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This is a patent infringement case. Plaintiff-appellant Ricoh Company, Ltd. (“Ricoh”) appeals from a summary judgment dismissing all claims against defendant-appellees Quanta Computer Inc. (“QCI”), Quanta Storage, Inc. (“QSI”), Quanta Computer USA, Inc. (“QCA”), and NU Technology, Inc. (“NU”). On summary judgment, the district court ruled that the asserted claims of U.S. Patent No. 6,631,109 (“the '109 patent”) are invalid for obviousness; that the accused devices do not practice the methods of the asserted claims of U.S. Patent No. 6,172,955 (“the '955 patent”); and that Ricoh failed to present evidence sufficient to create a material issue of fact as to either direct or indirect infringement of U.S. Patent Nos. 5,063,552 (“the '552 patent”) and 6,661,755 (“the '755 patent”) by the defendant-appel-lees. Ricoh Co. v. Quanta Computer, Inc., 579 F.Supp.2d 1110 (W.D.Wisc.2007) (“Summary Judgment Order”). Because the district court applied erroneous legal standards for assessing (1) whether Quanta contributorily infringed the '552 and '755 patents and (2) whether QSI induced infringement of the '552 and '755 patents, the district court’s summary judgment of noninfringement is vacated on these issues. The remainder of the decision is affirmed in all respects.
BACKGROUND
The patents in suit are directed to various aspects of optical disc drive technology.
The '109 patent is directed to methods and apparatuses for generating a particular pulse sequence for recording information to a rewritable optical disc. '109 patent col.3 1.66 to col.4 1.30. Rewritable optical discs store information on a
The asserted method claims of the '109 patent cover a specific write strategy for making legible marks on phase-change optical discs over a wide range of disc speeds. Asserted claim 1 of the '109 patent states:
An optical recording method which records a sequence of data blocks onto a recording layer of an optical recording medium by emitting light to the recording layer of the medium and changing a phase of a recording material of the recording layer, comprising the steps of: applying a light source driving power to a light source to control emission of a light beam to the recording layer of the medium, the driving power including a sequence of mark and space portions, each mark portion having a pulse width that corresponds to a multiple of a period T of a write clock based on a write data modulation method;
setting a multi-pulse waveform of each mark portion of the driving power that includes a front-end portion, a multi-pulse portion and a tail-end portion, the front-end portion having a first pulse width tl with a high-power write level Pw and starting from a middle-power erase level Pe, the multi-pulse portion including a sequence of write pulses each having a second pulse width t2 with the write level Pw and a third pulse width t3 with a low-power base level Pb, the multi-pulse portion having a given duty ratio z = t2/(t2 + t3), and the tail-end portion having a fourth pulse width t4 with the base level Pb and ending at the erase level Pe;
setting a linear velocity of rotation of the medium at a controlled speed; and controlling the waveform when the linear velocity of rotation of the medium is set in a high-speed range from 5 m/s to 28 m/s, such that the first pulse width tl of the front-end portion ranges 0.1 T to IT and the fourth pulse width t4 of the tail-end portion ranges 0.2T to 1.3T.
Id. at col. 121.65 to col. 13 1.28.
The '955 patent is directed to methods and apparatuses for formatting rewritable optical discs. '955 patent col.l 11.10-14. For certain types of recording modes, a rewritable disc must be formatted by dividing the recording area on the disc into fixed-sized units, called packets. Id. at eol.2 11.14-19. If formatting occurs as a foreground process, the optical disc drive is incapable of performing read or write commands during the formatting period. Id. at col.2 11.22-29. Thus, the '955 patent teaches formatting as a background process, such that the background formatting can be interrupted to carry out a read or write command. The optical disc drive employs background formatting by misinforming the host computer that it is not busy formatting, allowing the host computer to send read or write commands to the drive. Id. at col.4 11.20-24.
Asserted claim 8 of the '955 patent states:
A formatting method for formatting a rewritable optical disc, data being recorded on said optical disc by using a fixed packet write method, said formatting method comprising the steps of: starting a formatting process for said optical disc as a background process, the*1329 formatting process being performed so as to fill a recording area of said optical disc by packets having a fixed length; enabling execution of at least one of a recording process and a reproducing process by interrupting the formatting process and resuming the formatting process after the at least one of the recording process and the reproducing process is ended; and
ending the formatting process after the recording area to be formatted has been filled by the packets having the fixed length.
'955 patent col. 13 11.34-50.
The '552 patent is directed to an apparatus and method for controlling the velocity at which a disc drive spins an optical disc. Optical disc drives typically spin discs at either a constant angular velocity (“CAV”) or a constant linear velocity (“CLV”). '552 patent eol.l 11.19-24. In a CAV system, the disc completes the same number of revolutions per unit time, regardless of where on the disc the laser beam is positioned. Id. at col.l 11.25-38. In a CLV system, the linear velocity of the disc is constant relative to the laser beam, such that the disc is turning faster when the laser is near the center of the disc and slower when the laser is near the outer edge of the disc. Id. at col.l 11.39-46. The use of a CLV system increases the recording capacity of an optical disc but requires more complicated machinery in the optical disc drive. Id. at col.2 11.15-36. The invention of the '552 patent addresses this trade-off through the use of Zone-CLV. Zone-CLV, as claimed in the '552 patent, divides an optical disc into annular zones, wherein each zone is recorded at constant linear velocity, but different linear velocities are used for different zones. '552 patent col.3 11.5-68.
Asserted claim 1 of the '552 patent states:
A method for controlling an information recording and/or reproduction speed “f” and a rotation speed “n” of an optical disk used in an information recording and/or reproduction device, said optical disk having a plurality of tracks in the form of concentric circles or a spiral, said information recording and/or reproduction device being adapted to access said tracks by means of a light beam while rotating said optical disk, thereby to optically record information on or reproduce information from said tracks, said method comprising the steps of:
dividing said tracks into a plurality of concentric annular blocks which are different in radius from each other;
changing said information recording and/or reproduction speed “f” in accordance with the radius of a track to be accessed in such a manner that said recording and/or reproduction speed “f ’ is constant within a block but different as between said blocks depending on the block radii; and
changing said rotation speed “n” of said optical disk in such a manner that fi(n-r) is constant, where “r” is the radius of said track to be accessed.
'552 patent col.81.48 to col.91.3.
The '755 patent is directed to methods of writing data to optical discs in multiple sessions. '755 patent col.3 11.34-44. Optical disc drives typically store the data to be written to the optical disc in a temporary memory called the buffer. Id. at col.l 11.37-40. Many optical disc drives can write data to a disc faster than the data is received by the buffer, which can cause the buffer to go empty — a condition known as “buffer run.” Id. at col.l 11.54-63. In addition, at the time the '755 patent application was filed, conventional disc drive technology necessitated that an entire disc or track be written in a single session. Id. at col.l
Asserted claim 1 of the '755 patent states:
A method of recording on an optical disc recording media, said method comprising the steps of:
transferring stored input information to an encoder;
transferring encoded information to a record circuit;
causing an input buffer to contain less than a threshold amount of said input information; and
when said input buffer contains less than the threshold amount of said input information, pausing said transferring of said encoded information, to stop said record circuit at a first point on said optical disk recording media while maintaining said encoded information; and
wherein said record circuit does not write any run-out blocks while paused.
'755 patent col.8 11.51-65.
Quanta Computer Inc. (“QCI”) is a large manufacturer of notebook computers. QCI does not, however, sell notebooks directly to consumers. It is an original equipment manufacturer (“OEM”) and sells its products to other companies for retail marketing. QCI is a one-third owner of Quanta Storage, Inc. (“QSI”), which manufactures optical disc drives. Like QCI, QSI is an OEM. It does not sell direct to consumers, but sells products such as optical disc drives to its U.S. customers, including NU Technologies, who in turn sell to consumers. QCI also owns more than ten percent of Quanta Computer USA, Inc. (“QCA”), which is a California company that repairs notebook computers for branded computer companies. QCI, QSI, and QCA are hereinafter collectively identified as “Quanta.”
Ricoh filed suit against Quanta and NU, accusing them of directly and indirectly infringing each of the patents in suit.
DISCUSSION
Summary judgment is appropriate if “there is no genuine issue as to any material fact and ... the movant is entitled to a judgment as a matter of law.” Fed. R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A district court’s grant of summary judgment is reviewed without deference, reapplying the same standard as the district court. Micro Chem., Inc. v. Lextron, Inc., 318 F.3d 1119, 1121 (Fed.Cir.2003). “In deciding whether summary judgment was appropriate, we view the evidence in a light most favorable to the party opposing the motion with doubts resolved in favor of the opponent. ...” Ethicon Endo-Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1315 (Fed.Cir.1998).
I. The '109 Patent
The district court ruled that claims 1 and 4 of the '109 patent are obvious over either of Ricoh’s European Patent Nos. EP 0898272 (“EP '272”) and EP 0737962 (“EP '962”).
On appeal, Ricoh attempts to rebut the prima facie obviousness of claims 1 and 4 of the '109 patent by purportedly making separate arguments that EP '272 and EP '962 teach away from the range of recording speeds claimed by the '109 patent and that the range of the recording speeds claimed by the '109 patent produces unex
when the “recrystallization upper-limit linear speed” of the recording layer exceeds 5.0 m/s, the recording layer cannot assume a complete amorphous state when information is written therein. Thus, satisfactory signal properties cannot be obtained.
EP '272 p. 7 11.2-4. In its briefing to this court, Ricoh thus argues that EP '272 “specifically states that its write strategy does not work at speeds above 5.0 m/s.”
Ricoh’s arguments as to the teachings of EP '272 are inapposite because the recrystallization upper speed limit, as defined by EP '272, is unrelated to the effectiveness, at any speed, of the write strategy disclosed therein. “ ‘A reference may be said to teach away when a person of ordinary skill, upon reading the reference, would be discouraged from following the path set out in the reference, or would be led in a direction divergent from the path that was taken by the applicant.’ ” Optivus Tech., Inc. v. Ion Beam Applications S.A., 469 F.3d 978, 989 (Fed.Cir.2006) (quoting In re Kahn, 441 F.3d 977, 990 (Fed.Cir.2006)); see also In re Fulton, 391 F.3d 1195, 1201 (Fed.Cir.2004) (refusing to conclude that prior art disclosure taught away from the claimed invention where the disclosure did not “criticize, discredit, or otherwise discourage the solution claimed”). Here, EP '272 teaches that the recrystallization upper-limit linear speed is a physical characteristic of the particular phase change media — i.e., optical discs having a specific composition — disclosed therein. EP '272 p. 6 11.7-9 (stating that the “ ‘recrystallization upper-limit linear speed’ of the recording layer of the optical recording medium is a novel value for characterizing the recording medium, which was discovered by the inventors of the present invention”). This physical characteristic establishes an upper limit to the speed at which the phase change material of the optical disc can be recrystallized. EP '272 p. 6 11.3-4 (defining recrystallization upper-limit linear speed as “an upper limit linear speed of a light beam which scans the recording layer at which the recording layer can be recrystallized after being fused with the application of the light beam thereto, and then cooled and recrystallized”). In contrast, the asserted method claims of the '109 patent are write strategies comprising a specified sequence of laser pulses, not limited to use on a particular phase change medium. Ricoh offers no explanation as to why EP '272’s teaching of a particular type of medium limited to use below 5.0 m/s would criticize, discredit, or otherwise discourage a person of ordinary skill from using the write strategy of EP '272 at speeds beyond 5.6 m/s (the upper limit claimed by EP '272) when writing to optical media not limited to use below a speed of 5.0 m/s. Accordingly, there is no genuine issue of material fact that EP '272 does not teach away from using its disclosed write strategy, which is the same write strategy claimed in the '109 patent, in a high-speed range from 5 m/s to 28 m/s.
Ricoh relies on this same “teaching away” to support its assertions that the linear speed range of 5 m/s to 28 m/s claimed in the '109 patent is an unexpected result over the teachings of EP '272. As noted by Ricoh, Ormco does teach that the presumption of obviousness can be rebutted if “the claimed range produces new and unexpected results,” 463 F.3d at 1311 (emphasis added), but Ricoh argues that the claimed range is the new and unexpected result. In this case, Ricoh does not dispute that EP '272 discloses every limitation of claims 1 and 4 of the '109 patent other than the aforementioned linear speed range of the optical medium relative
II. The '955 Patent
Each of asserted claims 8-12 of the '955 patent requires the step of “starting a formatting process for said optical disc as a background process.” E.g., '955 patent col.13 11.21-22. The parties agree that a background process, as that term is used in the '955 patent, differs from a foreground process in that a background process “can be interrupted at any time to allow another, higher priority process to be performed.” Summary Judgment Order, 579 F.Supp.2d at 1117. The district court examined the evidence and concluded that Ricoh had presented no evidence of any process in the accused devices that starts as a background process. Accordingly, the district court granted summary judgment of noninfringement as to all asserted claims of the '955 patent because none of the accused devices starts a formatting process of an optical disc as a background process. Id. at 1118. On appeal, Ricoh argues that the district court mistakenly read the claims as requiring that the formatting process for the entire optical disc must start as a background process. It is Ricoh, however, that has mistakenly read the district court’s opinion.
Infringement of a method claim “occurs when a party performs all of the steps of the process,” BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1379 (Fed.Cir.2007), and Ricoh reads the district court’s opinion as improperly applying this standard. In particular, Ricoh argues that the use of “comprising” in the preamble, plus the indefinite article “a” to introduce “a formatting process,” indicates that an accused formatting method with one or more additional foreground steps may infringe the claims of the '955 patent as long as at least one process begins as a background process. Although the use of “comprising” in a claim’s preamble “raises a presumption that the list of elements is nonexclusive,” the enumerated steps of a method claim must nevertheless “all be practiced as recited in the claim for a process to infringe.” Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1343 (Fed.Cir.2007). Accordingly, even under Ricoh’s analysis, the process alleged to meet the background process limitation of claims 8-12 of the '955 patent must itself originate as a background process.
In this case, the district court found that the only evidence Ricoh presented of infringement of the '955 patent
III. The '552 and '755 Patents
As to both the '552 and the '755 patents, the district court ruled that there are material issues of fact with respect to whether the accused devices practice the methods of the asserted claims. Summary Judgment Order, 579 F.Supp.2d at 1121, 1122. Nevertheless, the district court dismissed Ricoh’s claims of infringement of the '552 and '755 patents against each of Quanta and NU, ruling that Ricoh had failed to create material issues of fact as to direct or indirect infringement under the provisions of 35 U.S.C. § 271(a)-(c). Ricoh appeals on the grounds that the district court both misinterpreted and misapplied the statute.
A. Direct Infringement
We first turn to Ricoh’s claims that Quanta directly infringed the '552 and '755 patents through the sale or offer for sale of software that causes the accused drives to perform the claimed methods. The district court ruled that: “[bjecause the claims asserted in the '552 patent and the '755 patent disclose methods for writing and recording rather [than] an actual device, to prove direct infringement, it is not enough for plaintiff to show a sale or offer to sell of an accused device.” Id. at 1123 (citing NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1321 (Fed.Cir.2005)). In support of this reading of NTP, the district court relied on this court’s opinion in Joy Technologies, Inc. v. Flakt, Inc., 6 F.3d 770, 773 (Fed.Cir.1993), which stated that “[t]he law is unequivocal that the sale of equipment to perform a process is not a sale of the process within the meaning of section 271(a).” Nevertheless, Ricoh argues that the sale of a method can be distinguished from the sale of an optical drive practicing the method because the software instructions that control the drive can be separated from the hardware that actually carries out those instructions. Because NTP explicitly did not decide the question of whether a “method claim may not be infringed under the ‘sells’ and ‘offers to sell’ prongs of section 271(a),” 418 F.3d at 1320-21, Ricoh invites this court to provide an answer and hold that a party may directly infringe a method claim under 35 U.S.C. § 271(a) by offering to include patented methods in software sold as part of the accused devices.
The answer lies in the language of the statute, and we therefore begin with its text. Section 271(a) of Title 35 sets forth the requirements of a claim of direct patent infringement: “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” Ricoh thus argues that the issue in this
In this case, Ricoh has mistakenly confused software with a process as that term has been interpreted by this court. As the court in NTP recognized, “a process is nothing more than the sequence of actions of which it is comprised.” 418 F.3d at 1318. This court has also stated that a process “consists of doing something, and therefore has to be carried out or performed.” In re Kollar, 286 F.3d 1326, 1332 (Fed.Cir.2002). In contrast, software is not itself a sequence of actions, but rather it is a set of instructions that directs hardware to perform a sequence of actions. See Microsoft Corp. v. AT & T Corp., 550 U.S. 437, 127 S.Ct. 1746, 1754, 167 L.Ed.2d 737 (2007) (recognizing that software is “the ‘set of instructions, known as code, that directs a computer to perform specified functions or operations’ ” (quoting Fantasy Sports Props., Inc. v. Sportsline.com, Inc., 287 F.3d 1108, 1118 (Fed.Cir.2002))); Microsoft Computer Dictionary 489 (5th ed.2002) (defining “software” as “[c]omputer programs; instructions that make hardware work.”); Alan Freedman, The Computer Glossary (9th ed.2001) (defining “software” as “[i]nstrue-tions for the computer.”). Despite its arguments on appeal, Ricoh itself impliedly acknowledges the distinction between a process and instructions to perform a process in its statements to this court — “the software instructions that control Quanta’s drives can be separated from the hardware that actually carries out those instructions.” Appellant’s Br. at 41.
The cases noted here make clear that the actual carrying out of the instructions is that which constitutes a process within the meaning of § 271(a). With this understanding of “process” in mind, we agree with the reasoning of NTP that the application of the concept of a sale or offer of sale to the actual carrying out of a sequence of actions is ambiguous. 418 F.3d at 1319 (“ ‘[A] process is a series of acts, and the concept of sale as applied to those acts is ambiguous.’ ” (quoting Minton v. Nat’l Ass’n of Sec. Dealers, Inc., 336 F.3d 1373, 1378 (Fed.Cir.2003))). Indeed, the Supreme Court recently recognized that “a patented method may not be sold in the same way as an article or device.” Quanta Computer, Inc. v. LG Elecs., Inc., — U.S. -, 128 S.Ct. 2109, 2117, 170 L.Ed.2d 996 (2008) (holding that despite this difference, the doctrine of patent exhaustion applied to method claims upon the authorized sale of a device embodying those claims). However, because the allegedly infringing sale in this case was the sale of software (i.e., instructions to perform a process rather than the performance of the process itself), we need not determine whether a process may ever be sold so as to give rise to liability under § 271(a). Accordingly, we hold that a party that sells or offers to sell software containing instructions to perform a patented method does not infringe the patent under § 271(a). Cf. Microsoft, 127 S.Ct. at 1753-55 (holding that as a set of instructions, software is not a component of a patented device within the meaning of § 271(f) until it is reduced to a machine-readable copy).
We next turn to Ricoh’s § 271(a) claims against NU. Ricoh alleges that NU directly infringed the '552 and '755 patents by testing the accused devices upon receipt from Quanta. The district court ruled that Ricoh “failed to adduce any specific evi
B. Contributory Infringement
We now turn to Ricoh’s arguments that Quanta contributorily infringed the '552 and '755 patents by selling optical disc drives adapted to perform the patented recording methods. The district court held that even though Quanta’s drives might be capable of being used to infringe Ricoh’s patented processes by writing discs, there was no liability for contributory infringement because the drives were also capable of “substantial noninfringing use” within the meaning of § 271(c) because they could also be used to read discs in a noninfringing manner. Summary Judgment Order, 579 F.Supp.2d at 1123-24. This is so, the district court held, even though it apparently assumed that the evidence, viewed in the light most favorable to Ricoh, indicated that Quanta’s drives use separate hardware and embedded software modules to perform the patented processes and that those components had no noninfringing use. For purposes of this appeal, we must accept as true Ricoh’s evidence that Quanta’s drives contain at least some distinct and separate components used only to perform the allegedly infringing write methods. In this posture, this case thus presents an important, and previously unresolved, question concerning the scope of liability for contributory infringement, the construction of § 271(c), and the interpretation of the Supreme Court’s decisions in Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984), and Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005).
The doctrine of contributory infringement long predated the enactment of § 271(c). See, e.g., Wallace v. Holmes, 29 F.Cas. 74, 80 (No. 17,100) (C.C.D.Conn.1871) (holding that the sale of an unpatent-ed burner component intended for use in a patented lamp combination contributorily infringed); see also Aro Mfg. Co., Inc. v. Convertible Top Replacement Co., Inc., 377 U.S. 476, 485-88 & n. 6, 84 S.Ct. 1526, 12 L.Ed.2d 457 (1963). Enacted as part of the Patent Act of 1952, § 271(c) was designed to codify the contributory infringement doctrine “that previously had been developed by the judiciary.” Dawson Chem. Co. v. Rohm & Haas Co., Additional Information