Contentguard Holdings, Inc. v. Apple, Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
CONTENTGUARD HOLDINGS, INC.,
Plaintiff-Appellant
v.
APPLE INC.,
Defendant-Cross-Appellant
______________________
2016-1916, 2016-2007
______________________
Appeals from the United States District Court for the
Eastern District of Texas in No. 2:13-cv-01112-JRG,
Judge J. Rodney Gilstrap.
______________________
Decided: July 12, 2017
______________________
DIRK D. THOMAS, McKool Smith, P.C., Washington,
DC, argued for plaintiff-appellant. Also represented by
ROBERT AUCHTER; ROBERT A. COTE, RADU A. LELUTIU,
New York, NY; SAMUEL FRANKLIN BAXTER, Marshall, TX.
CONSTANTINE L. TRELA, JR., Sidley Austin LLP, Chi-
cago, IL, argued for defendant-cross-appellant. Also
represented by NATHANIEL C. LOVE, DAVID T. PRITIKIN;
JEFFREY PAUL KUSHAN, Washington, DC.
______________________
2 CONTENTGUARD HOLDINGS, INC. v. APPLE INC.
Before DYK, REYNA, and WALLACH, Circuit Judges.
WALLACH, Circuit Judge.
Appellant ContentGuard Holdings, Inc. (“Content-
Guard”) sued Cross-Appellant Apple Inc. (“Apple”) and
various other defendants for patent infringement in the
U.S. District Court for the Eastern District of Texas
(“District Court”). Relevant here, ContentGuard alleged
that Apple infringed U.S. Patent Nos. 6,963,859 (“the ’859
patent”), 7,823,072 (“the ’072 patent”), 8,370,956 (“the
’956 patent”), 8,393,007 (“the ’007 patent”), and 8,001,053
(“the ’053 patent”) (collectively, “the Patents-in-Suit”), all
of which relate to digital rights management for comput-
ers and other devices. 1 The District Court convened a
claim construction hearing and issued a memorandum
opinion and order construing the disputed claims of the
1 ContentGuard originally alleged that Apple in-
fringed the Patents-in-Suit generally, J.A. 502, 3234,
3322; however, before trial, it narrowed its infringement
arguments to assert only claim 1 of the ’859 patent,
claim 1 of the ’072 patent, claim 7 of the ’956 patent,
claim 6 of the ’007 patent, and claim 1 of the ’053 patent
(collectively, “the Asserted Claims”), J.A. 3561. The ’859,
’072, ’956, and ’007 patents (collectively, “the Stefik pa-
tents”) share a specification. Compare ’859 patent col. 1
l. 1–col. 51 l. 14, with ’072 patent col. 1 l. 1–col. 52 l. 4,
’956 patent col. 1 l. 1–col. 50 l. 52, and ’007 patent col. 1
l. 1–col. 50 l. 29. The ’053 patent incorporates by refer-
ence the Stefik patents and purports to improve upon the
inventions disclosed therein. See ’053 patent col. 1 ll. 50–
55; Appellant’s Br. 16. Because the parties’ arguments
apply with equal force to all of the Patents-in-Suit, see
generally Appellant’s Br.; Cross-Appellant’s Br., we refer
to the ’859 and ’053 patents when discussing the Stefik
Patents and the Patents-in-Suit, respectively.
CONTENTGUARD HOLDINGS, INC. v. APPLE, INC. 3
Patents-in-Suit, including the term “usage rights” (“the
usage right limitation”). 2 See ContentGuard Holdings,
Inc. v. Amazon.com, Inc. (ContentGuard I), Nos. 2:13-CV-
1112-JRG, 2:14-CV-61-JRG, 2015 WL 1289321, at *11−17
(E.D. Tex. Mar. 20, 2015). Following claim construction,
the District Court entered a memorandum opinion and
order granting-in-part and denying-in-part the parties’
various evidentiary motions, see ContentGuard Holdings,
Inc. v. Amazon.com, Inc. (ContentGuard II), Nos. 2:13-CV-
1112-JRG, 2:14-CV-61-JRG, 2015 WL 4944514, at *1
(E.D. Tex. Aug. 19, 2015), and a memorandum opinion
and order denying Apple’s renewed motion for judgment
on the pleadings declaring the Patents-in-Suit patent-
ineligible, see ContentGuard Holdings, Inc. v. Ama-
zon.com, Inc. (ContentGuard III), 142 F. Supp. 3d 510,
511 (E.D. Tex. 2015).
The District Court then convened a jury trial, and the
jury determined that Apple had not infringed the Assert-
ed Claims but that Apple had not proven that the Assert-
ed Claims are invalid. Following the jury’s verdict, the
District Court entered a final judgment in favor of Apple.
Both ContentGuard and Apple filed renewed motions for
judgment as a matter of law (“JMOL”) or, in the alterna-
tive, motions for a new trial, on the grounds that the jury
lacked sufficient evidentiary support for its findings. The
District Court denied both parties’ Motions for JMOL and
for a New Trial. See ContentGuard Holdings, Inc. v.
2 Each of the Asserted Claims recites the usage
right limitation, see, e.g., ’053 patent col. 20 l. 47; ’859
patent col. 51 l. 19; ’072 patent col. 52 l. 11; ’956 patent
col. 51 l. 44; ’007 patent col. 51 l. 24, and the parties do
not argue for different constructions across the Patents-
in-Suit, see generally Appellant’s Br.; Cross-Appellant’s
Br.
4 CONTENTGUARD HOLDINGS, INC. v. APPLE INC.
Apple Inc. (ContentGuard IV), No. 2:13-CV-1112-JRG,
2016 WL 1637280, at *1 (E.D. Tex. Apr. 25, 2016).
ContentGuard appeals the District Court’s construc-
tion of the usage right limitation and denial of its Motion
for a New Trial. Apple conditionally cross-appeals the
District Court’s denial of its Motion for Judgment on the
Pleadings Declaring the Patents-in-Suit Patent-Ineligible,
Final Judgment that the Asserted Claims are not invalid,
and the denial of its Motions for JMOL and for a New
Trial. We affirm. 3
JURISDICTION
Before addressing the merits, we must satisfy our-
selves of our jurisdiction to adjudicate ContentGuard’s
appeal. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574,
583 (1999). Apple contends that we lack jurisdiction over
ContentGuard’s appeal “[b]ecause claims and counter-
claims remained unresolved” when ContentGuard filed its
notice of appeal, such that “there was no final and ap-
pealable judgment at that point.” Cross-Appellant’s Br. 3
(citation omitted); see id. at 2 (listing the purportedly
pending claims and counterclaims). These purportedly
unresolved claims and counterclaims concern patents and
claims that neither ContentGuard nor Apple pursued at
trial, J.A. 3561, and that the jury did not address in its
findings, J.A. 2716–21, presumably because Content-
Guard and Apple abandoned them or intended for them to
be dismissed, see J.A. 3783–84 (discussing intent to
“clean[] up” outstanding claims and counterclaims “so
3 Apple agreed that, “[i]f this [c]ourt . . . affirms the
noninfringement judgment on the merits, Apple will
voluntarily dismiss its appeal.” Cross-Appellant’s Br. 75.
Because we affirm the District Court’s noninfringement
judgment, we need not address Apple’s conditional cross-
appeal.
CONTENTGUARD HOLDINGS, INC. v. APPLE, INC. 5
that a final judgment can be entered that disposes of the
entire case”). After a merits resolution as to the Asserted
Claims, the District Court entitled its post-trial judgment
a “final judgment,” J.A. 1 (capitalization omitted), and
Apple subsequently filed a motion to dismiss the remain-
ing claims and counterclaims, J.A. 3786−87, which the
District Court granted, J.A. 3791–92. Under these cir-
cumstances, we hold that the District Court “clearly
declared [its] intention in this respect in [its] opinion,”
United States v. F. & M. Schaefer Brewing Co., 356 U.S.
227, 232 (1958), “evinc[ing] a clear intent to resolve or
dispose of all claims and end the case,” Pandrol USA, LP
v. Airboss Ry. Prods., Inc., 320 F.3d 1354, 1363 (Fed. Cir.
2003). “There is, therefore, a final judgment of the
[D]istrict [C]ourt, and this court has jurisdiction over the
appeal under 28 U.S.C. § 1295(a)(1) [(2012)].” Id.DISCUSSION
ContentGuard argues that a new trial is warranted
for two reasons. First, ContentGuard argues that the
“[t]he District Court’s construction [of the] usage
right[ limitation] was error because it is inconsistent with
the claims, the specification, the prosecution history, and
the commercial embodiment ContentGuard built.” Appel-
lant’s Br. 30; see id. at 30–47. 4 Second, ContentGuard
contends that the District Court committed “evidentiary
error.” Id. at 48; see id. at 48–51. After articulating the
applicable standards of review, we address these argu-
ments in turn.
4 ContentGuard conditions its infringement argu-
ments upon its claim construction argument. See Appel-
lant’s Br. 37, 39. Because we affirm the District Court’s
claim construction, we need not address infringement.
6 CONTENTGUARD HOLDINGS, INC. v. APPLE INC.
I. Standards of Review
We “review[] decisions on motions for JMOL, motions
for a new trial, and evidentiary rulings under the law of
the regional circuit,” here the Fifth Circuit. SSL Servs.,
LLC v. Citrix Sys., Inc., 769 F.3d 1073, 1082 (Fed. Cir.
2014) (citation omitted). The Fifth Circuit “reviews de
novo the district court’s denial of a motion for JMOL,
applying the same standards as the district court,” and
JMOL “is appropriate only when a ‘reasonable jury would
not have a legally sufficient evidentiary basis to find for
the party on that issue.’” Cambridge Toxicology Grp., Inc.
v. Exnicios, 495 F.3d 169, 179 (5th Cir. 2007) (quoting
Fed. R. Civ. P. 50(a)(1)). The Fifth Circuit reviews denials
of motions for a new trial for abuse of discretion, and
“there is no such abuse of discretion unless there is a
complete absence of evidence to support the verdict.”
Industrias Magromer Cueros y Pieles S.A. v. La. Bayou
Furs Inc., 293 F.3d 912, 924 (5th Cir. 2002) (internal
quotation marks, alterations, and citation omitted). The
Fifth Circuit also reviews evidentiary rulings for an abuse
of discretion and will affirm the ruling unless it “had a
substantial effect on the outcome of the trial.” U.S. Bank
Nat’l Ass’n v. Verizon Commc’ns, Inc., 761 F.3d 409, 430
(5th Cir. 2014).
“The proper construction of a patent’s claims is an is-
sue of Federal Circuit law . . . .” Powell v. Home Depot
U.S.A., Inc., 663 F.3d 1221, 1228 (Fed. Cir. 2011) (citation
omitted). “[C]laim construction must begin with the
words of the claims themselves.” Amgen Inc. v. Hoechst
Marion Roussel, Inc., 457 F.3d 1293, 1301 (Fed. Cir. 2006)
(citation omitted). “[W]ords of a claim are generally given
their ordinary and customary meaning” that they “would
have to a person of ordinary skill in the art [(PHOSITA)]
in question at the time of the invention . . . .” Phillips v.
AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir. 2005) (en
banc) (internal quotation marks and citation omitted).
The PHOSITA “is deemed to read the claim term not only
CONTENTGUARD HOLDINGS, INC. v. APPLE, INC. 7
in the context of the particular claim in which the disput-
ed term appears, but in the context of the entire patent,
including the specification.” 5 Id. at 1313. Where, as here,
“the district court reviews only evidence intrinsic to the
patent (the patent claims and specifications, along with
the patent’s prosecution history),[6] the judge’s determina-
tion will amount solely to a determination of law, and we
will review that construction de novo.” CardSoft, LLC v.
VeriFone, Inc., 807 F.3d 1346, 1350 (Fed. Cir. 2015)
(internal quotation marks, brackets, and citation omit-
ted).
II. The District Court Properly Construed the Usage
Right Limitation
ContentGuard’s primary argument concerns the con-
struction of the usage right limitation, namely the Dis-
trict Court’s requirement that usage rights be “attached,
or treated as attached” to the digital content. See Con-
tentGuard I, 2015 WL 1289321, at *17. Specifically,
ContentGuard argues that “[i]t was error for the District
Court to conclude that [digital rights management] sys-
tems that rely on usage rights that are ‘associated with’
content fall outside the scope of [the] Stefik[] patents.”
Appellant’s Br. 30; see id. at 31–32 (discussing language
from certain Asserted Claims and from the specification of
the Stefik patents that refers to “usage rights associated
with the content” (citations omitted)). We disagree.
5 A specification “includes both the written descrip-
tion and the claims” of a patent. In re Packard, 751 F.3d
1307, 1319–20 n.11 (Fed. Cir. 2014).
6 “The prosecution history . . . consists of the com-
plete record of the proceedings before the [U.S. Patent and
Trademark Office] . . . .” Phillips, 415 F.3d at 1317 (cita-
tion omitted).
8 CONTENTGUARD HOLDINGS, INC. v. APPLE INC.
At the claim construction hearing, the parties disput-
ed the construction of the usage right limitation. See
ContentGuard I, 2015 WL 1289321, at *11 (providing the
parties’ proposed constructions). Rejecting both parties’
proposed constructions, the District Court construed the
usage right limitation to mean, in relevant part, “indica-
tions that are attached, or treated as attached, to [a digital
work / digital content / content / a digital document].” Id.
at *17 (emphasis added). In response to various eviden-
tiary motions, the District Court held that the parties’
“claim construction arguments have previously been
considered and expressly rejected” and reiterated that
“[n]o expert may opine or insinuate that a mere associa-
tion between the content and the usage rights is enough
to meet the requirement that the usage rights be ‘at-
tached’ to the content.” ContentGuard II, 2015 WL
4944514, at *4 (emphasis added).
We agree with the District Court’s construction of the
usage right limitation. We begin our analysis “with the
words of the claims themselves.” Amgen, 457 F.3d at
1301 (citation omitted). Neither party contends that
“usage right” has a plain and ordinary meaning to a
PHOSITA, see generally Appellant’s Br.; Cross-
Appellant’s Br., and we must determine whether the
claims define “usage right,” see Marine Polymer Techs.,
Inc. v. HemCon, Inc., 672 F.3d 1350, 1358 (Fed. Cir.
2012). We conclude that they do not. While both claim 1
of the ’859 patent and claim 1 of the ’072 patent specify
that the usage right is “associated with” digital content in
some instances, ’859 patent col. 51 ll. 19, 27; ’072 patent
col. 52 ll. 11–12, the majority of the references to the
usage right in the Asserted Claims (including additional
references in claim 1 of the ’859 patent and claim 1 of the
’072 patent) are not followed by either “attached to” or
“associated with,” see ’859 patent col. 51 ll. 28−29, 37−38;
’072 patent col. 52 ll. 12−13, 15, 18−19, 20; ’956 patent
col. 51 ll. 44, 58; ’007 patent col. 51 ll. 24, 40, 42; ’053
CONTENTGUARD HOLDINGS, INC. v. APPLE, INC. 9
patent col. 20 ll. 47, 48, 51. Because the claim language is
not dispositive as to the meaning of the usage right limi-
tation, we turn to the specification. See Marine Polymer,
672 F.3d at 1358; see also Trs. of Columbia Univ. v. Sy-
mantec Corp., 811 F.3d 1359, 1363 (Fed. Cir. 2016)
(“‘[T]he specification is always highly relevant to the
claim construction analysis’ and is, in fact, ‘the single best
guide to the meaning of a disputed term.’” (quoting Phil-
lips, 415 F.3d at 1320)).
The specification removes all doubt that the usage
right must be “attached to” the digital content. The Stefik
patents’ “Glossary” section states that “[u]sage rights and
fees are attached to the digital work.” ’859 patent col. 50
ll. 11–12; see id. col. 49 ll. 48–51 (defining “Composite
Digital Work” as “[a] digital work comprised of distin-
guishable parts” that “[e]ach . . . have usage rights at-
tached”). 7 In fact, maintaining the attachment between
the usage right and the content is “[a] key feature of the
present invention.” Id. col. 6 l. 11; see, e.g., id. col. 10
ll. 45–46 (stating, in a section of the specification entitled
“Attaching Usage Rights to a Digital Work,” that “[i]t is
fundamental to the present invention that the usage
rights are treated as part of the digital work”). The
“attached, or treated as attached” requirement of the
District Court’s construction reflects the Patents-in-Suit’s
7 The Stefik patents’ “Glossary” section also defines
“Usage Rights,” but the definition includes neither the
“attached, or treated as attached” nor the “associated
with” language. See ’859 patent col. 51 ll. 7–10. The
District Court determined that this definition, which
expressed usage rights in terms of a “language,” did not
limit the construction of the usage right limitation, see
ContentGuard I, 2015 WL 1289321, at *12–13, and nei-
ther party challenges that holding on appeal, see generally
Appellant’s Br.; Cross-Appellant’s Br.
10 CONTENTGUARD HOLDINGS, INC. v. APPLE INC.
“repeated[] and consistent[] characteriz[ation of the usage
right limitation] in a particular way” and, thus, “it is
proper to construe the [usage right limitation] in accord-
ance with that characterization.” GPNE Corp. v. Apple
Inc., 830 F.3d 1365, 1370 (Fed. Cir. 2016) (internal quota-
tion marks omitted).
ContentGuard’s counterarguments are unpersuasive.
ContentGuard proffers a construction of the usage right
limitation that simply replaces “attached, or treated as
attached” with “associated with.” Appellant’s Br. 52. 8
However, ContentGuard repeatedly has argued that
“the[se] terms are synonymous,” Appellant’s Reply 12; see,
e.g., Appellant’s Br. 5; Appellant’s Reply 13, and we will
not assign error to the District Court for declining to
8 ContentGuard did not propose an alternative con-
struction of the usage right limitation that included the
term “association” or its variants to the District Court, see
ContentGuard I, 2015 WL 1289321, at *11–17, and Con-
tentGuard fails to consistently advocate for a particular
construction on appeal, compare Appellant’s Br. 37 (prof-
fering “an indication of the manner in which a [digital
work / digital content / content / a digital document] may
be used or distributed as well as any conditions on which
use or distribution is premised”), with id. at 52 (proffer-
ing, in the Conclusion section, “indications that are asso-
ciated with [a digital work / digital content / content / a
digital document] and that indicate the manner in which
the [digital work / digital content / content / digital docu-
ment] may be used or distributed as well as any condi-
tions on which use or distribution is premised”).
ContentGuard clarified its proposed construction to
substitute the term “associated with” for “attached to” at
oral argument. See Oral Arg. at 33:59–34:19,
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
16-1916.mp3.
CONTENTGUARD HOLDINGS, INC. v. APPLE, INC. 11
include every synonym of every word in a construction,
particularly when neither party advocated for its inclu-
sion to the District Court, cf. Andersen Corp. v. Fiber
Composites, LLC, 474 F.3d 1361, 1368 (Fed. Cir. 2007)
(rejecting as “unpersuasive” an argument that a “syno-
nym” for a claim term appearing in the specification
alters the definition of the claim term because “the use of
that alternative term in the . . . specification is not incon-
sistent with the restrictive definition . . . where the inven-
tion is described in more detail”).
Because ContentGuard proffers a construction that is
synonymous to the District Court’s construction, Con-
tentGuard’s position amounts to a challenge to the Dis-
trict Court’s evidentiary ruling that prevented
ContentGuard’s expert from arguing that “mere associa-
tion between the content and the usage rights is enough
to meet the requirement that the usage rights be ‘at-
tached’ to the content.” ContentGuard II, 2015 WL
4944514, at *4 (emphasis added); see Oral Arg. at 11:18–
29, http://oralarguments.cafc.uscourts.gov/default.
aspx?fl=2016-1916.mp3 (“We were precluded from saying
that an ‘association’ between the usage rights and the
content was sufficient to meet the ‘attached, or treated as
attached’ claim construction.”). We review such decisions
for abuse of discretion. See Ericsson, Inc. v. D-Link Sys.,
Inc., 773 F.3d 1201, 1225 (Fed. Cir. 2014) (“We review
decisions on . . . the admission of expert testimony under
the law of the regional circuit,” here the Fifth Circuit.
(citation omitted)); Snap-Drape, Inc. v. Comm’r, 98 F.3d
194, 197 (5th Cir. 1996) (“The decision whether to admit
expert testimony is entrusted to the sound discretion of
the trial court. Such an evidentiary ruling is reversible on
review only for an abuse of that discretion.” (footnote
omitted)). Because the District Court’s decision “avoided
possible jury confusion” stemming from the parties’ intro-
duction of terms outside the District Court’s claim con-
struction, it does not constitute an abuse of discretion.
12 CONTENTGUARD HOLDINGS, INC. v. APPLE INC.
TiVo, Inc. v. EchoStar Commc’ns Corp., 516 F.3d 1290,
1311–12 (Fed. Cir. 2008).
III. ContentGuard Has Waived Its Arguments on Eviden-
tiary Rulings
ContentGuard argues that the District Court commit-
ted various evidentiary errors that warrant a new trial.
Appellant’s Br. 48−51. Although ContentGuard describes
examples of Apple’s purported “gamesmanship,” id. at 51,
ContentGuard fails to identify any erroneous evidentiary
rulings by the District Court that “had a substantial effect
on the outcome of the trial” sufficient to constitute an
abuse of discretion, Verizon Commc’ns, 761 F.3d at 430;
see generally Appellant’s Br., even after Apple identified
the deficiencies of ContentGuard’s contentions, see Cross-
Appellant’s Br. 64 (stating that ContentGuard “fails to
identify any specific rulings to be overturned on appeal—
much less explain how they reflect an abuse of discre-
tion”); see generally Appellant’s Reply. A party’s failure to
make arguments under the operative legal framework
“typically warrants a finding of waiver.” Nan Ya Plastics
Corp. v. United States, 810 F.3d 1333, 1347 (Fed. Cir.
2016) (citing, inter alia, Carducci v. Regan, 714 F.2d 171,
177 (D.C. Cir. 1983) (finding waiver when “counsel has
made no attempt to address the issue” because “[t]he
premise of our adversarial system is that appellate courts
do not sit as self-directed boards of legal inquiry and
research, but essentially as arbiters of legal questions
presented and argued by the parties before them”)).
Because ContentGuard failed to identify the District
Court rulings purportedly requiring reversal or to apply
the appropriate legal framework in its analysis, we de-
cline to address its arguments here.
CONTENTGUARD HOLDINGS, INC. v. APPLE, INC. 13
CONCLUSION
We have considered ContentGuard’s remaining in-
fringement arguments and find them unpersuasive.
Accordingly, the Final Judgment of the U.S. District
Court for the Eastern District of Texas is
AFFIRMED
COSTS
Each party shall bear its own costs.