NeuroGrafix, et al. v. Brainlab, Inc. et al.
Docket No. 2018-2363
NEWMAN, O’MALLEY, TARANTO
October 7, 2019
Brief Summary: Grant of SJ reversed due to “genuine dispute of material fact on…whether the…software was capable of infringing uses”.
Summary: NeuroGrafix (NG) appealed multidistrict litigation court (MDL) grant of summary judgment (SJ) of non-infringement of NG’s US 5,560,360 directed to neural tissue magnetic resonance imaging (MRI) systems to Brainlab. NG alleged user of Brainlab’s software directly infringed and that Brainlab induced direct infringement. Brainlab relied “on customer-protection provisions of settlement agreements [NG] had entered into with” Siemans, GE, and Philips”; the MDL agreed as to Siemans but not GE and Philips. NG then alleged direct infringement by Brainlab “because the steps performed by Brainlab’s customers were attributable to Brainlab under an agency theory”, but the MDL disagreed (not “willing to infer from” the software manual “an affirmative intent to infringe” (Takeda, FC 2015)). The case was then remanded to the DC for invalidity proceedings, which denied NG’s motion for reconsideration that the MDL court had granted [SJ] on a basis not asserted in Brainlab’s SJ motion and dismissed Brainlab’s invalidity counterclaim. The FC panel explained that “[t]he central dispute in this appeal involves the ‘selected structure’ limitation in steps (a), (d), and (e)” as in representative “method of utilizing magnetic resonance” ‘360 claim 36 (e.g., “exposing…a selected structure that exhibits diffusion anisotropy” “to a magnetic polarizing field”). The FC panel explained that Braintree’s “non-infringement position depended on the premise that ‘select[ing] [a] structure’ requires knowing in advance the location of the chosen structure” and its “software is used to detect structures whose location is not already known.” NG argued that all that is required is “choosing a particular structure as a subject” and that “after taking a preliminary image” a structure can “be chosen for imaging”, pointing “to Brainlab’s advertisements as evidence that such a use was possible and even encouraged by Brainlab”. “In other words,” the FC panel wrote, NG “argued, and the MDL court eventually agreed, that the…software is capable of infringing uses as well as non-infringing uses”, a “showing” that “was sufficient for [NG] to defeat [SJ]” (but not a final judgment (Fujitsu, FC 2010), “and the MDL court erred in concluding otherwise” (e.g., “genuine dispute of material fact on…whether the…software was capable of infringing uses”, “[e]vidence of actual infringement…was unnecessary”). The FC panel found “[t]he MDL court’s ruling was contrary to…basic principles” of SJ (cannot be granted “on a ground that was [not] asserted” (Celotex, US 1986), accused infringer must “point to the specific ways in which the accused systems” do not infringe (Exigent, FC 2006)). The FC panel also considered the meaning of “selected structure, which was not precisely defined by the MDL court, concluding that it refers to “something merely located in the ‘region’” (e.g., “We have consistently interpreted ‘including’ and ‘comprising’ to have the same meaning, namely, that the listed elements…are essential but that other elements may be added.” (Lucent, FC 2005)) Thus, the MDL court’s grant of SJ was reversed.