Taurus IP, LLC v. Daimlerchrysler Corp.
726 F.3d 1306
Fed. Cir.2013Background
- Two Taurus patent cases in WD Wis over Taurus’s ’658 patent with external and internal websites accused of infringement of claim 16 and dependent claims; district court construed key terms (notably “user” and “user-defined relationship information”) and granted summary judgment of noninfringement and anticipation by Trilogy; Trilogy disclosure invalidated claims 16 and 27 as anticipated; district court later held the DaimlerChrysler Patent Suit exceptional under §285 and awarded fees; separate Breach of Warranty Suit addressed Orion/Spangenberg’s transfer of the patent and related damages and sanctions; personal jurisdiction and veil-piercing theories were litigated in the Breach of Warranty Suit and the district court sanctions for witness tampering were imposed; Taurus appeals on constructions, validity, infringement, and §285 ruling, while Orion/Spangenberg appeal jurisdiction, liability, damages, and sanctions, with Chrysler/Mercedes cross-appealing on the release issue.
- The district court’s Findings and rulings included: (a) claim construction limited “user” to individuals capable of creating/editing user-defined relationship information; (b) findings of anticipation by Trilogy for claims 16 and 27; (c) a finding of noninfringement for asserted external websites; (d) an exceptional case finding under §285 with damages for defending the DaimlerChrysler Patent Suit; (e) personal jurisdiction over Spangenberg and Orion via reverse veil-piercing under Wisconsin and Texas law; (f) liability on the Breach of Warranty Counterclaim and related damages, with evidentiary sanctions for witness tampering.
- The appeal largely challenges these outcomes, including claim-term constructions, validity/infringement conclusions, the §285 determination, and the Breach of Warranty damages/ sanctions.
- The procedural posture is appellate review of a multi-question district court decision in patent and contract disputes.
- Costs were awarded to Chrysler and Mercedes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper construction of 'user' in claim 16 | Taurus argues no need to limit 'user'; broad plain meaning. | District court correctly limited to personnel capable of creating/editing rules. | Affirmed district court construction: 'a person capable of creating and editing user-defined relationship information'. |
| Scope of 'user-defined relationship information' | Argues broader input-based definition of user inputs. | Court’s construction focuses on the set of user-specified rules. | Affirmed district court: 'the set of rules specified by the user that governs the relationship'. |
| Anticipation by Trilogy for claims 16 and 27 | Evidence may show predate by Appendix A and Johnson’s testimony. | Appendix A’s modification dates and corroboration do not prove an earlier invention; Trilogy discloses data categories and relationships. | Affirmed: Trilogy anticipates claims 16 and 27. |
| Noninfringement by external websites | Web surfers could be ‘users’ who create/edit rules. | Web surfers do not create/edit rules; they submit variables under predefined rules. | Affirmed: no infringement by the external websites. |
| Exceptional case under § 285 and damages | Litigation pursued in good faith; should not be exceptional. | Record shows bad faith/prolonged litigation and baseless claim construction. | Affirmed: district court properly found an exceptional case and awarded damages. |
| Breach of Warranty: personal jurisdiction and damages; sanctions | Orion/Spangenberg challenge jurisdiction and damages findings; sanctions not properly issued. | Alter ego reverse-piercing supports jurisdiction; damages and sanctions supported by record. | Affirmed personal jurisdiction; liability for breach; reversed in part the damages award for Breach of Warranty damages; upheld sanctions. |
Key Cases Cited
- Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (claim construction must look to intrinsic evidence; not in vacuum)
- Teva Pharm. Indus., Ltd. v. AstraZeneca Pharam. LP, 661 F.3d 1378 (Fed. Cir. 2011) (de novo review of claim construction; appellate standard)
- MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907 (Fed. Cir. 2012) (exceptional case and bad-faith litigation standards)
- Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314 (Fed. Cir. 2011) (baseless infringement positions; intrinsic evidence alignment)
- Raylon, LLC v. Complus Data Innovations, Inc., 700 F.3d 1361 (Fed. Cir. 2012) (sanctions standards; notice and opportunity to be heard)
- Castleberry v. Branscum, 721 S.W.2d 270 (Tex. 1986) (alter ego veil-piercing standards under Texas law)
- Mancorp, Inc. v. Culpepper, 802 S.W.2d 226 (Tex. 1990) (alter ego doctrine and injustice considerations)
- Consumer’s Co-op of Walworth Cnty. v. Olsen, 419 N.W.2d 217 (Wis. 1988) (Wisconsin alter ego/unity of control and injustice)
- In re Rimsat, Ltd., 212 F.3d 1039 (7th Cir. 2000) (notice and opportunity requirements for sanctions; appellate review)