Absolute Software, Inc. v. Stealth Signal, Inc., 659 F.3d 1121

Background

This is a patent infringement dispute between Absolute (AA) and Stealth/CSP over software for tracking lost laptops, with Absolute asserting three patents ('758, '863, '914) and Stealth asserting the '269 patent; the district court granted summary judgment of non-infringement for both sides, and the Federal Circuit affirmed-in-part, vacated-in-part, and remanded; issue centers on claim constructions and whether accused products meet those claims; the XTool Tracker sends a packet containing agent IP and host IP, and Stealth added an audible signal to circumvent Absolute's '914 limitation; Absolute’s Computrace reportedly calls back 24.5 hours after the previous call and sends a license serial number rather than full terms; claim construction involved a special master under Rule 53, with an amendment addressing “semi-random rate”; the parties filed cross-appeals and the panel reviews de novo the claim constructions and the grant of summary judgment.
Absolute and Stealth dispute the meaning of “global network communication links.” , the district court held that Stealth’s XTool Tracker did not provide two IP addresses (a required “link”) and that Absolute’s '914 claim requires signaling suppression; the district court found no literal infringement of '269’s “semi-random rate” and “terms of said usage agreement” limitations; the Federal Circuit vacated in part, affirmed in part, and remanded for further proceedings on issues of fact.
The court clarified that the claim construction for “global network communication links” was waivable if objections were not timely raised to the special master’s report, but addressed on the merits where properly challenged; summary judgment on Stealth’s infringement of '758 and '863 was improper due to genuine issues whether the XTool agent furnishes a second IP address; the '914 non-infringement was vacated due to factual questions about whether signaling timing could still infringe; the court affirmed Stealth's construction of “semi-random rate” and approved non-infringement of the '269 patent, and affirmed the construction of “unique usage information” and “terms of said usage agreement imbedded in said software.” ,
The case is remanded for further proceedings consistent with this opinion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Construction of global network communication links	Absolute argues for IP addresses as links; district court erred by requiring two IPs	Stealth argues links are IP routers or broader network connections	Waiver strictness noted; on the merits, genuine issues preclude summary judgment on this issue for '758 and '863
Non-infringement of the '758 and '863 Patents	XTool provides two IPs; potentially infringing under claim construction	XTool provides only one IP as per district court; no link	Remanded due to genuine issues of material fact precluding summary judgment
Non-infringement of the '914 Patent	XTool infringes if any contact occurs without signaling during the communication	Audible signaling at end of communication defeats infringement; timing disputed	Vacated; factual questions remain about temporal relationship of signaling and contact
Semi-random rate in the '269 Patent	Absolute’s 24.5-hour cadence fails randomness requirement; claims limit to semi-random timing	Evidence supports an interval-based semi-random rate; optional time interval feature	Affirmed construction; no literal infringement; doctrine of equivalents rejected
Unique usage information and terms embedded in software in the '269 Patent	Serial number plus terms could infringe if terms are transmitted	Terms beyond serial number must be transmitted; district court correct in construction	Affirmed construction; Computrace does not infringe under current terms

Key Cases Cited

Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (intrinsic evidence governs claim construction; (en banc))
Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (de novo review of claim construction)
Bai v. L & L Wings, Inc., 160 F.3d 1350 (Fed. Cir. 1998) (infringement is a question of fact; doctrine of equivalents)
IMS Tech., Inc. v. Haas Automation, Inc., 206 F.3d 1422 (Fed. Cir. 2000) (infringement, especially at summary judgment, requires resolution of fact questions)
Honeywell Int'l, Inc. v. ITT Indus., Inc., 452 F.3d 1312 (Fed. Cir. 2006) (claim construction and scope guided by intrinsic evidence)
Rambus, Inc. v. Infineon Techs. AG, 318 F.3d 1081 (Fed. Cir. 2003) (reasonable interpretation of claim scope and embodiments)
Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306 (Fed. Cir. 2008) (limitations and embodiments can limit claim scope with intrinsic evidence)
Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295 (Fed. Cir. 2007) (prior art and intrinsic evidence inform construction and obviousness)
Voda v. Cordis Corp., 536 F.3d 1311 (Fed. Cir. 2008) (ambiguous phrase limitations and context matter for scope)
L.E.A. Dynatech, Inc. v. Allina, 49 F.3d 1527 (Fed. Cir. 1995) (waiver and exception to appellate review)
Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323 (Fed. Cir. 2001) (waiver and preservation of issues on appeal)
Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871 (Fed. Cir. 2008) (avoid meaninglessness in claim construction)
Ala. Farm Bureau Mut. Cas. Co. v. Am. Fid. Life Ins. Co., 606 F.2d 602 (5th Cir. 1979) (waiver and appellate review standards)