DSW, INC. v. Shoe Pavilion, Inc.

United States Court of Appeals for the Federal Circuit
2008-1085

DSW, INC.
and DSW SHOE WAREHOUSE, INC.,

Plaintiffs-Appellants,

v.

SHOE PAVILION, INC.,

Defendant-Appellee.

Theodore R. Remaklus, Wood, Herron & Evans, L.L.P., of Cincinnati, Ohio,
argued for plaintiffs-appellants.

JoAnna M. Esty, Venable LLP, of Los Angeles, California, argued for defendant-
appellee.

Appealed from: United States District Court for the Central District of California

Judge Florence-Marie Cooper
 United States Court of Appeals for the Federal Circuit

2008-1085

DSW, INC.
and DSW SHOE WAREHOUSE, INC.,

Plaintiffs-Appellants,

v.

SHOE PAVILION, INC.,

Defendant-Appellee.

Appeal from the United States District Court for the Central District of California in case
no. 2:06-CV-06854, Judge Florence-Marie Cooper.

__________________________

DECIDED: August 19, 2008
__________________________

Before MAYER, SCHALL and LINN, Circuit Judges.

MAYER, Circuit Judge.

DSW, Inc. and DSW Shoe Warehouse, Inc. (together “DSW”), appeal the

judgment of the United States District Court for the Central District of California, granting

summary judgment of non-infringement of U.S. Patent No. 6,948,622 (“’622 patent”) in

favor of Shoe Pavilion, Inc. (“Shoe Pavilion”), and summary judgment of no liability for

damages for past infringement of U.S. Patent No. D 495,172 (“’172 patent”) and the

’622 patent, also in favor of Shoe Pavilion. DSW Inc. v. Shoe Pavilion, Inc., No. 2:06-

CV-06854-FMC-SHx (C.D. Cal. Sept. 25, 2007) (“Summary Judgment Order”).

Because the trial court erred by (1) construing claims 4-6 of the ’622 patent to include
the track and roller configuration limitation recited in claims 1-3, and (2) misapplying

Wine Railway Appliance Co. v. Enterprise Railway Equipment, 297 U.S. 387 (1936),

with respect to damages, we vacate and remand.

Background

DSW owns the ’622 patent, which teaches a system and method for storing and

displaying a large stock of footwear for customer self-service. DSW also owns the ’172

patent, which claims an ornamental design for a combined product display and stacked

product container separator. On May 19, 2006, DSW notified Shoe Pavilion that the

then-current shoe display design (“First Design”) in five of its stores infringed DSW’s

’622 and ’172 patents. Shoe Pavilion responded to the notice, and agreed to modify its

First Design to avoid infringement. Within seven months of DSW’s notification of

infringement, Shoe Pavilion removed all First Design displays from its stores and

replaced them with a modified design (“New Design”).

On October 27, 2006, DSW filed suit against Shoe Pavilion for patent

infringement, alleging that Shoe Pavilion’s manufacture and use of its New Design

footwear displays in seven of its California stores also infringed claims 4-6 of the ’622

patent, and that Shoe Pavilion owed damages for infringement of the ’172 and ’622

patents by the First Design. Shoe Pavilion moved for summary judgment that its New

Design footwear displays did not infringe, or, in the alternative, that the ’622 patent is

invalid, and that it owed no damages for infringement by the First Design.

With respect to infringement by the New Design, the parties’ dispute turned on

whether the language in claims 4-6 1 of the ’622 patent encompasses only methods of

1
Claim 4 provides:

2008-1085 2
displaying and storing footwear that contain track and roller mechanisms connecting

display modules to a support base, as described in claims 1-3 2 (the “Track and Roller

A method of displaying and storing footwear, comprising:

stacking containers of footwear of a first style in a [sic] least one vertical
stack, one on top of the other in direct physical contact;
stacking containers of footwear of a second style in at least one vertical
stack, one on top of the other in direct physical contact, said stack
of containers of footwear of said second style being located
adjacent the stack of containers of footwear of the first style;
selectively positioning a generally vertically disposed, horizontally movably
positionable stack divider between (i) the at least one stack of
containers of the first style and (ii) the at least one stack of
containers of the second style of footwear;
displaying a sample of footwear of the first style above the at least one
stack of containers of the first style of footwear; and
displaying a sample of footwear of the second style above the at least one
stack of containers of the second style of footwear.

’622 patent col.8 ll.33-53 (emphasis added to highlight the disputed claim term).

Claim 5 provides:

The method of claim 4, further comprising:

repositioning the divider to adjust the location of a boundary between the stacks
of containers of the first and second styles of footwear.

’622 patent col.8 ll.54-57.

Claim 6 provides:

The method of claim 4, wherein selectively positioning the horizontally movably
positionable divider between the stacks of said first and second styles of
footwear comprises variably positionably supporting the divider from a
horizontally disposed support arranged generally perpendicular to the divider.

’622 patent col.8 ll.58-63.
2
Claim 1 provides:

A footwear display and stack divider module, adapted to be selectively variably

2008-1085 3
supportably positioned on a module support member which extends in a generally
horizontal direction, comprising:
a footwear display configured to support at least one style of footwear and having a
rear edge and a lateral edge;
a divider disposed adjacent said lateral edge of said display and extending
downwardly from said display, said divider defining a vertical plane; and
at least one module connection element disposed adjacent said rear edge of said
display, said module connection element configured to selectively engage the
module support member at different horizontal positions therealong;
said vertical plane being generally perpendicular to the horizontal direction of the
module support member when the module is supported thereby;
wherein the module support member comprises a track and said module connection
element includes at least one roller configured to engage the track to thereby
slidably suspend the module therefrom.

’622 patent col.7 ll.24-45 (emphasis added).

Claim 2 provides in relevant part:

A system for displaying and storing footwear, the system comprising:
at least one horizontally extending module support member; and
a plurality of display modules coupled to said module support member . . . .

wherein said module support member comprises a horizontally extending elongated
track and each said module connection element includes at least one roller
configured to engage said track to thereby slidably suspend said module
therefrom with said divider disposed in a generally vertical direction
perpendicular to the elongated module support track.

’622 patent col.7 ll.46-67-col.8 ll.1-3 (emphasis added).

Claim 3 provides in relevant part:

A cabinet for displaying and storing footwear, the cabinet comprising:
a base;
at least one vertical support member extending upwardly from said base;
at least one module support member coupled to said vertical support and spaced
from said base; and
a plurality of display modules coupled to said module support member . . . .

wherein said module support member comprises a horizontally extending elongated
track and each said module connection element includes at least one roller
configured to engage said track to slidably suspend a respective module
therefrom, with said divider disposed in a generally vertical direction
perpendicular to said track.

2008-1085 4
Limitation”). DSW argued that the trial court erred by impermissibly construing claims 4-

6 to contain the Track and Roller Limitation, notwithstanding the conspicuous absence

of claim language evincing such a limitation. Shoe Pavilion argued that DSW

disclaimed from the scope of the ’622 patent any apparatus, method or system that

does not include a track and roller mechanism in the display module. First, the original

application’s independent claims, which did not include the Track and Roller Limitation,

were rejected as reading on the prior art or as obvious under 35 U.S.C. § 103(a), and

were cancelled. Second, the application’s dependent claims, already containing, inter

alia, the Track and Roller Limitation, were objected to for relying on the rejected

independent claims, and were only approved after being amended to read as

independent claims. These amended claims issued as independent claims 1-3 of the

’622 patent. DSW simultaneously added new application claims 15-21, which issued as

claims 4-10 of the ’622 patent.

Relying on the specification and the prosecution history, the trial court agreed

with Shoe Pavilion that method claims 4-6 were not independent and separately

patentable from claims 1-3. Specifically, it found that (1) the examiner’s reasons for

allowance indicated that the Track and Roller Limitation was the seminal feature

distinguishing the ’622 patent over the prior art, (2) claims 4-6 would be invalid as

indefinite without the limitation, and (3) the specification describes the invention as a

modular footwear display and storage system, and claims 1-3 recite a footwear display

and stack divider module connected by a module support member containing the Track

’622 patent col.8 ll.4-31 (emphasis added).

2008-1085 5
and Roller Limitation. The court also noted that the preferred embodiment explicitly

includes the Track and Roller Limitation. Accordingly, the court construed claims 4-6 to

include a footwear display module with vertically disposed horizontally moveable

dividers coextensive with the Track and Roller Limitation described in claims 1-3, and

concluded that because Shoe Pavilion’s New Design lacked the rolling connection

element, it did not infringe the ’622 patent. It granted summary judgment of non-

infringement in favor of Shoe Pavilion.

With respect to damages, the district court found that DSW was not entitled to

any damages as a matter of law, because immediately upon receipt of DSW’s notice of

infringement of the ’172 and ’622 patents by the First Design, Shoe Pavilion took

reasonable steps and timely removed all of the infringing shoe displays. Citing Wine

Railway, the trial court granted summary judgment to Shoe Pavilion and stated that no

damages for infringement are recoverable by a plaintiff unless the infringing activity

continues after notice is provided to the infringer.

DSW appeals the trial court’s Summary Judgment Order with respect to Shoe

Pavilion’s infringement of the ’622 patent by the New Design, and liability for damages

for infringement by the First Design. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

Discussion

We review the trial court’s grant of summary judgment of non-infringement de

novo. Netscape Commc’ns Corp. v. Konrad, 295 F.3d 1315, 1319 (Fed. Cir. 2002).

Summary judgment is appropriate “if the pleadings, the discovery and disclosure

materials on file, and any affidavits show that there is no genuine issue as to any

2008-1085 6
material fact and that the movant is entitled to a judgment as a matter of law.” Fed. R.

Civ. P. 56(c). We address each of DSW’s challenges in turn.

A. Non-infringement

Infringement occurs when a properly construed claim of an issued patent covers

an accused device. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 976

(Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370, 374 (1996). Claim construction is

reviewed de novo on appeal. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454

(Fed. Cir. 1998) (en banc).

The district court erroneously imported the Track and Roller Limitation directly

recited in claims 1-3 into the generally phrased “vertically disposed, horizontally

movably positionable stack divider” language of claims 4-6. First, absent contravening

evidence from the specification or prosecution history, plain and unambiguous claim

language controls the construction analysis. Northern Telecom Ltd. v. Samsung Elecs.

Co., 215 F.3d 1281, 1295 (Fed. Cir. 2000) (“The plain and ordinary meaning of claim

language controls, unless that meaning renders the claim unclear or is overcome by a

special definition that appears in the intrinsic record with reasonable clarity and

precision.”) (citation omitted); see also Intervet Am., Inc. v. Kee-Vet Labs, Inc., 887 F.2d

1050, 1053 (Fed. Cir. 1989) (“[T]his court has consistently adhered to the proposition

that courts cannot alter what the patentee has chosen to claim as his invention, that

limitations appearing in the specification will not be read into claims, and that

interpreting what is meant by a word in a claim ‘is not to be confused with adding an

extraneous limitation appearing in the specification, which is improper.’” (quoting E.I. Du

Pont De Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1433 (Fed. Cir.

2008-1085 7
1988))). On its face, the “horizontally movably positionable stack divider” disputed

language in claims 4-6 means that the vertically disposed stack dividers must be

capable of being moved into different horizontal positions in the footwear display.

Although broad, this claim language is not ambiguous. We therefore disagree with the

trial court’s decision to intermingle its validity and construction analyses and as a result

read into claims 4-6 the Track and Roller Limitation of claims 1-3. See Phillips v. AWH

Corp., 415 F.3d 1303, 1327 (Fed. Cir. 2005) (en banc) (“[W]e have limited the maxim [of

construing a claim to preserve its validity] to cases in which ‘the court concludes, after

applying all the available tools of claim construction, that the claim is still ambiguous.’”

(quoting Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 911 (Fed. Cir. 2004))). 3

Second, as the trial court acknowledged, nowhere does the prosecution history

show an express disclaimer by DSW over a method of displaying footwear not involving

the Track and Roller Limitation. To the contrary, the examiner allowed claims 4-6

without objection, concluding that the prior art does not teach or suggest a method of

displaying at least two footwear styles using the particular stacking of containers and

stack dividers recited in independent claim 15 (issued as claim 4). In contrast, when the

examiner allowed amended claims 2, 6, and 9 (issued as claims 1-3), she explained

that the prior art does not teach or suggest a footwear display and stack divider

containing the Track and Roller Limitation. Neither the claim language nor the language

of the examiner’s statement of reasons for allowance indicate that the display method

recited in claims 4-6 is constrained by the Track and Roller Limitation. See Markman,

3
We do not offer a view on whether the proper construction of the claim
language renders the method claims at issue obvious.

2008-1085 8
52 F.3d at 980 (“Although the prosecution history can and should be used to understand

the language used in the claims, it too cannot ‘enlarge, diminish, or vary’ the limitations

in the claims.”) (citations omitted). The trial court incorrectly inferred that the word “also”

from the examiner’s statement that “[t]he prior art also does not teach . . . a method of

displaying 1st and 2nd footwear styles” implied that the latter-discussed method claims

depended on the previously-discussed apparatus claims. Indeed, the examiner’s

specific reference to claim 15 (issued as claim 4) as “independent” directly refutes such

a presumption.

Third, although the preferred embodiment includes a rolling track mechanism, the

alternate embodiments include hooks, lips, and peg holes to permit the stack dividers to

have horizontally movable positions. Moreover, when claim language is broader than

the preferred embodiment, it is well-settled that claims are not to be confined to that

embodiment. E.g., Phillips, 415 F.3d at 1323 (“[A]lthough the specification often

describes very specific embodiments of the invention, we have repeatedly warned

against confining the claims to those embodiments.”).

In sum, the trial court did not construe or clarify the meaning of actual words in

claims 4-6, but improperly read into them a new limitation not required by the claim

language, specification, or prosecution history. Because claims 4-6 are unambiguous,

contain limitations other than the disputed claim term, and are directed to a method for

using an apparatus, not to its structure or assembly, it was improper for the trial court to

import limitations from the apparatus and system claims into the method claims.

Shoe Pavilion concedes that its New Design includes storage and display of

vertically stacked boxes of footwear, separated by vertically disposed dividers that may

2008-1085 9
be selectively positioned through use of a clip on a track. On remand, the trial court

should compare the properly construed ’622 patent claims to the New Design to

determine whether it infringes.

B. Damages

The district court misapplied the standard expressed by the Supreme Court in

Wine Railway, which held that under the predecessor statute to the notice provision of

35 U.S.C. § 287, a patentee who failed to mark his patented article with the appropriate

patent number could only recover damages for infringement occurring after actual

notice was provided the infringer. Wine Ry., 297 U.S. at 393-94. This court has applied

Wine Railway in the current context of Section 287. Tex. Digital Sys., Inc. v. Telegenix,

Inc., 308 F.3d 1193, 1219 (Fed. Cir. 2002). The purpose of the notice requirement is to

provide “protection against deception by unmarked patented articles.” Wine Ry., 297

U.S. at 398. The idea is to prevent innocent infringement. Motorola, Inc. v. United

States, 729 F.2d 765, 772 (Fed. Cir. 1984).

Wine Railway provides no support for the trial court’s summary judgment on

damages. The issue here is whether Shoe Pavilion is liable for damages to DSW for

infringement occurring subsequent to receipt of actual notice, and Wine Railway flatly

states that a patentee may indeed recover damages for infringement that continues

after actual notice is provided. Wine Ry., 297 U.S. at 393-94. Without a doubt, the law

offers an infringer no exception to liability for the time it takes to terminate infringing

activities, no matter how expeditious and reasonable its efforts. See In re Seagate

Tech., Inc., 497 F.3d 1360, 1368 (Fed. Cir. 2007) (en banc) (“Because patent

infringement is a strict liability offense, the nature of the offense is only relevant in

2008-1085 10
determining whether enhanced damages are warranted.”). The trial court therefore

erred in concluding that Shoe Pavilion’s reasonable steps and good faith efforts to bring

its infringing activity to a timely end equated to an immediate cessation. Thus, if the

patents at issue are valid, damages are owed on the design for the 6-7 months of

continued infringement while Shoe Pavilion phased out use of the displays in its stores.

Conclusion

Accordingly, the judgment of the United States District Court for the Central

District of California is vacated, and the case is remanded for further proceedings in

accordance with this opinion.

Costs

No costs.

VACATE AND REMAND

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