United States Court of Appeals
for the Federal Circuit
__________________________
DOW JONES & COMPANY, INC. AND
DOW JONES REUTERS BUSINESS INTERACTIVE,
LLC,
(DOING BUSINESS AS FACTIVA),
Plaintiffs-Appellees,
v.
ABLAISE LTD. AND GENERAL INVENTIONS
INSTITUTE A, INC.,
Defendants-Appellants.
__________________________
2009-1524
__________________________
Appeal from the United States District Court for the
District of Columbia in case nos. 06-CV-01014 and 06-CV-
01015, Judge James Robertson.
__________________________
Decided: May 28, 2010
__________________________
STEVEN M. LIEBERMAN, Rothwell, Figg, Ernst & Man-
beck, P.C., of Washington, DC, argued for plaintiffs-
appellees. With him on the brief were SHARON L. DAVIS,
BRIAN S. ROSENBLOOM and OLIVER L. EDWARDS.
JACOB M. HOLDREITH, Robins, Kaplan, Miller & Ci-
resi, L.L.P., of Minneapolis, Minnesota, argued for defen-
DOW JONES v. ABLAISE LTD 2
dants-appellants. With him on the brief were RONALD J.
SCHUTZ, CYRUS A. MORTON, TREVOR J. FOSTER and
PATRICK M. ARENZ. Of counsel was SETH A. NORTHROP.
__________________________
Before MICHEL, Chief Judge, RADER, Circuit Judge, and
FOLSOM * , District Judge
MICHEL, Chief Judge.
This appeal arises from a decision of the United
States District Court for the District of Columbia granting
summary judgment of invalidity against appellants
Ablaise Ltd. and General Inventions Institute A, Inc.’s
(collectively, “Ablaise”) U.S. Patent Nos. 6,961,737 (the
’737 patent) and 6,295,530 (the ’530 patent). Specifically,
the district court held that the asserted claims of the ’737
patent were invalid as obvious under 35 U.S.C. § 103 and
that the asserted claims of the ’530 patent were invalid
under 35 U.S.C. § 102 as anticipated by prior art. Addi-
tionally, Ablaise appeals the district court’s denial of its
motion to dismiss appellees’ Dow Jones & Co., Inc. and
Dow Jones Reuters Interactive, LLC’s (d/b/a Factiva)
(collectively, “Dow Jones”) claim against the ’530 patent
on the grounds that Ablaise’s proffer of a covenant not to
sue Dow Jones for infringement of that patent divested
the court of subject matter jurisdiction. For the reasons
set forth below, we reverse the district court’s denial of
Ablaise’s motion to dismiss Dow Jones’ invalidity claim
against the ’530 patent and affirm the district court’s
grant of summary judgment that the asserted claims of
the ’737 patent are invalid as obvious. Because the dis-
trict court lacked subject matter jurisdiction to hear Dow
Jones’ claim against the ’530 patent, this court cannot
* Hon. David Folsom, Chief Judge of the U.S. Dis-
trict Court for the Eastern District of Texas, sitting by
designation.
3 DOW JONES v. ABLAISE LTD
reach the question of whether the asserted claims of that
patent are invalid.
I.
A. The Patents-in-suit
The ’737 and ’530 patents-in-suit both claim a method
for generating computer web pages that are generated
and customized for the specific individual viewing them
based upon information encoded in the signal sent to the
location generating the pages.
In the early 1990s, the continuing development and
increasing availability of the Internet and the arrival of
more powerful personal computers (“PCs”) set the stage
for the advent of the World Wide Web (the “Web”). The
functioning of the Web depends upon a basic technology,
Hypertext Transfer Protocol (“HTTP”) and a computer
language, Hypertext Markup Language (“HTML”). HTTP
is an Internet protocol that enables a Web browser (a
program installed upon an individual’s PC) to request a
Web server (a Web site at which information is stored) to
send specific content in the form of a Web page to the
user’s Web browser. This content includes information, in
the form of HTML content, which specifies the formatting
of the layout and informational content of the web page
displayed on the PC user’s computer screen.
HTML is a language embodying sets of instructions
that control the format of a Web page displayed on the
browser application of a user’s PC. HTML employs par-
ticular instructions, known as “tags” to determine the
appearance of a Web page. A tag is designated by placing
the instruction within the symbols < >. For example, the
tag indicates that the text following the tag should be
in boldface type and the tag indicates the end of the
boldface text sequence. It is undisputed that by May 15,
1995 (the priority date claimed by the ’737 patent and the
DOW JONES v. ABLAISE LTD 4
’530 patent), HTML was well known to persons of ordi-
nary skill in the art of Web design.
In the nascent days of the Web, Web pages were typi-
cally constructed and stored as single, invariant hand-
coded pages. Thus, for a company making its catalogue
available on the Web, each product in the catalog required
that its own page be individually constructed and stored
separately. Needless to say, for a company that offered
hundreds or thousands of changing products, constructing
a page for each was extremely labor-intensive. Moreover,
each Web page so constructed and stored would appear
identical upon every user’s screen, regardless of the user’s
preferences or her PC’s capabilities.
A more flexible and less costly solution to this situa-
tion is to dynamically generate Web pages upon user
demand (colloquially referred to as being generated “on
the fly”). In this method, the HTML formatting informa-
tion for a given Web page would be generated automati-
cally only after the page was requested by the PC user. It
is undisputed by the parties that by May 15, 1995, the
ability of Web Site developers to construct Web pages on
the fly by using programs known as Common Gateway
Interfaces (“CGI programs” or “CGI scripts”) was well
known in the art. CGI programs are standard protocols
that define how the software of a Web server delegates
the generation of Web pages to the browser on a user’s
PC. Using a CGI program, a person of ordinary skill in
the art could create individualized, dynamically-
generated Web pages for each end user.
The ’737 and ’530 patents each claim methods for us-
ing a Web server to send individualized content and
formatting instructions in the form of Web pages that are
generated on the fly in response to user preference infor-
mation encoded in the user’s HTTP request for the spe-
cific Web page. At issue in this appeal are claims 1, 3, 4,
and 6 of the ’737 patent and claims 1-3 of the ’530 patent.
5 DOW JONES v. ABLAISE LTD
However, in the district court, both parties focused on the
first claim of each patent, agreeing that if that claim is
invalid, the remaining asserted claims are also invalid.
Claim 1 of the ‘737 patent discloses:
A method for serving pages of viewable data to
browsing devices connected to a network, wherein
a page of said viewable data comprises content
data defining text and/or graphics and formatting
data which specifies locations of said text and/or
graphics within a page, and said viewable data is
displayed at a browsing device such that locations
of said text and/or graphics depend on said for-
matting data, said method comprising:
identifying requests from browsing devices that
define a request for specified content data; storing
content data;
storing executable functions;
maintaining a user database comprising informa-
tion relating to user preferences;
and in response to identifying a request for speci-
fied content data and a user identifier;
(a) reading user preference information
from said user database in response to a
received user identifier;
DOW JONES v. ABLAISE LTD 6
(b) selecting stored content data in de-
pendence upon the content data specified
in a received request;
(c) receiving format identifiers identifying
the type of formatting required;
(d) selecting a set of stored functions in
dependence upon a received format identi-
fier and said read user information; and
(e) executing said set of functions to gen-
erate viewable data comprising said se-
lected content data and formatting data.
’737 patent col.19 l.65-col.20 l.16. Claim 4 teaches a
“serving device” that performs the method recited in claim
1. Claim 3 is identical to claim 1 except that it requires
that the “viewable data” be “HTML data” and that the
“formatting data” comprise “HTML tags.” Claim 6 adds
the same “serving device” limitation to claim 3 that claim
4 adds to claim 1.
Claim 1 of the ’530 patent discloses:
A method of serving output signals from a serving
device to a plurality of browsing devices connected
to a network, wherein said output signals repre-
sent commands executable by a browsing device
so as to display viewable data in accordance with
a specified page format; said method comprising
steps of:
identifying requests from browsing devices that
define a request for specified viewable data, said
7 DOW JONES v. ABLAISE LTD
request including formatting type identification
data;
maintaining a plurality of formatting types of
data defining respectively corresponding prede-
termined formats for portions of said viewable
data;
storing content data representing said viewable
data;
selecting a specific part of said content data repre-
senting specific viewable data;
selecting a specific one of said types of formatting
data in response to said formatting type identifi-
cation data;
processing said content data and said formatting
types of data so as to combine said selected part of
said content data with said specific one of said
types of formatting data, and for outputting proc-
essed viewable data with executable instructions;
and
supplying output signals to the requesting brows-
ing device derived from said output processed
data,
in which said output signals represent commands
executable by a browsing device so as to display
DOW JONES v. ABLAISE LTD 8
said specific viewable data in accordance with a
first specified page format when a first type of
formatting data is selected and in a second speci-
fied page format when a second type of formatting
data is selected.
’530 patent col.19 l.55-col.20 l.19. Claim 2 requires that
the “content data” include “graphics data.” Claim 3
requires that a “serving device” perform the method
described in claim 1.
The patents differ from one another in two relevant
respects. First, the method claimed by the ’737 patent is
capable of more flexible formatting than that claimed by
the ’530 patent. The ’737 patent discloses a method of
generating Web page formatting that coincides with a
user’s individual preferences, whereas the ’530 patent
limits a user’s formatting options to certain prescribed
templates which can be chosen by the user.
Second, only the ’737 patent discloses a server that
stores the user’s preferences in a database to be matched
against subsequent requests by that user. Thus, once a
user expresses a preference for a given content to appear
in a particular location and manner on the Web page, that
preference will be stored in the database. Following a
subsequent request by that user, the content will again be
displayed in the same location and manner. The ’530
patent, in contrast, discloses a method that is capable of
accommodating only a user’s current request that infor-
mation be displayed according to a selected template,
however that information is not stored in a database for
future retrieval, and the user must reselect his preferred
content template each time he requests information from
the server.
9 DOW JONES v. ABLAISE LTD
B. The Prior Art
1. Fishwrap
Fishwrap was an online newspaper developed at the
Massachusetts Institute of Technology that used CGI
script to dynamically generate HTML-formatted Web
pages in response to its reader’s preferences for specific
categories of content. In its fully developed form, Fish-
wrap contained a “self-organization feature” which re-
corded a user’s reading habits in a database. When the
user next visited the Fishwrap site, the stored informa-
tion was fed into an algorithm, the output of which was
used to dynamically generate the format of the Web page
to reflect the user’s implied preferences. Thus, if a user
repeatedly viewed articles about sports first, or more
frequently, return visits to the Fishwrap site would result
in sports stories being displayed higher up on the viewed
Web page.
2. Bobo
The Bobo patent, U.S. Patent No. 5,675,507 (“Bobo”)
has a priority date of April 28, 1995. Bobo claims a sys-
tem wherein users may access faxes by receiving HTML
pages on the Web. Specifically, Bobo’s claim 1 teaches:
A network message storage and delivery system,
comprising:
means for receiving an incoming call and for de-
tecting an address signal associated with said in-
coming call, said address signal associated with a
user of said message storage and delivery system;
DOW JONES v. ABLAISE LTD 10
means for receiving a message accompanied with
said address signal, said message being in a first
file format;
means for converting said message from said first
file format to a second file format;
means for storing said message in said second file
format in a storage area;
means for receiving a request from said user for
said message and for retrieving said message from
said storage area; and
means for transmitting a least a portion of said
message in said second file format to said user;
wherein said portion of said message is transmit-
ted to said user over the network, said second file
format is a mixed media page layout language and
comprises a standard generalized mark-up lan-
guage.
Bobo col.20 l.64-col.21 l.18. The system allows the user to
view faxes as text only, as text accompanied by a full-size
image of the first page of the fax, or as text accompanied
by a smaller thumbnail image of the first page of the fax.
The user can also elect to view images of all of the pages
of the fax in either full-size or thumbnail form. The user’s
preferred method of viewing the faxes is stored in a data-
base to be retrieved for future inquiries.
11 DOW JONES v. ABLAISE LTD
3. HTGrep
The launch of the HTGrep program (“HTGrep”) was
announced by its developer. Oscar Nierstrasz (“Nier-
strasz”) to public user groups in May 1994. Nierstrasz
posted information about HTGrep, including the address
of his public domain website where the source code for
HTGrep could be downloaded. HTGrep is a program that
performs searches of remote files employing user-selected
keywords and returns results in an HTML-formatted Web
page. When a user requests a search, the program allows
the user to choose whether the search results will be
displayed in paragraph form or in a numbered or bullet-
pointed list.
C. Procedural History
In 2006, Ablaise accused Dow Jones of infringing its
’737 and ’530 patents and simultaneously offered a licens-
ing agreement. Dow Jones spurned Ablaise’s offer of a
license and filed suit in the U.S. District Court for the
District of Columbia, seeking declaratory judgment that
both patents were invalid and not infringed. Ablaise
counterclaimed for infringement of both patents.
The district court held a Markman hearing on June 6,
2007 and subsequently issued its claim construction order
on July 11, 2007. Subsequent to the Markman hearing,
Ablaise offered Dow Jones a covenant not to sue on the
’530 patent if Dow Jones would dismiss its claim of inva-
lidity. Dow Jones demanded that Ablaise include News
Corporation, Dow Jones’ parent company, in the covenant.
Ablaise balked at expanding the covenant to include News
Corporation (which had acquired Dow Jones subsequent
to date on which the suit was filed) and refused to drop its
invalidity claim.
On October 15, 2008, the district court denied without
prejudice Ablaise’s motion to dismiss the invalidity claim
with respect to the ’530 patent on the grounds that its
DOW JONES v. ABLAISE LTD 12
offer of a covenant not to sue Dow Jones for infringement
of that patent divested the court of subject matter juris-
diction. Dow Jones subsequently filed a motion for sum-
mary judgment of invalidity against the asserted claims of
both the ’737 and ’530 patents on the grounds of obvious-
ness under 35 U.S.C. § 103 and anticipation by the prior
art under 35 U.S.C. § 102(a). On July 15, 2009, the
district court granted Dow Jones’ summary judgment
motion, holding that the asserted claims of the ’737 patent
were obvious in light of Bobo and the general knowledge
in the field and that the asserted claims of the ’530 patent
were anticipated by HTGrep. This appeal followed.
II.
A. Standard of Review
We review a district court’s grant of summary judg-
ment of invalidity on grounds of anticipation or obvious-
ness de novo. Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306,
1318 (Fed. Cir. 2008). Summary judgment is appropriate
when there is no genuine issue as to any material fact and
the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). Thus, summary judgment may
be granted when no “reasonable jury could return a
verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding
whether summary judgment was appropriate, we view the
evidence in a light most favorable to the opposing party
and resolve doubts in its favor. Ethicon Endo-Surgery,
Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1315 (Fed. Cir.
1998). The district court’s claim construction is likewise a
matter of law and is reviewed without deference. Nazomi
Commc’ns, Inc. v. Arm Holdings, PLC, 403 F.3d 1364,
1371 (Fed. Cir. 2005). However, in reviewing a district
court’s claim construction, this court takes into account
the views of the trial judge, as well as the record of the
13 DOW JONES v. ABLAISE LTD
trial, which helped that judge to understand the terms of
the claim. Id. Though we review those views and that
record “de novo,” “common sense dictates that the trial
judge’s view will carry weight.” Id. (quoting Cybor Corp.
v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998)
(Plager, J., concurring)).
B. Analysis
1. Subject Matter Jurisdiction and the ’530 Patent
As a threshold matter, this court must decide whether
Ablaise’s offer of a covenant not to sue Dow Jones for
infringement of the ’530 patent was sufficient to divest
the district court of subject matter jurisdiction over Dow
Jones’ suit for declaratory judgment of invalidity. Spe-
cifically, the proffered covenant stated that:
Ablaise, on behalf of itself and any successors-in-
interest to the ’530 patent, will release and un-
conditionally covenant not to sue Dow Jones &
Company, Inc., or any of its subsidiaries or divi-
sions, including but not limited to Dow Jones
Reuters Business Interactive, LLC d/b/a Factiva
(“Dow Jones”), for infringement of the '530 patent
as of the date of this agreement based on Dow
Jones’ manufacture, importation, use, sale and/or
offer for sale of currently existing products or use
of methods. This covenant does not include Dow
Jones' parent company, News Corporation, or any
of News Corporation's subsidiaries, divisions or
other affiliates which are not expressly included
in the covenant.
J.A. at 88 n.1.
In response to an assertion by Dow Jones that the
covenant did not cover past products or existing licenses,
Ablaise clarified that “Ablaise incorporates herein that
DOW JONES v. ABLAISE LTD 14
Ablaise’s covenant not to sue extends to Dow Jones’ past
products or use and includes Dow Jones’ licensees’ use of
any Dow Jones’ website or product.” Id. However, Dow
Jones demanded that Ablaise include Dow Jones’ parent
corporation, News Corporation, in the covenant. Ablaise
refused to expand its covenant to include News Corpora-
tion (which had acquired Dow Jones subsequent to the
filing of its suit) and Dow Jones consequently refused to
dismiss its claim of invalidity against the ’530 patent.
Subject matter jurisdiction in a declaratory judgment
suit depends upon the existence of “a substantial contro-
versy, between the parties having adverse legal interests,
of sufficient immediacy and reality to warrant the issu-
ance of a declaratory judgment," and the plaintiff bears
the burden of proving the existence of such a controversy
throughout the litigation. MedImmune, Inc. v. Genentech,
Inc., 549 U.S. 118, 127 (2007) (quoting Aetna Life Ins. Co.
v. Haworth, 300 U.S. 227, 240-41 (1937)); see also Preiser
v. Newkirk, 422 U.S. 395, 401 (1975) (the actual contro-
versy “must be extant at all stages of review, not merely
at the time the complaint is filed”). According to the
Supreme Court, “[T]he question in each case is whether
the facts alleged, under all the circumstances, show that
there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and
reality to warrant the issuance of a declaratory judg-
ment.” MedImmune, 549 U.S. at 127 (quoting Maryland
Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273
(1941)).
In its order denying Ablaise’s motion to dismiss for
lack of subject matter jurisdiction, the district court
reviewed this court’s precedential case law. The district
court noted that we have held, in a line of cases beginning
with Super Sack Manufacturing Corp. v. Chase Packaging
Corp., 57 F.3d 1054, 1060 (Fed. Cir. 1995), that a cove-
nant not to sue for patent infringement divests the trial
15 DOW JONES v. ABLAISE LTD
court of subject matter jurisdiction over claims that the
patent is invalid, because the covenant eliminates any
case or controversy between the parties. See Intellectual
Prop. Dev., Inc. v. TCI Cablevision of Calif., Inc., 248 F.3d
1333, 1342 (Fed. Cir. 2001) (statement of non-liability
divested the district court of Article III jurisdiction);
Amana Refrigeration, Inc. v. Quadlux, Inc., 172 F.3d 852,
855 (Fed. Cir. 1999) (“[A] covenant not to sue for any
infringing acts involving products ‘made, sold, or used’ on
or before the filing date is sufficient to divest a trial court
of jurisdiction over a declaratory judgment action.”).
Furthermore, the district court recognized the excep-
tion to Super Sack that this court carved out in Fort
James Corp. v. Solo Cup Co., 412 F.3d 1340 (Fed Cir.
2005). In Fort James, the district court dismissed the
alleged infringer’s invalidity claim against the patent-in-
suit when the patent holder submitted a covenant not to
sue. 412 F.3d at 1344-45. However, the covenant not to
sue was not offered by the patentee until after the jury
had determined that the patent was not infringed. Id.
We reversed the dismissal, holding that:
In Super Sack and its progeny, the patentee's
covenant not to sue was filed prior to considera-
tion or resolution of the underlying infringement
claim. In such circumstances, the promise not to
sue obviated any reasonable apprehension that
the declaratory judgment plaintiff might have of
being held liable for its acts of infringement.…
Here, however, the Post-Verdict Covenant had no
effect on Fort James's claim for infringement, be-
cause that controversy had already been resolved
by the jury's verdict. The question then becomes
whether the court retained jurisdiction to hear
Solo Cup's declaratory judgment counterclaim af-
ter the jury determined that Solo Cup's products
do not infringe Fort James's patents.
DOW JONES v. ABLAISE LTD 16
Id. at 1348 (internal citations omitted).
We affirmed the jurisprudence engendered by Super
Sack in Benitec Australia, Ltd. v. Nucleonics, Inc., 495
F.3d 1340 (Fed. Cir. 2007). In Benitec, we held that a
pretrial tender of a covenant not to sue divested the
district court of subject matter jurisdiction because,
unlike Fort James, the covenant was tendered “before …
the considerable effort connected [with a trial] had taken
place. 495 F.3d at 1347. More importantly, however, in
Fort James, the jury’s verdict of non-infringement had
removed any reasonably apprehensible justiciable contro-
versy between the parties. Fort James, 412 F.3d at 1348. 1
More recently, this court held that “whether a cove-
nant not to sue will divest the trial court of jurisdiction
depends on what is covered by the covenant.” Revolution
Eyewear, Inc. v. Aspex Eyewear, Inc., 556 F.3d 1294, 1297
(Fed. Cir. 2009). In Revolution Eyewear, the patentee
1 In his dissent, Judge Dyk stated that, in his view,
there was a different test for determining whether a case
or controversy exists when the allegation of infringement
is withdrawn during the course of the litigation. Benitec,
495 F.3d at 1350. According to Judge Dyk, if a patentee
files suit alleging infringement and the infringement
claim is subsequently mooted, a counterclaim for invalid-
ity should not be dismissed unless the patentee demon-
strates that there is no possibility of a future controversy
with respect to invalidity. Id. (citing Cardinal Chem. Co.
v. Morton Int’l, Inc., 508 U.S. 83, 98 (1993)). Judge Dyk
noted that Benitec did not offer a formal covenant not to
sue before the district court, rather, it stated in its motion
to dismiss that it “could only bring new claims if [the
accused infringer] Nucleonics is ultimately successful in
obtaining FDA approval for its infringing products or
otherwise engages in infringing activities not otherwise
permitted under the § 271(e) exemption.” Benitec, 495
F.3d at 1351. However, Judge Dyk noted, Benitec offered
no covenant with respect to future human or animal
products or animal research. Id. at 1352.
17 DOW JONES v. ABLAISE LTD
offered a covenant not to sue that this court found did not
bar future infringement actions if the accused infringer
again offered for sale the allegedly infringing articles. 2
556 F.3d at 1300. In its opinion, this court applied the
MedImmune test, as set forth in SanDisk Corp. v.
STMicroelectronics, Inc., 480 F.3d 1372 (Fed. Cir. 2007),
holding that:
[W]here a patentee asserts rights under a patent
based on certain identified ongoing or planned ac-
tivity of another party, and where the party con-
tends that it has the right to engage in the
accused activity without a license, an Article III
case or controversy will arise and the party need
not risk a suit for infringement by engaging in the
identified activity before seeking a declaration of
its legal rights.
Revolution Eyewear, 556 F.3d at 1297.
In the case at bar, the district court stated that:
If Benitec’s rule were applied formalistically here,
where the parties have not submitted their sum-
mary judgment briefs (or had not, when I denied
2 The covenant not to sue in question in that case
stated:
Revolution and counter-defendant [ ] hereby un-
conditionally covenant not to sue Aspex for patent
infringement under the ′913 patent based upon
any activities and/or products made, used, or sold
on or before the dismissal of this action (03-5965
case).
Revolution Eyewear, 556 F.3d at 1296. The covenant did
not preclude future infringement actions should Aspex re-
commence sales of the accused infringing device after the
dismissal of the action. The covenant not to sue in the
case at bar is not so limited.
DOW JONES v. ABLAISE LTD 18
the Ablaise motion to dismiss), and where a trial
date has not been set, the result would have to be
the dismissal of Dow Jones’ declaratory judgment
claims as to the ’530 patent.
Dow Jones & Co., Inc. v. Ablaise Ltd., 583 F. Supp. 2d 41,
44 (D.D.C. 2008). However, the district court noted that
he regarded our Super Sack-Benitec rule to be inapplica-
ble to this case, for what he believed to be “sound pruden-
tial reasons” and for “reasons of the efficient utilization of
the litigation resources of both bench and bar.” Id. at 268.
Likening the situation to one in which a federal trial court
may assert supplemental jurisdiction under 28 U.S.C. §
1367(a), the district court noted that the relationship
between the ’767 and ’530 patents was so close that the
validity or invalidity of one may be said to form part of
the same “case or controversy” as the other. Furthermore,
the district court noted that Ablaise has asserted the ’530
patent in at least nine other actions, and that resolving
the validity of the ’530 patent would “help move those
cases forward.” Finally, the district court quoted Hart
and Wechsler in support of his denial of Ablaise’s motion:
There is an important public interest in protecting
the legal system against manipulation by parties,
especially those prone to involvement in repeat
litigation, who might contrive to moot cases that
otherwise would be likely to produce unfavorable
precedents.
J.A. at 269 (citing H.M. Hart and H. Wechsler, THE
FEDERAL COURTS AND THE FEDERAL SYSTEM 204 (5th ed.
2003)).
The district court’s argument concerning the expendi-
ture of precious and admittedly overstretched judicial
resources is certainly well-taken; however, its denial of
Ablaise’s motion to dismiss is without support in the law
and contrary to this court’s jurisprudence established by
19 DOW JONES v. ABLAISE LTD
Super Sack and continuing, post-MedImmune, through
Revolution Eyewear. In the case at bar, Ablaise’s cove-
nant not to sue avowed that Ablaise would not sue Dow
Jones for any acts of infringement of its ’530 patent. The
covenant therefore extinguished any current or future
case or controversy between the parties, and divested the
district court of subject matter jurisdiction. Subject
matter jurisdiction is a threshold requirement for a
court’s power to exercise jurisdiction over a case, and no
amount of “prudential reasons” or perceived increases in
efficiency, however sound, can empower a federal court to
hear a case where there is no extant case or controversy.
Furthermore, the district court judge’s analogizing to
supplemental jurisdiction as a rationale for retaining
jurisdiction in this case was inapposite. Pursuant to 28
U.S.C. § 1367(a), federal courts may exercise supplemen-
tal jurisdiction “over all other claims that are so related to
claims in the action within such original jurisdiction that
they form part of the same case or controversy under
Article III of the United States Constitution.” In re
Ullico Inc. Litig., 605 F. Supp. 2d 210, 222-23 (D.D.C.
2009). However, each of the claims over which a district
court exercises its supplemental jurisdiction must have
standing on its own. According to the U.S. Supreme
Court: “a plaintiff must demonstrate standing for each
claim he seeks to press” and “for each form of relief” that
is sought. DaimlerChrysler Corp. v. Cuno, 547 U.S. 332,
352 (2006). Consequently, the district court erred in
denying Ablaise’s motion to dismiss Dow Jones’ claim
seeking invalidity of the ’530 patent.
Dow Jones argues that the covenant not to sue does
not extinguish the parties’ controversy regarding the ’530
patent because it does not include Dow Jones’ “affiliates”,
viz., Dow Jones’ parent company, News Corporation, as
well as “any of News Corporation’s subsidiaries, divisions,
or other affiliates which are not expressly included in the
DOW JONES v. ABLAISE LTD 20
covenant." Joint App’x at 88 n.1. Dow Jones contends
that because Ablaise has, in the past, repeatedly sought
damages from, and injunctive relief against, Dow Jones’
[unnamed] affiliates, it cannot subsequently deny that the
controversy likewise extends to those affiliates. Conse-
quently, according to Dow Jones, Ablaise’s covenant not to
sue (which explicitly excludes News Corporation) is
insufficient to extinguish the case or controversy with
respect to Dow Jones. Dow Jones further contends that
because Ablaise sought discovery from Dow Jones’ affili-
ates (including News Corporation) those affiliates are
therefore part of the controversy, and Ablaise’s covenant
not to sue is insufficient to extinguish the case. Dow
Jones also notes that because Ablaise, in its motion to
dismiss, sought to bind News Corporation to any finding
regarding the validity of the ’530 patent, it and its affili-
ates are consequently de facto parties to the case and,
again, the covenant not to sue is insufficient to extinguish
the controversy.
Dow Jones fails to provide a precise definition of what
it means by “affiliates”, but with respect at least to News
Corporation, its attempt to insinuate the latter as a party
into this case fails. News Corporation, of which Dow
Jones is a subsidiary, is a legally distinct entity from Dow
Jones, and it is well-settled law that, absent a piercing of
the corporate veil (which neither party alleges), a parent
company is not liable for the acts of its subsidiary. See,
e.g., Penick v. Frank E. Basil, Inc. of Del., 579 F. Supp.
160, 165 (D.D.C. 1984).
Because News Corporation is insulated from liability
should Dow Jones be found liable for infringement, Ab-
laise’s infringement suit against Dow Jones cannot be
said to constitute a case or controversy involving News
Corporation or its divisions and subsidiaries which are
legally distinct entities from Dow Jones. Whether Ablaise
at present (or in the future) seeks to assert the ’530
21 DOW JONES v. ABLAISE LTD
patent against News Corporation is consequently irrele-
vant to whether a controversy exists between Ablaise and
Dow Jones in the case at bar. Consequently, the covenant
not to sue proffered by Ablaise extinguishes the contro-
versy between Ablaise and Dow Jones and divests the
district court of its Article III jurisdiction. We therefore
reverse the order of the district court’s denial of Ablaise’s
motion to dismiss Dow Jones’ claim seeking invalidity of
the ’530 patent.
2. Invalidity of the ’737 Patent 3
The district court granted Dow Jones’ motion for
summary judgment of invalidity of the ’737 patent on the
grounds that the asserted claims were obvious under 35
U.S.C § 103. A claim is obvious if: “the differences be-
tween the subject matter sought to be patented and the
prior art are such that the subject matter as a whole
would have been obvious at the time the invention was
made to a person having ordinary skill in the art to which
said subject matter pertains.” 35 U.S.C. § 103(a). This
analysis requires an assessment of the “interrelated
3 In a recent submission to this court, Dow Jones
presented a copy of a final Office Action, dated December
23, 2009, by the U.S. Patent and Trademark (“PTO”)
Office in connection with an ex parte reexamination of the
’737 patent. The Office Action constitutes a final rejection
by the Examiner of claims 1-6 of the ’737 patent (includ-
ing the claims asserted in this appeal) as invalid under 35
U.S.C. § 102(a) as anticipated by the Bobo prior art refer-
ence as well as another prior art reference not raised in
this appeal (Varela). An ultimately final rejection of the
claims by the PTO would fatally undermine the legal
presumption of the validity of the ’737 patent and would
be sufficient by itself to moot this entire portion of the
appeal and warrant affirmation of the district court’s
finding of invalidity of the ’737 patent (although on
grounds of anticipation rather than obviousness). How-
ever, the ex parte reexamination has not yet been com-
pletely resolved.
DOW JONES v. ABLAISE LTD 22
teachings of [the prior art]; the effects of demands known
to the design community or present in the marketplace;
and the background knowledge possessed by a person
having ordinary skill in the art.” KSR Int'l. Co. v. Tele-
flex, Inc., 550 U.S. 398, 401 (2007).
The district court noted that Ablaise conceded that an
artisan of ordinary skill would have been aware that
HTML tags affect content location on a Web page. Nor
did Ablaise dispute that “[b]y May 15, 1995, HTML,
including the functions of the tags used therein, was well
known to persons of skill in the art.” Moreover, Ablaise
did not dispute Dow Jones’ expert witness, Dr. Bestavros’
(“Bestavros”) claim that “[m]any of the HTML tags in use
prior to May 15, 1995 control[led] the location on the web
page at which a certain piece of data (such as text or an
image) [was] to be displayed.” Indeed, Ablaise does not
dispute Dow Jones’ contention that Fishwrap used HTML
tags to affect the location of content on the page.
The district court found that there was undisputed
evidence that a modification incorporating location-
changing HTML tags into the Bobo prior art reference
would have been straightforward and obvious to an arti-
san of ordinary skill. As an example, the district court
pointed to the undisputed fact that the Bobo patent
employs the HTML tag, which is used to display
an image on the Web page. Ablaise conceded that such a
tag, accompanied by an alignment tag, would meet the
“formatting data” limitation of claim 1. Therefore, a
person of ordinary skill in the art would simply have to
add an alignment tag (already well known in HTML) to
the existing tag recited in the Bobo patent to
meet all of the limitations of claim 1 of the ’737 patent.
Because “[t]he combination of familiar elements according
to known methods is likely to be obvious when it does no
more than yield predictable results”, the district court
found that claim 1 was invalid as obvious under 35 U.S.C.
23 DOW JONES v. ABLAISE LTD
§ 103. KSR, 550 U.S. at 416. Further, the district court
credited Bestavros’ testimony that, with respect to an
artisan’s motivation to combine the elements, “[b]etween
1990 and May 15, 1995, with the pervasiveness and wide
acceptance of the web, there was a tremendous amount of
technological development seeking to increase the usabil-
ity of web pages and to bring the established features of
various computer programs to the web platform.” More-
over, the court noted that both parties acknowledged that
one of the “established feature” of non-web programs was
the capacity to personalize formatting. Taken together,
the court found that these facts presented clear and
convincing evidence of both design need and market
pressure to add location-changing HTML tags to the Bobo
patent.
The district court discounted as weak Ablaise’s sub-
mitted evidence of secondary indicia of non-obviousness,
viz., a long-felt but unmet need for the patented inven-
tion, skepticism about the possibility of the invention, and
the commercial success of the invention. Furthermore, it
noted that the revenues that Ablaise had generated from
the ’737 patent had been largely achieved though the use
of coercive licensing agreements that had more to do with
avoiding the costs of litigation than with the novelty of
the patent.
On appeal, Ablaise argues that the district court came
to its conclusion without explaining why an artisan of
ordinary skill would have been motivated to look at the
teachings of a fax converter to change the location of
content, especially when the converter lacked that utility.
Ablaise also notes that the district court lacked expert
testimony describing how the Bobo fax converter could be
reprogrammed to allow for content to be moved around
the screen. Further, according to Ablaise, the district
court made its obviousness conclusion without addressing
Ablaise’s expert’s opinions that “[t]he format identifier
DOW JONES v. ABLAISE LTD 24
that is used to locate selected content on the web page is
not present nor taught [sic] in Bobo … and is not an
obvious feature, function or even extension to this patent.”
Ablaise argues that the Bobo reference, in combina-
tion with an HTML align image tag, does not disclose the
limitations related to the use of a format identifier and
does not provide the same content in different formats for
different users. Ablaise contends that Bobo is “focused
exclusively on generating different type of content or
different amounts of content, not changing the location of
content based on a format identifier.” Ablaise maintains
that the user options for viewing the Web page that Bobo
presents are all related to varying the amount or type of
information that will be supplied with the listing of the
fax message and that that is different from changing the
location of the information within the Web page.
Ablaise also claims that the district court erred be-
cause it improperly ignored several of the limitations
missing in Bobo when performing its obviousness analy-
sis. Specifically, according to Ablaise, the district court
held that the only limitation in dispute between Bobo and
the prior art was the “formatting data” limitation, when
several other limitations were also in dispute. Rather,
the asserted claims require a system that uses a format
identifier to dynamically generate the HTML tags that
specify the location of text or graphics. Ablaise points to
the testimony of its expert, Mr. Geoff Mulligan (“Mulli-
gan”) who stated that the Bobo patent does not disclose
the use of format identifiers, which it claims are a sepa-
rate and distinct claim element from formatting data.
Mulligan opined that limitations of receiving format
identifiers, selecting function based on those format
identifiers, and executing those functions to generate
formatting data were all missing from the Bobo patent.
Ablaise’s arguments miss the mark entirely. The dis-
trict court correctly recognized that the Bobo patent was
25 DOW JONES v. ABLAISE LTD
designed to permit a user to vary the content of the Web
page in question according to her preferences, but also
recognized that it would have been obvious to an artisan
of ordinary skill to use HTML language that was well-
understood at the time to position the content in different
locations on the screen. Consequently, we see no fault in
the district court’s reasoning. Furthermore, Ablaise
elides the fact that, as the district court recognized, it
conceded that an tag accompanied by an align-
ment tag would meet the “formatting data” limitation of
claim 1.
Ablaise also argues that the district court improperly
relied on hindsight to combine an HTML image align tag
from the ’737 patent with Bobo. Specifically Ablaise
faults the district court’s finding that people of ordinary
skill would have been motivated by design and market
pressures to bring non-Web-based (i.e., local computer)
functionality to the Web and thus create the invention.
Ablaise complains that the district court ignored Mulli-
gan’s opinion that the invention disclosed by the ’737
patent was not obvious, but was rather a significant
advance over the prior art and that: “[t]he format identi-
fier that is used to locate selected content on the web page
is not present nor taught in Bobo or CGI and is not an
obvious feature, function or even extension to this patent.”
According to Ablaise, Mulligan provided no support
whatsoever for the district court's conclusion that there
was market pressure to bring personalized formatting to
the web.
However, Ablaise does not dispute that there was
both “design need and market pressure to add location-
changing HTML tags to the Bobo patent.” Nor does
Ablaise dispute that personalized formatting was well-
known on non-Web products such as database systems or
that during the relevant period there was an effort in the
DOW JONES v. ABLAISE LTD 26
art to bring established features of non-Web programs to
the Web.
Indeed, Ablaise implicitly concedes that the only dif-
ferences between Bobo and the invention disclosed in the
’737 patent is the extension of the user-selected display
options presented by Bobo to personalize the location of
text or graphics on the page. Such changes in location
were well-known in both non-Web applications and in the
HTML language extant at the time and known to artisans
of ordinary skill. Given all of these factors, the district
court did not err in determining that the invention dis-
closed in the ’737 patent would have been obvious to an
artisan of ordinary skill in light of Bobo and the known
art.
Finally, the district court correctly characterized Ab-
laise’s reliance on the secondary consideration of market
skepticism as “weak.” The three pieces of evidence prof-
fered by Ablaise do not directly address whether there
was actual skepticism concerning the invention of dy-
namically-generated personalized Web pages. The refer-
ence entitled “The Krakatoa Chronicle – An interactive,
personalized newspaper on the Web” (the “Kamba refer-
ence”), published shortly after the filing date of the ’737
patent, recognizes that Fishwrap and other online publi-
cations were using HTML to vary the format of Web
pages for individual users, and that such personalization
had strong appeal to users. The Kamba reference sug-
gests that the embedding of Java-based applications in
HTML language might provide a more powerful and
flexible system to provide continuous interaction between
user and server, but does not express any direct skepti-
cism concerning the feasibility of dynamically-generated,
HTML-based Web pages.
Ablaise also points to an e-mail exchange between an
unidentified student and Dr. Pascal Chesnais (the de-
signer of Fishwrap) in which the student complains about
27 DOW JONES v. ABLAISE LTD
the self-organizing features of Fishwrap. Dr Chesnais
responded that the student “better get used to self-
organizing paper. It will be around for quite a while.”
Ablaise’s argument that this evidence shows that Dr.
Chesnais did not reach the same insight as the inventors
of the ’737 patent is not persuasive. A much more plausi-
ble interpretation of Dr. Chesnais’ response is that dy-
namically-generated content on Web pages had come to
stay due to the popularity and future promise of such
content.
The third reference allegedly showing skepticism by
skilled artisans is the M.I.T. undergraduate thesis writ-
ten by Douglas Koen entitled “Automated Restructuring
of an Electronic Newspaper” (the “Koen reference”), which
relates Koen’s work on Fishwrap. The Koen reference
states:
Another user suggested that the problem of paper
structuring could be satisfactorily solved by pro-
viding the user with a mechanism for moving top-
ics and sections around manually, and in this
way, he would be able to select the paper struc-
ture that appealed to him. While this solution
might be equitable for technically inclined users,
the object of this research is to increase automa-
tion and responsiveness to the reader's wishes
without the need for explicit intervention on his
part.
J.A. at 352-53. This quotation, cherry-picked by Ablaise
from a section reviewing focus group responses to Fish-
wrap, does not express skepticism that dynamically-
generated Web pages were unfeasible or nonobvious. It
merely states that Fishwrap’s purpose was to automati-
cally change the layout of the Web content without any
intervention or expression of preference on the reader’s
part.
DOW JONES v. ABLAISE LTD 28
In summary, Ablaise’s assertion that there were sec-
ondary indicia of skepticism that rendered the invention
of the asserted claims nonobvious is supported only by
evidence that is irrelevant and not supportive of its claim.
Consequently, we affirm the district court’s grant of
summary judgment of invalidity of the ’737 patent on
grounds of obviousness under the Bobo prior art in view of
general knowledge in the field.
III.
We reverse the district court’s denial of Ablaise’s mo-
tion to dismiss Dow Jones’ invalidity claim against the
’530 patent and affirm the district court’s grant of sum-
mary judgment that the asserted claims of the ’737 patent
are invalid as obvious. Because the district court lacked
subject matter jurisdiction to hear Dow Jones’ claim
against the ’530 patent, we need not reach the question of
whether the asserted claims of that patent are invalid as
anticipated by the prior art.
REVERSED-IN-PART AND AFFIRMED-IN-PART