Medgraph, Inc. v. Medtronic, Inc.

United States Court of Appeals
for the Federal Circuit
______________________
MEDGRAPH, INC.,
Plaintiff-Appellant
v.
MEDTRONIC, INC.,
Defendant-Appellee
______________________
2015-2019
______________________
Appeal from the United States District Court for the
Western District of New York in No. 6:09-cv-06610-DGL-
MWP, Judge David G. Larimer.
______________________
Decided: December 13, 2016
______________________
DARIUSH KEYHANI, Meredith & Keyhani, PLLC, New
York, NY, argued for plaintiff-appellant.
WAYNE M. BARSKY, Gibson, Dunn & Crutcher LLP,
Los Angeles, CA, argued for defendant-appellee. Also
represented by KATHERINE QUINN DOMINGUEZ, New York,
NY.
______________________
Before LOURIE, PLAGER, and TARANTO, Circuit Judges.
2 MEDGRAPH, INC. v. MEDTRONIC, INC.
LOURIE, Circuit Judge.
Medgraph, Inc. (“Medgraph”) appeals from the deci-
sion of the United States District Court for the Western
District of New York, dismissing with prejudice Med-
graph’s claims of infringement of U.S. Patent 5,974,124
(“the ’124 patent”) and U.S. Patent 6,122,351 (“the ’351
patent”) (collectively, the “asserted patents”) against
Medtronic, Inc. (“Medtronic”). See Medgraph, Inc. v.
Medtronic, Inc., 111 F. Supp. 3d 346, 348 (W.D.N.Y. 2015)
(“Decision”). For the reasons that follow, we affirm.
BACKGROUND
Medgraph owns by assignment the asserted patents,
directed to a method for improving and facilitating diag-
nosis and treatment of patients, whereby data relating to
“medically important variable[s],” for example, blood
sugar levels of a diabetic patient, measured from a pa-
tient’s body, are uploaded onto a computer and transmit-
ted to a central storage device, from which they can be
accessed remotely by medical professionals treating the
patient. See, e.g., ’124 patent col. 3 ll. 35–46.
Claims 1–15 of the ’124 patent are method claims.
Claim 1 is representative and reads as follows:
1. A method for improving and facilitating
diagnosis and treatment of patients having
medical conditions requiring long-term profiles
of specific variables, said method including the
steps of
using at least one measuring device, periodically
taking a measurement of at least one medical-
ly important variable that has been identified
for a patient from a body of said patient;
ensuring said patient is separated from said at
least one measuring device after taking each
said measurement;
MEDGRAPH, INC. v. MEDTRONIC, INC. 3
inputting said at least one medically important
variable as raw data into a primary computer
system after said step of ensuring said patient
is separated and recording said raw data in a
mass storage device integrated with said pri-
mary computer system;
compiling said raw data as data for said patient
using the primary computer system, said data
representing a history of values for said at
least one medically important variable for said
patient;
receiving a request for data of one of said pa-
tients from by [sic] a medical practitioner that
is treating said one of said patients; and
outputting requested data for said one of said
patients in the form of at least one of a chart
and a graph to said medical practitioner;
said step of inputting comprising one of
transferring said raw data to a remote com-
puter comprising an ordinary general pur-
pose personal computer, then transferring
said raw data to said primary computer;
telephoning an automatic telephone interface
and employing one of speech recognition and
touch-tone recognition software to input said
raw data into said primary computer; and
telephoning a live receptionist, speaking the
raw data to said live receptionist for entry in-
to said primary computer.
Id. col. 7 ll. 13–50.
The ’351 patent, which is a continuation-in-part of the
’124 patent, sets forth a single, similar claim, with differ-
ences that are not relevant to this appeal.
4 MEDGRAPH, INC. v. MEDTRONIC, INC.
Claim 16 of the ’124 patent is the corresponding sys-
tem claim, and reads in relevant part:
16. A system for improving and facilitating
diagnosis and treatment of patients having
medical conditions requiring long-term profiles
of at least one predetermined medically im-
portant variable, comprising . . .
means for inputting said at least one predeter-
mined medically important variable as raw
data into a primary computer comprising
software and hardware enabling said primary
computer system to operate as at least one of a
web server, a dial-up host, a network server,
and a telephone answering and data collection
device whereby raw data can be communicated
from a remote computer proximate a patient
comprising an ordinary general purpose per-
sonal computer and from an ordinary tele-
phone wherein data is transmitted as one of
spoken data and touch-tone data; . . .
means to transmit said requested data in the
form of at least one of a chart and graph gen-
erated from said data from said primary com-
puter to a remote computer proximate said
practitioner whereby said primary computer is
one of a web server, a dial-up host, and a net-
work server and means to transmit said re-
quested data by facsimile through a fax-
modem integrated with said primary comput-
er . . . .
’124 patent col. 10 ll. 24–40, 53–60 (emphases added).
Medtronic manufactures and markets a variety of in-
tegrated diabetes management solutions, including the
CareLink® Therapy Management System for Diabetes,
which integrates CareLink Personal Therapy Manage-
MEDGRAPH, INC. v. MEDTRONIC, INC. 5
ment Software (“CareLink Personal”) for patients and
CareLink Pro Diabetes Therapy Management Software
(“CareLink Pro”) for healthcare professionals (collectively,
the “CareLink System”). The CareLink System allows
patients to upload data relating to management of their
diabetes, including blood glucose readings, to Medtronic’s
central computer server, where the data are collected and
stored in a database so that the patients can keep an
online record of the information, and/or share the infor-
mation remotely with a healthcare provider.
In December 2009, Medgraph sued Medtronic in the
United States District Court for the Western District of
New York, alleging infringement of all claims of the ’124
patent. In October 2010, Medgraph filed an amended
complaint to assert that Medtronic also infringed claim 1
of the ’351 patent. This appeal arises in part from the fact
that Medgraph’s suit coincided with a multi-year process
of judicial reconsideration by this court sitting en banc
and by the Supreme Court of the relevant governing law,
in a series of five appellate decisions, which the parties
refer to as “the Akamai cases.”
A year after Medgraph’s complaint was filed, this
court issued Akamai I, where we held that direct in-
fringement of a method claim requires a single party to
perform every step of the claimed method and that there
can only be joint infringement where the acts of another
are attributable to the accused infringer through either
an agency relationship or a contractual obligation. Aka-
mai Techs., Inc. v. Limelight Networks, Inc., 629 F.3d
1311, 1318–19 (Fed. Cir. 2010) (“Akamai I”).
In August 2012, Medtronic filed a motion for sum-
mary judgment of noninfringement of all claims of the
asserted patents, based on, inter alia, the grounds that:
(1) the CareLink System does not infringe any of the
method claims of the asserted patents because those
claims require performance of certain steps by patients
6 MEDGRAPH, INC. v. MEDTRONIC, INC.
and doctors in addition to those performed by Medtronic;
and (2) the CareLink System does not infringe claim 16 of
the ’124 patent because that claim, if properly construed,
requires a system that includes both telephonic and
computer (e.g., Internet) communication.
Two days after Medtronic filed its motion, this court
issued Akamai II, an en banc decision, in which we over-
ruled and vacated the panel decision in Akamai I. Aka-
mai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d
1301, 1306 (Fed. Cir. 2012) (en banc) (per curiam) (“Aka-
mai II”). In Akamai II, we left direct infringement stand-
ards in place without reconsidering them, but provided an
independent inducement basis for divided infringement
liability. Akamai II, 692 F.3d at 1317–18. As a result of
that decision, Medtronic filed an amended motion for
summary judgment, taking Akamai II into account.
Medgraph submits on appeal that, “in response to Akamai
II, [it] was compelled to forego its claim of direct in-
fringement and rely, instead, upon a claim for indirect
infringement under a theory of inducement.” Appellant’s
Br. 10.
After the district court held a hearing on Medtronic’s
summary judgment motion, the Supreme Court issued
Akamai III, reversing Akamai II on the issue of induced
infringement and remanding the case to this court for
possible reconsideration of the standard of divided direct
infringement. Limelight Networks, Inc. v. Akamai Techs.,
Inc., 134 S. Ct. 2111, 2120 (2014) (“Akamai III”). The
parties filed supplemental briefs to discuss the effect of
Akamai III on Medtronic’s motion for summary judgment.
The district court awaited a decision from this court
on remand from Akamai III before ruling on Medtronic’s
motion. On May 13, 2015, a divided panel of this court
issued Akamai IV, where we again rejected direct in-
fringement liability for Limelight—as had the initial
panel in Akamai I—reasoning that Limelight did not
MEDGRAPH, INC. v. MEDTRONIC, INC. 7
“direct or control” its customers to perform the claimed
steps, that its customers were not agents of or contractu-
ally obligated to Limelight, and that Limelight’s custom-
ers were not acting in a “joint enterprise” with Limelight
whereby each member could be charged with the acts of
the others. Akamai Techs., Inc v. Limelight Networks,
Inc., 786 F.3d 899, 915 (Fed. Cir. 2015) (“Akamai IV”).
On June 29, 2015, the district court in this case issued
a decision granting summary judgment of no infringe-
ment, applying the law on direct infringement liability as
it then stood. In its decision, the district court noted that
the legal standard governing direct infringement after
Akamai IV was the same as under Akamai II, which had
caused Medgraph to withdraw its claim of direct in-
fringement because “more than one person, i.e., the pa-
tient or doctor, neither of whom is an agent of or under
contractual obligation to Medtronic, is required to perform
all of the steps of the method claims . . . .” Decision, 111
F. Supp. 3d at 356 (internal quotation marks omitted).
Thus, the district court concluded that there was no
infringement because there had not been any “showing
that Medtronic itself directly infringed the method claims
or that it acted as a ‘mastermind’ by controlling or direct-
ing anyone else’s direct infringement.” Id. (citing Akamai
IV, 786 F.3d at 904). The district court then entered final
judgment of noninfringement on July 2, 2015.
Shortly after the district court’s entry of final judg-
ment, this court issued Akamai V, an en banc decision
where we broadened the circumstances in which others’
acts may be attributed to an accused infringer in cases of
divided infringement. Akamai Techs., Inc. v. Limelight
Networks, Inc., 797 F.3d 1020, 1023 (Fed. Cir. 2015) (en
banc) (per curiam) (“Akamai V”). We held that, in addi-
tion to an agency or contractual relationship, attribution
is proper “when an alleged infringer conditions participa-
tion in an activity or receipt of a benefit upon performance
of a step or steps of a patented method and establishes
8 MEDGRAPH, INC. v. MEDTRONIC, INC.
the manner or timing of that performance.” Id. Stated
otherwise, an actor who is implicated in that way in all of
the claimed steps it does not itself perform may be liable
as a direct infringer.
Medgraph timely appealed to this court. We have ju-
risdiction pursuant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
On appeal, Medgraph argues that: (1) given the
change in controlling law, the district court’s decision
should be vacated and remanded for proceedings in ac-
cordance with Akamai V; and (2) the district court’s
finding of noninfringement of system claim 16 was in
error because the court improperly construed the claim.
We discuss each issue in turn.
I.
We first consider whether the district court’s grant of
summary judgment of noninfringement of the asserted
method claims should be vacated and remanded in light of
Akamai V. We review the district court’s grant of sum-
mary judgment under the law of the regional circuit in
which the court sits, here, the Second Circuit. Classen
Immunotherapies, Inc. v. Elan Pharm., Inc., 786 F.3d 892,
896 (Fed. Cir. 2015). The Second Circuit reviews a grant
of summary judgment without deference, construing the
evidence in the light most favorable to the nonmovant and
drawing all reasonable inferences in that party’s favor.
Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir.
2011). Summary judgment may only be granted when no
“reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
Medgraph argues that the district court’s grant of
summary judgment of noninfringement was based “solely”
on Akamai IV, which limited attribution of liability for
divided direct infringement to agency and contractual
MEDGRAPH, INC. v. MEDTRONIC, INC. 9
relationships. Appellant’s Br. 14. Medgraph asserts that,
because Akamai V broadened the scope for attributing
third party actions to an accused infringer, the district
court did not conduct the relevant inquiries under Akamai
V and the evidence of record would need to be developed.
Thus, in effect, Medgraph argues that Medtronic condi-
tions the patients’ and/or doctors’ participation in the
CareLink System, or receipt of the benefit to the patients
and doctors of remote access to patient information, upon
their performance of the claimed method steps and estab-
lishes the manner or timing of that performance.
Medtronic responds that, under any of the Akamai
cases, proof of direct infringement required Medgraph to
show that some entity or group of entities performed all of
the claimed steps, a burden that Medgraph never met.
Medtronic maintains that Medgraph never produced
evidence of, inter alia, the steps that are performed by the
patient and doctor. Thus, argues Medtronic, the outcome
would remain unchanged if we were to remand this case,
because the only relevant inquiry occasioned by the
change in law from Akamai IV to V is the relationship
between the accused infringer (itself) and the third par-
ties (patients and doctors) that would allow for attribu-
tion, and this inquiry is unnecessary in the absence of
evidence of patients and doctors performing the claimed
steps.
We agree with Medtronic that a remand is unneces-
sary in this case. Ordinarily, when the governing legal
standards change during an appeal, remand is an appro-
priate action. See, e.g., Mankes v. Vivid Seats Ltd., 822
F.3d 1302, 1310 (Fed. Cir. 2016). However, in this case,
Medgraph has not pointed to any evidence that would
permit attribution of patient- and doctor-performed steps
to Medtronic under the sole standard of Akamai V in-
voked by Medgraph. See Appellant’s Br. 25–26. A finding
of direct infringement requires that “all steps of the claim
are performed by or attributable to a single entity.”
10 MEDGRAPH, INC. v. MEDTRONIC, INC.
Akamai IV, 786 F.3d at 904. That rule was unaffected by
Akamai V, which reiterated the rule while broadening the
circumstances under which attribution may be proper.
797 F.3d at 1023. Under the Akamai V standard invoked
by Medgraph, the evidence would have to allow a finding
that Medtronic “conditions participation in an activity or
receipt of a benefit upon performance of a step or steps of
a patented method and establishes the manner and
timing of performance.” Id. Medgraph has not identified
any basis on which it could meet that standard.
The evidence presented to the district court indisput-
ably shows that Medtronic does not condition the use of,
or receipt of a benefit from, the CareLink System on the
performance of all of Medgraph’s method steps. For
example, Medtronic does not deny users the ability to use
CareLink Personal and CareLink Pro without perfor-
mance of the claim step of ensuring detachment of the
measuring device from the patient after each measure-
ment. Nor does it offer an incentive for such detachment.
Indeed, the evidence indicates that Medtronic benefits
when patients use its continuous glucose monitoring
device, which does not involve ensuring detachment after
each measurement. J.A. 1947–48. The evidence also
shows that Medtronic freely permits using the CareLink
System without performing synchronization, and it denies
no benefit to such users for their choices to do so. J.A.
1499, 1503. Patients can freely choose to bring their
devices to their physician’s office and have their data
extracted locally there. J.A. 820–21, 967–68. Patients
also can print or email reports and bring them to their
medical practitioner. J.A. 907, 923.
This evidence defeats application of the Akamai V
standard that Medgraph invokes. Discovery was exten-
sive in this case, and Medgraph has identified no avenue
of discovery it was denied, or even that it chose not to
pursue, that is relevant to applying that standard. Nor
has it identified to this court any evidence that is in the
MEDGRAPH, INC. v. MEDTRONIC, INC. 11
record, or that it has reason to think exists, that would
alter the conclusion required by the evidence of record. In
these circumstances, we have been furnished no basis for
viewing a remand for further proceedings as anything but
a pointless prolonging of litigation.
The district court also correctly concluded that Med-
tronic was not liable under a theory of indirect infringe-
ment, because indirect infringement is predicated on
direct infringement. That rule was also unaffected by
Akamai V, so the outcome would, again, not change if we
were to vacate and remand.
We thus affirm the district court’s grant of summary
judgment of noninfringement of the method claims of the
asserted patents.
II.
We next consider whether the district court erred in
granting summary judgment of noninfringement of sys-
tem claim 16 of the ’124 patent. Evaluation of summary
judgment of noninfringement is a two-part inquiry: first, a
court construes the scope and meaning of the asserted
patent claims, and then compares the construed claims to
the accused product or process. Abbott Labs. v. Sandoz,
Inc., 566 F.3d 1282, 1288 (Fed. Cir. 2009). We review a
district court’s ultimate claim constructions de novo and
any underlying factual determinations involving extrinsic
evidence for clear error. Teva Pharm. U.S.A., Inc. v.
Sandoz, Inc., 135 S. Ct. 831, 841–42 (2015). Here, be-
cause the district court relied only on the intrinsic record
to construe claim 16, we review the district court’s con-
struction de novo. See Shire Dev., LLC v. Watson Pharm.,
Inc., 787 F.3d 1359, 1364, 1368 (Fed. Cir. 2015) (citing
Teva, 135 S. Ct. at 840–42).
Infringement is a question of fact. Absolute Software,
Inc. v. Stealth Signal, Inc., 659 F.3d 1121, 1129–30 (Fed.
Cir. 2011). As such, a grant of summary judgment of
12 MEDGRAPH, INC. v. MEDTRONIC, INC.
noninfringement is proper when no reasonable factfinder
could find that the accused product contains every claim
limitation or its equivalent. PC Connector Sols., LLC v.
SmartDisk Corp., 406 F.3d 1359, 1364 (Fed. Cir. 2005);
see Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520
U.S. 17, 29, 39 n.8 (1997).
Medgraph argues that the district court erred in con-
struing the claim limitation “and” to mean “and” instead
of “or.” Under the district court’s construction, claim 16
requires both computer (e.g., Internet) and telephone
capabilities for receiving and transmitting data. Med-
graph maintains that the written description supports a
disjunctive construction because it repeatedly states that
the invention transmits data either through “a common
network, over telephone lines, or over the Internet.” See,
e.g., ’124 patent col. 2 ll. 32–33 (emphasis added).
Medtronic responds that the district court correctly
held that “and” means “and” because claim terms are to
be given their plain and ordinary meaning. Additionally,
Medtronic argues, the written description teaches that
the invention possesses both computer and telephonic
capabilities, but only uses one at a time. See, e.g., id. col.
6 ll. 32–41 (describing the “high-tech” and “low-tech”
“utilization[s]” of the invention).
We agree with Medtronic that the district court cor-
rectly construed the claim. Although we have construed
“and” to mean “or” when the specification so requires, see,
e.g., Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 520
F.3d 1358, 1361 (Fed. Cir. 2008) (“In light of . . . the
specification, . . . this court sustains the trial court’s
ruling that . . . claim 1’s use of and means or.”), those
cases are distinct from the present case. For example, in
Ortho-McNeil, we held that “and” meant “or” because “as
used in [the] claim, and conjoins mutually exclusive
possibilities.” 520 F.3d at 1362. Such is not the case
here. Telephone and computer capabilities are not mutu-
MEDGRAPH, INC. v. MEDTRONIC, INC. 13
ally exclusive; the patents themselves teach that the
invention may contain both, to serve a diverse set of
customers. See, e.g., ’124 patent col. 5 ll. 26–28. Indeed,
all cases cited by Medgraph, most of them district court
cases that are not binding on this court, have a common
theme that distinguishes them from this case: the specifi-
cation compels a disjunctive construction for “and.” See,
e.g., Merck & Co. v. Teva Pharm. USA, Inc., 228 F. Supp.
2d 480, 493–94 (D. Del. 2002) (noting that a conjunctive
construction would render tables in the written descrip-
tion meaningless), aff’d, 347 F.3d 1367 (Fed. Cir. 2003).
In this case, in contrast, the written description can
be interpreted to support either construction. For exam-
ple, the patent describes the “high-tech” and “low-tech”
versions of the invention as both “utilization[s]” of the
invention and as “two systems.” See ’124 patent col. 6 ll.
32–41. Likewise, the remainder of the written description
contains portions that support a construction of “and”
while others support a construction of “or.” Compare, e.g.,
id. col. 5 ll. 32–40 (explaining that “it is only for illustra-
tion purposes that FIG. 1 shows only one . . . telephone
interface” even though “the primary computer may
have . . . any number of telephone interfaces”) and id.fig.1 (showing only one dashed arrow, which suggests that
all other arrows, including the one leading to telephone
30, are not optional), with, e.g., id. col. 6 ll. 12–14
(“[C]onnection 60 can include a direct network connection,
a modem-to-modem connection, or an Internet connec-
tion.” (emphasis added)).
Because the written description does not compel a
disjunctive construction for “and,” the claim term should
be given its plain and ordinary meaning. Phillips v. AWH
Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc). We
therefore conclude that the district court correctly con-
strued the limitation “and” to mean “and,” rather than
“or.”
14 MEDGRAPH, INC. v. MEDTRONIC, INC.
It is undisputed that Medtronic’s CareLink System is
not capable of transmitting patient data by telephone.
Because claim 16, as properly construed, requires that the
means for receiving and transmitting data include both
computer and telephonic capabilities, we conclude that
the district court correctly granted summary judgment of
noninfringement of claim 16 of the ’124 patent.
CONCLUSION
We have considered Medgraph’s remaining arguments
but find them to be unpersuasive. For the foregoing
reasons, we affirm the judgment of the district court.
AFFIRMED