iLOR, LLC v. Google, Inc. ( 2008 )

United States Court of Appeals for the Federal Circuit
2008-1178
ILOR, LLC,
Plaintiff-Appellant,
v.
GOOGLE, INC.,
Defendant-Appellee.
David E. Schmit, Frost Brown Todd LLC, of Cincinnati, Ohio, argued for plaintiff-
appellant.
Frank E. Scherkenbach, Fish & Richardson P.C., of Boston, Massachusetts,
argued for defendant-appellee. With him on the brief were Kurt L. Glitzenstein, and
John A. Dragseth, of Minneapolis, Minnesota. Of counsel was Shelley K. Mack, of
Redwood City, California.
Appealed from: United States District Court for the Eastern District of Kentucky
Senior Judge Joseph M. Hood
United States Court of Appeals for the Federal Circuit
2008-1178
ILOR, LLC,
Plaintiff-Appellant,
v.
GOOGLE, INC.,
Defendant-Appellee.
Appeal from the United States District Court for the Eastern District of Kentucky in case
no. 5:07-CV-109, Senior Judge Joseph M. Hood.
__________________________
DECIDED: December 11, 2008
__________________________
Before MAYER, LINN, and MOORE, Circuit Judges.
LINN, Circuit Judge.
iLOR, LLC (“iLOR”) appeals from a judgment of the U.S. District Court for the
Eastern District of Kentucky, iLOR, LLC v. Google, Inc., No. 5:07-CV-109, Doc. 71 (E.D.
Ky. Nov. 30, 2007), which dismissed the “action” with prejudice after the district court
denied iLOR’s motion for preliminary injunctive relief on claim 26 of U.S. Patent No.
7,206,839 (“the ’839 patent”) and granted Google, Inc.’s (“Google’s”) motion for
summary judgment of noninfringement of that claim, iLOR, LLC v. Google, Inc., No.
5:07-CV-109, Doc. 70 (E.D. Ky. Nov. 30, 2007) (“Decision”). As a threshold matter, the
finality of the judgment, which controls the scope of our review, is at issue. We
conclude that the judgment is not final, and as a result, we exercise jurisdiction only
over the district court’s denial of preliminary injunctive relief. On the merits, we
conclude that the district court correctly construed the sole claim limitation at issue, and
did not abuse its discretion by denying iLOR’s motion for preliminary injunctive relief
because noninfringement was undisputed under that construction. Thus, we affirm the
district court’s denial of injunctive relief and dismiss the remaining issues raised in this
appeal, which relate to matters that remain before the district court.
I. BACKGROUND
iLOR is the assignee of the ’839 patent, which is directed to a “method for adding
a user selectable function to a hyperlink.” As stated in the abstract, the method
described in the claims “permits the user to interact with a hyperlink in a variety of ways
without necessarily having to open and/or follow the hyperlink.” Claim 26, the only claim
at issue in this appeal, recites:
A method for enhancing a hyperlink, comprising:
providing a user-selectable link enhancement for a toolbar, the toolbar
being displayable based on a location of a cursor in relation to a hyperlink
in a first page in a first window of an application, wherein said first page is
associated with a first uniform resource locator (URL), wherein said
hyperlink is associated with a second URL and a second page, wherein
said user-selectable link enhancement is adapted to display a graphical
element based on said first URL;
receiving an indication of a first user selection of said link enhancement;
and
as a result of said first user selection,
capturing said first URL associated with said first page; and
displaying a graphical element, said graphical element associated
with said captured first URL, said graphical element adapted to
cause said first page to be displayed as a result of a second user
selection of said graphical element.
iLOR sued Google alleging that Google’s “Google Notebook” product infringed
the ’839 patent. Google counterclaimed, seeking a declaratory judgment of
noninfringement, invalidity, and unenforceability of the ’839 patent. iLOR subsequently
2008-1178 2
moved for a preliminary injunction. Relying only on claim 26, iLOR requested that
Google be enjoined from using or inducing others to use Google Notebook in a way that
infringed that claim. Google filed a cross-motion in response for summary judgment of
noninfringement. In the course of resolving these motions, the district court focused, as
the parties did, only on claim 26. The only disputed limitation of that claim was “the
toolbar being displayable based on a location of a cursor in relation to a hyperlink,”
which the district court construed to require that the “toolbar is ‘automatically displayed’
upon the placement of the cursor in proximity to a hyperlink with no further action on the
part of a user.” Decision at 14. Because it was undisputed that Google Notebook does
not automatically display its toolbar, but instead requires the user to right-click on the
hyperlink to display the toolbar, the district court granted Google’s motion for summary
judgment of noninfringement and denied iLOR’s motion for preliminary injunction. Id. at
20-21.
In the decision resolving these motions, the district court also sua sponte ordered
“that [iLOR’s] claims pending against [Google] in this matter shall be and the same
hereby are dismissed with prejudice.” Id. at 21 (emphasis omitted).
Contemporaneously with entry of the decision, the district court also entered the
judgment, which reads, in full:
In accordance with the Order of even date and entered
contemporaneously herewith,
IT IS HEREBY ORDERED:
(1) That this action be, and the same hereby is, DISMISSED
WITH PREJUDICE AND STRICKEN FROM THE ACTIVE DOCKET.
(2) That all pending motions be, and the same hereby are,
DENIED AS MOOT.
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(3) That all scheduled proceedings be, and the same hereby
are, CONTINUED GENERALLY.
(4) That this Order is FINAL AND APPEALABLE and THERE
IS NO JUST CAUSE FOR DELAY.
iLOR timely appealed from the district court’s decision and judgment.
II. DISCUSSION
A. Standard of Review
Claim construction is a question of law, see Markman v. Westview Instruments,
Inc., 52 F.3d 967, 970-71 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996), over
which we exercise plenary review. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448,
1456 (Fed. Cir. 1998) (en banc).
A district court’s decision granting, denying, or modifying an injunction in a patent
case is reviewed for abuse of discretion. Lab. Corp. of Am. Holdings v. Chiron Corp.,
384 F.3d 1326, 1331 (Fed. Cir. 2004).
B. Analysis
1. Jurisdiction
“Federal courts are not courts of general jurisdiction; they have only the power
that is authorized by Article III of the Constitution and the statutes enacted by Congress
pursuant thereto. For that reason, every federal appellate court has a special obligation
to ‘satisfy itself . . . of its own jurisdiction . . . .’” Bender v. Williamsport Area Sch. Dist.,
475 U.S. 534, 541 (1986) (citations omitted). Thus, before reaching the parties’
arguments, we must first address the scope of our jurisdiction, which depends on how
the judgment is construed. iLOR contends that the judgment disposes of all claims and
counterclaims and therefore is final. Thus, according to iLOR, we have jurisdiction
under 28 U.S.C. § 1295(a)(1) to address all issues raised below, including the district
2008-1178 4
court’s grant of summary judgment of noninfringement and the district court’s sua
sponte dismissal of its remaining claims. Alternatively, iLOR argues that if it does not
dispose of Google’s counterclaims, the judgment certifies the decision for immediate
appeal under Federal Rule of Civil Procedure 54(b), and consequently vests us with
jurisdiction to consider—in addition to the denial of the preliminary injunction—the grant
of summary judgment of noninfringement and the dismissal of iLOR’s remaining claims.
Google contends that the judgment neither disposes of its counterclaims nor meets the
requirements under Rule 54(b) to certify the decision for immediate appeal. Thus,
according to Google, our jurisdiction is limited under 28 U.S.C. § 1292(a)(1) to the
district court’s denial of preliminary injunctive relief.
We agree with Google. We do not interpret the judgment to dispose of Google’s
counterclaims or to certify the decision for immediate appeal under Rule 54(b). iLOR’s
contention that the judgment dismisses Google’s counterclaims rests largely on its
argument that the judgment’s dismissal of the “action” necessarily encompasses all
claims at issue in the case—both iLOR’s claims and Google’s counterclaims. For this
contention iLOR relies upon our decision in Walter Kidde Portable Equipment, Inc. v.
Universal Security Instruments, Inc., 479 F.3d 1330 (Fed. Cir. 2007). iLOR’s reliance
on Walter Kidde in this case is misplaced.
In Walter Kidde, we addressed the propriety of a district court’s grant of a
plaintiff’s motion to voluntarily dismiss pursuant to Rule 41(a)(2) over the objection of a
defendant who had filed counterclaims. The plaintiff in Walter Kidde had filed a Rule
41(a)(2) motion to dismiss the “action” so that it could correct a jurisdictional deficiency
and refile the case. Walter Kidde, 479 F.3d at 1334. The defendant objected and
2008-1178 5
requested dismissal with prejudice or without prejudice but with conditions. Id. The
district court dismissed the “action” without prejudice, and without further comment on
the nature of the dismissal. Id. at 1334, 1335. Because the district court’s order did not
explicitly address the defendant’s counterclaims, the defendant argued on appeal that
the judgment was not final and thus not appealable. We disagreed, stating that “[t]he
term ‘action’ encompasses the entire proceedings in the district court, signifying that the
order of dismissal terminated [the defendant’s] counterclaims.” Id. at 1335.
iLOR appears to contend that following Walter Kidde, a district court’s use of the
word “action” robotically signifies all claims, counterclaims, cross-claims, etc.,
regardless of the context in which that word is used. Walter Kidde did not go so far.
Indeed, our primary citation for the proposition that “action” included the defendant’s
counterclaims was a Second Circuit case which stated that “[t]he word ‘action,’ without
more, is arguably broad enough to encompass any type of judicial proceeding, including
counterclaims.” See Local Union No. 38, Sheet Metal Workers’ Int’l Ass’n AFL-CIO v.
Pelella, 350 F.3d 73, 81 (2d Cir. 2003) (emphases added, citation omitted). We agree
that the word “action,” without further explanation, may generally be used to denote the
entire judicial proceeding, including counterclaims. Thus, in Walter Kidde, where the
parties disputed whether the entire proceeding could be dismissed under Rule 41 in
light of the existence of those counterclaims, it was clear when the district court granted
the motion to dismiss the “action” that the “action” included both the plaintiff’s claims
and the defendant’s counterclaims.
But the context in which the word “action” is used cannot be ignored. The district
court’s decision, which grants summary judgment of noninfringement of claim 26 and
2008-1178 6
dismisses the remainder of iLOR’s claims with prejudice, clearly disposes of iLOR’s half
of the case. But it does not dispose of, or mention, Google’s counterclaims. This is
unremarkable, because the counterclaims were not implicated in assessing the
propriety of iLOR’s motion for preliminary injunction or Google’s motion for summary
judgment of noninfringement. The judgment was entered contemporaneously with and
for the purpose of effectuating the district court’s decision. Because the judgment
makes no mention of Google’s counterclaims, we interpret “action” in the context of this
case to encompass only iLOR’s causes of action. Perhaps the district court thought it
was unnecessary to reach Google’s counterclaims due to the decision, or perhaps it
was unaware that the counterclaims were pending. That is unclear. What is clear,
however, is that neither the decision nor the judgment gives any indication that the
district court intended to address or dismiss Google’s counterclaims. Since the district
court would have clearly abused its discretion by sua sponte dismissing Google’s
counterclaims, see Catz v. Chalker, 142 F.3d 279, 286 (6th Cir. 1998) (permitting sua
sponte dismissals only where the parties have had ample notice of the court’s intent to
dismiss or have had an opportunity to address the issues raised by the dismissal), we
decline to interpret the judgment to do so.
Alternatively, iLOR argues that even if Google’s counterclaims remain pending,
the district court certified the decision for immediate appeal under Rule 54(b), thereby
rendering it reviewable. Rule 54(b) provides that “the court may direct entry of a final
judgment as to one or more, but fewer than all, claims or parties only if the court
expressly determines that there is no just reason for delay.” Whether an order is
sufficient to confer appellate jurisdiction under Rule 54(b) is a question of Federal
2008-1178 7
Circuit law. See Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 830 (Fed. Cir.
2003). While we have never directly addressed the question, the consensus view,
which we hereby adopt, is that the bare recitation of the “no just cause for delay”
standard of Rule 54(b) is not sufficient, by itself, to properly certify an issue for
immediate appeal. See 10 James Wm. Moore et al., Moore’s Federal Practice §
54.23[2] (3d ed. 2008) (“[T]he rule calls for the exercise of the court’s discretion and if
that exercise is to be subject to meaningful appellate review, the court of appeals must
be informed of the basis for the court’s certification of the judgment. The district court
should not simply declare that there is ‘no just reason for delay,’ but should set forth the
justification for that determination.”); see also Corrosioneering, Inc. v. Thyssen Envtl.
Sys., Inc., 807 F.2d 1279, 1282 (6th Cir. 1986) (“[T]o avoid a finding of abuse of
discretion . . . a district court should do more than just recite the Rule 54(b) formula of
‘no just reason for delay.’”). Rather, it must be apparent, either from the district court’s
order or from the record itself, that there is a sound reason to justify departure from the
general rule that all issues decided by the district court should be resolved in a single
appeal of a final judgment. Cf. Ebrahimi v. City of Huntsville Bd. of Educ., 114 F.3d
162, 166-67 (11th Cir. 1997) (“[W]hen a sound basis for the certification is not obvious
and the district court merely repeats the language of the Rule or frames its certification
in conclusory terms, we have little choice but to dismiss the appeal for lack of a final
judgment.”).
The judgment here neither cites Rule 54(b) nor sets forth the circumstances
justifying immediate appeal of the decision; it merely states that there is no just cause
for delay. Nor can we discern from the record a sensible reason to justify review of the
2008-1178 8
decision now, instead of in connection with the final judgment. For these reasons, we
do not have jurisdiction pursuant to Rule 54(b) to review the district court’s decision
granting summary judgment and sua sponte dismissing the remainder of iLOR’s claims.
Because there is neither a final judgment nor an appealable judgment under Rule 54(b),
we limit our review to the district court’s denial of preliminary injunctive relief. 1 See 28
U.S.C. § 1292(a)(1).
2. Preliminary Injunction
The district court construed the “displayable” limitation to require that the “toolbar
is ‘automatically displayed’ upon the placement of the cursor in proximity to a hyperlink
with no further action on the part of a user.” Decision at 14. Based on its construction
of this limitation, the district court concluded that iLOR could not demonstrate a
reasonable likelihood of success on the merits and accordingly denied its motion for
preliminary injunction. Id. at 21. iLOR argues that the specification and prosecution
history do not support the district court’s construction of the “displayable” limitation.
According to iLOR, “displayable” means that “the toolbar can become visible (but
doesn’t necessarily in fact become visible) when the cursor is positioned in a certain
relationship to the enhanced hyperlink, regardless of whether additional user action . . .
is necessary to cause the toolbar to actually display,” Appellant’s Br. at 12, and that
1
We recognize that under limited circumstances in conjunction with the
consideration of the denial of a request for preliminary injunctive relief, we may exercise
discretion, under the doctrine of appellate pendent jurisdiction, to review other
interlocutory orders, which ordinarily would be nonappealable standing alone. See
Intermedics Infusaid, Inc. v. Regents of the Univ. of Minn., 804 F.2d 129, 134 (Fed. Cir.
1986); see also Procter & Gamble Co. v. Kraft Foods Global, Inc., No. 2008-1105, slip.
op. at 6 (Fed. Cir. Dec. 5, 2008). The parties in this case have not requested us to
exercise such discretion, and we decline to do so sua sponte.
2008-1178 9
under this construction of the term it is entitled to a preliminary injunction. Google
counters that the claim language, the specification, and the prosecution history all
support the district court’s construction, thus rendering noninfringement (and lack of
likelihood of success on the merits) undisputed.
We agree with the district court that “the toolbar being displayable based on a
location of a cursor in relation to a hyperlink” is properly limited to toolbars that are
automatically displayed based on the location of the cursor without further user action.
The language of the claim itself suggests that the toolbar is automatically displayed, as
opposed to requiring some further action on the part of the user. The claim recites, “the
toolbar being displayable based on a location of a cursor in relation to a hyperlink.”
(emphasis added). While iLOR contends that the emphasized language is merely a
necessary, as opposed to a sufficient, condition for display of the toolbar, the claim
language does not provide any indication that the display is “based in part” on the
cursor position, nor does either the claim language or the specification illustrate any
other condition which, along with the cursor position, may cause display of the toolbar.
Assuming for the sake of argument, however, that the language of the claim is
ambiguous as to whether further user action is contemplated, such ambiguity is
eliminated when the claim language is viewed in light of the specification and
prosecution history.
The abstract of the ’839 patent, for example, provides that “[w]hen the cursor has
remained near the hyperlink for a predetermined time period, a toolbar is displayed
containing one or more link enhancements that the user may select.” (emphasis
added). Similarly, the specification states that:
2008-1178 10
The Enhanced Hyperlink toolbar may be designed to appear when a user
“mouses-over” a hyperlink. Alternatively, the toolbar may display with the
page or the toolbar may appear when the cursor or pointer is in a
predetermined area around the hyperlink. Preferably the toolbar is
presented to the user instantly on mouse-over, or after the user keeps the
mouse pointer on the hyperlink (or banner ad) for a predetermined time,
for example one to three seconds. A short time delay prevents the
browser from becoming jumbled with too much information if the user
simply desires to click through on any given hyperlink.
’839 patent, col. 3, l. 60 – col. 4, l. 3; see also id., col. 5, ll. 35-41 (“[T]he user selects a
hyperlink in block 102 by moving a cursor either ‘over’ or near a hyperlink that the user
wishes to select. When the cursor is ‘over’ or near a hyperlink, the program displays a
toolbar which illustrates the link enhancements available for that particular hyperlink in
block 104.”); id., col. 7, ll. 37-42 (similar); id., col. 8, ll. 10-20 (similar). The specification
does not disclose any embodiment in which the user must further act in order to display
the toolbar, such as by right-clicking. iLOR disagrees, pointing to the excerpts above
and contending that by requiring the cursor to remain proximate to the hyperlink for a
predetermined time, the embodiment contemplates “further user action.” We disagree.
At best, the specification demonstrates that user inaction upon placing the cursor near
the hyperlink may cause the toolbar to display. There is nothing in the specification,
however, that indicates that some further action, such as right-clicking, is required to
display the toolbar.
The prosecution history of the ’839 patent confirms that iLOR contemplated
display of the toolbar without further user action. During prosecution of the ’839 patent’s
parent application, iLOR distinguished a prior art reference (“Newfield” or “the Newfield
reference”) on the basis that it required further user action for display, not merely
locating the cursor proximate to the hyperlink:
2008-1178 11
Newfield does not teach detecting a cursor in proximity to a hyperlink.
Instead, Newfield teaches that a user must click on or select a hyperlink to
access the breadth-first search system of Newfield. In contrast, the
present invention detects a cursor in proximity to the hyperlink. Therefore
Newfield does not teach detecting a cursor in proximity to a hyperlink.
J.A. at 641 (emphasis in original, citation omitted). iLOR contends that these arguments
are inapplicable to claim 26 because it describes different aspects of the invention than
the claims at issue during prosecution of the parent application.
We disagree that these representations are inapplicable to claim 26. The
arguments made above were made to distinguish claims that contained, inter alia,
limitations relating to “detecting a cursor in proximity to said hyperlink” and “displaying a
graphical toolbar in proximity to said cursor while said cursor is in proximity to said
hyperlink.” Id. at 634, 640. Notably, these limitations are present in independent claims
1 and 9 of the ’839 patent, and iLOR appears to concede that the arguments made
during prosecution of the parent application are applicable to these claims. See
Appellant’s Br. at 49 & n.24. When iLOR added claim 26 during prosecution, it argued
that the claim was “similar to” and “allowable for at least the same reasons” as the
pending claims, including claims 1 and 9. iLOR’s representation that this newly added
claim was similar to the pending claims, and its contemporaneous failure to put the
examiner on notice that it was attempting to capture previously surrendered subject
matter, renders the representations it made with respect to the Newfield reference
applicable to claim 26. See Hakim v. Cannon Avent Group, PLC, 479 F.3d 1313, 1317-
18 (Fed. Cir. 2007). These representations confirm that the claims, including claim 26,
contemplate display of the toolbar without further user action.
2008-1178 12
The parties do not dispute the denial of preliminary injunctive relief if the district
court’s construction of the “displayable” limitation is sustained. Thus, we affirm the
district court’s denial of injunctive relief. 2
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s denial of preliminary
injunctive relief and dismiss the remaining issues raised in this appeal, which relate to
matters that remain before the district court.3
AFFIRMED-IN-PART and DISMISSED-IN-PART
COSTS
No costs.
2
While we do not address the district court’s grant of summary judgment of
noninfringement, we note that the claim construction we affirm herein was the basis for
that decision, there being no dispute over infringement of claim 26 under that claim
construction.
3
Because we exercise jurisdiction only over the matters discussed above,
we do not address the district court’s sua sponte dismissal of iLOR’s remaining claims
in this appeal. Nevertheless, we suggest that the district court may wish to reconsider
that determination in light of the Sixth Circuit’s prohibition against sua sponte dismissals
except in limited circumstances. See Catz, 142 F.3d at 286.
2008-1178 13