Furnace Brook, LLC v. Overstock.com, Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1064
FURNACE BROOK, LLC,
Plaintiff-Appellant,
v.
OVERSTOCK.COM, INC.,
Defendant-Appellee.
George C. Summerfield, Stadheim & Grear, Ltd., of Chicago, Illinois, argued for
plaintiff-appellant. With him on the brief were Joseph A. Grear, Rolf O. Stadheim, and
Keith A. Vogt.
John H. Barr, Jr., Bracewell & Giuliani LLP, of Houston, Texas, argued for
defendant-appellee. With him on the brief were Warren W. Harris and John F. Luman, III.
Appealed from: United States District Court for the Southern District of New York
Judge Charles L. Brieant

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NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1064
FURNACE BROOK LLC,
Plaintiff-Appellant,
v.
OVERSTOCK.COM, INC.,
Defendant-Appellee.
___________________________
DECIDED: May 23, 2007
___________________________
Before MAYER, Circuit Judge, CLEVENGER, Senior Circuit Judge, and BRYSON,
Circuit Judge.
BRYSON, Circuit Judge.
Appellant Furnace Brook LLC seeks review of the final judgment of the United
States District Court for the Southern District of New York, in Docket No. 05 Civ. 7329,
granting summary judgment of noninfringement to appellee Overstock.com, Inc. The
district court held that the “telephone terminal” and “customer terminal means”
limitations of claims 1 and 5 of the asserted patent, U.S. Patent No. 5,721,832 (“the ’832
patent”), do not read on the accused structures—personal computers and cellular
telephones to the extent they access Overstock’s website over the Internet. We affirm.
1. With respect to claim 1, Furnace Brook argues that the “telephone terminal”
referred to in one of the limitations may be a cellular telephone or a personal computer.

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We agree with Furnace Brook insofar as it suggests that a “telephone terminal” refers to
a device for communicating over a telephone network: a cellular telephone and a
personal computer are capable of such communication, and to the extent that they are
used to do so, either device can constitute a “telephone terminal.” But telephone
communication, as discussed in the patent, requires more than just communication over
a telephone line. It requires a dial-up connection to the catalog server at the other end
of the connection. The specification states that the telephone terminal “dial[s] a
predetermined assigned telephone number” used by catalog companies to permit
customers to make calls “to their business.” ’832 patent, col. 3, ll. 1–5. According to the
specification, the act of making that telephone call “connects the customer” to the
catalog server. Id., col. 3, l. 6. The specification later confirms that requirement, stating
that “a telephone call to a predetermined number, e.g. an 800 number” is “recei[ved] by
the central data processor of applicants’ improved catalog system.” Id., col. 8, ll. 3–8.
Thus, the claim 1 limitation reciting the establishment of a “selective
communication link initiated by a user between said user’s telephone terminal and said
computer system” requires that the communication link be established over a telephone
network by dialing the computer system directly. Although a personal computer and a
cellular telephone are capable of performing that function, those devices must actually
be performing that function in order to be “telephone terminals,” as that term is used in
the ’832 patent. The record contains no evidence that the personal computers or
cellular telephones of Overstock’s customers place such a call when accessing
Overstock’s website over the Internet. The district court was therefore correct to hold
that those devices fall outside the literal scope of the claim 1 limitation.
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Furnace Brook notes that the specification discloses an embodiment in which a
“terminal” communicates with a catalog server using an “interactive media contact,” of
which mail, fax, and telephone are given as examples. ’832 patent, col. 9, ll. 37–39.
Furnace Brook argues that the Internet is a form of interactive media contact and
therefore that communications over the Internet do not fall outside the literal scope of
claim 1. Even if we assume that the Internet is a form of interactive media contact,
Furnace Brook’s argument fails because the portion of the specification to which
Furnace Brook refers discusses a “terminal” without any further elaboration, whereas
claim 1 recites a “telephone terminal.” The modifier “telephone” must add some
limitation to the noun “terminal” for the modifier to have any meaning. As explained, the
specification tells us what telephone communication requires for purposes of the patent.
Thus, we reject Furnace Brook’s assertion that any embodiment described as a
“terminal” in the specification must be a “telephone terminal” within the meaning of claim
1.
Next, Furnace Brook argues that the accused devices, when used to access the
Internet, are captured by the doctrine of equivalents, even if they are not within the
literal scope of claim 1. The question of infringement under the doctrine of equivalents
is a factual question, however, and Furnace Brook has not introduced evidence
sufficient to create a genuine issue of material fact as to that question. In its summary
judgment briefing, Furnace Brook pointed to the declaration of Dr. Robert Stevenson
and the deposition testimony of Dr. Richard Nemes in an effort to show equivalence.
Yet none of the facts stated in those sources are material to the equivalents issue
before us. Although Dr. Stevenson stated that a personal computer and a cellular
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telephone can perform the same functions as a standard telephone set, and that those
devices can also access the Internet, he did not explain why accessing a computer
server over the Internet is equivalent to dialing a computer server over a telephone
network. The deposition testimony of Dr. Richard Nemes suffers from the same flaw.
Without record evidence to create a genuine factual dispute on the equivalents issue,
the district court properly granted summary judgment that Overstock does not infringe
claim 1.
2. With respect to claim 5, the critical limitation recites a “customer terminal
means” that activates a communication means to connect with a central data
processing means. ’832 patent, col. 11, ll. 39–43. Because the customer terminal
means limitation uses the term “means” and because the phrase “customer terminal”
identifies no significant structure, the district court correctly interpreted the limitation as
a means-plus-function limitation in accordance with 35 U.S.C. § 112, ¶ 6. The district
court identified two means disclosed in the specification for performing the claimed
function: a “standard landline telephone unit” and a “touchtone telephone” connected to
a television for displaying catalog data. Furnace Brook asserts that the district court
ignored as a disclosed means a device communicating over an “online interactive
communications network” (shown in figure 4 of the patent), which Furnace Brook
defines as a device in “connection to, or communication with, a computer.” The label
“online interactive communications network,” however, identifies no specific structure for
performing the claimed function; it describes only a generic class of structures and was
thus properly ignored. See Fonar Corp. v. Gen. Elec. Co., 107 F.3d 1543, 1551–52
(Fed. Cir. 1997) (holding that the disclosed wave forms for performing a claimed
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function included a wave form specifically identified in the specification but did not
include the nonspecific set of “other wave forms” mentioned only generically in the
specification as suitable for performing the claimed function).
Furnace Brook also faults the district court for not stating that the literal scope of
the critical limitation includes equivalents of the disclosed means. According to Furnace
Brook, those equivalents include Internet-enabled cellular telephones and personal
computers. The district court, however, stated in its claim construction order that the
scope of a means-plus-function limitation “is . . . limited to the structures disclosed in the
specification, and their equivalents,” which indicates that the court understood the
requirements of section 112, paragraph 6. The district court then addressed the issue
of equivalent means at the summary judgment stage, holding that “no reasonable juror
could find an insubstantial difference between the ‘[c]ustomer [t]erminal [m]eans’
disclosed in the ’832 patent” and an Internet-enabled cellular telephone or personal
computer. As explained above in connection with claim 1, that ruling is correct. Dr.
Stevenson’s declaration and Dr. Nemes’s deposition testimony do not address the
equivalence of communication with a server over the Internet and communication with a
server by dialing the server over telephone networks. Furnace Brook offered no other
evidence of equivalence. Furthermore, Furnace Brook proffered no evidence that the
Internet is an after-arising technology that could be within the reach of the doctrine of
equivalents as applied to the disputed means-plus-function limitation. See Chiuminatta
Concrete Concepts, Inc. v. Cardinal Indus., Inc., 145 F.3d 1303, 1310–11 (Fed. Cir.
1998). Because Furnace Brook’s evidence of equivalence was insufficient to survive
summary judgment, we uphold the judgment of noninfringement as to claim 5.
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