Centillion Data Systems, LLC v. Qwest Communications International, Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
CENTILLION DATA SYSTEMS, LLC,
Plaintiff-Appellant,
v.
QWEST COMMUNICATIONS INTERNATIONAL,
INC., QWEST CORPORATION, AND QWEST
COMMUNICATIONS CORPORATION,
Defendants-Appellees.
______________________
2013-1084
______________________
Appeal from the United States District Court for the
Southern District of Indiana in Nos. 04-CV-0073 and 04-
CV-2076, Judge Larry J. McKinney.
______________________
Decided: November 25, 2013
______________________
VICTOR M. WIGMAN, Blank Rome LLP, of Washington,
DC, argued for plaintiff-appellant. With him on the brief
were PAUL M. HONIGBERG and KENNETH L. BRESSLER, of
New York, New York.
VINCENT J. BELUSKO, Morrison & Foerster, LLP, of
Los Angeles, California, argued for defendants-appellees.
______________________
2 CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS
Before RADER, Chief Judge, LOURIE, and MOORE, Cir-
cuit Judges.
MOORE, Circuit Judge.
Centillion Data Systems, LLC (Centillion) appeals
from the district court’s grant of summary judgment to
Qwest Communications International, Inc. (Qwest) that
various claims of U.S. Patent No. 5,287,270 (’270 patent)
are not infringed. Centillion also challenges the award of
costs to Qwest. Because the district court erred in con-
cluding that there is no genuine factual dispute regarding
infringement by one of the two accused products, but did
not err with respect to the other product, we affirm-in-
part and reverse-in-part the judgment of noninfringement,
vacate the award of costs, and remand for further proceed-
ings.
BACKGROUND
The ’270 patent discloses systems for collecting, pro-
cessing, and delivering billing information from a service
provider, such as a telephone company, to a customer.
’270 patent col. 1 ll. 15–20. The patent teaches providing
call data to customers in a format appropriate for a per-
sonal computer. Id. col. 2 l. 66 – col. 3 l. 6. Claim 1 is
representative:
A system for presenting information . . . to a user
by a service provider . . . comprising:
storage means for storing individual transaction
records . . . ;
data processing means . . . ;
means for transferring . . . said individual trans-
action records . . . to said data processing means;
said data processing means generating prepro-
cessed summary reports as specified by the user
CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS 3
from said individual transaction records . . . and
organizing said summary reports into a format for
storage, manipulation and display on a personal
computer data processing means;
means for transferring said individual transac-
tion records including said summary reports . . .
to said personal computer data processing means
....
’270 patent claim 1 (emphases added).
Centillion accused Qwest of infringing various claims
of the ’270 patent through its Logic, eBill Companion, and
Insite systems (accused systems). 1 Customers who sign
up to use the accused systems receive phone billing in-
formation from Qwest in electronic form. The district
court granted summary judgment of noninfringement to
Qwest. The court held that, based on its undisputed
claim constructions, Logic lacks the “as specified by the
user” limitation and eBC lacks the “data processing
means generating preprocessed summary reports . . . and
organizing said summary reports into a format for . . .
display” limitation. Centillion Data Sys., LLC v. Qwest
Commc’ns Int’l, Inc., Nos. 1:04-cv-0073-LJM-DKH, 1:04-
cv-2076, 2012 WL 4897619 (S.D. Ind. Oct. 15, 2012) (SJ
Order). The court awarded costs to Qwest.
Centillion appeals. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
DISCUSSION
We review grants of summary judgment under the
law of the regional circuit. Grober v. Mako Prods., Inc.,
1 For the purposes of this appeal, eBill Companion
and Insite are the same product and are referred to
collectively as “eBC.”
4 CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS
686 F.3d 1335, 1344 (Fed. Cir. 2012). The Seventh Circuit
reviews the district court’s grant of summary judgment de
novo. Schindler v. Seiler, 474 F.3d 1008, 1010 (7th Cir.
2007). Summary judgment is appropriate when, drawing
all justifiable inferences in the nonmovant’s favor, there
exists no genuine issue of material fact and the movant is
entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
A. “Data processing means . . . organizing said summary
reports into a format for . . . display”
The district court concluded that the “data processing
means” is a means-plus-function limitation having the
functions of “generating preprocessed summary reports”
and “organizing said summary reports into a format for
. . . display on a personal computer data processing
means.” Centillion Data Sys., LLC v. Qwest Commc’ns
Int’l, Inc., 529 F. Supp. 2d 982, 1001 (S.D. Ind. 2008)
(Markman Order). It determined that the corresponding
structure is “a computer that is programmed to segregate
data by customer and record type, to edit and accumulate
data to produce reports, to create database tables . . . and
to convert data.” Id. The court held that there was no
genuine dispute that the accused eBC system does not
organize the summary reports “into a format for . . .
display on a personal computer.” SJ Order, 2012 WL
4897619, at *11. It concluded that, although eBC gener-
ates summary report data in the form of .TXT files, fur-
ther processing by a different system (using .FMT files) is
needed to format .TXT files for display on a PC. Id.
Centillion contends that the court misapplied the
claim construction. It argues that the claims require only
that the summary reports be in a PC-compatible format,
and that eBC meets the “format for . . . display” limitation
because .TXT files contain PC-compatible ASCII text.
Centillion contends that no additional formatting using
CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS 5
.FMT files is needed to display a .TXT file on a PC.
Centillion further argues that the district court’s in-
fringement analysis was premised on the erroneous
assumption that the construed claims require creation of
a database table after processing a .TXT file using an
.FMT file. It contends that, regardless, a genuine dispute
of material fact exists as to whether an ordinary artisan
would describe a .TXT file as a “database table.”
Qwest counters that the district court correctly con-
cluded that eBC does not organize the summary reports
into a format appropriate for display on a PC. It argues
that the district court’s construction requires that the
“data processing means” creates a database table before
the file is transferred to a PC. Qwest contends that a
.TXT file, by itself, is not a database table and is not in a
format “for display on a personal computer.”
We agree with Centillion that there is a genuine fac-
tual dispute whether .TXT files meet the limitation at
issue. Evidence in the record suggests that .TXT files
may be in a format that allows them to be displayed on a
PC. See J.A. 3512.
Qwest’s assertion that the claims require creation of
database tables is incorrect. There is no language in the
claims that requires creation of database tables. The
claims require only that the data processing means gen-
erate the preprocessed summary reports and organize
them into a format for storage, manipulation, and display.
The district court’s construction, quite properly, does not
require that database tables be generated. Rather, it
identifies the structure for the data processing means as a
computer which, via programming, is capable of creating
database tables. Centillion created a genuine issue of
material fact regarding whether Qwest’s eBC system
meets the “format . . . for display limitation” because a
trier of fact may find that it organizes summary reports
into a format for display, i.e., a .TXT file. Even if the data
6 CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS
processing means was required to create a database table,
which it is not, the record contains testimony of a Centil-
lion expert that a person of ordinary skill in the art would
consider a .TXT file to be a “database table.” See J.A.
4272; J.A. 4753. To the extent that summary judgment of
noninfringement was granted on the basis of a database
table limitation, it is in error. There is a genuine issue of
material fact on this record as to whether .TXT files and
the structure that creates them satisfies the “format for
. . . display” limitation.
B. “As specified by the user”
The district court construed “as specified by the user”
to mean “the service customer selects, or makes specific,
the character of” the summary reports. Markman Order,
529 F. Supp. 2d at 1003. At the district court, Centillion
argued that there was at least a genuine factual dispute
over whether three separate features met this limitation:
(1) customers’ requests to use a project account code
(PAC) to classify phone calls by employee or office; (2)
Qwest’s customization of data files in response to custom-
er requests; and (3) the “On Demand” feature. The Logic
system includes only the first feature, and the eBC sys-
tem includes all three. The court concluded that there
were no genuine issues of material fact that features (1)
and (2) do not meet the limitation at issue. However, it
determined that a genuine dispute existed with respect to
the On Demand feature. SJ Order, 2012 WL 4897619, at
*9–10. The court entered summary judgment of nonin-
fringement as to the Logic system on the basis of the “as
specified by the user” limitation. Id. at 9.
1. PACs
The district court held that there was no genuine fac-
tual dispute that Qwest’s customers’ use of PACs is “con-
figured completely outside of the [accused systems’]
application framework.” SJ Order, 2012 WL 4897619, at
*9. The court determined that, like a telephone number,
CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS 7
a PAC is a “mere piece of data” that cannot “make specific
the character of” a summary report, as required by its
claim construction. Id.
We agree. Customer requests to include a PAC do not
“make specific the character of” summary reports within
the meaning of the claims. By enabling the use of a PAC,
customers allow for the inclusion a piece of data that goes
into the reports, but this does not specify or select the
“character” of the reports. Indeed, the PAC field is always
present in the data files, whether the customer chooses to
use it or not. Id. at *3. Because the inclusion of PAC data
is the only basis upon which Centillion argues that the
Logic system meets the “as specified by the user” limita-
tion, we affirm the district court’s judgment that the Logic
system does not infringe. Inclusion of PAC data would
likewise not be a basis for claiming that eBC meets the
“as specified by the user” limitation.
2. Customization
The district court determined that Centillion conceded
in the previous appeal that, if customers do not use
Qwest’s client application software, they do not infringe.
SJ Order, 2012 WL 4897619, at *7, *9; see Centillion Data
Sys., LLC v. Qwest Commc’ns Int’l, Inc., 631 F.3d 1279,
1286 n.2 (Fed. Cir. 2011). Because it is undisputed that
customized files cannot be used with Qwest’s application
software, the court concluded that Qwest’s customization
of data-containing .TXT files in response to customer
requests does not meet the “as specified by the user”
limitation. SJ Order, 2012 WL 4897619, at *9.
Centillion argues that there is at least a genuine issue
of material fact regarding whether customization of data
files in response to a customer request meets the “as
specified by the user” limitation. Centillion contends that
it did not concede that direct infringement by customers
requires the use of Qwest’s own application software as
opposed to third-party application software. Centillion
8 CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS
contends that its previous arguments focused on direct
infringement by Qwest and on whether the claimed inven-
tion is “used” within the meaning of 35 U.S.C. § 271(a).
We agree that Centillion did not concede that custom-
ers who use third-party software do not infringe. A
statement during an argument made to a court consti-
tutes a conclusive “judicial admission” only if the conces-
sion is “clear, deliberate, and unambiguous.” United
States v. Cunningham, 405 F.3d 497, 504 (7th Cir. 2005);
see also Keller v. United States, 58 F.3d 1194, 1199 n.8
(7th Cir. 1995). Centillion’s statements regarding third-
party software in the previous appeal do not meet the
Seventh Circuit’s standard for a judicial admission.
Centillion made its statements in the context of its argu-
ment that Qwest “uses” the accused systems. J.A. 4315.
Because Centillion’s arguments were not directed to
customer infringement, Centillion could not have deliber-
ately conceded that the customers must use Qwest’s
application software to infringe. While the statements
read in isolation imply a requirement that Qwest software
be used, in the context of the argument made to the court
in that appeal we cannot conclude that Centillion’s state-
ments amount to a concession for all purposes.
To the extent that the district court concluded that
customization of .TXT files for use with third-party soft-
ware cannot meet the “as specified by the user” limitation,
we do not agree. There is a genuine issue of material fact
whether the eBC system satisfies this limitation based on
its capability of generating summary reports in which
Qwest has customized .TXT files at the request of the
customer.
3. “On Demand”
eBC’s “On Demand” feature “allows a customer to
submit a request to receive billing information for a
previous billing cycle.” SJ Order, 2012 WL 4897619, at
*9. The district court determined that the eBC On De-
CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS 9
mand feature meets the “as specified by the user” limita-
tion and there was a question of fact as to whether any
customer actually used the feature. Id. As an alternative
basis to affirm the judgment of noninfringement by eBC,
Qwest argues that On Demand requests do not “make
specific the character of” summary reports because they
only provide summaries for previous billing cycles and do
not materially affect the reports. Qwest also contends
that there is no evidence that customers used the On
Demand feature in conjunction with the accused eBC
system.
We agree with the district court. As the court correct-
ly concluded, customers’ ability to “select a subset of
available time ranges” shows that the On Demand feature
meets the “as specified by the user” limitation. Id. The
report’s character changes after an On Demand request
because the report becomes directed to past rather than
current billing information. By limiting the range to a
particular billing cycle, the customer “makes specific the
character of” summary reports provided by eBC. Fur-
thermore, record evidence shows that On Demand files
can be downloaded via the eBC system and that a cus-
tomer attempted to download such files. J.A. 4554; J.A.
4551; see SJ Order, WL 4897619, at *9. We hold that the
district court did not err in concluding that On Demand
meets the “as specified by the user” limitation and that
there is a triable issue whether a customer has used the
On Demand feature.
C. “Summary reports”
The district construed the “summary reports” limita-
tion as “a collection of analyzed and/or reorganized data.”
See SJ Order, 2012 WL 4897619, at *11. It held that
.TXT files meet this limitation. Id. The court noted that
the data is “reorganized” in that eBC “organizes the
billing information by customer and inserts that infor-
mation into various .TXT files.” Id. Qwest argues that
10 CENTILLION DATA SYSTEMS v. QWEST COMMUNICATIONS
the district court erred and that .TXT files are not “sum-
mary reports” because they do not include “reorganized
data” within the meaning of the claims.
We again agree with the district court’s conclusion.
Evidence in the record indicates that .TXT files are a
product of analysis and reorganization of raw data. Id.
Thus, the district court did not err in concluding that
.TXT files meet the “summary report” limitation.
D. Costs
Because we reverse the summary judgment of nonin-
fringement with respect to eBC, we vacate the district
court’s award of costs to Qwest. See Corley v. Rosewood
Care Ctr., Inc. of Peoria, 142 F.3d 1041, 1056 (7th Cir.
1998).
CONCLUSION
We affirm the district court’s grant of summary judg-
ment of noninfringement with respect to Logic, but reverse
its grant of summary judgment of noninfringement with
respect to eBC and remand for further proceedings. We
vacate the district court’s award of Costs to Qwest.
AFFIRMED-IN-PART, REVERSED-IN-PART,
VACATED, AND REMANDED
COSTS
No costs.