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Furnace Brook LLC v. Aeropostale

September 29, 2010

FURNACE BROOK LLC, PLAINTIFF,
v.
AEROPOSTALE, INC.; BOSTON PROPER, INC.; DICK'S SPORTING GOODS, INC.; HICKORY FARMS, INC.; LEVI STRAUSS & COMPANY; NIKE, INC.; AND THOMASVILLE FURNITURE INDUSTRIES, INC., DEFENDANTS.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff Furnace Brook LLC ("Furnace Brook") sued Defendants Aeropostale, Inc., Boston Proper, Inc., Dick's Sporting Goods, Inc., FOXSTORE.COM, GameStop Corp., Green Mountain Coffee Roaster, Inc., Hallmark Cards Inc., Hickory Farms, Inc., Home Depot Inc., Levi Strauss & Company, Mrs. Fields' Original Cookies, Inc., Nike, Inc., and Thomasville Furniture Industries, Inc. alleging infringement of United States Patent No. 5,721,832 ("the '832 patent"). Furnace Brook voluntarily dismissed several defendants from the suit, leaving only Defendants Aeropostale, Inc., Boston Proper, Inc., Dick's Sporting Goods, Inc., Hickory Farms, Inc., Levi Strauss & Company, NIKE, Inc., and Thomasville Furniture Industries, Inc. (collectively "the Defendants"). The remaining parties cross-moved for summary judgment on the issue of whether the doctrine of collateral estoppel bars Furnace Brook's claim of infringement. For the reasons set forth below, the Court grants the Defendants' Motion for Summary Judgment and denies Furnace Brook's Motion for Summary Judgment.

STATEMENT OF UNDISPUTED FACTS*fn1

Furnace Brook is the owner by assignment of the '832 patent, entitled Method and Apparatus for an Interactive Computerized Catalog System. (R. 1, Compl. ¶ 19.) The '832 patent claims a "method and apparatus for an interactive, computerized electronic catalog system." ('832 patent, col. 10-11, 54-67, 1-16.) Furnace Brook alleges that Defendants' online ordering websites infringe claims 1-4 of the '832 patent. (Pl. 56.1 Resp. ¶ 12.)*fn2

Claims 1-4 of the '832 patent each include the limitation "telephone terminal." (Pl. 56.1 Resp. ¶ 13.) Claim 1 states (with emphasis added):

1. An improved interactive computerized catalog process comprising the steps of: storing digitized graphic catalog data in a selectively addressable computer system memory, generating a menu of catalog products and services comprising catalog data available for selective viewing at any user's telephone associated terminal screen, establishing a selective communication link initiated by a user between said user's telephone terminal and said computer system, transmitting said menu of catalog products and services data to a user's telephone terminal in response to a user's initial request, transmitting from said computer system such catalog data which corresponds to said user's product and services request signal, requesting user authorization to include data regarding an order transaction in a customer profile marketing data file, initiating an order processing sequence, including a user initiated financial payment authorization process, to permit a user to enter from a user telephone terminal an order to be processed and delivered in response to said user's order, and enabling a user when placing an order to selectively elect to be included in or to be excluded from said customer profile marketing data file created as part of a completed catalog product or services order transaction. (Pl. 56.1 Resp. ¶ 13.) (emphasis added)

All user traffic for Defendants' catalog servers must arrive at one of the Defendants' web servers or a web server operated by a vendor for one of the Defendants via the Internet. (Pl. 56.1 Resp. ¶ 36.) To accomplish this, a user using an Internet browser must first connect to the user's Internet Service Provider ("ISP") through a Broadband, dial-up Internet, or Internet-based wireless connection. (Pl. 56.1 Resp. ¶ 37.) It is the ISP's servers that connect the user to the Internet, after which the first layer of each of the Defendants' or vendors' servers ("web servers") may be accessed. (Pl. 56.1 Resp. ¶ 38.) The web servers route the user to the requested portion of the Defendants' or vendors' second layer of servers ("application servers") to access the desired web store. (Pl. 56.1 Resp. ¶ 39.) Finally, the Defendants' or vendors' application servers communicate with the requested portion of the Defendants' or vendors' catalog databases housed at a second or third database server layer of the computer architecture for each desired web store. (Pl. 56.1 Resp. ¶ 40.)

Furnace Brook previously alleged infringement of claims 1-4 of the '832 patent, both literally and under the doctrine of equivalents, against a different company, Overstock.com, Inc., in the United States District Court for the Southern District of New York. (Pl. 56.1 Resp. ¶ 13.) Following a Markman hearing, the district court in that case construed the term "telephone terminal" in claims 1-4 as "standard telephone landline unit, which has a standard commercial handset, a touchtone pad, a display unit and an audio unit, which may have a cordless handset." (Pl. 56.1 Resp. ¶ 14.) The court stated that "neither a cellular telephone nor a computer on the user end is claimed by the '832 Patent." (Pl. 56.1 Resp. ¶ 14.)

Overstock.com moved for summary judgment of non-infringement based upon the absence in its accused websites of the "telephone terminal" limitation in claims 1-4. (Pl. 56.1 Resp. ¶ 15; Def. 56.1 Resp. ¶ 1.) Because the district court's construction excluded computers and cellular telephones, and because Overstock's websites could only be accessed by computers or cellular phones, Furnace Brook conceded that there was no literal infringement. (Pl. 56.1 Resp. ¶¶ 16, 23.). The district court therefore granted summary judgment of no literal infringement of claim 1-4 based on the absence of the "telephone terminal" limitation in the accused websites. (Pl. 56.1 Resp. ¶ 16; Def. 56.1 Resp. ¶¶ 2, 3.)

The district court also granted summary judgment of non-infringement under the doctrine of equivalents for claims 1-4. (Pl. 56.1 Resp. ¶ 17.) Furnace Brook argued and presented evidence to the district court that a computer and a cellular telephone are equivalent to a telephone terminal as the district court had construed that term. (Pl. 56.1 ¶¶ 24, 25.) Nevertheless, the district court concluded that the "doctrine of prosecution history estoppel" barred Furnace Brook "from claiming that computer access on the customer end is also encompassed by the '832 patent, because its inventors specifically disavowed such a construction during the prosecution of the patent." (Pl. 56.1 Resp. ¶ 17.) Thus, the court held that neither a personal computer nor a cellular phone satisfies the claim limitation of "telephone terminal" either literally or under the doctrine of equivalents. (Pl. 56.1 Resp. ¶¶ 26-28, 33; Def. 56.1 Resp. ¶ 2.) Furnace Brook was fully represented in the proceedings before the district court. (Pl. 56.1 Resp. ¶ 31.)

The Federal Circuit affirmed the district court's judgment of non-infringement in Furnace Brook LLC v. Overstock.com, Inc., 230 Fed. App'x 984 (Fed. Cir. 2007) (unpublished) [hereinafter Overstock.com]. (Pl. 56.1 Resp. ¶¶ 18-19.) Specifically, the court stated:

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.

Overstock.com, 230 Fed. App'x at 986 (emphasis in original) (Pl. 56.1 Resp. ¶ 19.) In reaching its conclusion as to the doctrine of equivalents, the court specifically pointed to expert evidence submitted by Furnace Brook in the district court proceedings on the question of equivalents of a "telephone terminal." (Pl. 56.1 Resp. ¶ 29.) Furnace Brook was ...


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