                      NOTE: This disposition is nonprecedential.


 United States Court of Appeals for the Federal Circuit

                                   2008-1206, -1207

                    CONTECH STORMWATER SOLUTIONS, INC.

                                                       Plaintiff-Appellant,

                                           v.

                           BAYSAVER TECHNOLOGIES, INC.
                           and ACCUBID EXCAVATION, INC.,

                                                       Defendants-Cross Appellants.


       Stephen J. Butler, Thompson Hine LLP, of Cincinnati, Ohio, argued for plaintiff-
appellant. With him on the brief was Jeffrey C. Metzcar, of Dayton, Ohio.

       Joseph J. Zito, ZITO tlp, of Washington, DC, argued for defendants-cross
appellants.

Appealed from: United States District Court for the District of Maryland

Judge Catherine C. Blake
                        NOTE: This disposition is nonprecedential.


 United States Court of Appeals for the Federal Circuit
                                     2008-1206, -1207


                     CONTECH STORMWATER SOLUTIONS, INC.,

                                                         Plaintiff-Appellant,

                                             v.

           BAYSAVER TECHNOLOGIES, INC. and ACCUBID EXCAVATION, INC.,

                                                         Defendants-Cross Appellants.


                             __________________________

                              DECIDED: February 13, 2009
                             __________________________



Before MICHEL, Chief Judge, MOORE, Circuit Judge, and HUFF, District Judge. *

HUFF, District Judge.

       Plaintiff-Appellant Contech Stormwater Solutions, Inc. (AContech@) sued Defendants-

Cross Appellants Baysaver Technologies, Inc. and Accubid Excavation, Inc. (collectively,

ABaysaver@) in the United States District Court for the District of Maryland for infringement

of U.S. Patent No. 5,707,527 (the =527 patent). 1

       Contech appeals the district court=s grant of Baysaver=s motion for summary

judgment of noninfringement. Baysaver cross-appeals the district court=s grant of summary



       *
             Honorable Marilyn L. Huff, District Judge, United States District Court for the
Southern District of California, sitting by designation.
      1
             Contech also asserted U.S. Patent No. 6,027,639 in the action below.
judgment in favor of Contech on business tort and invalidity counterclaims, as well as the

denial of Rule 11 sanctions. For the reasons stated below, we affirm.

                                     I. BACKGROUND

       The case below involved the alleged infringement of patents that grant Contech

rights to specific storm water filtration methods and apparatuses. The =527 patent was

granted to Contech=s predecessor in 1998. The =527 patent teaches a method of storm

water filtration that utilizes replaceable water-permeable baskets and a Asiphon effect.@

Asserted independent claim 1 reads as follows:

       1. A method of treating storm water runoff, the method comprising:
             (a) allowing the runoff water to infiltrate through a water permeable
             outer surrounding wall of a basket containing a bed comprising
             material able to remove pollutants from the storm water;
             (b) treating the runoff water by removing pollutants from the storm
             water by passing the storm water through the bed contained within the
             basket to an interior drainage space;
             (c) establishing continuous fluid communication between the interior
             drainage space of the basket and a treated water outlet conduit;
             (d) siphoning treated water from the drainage space under gravity into
             the treated water outlet conduit; and
             (e) controlling a flow rate of the storm water through the basket to a
             lower rate than an initial infiltration capacity of the bed, the controlled
             lower rate allowing sufficient contact between the storm water runoff
             and the bed to remove a substantial proportion of at least one
             pollutant from the storm water runoff.

       Also asserted in the claim below, but not at issue on appeal, was U.S. Patent No.

6,027,639 (the =639 patent) that issued from a continuation-in-part of the application for the

=527 patent.

       Contech claimed that Baysaver=s marketing, manufacturing, and selling of the

BayFilter storm water filtration device literally infringed the =527 patent. Baysaver=s answer

denied infringement and raised an invalidity defense to the =527 patent. Baysaver also filed

business tort counterclaims arising from correspondence sent by Contech to Baysaver=s



2008-1206,-1207                               2
customers at the outset of the litigation.       In February 2007, Baysaver moved for a

Temporary Restraining Order (TRO) against Contech, citing the letter that Contech had

sent to Baysaver=s customers. In March 2007, the district court denied the TRO motion. In

June 2007, Baysaver filed a motion for Rule 11 sanctions, claiming that Contech failed to

conduct a reasonable pre-filing inquiry of the BayFilter device.

         In September 2008, the district court filed a memorandum opinion, construing the

disputed claim terms and granting Baysaver=s motion for summary judgment of

noninfringement. Contech Stormwater Solutions, Inc. v. Baysaver Techs., Inc., No. CCB-

07-358 (D. Md. Sept. 25, 2007). The district court also denied Baysaver=s motion for Rule

11 sanctions. In January 2008, the district court filed a memorandum opinion granting

summary judgment for Contech on Baysaver=s business tort and patent invalidity

counterclaims, and ordered the case closed. Contech Stormwater Solutions, Inc. v.

Baysaver Techs., Inc., 534 F. Supp. 2d 616 (D. Md. 2008). Both parties timely filed their

appeals. We have jurisdiction over these appeals pursuant to 28 U.S.C. ' 1295(a)(1).

                                     II. DISCUSSION

                        A. Summary Judgment of Noninfringement

         Contech appeals the district court=s grant of summary judgment of

noninfringement. A proper infringement analysis involves two steps: Afirst, the claims

are construed, and second, the properly construed claims are applied to the accused

devices.@ Elbex Video, Ltd. v. Sensormatic Elecs. Corp., 508 F.3d 1366, 1370 (Fed. Cir.

2007).



                                   1. Claim Construction




2008-1206,-1207                              3
       Claim construction is a question of law reviewed de novo. Cybor Corp. v. FAS

Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc). To construe a claim term, a

court must determine the meaning of any disputed words from the perspective of one of

ordinary skill in the pertinent art at the time of filing. Phillips v. AWH Corp., 415 F.3d 1303,

1313 (Fed. Cir. 2005) (en banc). In determining the meaning of a disputed claim limitation,

courts look primarily to the intrinsic evidence of record, examining the claim language, the

specification, and the prosecution history. Id. at 1312-17. AIt is a bedrock principle of

patent law that the claims of a patent define the invention to which the patentee is entitled

the rights to exclude.@ Id. at 1312. Absent evidence to the contrary, words of a claim Aare

generally given their ordinary and customary meaning@ as understood by a person of

ordinary skill in the art. Id. at 1312-13.

       However, claims Ado not stand alone@ and are read within the context of the

specification, which is the single best guide to the meaning of disputed terms. Id. at 1315.

The specification may expressly or impliedly define a claim term contrary to their ordinary

meaning. See id. at 1321. AIn examining the specification for proper context, however,@ it

is improper to Aat any time import limitations from the specification into the claims.@

CollegeNet, Inc. v. ApplyYourself, Inc., 418 F.3d 1225, 1231 (Fed. Cir. 2005) (citing

Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1326 (Fed. Cir. 2002)).

       We first address the construction of the claim term Athrough a water-permeable outer

surrounding wall of a basket@ found in step (a) of claim 1 of the =527 patent. =527 patent

col.10 ll.1-2. The district court construed this phrase to require a basket Aenclosed by

vertical, porous walls that allow storm water to infiltrate the filter material following a




2008-1206,-1207                                4
horizontal flow.@ Contech argues on appeal that this construction improperly imports

limitations from the specification.

       Turning first to the intrinsic evidence, the use of the term Aouter surrounding wall@ in

the =527 patent is consistent with a meaning that contemplates a substantially vertical

structure. The specification refers to an Aouter surrounding wall@ when describing the

vertical surface of the cylindrical preferred embodiment. =527 patent col.6 ll.33-37, 43-47.

By contrast, the specification describes the horizontal top and bottom of the cylindrical

preferred embodiment as the Atop@ and Abase@ of the Abasket.@ Id. This distinction is further

evidenced by the specification describing the horizontal Atop@ and Abase@ as Aengaging@ the

Aupper end@ and Alower end@ of the Aouter surrounding wall.@ Id. A person of ordinary skill

in the art reading the specification would recognize that a substantially vertical

surfaceBsuch as a wall that is slightly angled or slightly curvedBis an Aouter surrounding

wall@ and not a horizontal Atop@ or Abase.@ Therefore, the language in the specification

illustrates that the term Aouter surrounding wall@ refers to a substantially vertical surface. 2

       A[T]he distinction between [properly] using the specification to interpret the meaning

of a claim and [improperly] importing limitations from the specification into the claim can be

a difficult one to apply in practice.@ Phillips, 415 F.3d at 1323. As the district court correctly

pointed out, this construction does not limit the claim to the preferred embodiment, as the

claimed invention covers baskets of any shape with vertical walls, e.g., cylindrical or cubic,

and is not required to be made with steel wire mesh. Furthermore, the Avertical@




       2
               Contech=s argument that the terms Atop@ and Abase@ could refer to parts of
the outer surrounding wall fails, as no modifier such as Aside@ is used to describe the
vertical Aouter surrounding wall.@


2008-1206,-1207                                 5
requirement is not limited to the strictly vertical walls disclosed in the specification, but

includes substantially vertical walls, such as walls that are slightly angled or slightly curved.

       Contech argues that the district court ignored dictionary definitions that more broadly

define Awall@ as a Amaterial layer enclosing space,@ which would cover any orientation of a

surface, including vertical and horizontal. However, Contech Ais not entitled to a claim

construction divorced from the context of the [intrinsic evidence].@ Nystrom v. TREX Co.,

424 F.3d 1136, 1144-45 (Fed. Cir. 2005). Lacking evidence within the specification to

support this broad construction, Contech=s argument fails.

       Even if Aouter surrounding wall@ is interpreted as Contech suggests, then the

cylindrical preferred embodiment in the =527 patent would not satisfy another limitation of

the claimed step. Namely, claim 1 also requires that the Aouter surrounding wall@ is Awater-

permeable.@ The district court construed the term Awater-permeable@ as Aporous, and

therefore capable of permitting storm water infiltration.@ Contech argues that the correct

construction only requires that a portion of the Aouter surrounding wall@ is Awater-

permeable.@ This argument is not supported by the evidence in the record. Specifically,

the =639 patent, also asserted in the action below, illustrates the difference between Awater-

permeable@ and merely having discrete portions of a surface that allow water to infiltrate.

The disclosure in the =639 patent is relevant for claim construction of the earlier =527 patent

claim because the =639 patent was issued to the same inventors from a continuation-in-part

of the =527 patent. See, e.g., Mantech Envtl. Corp. v. Hudson Envtl. Servs., Inc., 152 F.3d

1368, 1375 & n.11 (Fed. Cir. 1998).

       The >639 patent discloses a preferred embodiment that has Aa base . . . of water-

impermeable material . . . [that] includes a series of spaced slots . . . for permitting




2008-1206,-1207                                6
sediment particles to flow through.@ =639 patent col.6 ll.19-29. The =639 patent also claims

Aa cylindrical external housing comprising means for admitting air into the housing

proximate a lower end of the housing.@ Id. at col.8 ll.65-67. This indicates that a person of

ordinary skill in the art would recognize a distinction between a water-permeable surface

and a water-impermeable surface with discrete openings. Therefore, the entire Awater-

permeable outer surrounding wall@ claimed in the =527 patent should be construed as being

porous, such as to allow infiltration of storm water. In light of this construction, Contech=s

assertion that the Aouter surrounding wall@ of the preferred embodiment disclosed in the

=527 patent includes both the Atop@ and Abase@ water-impermeable horizontal surfaces

would improperly exclude the preferred embodiment from claim 1. See Vitrionics Corp. v.

Conceptronic, Inc., 90 F.3d 1576, 1583 (Fed. Cir. 1996) (noting that Aa construction which

would result in excluding the preferred, and only, embodiment Ais rarely, if ever, correct@).

       Therefore, Contech=s preferred construction is untenable, and the district court=s

construction was proper. 3 It is not necessary to review the disputed constructions of

additional claim terms because the lack of the Avertical@ limitation in the allegedly infringing

BayFilter device is sufficient to find noninfringement. See Southwall Techs., Inc. v. Cardinal

IG Co., 54 F.3d 1570, 1575 (Fed. Cir. 1995).

                                       2. Infringement


       3
               Contech further argues that the district court=s inclusion of Ahorizontal flow@
in its construction ignores the limitation in dependent claim 2 which requires Awherein
the allowing of step (a) comprises allowing the storm water to flow horizontally through
the bed, the bed disposed in a space between the water permeable outer wall of the
basket and an inner water-permeable wall of the basket.@ See Phillips, 415 F.3d at
1314-15 (A[T]he presence of a dependent claim that adds a particular limitation gives
rise to a presumption that the limitation in question is not present in the independent
claim.@). Baysaver counters that claim 2 does not add the Ahorizontal flow@ limitation,
but rather adds the Ainner water-permeable wall@ limitation not present in claim 1.


2008-1206,-1207                                7
       A district court=s grant of summary judgment is reviewed de novo. Ethicon Endo-

Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1315 (Fed. Cir. 1998). Summary

judgment is appropriate if no genuine issue of material fact exists and the movant is entitled

to judgment as a matter of law. Id. In order for a product to literally infringe a patent,

Aevery limitation set forth in a claim must be found in [the] accused product, exactly.@

Southwall, 54 F.3d at 1575.

       Therefore, in order to infringe step (a) of claim 1 of the =527 patent, a storm water

filtration method must allow Arunoff water to infiltrate through a water-permeable outer

surrounding basket.@ Correctly construed, this requires that an infringing device allows

storm water runoff to infiltrate through a porous, substantially vertical surrounding wall. The

BayFilter has a water-impermeable vertical surrounding wall. Because the BayFilter does

not have a porous, substantially vertical surrounding wall, it could not infringe step (a) of

claim 1 of the =527 patent.

       As a matter of law, the BayFilter device does not infringe at least one element of

claim the =527 patent. Therefore, the district court=s grant of summary judgment of

noninfringement in favor of Baysaver was proper.

                   B. Counterclaims, Invalidity, and Rule 11 Sanctions

       Baysaver appeals the district court’s grant of Contech=s summary judgment motion

with regard to business tort counterclaims arising from an allegedly threatening letter sent

by Contech to Baysaver=s customers. A grant of summary judgment is reviewed de novo,

Areapplying the same standard as the trial court.@ Lacavera v. Dudas, 441 F.3d 1380, 1382

(Fed. Cir. 2006). A[T]he plain language of Rule 56(c) mandates the entry of summary



Notably, the direction of flow does not affect the infringement analysis.

2008-1206,-1207                               8
judgment, after adequate time for discovery and upon motion, against a party who fails to

make a showing sufficient to establish the existence of an element essential to that party=s

case, and on which that party will bear the burden of proof at trial.@ Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986). To prevail on the counterclaims, Baysaver had to (1)

show that Athe underlying infringement claim is objectively baseless@, and (2) Athat it was

asserted in bad faith.@ Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d

1367, 1375-77 (Fed. Cir. 2004). To satisfy the Aobjectively baseless@ element, Baysaver

had to prove by clear and convincing evidence that Ano reasonable litigant could realistically

expect success on the merits.@ Id. at 1376-77 (quoting Prof=l Real Estate Investors, Inc. v.

Columbia Pictures Indus., Inc., 508 U.S. 49, 60 (1993)); see also Golan v. Pingel Enter.,

Inc., 310 F.3d 1360, 1371 (Fed. Cir. 2002).

       The district court correctly held that Baysaver failed to establish the Aobjectively

baseless@ element. The only evidence offered by Baysaver concerned the subjective Abad

faith@ element, and therefore, was insufficient as a matter of law to prove the Aobjectively

baseless@ element. See Dominant Semiconductors Sdn. Bhd. v. Osram GmbH, 524 F.3d

1254, 1264 (Fed. Cir. 2008) (ADominant=s focus on the contention that there was no

indication that [patentee=s counsel] had performed a sufficient analysis, though arguably

relevant on the issue of subjective intent, had nothing to do with the issue of whether

[counsel=s] contentions were objectively baseless.@(emphasis in original)).

       Baysaver further contends that additional evidence was improperly excluded by the

district court that would have established causation and damages. Under the applicable

Fourth Circuit precedent, we find no abuse of discretion. See Microstrategy Inc. v. Bus.

Objects, S.A., 429 F.3d 1344, 1349 (Fed. Cir. 2005); see also S. States Rack & Fixture,




2008-1206,-1207                               9
Inc. v. Sherwin-Williams Co., 318 F.3d 592, 597 (4th Cir. 2003). Therefore, summary

judgment on the business tort counterclaims in favor of Contech was proper. 4

       Baysaver also appeals the district court=s denial of Rule 11 sanctions. A district

court=s Rule 11 ruling is reviewed for abuse of discretion. Cooter & Gell v. Hartmarx Corp.,

496 U.S. 384, 405 (1990); View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 984

(Fed. Cir. 2000). Baysaver claims that Contech failed to conduct a reasonable pre-filing

inquiry of the alleged infringing device. However, the record includes Contech=s response

that it conducted a Adetailed analysis of the claimed structure and function of the BayFilter.@

Therefore, the district court did not abuse its discretion by denying the motion.

                                     III. CONCLUSION

       The district court correctly granted summary judgment of noninfringement of the =527

patent and the other issues detailed above. Therefore, we affirm.




       4
              Baysaver further argues that the district court=s alternative basis for
granting summary judgment in favor of Contech on the grounds that Baysaver failed to
demonstrate causation and damages was in error. This alternative basis was proper, as
Baysaver failed to Aset out specific facts,@ as required by Fed. R. Civ. P. 56(e).




2008-1206,-1207                               10
