
hold . . . .” J.A. 473. The examiner allowed the claims on
the basis of Info-Hold’s argument. J.A. 361. Independent
claim 7 is representative of the technology claimed in the
’374 patent and recites:
7. A programmable message delivery system for
playing messages on message playback devic-
es at one or more remote sites comprising:
a communication link;
a plurality of message playback devic-
es, each of said message playback de-
vices communicating with a respective
telephone system and comprising a
storage device for storing messages
and for playing selected ones of said
messages through an output of said
message playback device when a caller
is placed on hold; and
4 INFO-HOLD, INC. v. MUZAK LLC
a computer remotely located from said
plurality of message playback devices
and operable to generate and transmit
control signals via said communication
link for controlling at least one of said
plurality of message playback devices;
each of said plurality of message playback devices
being adapted to receive said control signals
via said communication link and being pro-
grammable to access at least one of said mes-
sages from said storage device and to provide
said accessed message to said output in ac-
cordance with said control signals when a
caller is placed on hold;
wherein said computer comprises a display device
and is programmable to generate screens on
said display device that include user se-
lectable menu items for selection by an opera-
tor to define relationships between said
plurality of message playback devices and
said messages, the screens guiding an opera-
tor to make choices selected from the group
consisting of which of said messages are to be
played, which of said plurality of message
playback devices are to play said selected
messages, a time of day when said control
signals are to be transmitted to said message
playback devices, a date on which said control
signals are to be transmitted to said message
playback devices, a sequence in which said se-
lected messages are to be played, and how
many times to repeat at least one of said se-
lected messages in said sequence, and to gen-
erate said control signals to implement said
choices via said message playback devices.
INFO-HOLD, INC. v. MUZAK LLC 5
’374 patent reexamination certificate, col. 1 ll. 28-67
(emphasis added).
The parties in this case make and sell MOH systems.
Info-Hold sells a product called “Info-Link” that purport-
edly embodies the features of the ’374 patent, including
remote programming capabilities and the ability to select
messages for playback at particular locations. Muzak
makes and sells two music and messaging delivery devic-
es, the Encompass LE 2 and the Encompass MV, which
Info-Hold alleges infringe the ’374 patent.
LITIGATION HISTORY
In 2006, Info-Hold contacted Muzak on at least two
occasions regarding the possibility that Muzak’s products
infringe the ’374 patent. On February 21, 2006, Info-
Hold’s in-house counsel, Daniel Wood, sent a letter to
Muzak’s General Counsel, Michael Zendan, drawing
attention to the ’374 patent and asking whether any of
Muzak’s products might practice the patented technology.
Mr. Wood specifically requested to be informed of the
results of any “detailed analysis of the ’374 patent” al-
ready conducted by Muzak. Mr. Wood also requested that
Muzak conduct such an analysis. J.A. 2890. Muzak did
not respond to Info-Hold’s letter.
Mr. Wood called Mr. Zendan in June 2006. In that
conversation, Mr. Wood explained the technology alleged
to be covered by the ’374 patent. Mr. Wood inquired
whether Muzak’s products included the ability to control
music and/or message playback at one or more other
locations from a single, remotely located computer. See,
e.g., J.A. 2815, 6:17-21; 2816, 13:14-22. During the course
of the conversation, Mr. Zendan expressed surprise upon
learning that the ’374 patent covered the playback of
music as opposed to only messages. Mr. Zendan stated,
“We’re talking about the music, how they control their
music. . . . Well . . . yeah, we have a system where there
probably is some control of the music.” J.A. 2817, 14:1-7.
6 INFO-HOLD, INC. v. MUZAK LLC
In light of this fact, Mr. Zendan told Mr. Wood that he
would take another look at the ’374 patent in relationship
to Muzak’s products. Id. at 14:17-22. Mr. Zendan asked
whether Info-Hold wanted Muzak to “look at our technol-
ogy from the standpoint of . . . music that you would hear
in a store . . .” Id. at 15:22-16:5. Mr. Wood replied, “Yes.”
Id. at 16:6.
Info-Hold filed suit in May 2011, alleging that Muzak
infringed the ’374 patent through the manufacture and
sale of Muzak’s Encompass LE 2 and Encompass MV
products. Info-Hold also alleged that Muzak induced and
contributed to the infringement of the ’374 patent. Muzak
answered, seeking a declaratory judgment that the ’374
patent was invalid and that it did not indirectly infringe
the patent.
During the Markman phase of the litigation, the par-
ties requested construction of several terms, including the
term “when a caller is placed on hold.” The parties’
dispute focused on whether “when” meant at the moment
the caller was placed on hold (Muzak’s position) or during
the period the caller was on hold (Info-Hold’s position).
The district court construed this term to mean “at the
moment a caller is placed on hold.” Based on the district
court’s construction, the parties stipulated to non-
infringement of the asserted independent claims of the
’374 patent containing the phrase “when a caller is placed
on hold,” and all claims depending from those independ-
ent claims.
On the issue of damages, the parties disagreed about
the royalty to which Info-Hold would be entitled if in-
fringement were found. Info-Hold attempted to base its
damages case on the report and testimony of its expert,
Robert White, who performed tax and audit work for Info-
Hold for fifteen years prior to the suit. Mr. White em-
ployed the entire market value rule, though his report
was silent on whether the patented features drove de-
INFO-HOLD, INC. v. MUZAK LLC 7
mand for the accused products. As part of the reasonable
royalty analysis, Mr. White considered a license of the
’374 patent to Trusonic, Inc. (“Trusonic License”), entered
into as part of a litigation settlement, and the Hazenfield
Assignment. Mr. White’s royalty calculation relied on the
25-percent rule of thumb. Muzak introduced the report of
its expert, David Paris. Mr. Paris considered the Trusonic
License, the Hazenfield Assignment, a settlement agree-
ment between Muzak and a third party for use of patents
comparable to the ’374 patent, the license of several Info-
Hold patents to a third party related to MOH systems,
and the financial data of Info-Hold and Muzak during the
relevant period. Based on these sources of information,
Mr. Paris determined that a royalty between 1 and 2
percent was reasonable, if infringement were established.
The parties filed numerous summary judgment mo-
tions. Those that are relevant to this appeal are Muzak’s
motions for summary judgment that (1) Muzak did not
induce infringement of the ’374 patent; (2) Info-Hold is
not entitled to lost profits; and (3) Info-Hold is not entitled
to reasonable royalty damages. The district court granted
each of these motions. The district court granted Muzak’s
motion that it did not induce infringement on the basis
that Muzak did not possess actual knowledge that the
acts it allegedly induced constituted infringement of the
’374 patent. Further, no pre-suit communication between
Mr. Wood and Mr. Zendan identified which claims were
allegedly infringed or which products were allegedly
infringing. J.A. 59-60. The court granted Muzak’s motion
that Info-Hold was not entitled to lost profits because
Info-Hold never introduced evidence of the profits it
earned from solely the patented technology. J.A. 65-67.
Muzak’s summary judgment motion related to rea-
sonable royalty damages was combined with a motion to
strike the expert report of Mr. White, Info-Hold’s damages
witness, and to preclude his testimony. Because Mr.
White was not qualified to aid the understanding of the
8 INFO-HOLD, INC. v. MUZAK LLC
trier of fact on the issue of damages, and because he based
the royalty rate in his report upon the 25-percent rule of
thumb, which this court discredited in Uniloc USA, Inc. v.
Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011), the
district court struck the report and precluded his testimo-
ny. J.A. 81-87. Turning to Muzak’s motion on reasonable
royalties, the district court explained that Info-Hold did
not disclose any other expert witness, and Info-Hold’s lay
witnesses were not qualified to testify on the issue of
damages. According to the district court, this left Info-
Hold without any evidence to make a prima facie case
regarding reasonable royalty damages. J.A. 88-89. Thus,
the court granted summary judgment to Muzak on the
issue of reasonable royalty damages. J.A. 89.
Muzak also filed a motion for summary judgment of
non-infringement on all asserted claims and that all
asserted claims are invalid for lacking enablement. Info-
Hold filed a motion for summary judgment on the issue of
infringement. Before ruling on these motions, the district
court ordered Info-Hold to show cause why final judgment
should not be entered against Info-Hold in light of its
inability to prove lost profits or reasonable royalty dam-
ages. In its order ruling on Info-Hold’s show cause memo-
randum, the court reasoned that after the exclusion of the
evidence from Mr. White, Info-Hold had “not demonstrat-
ed that it [wa]s entitled to any measurable remedy,”
including a reasonable royalty. J.A. 98-99. Thus, the
court entered final judgment against Info-Hold and dis-
missed the case.
Info-Hold appeals (1) the propriety of the district
court’s entry of summary judgment against it, and subse-
quent dismissal, based on a purported inability to prove
any reasonable royalty damages; (2) the construction of
the term “when a caller is placed on hold”; and (3) the
grant of summary judgment of no induced infringement
based on supposed lack of evidence of knowledge or willful
INFO-HOLD, INC. v. MUZAK LLC 9
blindness. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1).
DISCUSSION
I. DAMAGES
Info-Hold argues that the district court is required to
award some amount of damages when infringement is
proven. An award is necessary, it argues, even when
there is little or no satisfactory evidence as to the amount
of the reasonable royalty, because the court must still
employ the Georgia-Pacific factors, sua sponte, to deter-
mine the royalty rate. Info-Hold contends that the dis-
trict court’s dismissal on summary judgment for alleged
lack of evidence of a reasonable royalty is erroneous
because the court failed to invoke a Georgia-Pacific analy-
sis.
According to Info-Hold, there were numerous pieces of
evidence properly admitted to the record from which the
district court could determine a reasonable royalty. Info-
Hold points to evidence it cited to the district court in its
opposition to Muzak’s motion for summary judgment that
Info-Hold was not entitled to a reasonable royalty, includ-
ing the Hazenfield Assignment, the Trusonic License, and
documents relied upon by both experts in forming their
opinions. Info-Hold also points to evidence of record that
was not cited in its opposition, including a declaration by
Mr. Hazenfield and the deposition transcripts of Mr.
Hazenfield and Mr. Paris. Thus, even without Info-Hold’s
expert’s report, Info-Hold contends that there were nu-
merous pieces of record evidence from which a reasonable
royalty could be determined.
Muzak responds that the district court correctly
struck Mr. White’s expert report, leaving Info-Hold with
no evidence upon which a reasonable royalty determina-
tion could be made. Addressing the evidence Info-Hold
alleges was of record, Muzak points out that Mr. White
10 INFO-HOLD, INC. v. MUZAK LLC
testified that the Hazenfield Assignment and Trusonic
License were not overly relevant to a reasonable royalty
determination. Muzak argues that the documents relied
upon by Mr. Paris in his expert report are not admissible
because they cannot be authenticated. According to
Muzak, the Sixth Circuit prevents one party from calling
another party’s expert, even if the latter party does not
intend to use the expert. Without the ability to call Mr.
Paris as a witness, Muzak argues that Info-Hold would
have no one to authenticate the documents on which he
relied.
A. The District Court’s Decision To Strike Mr. White’s
Report And Preclude His Testimony
For issues not unique to patent law, we apply the law
of the regional circuit. Allergan, Inc. v. Athena Cosmetics,
Inc., 738 F.3d 1350, 1354 (Fed. Cir. 2013). The Sixth
Circuit reviews a district court’s evidentiary rulings,
including the grant of a motion to strike and the decision
to exclude expert testimony, for an abuse of discretion.
Andler v. Clear Channel Broadcasting, Inc., 670 F.3d 717,
722 (6th Cir. 2012); Seay v. Tenn. Valley Authority, 339
F.3d 454, 480 (6th Cir. 2003). “A district court abuses its
discretion if it bases its ruling on an erroneous view of the
law or a clearly erroneous assessment of the evidence.”
Newell Rubbermaid, Inc. v. Raymond Corp., 676 F.3d 521,
527 (6th Cir. 2012) (internal quotation marks and citation
omitted).
The district court did not abuse its discretion in strik-
ing Mr. White’s expert report. The district court stated
that Info-Hold’s reliance on the entire market value rule,
without presenting evidence that the patented features
drove customer demand, was “improper” and itself suffi-
cient to strike Mr. White’s evidence. J.A. 92; cf. J.A. 85.
Info-Hold has not appealed this basis for striking the
report. Mr. White’s damages analysis was also deficient
because he relied on the 25-percent rule, which this court
INFO-HOLD, INC. v. MUZAK LLC 11
discredited as “fundamentally flawed” in Uniloc. 632 F.3d
at 1315 (deeming evidence relying on the 25-percent rule
as inadmissible for failing to tie the royalty base to evi-
dence in the case). We therefore affirm the striking of Mr.
White’s evidence.
B. The District Court’s Grant Of Summary Judgment
For A Purported Lack Of Damages Evidence
The Sixth Circuit reviews a grant of summary judg-
ment de novo. Loyd v. St. Joseph Mercy Oakland, 766
F.3d 580, 588 (6th Cir. 2014). Summary judgment is
appropriate when there is no genuine issue of material
fact for trial and the moving party is entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(a); Kalich v. AT&T
Mobility, LLC, 679 F.3d 464, 469 (6th Cir. 2012). A
genuine issue of material fact exists when there is evi-
dence sufficient to allow a jury to return a verdict for the
nonmoving party. Loyd, 766 F.3d at 588 (quoting Ander-
son v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). In
reviewing a grant of summary judgment, the Sixth Circuit
accepts all of the nonmovant’s evidence as true and draws
all reasonable inferences in the nonmovant’s favor. Id.(citing Liberty Lobby, 477 U.S. at 255).
In Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1328
(Fed. Cir. 2014), we explained that at “summary judg-
ment . . . a judge may only award a zero royalty . . . if
there is no genuine issue of material fact that zero is the
only reasonable royalty.” Therefore, if there exists a
factual issue regarding whether the patentee is due any
non-zero royalty, the district court must deny summary
judgment. Id. Where the patentee’s proof is weak, the
court may award nominal damages. Id. Moreover, we
explained that a patentee’s failure to show that its royalty
estimate is correct is insufficient grounds for awarding a
royalty of zero. Id. By extension, the exclusion of the
patentee’s damages evidence is not sufficient to justify
granting summary judgment. As we made clear in Dow
12 INFO-HOLD, INC. v. MUZAK LLC
Chemical Co. v. Mee Indus., Inc., 341 F.3d 1370, 1381
(Fed. Cir. 2003), 35 U.S.C. § 284 requires the district
court to award damages “in an amount no less than a
reasonable royalty” even if the plaintiff’s has no evidence
to proffer. We explained that, in such a case, the district
court should consider the Georgia-Pacific factors “in
detail, and award such reasonable royalties as the record
evidence will support.” Id. at 1382 (footnote omitted).
Here, as in Apple, the issue of infringement has not
been decided. The district court granted summary judg-
ment to Muzak on the issue of reasonable royalty damag-
es because, after striking its expert’s report and
precluding him from testifying, Info-Hold was unable to
make a prima facie case as to any reasonable royalty rate.
There was other record evidence which the district court
could use as a basis for determining a reasonable royalty,
even after the exclusion of Mr. White’s report and testi-
mony. In his deposition, Mr. Paris affirmed that reasona-
ble royalty rates for Muzak’s Encompass LE 2 and
Encompass MV systems would be 1 and 2 percent, respec-
tively. He also discussed the Trusonic License, the royal-
ty paid to Mr. Hazenfield under his assignment of the
patent to Info-Hold, the profitability of the accused sys-
tems, and more.
The Federal Rules of Civil Procedure allow the use of
deposition testimony for any purpose allowed by the
Federal Rules of Evidence. Fed. R. Civ. P. 32(a)(2). An
Advisory Committee Note to Rule 32(a) explains that the
rule was updated to make “clear that the rules of evidence
are to be applied to the depositions offered at trial as
though the deponent were then present and testifying at
trial” so as to eliminate “certain technical hearsay objec-
tions” based on the deponent’s “absence from court.”
Here, Muzak has not specifically objected to the admissi-
bility of Mr. Paris’ deposition testimony. We leave to the
district court to decide whether the deposition may be
considered in determining the reasonable royalty rate. In
INFO-HOLD, INC. v. MUZAK LLC 13
any case, there is other record evidence to demonstrate
the existence of a genuine issue of material fact as to
whether zero is a reasonable royalty rate.
In light of the foregoing, we reverse the district court’s
grant of summary judgment because there was no evi-
dence of record supporting a zero royalty and the evidence
of record which could be used to determine a non-zero
royalty was ignored. We further remand the case to the
district court for further proceedings consistent with this
opinion.
II. INDUCED INFRINGEMENT
To prove inducement of infringement, the patentee
must “show that the accused inducer took an affirmative
act to encourage infringement with the knowledge that
the induced acts constitute patent infringement.” Mi-
crosoft Corp. v. DataTern, Inc., 755 F.3d 899, 904 (Fed.
Cir. 2014) (citing Global-Tech Appliances, Inc. v. SEB
S.A., 131 S. Ct. 2060, 2068 (2011)). The inducement
knowledge requirement may be satisfied by a showing of
actual knowledge or willful blindness. Commil USA, LLC
v. Cisco Sys., Inc., 720 F.3d 1361, 1366 (Fed. Cir. 2013),
cert. granted on other grounds, 135 S. Ct. 752 (2014).
Willful blindness is a high standard, requiring that the
alleged inducer (1) subjectively believe that there is a
high probability that a fact exists and (2) take deliberate
actions to avoid learning of that fact. Global-Tech, 131 S.
Ct. at 2070.
Issues of material fact remain as to whether Muzak
acted with knowledge that its actions constituted in-
fringement of the ’374 patent. The record shows that
Info-Hold repeatedly contacted Muzak in an effort to put
Muzak on notice of the ’374 patent and Muzak’s patent
infringement. During the conversation between Mr. Wood
and Mr. Zendan, Mr. Zendan raised questions about the
specific functionality alleged to be covered by the ’374
patent. See J.A. 2817, 14:1-3. Mr. Zendan admitted that
14 INFO-HOLD, INC. v. MUZAK LLC
Muzak had a system where there was probably some
control of the music. Id. at 14:5-7. Mr. Zendan told Mr.
Wood he would “look again at [Info-Hold’s] patent.” Id. at
14:19-20. Despite Mr. Wood’s letter requesting that Mr.
Zendan honor his statement to look into whether Muzak’s
systems infringed the ’374 patent, there is no evidence
that Muzak did so.
This record raises issues of material fact as to wheth-
er Muzak may have subjectively believed there was a high
probability it infringed the ’374 patent and took deliberate
actions to avoid learning whether it actually did. In other
words, the record raises the issue of whether Muzak
willfully blinded itself to whether it acted to induce in-
fringement after becoming aware of the existence and
alleged functionality of the ’374 patent. See Global-Tech,
131 S. Ct. at 2070.
Therefore, we vacate the district court’s grant of
summary judgment of no induced infringement and
remand for further consideration on the issue of Muzak’s
willful blindness.
III. CONSTRUCTION OF “WHEN A CALLER
IS PLACED ON HOLD”
During claim construction, the parties sought compet-
ing constructions of the term “when a caller is placed on
hold,” as that term influenced whether music or message
playback had to begin at the time the caller was placed on
hold, or could begin at some time prior to, and independ-
ent of, when a caller was placed on hold. As used in this
term, the word “when” could either mean during a period
of time (e.g., she played sports when she was in high
school) or at one moment of time (e.g., the lights go on
when you flip the switch). The district court construed
the term to mean “at the moment a caller is placed on
hold.”
INFO-HOLD, INC. v. MUZAK LLC 15
Our review of a district court’s claim construction
based solely on the patent’s intrinsic record is de novo.
Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831,
841 (2015). The words of a claim are generally given their
ordinary and customary meaning, as understood by one of
ordinary skill in the art reading the claims in the context
of the specification and prosecution history. Thorner v.
Sony Computer Entm’t Am. LLC, 669 F.3d 1362, 1365
(Fed. Cir. 2012). “Claims must be interpreted with an eye
toward giving effect to all terms in the claim.” Becton,
Dickinson & Co. v. Tyco Healthcare Grp., LP, 616 F.3d
1249, 1257 (Fed. Cir. 2010) (citation and internal quota-
tion marks omitted).
We hold that the district court’s construction remains
faithful to our principles of construction and is supported
by the intrinsic evidence. Claims of the ’374 patent cover
actions such as accessing messages from a storage device,
providing the accessed messages to the playback device,
and playing the messages on the playback device, each
occurring “when” the caller is “placed on hold.” See, e.g.,
’374 patent, claims 7, 17 (’374 patent reexamination
certificate, col. 1 ll. 37 & 48-49; col. 2 l. 61). There is no
disclosure that any of these actions, or any other action,
occurs before or while the caller is on hold. Every in-
stance of the words “on hold” in the ’374 patent is preced-
ed by the word “placed.” Thus, to construe this term to
not require that playback starts at the time the caller is
placed on hold, as Info-Hold asks us to do, would be to
read the word “placed” out of the claims of the patent.
Our precedent prohibits us from adopting such a con-
struction. See Becton, Dickinson, 616 F.3d at 1257.
Here, the intrinsic evidence supports the district
court’s construction determinations. During reexamina-
tion of the ’374 patent, Info-Hold amended the claims by
adding the limitation “when a caller is placed on hold” to
avoid anticipation by the prior art. Info-Hold argued that
the addition of this limitation overcame the prior art
16 INFO-HOLD, INC. v. MUZAK LLC
because the prior art did “not teach, or even suggest . . .
playing messages or generating signals when callers are
placed on hold.” J.A. 473. As claim 7 shows, the generat-
ed signals “control” the message playback devices by
directing them to access messages and play them back
through the output. If the signals themselves are gener-
ated “when callers are placed on hold,” as Info-Hold
argued during reexamination, then the playback resulting
from the control signal must also occur at that time, not
before the caller is placed on hold. Thus, both the prose-
cution history and the claim language support a construc-
tion of the term “when a caller is placed on hold” to mean
“at the moment the caller is placed on hold.”
For these reasons, we affirm the district court’s con-
struction of the term “when a caller is placed on hold.”
CONCLUSION
Because record evidence exists upon which the district
court can base a reasonable royalty analysis, we reverse
the grant of summary judgment that Info-Hold cannot
prove damages. We vacate the grant of summary judg-
ment that Muzak did not induce infringement on the
basis that there is a genuine issue of material fact as to
Muzak’s subjective belief regarding its infringement of the
’374 patent. Finally, because the district court’s construc-
tion of the term “when a caller is placed on hold” gives
meaning to all claim terms and is supported by the intrin-
sic record, we affirm the district court’s construction. We
remand the case for further proceedings consistent with
this opinion.
AFFIRMED-IN-PART, REVERSED-IN-PART,
VACATED-IN-PART AND REMANDED
COSTS
Each party shall bear its own costs.