Claim Construction – We Agree . . . Or Do We? – One-E-Way, Inc. v. Apple Inc.

Sometimes we think we have an agreement—only to find out that we do not agree about the meaning of the agreement, and therefore have no agreement at all.  This is, of course, a common fact pattern in a contract dispute, but it is also something to look out for in the claim construction process.  An agreed claim construction is a far cry from an agreement as to the meaning of that construction as applied to the accused products.  We therefore have the counter-intuitive situation where an agreed construction becomes hotly disputed.  When this happens, it is a reminder that even when we agree on a construction that we think favors us, we should not assume that the opposing party, court, or jury will see it that way.

That is exactly what happened in One-E-Way v. Apple, recently decided by the Federal Circuit.  One-E-Way accused Apple’s Bluetooth audio devices of infringing patents relating to a wireless digital audio system for private listening without interference.  The patented system uses a transmitter on an audio source and a receiver on headphones.  The transmitter generates a “unique user code” associated with a specific user that allows pairing between the transmitter and receiver.  This is the sort of technology that connects Bluetooth headphones to a smart phone for the user’s private musical enjoyment without interference from any other receiver headphone user.

The crux of the dispute was the parties’ competing interpretations of a previously agreed-upon construction of the term “unique user code.”  Although the parties initially agreed that the term “unique user code” means “fixed code (bit sequence) specifically associated with one user of a device(s),” they later disagreed on the interpretation and application of that construction, and whether it covers Apple’s accused products.  Apple argued that the code must be associated with a particular user of a device, not just with a particular device.  One-E-Way argued that the unique user code is associated with a user through the operation of the device, and the accused Bluetooth-compliant devices therefore infringe the asserted claims.  This turned into a hotly disputed dispositive issue on summary judgment, even though the parties had previously agreed on the construction.

Apple won summary judgment of non-infringement.  The district court held that the plain meaning of the stipulated construction of “unique user code” “means that the code is ‘associated with one user of a device(s),’ and not the device itself,” concluding that the accused products do not infringe because they only assign a code to a device, and not to a particular user of that device.

On appeal, the Federal Circuit conducted a claim construction analysis, looking for the term’s “ordinary and customary meaning” in view of the context of the claim, the specification, and the prosecution history.  Using this approach, the Federal Circuit affirmed, finding that the ordinary and customary meaning of the construction refers to a code associated with the user of a device rather than the device itself.  The Federal Circuit explained that this construction was supported by the specification as well as the prosecution history, both of which reinforced the key distinction between a user and a device.   

Litigants can take this as a cautionary tale and ensure that their proposed claim constructions actually provide the clarity they need to win, rather than falling into a trap of an “agreed” construction that ultimately does not help them due to an unforeseen disagreement about its meaning.  This can help to avoid multiple rounds of claim construction arguments at the district court level and on appeal.  Litigants should also ensure there is sufficient supporting evidence for the proposed claim construction in the intrinsic record and that nothing in the written description or the prosecution history contradicts that construction.