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Vehicle IP, LLC v. Werner Enterprises, Inc.

United States District Court, Third Circuit

September 9, 2013

VEHICLE IP, LLC, Plaintiff,
v.
WERNER ENTERPRISES, INC., Defendant.

Thomas L. Halkowski, Esquire, and Martina Tyreus Hufnal, Esquire of Fish & Richardson P.C., Wilmington, Delaware. Counsel for Plaintiff. Of Counsel: Michael J. Kane, Esquire, William R. Woodford, Esquire, Jason M. Zucchi, Esquire, Geoffrey D. Biegler, Esquire, and John C. Adkisson, Esquire of Fish & Richardson P.C.,

Christopher A. Ward, Esquire, and Shanti M. Katona, Esquire of Polsinelli PC, Wilmington, Delaware. Counsel for Defendant. Of Counsel: Russell S. Jones, Jr., Esquire, Keith J. Grady, Esquire, John M. Challis, Esquire, and Jay E. Heidrick, Esquire, of Polsinelli PC.

MEMORANDUM OPINION

SUE L. ROBINSON, District Judge.

I. INTRODUCTION

Plaintiff Vehicle IP, LLC ("VIP") filed this patent infringement suit against defendant Werner Enterprises, Inc. ("Werner") on June 9, 2010, alleging infringement of U.S. Patent No. 5, 694, 322 ("the 322 patent").[1] The 322 patent relates to a method and apparatus for determining taxes on vehicles traveling through taxing jurisdictions. Twelve dependent claims are at issue: claims 7, 29, 30, 34, 38, 51, 130, 135, 140, 141, 174, and 175 (the "asserted claims"). ( See D.I. 107, ex. 2 at 3)

Currently before the court are claim construction and various summary judgment motions. VIP has moved for partial summary judgment of infringement of claims 29 and 34 (D.I. 112), and Werner has moved for summary judgment of non-infringement of all asserted claims (D.I. 105). Regarding validity, Werner has moved for summary judgment of invalidity of all asserted claims (D.I. 108), while VIP has moved for partial summary judgment that certain systems and methods are not prior art (D.I. 114). A Markman hearing and oral argument were held on August 1, 2013. The court has jurisdiction over these matters pursuant to 28 U.S.C. § 1338.

II. BACKGROUND

A. The Parties

Plaintiff VIP is a Delaware limited liability corporation with its principal place of business in Memphis, Tennessee. (D.I. 78 at ¶ 1) It is wholly-owned by Vehicle Safety & Compliance, LLC, which is a transportation technology company. ( Id. )

Defendant Werner is a Nebraska corporation with its principal place of business in Omaha, Nebraska. ( Id. at ¶ 2) It is a trucking and logistics provider that operates over 7000 tractor-trailers nationwide. (D.I. 105 at 1; D.I. 113 at 17; D.I. 117, ex. 9 at 24:4-5)

B. Technology Overview

Many users of mobile positioning technology, particularly those operating commercial vehicles, must determine the tax owed to taxing regions through which their vehicles travel. (322 patent, col. 1:18-21) For example, the International Fuel Tax Agreement ("IFTA") was formed by several states to address the problem caused by differences in the amount of fuel tax charged by various states when drivers of long-haul trucks purchase fuel in one state and consume a significant portion in a different state. (D.I. 105 at 2; D.I. 113 at 3-4) Under IFTA, trucking companies are required to file quarterly reports that indicate the fuel taxes owed to or refunds due from each taxing jurisdiction. (D.I. 105 at 2; D.I. 113 at 4) The taxes are then allocated among the jurisdictions where the fuel was consumed. (D.I. 113 at 4) Almost every state and Canadian province has implemented IFTA. (D.I. 105 at 2; D.I. 113 at 4)

Previously, the determination of tax was done by hand, "based upon manual reporting and charting of vehicle positions, or recreation of the miles traveled in taxing regions after a trip." (322 patent, 1:21-24) Such manual reporting had the drawbacks of being time-consuming and often inaccurate. ( Id., col. 1:24-29) As a result, there arose a need in the mid-1990s for a system that allowed users of mobile positioning systems, particularly those operating commercial vehicles, to achieve an accurate determination of tax assessed by taxing regions. ( Id., col. 1:30-33)

C. The 322 Patent

The 322 patent is titled "Method and Apparatus for Determining Tax of a Vehicle" and lists three inventors: Kenneth R. Westerlage, William C. Kennedy, Ill. and William L. Haag. It was filed on May 9, 1995 and issued on December 2, 1997 to HighwayMaster Communications, Inc. ("HighwayMaster"). VIP later acquired the 322 patent by assignment. (D.I. 78 at ¶ 7)

The 322 patent has been through two reexaminations at the U.S. Patent and Trademark Office ("PTO"). The result of the first reexamination was a reexamination certificate issued Sept. 13, 2011 that confirmed the patentability of original claims 1-45 and added new claims 46-186. The second reexamination is currently pending. The PTO has issued final rejections of, inter alia, independent claims 1, 27, and 37, from which all of the asserted claims depend.[2] ( See D.I. 107, ex. 3) Four original and thirty new claims from the first reexamination - including all of the asserted claims - stand confirmed as patentable. VIP has appealed the PTO's final action on the second reexamination, and a hearing on appeal was held on May 2, 2013. The asserted claims were confirmed in the second reexamination and are currently presumed valid.

D. The Claimed Invention

The asserted claims of the 322 patent recite systems and methods that allow for the automatic determination of taxes that taxing regions may charge based on activity relating to the distance or roads traveled. The invention improves the prior art by reducing human error and increasing accuracy. ( Id., col. 1:38-42, 1:64-67, 2:13-16) Other advantages of certain embodiments include the determination of tax on the vehicle or at a remote location, and the consolidation of tax determinations for billing information. ( Id., col. 1:67-2:13) Some embodiments also require the determination of distance traveled in order to determine the tax. ( Id., col. 1:44-55)

As shown in figure 1 of the 322 patent, reproduced below, the inventive system includes a vehicle equipped with a "mobile unit" (22), a "communications link" (40), and a "dispatch" (30). ( Id., col. 2:64-66, fig. 1)

The mobile unit determines positioning of the vehicle by either a land-based or satellite-based positioning system, such as global positioning system ("GPS"), LORAN-C. or GLONASS technology, or an on-board positioning sensor, such as an inertial navigation system or a dead reckoning system.[3] ( Id., col. 3:38-3:62, 4: 18-29) The mobile unit determines the "position fixes" of the vehicle from the positioning information. ( Id., col. 4:29-32) Using the position fixes, the mobile unit may determine the distance traveled and tax assessed and then transmit the information to the dispatch via the communications link for additional processing. ( Id., col. 4:49-52) Alternatively, the mobile unit may transmit information to the dispatch, which in turn performs the determination of distance traveled and tax assessed remotely. ( Id., col. 4:40-45, 4:53-57, 6:54-63, 10:3-7, 10:15-17) Information may also be downloaded to the dispatch rather than over a communications link. ( Id., col. 7:32-37) Optionally, some or all of the functions performed by the dispatch may be distributed to one or more "hosts." ( Id., col. 6:37-42)

The specification of the 322 patent provides several methods for executing the invention. ( Id., col. 9:11-14) The steps in these methods may either be performed wholly on the vehicle by the mobile unit, or partially on the vehicle and partially at a remote location, such as at a dispatch, host, or taxing authority. ( Id., col. 10:3-17; see also id., col. 4:45-49, 4:53-57)

Relevant to the asserted claims, the specification teaches a method that uses "predetermined vehicle positions, " which "are defined as significant geographical points, such as cities, towns, boundaries between taxing regions, or intersections of major highways." ( Id., col. 9:33-43, 12:4-10, fig. 4) The mobile unit generates a number of position fixes and, optionally, interpolated vehicle positions along a route, and that information is overlaid on a grid showing taxing regions divided into same-size cells, wherein each cell is associated with the nearest predetermined vehicle position. ( Id., col. 12:10-13, 12:23-40, 13:38-47, figs. 4 & 5) Each position fix or interpolated vehicle position is then associated with the predetermined vehicle position for the cell in which it lies. ( Id., col. 13:47-49)

The specification also teaches that, by using "a database containing the predetermined vehicle positions, the corresponding distance in each taxing region between vehicle positions, and the tax associated with each taxing region between vehicle positions, " the distance traveled and associated tax can be determined between any two predetermined vehicle positions. ( Id., col. 13:54-65, 14:1-5, 14:41-44, fig. 6) The. distance traveled between two position fixes is then divided proportionally among the taxing regions that it spans so that the determination of tax can be made "for each taxing region in response to the distance traveled by [the] vehicle in that taxing region." ( Id., col. 16:16-18) With respect to the prospect of "automatically determining, " the specification only provides that "vehicle information and tax for [the] vehicle are automatically determined. Any human error in inputting the vehicle information or determining the tax is substantially reduced or eliminated." ( Id., col. 8:37-40)

Asserted claims 7 and 51 are system claims and depend from claim 1, which recites:

1. A system for determining a tax for a vehicle equipped with a mobile unit, comprising:
the mobile unit operable to determine a plurality of position fixes along a route traveled by the vehicle, the mobile unit further operable to transmit the position fixes;
a communications link coupled to the mobile unit, the communications link operable to receive the position fixes from the mobile unit; and
a dispatch remote from the vehicle and coupled to the communications link, the dispatch operable to receive the position fixes determined by the mobile unit using the communications link, the dispatch further operable to store geographic information comprising a plurality of predetermined vehicle positions, the dispatch further operable to associate the position fixes with the predetermined vehicle positions, the dispatch further operable to automatically determine a distance traveled by the vehicle within a region using the predetermined vehicle positions, the dispatch further operable to automatically determine a tax for the vehicle in response to the distance traveled by the vehicle within the region.

(Emphasis added)

The claimed methods generally teach four steps: (1) generating geographic information from "predetermined vehicle positions;" (2) determining a plurality of "position fixes;" (3) associating each position with a predetermined vehicle position; and (4) "automatically determining" the tax in each taxing region based on the predetermined vehicle positions. ( See id., figs. 4-6) Claim 27, from which asserted claims 29, 30, 34, 130, 135, 140, 141 depend, is exemplary of the asserted method claims:

27. A method for determining a tax for a vehicle traveling through a plurality of taxing regions, comprising:
generating geographic information identifying a plurality of predetermined vehicle positions; determining a plurality of position fixes;
associating each position fix with one of the predetermined vehicle positions; and
automatically determining the tax in each taxing region in response to the predetermined vehicle positions.

(Emphasis added) Asserted claims 38, 174, and 175 relate to a similar method but refer to two points in different taxing regions. They each depend from claim 37, which recites:

37. A method for determining a tax for a vehicle traveling through a plurality of taxing regions, comprising:
generating geographic information comprising a plurality of predetermined vehicle positions, each predetermined vehicle position associated with a corresponding taxing region;
determining a first position fix and a second position fix;
associating the first position fix with a first predetermined vehicle position and the second position fix with a second predetermined vehicle position; and
automatically determining the tax in each of the two taxing regions in response to the predetermined vehicle positions.

(Emphasis added)

E. The Accused System and Method

VIP alleges that Werner's systems and methods for automatically determining the fuel tax of a vehicle directly infringe the 322 patent. (D.I. 78 at ¶ 24) The accused systems and methods relate to the use of GPS units in Werner's trucks along with Werner's computer-based communication and processing system, which uses various software programs to determine the distance traveled by Werner's vehicles and the fuel taxes for ...


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