CAFC Sends Amazon Patent Case Back to District Court Due to Ambiguous Stipulation

“The court took issue with the stipulation and ‘warned of the dangers of stipulating to non-infringement based on a district court’s claim constructions without indicating the exact basis for non-infringement.’”

stipulationThe United States Court of Appeals for the Federal Circuit (CAFC) issued a precedential ruling Monday that vacated and remanded a district court ruling on patent infringement in a case between Amazon and AlterWAN. The circuit judges vacated the ruling, which found Amazon did not infringe on two AlterWAN patents for internet network technology.

Based on two of the district court’s claim constructions, the parties entered into a stipulation of non-infringement; however, AlterWAN appealed the case and contested the district court’s construction of two terms relevant to the patent claims.

The CAFC found the stipulation to be vague and lacking detail, and thus vacated the ruling and sent it back to the district court.

“We must vacate the judgment and remand to the district court for further proceedings to clarify the parties’ non-infringement positions, and to determine whether a stipulation of non-infringement is even possible in the circumstances of this case,” wrote the judges.

The court took issue with the stipulation and “warned of the dangers of stipulating to non-infringement based on a district court’s claim constructions without indicating the exact basis for non-infringement.”

Claim Construction and Appeal

The two patents at issue are AlterWAN’s U.S. Patent Nos. 8,595,478 and 9,015,471 related to improving the implementation of Wide Area Networks over the internet. AlterWAN filed a patent infringement lawsuit against Amazon and Amazon Web Services in August 2019 in the U.S. District Court for the District of Delaware.

Following a summary judgment hearing, AlterWAN and Amazon filed a stipulation and order of non-infringement of the patents. The stipulation clarified that “[u]nder the Court’s constructions of ‘cooperating service provider’ and ‘non-blocking bandwidth,’ Amazon has not infringed, and does not infringe, the ’478 and ’471 patents.”

Subsequently, in January 2022, AlterWAN filed an appeal to the CAFC. AlterWAN contested the court’s construction of the two terms “cooperating service provider’ and ‘non-blocking bandwidth’ but the district court ultimately sided with Amazon on the construction of both terms.

AlterWAN also contested a third term, “routing,” that was not in the stipulation, but that the district court provided guidance on during the summary judgment hearing, and argued it should be addressed by the CAFC despite not being part of the stipulation “to preserve judicial resources.”

Impossible to Review

While AlterWAN identified what it disputed in the district court’s ruling, the CAFC said that the stipulation did not present which claims in the ‘471 patent are at issue in the appeal. As a result, the court said it could not materially discuss the claim constructions. “Under the circumstances of this case, the stipulation does not provide sufficient detail to allow us to resolve the claim construction issues presented on appeal,” the circuit judges wrote.

The judges said that various factors were unclear related to the claim constructions. Additionally, the CAFC stated that the lack of agreement between the two parties on this matter made the matter more unclear.

“It became apparent that the parties have significant disagreements as to the effect of the stipulation—disagreements that render it impossible for this court to review the judgment,” wrote the judges.

According to the judges, the confusion grew when AlterWAN claimed that it could prove infringement based on the district court’s construction if “Internet availability language” was included.

In summary, the CAFC found that “the parties did not adequately explain how the claim construction rulings related to the accused systems,” thus the court was unable to make a judgment on non-infringement.

Clarification from the Court

While the court was unable to rule on non-infringement, it did offer a clarification on the meaning of “non-blocking bandwidth.”

The circuit court judges said the district court’s construction of this term “is not a reasonable construction… since it requires the impossible.”

In an attempt to counteract this, Amazon previously quoted Chef Am., Inc. v. Lamb-Weston, Inc., which states that “[c]ourts may not redraft claims, whether to make them operable or to sustain their validity.”

In that case, the CAFC declined to replace one term in a patent claim because it was unambiguous even though the claim as it was written led to an “absurd result.

However, the circuit court judges wrote that the case, “does not require us to depart from common sense in claim construction.”

In the case of AlterWAN’s patent and the district court’s construction of ‘non-blocking bandwidth’ the CAFC said, “the claim language itself does not unambiguously require bandwidth to be available even when the Internet is inoperable.”

The CAFC did not offer a further definition of the term “non-blocking bandwidth” other than that it does not require bandwidth when the Internet is down. Instead, the CAFC kicked the case back to the district court to make an appropriate revision on remand.

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Author: thinglass


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