Automed Technologies, Inc. v. Microfil, LLC , 244 F. App'x 354 ( 2007 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2006-1620
AUTOMED TECHNOLOGIES, INC.,
Plaintiff-Appellant,
v.
MICROFIL, LLC
and WILLIAM GEROLD,
Defendants-Appellees.
Sharon R. Barner, Foley & Lardner LLP, of Chicago, Illinois, argued for plaintiff-
appellant. With her on the brief were Marianne C. Holzhall and Michael R. La Porte.
Eugene J. Rath III, Price, Heneveld, Cooper, DeWitt & Litton, LLP, of Grand Rapids,
Michigan, argued for defendants-appellees. With him on the brief was Steven L.
Underwood.
Appealed from: United States District Court for the Northern District of Illinois
Judge Samuel Der-Yeghiayan
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2006-1620
AUTOMED TECHNOLOGIES, INC.,
Plaintiff-Appellant,
v.
MICROFIL, LLC
and WILLIAM GEROLD,
Defendants-Appellees.
__________________________
DECIDED: July 16, 2007
__________________________
Before MAYER, Circuit Judge, CLEVENGER, Senior Circuit Judge, and LINN, Circuit
Judge.
Opinion for the court filed by Circuit Judge LINN. Opinion dissenting in part filed by
Circuit Judge MAYER.
LINN, Circuit Judge.
AutoMed Technologies, Inc. (“AutoMed”) appeals from the grant by the United
States District Court for the Northern District of Illinois (“district court”) of summary
judgment of non-infringement by William Gerold (“Gerold”) and Microfil, LLC
(collectively, “Microfil”) of AutoMed’s U.S. Patents No. 6,449,927 (“’927 patent”) and No.
6,742,671 (“’671 patent”), AutoMed Techs., Inc. v. Microfil, LLC, No. 04-CV-5596 (N.D.
Ill. Jan. 18, 2006) (“Infringement Opinion”), and of the award of nominal damages
against Microfil for a previously adjudicated breach of contract claim, AutoMed Techs.,
Inc. v. Microfil, LLC, No. 04-CV-5596 (N.D. Ill. June 7, 2006) (“Contract Damages
Opinion”). Because one of the accused products lacks a “vibratory dispenser,” and
because AutoMed failed to provide a proper basis for calculating damages beyond the
nominal award, we affirm-in-part; because we have clarified the proper construction of
the claim term “controller,” we vacate-in-part and remand for further proceedings
consistent with this opinion.
I. BACKGROUND
It is undisputed that Gerold, along with his consulting company, worked for
AutoMed and its predecessor to design a commercial embodiment of AutoMed’s ’927
and ’671 patents, now known as the AutoMed QuickScript® system. After Gerold
completed his work with AutoMed, he designed what would become the first generation
of Microfil systems, the Microfil 219 and 107 systems (collectively the “219/107
Systems”). In response, AutoMed sued. Gerold and Microfil then developed a second
generation system, referred to as the auger-based system (“Auger System”). AutoMed
accused both systems of infringing various claims of both the ’927 and ’671 patents and
accused Gerold of breaching his non-employee security agreement. The district court
entered summary judgment of non-infringement for Microfil on both systems for all of
the asserted claims and against Microfil on AutoMed’s breach of contract claim. The
district court awarded nominal damages of one dollar on the contract claim. AutoMed
appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
2006-1620 2
II. DISCUSSION
A. Claim Construction
AutoMed appeals the district court’s constructions of the terms “controller” and
“vibratory dispenser,” over which we exercise plenary review. Markman v. Westview
Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370(1996); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998) (en
banc). Additionally, Microfil disputes the district court’s construction of the terms
“container” and “canister.”
1. “Controller”
The district court construed the term “controller” to mean “a single control system
[that] regulates the entire process.” In so doing, the district court rejected AutoMed’s
preferred construction of “a device or system that regulates a process or another
device” as inconsistent with the specification. AutoMed Techs., Inc. v. Microfil, LLC, No.
04-CV-5596, slip op. at 17-18 (N.D. Ill. Oct. 26, 2005) (“Claim Construction Opinion”).
In applying this construction, the district court then held that “multiple controllers . . .
coordinated by a master computer” could not constitute a single control system.
Infringement Opinion, slip op. at 8. In effect, the district court’s application treated the
“single control system” as referring to a single control device. Id. (emphasis added).
AutoMed argues that the district court erred by limiting “controller” to a single control
device, while Microfil urges us to adopt a definition from a technical dictionary, which
defines “controller” as “[a] module or specific device which operates automatically to
regulate a controlled variable or system.” Charles J. Sippl, Microcomputer Dictionary 85
(2d ed. 1981). Microfil misrepresents this definition in its brief, however, by introducing
2006-1620 3
the modifier “single” before “module or specific device,” and by ignoring the first
definition listed, which recites “[a]n element or group of elements . . . .” See id.(emphasis added). The cited dictionary definition does not limit the term “controller” to a
device as distinguished from a group, collection, or system of devices.
We agree with the district court’s initial construction, with the clarification that the
“controller” need not be limited to a single device, as applied by the district court and
asserted by Microfil. We see no basis in the intrinsic record to warrant reading the term
“controller” to be limited to a single device or to any particular hardware or software.
The specifications of the ’671 and ’927 patents support a broad interpretation of
“controller.” While the specifications differ in some respects, these differences are not
material to our analysis here; we rely on text common to both specifications. Moreover,
“the same term or phrase should be interpreted consistently where it appears in claims
of common ancestry.” Epcon Gas Sys., Inc. v. Bauer Compressors, Inc., 279 F.3d
1022, 1030 (Fed. Cir. 2002). The specifications disclose at least two structures that
perform control functions: a “controller 180,” which apparently controls only the rate of
vibration; and a “control system 80,” which seems to control many aspects of the entire
process. Compare, e.g., ’927 patent col.8 ll.51-59, with id. col.11 ll.43-46.
Unfortunately, the specifications fall short of clarity in outlining the exact functions
and details of the control system software and hardware. Even though the relationship
between these structures is not entirely clear from the written description, what is
unmistakable is that no single device is disclosed which performs or is capable of
performing all of the functions recited in claim 1 of the ‘927 patent, namely, to receive a
patient’s prescription information and to control the entire apparatus, including the
2006-1620 4
vibratory dispenser, the container transport assembly, and the vial transport assembly.
See ’927 patent claim 1. To the contrary, the patents describe only in general terms the
control of several distinct systems and processes. E.g., ’927 patent col.8 ll.1-2 (drive
unit vibration); id. col.10, ll.58-62 (vial transport); id. col.11, ll.47-63 (patient entry
process). With all due respect to the view expressed in the dissent, a construction of
the term “controller” to be “a single module or specific device which operates
automatically to regulate a controlled variable or system,” as argued by Microfil, would
fly in the face of the specification and would engraft onto the claims an unwarranted
limitation. See Phillips v. AWH Corp., 415 F.3d 1303, 1322-23 (Fed. Cir. 2005) (en
banc) (cautioning that dictionary definitions cannot be used to “contradict any definition
found in or ascertained by a reading of the patent documents” (quoting Vitronics Corp.
v. Conceptronic, Inc., 90 F.3d 1576, 1584 n.6 (Fed. Cir. 1996))). Without a clear
indication from the patentee that a single device must control these varied functions, it is
improper to limit the term “controller” to a single device rather than a single system.
Accordingly, while we affirm the district court’s initial construction of “controller” to mean
a “single control system that regulates the entire process,” we clarify that the controller
need not be limited to a single device, nor to any particular hardware or software.
2. “Vibratory Dispenser”
The district court construed “vibratory dispenser” as “a device that uses vibration
in order to dispense medication, and not a device that merely assists in the dispensing,”
thereby rejecting AutoMed’s proposed construction, “a dispenser that uses vibration to
aid in the dispensing function.” Claim Construction Opinion, slip op. at 18-19. Microfil
argues that under the district court’s construction, vibration must be the exclusive force
2006-1620 5
causing the dispensing of medication. Microfil thus attempts to exclude devices
requiring the assistance of gravity from the scope of the claims. AutoMed challenges
Microfil’s interpretation of the district court’s construction and maintains that vibration
need not be the sole force used to dispense medication.
We agree with the district court’s construction, but clarify that to the extent
Microfil reads it to require the use of vibration alone to dispense pills, it is incorrect.
Nothing in the language of the claims or the specifications indicates that the term
“vibratory” should be interpreted to mean “vibratory only.” Even Microfil has previously
admitted that the claimed dispenser requires gravity—in addition to vibration—to
effectively dispense pills. See Br. Supp. Defs.’ First Mot. for Partial Summ. J. for Non-
Infringement (Dckt. No. 47) at 10. The preferred embodiments corroborate this
admission; both specifications indicate that internal ramps position pills to be dispensed
through a gate on the bottom of the container or canister, which opens to allow pills to
drop out during the vibratory dispenser’s operation. This precludes any claim
construction wholly excluding the role of gravity. See Vitronics Corp. v. Conceptronic,
Inc., 90 F.3d 1576, 1583 (Fed. Cir. 1996). Thus, we affirm the district court’s
construction with the clarification that natural forces—including gravity—are not
excluded from the dispensing process.
3. “Container” and “Canister”
As an alternative basis for affirmance, Microfil challenges the district court’s
construction of “container” and “canister,” as “any suitable design that allows dispensing
of countable oral solid drugs.” Claim Construction Opinion, slip op. at 17. Microfil
contends that these terms, which the parties agree are synonymous, should be limited
2006-1620 6
to a unitary structure. AutoMed counters that nothing in the intrinsic record compels this
narrow construction. Having considered the claims, the written description, and the
figures of the ’927 and ’671 patents, we agree with the district court’s refusal to read in
this additional limitation. See ’927 patent, col.6 ll.15-17 (“The canister may be of any
suitable design that allows dispensing of countable oral solid drugs within an automated
drug dispensing system.”); ’671 patent, col.6 ll.17-19 (same). We accordingly affirm the
district court’s construction of these terms.
B. Infringement
“We review a district court’s grant of summary judgment of non-infringement
without deference.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355,
1369 (Fed. Cir. 2006). The district court based its non-infringement determination on
the absence from the accused systems of structure corresponding to the “controller”
limitation. The district court so ruled by incorrectly applying its “single control system”
construction of the term “controller” to a specific device and by failing to recognize that
several of the asserted claims lack the “controller” limitation completely. However, we
affirm the summary judgment of non-infringement with respect to Microfil’s Auger
System on the alternate ground that AutoMed has failed to raise a genuine issue of
material fact that the Auger System includes a “vibratory dispenser.” Accordingly, we
vacate the summary judgment of non-infringement on the “controller” limitation, and
provide guidance to the district court in revisiting this issue on remand. See Ecolab, Inc.
v. Envirochem, Inc., 264 F.3d 1358, 1370 (Fed. Cir. 2001).
Under the clarified interpretation of “controller,” discussed supra, the district court
must consider on remand AutoMed’s contentions that Microfil’s separate controller
2006-1620 7
modules and master control program comprise a “single control system.” Microfil
admitted at oral argument that its various controllers comprise a single system, see Oral
Arg. at 25:42-25:55, 27:00-27:30, available at http://www.cafc.uscourts.gov/
oralarguments/mp3/06-1620.mp3, and argued for non-infringement based on its multi-
component design. As discussed previously, however, nothing in the ’927 or ’671
patents indicates that the inventor intended to exclude modular or multi-component
systems, and we do not limit “controller” to a single device. Although Microfil contends,
for example, that its systems comprise multiple autonomous controllers and not “a
single control system that regulates the entire process,” such arguments implicate
factual questions. For these reasons, the summary judgment of non-infringement
based on the “controller” limitation cannot stand.
Moreover, the district court did not address the complete absence of the
“controller” limitation from asserted claims 12-17, 19-20, 22, and 24-26 of the ’671
patent. This variation in claim language gives rise to a presumption of differing claim
scope, one which was not disputed by Microfil prior to oral argument, and one which is
further bolstered by the addition of the “controller” limitation in dependent claim 21. See
Phillips, 415 F.3d at 1314-15 (discussing claim differentiation doctrine). We also note
that claim 27 of the ’671 patent, which recites “the controller,” appears to be mistakenly
dependent on claim 20, in which this term finds no antecedent basis. See NTP, Inc. v.
Research In Motion, Ltd., 418 F.3d 1282, 1306 (Fed. Cir. 2005) (construing claim term
employing definite article “the” as requiring an antecedent basis). Because claim 21—
and not claim 20—recites a “controller” limitation, perhaps claim 27 was intended to
depend from claim 21. However, we leave to AutoMed any corrective action it deems
2006-1620 8
necessary. The district court erred as to these asserted claims by entering summary
judgment of non-infringement based solely on a claim limitation not recited therein.
Microfil presents an alternative ground for affirmance—the lack of a “vibratory
dispenser” in the accused systems. We disagree as to the 219/107 Systems. The
219/107 Systems indisputably use vibration to dispense pills. Microfil itself refers to the
“original [Microfil] systems [as] using vibration,” Appellee Br. at 27, and has admitted
that “Microfil’s [219/107 Systems] use gravity, in addition to vibration, to cause the
dispensing of pills,” id. at 15 (emphasis added); see also id. at 3. Not only do we
disagree with Microfil’s alternative ground for affirmance, it would appear that, in the
absence of other facts not apparent from the record as presently developed, Microfil’s
admission with respect to the “vibratory dispenser” limitation, and the absence of any
“controller” limitation in claims 12-17, 19-20, 22, and 24-26 of the ’671 patent would
support a conclusion of infringement of those claims by the 219/107 Systems.
Nonetheless, we leave it to the district court to address this issue in the first instance on
remand. We also leave it to the district court to assess infringement of the remaining
claims by the 219/107 Systems in light of our clarifications to the claim constructions.
As to the Auger System, Microfil makes no concessions regarding vibration, and
AutoMed fails to provide evidence to support its claim that the Auger System uses
vibration to dispense pills. The 2005 Microfil patent application cited by AutoMed as
descriptive of the Auger System makes no reference to vibration, and AutoMed’s expert
offered little more than speculation regarding the capability of the system to be
configured to vibrate pill containers. Telemac Cellular Corp. v. Topp Telecom, Inc., 247
F.3d 1316, 1330 (Fed. Cir. 2001) (“[T]hat a device is capable of being modified to
2006-1620 9
operate in an infringing manner is not sufficient, by itself, to support a finding of
infringement.”); see also Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052, 1080
(Fed. Cir. 2005) (holding expert speculation insufficient to defeat summary judgment).
AutoMed’s assertion that Microfil’s own expert characterized the motion of the Auger
System as vibration is unsupported by the record. At best, Microfil’s expert testified only
that the Auger System could be configured to cause vibration. Because AutoMed failed
to make a showing sufficient to establish a genuine issue of material fact as to the
existence of vibration in the Auger System, and because every claim asserted by
AutoMed from both the ’927 and ’671 patents includes a limitation requiring a “vibratory
dispenser,” we affirm the district court’s summary judgment of non-infringement of both
the ’927 and ’671 patents with respect to Microfil’s Auger System. See E-Pass Techs.,
Inc. v. 3Com Corp., 473 F.3d 1213, 1222 (Fed. Cir. 2007) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986)).
C. Contract Damages
Following a grant of summary judgment of breach of contract against Gerold, the
district court granted AutoMed a permanent injunction barring Gerold from disclosing
AutoMed’s confidential information, but awarded only nominal damages in the amount
of one dollar. Contract Damages Opinion, slip op. at 8-10. The district court was not
persuaded that AutoMed had demonstrated any monetary harm resulting from Gerold’s
breach, particularly in light of its findings that Gerold contributed to the QuickScript®
project in exchange for compensation paid by AutoMed and its predecessor; that
AutoMed alleged no lost sales as a result of Gerold’s breach; and that Gerold’s contract
lacked a non-compete clause. Id., slip op. at 9-10. AutoMed appeals the nominal
2006-1620 10
damages award and relies on Olympia Hotels Corp. v. Johnson Wax Development
Corp., 908 F.2d 1363 (7th Cir. 1990), for the proposition that reimbursement of
consideration paid for a broken promise is an acceptable measure of damages where
the plaintiff cannot establish lost profits. AutoMed thus seeks reimbursement for the
entire amount of compensation paid to Gerold and his company under the contract.
Microfil argues in response that AutoMed failed to establish any correlation between the
amount paid to Gerold for his services and any subsequent harm suffered as a result of
Gerold’s breach.
We review the nominal damages award for breach of contract for clear error.
Okaw Drainage Dist. v. Nat’l Distillers & Chem. Corp., 96 F.3d 1049, 1051 (7th Cir.
1996) (applying Illinois law and recognizing the “broad discretion” of the district court).
Because AutoMed provided no basis for quantifying any damages suffered as a result
of the breach of contract, we find no clear error on the part of the district court in
entering an award of only nominal damages. See Midwest Software, Ltd. v. Willie
Washer Mfg. Co., 630 N.E.2d 1088, 1105 (Ill. App. Ct. 1994) (“If a party proves that it
has the right to damages but fails to provide a proper basis for computing those
damages, only nominal damages may be awarded.”).
AutoMed failed to establish the monetary extent, if any, of its injury, much less to
justify reimbursement of the full contract price AutoMed or its predecessor paid to
Gerold for his work in developing AutoMed’s QuickScript® system. See Ustrak v.
Fairman, 781 F.2d 573, 578 (7th Cir. 1986) (stating that nominal damages alone suffice
“if only the fact and not the extent of injury is proved.”). AutoMed provides only the fact
that it had previously compensated Gerold (or perhaps his company) to justify a larger
2006-1620 11
award. Unlike Olympia Hotels, however, where the breach went to the heart of the
contracted services, and a partial refund of the contract price could make the plaintiff
whole, see 908 F.2d at 1366, 1372 (holding that breach of contract by hotel
management firm based on its failure to “use its best efforts to make the hotel a
success” could justify a “refund [of] a portion of the management fees that [the plaintiff]
had paid under the contract”), the breach here was ancillary to the primary purpose of
the contract. AutoMed provides no basis to quantify any harm suffered as a result of
the breach, much less correlate this harm to the compensation paid under the contract.
Because we find no clear error in the district court’s award of nominal damages, we
affirm.
III. CONCLUSION
For the foregoing reasons, we affirm-in-part as to the district court’s nominal
damages award for breach of contract and as to summary judgment of non-infringement
by Microfil’s Auger System. We vacate-in-part the district court’s summary judgment of
non-infringement of Microfil’s 219/107 Systems, and remand for further proceedings
consistent with this opinion.
COSTS
No costs.
2006-1620 12
NOTE: This disposition is nonprecedential
United States Court of Appeals for the Federal Circuit
2006-1620
AUTOMED TECHNOLOGIES, INC.,
Plaintiff-Appellant,
v.
MICROFIL, LLC and WILLIAM GEROLD,
Defendants-Appellees.
MAYER, Circuit Judge, dissenting-in-part.
I would affirm the trial court’s grant of summary judgment of noninfringement of
U.S. Patent No. 6,449,927 (“’927 patent”). The ’927 patent requires a single controller
to receive a patient’s prescription information and control the entire apparatus, including
the vibratory dispenser, the container transport assembly, and the vial transport
assembly. See ’927 patent claim 1. Allowing multiple controllers to perform these
functions under the guise of a single control unit or system disregards the claim
requirement that a single “controller” be used. Because the accused devices do not
have a single controller that performs the required functions, and AutoMed
Technologies, Inc. did not pursue a doctrine of equivalents argument before the trial
court, Microfil, LLC does not infringe the ’927 patent.