Fargo Electronics Inc. v. Iris, Ltd. , 287 F. App'x 96 ( 2008 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1523
FARGO ELECTRONICS INC.,
Plaintiff-Appellant,
v.
IRIS, LTD., INC.,
Defendant-Appellee.
David P. Swenson, Robins, Kaplan, Miller & Ciresi, L.L.P., of Minneapolis,
Minnesota, argued for plaintiff-appellant. With him on the brief were Robert J.
Gilbertson and Sang Young A. Brodie.
J. Derek Vandenburgh, Carlson, Caspers, Vandenburgh & Lindquist, P.A., of
Minneapolis, Minnesota, argued for defendant-appellee. With him on the brief were
Brian W. Hayes and Rachel C. Hughey.
Appealed from: United States District Court for the District of Minnesota
Judge John R. Tunheim
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1523
FARGO ELECTRONICS INC.,
Plaintiff-Appellant,
v.
IRIS, LTD., INC.,
Defendant-Appellee.
Appeal from the United States District Court for the District of Minnesota in case no. 04-
1017, Judge John R. Tunheim.
__________________________
DECIDED: June 27, 2008
__________________________
Before NEWMAN, PROST, and MOORE, Circuit Judges.
PROST, Circuit Judge.
Fargo Electronics, Inc. (“Fargo”) appeals a decision of the United States
District Court for the District of Minnesota granting partial summary judgment of no
contributory or induced infringement of claims 1 through 7 of U.S. Patent No. 5,755,519(the “’519 Patent”), and invalidity of claims 8 through 15 of the ’519 Patent. Fargo
Elecs., Inc. v. Iris Ltd., Inc., No. 04-1017, 2005 U.S. Dist. LEXIS 34493, *15-16, *23 (D.
Minn. Nov. 30, 2005) (“Summary Judgment Order”). We affirm.
BACKGROUND
Fargo manufactures and sells photo identification (“ID”) card printers and
replacement ink ribbons. Fargo makes a number of different types of ribbons, with
different characteristics, for use in its photo ID card printers. Fargo’s printers have a
sensor, which identifies the ribbon type by detecting identifying indicia arranged in the
ribbon supply roll.
Fargo owns two patents, the ’519 Patent and U.S. Patent No. 6,152,625 (the
“’625 Patent”), relating to printer ribbon supply rolls with identifying indicia and sensors
to detect the indicia during operation of a printer. Figure 7 of the ’519 Patent shows a
schematic view of a printer ribbon supply roll 54, including a magnetic sensor core 58
with a plurality of apertures or bores arranged around the periphery, and a Hall Effect
sensor 42 attached to the printer to detect pins in the apertures or bores as they pass
the sensor.
’519 Patent col.4 ll.65-67, col.5 ll.10-19, 64-67.
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IRIS, Ltd., Inc. (“IRIS”), a former Fargo distributor, makes and sells replacement
ribbons with identifying indicia compatible with Fargo printers. Upon learning of the IRIS
replacement ribbons, Fargo terminated IRIS’s distribution agreement and filed suit in the
United States District Court for the District of Minnesota alleging, inter alia, infringement
of the ’519 and ’625 Patents.
In June 2004, Fargo moved for a preliminary injunction to prevent IRIS from
selling its ribbon called Ribbon Choices No. 81733G (“81733G ribbon”). In March 2005,
pursuant to IRIS’s stipulation that it would not make, use, sell, or offer to sell the
81733G ribbon, the district court granted in part Fargo’s preliminary injunction motion
and enjoined the sale of the 81733G ribbon. Fargo alleges that after the preliminary
injunction hearing, IRIS began making and selling another ribbon (the “FPYMCKO-250
ribbon”), which is also compatible with Fargo’s printers. In June 2005, Fargo filed its
Second Amended Complaint including the FPYMCKO-250 ribbon in this suit.
Thereafter, the district court construed the disputed claim terms and granted
partial summary judgment in favor of IRIS. Summary Judgment Order, at *15-16, *23.
The court concluded that claims 8 through 15 of the ’519 Patent are invalid as indefinite
under 35 U.S.C. § 112, ¶ 2. Id. at *15-16. The court also concluded that claims 1
through 7 of the ’519 Patent are not infringed contributorily or by inducement because
the reasonable repair doctrine applies such that there is not an underlying act of direct
infringement. Id. at *23. The parties later agreed to dismiss the remaining counts with
prejudice, and the court entered final judgment. This appeal followed. We have
jurisdiction over this appeal pursuant to 28 U.S.C. § 1295(a)(1).
2007-1523 3
DISCUSSION
A. Standard of Review
We review a district court’s grant of summary judgment without deference,
drawing all reasonable inferences in favor of the nonmovant. Perricone v. Medicis
Pharm. Corp., 432 F.3d 1368, 1372 (Fed. Cir. 2005). We review a district court’s claim
construction as a matter of law without deference, including a determination that a claim
is indefinite under 35 U.S.C. § 112, ¶ 2. See Novo Indus., L.P. v. Micro Molds Corp.,
350 F.3d 1348, 1353 (Fed. Cir. 2003).
B. Indefiniteness
As previously noted, the district court determined that independent claim 8 of the
’519 Patent is invalid as indefinite under 35 U.S.C. § 112, ¶ 2. Summary Judgment
Order, at *15-16. Claim 8 recites:
An ink ribbon supply roll comprising a roll core, a plurality of supports
comprising a first support and a plurality of second supports formed in a
member movable with the roll core and radially spaced from an axis of
rotation of the roll core when the roll core rotates as ribbon thereon is
removed, and first identifier indicia comprising an unmagnetized magnetic
material in a first support to indicate a home position, the second supports
other than the being oriented at known positions relative to the home
position and at least one second support carrying a removable
unmagnetized magnetic material identifier indicia.
’519 Patent col.7 l.46–col.8 l.9 (emphasis added).
Fargo argued to the district court that claim 8 does not have an error and that it
should be construed according to standard principles of claim construction. Fargo
submitted the following two proposed “constructions” of the limitation “the second
supports other than the” to the district court:
(1) “the supports other than the first support” (thus deleting “second”
and adding “first support”); or
2007-1523 4
(2) “the second supports” (thus deleting “other than the”).
Summary Judgment Order, at *9. The district court concluded that claim 8 contains an
error, and that both of the proposed “constructions” require the addition or subtraction of
claim terms. Id. Thus, the district court determined that correction of the claim would
require the application of principles of claim correction as explained by this court in
Novo Industries, rather than standard principles of claim construction. It noted that in
Novo Industries this court held that a district court may only correct an error in a patent
by interpretation of the patent “if (1) the correction is not subject to reasonable debate
based on consideration of the claim language and the specification and (2) the
prosecution history does not suggest a different interpretation of the claims.” 350 F.3d
at 1354. After considering the parties’ arguments and proposed constructions, the
district court determined that it “would have to engage in conjecture” in order to assign a
meaning to the phrase “second supports other than the.” Summary Judgment Order, at
*15. It concluded that it could not correct claim 8 under Novo Industries and,
accordingly, that independent claim 8 is invalid as indefinite. Because dependent
claims 9 through 15 depend from claim 8, the district court found that they are also
invalid as indefinite.
Fargo makes two main arguments on appeal regarding indefiniteness. First, it
argues that claim 8 does not contain a mistake and the district court should have
construed it according to standard principles of claim construction, rather than engaging
in a claim correction analysis under Novo Industries. Second, it argues in the
alternative that if there is an error in claim 8, it is correctable under Novo Industries. We
address each argument in turn.
2007-1523 5
A plain reading of claim 8 shows that there is an error. We reject Fargo’s
argument to the contrary. As the district court noted, “the phrase ‘second supports
other than the’ naturally leads the reader to expect a description of a further subset of
that category of supports known as ‘second supports.’” Summary Judgment Order, at
*13. Claim 8 as issued, however, does not identify the object of the phrase “other than
the.” Absent correction, “[t]he claim is invalid for indefiniteness because it is ‘insolubly
ambiguous’ and not ‘amenable to construction.’” Novo Indus., 350 F.3d at 1358(quoting Exxon Research & Eng’g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir.
2001)). Thus, the district court did not err by engaging in a claim correction analysis
under Novo Industries.
Accordingly, we next turn to the question of whether the district court properly
determined that it could not correct the error in claim 8 under Novo Industries. In this
regard, on appeal Fargo submits that the claim limitation “the second supports other
than the being oriented at known positions relative to the home position” should be
construed to mean “the apertures or bores not in the home position are located in
predetermined positions having reference to the home position.” Appellant’s Br. 10.
Responding to this proposed construction as well as the two constructions that Fargo
proposed to the district court, IRIS argues that “[h]aving offered these three possible
corrections, Fargo cannot dispute that each one constitutes a reasonable correction of
the error in claim 8.” Appellee’s Br. 22. It further argues that “each of these three
corrections results in a claim of different scope.” Id. Fargo disagrees, claiming that “[i]n
the present case, unlike Novo, the plausible proposed corrections would lead to the
same scope for claim 8 as simply performing a claim construction analysis.” Appellant’s
2007-1523 6
Reply Br. 6. Thus, while the parties do not appear to dispute that there are multiple
reasonable ways to correct the error in claim 8 (in fact Fargo itself has proposed several
possible corrections), they disagree as to whether there is a reasonable debate as to
the proper correction and whether all of the reasonable corrections would result in the
same claim scope.
With regards to the question of claim scope, Fargo appears to argue that claim 8
should be construed to require two pins in two supports to indicate the home position
and at least one other pin in a support located at a known position relative to the home
position. For example, in discussing the construction that it proposes on appeal—“the
apertures or bores not in the home position are located in predetermined positions
having reference to the home position”—Fargo submits that
[t]he full limitation at issue could be described even more simply by stating
merely that it requires at least one pin in a second support at a known
location apart from the home position. When one of ordinary skill reads
the entire ’519 patent, the only way to identify a specific printer ribbon in
this novel scheme relies on two pins in a home position, plus at least one
pin in another known position.
Appellant’s Reply Br. 4-5.
At least one of the other constructions proposed by Fargo, however, would
appear to require only one support in the home position and at least two supports
located at known positions relative to the home position. Specifically, under Fargo’s
proposed construction to the district court—“the supports other than the first support
being oriented at known positions relative to the home position”—it appears that a
singular “first support” indicates the home position, while all other “supports” must be
oriented at known positions relative to the home position. IRIS also points to the
following statement in the specification as an example that it claims does not require
2007-1523 7
two supports in the home position: “While binary codes could be used, more magnets
are required.” ’519 Patent col.2 ll.41-42. It argues that, while a “binary code”
arrangement may not be the preferred embodiment because it would require more
magnets, it is an example in the specification where two pins would not be required in
the home position. See Oral Arg. at 36:38, available at
http://www.cafc.uscourts.gov/oralarguments/mp3/2007-1523.mp3. Additionally, we note
that the constructions requiring only one “first support” in the home position seem
consistent with the broad language used multiple times in claim 8 when the patentee
refers to a singular “first support.” See ’519 Patent col.7 l.46–col.8 l.6 (“a plurality of
supports comprising a first support and a plurality of second supports . . . , and first
identifier indicia comprising an unmagnetized magnetic material in a first support to
indicate a home position” (emphases added)).
Further, IRIS proposes the following correction for the disputed limitation in claim
8: “the second supports other than the one adjacent the first support being oriented at
known positions relative to the home position.” Appellee’s Br. 24. This correction would
include one of the “second supports” in the home position (in addition to a singular “first
support”). As the district court noted,
[t]he language of claim 8 . . . refers to “first identifier indicia . . . in a first
support,” with “support” being singular, yet the specification shows more
than one support in the “home position.” Thus, it appears possible that
“the second supports other than the” could refer to the other support in the
“home position,” which is a correction inconsistent with that proposed by
Fargo.
Summary Judgment Order, at *13. This approach appears consistent with Fargo’s
argument on appeal that the claim requires two pins and two supports in the home
position and at least one other pin in a support located at a known position relative to
2007-1523 8
the home position. It is inconsistent, however, with other Fargo arguments on appeal,
including its argument that a second support cannot be one of the supports in the home
position. See Appellant’s Br. 16 (stating that “the ‘second supports’ elements are not in
the ‘home position’”); Appellant’s Reply Br. 9 n.14 (“The second supports element does
not—and cannot—define the home position, and must be elsewhere.”).
Moreover, we agree with the district court that “the phrase ‘second supports other
than the’ naturally leads the reader to expect a description of a further subset of that
category of supports known as ‘second supports.’ Fargo’s proposed constructions take
any such additional differentiation out of the phrase completely.” Summary Judgment
Order, at *13-14. Based on our review of the record and the arguments presented by
the parties, we conclude that the specification and claims do not resolve the reasonable
debate as to the proper way to correct the obvious error in claim 8.
Finally, while it is not entirely clear if it intends this argument to apply in the
correction context, we note that Fargo argues that the prosecution history supports only
one reasonable construction of claim 8. IRIS maintains, however, that under Novo
Industries our inquiry is complete if the proper way to correct the error is not apparent
from the face of the patent, even if the proper correction is clear from the prosecution
history. Fargo is correct in so far as it argues that the prosecution history is to be
consulted to determine whether the error is subject to only one reasonable construction.
See Hoffer v. Microsoft Corp., 405 F.3d 1326, 1331 (Fed. Cir. 2005) (holding that claim
22, which depends from nonexistent claim 38, could be corrected because the error in
the dependency was evident based on the face of the patent and that the correct
antecedent claim was apparent from the prosecution history). The error must be
2007-1523 9
evident on the face of the patent, see Group One, Ltd. v. Hallmark Cards, Inc., 407 F.3d
1297, 1303 (Fed. Cir. 2005), but the prosecution history should be consulted to
ascertain whether there is only a single reasonable construction. This is exactly what
occurred in Hoffer and nothing in Novo Industries or Group One is to the contrary. The
prosecution history cited on appeal by Fargo primarily focuses on distinguishing a prior
art patent to make clear that the application’s identifier indicia include removable
magnetic material inserts rather than bar codes or stick-on labels. It does not, however,
resolve the reasonable debate relating to the use of the terms “other than the” in claim
8. Thus, the prosecution history does not change the result in this case.
In light of the foregoing analysis, we are not persuaded by Fargo’s arguments
that all of the reasonable ways to correct the error result in the same claim scope and
that the correction is not subject to reasonable debate. We conclude that the district
court properly refused to correct claim 8. Accordingly, we affirm the district court’s
determination that claims 8 through 15 of the ’519 Patent are invalid as indefinite.
Summary Judgment Order, at *15-16.
C. Permissible Repair
Independent claim 8 and dependent claims 9 through 15 of the ’519 Patent claim
an ink ribbon supply roll. See ’519 Patent col.7 l.46–col.8 l.45. Independent claims 1
and 5 and dependent claims 2, 3, 4, 6, and 7 of the ’519 Patent claim combinations
including an ink ribbon supply roll and other printer components, such as a detector.
See ’519 Patent col.6 l.61–col.7 l.45. Fargo alleges that IRIS infringes the ’519 Patent
contributorily or by inducement by selling infringing printer ribbon supply rolls used in
combination with other components. “Fargo does not allege that Iris sells printers with
2007-1523 10
the accompanying detectors, . . . but only that Iris sells infringing printer ribbon supply
rolls.” Summary Judgment Order, at *16.
As the district court noted, “[l]iability under § 271(b) and (c) is dependent on the
existence of an underlying act of direct infringement.” Summary Judgment Order, at
*16-17. After considering the relevant factors, including the fact that “[t]he printer ribbon
is a readily replaceable part that must be replaced after a set number of uses,” the
district court stated that “[t]he facts of this case fall squarely within these earlier
precedents finding repair.” Id. at *19. Thus, the district court concluded that IRIS does
not infringe combination claims 1 through 7 of the ’519 Patent contributorily or by
inducement because the reasonable repair doctrine applies such that there is not an
underlying act of direct infringement. Id. at *23.
Fargo argues on appeal that “[b]ecause claim 8 of the ’519 patent is valid, the
district court erred in finding that IRIS cannot infringe claims 1-7 indirectly.” Appellant’s
Br. 27. As IRIS notes, Fargo’s entire argument on appeal as to infringement of claims 1
through 7 of the ’519 Patent is based on its contentions that the ribbon supply roll is
separately patented and that the permissible repair doctrine is not available when a
replacement component is separately patented. As discussed above, however,
because claims 8 through 15 of the ’519 Patent are invalid as indefinite, the ribbon
supply roll is not separately patented. Thus, Fargo’s argument fails and we affirm the
district court’s decision that IRIS does not infringe claims 1 through 7 of the ’519 Patent
contributorily or by inducement. Summary Judgment Order, at *23.
2007-1523 11
CONCLUSION
For the aforementioned reasons, we affirm the district court’s final judgment of
invalidity and noninfringement.
2007-1523 12