Netflix Brief

8/9/2019 Netflix Brief

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No. 2010-1199, -1344UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

MEDIA QUEUE, LLC,PtaintiffApptellant,

V.NETFLIX, [NIC.,

D efend ant- Cro ss App e I lant,and

BLOCKBUSTER, fNC.,Defendant-Appellee,and

GREENCINE HOLDINGS, LLC,Defendnt.

Appeal from the United States District Court for the Northern District ofCalifornia in Case No. 09-CV-1.021, Judge Susan IllstonPRINCIPAL AND RESPONSE BRIEF OF DEFENDANT.CROSSAPPELLANT NETFLIX, INC.

Daralyn J. DurieMark A. LemleyAaron M. NathanDurup TaNcnr LLP2I7 Leidesdorff StreetSan Francisco, CA 94lll(415) 362-6666

Deanne E. MaynardMonnrsox & FoBnsrER LLp2000 Pennsylvania Ave., NWsuite 6000Washington, DC 20006(202) 887-8740

Michael A. JacobsMatthew I. KreegerMarcelo GuerraMatthew A. ChivvisMonrusoN & FopnsrpR LLp425 l;4:arket StreetSan Francisco, CA 94105(41s) 268-1000

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Couns el r D efendant-Cro s s App ellant l{etflix, Inc.


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CERTIFICATE OF INTERESTPursuant to Federal Circuit Rule a7.a@)Q) and Federal Rule of Appellate

Procedure26.1, counsel for Defendant-Cross Appellant Netflix, Inc., certifies thefollowing:1. The full name of every party represented by us is:

Netflix, Inc.2. The name of the reaLparty in interest (if the patry named in the caption is notthe real party in interest) represented by us is:Not applicable.3. All parent corporations and any publicly held companies that own 10 percentor more of the stock of the party represented by us are:None.4. The names of all law firms and the partners or associates that appeared fortheparty now represented by me in the trial court or agency, or are expected toappear in this Court, are:Morrison & Foerster LLP: Michael A. Jacobs, Matthew I. Kreeger,Deanne E. Maynard, Marcelo Guerra, Matthew A. ChiwisDrie Tangri LLP: Daralyn J. Durie, Mark A. Lemley, Aaron M.NathanThe Burrage Law Firm: David A. Burrage

Dated: July 1, 2010

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Table of ContentsPage

STATEMENT OF RELATED CASES .................. 1STATEMENT OF THE ISSUES ............2INTRODUCTION .....4STATE,MENT OF THE CASE AND THE FACTS ............... 6A. The'243 Patent..... ...............1B. The C1aims............. ............13C. The District Court Proceedings ........... ..............131. The District Court's Claim Construction.......... ......15

2. The District Court's Summary Judgment Order .....I73. Motion for Fees .......19SUMMARY OF THE ARGUMENT....... .............21ARGUMENT ........26I. THE DISTRICT COURT CORRECTLY GRANTEDSUMMARY JUDGMENT ON THE GROUND THATNETFLIX DOES NOT USE "NOTIFICATION RULES" .......26A. The District Court Correctly Construed the Claim Term

"Notification Rules" to Require Notification Rules AboutQueue Status ......26B. The District Court Correctly Granted Summary JudgmentBecause Media Queue Did Not Raise a Genuine Issue ofMaterial Fact of Infringement of the "Notification Rules"Limitation............. ..............32C. In the Alternative, Summary Judgment Should BeAffirmed Because Media Queue Has Not Raised aGenuine Issue of Material Fact of Infringement EvenUnder a Broader Construction of '1.{otification Rules" ....................33II. THE DISTRICT COURT CORRECTLY GRANTEDSUMMARY JUDGMENT ON THE GROI.IND THATNETFLIX DOES NOT USE "QUEUE REPLENISHMENTCONTROL RULES" ............. ..... 35sf-2845582


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A. The District Court Correctly Ruled that "QueueReplenishment Control Rules" Must ControlReplenishment of the Queue, Not Merely Reordering ofthe Queue............. ...............36B. The District Court Correctly Ruled that "QueueReplenishment Control Rules" Must Govern Whether toAutomatically Add Items to the Queue ..............40C. As the District Court Correctly Concluded, Media QueueOffered No Evidence that Netflix Uses QueueReplenishment Control Rules .............46il. THE DISTRICT COURT CORRECTLY RULED THAT ASUBSCRIBER'S ACT OF USING NETFLIX'S SERVICEDID NOT CONSTITUTE DEFINING A SET OF RULES..AUTHORIZED BY THE SUBSCRIBER" ..............47A. The Specification Demonstrates that User Selection ofthe Rules Governing the Queue Is Central to theInventionB. This CourI Can Affirm on the Alternative Ground thatMedia Queue Has Not Raised a Genuine Issue ofMaterial Fact of Infngement Even If "Authonzed by theSubscriber" Does Not Require Selection from a Group ofOptions.. .............51ry. ALTERNATIVELY, THE CLAIM TERMS "NOTIFICATIONRULES'' AND "QUEUE REPLENISHMENT CONTROLRULES" ARE INDEFINITE......... .............. 52V. THE DISTRICT COURT ERRED IN DENYING NETFLIX'SMOTION FOR ATTORNEYS' FEES ........52A. This Court's Current Standard for Awarding Attorneys'Fees in Patent Cases Improperly Treats PrevailingDefendants Differently from Prevailing Plaintif ............531. This Court's Standard for Attorneys' Fees CannotBe Squared with Supreme Court Authority .............562. This Court's Standard for Prevailing PatentDefendants Is Inconsistent with Other Courts'Treatment of the Trademark Statute.... ....593. Requiring Prevailing Defendants to DemonstrateFrivolity Renders Section 285 Superfluous ............61

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4. The Frivolity Rule Improperly Constrains theDiscretion of District Courts ...................645. The Current Restrictive Rule Permits AbusivePatent Litigation .......66B. This Court Should Revisit the Section2S5 Standard toPermit District Courts Discretion to Award Fees toPrevailing Defendants When the Patentee's Case WasObjectively Reckless, or When the Defendant Vindicatesan Important Public Interest... ............67C. The Outcome of This Case Justifies the Award of Fees ....69CONCLUSTON .....73CERTIFICATE OF COMPLIANCE ....76

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Table of AuthoritiesPage(s)

C.sns800 Adept, Inc. v. Murex Sec., Ltd.,539 F.3d 1354 (Fed. Cir.2008).............. ............43Alloc, Inc. v. ITC,342F.3d 1361 (Fed. Cir. 2003) ...........51Aspex Eyewer, Inc. v. Clariti Eyewear, Inc.,605 F.3d 1305 (Fed. Cir. 2010).............. .............55Bilski v. v. Kappos,

10 C.D.O.5.7966,561 U.S. _ (June 28,2010) ......... ......66Blonder-Tongue Labortories, Inc. v. University of Illinois Foundation,402 U.S. 313 (r97r)............. 58,69Brice v. Sec'y of Health qnd Human Servs.,240F.3d 1367 (Fed. Cir. 2001).............. ............46Brulotte v. Thys Co.,379 U.S. 29 (1964) .............58Cambridge Prods., Ltd. v. Penn lt{utrients, Inc.,962F.2d 1048 (Fed. Cir. 1992).......... ... ............ 63Canada v. Blqin's Helicopters, fnc.,831 F.2d 920 (9th Cir. 1987).............. ................32Cardinal Chemical Co. v. Morton Int'L, Inc.,508 U.S. 83 (1993) ....... s8, 69Chambers v. NASCO, Inc.,

s01 u.s. 32 (1991) .............63Chimie v. PPG Indus.,402F.3d 1371 (Fed. Cir.200s)...... ....43Corning Glass Works v. Sumitomo Elec. (JSA, Inc.,868 F.2d 1251 (Fed. Cir. 1989)...... ....34

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Door Sys., Inc. v. Pro-Line Door Sys., fnc.,126F.3d1028 (7tIlCir.1997). . .......... ..............60eBay Inc. v. MercExchange, L.L.C.,547 U.S. 388 (2006)... ... ...... .............65Edwards Lifesciences LLC v. Cook, Inc.,582 F.3d 1322 (Fed. Cir.2009).............. ....... 31, 50Eltech Systems Corp. v. PPG Industries,903 F.2d 805 (Fed. Cir. 1990)........ 55,57Festo Corp v. Shoketzu Kinzoku Kogto Kabushiki Co.,535 U.S. 722 (2002)............. ..............65Fogerty v. Fantasy, Inc.,

510 U.S. 517 (1994)........ passimFree Motion Fitness, Inc. v. Cybex Int'L, Inc.,423F.3d 1343 (Fed. Cir.2005) ..........45Granite Mgmt. Corp. v. United Sttes,4l6F.3d 1373 (Fed. Cir. 2005) ....35,46Hll v. Cole,412 U.S. r (1913) ...............63Hartman v. Hllmark Cards, Inc.,833 F.2d 117 (8th Cir. 1987)........ ...... 60ICU Medical, Inc. v. Alqris Medical Sys., Inc.,558 F.3d 1368 (Fed. Cir. 2009)...... 31,62In re Seagate Technologlt, LLC,497 F.3d 1360 (Fed. Cir.2007) ............. ............53Key Pharms. v. Hercon Labs. Corp.,161 F.3d 709 (Fed. Cir. 1998).. ........... ..............36Kraft Foods, Inc. v. Int'l Trading Co.,203 F.3d 1362 (Fed. Cir.2000).......... ... ............45KSR Int'l Co. v. Teleflex, Inc.,550 U.S. 398 (2007)............. ..;............. ..............66sf-2845582


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Laitram Corp.v. Morehouse Indus.,143 F.3d 1456 (Fed. Cir. 1998). ............ ............ 39Lear, Inc. v. Adkins,395 U.S. 653 (1969)............. 57,69Lemelson v. General Mills, Inc.,968 F .2d 1202 (Fed. Cir. I 992)........ .................. 39Medlmmune, Inc. v. Genentech, Inc.,549 U.S. 118 (2007)........... . ..............66Medtronic Navigation, Inc. v. B rainLAB Medizinis che Computersy s temeGmbH,603 F.3d 943 (Fed. Cir. 2010).............. ..............64Microsoft Corp. v. Multi-Teclt Sys., Inc.,357 F.3d 1340 (Fed. Cir.2004).............. ............50Morton Salt Co. v. G. S. Suppiger Co.,314 U.S. 488 (1942)... .... ....National Ass'n of Professional Baseball Leagues, Inc. v. Very MinorLeagues, Inc.,223 F.3d tt43 (10th Cir. 2000)...... .... 60Netcraft Corp. v. eBay, Inc.,s49F.3d1394 (Fed. Cir. 2008).............. ............31Noxell Corp. v. Firehouse No. I Bar-B-Que Resturant,771 F.zd 521 (D.C. Cir. 1985) ..:............. ........... 60Nystrom v. Trex Co.,424F.3d1136 (Fed. Cir. 2005) ............. ......31,32Pitney Bowes, Inc. v. Hewlett-Packqrd Co.,

182 F.3d 1298 (Fed. Cir. 1999)............. .............34Quant Computer, Inc. v. LG Electronics, Inc.,s53 U.S. 617 (2008).......... .. ..............66Regents of Univ. of Cal. v. DakoCytomation Cal., Inc.,517 F.3d 1364 (Fed. Cir. 2008).............. ............31

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SciMed Life Sys. Inc. v. Advnced Cardiovascular Sys. Inc.,242F.3d1331 (Fed. Cir.2001).............. ......49,50Scotch Whis Ass'n v. Majestic Distilling Co.,958 F.2d 594 ( thCir. 1992).............. 61,64Seachange Int'L, Inc. v. C-COR, Inc.,413 F.3d 1361 (Fed. Cir.2005) ..........45Springs Window Fashions LP v. Novo Indus.,323 F.3d 989 (Fed. Cir. 2003).............. 38, 39Standard Havens Prods., Inc. v. Gencor Indus., Inc.,897 F.zd 511 (Fed. Cir. 1990)............. ..............40Toro Co. v. White Consol. Indus.,

199 F.3d 1295 (Fed. Cir. 1999) .......... s0Wedgetail, Ltd. v. Huddleston Deluxe, fnc.,576F.3d 1302 (Fed. Cir.2009).............. 54,56,51,62Srarurns15 U.S.C. $ 1117 59,6417 U.S.C. $ s05 .......s735 U.S.C. $ 112 24,52,7435 U.S.C. $ 285 passimOrnnn AurnonrrrpsFederal Rules of Civil Procedure, Rule 11............ passimFederal Rules of Civil Procedure, Rule 56(....... ...I4Federal Circuit Rule 35 ........... ................52S. Rep. 93-1400,1914 U.S.C.C.A.N. 7132.......... 60,65

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American Intellectual Property Law Association, Report of the 2009Economic Survey 29 (2009) ...............66Kimberly A. Moore, Empirical Statistics on Willful Ptent Infringement,14 Fed. Cir. B. 1.227 (2004) ...............54

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STATEMENT OF RELATED CASESPursuant to Federal Circuit Rule 47.5, counsel for Defendant-Cross

Appellant Netflix, Inc., certifies the following:1. No other appeal from the same civil action or proceeding in the lowercourt or body was previously before this or any other appellate court.2. No cases are known to counsel to be pending in this or any other courtthat will directly affect or be directly affected by this Court's decision in thepending appeal.

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STATEMENT OF THE ISST]ES1. (a) Did the district court correctly construe the claim term "a set ofnotification rules" to mean "a set of rules governing the transmittal of notifcationsabout queue status sent to the subscriber"?

(b) Did the district court correctly conclude that Media Queuefailed to raise a genuine issue of fact of infringement of the "notification rules"limitation?

(c) Should this Court affirm on the alternative ground that MediaQueue failed to raise a genuine issue of material fact of infringement under abroader construction of "notification rules"?

2. (a) Did the district court correctly conclude that the claim term"aseparate set of queue replenishment control rules" must govern the addition ofplayable media titles to a subscriber's queue?(b) Did the district court correctly conclude that the claim term "aseparate set of queue replenishment control rules" must govern whether toautomatically addplayable media titles to the subscriber's rental queue?(c) Did the district court correctly conclude that Media Queuefailed to raise a genuine issue of fact of infringement of the "queue replenishmentcontrol rules" limitation?

3. (a) Did the district court correctly construe the claim term"authortzed by the subscriber" to mean "elected by the subscriber after thesf-2845582


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subscriber is presented with a choice among multiple options," and correctlyconclude that Media Queue failed to raise a genuine issue of material fact ofinfringement of the "authonzed by the subscriber" limitation?

(b) Should this Court affirm on the alternative ground that MediaQueue failed to raise a genuine issue of material fact of infngement, even if theterm is construed without the "multiple options" requirement?

4. Should this Court aff,rrm on the alternative ground that the claim terms"a set of notification rules" artd"a separate set of queue replenishment controlrules" are indefinite?

5. (a) Should this Court revisit the legal standard under 35 U.S.C.$ 285, so that district courts will have discretion to award fees in exceptional patentcases on an evenhanded basis to both patentees and accused infringers, as incopyright and trademark cases?(b) Does the outcome of this case justifu the award of fees toNetflix?

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INTRODUCTIOI\The patent at issue claims as its purported invention a naffow improvement

to the prior art Netflix system for renting movies to customers. Before he filed forhis patent, J. Nicholas Gross, the named inventor, had been a longtime subscriberof the Netflix service, and was well aware of its features. Apparently, Mr. Grossbecame frustrated when using the Netflix service because "he found himselfwithout any new movies" after his rental queue of movies became empty.(Principal Brief of Plaintiff-Appellant Media Queue LLC ("M.Q. Br.") at 6.)Because of his experience, Mr. Gross imagined a new and improved Netflix thatwould allow subscribers to control what sorts of notifications they would receivewhen their queues needed replenishment, and whether their rental queues would beautomatically "replenished" after running low. As the patent reflects, the allegedly"unique" feature of Mr. Gross's invention is the "Queue Control Options" interfacethat includes "a set of subscriber queue control options." These options allow thesubscriber to control what happens when his or her rental queue "runs dry,"including an auto-replenishment option in which the service automatically adds amovie to the queue.

Netflix does not use Mr. Gross's purported invention. Each of the patentclaims requires the use of "notification rules for the subscriber rental queue" and,"aseparate set of queue replenishment control rules." Each set of rules must be

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"authonzed" by the subscriber. The district court correctly concluded that theseterms require that the subscriber be able to select rules governing: (1) what noticesthe subscriber receives about the status of the rental queue, and (2) whether therental queue is automatically replenished. Netflix's subscribers do not have suchcontrol. They cannot select automatic queue replenishment, nor can they tailorqueue notifications to their individual preferences. Accordingly, the district courtcorrectly found that Netflix does not inftinge as a matter of law.

The district court erred, however, in denying Netflix's motion for attorneys'fees. Constrained by this Court's precedent, the district court concluded thatNetflix had "not met its high burden to show by clear and convincing evidence thatMedia Queue's claims were brought in bad faith or that the claims were objectivelybaseless." (42558.) Under 35 U.S.C. S 285, however, a prevailing defendant, noless than a prevailing plaintiff, is entitled to fees "in exceptional cases." ThisCourt should revisit the legal standard for attorneys' fees to treat.prevailingdefendants the same as prevailing plaintif. Under an evenhanded approach,district courts would have discretion to award attorneys' fees when a patent ownerwas objectively reckless-that is, filed or maintained a lawsuit with an objectivelylow likelihood of success knowing or having reason to know that it was likely tolose-or when the court finds that the defendant vindicated an importantpublic

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interest. Both circumstances are present in this case, justifuing an award of fees toNetflix.

STATEMENT OF THE CASE AND THE FACTSNetflix operates an online, subscription-based movie rental service thatallows users to receive DVDs by mail at their homes. (Al732-83 lT3.) Netflixusers enroll in a subscription plan that allows them to "check out" between one toeight DVDs at a time. (41783 fl 4.) Netflix users choose the DVDs they wouldlike to receive by visiting the Netflix website and setting up a list of movies to beshipped. (/d.) This list of selected movies is called the subscriber's rental"queue." (Id.) Once the subscriber returns a movie, Netflix sends the subscriberthe next available title from his or her queue. (1d..) Netflix subscribers can choosefrom more than 100,000 titles in Netflix's DVD library to add to their queues, andfrom a separate library of more than 12,000 titles that can be watched instantly bystreaming video. (41782-83'lifl 3-4.)

Netflix began offering this subscription-based plan in the fall of 1999.(41783 fl 4.) Netflix was awarded U.S. Patent No. 6,584,450 for its innovations onJune 24,2003 ("the '450 patent" or "Hastings patent"); this patent is expresslyreferenced on the face of Media Queue's U.S. Patent 7,389,243 ("the '243 patent").(A1542; AI1T s-1602.)

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A. The'243 PatentBy his own account, in 2003, John Gross was a "frustrated" Netflix

subscriber. (41099.) The reason for Mr. Gross's frustration: "fA]fter realizingthat he had not received a movie in what felt like months, Mr. Gross logged on tohis Netflix account and noticed he hadn't manually altered his queue so he was notreceiving movies he was entitled to under his subscription plan." (41099-1100.)

As a result, Mr. Gross envisioned a supposedly improved version of Netflixthat would "automatically ensure[] that [the subscriber's] preference queue is neverallowed to completely run 'dry' so to speak." (A0041, 5:60-62.) He filed a patentapplication, which eventually issued as the '243 patent. When that application wasfiled, Netflix had already been providing its subscription-based rental service forseveral years. (41783 fl a.) Indeed, the '243 patent's "Background" sectiondescribes the Netflix system, acknowledging it as prior art. (40045,1:22-67.) Asthe Examiner explained during prosecution, general-purpose systems for providingnotifications to customers were also well known in the art. (40333 (stating that theprior art Elston patent "discloses an automatic customer notification system thatnotifies customers of a business or other entity of the fact that an event hasoccurred that involves that business or entity").)

The'243 patent makes clear that Netflix permits users to engage in "aninteractive online session" in which the user "selectfs] a number of titles, and then

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prioritize[s] them in a desired order for shipment within the selection queue."(40045, l:29-32.) "After the movie title selection session is over, the systemproceeds to ship the desired titles in the order requested by the subscriber." (Id. atI:43-45.) "(Jnder the Netflix terms of service, the system places a limit on thenumber of outstanding titles that a subscriber may have at any one time." (Id. aTl:57-59.) "Additional titles in the rental selection queue are only shipped to theuser after the system logs a returned item from that same user." (Id. at l:63-65.)

The'243 patent asserts that the Netflix service suffers from certain"limitations" upon which the patent improves. According to the patent, "from afundamental perspective, the Netflix system . . . dofes] not permi t anysignificantuser interaction, control, or monitoring of selections presented in a rental queue."(Id. at2:57-60.) The patent identifies several purported limitations of Netflix,including:. "[W]hile the [Netflix] system automatically ships the next items in the

rental queue it fails to notiSr the subscriber when the rental queue isempty, near-empty, or perhaps contains less desirable selections thanthose that the user would otherwise select if they were aware of morerecent available titles" (id. at2:I-6); and. "[T]he Netflix system . . . does not give subscribers any flexible degreeof control over their rental selection queue or shipments. For example,

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subscribers are not given an option of whether a particular title in therental queue should be shipped; it is automatically shipped, even if theymay have changed their minds." (id. at2:19-26)

The patent purports to overcome these limitations by describing an"intelligent queue monitoring" system, which the patent labels the "auto-noti/ +auto select/ship" system. (4003a; 4005 r, 13:23-27; see lso A0032, ,\bstract;40052, 16:55-67 (stating that while most software components described in thespecification are "essentially the same as those found in a prior art system," the"Intelligent Queue Monitor Module" and "Queue Status Notifcation Modul e" ateamong the "new software components of the present invention").) The purpose ofthis "intelligent queue monitoring" system is to solve the perceived limitation inthe prior art, where "subscribers run the risk of being 'title less' for several days."(40045,2:18.)

Rather than require a subscriber to "constantly monitor [his or her] ownrental queue to make sure it is stocked with selections for shipping" (40045,2:14-I7),the'243 patent provides that the subscriber would have the option to ensurethat items are always available in the queue for shipment. (40046,3:5-13("[O]bject [of the invention] is to implement an intelligent queue monitoringsystem that allows subscribers/purchasers to define policies and rules to be used indetermining what actions should be taken with respect to particular items in such

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queue, ad at what times."); 40039, Fig. 4 (showing the steps of the "Auto-noti$ziAuto-Ship Process").) Depending on the options selected by a subscriber, thesubscriber would be notified that the queue needed replenishment (auto-noti) otwould have the queue automatically replenished by the system (auto selectiship).(rd.)

The specification describes embodiments for implementing these objectives,alternatively referring to them as the Auto-Notifu/Auto-Ship, Autototify + AutoSelectiShip, or Auto Notifu Auto Ship + Auto Recommend system. (40052,I5:3I-32; see also A0034-40.) As a central component of these embodiments, thesubscriber is presented with choices whereby he or she "either elects a number ofdefault values, or begins the process of configuring particular parameters to beused in a queue monitoring system." (A0052, 15:33-35.)

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Figure 2 of the'243 patent, shown below, is instructive:Fig.2

Preferences set up for auto notifyautoship + autorecommendDo you want us to automatically notify you when your rental quete isempty (or near empty) and automatically select and ship a tifle b you?,lf so please fill out the information below, then simply select ',finish.,21G- to go back to your rental queue. Otherwise hit-"cancel"

m;l [;,l zeol I zrel

I00\.

11

Hhcnsnouu I touowliltrfo[tal 0u0u0p Queue is completely emptyn Queuehasspace tr Movies teftI A selecton lwould like is available! days havegone by

Ill[atdoyoremmetodotlGn t[r [u8ue sn0ul [DtGIlGnsn0dfln Send Notice only I r aar! Notice + waitfor! Mymtrmlton I zcuy SendNoticeandauto-ship ! -,0.,! No notce- autoship lf I don't respond in I daysu send notice again 2@

Whattylos olto$ s[old I ltsotorellGnsn s sGlec[on rucspTt f] e'io,.ungLl Auto recommend r] .PritrrentelBI Newroleases !n Genre (select)n ColtectionD Topl0on crtc choices a9

umon 0 leIcrnnds e [ercr m,l rrortnlmftLvz Reolacthe next tem to be shipped.! Put t in the Queuo.inrder aftermy curent chotces.n Put t in my Queue as tenttive" but do not ship unless I confirm250

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Figure 2 provides the interface that allows "users/subscribers to set up queuemonitoring control parameters, queue notification parameters, queue replenishmentparameters and other queue control options." (40048, 7:36-40.) Preferencedisplay area220 sets a first parameter by presenting a "queue trigger thresholdquestion" to the subscriber. (Id. at 8:23-25.) The subscriber may then choose fromamong the "threshold options," which determine when the queue monitoring logicreviews the subscriber's queue (".g., when a predetermined number of itemsremain in the queue). Qd. at8:25-37.) The second parameter is shown inpreference display area230, which "is used to specifu options for 'what' thesystem should do when the so-called triggering threshold is met" (".g.,send anotice, send a notice and wait for confirmation, send a notice and automaticallyship a title, or do not send a notice and automatically ship). (40049, 9:28-30.)According to the specification, these options are "notification options." The thirdparameter is shown in preference display area240, which "is used to specifuoptions for 'how' the system should replenish or supplement the SubscriberSelection Queue 110." (Id. at 10:5-7.) A fourth parameter is shown in preferencedisplay area250 and'rovides additional levels of queue management control."(Id. at 10:41-42.)

This setup process is the only method described by the'243 patent thatallows the subscriber to authorizethe rules that the system employs. The

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specification funher explains that atypical subscriber experience starts with thesubscriber configuring rental queue preferences, including the various optionsnoted above in connection with Figure 2. (A0051, 13:33-35.)

B. The ClaimsThe'243 patent claims methods "of electronically notif,ring a subscriber to a

content provider of activity in a subscriber rental queue associated with thesubscriber." The claims include "a set of notification rules for the subscriber rentalqueue" and a "separate set of queue replenishment control rules," each of whichmust be "authorizedby the subscriber." The "computer" uses these rules to"monitor" the subscriber queue to "determine" if the queue should be altered. Ifthe computer determines that such an alteration is necessary, and if the notificationrules require it, the computer sends an electronic notification to the subscriber.

C. The District Court ProceedingsMedia Queue LLC is an Oklahoma corporation formed shortly before thislitigation commenced. Media Queue initiated this patent infringement actionagainst Netflix and other defendants in the Eastern District of Oklahoma, avenuewith "at best, random and minimal" connections to the dispute. (A2316.) TheOklahoma court found that Media Queue had engaged in "apparentefforts tomaneuver the facts to establish venue in" that district, and transferred the action tothe Northern District of California. (42318.)

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The parties briefed several claim construction issues, but all parties agreedthat three issues were potentially dispositive. In particular, Media Queue stipulatedthat if the court agreed with defendants'proposed constructions of "notificationrules," "queue replenishment control rules," and "authonzedby the subscriber,"the court should grant summary judgment and need not construe additional terms.(A222r-22.)

1. The District Court's Claim ConstructionThe district court resolved the three key claim construction disputes, and

granted summary judgment of non-infringement.Notification Rules: Media Queue contended that the claimed "set of

notification rules for the subscriber queue" could mean any rule relating in anyway to notification. In its infringement contentions, for example, Media Queuemaintained that Netflix's "Facebook Connect" feature-which allows users to benotified when friends hlve recommended a movie-constituted such a notificationrule, even though the rule had nothing to do with the subscriber's queue.

The court adopted a construction of the term "notification rules" that tookinto account the claim as a whole, and the specification. The court noted that "it isevident from the claim language and the intrinsic evidence that the notificationrules are about the subscriber's queue status, and not any notification." (40016.)

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The court therefore construed the term to mean "a set of rules governing thetransmittal of notifications about queue status sent to the subscnber." (Id.)

Queue Replenishment Control Rules: Media Queue asserted that this claimterm should be construed to mean any ruIe related in any way to the "refilling" of aqueue. Based on the language of the claims, the district court found that"'aseparate set of queue replenishment control rules' refers to a set of rules that isused by a computer to determine whether to add media titles to the subscriberqueue." (40018.) The court further held that the computer, not the subscriber,must be able to add titles to the queue and that there must be an option under whichsuch replenishment occurs automatically. (40019-20.) The court concluded thatits construction was required by the claims, the specification, and the prosecutionhistory. (/d.)

Authorized by the Subscriber: Finally, the district court rejected MediaQueue's contention that the rules could be "authonzedby the subscriber" evenwhere the subscriber takes no action but simply'ermits" the rules to be used.Media Queue claimed that, under its construction, merely signing up for theNetflix service constituted infringement. (A1946.) Based on the intrinsicevidence, the court found that the claims required the affirmative selection of aparticular rule, not mere acquiescence. (40021.)

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2. The District Court's Summary Judgment OrderApplyrng the claim constructions, the district court entered summary

judgment of non-infringement. Media Queue had asserted that several Netflixfeatures constituted the claimed "notification rules" and "queue replenishmentcontrol rules" that had been "authonzed by the subscriber." The district courtfound that none of the accused Netflix features satisfied the claimed elements,correctly construed.

Account Hold, Netflix Friends-Movie Notes, and Facebook Connect: MediaQueue pointed to three Netflix features that supposedly coffesponded to"notification rules" authonzed by the subscriber. Netflix's "Account Hold" featureallows a subscriber temporartly to place his or her subscription on hold forvacation or other reasons. (40024.) The "Netflix Friends-Movie Notes" feature"allows the subscriber to receive email notifications about movie recommendationsfrom fends." (Id.) "Facebook Connect" similarly allows a subscriber to "receivenotifications containing information on movies rated by fends and links thatallow the subscriber to add the rated movies to his or her rental queue." (/d )

The court found that Media Queue'resented no evidence that the accusedfeatures of Netflix's system control notifications about the status of thesubscriber's rental queue," and therefore none could constitute a claimed"notification rule." (1d.)

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User Profiles: Media Queue contended that Netflix's "IJser Profile" featureincluded queue replenishment control rules. Netflix permits "subscribers to createup to four profiles for each subscriber account. . . . tA] subscriber [can] divideDVD allotments for different profiles defined within the subscriber's account."(40025.) A subscriber can also "specifu maturity levels for different profilesdefined within his or her account so that parents may restrict their children fromadding certain material to their queue, for examp\e." (Id.) Finally, a subscribercan choose whether to include Blu-Ray movies as part of the subscriber's account.(rd.)

The district court found that none of Media Queue's contentions establishedinftingement, because none of the accused Netflix features includes rules used to"govern whether to automatically add media titles to the subscriber rental queue."(rd.)

Subscription Plans: Media Queue asserted that queue replenishment controlrules could be found in Netflix's subscription plans, which "allow a subscriber todesignate how many titles the subscriber can check out at one time andlor howmany titles the subscriber can receive per month, for example." (40026.) As withthe other Netflix features, this aspect of Netflix's service does not govern whetherto automatically add titles to the subscriber queue. As a result, the court found thatthe feature did not constitute a queue replenishment control rule. (40027.)

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Terms of Use: Finally, Media Queue asserted that Netflix's Terms of Use,which are posted on Netflix's website and govern customers' use of the Netflixservice, constituted "notification rules" and "queue replenishment control rules."The district court found that any "rules" within the Terms of Use were not"atthonzed by the subscriber" as required by the claims. (A0023-24; see lsoA0026.)t

3. Motion for FeesFollowing the grant of summary judgment, Netflix moved for a finding ofexceptional case and an award of attorneys' fees. (A2320-66.) Netflix based its

motion on Media Queue's continued pursuit of an infringement case with noreasonable possibility of success. Media Queue attempted to find infngement infeatures that were concededly part of Netflix's seryice before the'243 patent wasfiled, and indeed, that are admitted prior art in the'243 specification itself. Inaddition, Media Queue's infringement position directly contradicted statements

I In this appeal, Media Queue also refers to its belated allegation that"'Netflix News' implicates notification rules in the Netflix system."(M.Q.Br.12n.7; see also id. at37.) Neither Media Queue's opposition toNetflix's summary judgment motion (A1929-50) nor its sole declaration inopposition (4195I-2001) included any allegations concerning Netflix News.Rather, these allegations stem from unauthenticated demonstrative exhibits shownto the district court at the hearing on summary judgment that were not evidence inthe summary judgment record. (AZI20-4I.) As a result, counsel for Netflixobjected to their use at the hearing. (A21S3-84.) The district court declined to ruleon the objection, as it found that summary judgment was proper in any event.(A0027 at n.9.)

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made to the Patent Office during prosecution. (42325-25.) Netflix had providedearly notice to Media Queue that the inftingement allegations were baseless, yetMedia Queue's principal, himself a patent litigator, was undeterred. (A2323,3:I2-17; 42548, 5:1-3.)

The district court, relying on the current "bad faith" standard for awardingfees to prevailing accused infngers, held that the case was not exceptional. Thecourt noted that Media Queue had alleged "due diligence" in filing and pursuing itslitigation, that Netflix did not prevail on its indefiniteness arguments, and thatneither party received the exact claim constructions it had sought. (A2556-59.)Because the court found the case not exceptional, it never reached the second,discretionary step in the fees analysis. (Id.)

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SUMMARY OF THE ARGT]MENTThe district court correctly construed three key claim limitations present in

every asserted claim, and found as a result that Netflix does not practice theclaimed invention. In particular, the court construed the claim terms "a set ofnotification rules," "a separate set of queue replenishment control rules," and"authonzed by the subscriber." The district court considered undisputed evidenceabout the Netflix service, and correctly determined that none of the accused Netflixfeatures constituted the claimed "set of notification rules," the claimed "separateset of queue replenishment control rules," and that several of the accused featureshad not been "authorized by the subscriber." Accordingly, Netflix was entitled tosummary judgment of non-infringement.

I. The district court correctly construed the claim term "a set ofnotification rules" as rules that govern the transmittal of notifications about thestatus of the rental queue. The claim language, specification, and prosecutionhistory all establish that the claimed "notification rules" govern not just anynotifications, but notifications about the subscriber's queue status. As the abstractof the invention makes clear, the purported invention is directed to "[a] notificationsystem method . . . for alerting subscribers to a status of their rental queues."(40032.) Media Queue did not introduce any evidence that Netflix possessed such

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notification rules. Thus, surnmary judgment of non-infringement should beaffirmed.

Even if the claim term were construed more broadly, however, Netflixwould still not infnge the claims as a matter of law. All of the asserted claimsinclude the additional limitations that the user be notified regarding "activity in asubscriber rental queue," and that the claimed notification rules be "for thesubscriber rental queue." (40058.) The feafures accused by Media eueue ofsatisSring the "notification rules" limitation do not meet these additionallimitations. Accordingly, this Court can affirm on an alternative non-infringementground.

II. Summary judgment to Netflix is also appropriate, as the district courtconcluded, on the independent ground that the accused features do not constitute "aseparate set of queue replenishment control rules." The court correctly construedthis limitation as limited to rules that govern the addition of items to the queue, theplain meaning of "replenishment." Media Queue itself advocated to the districtcourt that term "replenishment" be given the meaning of its synonrm, to "refill"the queue. The court also correctly concluded that the "queue replenishmentcontrol rules" must govern whether to automatically add items to the queue. Theplain language of the claims, as well as the specification, compel this meaning.Indeed, the patent describes the purported invention as a set of parameters chosen

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to the present invention," ard as the feature that overcomes the limitations of theprior art Netflix system. (A0047,6:4I-46.) The court thus correctly construed theterm "authortzed by the subscriber" to require an affirmative subscriber election.

ry. As shown in Part II of the brief filed by Defendant-AppelleeBlockbuster, which part Netflix adopts and incorporates by reference, this Courtalso can affirm the judgment on the entirely separate ground that the claim terms"notification rules" and "queue replenishment control rules" are not sufficientlydefinite. The claims are therefore invalid under 35 U.S.C. $ 1121T2.V. The district court erred in denying Netflix's motion for attorneys'fees. Under 35 U.S.C. $ 285, "[t]he court in exceptional cases may award attorneyfees to the prevailing party." This statutory language requires that prevailingplaintiffs and defendants be treated alike. Under this Court's precedent, however,district courts have lacked discretion to grant fees to prevailing defendants unlessthe patentee committed inequitable conduct or engaged in frivolous litigationtantamount to a violation of Rule 11 of the Federal Rules of Civil Procedure. Thisreading of section 285 creates an inequality between plaintiffs and defendants inthe award of fees, and cannot be squared with the Supreme Court's analysis of thecopyright statute.

Requiring frivolity also sets up a bright-line threshold rule forexceptiona\ity, thereby demoting the exercise ofjudicial discretion to a mere

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afterthought. The frivolity requirement is therefore at odds with both the purposeof section 285 and the way courts in other circuits have treated the identicallanguage in the trademark statute.

The requirement of frivolity also makes section 285 superfluous. Rule 11gives federal courts the power to sanction frivolous litigation in every civil case.An interpretation of section 285 that is coextensive with Rule 11 renders it anullity.

Finally, the social costs of this restrictive interpretation of section 285 aresubstantial. Patent litigation is extremely expensive, with attorneys' fees oftenexceeding $5 million for a company accused of infringement. And litigation costsare distributed asymmetrically: the rise of contingent-fee patent-plaintif'attorneys means that plaintif can often impose costs on defendants that they donot bear themselves.

Under an evenhanded application of section 285, district courts would havediscretion to award attorneys' fees when a patent owner was objectively reckless-that is, filed or maintained a lawsuit with an objectively low likelihood of successknowing or having reason to know that it was likely to lose----or when the courtfinds that the defendant vindicated an important public interest. Bothcircumstances are present here. Netflix's motion for attorneys' fees should havebeen granted.

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ARGUMENTI. THE DISTRICT COI]RT CORRECTLY GRANTED SUMMARYJI]DGMENT ON THE GROT]ND THAT NETFLIX DOES NOT USE*NOTIFICATION RULES"A. The District Court Correctly Construed the Claim Term"lrTotfcation Rules" to Require Notification Rules About QueueStatusThe district court correctly ruled that the claim term "a set of notification

rules" means "a set of rules governing the transmittal of notifications about queuestatus sent to the subscriber." (40016.) That construction is compelled by theclaim language, as well as the specification and the prosecution history.

The language and structure of the asserted claims establish that thenotification rules govern not just any type of notification, but notificationsconcerning the status of the subscriber rental queue. Both of the assertedindependent claims (claims 13 and 23) begin with the following language: "Amethod of electronically notifying a subscriber to a content provider of activity in asubscriber rental queue associated with the subscriber." (40058 (emphasisadded).) Both claims continue by requiring, as the first step of the method,"defining a set of notification ruIesfor the subscriber rental queue."(Id. (emphasis added).)

In subsequent steps, a computer uses the notification rules and a separate setof "queue replenishment control rules" to monitor the queue to determine if the

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queue should be altered. (Id.) If the monitoring step determines that the queuemust be altered, then a notification is sent to the subscriber "in response to anaffirmative determination . . . that such notification is necessary based on" thenotification rules. (Id.) Thts, the claimed methods provide that notifications aresent only after the computer monitoring the queue determines that the queueshould be altered. These requirements cannot be met by just any type ofnotification-the notification must be about the status of the queue.

The specification confirms this conclusion. The'243 patent does notpurport to invent an online video rental system or a general-purpose notificationsystem. Such systems were already known in the prior art. Rather, the abstractdescribes the patent as limited to a much more specific system: "[a] notificationsystem method . . . for alerting subscribers to a status of their rental queues."(40032.) Indeed, the patentee was particularly concerned with what he perceivedto be a limitation of the Netflix system: "it fails to notify the subscriber when therental queue is empty, near-empty, or perhaps contains less desirable selections."(40045, 2:I-6 (emphasis added).)

While the "Summary of the Invention" section of the patent lists severalobjects "of the present invention," the only object directed to notifications statesthe following:

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A funher object is to provide a notification system thatalerts and informs subscribers/purchasers of the status ofitems in a rental/purchase queue[.](40045, 3:10-12.)

The embodiments described in the specification also support the districtcourt's construction. For instance, Figures 3A and 38, which are the onlyelectronic notifications exemplified in the patent, are limited to information aboutthe status of the queue. (See 40036 ("Your shipping queue is empty or nearempty"); 40037 ("Per your request we are placing a new title in your queue forshipping.").) The structure responsible for sending the messages of Figures 3Aand 38 is called the "Queue Status Notification Module." (40053, 18:46-55.)

In addition, all of the notification options discussed in Figure 1 involve thestatus of the subscriber queue. (See, e.g., A0034 ("When queue is completelyempty, Send notice and autoship").) The specification describes that figure as the"Subscriber Queue Status Interface." (40034; 40046, 4:28-31.) It includes a"Queue Control Options display atea" which is described as "unique to the presentinvention." (40047, 6:41-43.)

The preference setup display in Figure 2 similarly provides the subscriberwith several options for customizingthe notification and queue replenishmentcontrol rules. (40035.) Each of these options involves either notifliing thesubscriber about queue status or automatically replenishing the queue. (1d.)

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Media Queue contends that "the specification contemplates the existence ofnotification rules that are 'for the subscriber rental queue,' but not strictly 'aboutqueue status."' (M.Q. Br. 16.) But the two examples cited by Media Queue do notsupport its assertion.

Media Queue's first example relies on the following passage from thespecification:

In response to the subscriber selecting NotificationOption #3 ['No notice-autoship"], the system will skipany official notification to the subscriber, and simplyselect a new title to be inserted into fthe queue.]

(40049, 9:54-59.) According to Media Queue, because the passage discloses arule that is "used to determine whether to send any sort of notification at aIl," thepassage contains an example of a notification rule that does not governnotifications about "queue status." (M.Q. Br. 16.)

But, viewed in context, the "official notification" referenced in the passageis plainly a notification about queue status. The 'No notice-autoship" optiondescribed in the passage is part of a set of options presented to the user in Figure 2,tsox 230. (40035.) Figure 2 asks the user: "Do you want us to automaticallynoti$z you when your rental queue is empty (or near empty) and automaticallyselect and ship a title to you?" (1d.) Box 230 asks: "'What do you want me to dowhen the queue should be replenished?" (Id.) Hence, as the figure itself indicates,the options presented to the subscriber in Figure 2, including the "No Notice-sf-2845582

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Autoship" option, specifli whether the subscriber wants to receive a notifcationabout the status of h or lter queue. Far from supporting Media Queue's position,the passage in fact confirms that the claimed notification rules govern notificationsabout queue status.

Media Queue also points to Figure 3B as another example that allegedlysupports its argument, citing the specification's discussion of "notices of moviesthat may be of interest to the subscriber." (M.Q. Br. 17; see also 40050, 12:14-20.) According to Media Queue, this is not a notice about the status of thesubscriber queue. (Id.) Again, however, the example shows just the opposite. Asindicated above, Figure 38 does not simply provide movie recommendations to thesubscriber. Rather, the notice informs the subscriber that the system has changedthe queue by automatically adding a title to it: "Per your request we are placing anew title in your queue for shipping." (40037.) Thus, Figure 3B in fact is a queuestatus notification.

Unable to show effor based on the specification, Media Queue seeks refugein the doctrine of claim differentiation. (M.Q. Br. 17-I9.) According to MediaQueue, claim 1 specifies a set of notification rules and the sending of an electronicnotification. (Id.) Claim 11 narrows claim 1 by adding the limitation that "saidnotification includes an indication of a status of the subscriber rental queue."(40058.) Media Quzue argues that the "notification rules" must therefore be

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construed to be broader than rules concerning notifications of queue status.(M.Q.Br. 1e.)

As this Court has recog nized,,however, claim differentiation does not"trump the clear import of the specification." Edwqrds Lifesciences LLC v. Cook,Inc., 582 F .3d 1322, 1332 (Fed. Cir. 2009) ("[C]laim differentiation is a rule ofthumb."); see also, e.g.,ICU Medical, Inc. v. Alaris Medical Sys., Inc., 558 F.3d1368, 1376 (Fed. Cir.2009) ("[T]his doctrine is not a rigid rule but rather is one ofseveral claim construction tools."); Netcraft Corp. v. eBay, nc.,549 F.3d 1394,1400 n.1 (Fed. Cir. 2008) (claim differentiation "is just one of many tools used bycourts in the analysis of claim terms."). Applyrng that flexible approach, thisCourt has held in several cases that "the presumption created by the doctrine ofclaim differentiation . . . will be overcome by a contrary construction dictated bythe written description or prosecution history." Regents of Univ. of CaL v.DkoCytomation Cal., lnc.,517 F.3d L364,1315 (Fed. Cir. 2008) (citationomitted).

For example, in Nystrom v. Trex Co.,424 F.3d 1136 (Fed. Cir. 2005), thepatentee argued that the claim limitation "board" should be construed broadlybecause another claim contained the limitation "wood decking board." Id. at II43.This Court noted that "ft]hroughout the written description, Nystrom consistentlyused the term 'board' to describe wood decking material cut from alog." Id. As a

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result, there was "nothing in the intrinsic record to support the conclusion that askilled artisan would have construed the term 'board' more broadly than a piece ofconstruction material made from wood cut from a 1og." Id. at II44-45. Here, as inNystrom,the specification only describes "notifications" about queue stafus, inkeeping with the replenishment purpose of the invention. The claim differentiationargument does not overcome the plain language of the asserted claims and theconsistent description of the specification.

B. The District Court Correct Granted Summary JudgmentBecause Media Queue Did Not Raise a Genuine fssue of MaterialFact of Infringement of the ooNotifcation Rules" LimitationApplyrng its claim construction, the district court correctly concluded that

Media Queue failed to raise a triable dispute of fact as to whether Netflix infringedthe "notification rules" limitation. On appeal, Media Queue's only argument to thecontrary is its assertion that it "showed an example of 'Netflix News' that includedinformation regarding the subscriber's queue." (M.Q. Br. 37.) But Media eueueintroduced no evidence about'T.{etflix News" in its opposition to the summaryjudgment motion. See Canada v. Blain's Helicopters, rnc.,83l F.2d 920,925(9th Cir. 1987) (holding that where documents are not "authenticated by andattached to an affidavit" such documents "may not be relied upon to defeat amotion for summary judgment"). As the district court found, Netflix was entitledto summary judgment in any event, because Media Queue "did not raise a triable

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factual dispute as to whether Netflix employs 'queue replenishment control rules."'(A0027 n.9; see Part II, infra.)

C. In the Alternative, Summary Judgment Should Be AffirmedBecause Media Queue Has Not Raised a Genuine Issue ofMaterial Fact of Infringement Even Under a BroaderConstruction of "l{otification Rules"Media Queue makes essentially no attempt to establish that it could have

prevailed under its own construction of "notification rules." It asserts that"Netflix's summary judgment arguments quickly fail under a proper claimconstruction," citing without explanation eighteen pages from the demonstrativeexhibits its counsel displayed during the district court hearing. (M.Q. Br. 36(citing AZI24-4I).) Contrary to this assertion, the evidence submitted by MediaQueue in fact demonstrates that there is no triable issue on infringement, evenunder Media Queue's proposed construction.

In particular, each asserted claim contains two additional claim limitations,neither of which the accused features infringe as a matter of law. First, each of theasserted claims is limited to "[a] method of electronically noti$ring a subscriber toa content provider of activity in a subscriber rental queue." (40058 (emphasisadded).) 2 Second, all of the asserted claims require that the notification rules be

t This language from the preamble of the claims is limiting on the claims.The'243 patent does not purport to invent either a general-purpose notificationsystem or an online video rental system; it is limited to a method for "alertingsubscribers to a status of their rental queue." (40032.) As a result, the preambleJJ

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"for the subscriber rental queue." (1d.) Even assuming the district court erred byrequiring notification rules to be about "queue status" (and it did not), the accusedfeatures-Account Hold, Netflix Friends-Movie Notes, and Facebook Connect-still fail to meet all of the claim elements.

The "Account Hold" feature permits "a subscriber to temporarily place hisor her subscription on hold for vacation or other reasons." (40024.) Whether ornot this feature deals with "queue status," it does not constitute a notification rule"for the subscriber rental queue." The "Account Hold" feature also does notgovern notifications of "activity in a subscriber rental queue."

Similarly, the "Netflix Friends-Movie Notes" and "Facebook connect"features allow users to receive notifications when their friends have recommendedor rated a movie. (1d.) Nothing in these features constitutes a notification rule "forthe subscriber rental queue." Nor do these features have any connection toelectronic notifications concerning "activity in a subscriber rental queue."

language is limiting. Corning Glass Worlcs v. Sumitomo Elec. USA, nc.,868 F.2d,1251,1257 (Fed. Cir. 1989) ("The effect preamble language should be given canbe resolved only on review of the entirety of the patent to gain an understanding ofwhat the inventors actually invented and intended to encompass by the claim").The preamble language is also "meshed with the ensuing language in the claims."Pitney Bowes, Inc. v. Hewlett-Pqckard Co., 182 F.3d 1298,1306 (Fed. Cir. L999).Indeed, Media Queue acknowledges that the preamble helps elucidate the meaningof the claimed "notification rules." (M.Q.Br. 16-17 (relyng onthepreamble inevaluating claim scope).)

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As a result, even if Media Queue could show that the district court erred inits construction, the accused Netflix features would still not infringe the assertedclaims, and the summary judgment of non-infringement should be affrrmed.Granite Mgmt. Corp. v. United States,4l6 F.3d 1373,1378 (Fed. Cir. 2005)("An appellee may rely upon any ground supported by the record for affirmance ofthe judgment, whether or not the lower court relied on that ground.").il. THE DISTRICT COI]RT CORRECTLY GRANTED SUMMARYJI]DGMENT ON THE GROI]ND THAT NETFLIX DOES NOT USE

"QUEUE REPLENISHMENT CONTROL RULES"The district court correctly construed the claim term "a separate set of queue

replenishment control rules" to mean "a set of rules (distinct from the set ofnotification rules) governing whether to automatically add ptayable media titles tothe subscriber's rental queue." (40021.) The district court's construction wasbased on the plain meaning of the claim term, as confirmed by the specificationand prosecution history.

Media Queue contends that the district court erred in two ways in construingthis term. Media Queue contends that the claimed "queue replenishment controlrules" (1) need not actually control queue replenishment but can instead simplyreorder items in the queue; and (2) are broad enough to encompass a system wherethe subscriber alone is responsible for adding items to the queue. Media Queue iswrong on both counts.

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A. The District Court Correctly Ruled that'6Queue ReplenishmentControl Rules" Must Control Replenishment of the Queue, NotMerely Reordering of the QueueMedia Queue argues on appeal that the district court erred by construing the

term "queue replenishment control rules" as limited to the addition of items to thequeue. (M.Q. Brr.20-2L.) According to Media Queue, "queue replenishmentcontrol rules must be broad enough to also permit changes to the order of items andnot be limited to addition of items in the queue." (1d.) This new proposedconstruction is contradicted by Media Queue's own proposed construction below,and is not supported by the intrinsic evidence.

In the district court, Media Queue proposed that the claim term should beconstrued to mean rules relating to the "refilling'? of the queue. (A1105-07;41834.) Just like its synonSrm "replenishment," the word "refilling" means addingitems, not merely shuffling the order of any items remaining in the queue. MediaQueue cannot complain about a construction that it advocated below. See KeyPharms. v. Hercon Labs. Corp.,161 F.3d 709,175 (Fed. Cir. 1998) ("ordinarily,doctrines of estoppel, waiver, invited error, or the like would prohibit aparty fromasserting as 'error' a position that it had advocated at the trial.").

In any case, the district court was correct in construing "queuereplenishment control rules" as limited to rules that govern the "addition" of itemsto the queue. The claims speci$r that the computer uses both the notification and

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queue replenishment control rules to monitor the queue to "determine if acomposition of such rental queue should be altered through additions of playablemedia titles and/or ordering of playable media titles in the subscriber rental queueshould be altered" (40058, claim 13) or to "determine if a composition and/orordering of playable media titles in the subscriber rental queue should be altered."Qd., c\aim23.) Although this language would permit a computer to alter the orderof the queue, it does not in any way speciSr that such reordering constitutes"replenishment." To the contrary, when the claims refer to reordering, it is alwaysin contrast to changing the "composition" of the queue by adding items.

The specification fully supports the plain meaning of the term"replenishment." Although the term "queue replenishment control rules" does notappear in the specification (other than in the claims), the words "replenish" artd"replenishment" appear several times. In each case, these words are usedaccording to their ordinary meaning of "adding," which in the context of the patentinvolves the addition of items to the queue. For example, display area240 inFigure 2 begins with the question "What types of titles should I use to replenish theselection queue?" (40035.) As the patent explains, this display area is used tospeciz how the system should "supplement" the queue: "A fourth preferencedisplay area240 is used to speci$r options for'how'the system should replenish orsupplement the Subscriber Selection Queue 110." (40049 at 10:5-11.)

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Mr. Gross's statements in allowing the claims at issue does not alter this result.See Springs Window Fashions,323 F.3d at 9951' Litram Corp. v. MorehouseIndus.,143 F.3d 1456,1462 (Fed. Cir. 1998). Rather, it is proper for a court torestrict the scope of claims based on statements made in prosecution, even if theexaminer found these statements unconvincing. Springs Window Fashions,323F.3d at 995 ("Because an examiner has the duty to police claim language by givingit the broadest reasonable interpretation, it is not'surprising that an examiner wouldnot be satisfied with the applieant's insistence that particular claim languagedistinguishes a prior art reference, but that a court would later hold the patentee tothe distinction he pressed during prosecution.") (citation omitted).3

Not only did Mr. Gross make this argument during the original prosecutionof the '243 patent; he has repeated and emphasized the argument in the currentlypending reexamination of the '243 patent. As recently as May 12,2010, Mr. Grossasserted that replenishment is limited to adding items to the queue:

The citation from Hastings identified by the Examiner,even in its broadest sense, has nothing to do with this' Media Queue cites Lemelson v. Generl Mills, lnc.,968 F.2d 1202 (Fed.Cir. 1992) for the proposition that it "should be allowed to rely on the PTO's viewthat queue replenishment control rules include changes to the order of items in thequeue." (M.Q. B.r.25.) But Media Queue misinterpre,ts Lemelson. There, theCourt found that the patentee could not "later shift his stance 180 degrees" fromhis position before the Patent office. Lemelson,968 F.2d at 1207 -08. Thus,Lemelson, like Spring Window Fashions, actually supports Netflix's position thatthe patentee is held to representations made during prosecution.

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"queue replenishment" concept . . . . All that ishappening is that they are being sent more movies fromthe selection queue, which is in effect the opposite of"replenishm ent."4Thus, during current prosecution of the reexamined'243 patent, the patenteecontinues to assert that the term "replenishment" involves adding items to thequeue. These representations confirm that the district court's construction iscorrect.

B. The District Court Correctly Ruled that 66Queue ReplenishmentControl Rules" Must Govern Whether to Automatically AddItems to the Queue

The district court likewise correctly construed "queue replenishment controlrules" as rules governing whether to utomqtically add items to the queue. Theplain language of the term "queue replenishment control rules" means that the"rules" must "control" the "replenishment" of the subscriber's queue. Accordingto the language of the claims, subscribers must authonze rules that governcomputer-controlled replenishment.

o Su" Reexam # 951000469,}/ray 12,2010 Declaration of J. Nicholas Gross,fl 19 (emphasis in original); see also Apt'rr 6,2010 (Revised) Amendment A &Response to Office Action at 53. These documents are publicly available on thePTO's "PAIR" website, ht:llportal.uspto.gov/externallportallpair,by entering thereexamination number (951000469) in the "Control Number" field, and selectingthe "Image File'Wrapper" tab. See Standard Hvens Prods., Inc. v. Gencor Indus.,Inc.,89J F.2d 51 1, 514 n.3 (Fed. Cir. 1990) (flings in reexamination proceedingare public records thatmay be judicially noticed).

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The specification conf,trms that for purposes of Mr. Gross's invention,"replenishment" of the queue is performed by the computer system itself not bythe subscriber:

e . "A fourth preference display area240 is used to speci$r options for 'how'the system should replenish or supplement the Subscriber SelectionQueue 110" (40049, 10:5-7 (emphasis added));. "recommender should work in the background, seamlessly and withoutextensive burdensome participation by the subscriber so that the queue isautomatic ally r ep I enish et' (id., I 0 :28-3 1 (emphasis added)) ;. "Additional replenishment options are based on various categories ofselections available at the media service provider. Thus, a subscriber canask that any utomatic selectionberestricted to one or more, particularcategories, such as a New Release, a particular genre, aparticularcollection, from the top 100 most popular choices, from a Critic's choiceselection, etc." (id., 10:32-38 (emphasis added));. Recommendations are "used by a Queue Control Monitor 726 torepleni,sh/modifiziup date asubscriber delivery queue 723" (40053,18:19-24); and

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. "the present invention could similarly operate to review a subscriber'sselection queue, make recommendations, and replenish a SubscriberSelection Queue with suggestions" (40057, 25:46-53).These uses of the term "replenishment" are completely consistent with the

specification's description of Mr. Gross's purported invention: a set of parameterschosen by the subscriber so that "the system automatically ensures that lthesubscriber's] preference queue is never allowed to completely run 'dry' so tospeak." (A0047, 5:60-63.)

During prosecution, the patentee confirmed that the patent claims aredirected to automatic modif,rcations of the rental queue. At one point, theExaminer rejected several claims on the ground of indefiniteness, including thenpending claim 7, which ultimately issued as claim 13 of the '243 patent.(4065I-52.) As claims 13 and 23 do now2 those rejected claims had limitationsrequiring a "separate set of queue replenishment control rules" used to monitor thesubscriber rental queue, and a "trigger event to be used in determining when saidsubscriber rental queue should be modified." (40508-10.)

Faced with the Examiner's rejection, Mr. Gross responded with anamendment that he stated made the claims perfectly clear: "it should be apparentnow that these [claims] are directed to alternative techniques by which a user canset up a set of rules which automatically cuse modffication to q subscriber

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rental queue.') (40640 (emphasis added).) Eventually, after fuither amendment,the Examiner allowed the claims. This exchange confirms that the queuereplenishment control rules govern the automatic addition of items to the rentalqueue. 800 Adept, Inc. v. Murex Sec., Ltd., 539 F.3d 1354 , 1365 (Fed. Cir. 2008)(using statements made during prosecution "as support for the construction alreadydiscerned from the claim language and confrmed by the written description");see also Chimie v. PPG Indus., 402F.3d I37I, 1384 (Fed. Cir. 2005) (noting thatclaims should be construed consistent with the prosecution history).

On appeal, Media Queue focuses on the word "can," arguing that "Mr. Grosswas discussing a capability of the system as opposed to a requirement."(M.Q. Br. 31.) Media Queue ignores, however, that this discussion was directed tothe meaning of the claim term "queue replenishment control rules," which isunquestionably a limitation of the claims. Thus, even if Mr. Gross were onlyaddressing a system "capabilityi' that capability is required by the claims. As thedistrict court recognized, an infringing system must at least provide an option forautomatically adding items:

Although a subscriber may choose not to benefit from theautomatic queue replenishment feature, the subscriberstill has to be presented with this option, and a computermust determine whether the subscriber has selected thisoption.

(40020.) Thus, as the district court found, the claims require that the subscriber

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authorize rules governing whether to automatically add items to the queue.Media Queue cites to several examples from the specification where "the

system may merely alert the subscriber to the queue deficiency." (M.Q. Br. 30.)These examples are fully consistent with the district court's construction. In eachsuch example, the subscriber has selected an option determining whether thesystem will automatically add items to the queue. (Compre 40048, 8:42-56(discussing Figure 2 "Threshold Option#I" cited by M.Q. Flr.29-30) with 40048-49, 8 :57 -9:28 (discussing additional threshold options including automaticadditions to the queue); compqre 40057,14:6-7 (discussing Figure 4 step 435,cited by M.Q. Br. 30) with id., I4:I5-20 (discussing step 445, inwhich the queue isautomatically updated). )

Having failed to find support for its construction in the intrinsic evidence,Media Queue again relies on the doctrine of claim differentiation. Media Queuepoints to unasserted claim 1, which specif,res that the "set of notification rulesandlor set of queue replenishment control rules include a user configurable optionwith a first choice to automatically trigger a modification of the subscriber rentalqueue, and a second choice which does not trigger a modification of the subscriberrental queue." (40057, 26:28-34.) According to Media Queue, "[t]his language isvery similar to the district court's interpretation of the automatic aspects of 'queuereplenishment control rules."' (M.Q.Br. 28.)

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claim differentiation cannot justiff rejecting the district court's construction of"queue replenishment control rules."

C. As the District Court Correctly Concluded, Media Queue OfferedNo Evidence that Netflix Uses Queue Replenishment ControlRulesThe district court correctly concluded that Media Queue failed to establish a

dispute of fact as to whether Netflix employs "queue replenishment control rules."Media Queue pointed to "IJser Profiles," which "enablfe] a subscriber to divideDVD allotments for different profiles defined within the subscriber's account," and"enabl[e] a subscriber to specifu maturity levels for different profiles[.]" (40025.)Media Queue also pointed to Netflix's subscription plans, which "allow asubscriber to designate how many titles the subscriber can check out at one timeandlor how many titles the subscriber can receive per month[.]" (40026.) As thedistrict court found, these features do not govern whether to automatically addmedia items to the queue. Media Queue does not contend otherwise on appeal.

Moreoer, none of these features have anything to do with reordering ofitems within the queue. Thus, even if Media Queue could show that the claim termencompassed reordering, summary judgment would still be proper. Grnite Mgmt.Corp.,416 F.3d at1378; Bricev. Sec'y of Health and Humn Servs.,240F.3d1367,1372 n.2 (Fed. Cir. 2001).

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ilI. THE DISTRICT COURT CORRECTLY RULED THAT ASTIBSCRIBER'S ACT OF USING NETFLIX'S SERVICE DID NOTCONSTITUTE DEFINING A SET OF RI]LES "AUTHORIZED BYTHE SUBSCRIBER"The district court correctly construed the claim term "authorrzed by the

subscriber" to mean "elected by the subscriber after the subscriber is presentedwith a choice among multiple options." (A0021-22.) Within the context of the'243 patent's claims, that means that the subscriber must choose"a set ofnotification rules" and"a separate set of queue replenishment control rules." Asthe court below concluded, the subscriber is not presented with a meaningfulchoice if the subscriber merely "permit" or "sanctions" a set of rulespredetermined by the system. (40021 ; 0023-2a.)A. The Specification Demonstrates that User Selection of the RulesGoverning the Queue fs Central to the Invention

The specif,rcation repeatedly emphasizes that user selection is a key aspect ofthe invention. The first two "objects of the present invention" listed are:(1) overcoming the identified "limitations of the prior art," including the supposed"limitation of the Netflix system . . . that it does not give subscribers any flexibledegree of control over their rental selection queue or shipments" (400 46,3:3-4;40045, 2:20-23); and (2) providing "an intelligent queue monitoring system thatallows subscribers/purchasers to define policies and rules to be used in determining

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These subscriber-selected options are central to Mr. Gross's purportedinvention. As the very first step in using the system, the "subscriber configureshis/trer preferences" by either "elect[ing] a number of default values, orbeginfning] the process of configuring particular parameters to be used in a queuemonitoring system." (4005 I, 73:32-35; 40052, 15:33-35.)

Media Queue's attempt to give the term "authortzed" abroader meaning isinconsistent with the specification. The patent does not merely mention subscriberselection as one of many possible embodiments of the invention; it characterizesthis feature as "unique to the present invention." (40047,6:4I-46.) The patentidentifies the relevant prior art-Netflix's system-and criticizes it for lackingoptions for subscribers to select the rules that would govern their queue. All of thedisclosed embodiments are directed to subscriber selections that control themanagement of the subscriber's queue. Under such circumstances, the claimsshould be read as limited to the use of subscriber selection:

Where the specification makes clear that the inventiondoes not include a particular feature,that feature isdeemed to be outside the reach of the claims of thepatent, even though the language of the claims, readwithout reference to the specification, might beconsidered broad enough to encompass the feature inquestion.

SciMed Life Sys. Inc. v. Advanced Cardiovscular Sys. ?nc.,242F.3d, L337, 1347(Fed. Cir. 2001). Just as in SciMed, the patent here "explains that the prior art . .

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'sufferfs] from several disadvantages."' Id. at 1342. And, as in SciMd,the patenthere describes user selection as part of "the present inventi on." Id. at 1343 ("[T]hecharacterization of [a feature] as part of the 'present invention' is strong evidencethat the claims should not be read to encompass the opposite structure."); see alsoEdwards Lifesciences,5S2 F.3d at 1330 ("pV]hen the preferred embodiment isdescribed in the specification as the invention itself, the claims are not necessarilyentitled to a scope broader than that embodiment.") (citations omitted).

Media Queue's argument that allowing subscriber selection is merely apreferred embodiment (M.Q.Blr.34-35) "flies in the face" of the specification'sstatements that "define 'the invention"' as selection of queue parameters. SciMed,242 F .3d at 1344; see also Toro Co. v. white Consol. Indus., 199 F.3d 7295,1300-01 (Fed. Cir. 1999) (finding that a claim required a particular configurationwhere the specification described the importance of the configuration and did notdisclose others).

The district court therefore correctly determined that the claim term"aufhonzed by the subscriber," read within the context of the claims and thespecification, requires affirmative selection of the parameters that governnotifications and automatic queue replenishment. See Microsoft Corp. v. Multi-Tech Sys., 1nc.,357 F.3d 7340,135r-52 (Fed. Cir.2004) (construing a claim as

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requiring a feature because it was "centralto the functioning of the claimedinvention"); accord Alloc, Inc. v. ITC,342 F.3d 1361 ,1369-70 (Fed. Cir. 2003).

B. This Court Can Affirm on the Alternative Ground that MediaQueue Has Not Raised a Genuine Issue of Material Fact ofInfringement Even If "Authorized by the Subscriber" I)oes NotRequire Selection from a Group of OptionsMedia Queue's brief on appeal criticizes the district court's construction of

the term "authonzed" as requiring selection from a group of options. (See, e.g.,M.Q. Br. 33-35.) As shown above, the district court committed no error in thisaspect of the claim construction. Any such error, however, would not requirereversal.

If the "multiple options" language were removed from the court'sconstruction, the remaining construction would still require rules "elected by thesubscriber." Below, Media Queue offered no evidence that Netflix subscribersmake an affirmative "election" of the Terms of Use. To the contrary, theundisputed evidence established that a Netflix user must accept the Terms of Useas is. (40023.) Accordingly, the judgment should be affirmed, even if this Courtwere to adopt Media Queue's proffered construction.

Moreover, according to the plain language of the claims and specification,the notification and queue replenishment control rules must be authorizedby asubscriber. The Terms of Use cannot be authori zed,bya subscriber because at thetime of acceptance, an individual is not yet a subscriber. As the district court

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observed, "someone who chooses not to accept the Terms of Use would not be a'subscriber' of Netflix's services." (Id.) Accordingly, agreeing to Netflix's Termsof Use cannot constitute authonzation of the notification and queue replenishmentcontrol rules, even under a broader construction of "authonzed."IV. ALTERNATIVELY, THE CLAIM TERMS "NOTIFICATIONRULES' AND *QIIEUE REPLENISHMENT CONTROL RULES"ARE INDEFINITE

The summary judgment can also be affirmed on the independent ground thatthe claims are invalid as indefinite under 35 U.S.C. $ 112 fl 2. Netflix joins Parr IIof the brief frled by Defendant-Appellee Blockbuster on that issue.V. THE DISTRICT COURT ERRED IN DENANG NETFLIX'SMOTION FOR ATTORNEYS' F'EES

Relying on this Court's precedent, the district court denied Netflix's motionfor fees, concludingthatNetflix had not shown that this litigation was objectivelybaseless and brought in bad faith. This Court should revisit the appropriate legalstandard for a prevailing defendant, so that those who successfully defend aninfringement suit are placed on equal footing with prevailing patentees.s

Section 285 of Title 35 provides: "[t]he court in exceptional cases mayaward attorney fees to the prevailing party." This statutory language does notdifferentiate between prevailing plaintif and defendants. Yet this Court has

t Pursuant to Rule 35 of this Court's rules, Netflix is filing, concurrentlywith this brief a petition that this issue be initially heard en banc.

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applied section 285 in a manner that makes it substantially more difficult forprevailing defendants to obtain fees. As the Supreme Court held in the copyrightcontext tn Fogerty v. Fantasy, nc.,510 U.S. 5I7 (1994), plaintiffs and defendantsare entitled to equal treatment in obtaining attorneys' fees. This Court's section285 precedent runs afoul of this important principle.

This Court should revise the standard and hold that a district court has widediscretion in evaluating a fees motion, and that among the ways a prevailingdefendant can obtain fees is to show that (1) the patentee was objectively recklessin filing or pursuing a lawsuit, or (2) the defendant vindicated an importantpublicinterest that will have ramif,rcations beyond the bounds of that case itself. Netflix'smotion for fees should have been granted, as it meets both of these tests.

A. This Court's Current Standard for Awarding Attorneys' Fees inPatent Cases Improperly Treats Prevailing DefendantsDifferently from Prevailing PlaintiffsWhen the prevailing party in a patent case is a plaintiff, it can obtain fees

merely by proving willfulness; that is, by showing that the defendant was or shouldhave been aware of an objectively high likelihood that the plaintiff would prevail.In re Seagate Technologlt, LLC,4g7 F.3,1360, 1371 (Fed. Cir. 2007) (en bnc).Plaintiffs do not have to prove that the defendant's arguments were frivolous.Indeed, a defendant can have a reasonable, nonfvolous non-infringementargument and still be found a willful infringer, so long as the argument is one a

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case in which a defendant could establish this standard, allthat results is that thedistrict court has discretionto award fees.7

The Wedgetail standard-that a defendant must demonstrate the lack of anyobjective basis for plaintiff s case, and that the plaintiff actually knew it-is thesame as requiring a showing that plaintiffls case was frivolous. Wedgetail,516F.3d, at 1304-05. This frivolity standard is almost impossible for accusedinftingers to meet. As a result, courts applying this standard are unlikely to awardfees even in cases involving obviously weak patent claims.1. This Court's Standard forAttorneys'Fees Cannot BeSquared with Supreme Court Authorify

The Supreme Court's treatment of attorneys' fees in the copyright contextdemonstrates that this Court has adopted too stringent a standard for prevailingdefendants in patent cases. Before IggL,copyright law regularly awardedattorneys' fees to prevailing plaintif, but only rarely to prevailing defendants.Fogerty ended thatpractice. The Court established that plaintif and defendantsare entitled to equal treatment in obtaining attorneys' fees in copyright cases, in

t This Court also permits the award of attorneys' fees based on a finding ofinequitable conduct. Inequitable conduct is rarely proven, however, as it requiresproof not only of amateial misstatement or omission to the PTO but also anaffirmative intent to deceive. The standard remains significantly higher than thecoffesponding standard for willfulness, which can be found on the basis of anegligent state of mind, and which, unlike inequitable conduct, is a continuingobligation.

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significantpartbecause victories by intellectual property defendants as well asplainti ffs can vindi cate imp o rianf public interests.

Although Fogerty was based upon 17 u.s.c. $ 505, which differs fromsection 285, the Supreme Court held that plaintif and defendants must be treatedevenhandedly in part because "the federal fee-shifting statutes in the patent andtrademarkfields,which are more closely related [than the Civil Rights Act] to thatof copyright, suppo rt a party-neutral approach ." Fogerty, 5 I 0 U. S. at 525 n.I2(citing Eltech, 903 F.2d at 81 1) (emphasis added). Thus, despite the differences inthe patent, trademark, and copyright statutes, the Court found them sufficiently"closely related" that lessons from one should cany over to the others.

The Court emphasized the important public purpose served by defendantswho successfully defend copyright cases. Because Congress has granted only alimited monopoly to copyright owners, "it is peculiarly important that theboundaries of copyright law be demarcated as clearly as possibl e." Id. at 527 .As a result, "defendants who seek to advance a variety of meritorious copyrightdefenses should be encouraged to litigate them to the same extent that plaintiffs areencouraged to litigate meritorious claims of infringement." Id.

These considerations apply with equal force in patent cases. The SupremeCourt has long made clear the important public interest in invalidating weakpatents. See Leqr, Inc. v. Adkins,395 U.S. 653,670 (1969) (abrogating licensee

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estoppel because of the "important public interest in permitting full and freecompetition in the use of ideas which are in reality apart of the public domain");Blonder-Tongue Lqboratories, fnc. v. (Jniversity of lllinois Foundation,402lJ.S.3I3,343,350 (L911) (reaffirming that "[a] patent by its very nature is affectedwith a public interest. . . . tlt] is an exception to the general rule againstmonopolies and to the right to access to a free and open market. The far-reachingsocial and economic consequences of a patent, therefore, give the public aparamount interest in seeing that patent monopolies spring from backgrounds freefrom fraud or other inequitable conduct and that such monopolies are kept withintheir legitimate scope."). The Supreme Court has recognizedthat, even when apatent is found not to be infringed, invalidating abadpatent seryes an importantpublic interest. Cardinal Chemicql Co. v. Morton Int'\, nc.,508 U.S. 83, 100-101(1ee3).

But defendants do not serve the public interest only by invalidating badpatents. Patentees with valid patents can still harm the public by asserting greaterrights than they have in fact been given. See Brulotte v. Thys Co.,3l9 U.S. 29,32-33 (196\; Morton Slt Co. v. G. S. Suppiger Co.,314 U.S. 488,493 (Ig4Z)("Where the patent is used as a means of restraining competition with thepatentee's sale of an unpatented product, the successful prosecution of aninfringement suit even against one who is not a competitor in such sale is a

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powerful aid to the maintenance of the attempted monopoly of the unpatentedarticle, and is thus a contributing factor in thwarting the pubtic policy underlyingthe grant of the patent.").

Turning back overbroad readings of patent claims by their owners thusserves the public interest as well. It protects the notice function that patent claimsare supposed to serve, and protects the freedom to engage in commerce in non-infringing products. The Supreme Court's reasoning in Fogerty is instructive. Inthat case, the defendant did not invalidate the copyright, but prevailed at trial onnon-infringement, after denial of its summary judgment motion. The Courtnonetheless found a fee award appropriate. "[A] successful defense of a copyrightinftingement action may further the policies of the Copyright Act every bit asmuch as a successful prosecution of an infringement claim by the holder of acopyright." Fogerty, 510 U.S. at 527 .

2. This Court's Standard for Prevailing Patent Defendants IsInconsistent with Other Courts' Treatment of theTrademark StatuteThe fee provision in the trademark statute is identical to the patent statute.

See 15 U.S.C. $ 1117 (providing in relevantpart that "[t]he court in exceptionalcases may award reasonable attorney fees to the prevailing party J');35 U.S.C.$ 285 (same). Indeed, the trademark statute was copied directly from the patentstatute, and the legislative history of the trademark fees statute makes explicit

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Indeed, the Supreme Court in Fogerty noted that, in trademark, "prevailingdefendants are to be treated more favorably than prevailing plaintif" because onlya fee award can make defendants whole. Fogerty,sl0 U.S. at 525 n.12 (citingScotch Whis Ass'nv. Mjestic Distilling Co.,958 F.2d5

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