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Apple Inc. v. International Trade Commission

United States Court of Appeals, Federal Circuit

August 7, 2013

APPLE INC., Appellant,
v.
INTERNATIONAL TRADE COMMISSION, Appellee, AND MOTOROLA MOBILITY, INC., Intervenor.

Appeal from the United States International Trade Commission in Investigation No. 337-TA-750.

E. Joshua Rosenkranz, Orrick, Herrington & Sut-cliffe, LLP, of New York, New York, argued for the appellant. With him on the brief were Mark S. Davies, Rachel M. McKenzie and T. Vann Pearce, Jr., of Washington, DC.

Megan M. Valentine, Attorney Advisor, Office of General Counsel, United States International Trade Commission, of Washington, DC, argued for appellee. With her on the brief were Dominic L. Bianchi, Acting General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.

David A. Nelson, Quinn Emanuel Urquhart & Sullivan LLP, of Chicago, Illinois, argued for intervenor. With him on the brief were Charles K. Verhoeven, of San Francisco, California. Of counsel on the brief were Edward J. DeFranco, Alexander Rudis and MAtthew A. Traupman, of New York, New York.

Before Moore, Linn, and Reyna, Circuit Judges.

OPINION

Moore, Circuit Judge.

Apple appeals from the final decision of the International Trade Commission (ITC) that the asserted claims of U.S. Patent No. 7, 663, 607 ('607 patent) are invalid and that Motorola does not infringe the asserted claims of U.S. Patent No. 7, 812, 828 ('828 patent). Apple challenges the ITC's claim construction and its determinations of obviousness, anticipation, and noninfringement. For the following reasons, we affirm-in-part, reverse-in-part, and vacate-in-part the ITC's decision and remand for further proceedings.

Background

This patent case involves smartphone touchscreens. The '607 patent discloses a touch panel with a transparent capacitive sensing medium that can detect multiple touches at once. '607 patent, at [57]. To achieve the multitouch functionality, the touch panel employs a matrix of electrodes connected to circuits that measure the change in charge that occurs as a result of pressure applied to the screen. Id. col.5 l.27–col.6 l.7. The pressure-induced change occurs because the electrode rows are in a different layer than the electrode columns. Id. col.5 l.15–col.6 l.18. When a user touches the screen, the pressure applied at each intersection point causes charge to flow between the electrodes at that node. Id. Measuring circuits connected to the electrodes scan the matrix and measure the displaced charge at each node. Id. By detecting these changes, the touch panel can determine if and where a user has touched the screen. Id.

The '607 patent also discloses how to make the touchscreen transparent. It teaches constructing the electrodes with indium tin oxide (ITO), a transparent material. '607 patent, col.12 ll.35–52. But simply forming the electrodes from ITO may not render the matrix invisible because the ITO electrodes tend to be less transparent than gaps in the electrode matrix. Id. col.14 l.60–col.15 l.23. To remedy this problem, the patent teaches the use of "dummy" ITO pads to fill in gaps in the matrix. Id. col.15 ll.8–24. By inserting these pads in the matrix gaps, the matrix has the optical properties of a uniform sheet of ITO and thus becomes invisible to the user. Id.

The '828 patent discloses a method to determine if the displaced charge at the nodes corresponds to a finger touching the screen. It teaches that the touch panel software "mathematically fit[s] an ellipse" around the nodes at which the measuring circuits have detected a touch. '828 patent, figs. 13–15, col.60 l.5–16. Performing the "fit" allows the device to determine if pressure applied to the screen constitutes a finger touch as well as track the movement of the finger across the touchscreen. Id. at [57].

Apple initiated proceedings in the ITC, alleging that Motorola's smartphones and tablets infringed various claims of the '607 and '828 patents. Apple alleged that Motorola infringed claims 1–7 and 10 of the '607 patent and claims 1, 2, 10, 11, 24–26, and 29 of the '828 patent. Claim 1 of the '607 patent is representative of the asserted touch panel claims:

A touch panel comprising a transparent capacitive sensing medium configured to detect multiple touches or near touches that occur at a same time and at distinct locations . . . wherein the transparent capacitive sensing medium comprises:
a first layer having a plurality of transparent first conductive lines . . .; and a second layer spatially separated from the first layer and having a plurality of transparent second conductive lines . . . each of the second conductive lines being operatively coupled to capacitive monitoring circuitry;
wherein the capacitive monitoring circuitry is configured to detect changes in charge coupling between the first conductive lines and the second conductive lines.

'607 patent, claim 1 (emphases added). Claim 10, also disputed on appeal, recites a similar display arrangement and requires the touch panel to form a "pixilated image." Claim 1 of the '828 patent is representative of the asserted claims relating to mathematically fitting an ellipse:

A method of processing input from a touch-sensitive surface, the method comprising:
receiving at least one proximity image representing a scan of a plurality of electrodes of the touch-sensitive surface; segmenting each proximity image into one or more pixel groups that indicate significant proximity, each pixel group representing proximity of a distinguishable hand part or other touch object on or near the touch-sensitive surface; and
mathematically fitting an ellipse to at least one of the pixel groups.

'828 patent, claim 1 (emphasis added). Motorola prevailed in the ITC proceedings. While the ITC determined that an article describing SmartSkin, a prior art touchscreen system, did not anticipate the asserted claims of the '607 patent, it determined that SmartSkin rendered those claims obvious. The ITC also found that U.S. Patent No. 7, 372, 455 (Perski '455) anticipated the '607 patent claims. The ITC also found that Motorola did not infringe the '828 patent. It construed the term "mathematically fitting an ellipse" to require the method to perform "a mathematical process" whereby "an ellipse is actually fitted to the data." J.A. 58–70. Finding that the Motorola products do not fit an ellipse to the electrode data, the ITC determined that those products do not infringe the asserted claims of the '828 patent.

Apple appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(6).

Discussion

I. Standard of Review

We review the ITC's legal determinations de novo and its factual findings for substantial evidence. Crocs, Inc. v. Int'l Trade Comm'n, 598 F.3d 1294, 1302 (Fed. Cir. 2010). Claim construction is a matter of law, which we review de novo. Sorensen v. Int'l Trade Comm'n, 427 F.3d 1375, 1378 (Fed. Cir. 2005). Obviousness is a question of law based on underlying facts. Crocs, 598 F.3d at 1308. We review the ITC's obviousness determination without deference and its factual findings for substantial evidence. Id. Whether a prior art reference anticipates the claims is a question of fact, reviewed for substantial evidence. Vizio, Inc. v. Int'l Trade Comm'n, 605 F.3d 1330, 1342 (Fed. Cir. 2010).

II. Anticipation of the '607 Patent: Perski '455

The ALJ found that Perski '455 anticipates the asserted claims of the '607 patent. He found that Perski '455 was § 102(e) prior art despite Apple's allegation of conception prior to the filing date of the application that issued as Perski '455. The ALJ found that the provisional application to which Perski '455 claims priority, U.S. Provisional Patent Application No. 60/446, 808 (Perski '808), provides written description support for the disclosure in Perski '455. After resolving the priority issue against Apple, the ALJ determined that Perski '455 anticipates the '607 patent claims. The ALJ found that Perski '455 discloses a touchscreen that can detect multiple touches at the same time. The ITC declined to review these findings.

Apple argues that the ITC anticipation findings were in error. It contends that Perski '455 is not prior art because (1) Perski '808 does not disclose any way to determine whether multiple fingers touch the screen; and (2) Perski '808 does not specifically incorporate by reference the "front end" and "digital unit" aspects of U.S. Provisional Patent Application 60/406, 662 (Morag) that the ALJ used to find claim 10 anticipated.

Even if Perski '455 is prior art, Apple argues that the reference does not disclose "detect[ing] multiple touches or near touches that occur at a same time and at distinct locations." It contends that the algorithm disclosed in Perski '455 cannot detect multiple touches that occur at the same time because it requires too much processing— the algorithm requires at least n*m steps to accurately scan all the nodes in a sensor matrix containing m rows and n columns. Apple asserts that Motorola also failed to present any evidence that the matrix disclosed in Perski '455 can accurately detect multiple touches at the same time because a single large touch can cause an output signal to be detected on more than one conductor line.

The ITC and Motorola respond that Perski '455 is prior art to the '607 patent. They argue that Perski '808 discloses the same sensor matrix and multitouch detection algorithms as Perski '455. Regarding claim 10, Motorola argues that Perski '808 specifically incorporates the relevant portions of Morag.

The ITC and Motorola argue that Perski '455 discloses all of the limitations of the '607 patent claims. They argue that Perski '455 discloses a sensor that can detect multiple touches at the same time. They contend that the claims do not require a particular speed or accuracy in detecting the multiple touches, and regardless, Perski '455 discloses both "simple" and "faster" detection algorithms. Lastly, Motorola asserts that Perski '808 discloses the exact scanning method that the '607 patent discloses to "detect multiple touches or near touches that occur at a same time and at distinct locations."

As an initial matter, we agree with the ITC and Motorola that substantial evidence supports the ITC's determination that the disclosure in Perski '808 provides adequate written support for Perski '455. Perski '808 provides the same multitouch scanning algorithms as Perski '455. Both disclose a sensor matrix that senses a touch by scanning the nodes of the matrix. Both disclose a "simple and direct approach" in which the circuitry scans each node of the matrix, which requires at least n*m steps for a sensor matrix that contains n columns and m rows. Each reference also discloses the same "faster approach." Specifically, each discloses scanning the nodes affiliated with a group of lines on one axis, which requires between two steps and n steps depending on the number of lines in the group. This faster approach, however, is not as accurate when detecting multiple touches that occur simultaneously at specific locations. To remedy this problem, both references disclose the "optimal approach" of combining the two methods to achieve the right balance of speed and accuracy. Thus, substantial evidence supports the ITC's finding that Perski '808 provides written support for Perski '455.[1]

We agree with Apple, however, that Perski '808 fails to incorporate by reference Morag.[2] For a prior art reference to anticipate a claim, the reference must disclose each claim limitation in a single document. Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000). The prior art document, however, may incorporate subject matter by reference to another docu- ment such that the incorporated material becomes part of the host document for the purposes of anticipation. Id. "To incorporate material by reference, the host document must identify with detailed particularity what specific material it incorporates and clearly indicate where that material is found in the various documents." Id. at 1282– 83. Whether and to what extent a host document incorporates material by reference is a question of law, subject to de novo review. Id. at 1283.

Here, Perski '808 only makes a passing reference to Morag as a "method similar" for detecting the presence of a stylus. J.A. 16149. It does not affirmatively incorporate any information. Perski '808 does not even refer to the particular functionality in Morag that detects the presence of a stylus, let alone the process that outputs touch event information to form a pixilated image, as required by claim 10. Thus, Perski '808's reference to Morag falls short of identifying with detailed particularity the material that discloses the "pixilated image" limitation in claim 10. Because Perski '808 does not incorporate by reference the anticipatory subject matter from Morag, the ITC's finding that Perski '455 anticipates claim 10 of the '607 patent lacks substantial evidence.

Having resolved that Perski '455 is prior art for claims 1–7 of the '607 patent, we conclude that substantial evidence supports the ITC's finding that Perski '455 anticipates those claims. Perski '455 discloses an embodiment in which "[a] two-dimensional sensor matrix lies in a transparent layer over an electronic display device" and a finger touch at a certain location on the matrix "increases the capacitance between the first conductor line and the orthogonal conductor line which happens to be at or closest to the touch position." Perski '455, col.13 ll.32–40 (reference numerals omitted). It discloses two ...


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