Server Technology, Inc. v. American Power Conversion , 657 F. App'x 1030 ( 2016 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
SERVER TECHNOLOGY, INC.,
Plaintiff-Appellee
v.
AMERICAN POWER CONVERSION
CORPORATION,
Defendant-Appellant
______________________
2015-1605
______________________
Appeals from the United States District Court for the
District of Nevada in No. 3:06-cv-00698-LRH-VPC, Judge
Larry R. Hicks.
______________________
Decided: September 23, 2016
______________________
JAMES E. HARTLEY, Holland & Hart LLP, Denver, CO,
argued for plaintiff-appellee. Also represented by
MICHAEL P. MANNING, Billings, MT; DONALD A. DEGNAN,
Boulder, CO.
PAUL MARCH SMITH, Jenner & Block LLP, Washing-
ton, DC, argued for defendant-appellant. Also represent-
ed by ADAM G. UNIKOWSKY; REGINALD J. HILL, MICHAEL
2 SERVER TECHNOLOGY, INC. v. AMERICAN POWER CONVERSION
GLENN BABBITT, PETER H. HANNA, TERRENCE J. TRUAX,
Chicago, IL.
______________________
Before DYK, PLAGER, and REYNA, Circuit Judges.
REYNA, Circuit Judge.
The trial court adopted a jury’s advisory verdict that
Server Technology Inc.’s (“STI”) patents were not invalid
as obvious and upheld the jury’s verdict that those pa-
tents were infringed by American Power Conversion
Corporation (“APC”). APC appeals the district court’s
denial of its motions for judgment as a matter of law
(“JMOL”) on those issues. We reverse the trial court’s
decisions because they were based on an erroneous claim
construction.
BACKGROUND
A. Patented Technology
APC and STI are competitors in the market for intel-
ligent power distribution units (“PDUs”)—informally
known as plugstrips:
SERVER TECHNOLOGY, INC. v. AMERICAN POWER CONVERSION 3
U.S. Patent No. 7,702,771 at Fig. 1.
PDUs are used to regulate power flowing to computer
servers in data centers. In data centers, computer servers
are stacked in racks. Data centers may contain thou-
sands of racks, and each rack has a PDU to power the
servers it holds. Data centers benefit from maximizing
the number of servers in each rack. However, if the
servers in a rack draw too much power, the PDU will
overload and fail.
The patents at issue relate to PDUs that digitally dis-
play the amount of power being drawn. Only two claims
are at issue: claim 15 of U.S. Patent No. 7,043,543 (the
“’543 patent”) and claim 15 of U.S. Patent No. 7,702,771(the “’771 patent”). There are only two pertinent differ-
ences between claim 15 of the ’543 patent and claim 15 of
the ’711 patent. Compare ’543 patent col. 12 ll. 21−50
with ’771 patent col. 12 ll. 19−46. First, claim 15 of the
’543 patent describes an “electrical power distribution
plugstrip,” while claim 15 of the ’771 patent describes an
“electrical power distribution device.” Second, Element A
of claim 15 of the ’543 patent includes the limitation of a
“vertical strip enclosure,” while Element A of claim 15 of
the ’771 patent includes the broader limitation of “an
enclosure.” Claim 15 of the ’543 patent reads as follows:
15. An electrical power distribution plugstrip con-
nectable to one or more electrical loads in a verti-
cal electrical equipment rack, the electrical power
distribution plugstrip comprising in combination:
A. a vertical strip enclosure having a thickness,
and a length longer than a width of the enclosure;
B. a power input penetrating said vertical strip
enclosure;
4 SERVER TECHNOLOGY, INC. v. AMERICAN POWER CONVERSION
C. a plurality of power outputs disposed along an
area on a face of said length of the strip enclosure,
each among the plurality of power outputs being
connectable to a corresponding one of said one or
more electrical loads;
D. a plurality of power control relays disposed in
said vertical strip enclosure, each among said plu-
rality of power control relays being connected to
said power input and to one or more correspond-
ing power outputs among said plurality of power
outputs;
E. a digital current information display disposed
on another area of said vertical strip enclosure
and adjacent to said plurality of outputs in cur-
rent-determining communication with at least one
among said power input and said plurality of
power outputs; and
F. a plugstrip current reporting system (i) asso-
ciated with the vertical strip enclosure (ii) in pow-
er information determining communication with
at least one among said power input and said plu-
rality of power outputs, and (iii) communicatingly
connectable with a distal current reporting system
through a communications network external to
the electrical power distribution plugstrip.
’543 patent col. 12 ll. 21−50.
Conventional PDUs used light-emitting diodes
(“LEDs”) to alert users to the risk of overload, but they
did not tell users how much more power a rack could
handle. STI’s patented PDU uses a digital display to
provide a numerical value for the amount of power flow-
ing through the PDU. STI’s claimed invention allows
users to maximize the number of servers in each rack
without risking overload by displaying the amount of
power flowing through a PDU.
SERVER TECHNOLOGY, INC. v. AMERICAN POWER CONVERSION 5
B. Procedural History
STI sued APC, claiming that two APC PDUs infringe
claims 15 of the ’543 and ’771 patents. APC denied the
infringement allegations and filed a motion for summary
judgment on grounds that the asserted claims are invalid
as obvious. APC argued that a person of ordinary skill in
the art would have combined a prior art PDU with identi-
fied prior art digital displays that numerically reveal how
much power is flowing through a plugstrip.
The district court construed the word “plugstrip” in
claim 15 of the ’543 patent to include a one-piece limita-
tion; the claimed invention was limited to a single, fully-
integrated device. The trial court denied APC’s motion for
summary judgment with respect to obviousness. The trial
court held that the prior art did not disclose a single,
integrated device; in particular, that the LED display
associated with the prior art PDU was attached external-
ly to the plugstrip, not integrated into it. The trial court
reasoned that the evidence, viewed most favorably to STI,
revealed no motivation to combine and that STI’s evi-
dence of secondary considerations supported a finding of
non-obviousness.
A trial was held on the parties’ infringement and in-
validity claims. Although the trial court’s summary
judgment decision finding a one-piece limitation only
applied to the ’543 patent, the record reveals that the
limitation was applied to both patents at trial. The
parties presented expert and demonstrative evidence
showing that the one-piece limitation applied to both
patents, and during trial the judge stated that both
patents had a one-piece limitation. See J.A 25023 at Tr.
95:9−13, 25142 at Tr. 569:10−14, 25147 at Tr. 589:18−24.
The jury returned a verdict finding that APC in-
fringed the ’543 patent and the ’771 patent. The jury also
issued an advisory verdict pursuant to Fed. R. Civ. P.
39(c) finding that APC failed to prove by clear and con-
6 SERVER TECHNOLOGY, INC. v. AMERICAN POWER CONVERSION
vincing evidence that either of the claims at issue would
have been obvious to a person of ordinary skill in the art
at the time of the invention. The advisory verdict includ-
ed explicit findings by the jury concerning secondary
indicia of nonobviousness. Consistent with the jury’s
findings in its advisory verdict, the trial court held that
claims 15 of ’543 and ’771 patents were not invalid as
obvious.
The district court denied APC’s motion for JMOL and
alternative motion for a new trial. APC appeals. We
have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(C).
STANDARD OF REVIEW
We review a district court’s order granting or denying
JMOL under the standard applied by the regional circuit,
which in this case is the Ninth Circuit. Lincoln Nat’l Life
Ins. Co. v. Transamerica Life Ins. Co., 609 F.3d 1364,
1367 (Fed. Cir. 2010). In the Ninth Circuit, JMOL review
is de novo, and the appellate court views evidence in the
light most favorable to a jury verdict. Amarel v. Connell,
102 F.3d 1494, 1521 (9th Cir. 1996). When a district
court’s claim construction relies only on intrinsic evi-
dence, as it did here, we review that claim construction de
novo. Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct.
831, 841 (2015).
DISCUSSION
APC argues that the district court erred in construing
claim 15 of the ’543 patent to contain a one-piece limita-
tion. We agree.
Claim terms are given their ordinary and customary
meaning, which is the meaning they would have to a
person of ordinary skill in the art at the time of the inven-
tion. Phillips v. AWH Corp., 415 F.3d 1303, 1312–13
(Fed. Cir. 2005) (en banc). That meaning may be deter-
mined from the claims themselves, the specification, the
SERVER TECHNOLOGY, INC. v. AMERICAN POWER CONVERSION 7
prosecution history, dictionaries, and any other relevant
evidence. Id. at 1312−18.
Element A of claim 15 of the ’543 patent indicates
that the claimed plugstrip comprises a vertical strip
enclosure, and some of the elements must clearly be
physically connected to that enclosure. For example, the
power outputs in Element C must be “disposed along” a
length of the enclosure, the power control relays in Ele-
ment D must be “disposed in” the enclosure, and the
digital current information display in Element E must be
“disposed on” the enclosure. ’543 patent col. 12 ll. 21−50.
By contrast, Element F, the current reporting system,
must only be “associated with” the enclosure. Id. This
does not require that the current reporting system be
lodged on or within the one-piece enclosure, because
“associated with” merely requires commonality, not
physical connection. See Apple Inc. v. Motorola, Inc., 757
F.3d 1286, 1306 (Fed. Cir. 2014).
The district court incorrectly interpreted the term
“comprising” in claim 15 of the ’543 patent to require that
all six elements must be contained inside a single enclo-
sure. We have recognized that “comprising” is a term of
art that means “including but not limited to.” CIAS, Inc.
v. Alliance Gaming Corp., 504 F.3d 1356, 1360 (Fed. Cir.
2007). The use of the word “comprising” only means that
the plugstrip must have at least all six of the claimed
elements, but not that all six elements must be contained
in a single enclosure. Moreover, dependent claim 17
discloses a two-piece embodiment of the plugstrip in claim
15, which further militates against construing the plug-
strip in claim 15 to have an inherent one-piece limitation.
See ’543 patent col. 12 ll. 47−61. Finally, the fact that the
specification discloses a one-piece embodiment does not
limit the plain language of claims that are broader than
that disclosed embodiment. Electro Med. Sys., S.A. v.
Cooper Life Sci., Inc., 34 F.3d 1048, 1054 (Fed. Cir. 1994).
8 SERVER TECHNOLOGY, INC. v. AMERICAN POWER CONVERSION
Given evidence in the record revealing that the one-
piece limitation was effectively applied to both patents at
trial, the jury’s advisory findings were based on an erro-
neous construction. The one-piece limitation was materi-
al to the scope of applicable prior art, motivation to
combine, and the nexus between secondary indicia of
obviousness and the claimed inventions.
We therefore decline to uphold the jury verdict of in-
fringement given the flawed claim construction.
CONCLUSION
We reverse the trial court’s claim construction and
remand for further proceedings consistent with this
opinion its rulings on validity and infringement.
REVERSED AND REMANDED
COSTS
No costs.