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Kit Check, Inc. v. Health Care Logistics, Inc.

United States District Court, S.D. Ohio, Eastern Division

August 30, 2019

KIT CHECK, INC., Plaintiff,
v.
HEALTH CARE LOGISTICS, Inc., Defendant.

          Vascura Magistrate Judge

          OPINION & ORDER

          ALGENON L. MARBLEY UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the parties' motions for claim construction. (ECF Nos. 41, 42). This Court held a Markman Hearing on April 19, 2019. This Court will construe the disputed claim terms as follows.

         I. BACKGROUND

         KCI owns several patents for a product that automates the process for restocking medications. (ECF No. 1 at 1). The KCI Product consists of several parts but can be described as a variation on the following general process: (1) pharmacy items are included in a pharmacy kit; (2) an RFID tag[1] is attached to the pharmacy items or the pharmacy kit itself; (3) the pharmacy kit is put into an electromagnetically shielded container; and (4) a device reads the data on the RFID tags to determine if any of the items are expired, expiring, missing, or the like. (Id.). KCI has seven patents for its products, all titled “Management of Pharmacy Kits”: U.S. Patent No. 8, 990, 099 (the “'099 Patent”), issued March 24, 2015; U.S. Patent No. 9, 037, 479 (the “'479 Patent”), issued May 19, 2015; U.S. Patent Number 9, 058, 412 (the “'412 Patent”), issued June 16, 2015; U.S. Patent No. 9, 058, 413 (the “'413 Patent”), issued June 16, 2015; U.S. Patent No. 9, 367, 665 (the “'665 Patent”), issued June 14, 2016; U.S. Patent No. 9, 734, 294 (the “'294 Patent”), issued August 15, 2017; and U.S. Patent No. 9, 805, 169 (the “'169 Patent”), issued October 31, 2017. (ECF No. 1 at 12).

         HCL and KCI were working together to bring KCI's product to market. KCI has described “HCL as its supplier to construct the scanning station portion of the KCI Product.” (Id. at 2). HCL sees its role as more than a supplier and asserts that it “provided design services to KCI for an RFID reader box . . . .” (ECF No. 18 at 3). KCI alleges that it had a nondisclosure agreement (NDA) with HCL[2] and a separate agreement stating the KCI owned all of the intellectual property for the product. (ECF No. 1 at ¶¶ 26-27). KCI spent over one year refining its product, cycling at least twelve different designs. (ECF No. 1 at 8-10). HCL disputes that KCI “was the only party performing testing and making suggestions for improvements that were incorporated into the design, or that any or all improvements were proprietary to Kit Check.” (ECF No. 18 at 5, ¶35).

         HCL also sells a system for managing medication refills. HCL's product line is called Stat Stock. HCL's system also uses RFID technology. HCL asserts that KCI “gave HCL permission to design, manufacture, offer to sell, and sell RFID boxes that would target a different market from the large hospital market that Plaintiff was pursuing.” (ECF No. 18 at 24).

         On December 14, 2016, KCI sent a letter to HCL “notif[ying] HCL of the Asserted Patents” (ECF No. 1 at 12) and asking HCL to “cease and desist from its unlawful competitive activity.” (Id. at 16). On November 20, 2017, KCI notified HCL that KCI believed HCL was infringing its patents. (ECF No. 1 at 12).

         On December 1, 2017, KCI sued HCL for misappropriation of trade secrets under federal and state law, breach of their 2013 Nondisclosure agreement, breach of the 2015 Design Services/Prototyping and Supplier Agreement, and infringement of KCI's seven patents. (ECF No. 1). The parties have filed their claim construction briefs, proposing constructions for disputed claim terms. Since the filing of these claim construction briefs, KCI voluntarily dismissed claims based on the ‘479 Patent and the ‘294 Patent.

         II. STANDARD OF REVIEW

         Patents typically contain three important sections: (1) drawings of the claimed invention, (2) the specification, and (3) the patent claims. It is the claims of the patent, however, that “define[] the scope of the patentee's rights.” Markman v. Westview Instruments, Inc., 517 U.S. 370, 372 (1996). It is the court's role to construe disputed claim terms. Generally, terms in a patent claim are “given their ordinary and customary meaning.” Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996). It is settled law that “the ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as of the effective filing date of the patent application.” Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005). In determining how a person of ordinary skill in the art (“POSITA”) would understand a claim term, courts look not only to “the context of the particular claim in which the disputed term appears, but [also to] the context of the entire patent, including the specification, ” id., and prosecution history. Id. (quoting Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 1477 (Fed. Cir. 1998). Put another way, courts look to “sources available to the public that show what a person of skill in the art would have understood disputed claim language to mean, ” including “the words of the claims themselves, the remainder of the specification, the prosecution history, and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art.” Innova/Pure Water, Inc. v. Safari Water Filtration Systems, Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004). In looking to the claims, the court is not limited to the asserted claims “[b]ecause claim terms are normally used consistently throughout the patent.” Phillips, 415 F.3d at 1314.

         The Federal Circuit has consistently held that “[t]he specification is . . . the primary basis for construing the claims.” Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985). But it has also cautioned not to “read[] limitations from the specification into the claim.” Phillips, 415 F.3d at 1323.

         In addition to intrinsic evidence (the claims, specification, and prosecution history), courts may also look to extrinsic evidence, including “all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.” Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995). Extrinsic evidence, however, is typically less important than intrinsic evidence. Phillips, 415 F.3d at 1317.

         III. ANALYSIS

         Since the parties have submitted their initial claim construction briefs, the parties have resolved several of the disputed claim terms. The remaining terms to be construed are: (1) pharmacy item, (2) pharmacy kit[s], (3) pharmacy kit template, (4) template, (5) segment, and (6) substitute first pharmacy item/substitute first medication. The parties do not rely on extrinsic evidence for these terms. (See ECF No. 38). In addition to these disputed claim terms, the parties also dispute whether the claims contain “means-plus-function” language.

         A. Pharmacy Item

Claim Term

KCI's Proposed

Construction

HCL's Proposed

Construction

Court's Construction

Pharmacy item

Medicine or medicinerelated supplies.

Medicines or medical supplies.

Medicines or other medical supplies that may be stocked by a pharmacy.

         At the Markman hearing, the parties agreed that the following construction was acceptable for “pharmacy item”: “medicines or other medical supplies that may be stocked by a pharmacy.” The Court therefore adopts that construction for “pharmacy item.”

         B. Pharmacy Kit[s]

Claim Term

KCI's Proposed

Construction

HCL's Proposed Construction

Court's Construction

Pharmacy kit[s]

Transportable container having a collection of pharmacy items for a common purpose that can be deployed for a specific medical procedure, for a specific physician, or to a designated location.

Transportable container having a collection of medical items for a common purpose that can be deployed for a specific medical procedure, for a specific physician, or to a designated location.

Transportable container having a collection of pharmacy items for a common purpose that can be deployed for a specific medical procedure, for a specific physician, or to a designated location.

         The parties essentially agree on how to define this term; the proposed constructions differ only in that KCI proposes that the term be construed to include “collection of pharmacy items” while HCL's construction proposes “collection of medical items.” KCI contends that HCL's proposed construction of “pharmacy kit” is too broad because it includes “medical items” rather than “pharmacy items.” HCL argues that KCI's construction improperly reads a limitation from the specification into the claim.

         This Court adopts KCI's construction because KCI's construction uses “pharmacy items, ” a term that will be defined elsewhere for the jury. HCL's construction may inject additional ambiguity into the definition of pharmacy kit[s] that would not be present by using a term defined elsewhere. Additionally, HCL's arguments that KCI is reading a limitation from the specification into the claim goes more to the definition of “pharmacy item” itself rather than the definition of pharmacy kit[s].

         C. Pharmacy Kit Template

Claim Term

KCI's Proposed Construction

HCL's Proposed Construction

Court's Construction

Pharmacy kit template

Predetermined specification of permissible pharmacy items that form the contents of a pharmacy kit.

A specification that defines the contents of a pharmacy kit containing at least one segment

A specification that defines the contents of a pharmacy kit and may contain at least one segment.

         The parties disagree on whether “pharmacy kit template” must include a segment. KCI argues that a pharmacy kit template need not include any “segment.” A pharmacy kit template without any segments could simply be a list of medications. KCI argues that, where the patentee intended to include the word “segment” it did so explicitly, and reading “segment” into every use of the phrase “pharmacy kit template” would render “segment” superfluous.

         HCL argues that “each embodiment described and illustrated by Plaintiff involves a template which defines the contents of a pharmacy kit containing at least one segment.” (ECF No. 42 at 9). HCL argues that the inventor is only entitled to what he disclosed and that all of the examples in the patent are examples where the pharmacy kit template includes segments.

         The parties' dueling constructions highlight different doctrines on how to read patent claims. On the one hand, “[b]ecause claim terms are normally used consistently throughout the patent, the usage of a term in one claim can often illuminate the meaning of the same term in other claims.” Phillips, 415 F.3d at 1314 (citing Rexnord Corp. v. Laitram Corp., 274 F.3d 1336, 1342 (Fed. Cir. 2001)). The Federal Circuit has gone so far as to say that “the presence of a dependent claim that adds a particular limitation gives rise to a presumption that the limitation in question is not present in the independent claim.” Phillips, 415 F.3d at 1315 (emphasis added) (citing Liebel - Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 910 (Fed. Cir. 2004)). On the other hand, “[t]he descriptive part of the specification aids in ascertaining the scope and meaning of the claims inasmuch as the words of the claims must be based on the description.” Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985). In that sense, HCL's reference to the figures and the remainder of the specification as describing only a template with segments has some appeal. See also LizardTech, Inc. v. Earth Res. Mapping, Inc., 424 F.3d 1336 (Fed. Cir. 2005) (finding that a patent did not cover a general process where the specification only described a particular type of process). While LizardTech was not construing the claims at issue but rather deciding whether a claim was “invalid for failing to satisfy the written description requirement of 35 U.S.C. § 112, ” id. at 1340, the impact of the specification on the claims may nevertheless shed light on claim construction.

         The Federal Circuit has acknowledged that “there is sometimes a fine line between reading a claim in light of the specification, and reading a limitation into the claim from the specification.” Comark Communications, Inc. v. Harris Corp., 156 F.3d 1182, 1186-87 (Fed. Cir. 1998). As the Federal Circuit has also clarified, however, “[w]hether a claim must, in any particular case, be limited to the specific embodiment presented in the specification, depends in each case on the specificity of the description of the invention and on the prosecution history.” Cultor Corp. v. A.E. Staley Mfg. Co., 224 F.3d 1328 (Fed. Cir. 2000). Where the Federal Circuit has limited an invention to the embodiments disclosed in the specification, “there were specific reasons dictating a narrow claim construction beyond the mere fact that the specification disclosed only a single embodiment or a particular structure.” Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898 (Fed. Cir. 2004). The Federal Circuit rejected an argument similar to HCL's, that because all of the embodiments in the specification included a particular limitation, the invention necessarily included that limitation. See Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898 (Fed. Cir. 2004). Thus, LizardTech, while helpful for purposes of whether the specification meets statutory requirements, does not override the case law directly on point for how to construe claims in light of the specification.

         Some claims in the patents at issue do not explicitly refer to a segment as part of the pharmacy kit template. For example, claim 17 of the ‘412 patent refers to “a pharmacy kit template, wherein the pharmacy kit template indicates a group of pharmacy items that form at least a portion of the pharmacy kit . . . .” ‘412 patent, col. 20 l. 4-6 (filed Jan. 23, 2015). HCL, however, points out that “the only detailed discussion or illustration of embodiments of templates includes segments.” (ECF No. 47 at 5). KCI disputes that, arguing that the “summary” section of the specification describes comparing tag information to a kit template. See ‘099 patent at col. 1 l. 64 - col. 2 l. 29 (filed July 20, 2012). That summary section, however, is written at a highly general level. It does not disclose the use of any templates, even though the detailed description does include descriptions of how to use a template with segments. Nevertheless, the patentee showed himself capable of using the term “segment” when he wanted to denote a template with segments. Other times, the claims contain no such segment requirement. Additionally, the prosecution history does not appear to reflect any goal, on behalf of the patentee, to limit the invention to templates with segments. Therefore, a template need not always include a segment.

         Because a template may include a segment, this Court will adopt the following construction for pharmacy kit template: “A specification that defines the contents of a pharmacy kit and may contain at least one segment.”

         D. Template

Claim Term

KCI's Proposed Construction

HCL's Proposed Construction

Court's Construction

Template

Predetermined specification of permissible pharmacy items that form the contents of a pharmacy kit.

A specification that defines the contents of a kit containing at least one segment.

A specification that defines the contents of a pharmacy kit and may contain at least one segment.

         KCI has argued that it is not necessary to construe the term “template” because it only appears as part of the term “pharmacy kit template” which is already submitted for construction. HCL does not offer a reason for why it is necessary to construe this term but has supplied a proposed construction that is almost identical to its proposed construction for “pharmacy kit template, ” the only difference being that HCL's proposed construction for “template” appears to apply to “a kit” while “pharmacy kit template” would appear to apply to “a pharmacy kit.” This Court does not find it necessary to supply any additional definition for this term. The patents deal only with pharmacy kits, not kits in general. Therefore, this Court adopts the same construction for “template” as for “pharmacy kit template.”

         E. ...


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