author: WILLIAM PRYOR, Circuit Judge:

text:
    FOURTH ESTATE PUBLIC BENEFIT CORPORATION, Plaintiff-Appellant, v. WALL-STREET.COM, LLC, Jerrold D. Burben, Defendants-Appellees.
    No. 16-13726
    United States Court of Appeals, Eleventh Circuit.
    (May 18, 2017)
    Joel B. Rothman, Jerold I. Schneider, Schneider Rothman Intellectual Property Law Group, PLLC, BOCA RATON, FL, for Plaintiff-Appellant.
    David Andrew Geller, The Geller Law Group, PA, HOLLYWOOD, FL, for Defendants-Appellees.
    Before WILLIAM PRYOR, MARTIN, and BOGGS, Circuit Judges. ■

       Honorable Danny J. Boggs, United States Circuit Judge for the Sixth Circuit, sitting by designation.

   WILLIAM PRYOR, Circuit Judge:

“Registration” of a copyright is a precondition to filing suit for copyright infringement. 17 U.S.C. § 411(a). This appeal requires us to decide an issue that has divided the circuits: whether - registration occurs when an owner files an application to register the copyright or when the Register of Copyrights registers the copyright. Compare Cosmetic Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612, 619 (9th Cir. 2010) (concluding that registration occurs when the owner files an application), with La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1197 (10th Cir. 2005) (concluding that registration occurs when the Register approves an application), abrogated in part by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 157, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010). Fourth Estate Public Benefit Corporation filed a suit for infringement against Wall-Street.com and Jerrold Burden. The complaint alleged that Fourth Estate had filed an application to register its allegedly infringed copyrights, but that the Copyright Office had not registered its claims. The district court dismissed the action because Fourth Estate failed to plead compliance with the registration requirement, 17 U.S.C. § 411(a). Because registration occurs when the Register of Copyrights “register[s] the claim,” id. § 410(a), we affirm.

I.BACKGROUND

Fourth Estate Public Benefit Corporation is a news organization that produces online journalism. It licenses articles to websites but retains the copyright to the articles. Wall-Street.com, a news website, obtained licenses to a number of articles produced by Fourth Estate. The license agreement required Wall-Street to remove all of the content produced by Fourth Estate from its website before Wall-Street cancelled its account. But when Wall-Street cancelled its account, it continued to display the articles produced by Fourth Estate.

Fourth Estate filed a complaint for copyright infringement, 17 U.S.C. § 501, against Wall-Street and its owner, Jerrold Burden. The complaint alleged that Fourth Estate had filed “applications to register [the] articles with the Register of Copyrights.” But the complaint did not allege that the Register of Copyrights had yet acted on the application.

Wall-Street and Burden moved to dismiss the complaint. They argued that the Copyright Act, id. § 411(a), permits a suit for copyright infringement only after the Register of Copyrights approves or denies an application to register a copyright. The district court agreed and dismissed the complaint without prejudice.

II.STANDARD OF REVIEW

“We review de novo the district court’s grant of a motion to dismiss under [Federal Rule of Civil Procedure] 12(b)(6) for failure to state a claim, accepting the factual allegations in the complaint as true and construing them in the light most favorable to the plaintiff.” Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1308 (11th Cir. 2006) (emphasis added).

III.DISCUSSION

As a preliminary matter, the issue presented does not involve jurisdiction. Until 2010, our precedent held that registration was a jurisdictional prerequisite to filing an action for infringement. M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486, 1488 (11th Cir. 1990). But in Reed Elsevier, Inc. v. Muchnick, the Supreme Court held that the “registration requirement is a precondition to filing a claim that does not restrict a federal court’s subject-matter jurisdiction.” 559 U.S. 154, 157, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010).

Although registration is voluntary under the Copyright Act, Congress created several incentives for a copyright owner to register his copyright, Kernel Records Oy v. Mosley, 694 F.3d 1294, 1301 (11th Cir. 2012), one of which is the right to enforce a copyright in an infringement action:

[N]o civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.

17 U.S.C. § 411(a); see also id. § 408(f) (explaining that the Register “shall permit preregistration” for a limited class of works that have “a history of infringement prior to authorized commercial distribution”); 37 C.F.R. § 202.16(b)(1) (defining the limited class of works capable of preregistration to include material such as movies and sound recordings not at issue in this appeal). The question we must decide is when registration occurs.

The question when registration occurs has split the circuits. The Tenth Circuit follows the “registration” approach to section 411(a), which requires a copyright owner to plead that the Register of Copyrights has acted on the application—either by approving or denying it—before a copyright owner can file an infringement action. La Resolana, 416 F.3d at 1197-1203. In contrast, the Ninth and Fifth Circuits follow the “application” approach, which requires a copyright owner to plead that he has filed “the deposit, application, and fee required for registration,” 17 U.S.C. § 411(a), before filing a suit for infringement. Cosmetic Ideas, 606 F.3d at 618-19; Positive Black Talk Inc. v. Cash Money Records Inc., 394 F.3d 357, 365 (5th Cir. 2004), abrogated in part by Muchnick, 559 U.S. 154, 130 S.Ct. 1237, 176 L.Ed.2d 18; Apple Barrel Prods., Inc. v. Beard, 730 F.2d 384, 386-87 (5th Cir. 1984); see also Melville B. Nimmer, et al., 2 Nimmer on Copyright § 7.16[B][3][b][v] (2016). The Eighth Circuit, in dicta, also endorsed the application approach. Action Tapes, Inc. v. Mattson, 462 F.3d 1010, 1013 (8th Cir. 2006). The caselaw of the Seventh Circuit contains conflicting dicta on whether it follows the application approach, Chi. Bd. of Educ. v. Substance, Inc., 354 F.3d 624, 631 (7th Cir. 2003) (“[A]n application for registration must be filed before the copyright can be sued upon.”), or the registration approach, Gaiman v. McFarlane, 360 F.3d 644, 655 (7th Cir. 2004) (“[A]n application to register must be filed, and either granted or refused, before suit can be brought.”), or whether it has even decided this question, Brooks-Ngwenya v. Indianapolis Pub. Sch., 564 F.3d 804, 806 (7th Cir. 2009). And both the First and Second Circuits have acknowledged the circuit split but have declined to decide whether to adopt the application approach or the registration approach. Alicea v. Machete Music, 744 F.3d 773, 779 (1st Cir. 2014); Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120, 125 (2d Cir. 2014).

The parties dispute whether our precedents bind us to follow either approach. Wall-Street argues that our Circuit has adopted the registration approach and cites M.G.B. Homes, where we stated that a “lawsuit for copyright infringement cannot be filed unless plaintiff has a registered copyright.” M.G.B. Homes, 903 F.2d at 1488 n.4 (quoting Haan Crafts Corp. v. Craft Masters, Inc., 683 F.Supp. 1234, 1242 (N.D. Ind. 1988)); see also Kernel Records, 694 F.3d at 1302 n.8 (stating that “[w]e adopted the ‘registration’ approach in M.G.B. Homes.”). Fourth Estate counters that we are not bound by M.G.B. Homes because Muchnick eroded the rationale for following the registration approach.

We need not decide this dispute about our precedents because the text of the Copyright Act makes clear that the registration approach that we endorsed in M.G.B. Homes and Kernel Records is correct. “[Registration of [a] copyright ... has [not] been, made in accordance with ... title [17],”17 U.S.C. § 411(a), until “the Register ... register^] the claim,” id. § 410(a). Filing an application does not amount to registration.

The Copyright Act defines registration as a process that requires action by both the copyright owner and the Copyright Office. A copyright owner must first deposit a copy of the material with the Copyright Office, file an application, and pay a fee. Id. § 408(a). The Register of Copyrights then examines the material and determines whether “the material deposited constitutes copyrightable subject matter.” Id. § 410(a). If the material is copyrightable “the Register shall register the claim and issue to the applicant a certificate of registration.” Id. If “the material deposited does not constitute copyrightable subject matter ..., the Register shall refuse registration and shall notify the applicant in writing of the reasons for such refusal.” Id. § 410(b).

The use of the phrase “after examination” in section 410(a) makes explicit that an application alone is insufficient for registration:

When, after examination, the Register of Copyrights determines that, in accordance with the provisions of this title, the material deposited constitutes copyrightable subject matter and that the other legal and formal requirements of this title have been met, the Register shall register the claim and issue to the applicant a certificate of registration under the seal of the. Copyright Office.

Id. § 410(a) (emphasis added). That registration occurs only after examination of an application necessarily means that registration occurs “[l]ater in time than” or “subsequent to” the filing of the application for registration. After, Webster’s New International Dictionary 45 (2d ed. 1961).

Section 410(b) also establishes that registration can occur only after application and examination. That section states, “In any case in which the Register of Copyrights determines that ... the material deposited does not constitute copyrightable subject matter ... the Register shall refuse registration.” 17 U.S.C. § 410(b). And section 411(a) allows a copyright holder who filed an application for registration to file an infringement suit if “registration has been refused.” Id. § 411(a). If registration occurred as soon as an application was filed, then the Register of Copyrights would have no power to “refuse registration.” Id. § 410(b).

Fourth Estate argues that section 408(a) supports the application approach because it fails to mention the certificate of registration, but we disagree. Section 408(a) states, “[T]he owner of copyright ... may obtain registration of the. copyright claim by delivering to the Copyright Office the deposit specified by this section, together with the application and fee specified by sections 409 and 708.” Id. § 408(a). This section states only the conditions a copyright owner must satisfy to obtain registration. It does not speak to the timing of registration or the obligation of the Register of Copyrights to examine and approve or refuse an application.

Section 410(d) also supports the registration approach, notwithstanding the argument of Fourth Estate to the contrary. That section states that “[t]he effective date of a copyright registration is the day on which an application, deposit, and fee, which are later determined by the Register of Copyrights or by a court of competent jurisdiction to be acceptable for registration, have all been received in the Copyright Office.” § 410(d). To be sure, section 410(d) relates registration back to the date that the owner files an application, but section 410(d) also makes evident that registration occurs only after the Register of Copyrights deems an application “to be acceptable.” Id. Like other provisions of Title 17, section 410(d) establishes that registration occurs only after review and approval by the Register of Copyrights.

Fourth Estate argues that the three-year statute of limitations for infringement suits, id. § 507(b), supports the application approach, but we disagree. Considered together, the registration requirement and the three-year statute of limitations reflect a statutory plan to encourage registration. See La Resolana, 416 F.3d at 1199 (“Although Congress established a voluntary registration system, it created incentives for copyright owners to register their copyrights.”). True, an owner who files an application late in the statute of limitations period risks losing the right to enforce his copyright in an infringement action because of the time needed to review an application. But this potential loss encourages an owner to register his copyright soon after he obtains the copyright and before infringement occurs. And section 507(b) is not the only provision of the Copyright Act that favors prompt registration. See 17 U.S.C. § 410(c) (“[Registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.” (emphasis added)). That is, far from undermining the registration approach, the three-year statute of limitations further evidences that the Copyright Act encourages registration.

Fourth Estate devotes its remaining statutory arguments to legislative history and policy, but “[w]hen,” as here, “the words of a statute are unambiguous, then ... judicial inquiry is complete.” Villarreal v. R.J. Reynolds Tobacco Co., 839 F.3d 958, 969 (11th Cir. 2016) (en banc) (internal quotation marks omitted) (quoting Conn. Nat’l Bank v. Germain, 503 U.S. 249, 254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)). Indeed, “[e]ven if a statute’s legislative history evinces an intent contrary to its straightforward statutory command, we do not resort to legislative history to cloud a statutory text that is clear.” Id. (internal quotation marks omitted) (quoting Harry v. Marchant, 291 F.3d 767, 772 (11th Cir. 2002) (en banc)).

Finally, this appeal is not akin to the “unusual circumstance” presented by Pacific & Southern Co. v. Duncan, 744 F.2d 1490 (11th Cir. 1984), in which we “allowed injunctive relief to be sought prior to registration” where there was “infringement of a registered work, a continuing series of original works created with predictable regularity, and a substantial likelihood of future infringements.” Stuart Weitzman, LLC v. Microcomputer Res., Inc., 542 F.3d 859, 865 n.6 (11th Cir. 2008) (citing Pacific, 744 F.2d at 1499 & n.17). As explained, Fourth Estate has not alleged infringement of any registered work. And this appeal, unlike Pacific, does not involve the ongoing creation of original works, or potential future infringement of works not yet created.

IV. CONCLUSION

We AFFIRM the dismissal of the complaint filed by Fourth Estate.


source: Caselaw Access Project

author: ED CARNES, Chief Judge:

license: Public Domain

text:
    Clifford A. ZUCKER, not individually, but as Plan Administrator for BankUnited Financial Corporation, and as assignee of Humberto L. Lopez and Ramiro A. Ortiz, Plaintiff-Appellant, v. U.S. SPECIALTY INSURANCE COMPANY, Defendant-Appellee.
    No. 15-10987
    United States Court of Appeals, Eleventh Circuit.
    May 16, 2017

      Caroline W. Spangenberg, Alfred S. Lu-rey, Todd C. Meyers, Kilpatrick Townsend & Stockton, LLP, ATLANTA, GA, Corali Lopez-Castro, Kozyak Tropin & Throck-morton, PA, CORAL GABLES, FL, for Plaintiff-Appellant.
    Douglas M. Mangel, Joseph Anselm Bailey, III, Joshua P. Mayer, Shipman & Goodwin, LLP, WASHINGTON, DC, Mark K. Ostrowski, Shipman & Goodwin, LLP, HARTFORD, CT, Ira Scott Bergman, Lionel F. Rivera, Mound Cotton Wol-lan & Greengrass, FORT LAUDER-DALE, FL, for Defendant-Appellee.
    Before ED CARNES, Chief Judge, FAY and PARKER, Circuit Judges.

       Honorable Barrington D. Parker, Jr., United States Circuit Judge for the Second Circuit, sitting by designation.

   ED CARNES, Chief Judge:

For want of good corporate officers, BankUnited Financial Corporation engaged in risky lending practices before November 2008. For want of good lending practices, BankUnited became insolvent. For want of solvency, BankUnited’s transfers of money to its subsidiary were fraudulent.

Wanting their money back, BankUnit-ed’s creditors sued its officers for authorizing those transfers. Wanting protection from the resulting liability, the officers asked their insurer—U.S. Specialty—to indemnify them. Not wanting to do that, U.S. Specialty refused based in part on a policy exclusion that barred coverage for claims “arising out of’ conduct that occurred before November 2008. The question is whether the fraudulent transfers “arose out of’ the officers’ pre-November 2008 misconduct.

I. FACTS & PROCEDURAL HISTORY

BankUnited (the Parent Bank) was a holding company headquartered in Florida. Its wholly-owned subsidiary, BankUn-ited FSB (the Subsidiary Bank), was a federally-chartered savings bank. By November 2008 both of them were in serious financial trouble.

A. The Banks’ Fiscal Difficulties

The Treasury Department’s Office of Thrift Supervision (OTS) began investigating the Subsidiary Bank in January 2008. By August, news reports were circulating that the Subsidiary Bank had engaged in risky lending practices during the housing boom that preceded the 2008 recession. The Parent Bank reported in a regulatory filing that, unless the Subsidiary Bank raised $400 million, OTS would downgrade its capitalization rating. The Parent Bank also announced that it was contributing $80 million in fresh capital to the Subsidiary Bank. This left the Parent Bank itself with only $40 million dollars to service $125 million in debt, not a good situation for any financial institution to be in.

In September 2008 the Parent Bank’s investors filed a class action against several corporate officers of the Parent Bank and the Subsidiary Bank, alleging that those officers had violated federal securities laws by knowingly or recklessly making “false and misleading statements about [the Parent Bank].” The investor plaintiffs based their allegations on, among other things, the Parent Bank’s regulatory filings from 2006, which touted its “conservative underwriting standards that include evaluation of a borrower’s debt service ability” and internal underwriting process. They also pointed to a 2007 filing by the Parent Bank that boldly asserted: “We expect that our historically conservative credit standards and relatively low loan to values will keep our loss experience well below industry averages.” Even more boldly, the Parent Bank issued an April 2007 press release that included this statement by the company’s CEO, Alfred Camner: “[0]ur levels came in better than we projected last quarter. This is because of our conservative underwriting. We do not engage in subprime lending and, as a portfolio lender, we treat each loan as if it is our own.” And so on.

As it turned out (we are beyond mere allegations now), the Subsidiary Bank did engage in risky lending practices. Around the same time that the Parent Bank was being sued by its shareholders, the banks entered into agreements with OTS stipulating in September 2008 that they had “engaged in unsafe and unsound practices that ... resulted in [the Subsidiary Bank] being in an unsatisfactory condition.” This was “primarily due to the rising delinquencies and defaults in its payment option [Adjustable Rate Mortgage] loan portfolio.”

B. The Parent Bank’s Search for a New Insurer

By September 2008 St. Paul Mercury Insurance Company (Travelers) had declined to renew the Parent Bank’s directors and officers (D&O) insurance policy, which is not surprising given the banks’ fiscal difficulties. The Parent Bank began searching for a new insurer.

It found one in U.S. Specialty. At the time, U.S. Specialty was aware that “[b]ad loans were affecting [the banks’] financial performance,” and that they were in a “distressed financial condition.” It was also aware that OTS was threatening to downgrade the Subsidiary Bank’s capitalization rating unless the Parent Bank raised $400 million. All of which made issuing a D&O policy covering the Parent Bank’s officers a risky proposition.

Margaret Kingsley, an underwriter and U.S. Specialty’s designee under Rule 30(b)(6) of the Federal Rules of Civil Procedure, testified at her deposition that around the time the policy was issued, she thought it was unlikely that the Parent Bank would survive. She noted in the underwriting file that U.S. Specialty might be able to make an “opportunistic play” if it agreed to provide D&O coverage to the Parent Bank. Kingsley later testified that note in the file meant that insuring the Parent Bank was “an opportunity for [U.S. Specialty] to write a very restrictive policy and get some premium for it.” In considering whether to issue a D&O policy to the Parent Bank, U.S. Specialty also considered that regulators would be watching the banks closely, which would “keep[ ] them honest.”

U.S. Specialty offered the Parent Bank a choice between two policies: one with a Prior Acts Exclusion (barring coverage for losses attributable to conduct of the officers before November 10, 2008) and one without that exclusion. The policy with the exclusion would cost $350,000; the policy without it would cost $650,000. The policy without the Prior Acts Exclusion would provide coverage only after the Parent Bank’s other insurance policies had been exhausted.

The Parent Bank decided to purchase the policy with the Prior Acts Exclusion, but asked U.S. Specialty to increase the coverage limit from $10 million to $20 million. The purchased policy included in addition to the Prior Acts Exclusion a Prior Notice Exclusion, which excluded coverage as to any losses reported to any insurers under earlier insurance policies. With those two exclusions, the one-year policy cost the Parent Bank $700,000. And, at U.S. Specialty’s request, the Parent Bank purchased an extension of the discovery period on the pre-existing Traveler’s policy, increasing the amount of time it had to report claims to Traveler’s. The first day of coverage under the U.S. Specialty policy was November 10, 2008.

C. The Transfer of Two Tax Refunds to the Subsidiary Bank

While the Parent Bank and the Subsidiary Bank were struggling to come to terms with the 2008 financial crisis, the Parent Bank’s officers approved two transfers of money to the Subsidiary Bank that are the subject of this lawsuit. In January 2009 the Parent Bank received á tax refund check from the U.S. Treasury for approximately $20 million. It transferred all of that refund to the Subsidiary Bank. In March 2009 an officer of the Parent Bank directed that a second tax refund check from the Treasury for approximately $26 million that was supposed to be issued to the Parent Bank be wired directly to the Subsidiary Bank. Those $46 mil-' lion in transfers occurred after November 10, 2008 (the inception date for the U.S. Specialty policy).

D. The Bankruptcy Litigation

The Parent Bank’s and the Subsidiary Bank’s financial conditions did not improve. And in May 2009 OTS closed the Subsidiary Bank and appointed the FDIC as its receiver. One day later, the Parent Bank filed for bankruptcy under Chapter 11 of the Bankruptcy Code. And a few days after that, an official committee of unsecured creditors (the Committee) was appointed in the bankruptcy action and began investigating whether claims might exist against, among others, the Parent Bank’s corporate officers—the idea being that those claims could be pursued for the benefit of the bankruptcy estate.

The Committee filed a derivative standing motion, seeking “an order granting the Committee standing to investigate, assert and prosecute any and all claims that [the Parent Bank might have] against [its] current and former officers and directors....” The motion asserted that:

Based on [the Parent Bank’s] financial collapse, the issues raised in the [September 2008] Securities Litigation, and information obtained by its professionals, the Committee believes that Claims on behalf of [the Parent Bank’s bankruptcy estate] may exist against certain of [its] current and former officers and directors ... including without limitation Claims arising from breaches of duties owed by [those insiders] to [the Parent Bank] or [its] constituents, misrepresentations, failures to disclose and other wrongful acts....

The bankruptcy court granted the Committee’s derivative standing motion.

In November 2009, the Committee sent demand letters to three former Parent Bank executives—Alfred Camner, Ramiro Ortiz, and Humberto Lopez—stating that it believed the Parent Bank’s estate had claims against the three of them, “including without limitation claims arising from the breach of [their] fiduciary duties of care and loyalty ... and [their] failure to perform [their] duties ... in good faith” and from their violations of federal securities laws. U.S. Specialty was notified of those claims and issued a letter denying coverage based on the Prior Acts Exclusion, because the “Committee Demand Letters allege numerous Wrongful Acts occurring prior to November 10, 2008.”

In December 2011, the Committee filed an adversary proceeding against Camner and Lopez in the bankruptcy court. It later sought to amend the complaint by substituting Ortiz for Camner as a defendant as to one count. Meanwhile, in June 2012, the. bankruptcy court substituted Clifford Zucker, who had been appointed as the bankruptcy Plan Administrator, for the Committee as the plaintiff in the bankruptcy action. After the district court granted Zucker leave to do so, he filed an amended complaint against Camner, Lopez, and Ortiz.

The amended complaint had four counts. Count I sought to recover from Lopez and Camner for breaching their fiduciary duties by “failing] to implement and maintain effective risk management procedures and internal controls,” which caused the Subsidiary Bank to be placed into receivership and the Parent Bank to declare bankruptcy. Count II sought to recover from Lopez and Camner for breaching their fiduciary duties by providing inaccurate and incomplete information to the Parent Bank’s board of directors “concerning the lack of internal controls and unreasonably risky lending practices,” which Zucker alleged caused the board to authorize expenditures and the issuance of debt and artificially prolonged the existence of the company, causing more losses. Count III sought to recover from Camner alone for causing the Parent Bank’s board to approve the infusion of $80 million into the Subsidiary Bank without “investigating whether, or disclosing to [the Parent Bank’s] board that, among other things, the capital infusion would not forestall regulatory seizure of the [Subsidiary Bank].” And Count IV sought to recover from Ortiz and Lopez based on the contention that approving the two tax refund transfers to the Subsidiary Bank in 2009 was a breach of their fiduciary duties because the transfers violated Florida’s Uniform Fraudulent Transfers Act. The fraudulent transfer claims (Count IV) based on the 2009 tax refund transfers are the primary focus of this lawsuit.

In November 2012, Bankruptcy Plan Administrator Zucker sent a written settlement demand to Lopez and Oritz concerning the fraudulent transfer claims (Count IV). That demand was forwarded to U.S. Specialty, which again denied coverage.

Eventually, the fraudulent transfer claims settled for $15 million to be paid either by U.S. Specialty or by Lopez and Ortiz individually. The settlement agreement assigned Lopez’s and Ortiz’s rights under the U.S. Specialty policy to Zucker. The other claims were settled separately.

E. The Lawsuit against U.S. Specialty

After Zucker settled his fraudulent transfer claims against the banks’ corporate officers in the bankruptcy action, he filed this lawsuit in the district court against U.S. Specialty based on its denial of coverage as to those claims. In the complaint, he asserted claims for breach of contract, statutory bad faith, and common law bad faith. The district court bifurcated the proceedings so that it could decide whether denying coverage of the fraudulent transfer claims amounted to a breach of contract before considering whether U.S. Specialty acted in bad faith. The parties filed cross-motions for summary judgment, disagreeing primarily over whether the fraudulent transfer claims were covered by the U.S. Specialty policy.

The district court concluded that the Prior Acts Exclusion did bar coverage for the fraudulent transfer claims, and as a result, U.S. Specialty did not breach the insurance contract. On that basis it granted summary judgment in favor of U.S. Specialty. Because that decision also foreclosed Zucker’s bad faith claims, the district court entered a final judgment against Zucker. This is his appeal.

II. ANALYSIS

We review de novo the district court’s interpretation of the insurance policy and its grant of summary judgment in favor of U.S. Specialty. See EmbroidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am., 845 F.3d 1099, 1105 (11th Cir. 2017). In so doing, “we view all of the evidence in a light most favorable to the nonmoving party and draw all reasonable inferences in that party’s favor.” Procaps S.A. v. Patheon, Inc., 845 F.3d 1072, 1079 (11th Cir. 2016) (quotation marks omitted).

The parties agree that Florida law applies to this case. “Under Florida law, insurance contracts are construed according to their plain meaning.” Taurus Holdings, Inc. v. U.S. Fidelity & Guar. Co., 913 So.2d 528, 532 (Fla. 2005). “Ambiguities are construed against the insurer and in favor of coverage[,].... [but] to allow for such a construction the provision must actually be ambiguous.” M. While “insurance policies may be confusing to persons not trained or experienced in the form and language of insurance policies!,] • • • • that fact does not make such policies or language legally ambiguous.” Fla. Ins. Guar. Ass’n v. Sechler, 478 So.2d 365, 367 (Fla. 5th DCA 1985). “[C]ourts may not rewrite contracts, add meaning that is not present, or otherwise reach results contrary to the intentions of the parties.” Taurus Holdings, Inc., 913 So.2d at 532 (quotation marks omitted).

Zucker contends that the district court erred when it concluded that the fraudulent transfer claims in the bankruptcy complaint fell within the Prior Acts Exclusion in the U.S. Specialty policy. We disagree with him and agree with the district court.

A. Zucker’s Claims Fall within the Pri- or Acts Exclusion

Zucker’s claims against Lopez and Ortiz alleged that approving the 2009 tax refund transfers was a breach of their fiduciary duties because those transfers were fraudulent ones under Florida law. He alleged that they were fraudulent transfers because they “were made to the [Subsidiary Bank], an insider, for antecedent debt, ... at a time when [the Parent Bank] was insolvent.... [and] the persons in control of [the Subsidiary Bank] had reasonable cause to believe [the Parent Bank] was insolvent.”

As the district court explained: “This allegation parrots the language of Florida’s Uniform Fraudulent Transfer Act....” See Fla. Stat. § 726.106(2). To sustain a fraudulent transfer claim under that statutory provision, a creditor must demonstrate that, among other things, the debtor was insolvent at the time of the transfer. Id.

The U.S. Specialty policy’s Prior Acts Exclusion reads:

In consideration of the premium charged, it is agreed that the Insurer will not be liable to make any payment of Loss in connection with a Claim arising out of, based upon or attributable to any Wrongful Act committed or allegedly committed, in whole or in part, prior to [November 10, 2008].

And the policy defines a “wrongful act” as any:

(1) actual or alleged act, error, misstatement, misleading statement, omission or breach of duty:
(a) by an Insured Person in his or her capacity as such, including in an Outside Capacity, or
(b) with respect only to Securities Claims, by the Company; or
(2) matter claimed against an Insured Person solely by reason of his or her service in such capacity or in an Outside Capacity.

Zucker argues that because the tax refund transfers that form the basis of the fraudulent transfer claims occurred in 2009 and insolvency itself is not a wrongful act, those claims should not fall within the Prior Acts Exclusion of the policy. U.S. Specialty responds that the claims do fall within the exclusion because what made the transfers wrongful was the Parent Bank’s insolvency, which resulted from its officers’ pre-November 2008 misdeeds, not their post-November 2008 conduct.

“When we address issues of state law, like the ones in this case, we are bound by the decisions of the state supreme court.” World Harvest Church, Inc. v. Guideone Mut. Ins. Co., 586 F.3d 950, 957 (11th Cir. 2009). The Supreme Court of Florida has concluded that the phrase “arising out of’ is not ambiguous and has a broad meaning, even when used in a policy exclusion. Taurus Holdings, Inc., 913 So.2d at 539. It “means ‘originating from,’ ‘having its origin in,’ ‘growing out of,’ ‘flowing from,’ ‘incident to’ or ‘having a connection with.’ ” Id. While that standard “requires more than a mere coincidence between the conduct ... and the injury[,].... it does not require proximate caus[ation].” Id. at 539-40.

Decisions of the Florida Supreme Court, the Florida Courts of Appeal, and this Court show that the “arising out of’ standard is not difficult to meet. For instance, in Hernandez v. Protective Casualty Insurance Co., 473 So.2d 1241, 1242-43 (Fla. 1985), the court concluded that a driver’s injuries did “aris[e] out of the ownership, maintenance or use of a motor vehicle” where he was injured by the police as they arrested him for a traffic violation. The Florida Supreme Court explained:

It was the manner of petitioner’s use of his vehicle which prompted the actions causing his injury. While the force exercised by the police may have been the direct cause of injury, under the circumstances of this case it was not such an intervening event so as to break the link between petitioner’s use of the vehicle and his resultant injury.

Id. at 1243.

Likewise, in Acosta, Inc. v. National Union Fire Insurance Co., 39 So.3d 565, 576-77 (Fla. 1st DCA 2010), the Florida First District Court of Appeal concluded that a lawsuit “arose out of’ an earlier lawsuit and thus fell within a prior litigation exclusion. The court explained that the later lawsuit “ha[d] a connection with” the earlier one because “all of the counts asserted against” the defendant in both the earlier and later lawsuits “centered] on its efforts to obtain contracts with [the plaintiffs’] clients.” Id. Although the two lawsuits focused on different conduct, they shared a connection because the defendant’s conduct giving rise to each lawsuit was part of the same “overall scheme.” Id. And we have applied the Florida Supreme Court’s definition of “arising out of’ from Taurus Holdings in a similar fashion. James River Ins. Co. v. Ground Down Eng’g, Inc., 540 F.3d 1270, 1276-77 (11th Cir. 2008) (holding that a claim “arose out of’ pollution, and therefore was covered by a pollution exclusion, where a negligent environmental site assessment that failed to detect the presence of pollution on the property led to lost profits, lost property value, and the need for environmental remediation).

In light of the Florida courts’ broad interpretation of the “arising out of’ standard, we conclude that the Parent Bank’s insolvency “arose out of’ wrongful acts that occurred before November 10, 2008. After all, Zucker’s complaint in the bankruptcy case alleged that the Parent Bank’s corporate officers committed wrongful acts, some of which occurred before November 2008, that harmed the company financially. So Zucker has admitted that the wrongful conduct of the corporate officers contributed to the insolvency that made the 2009 tax refund transfers fraudulent under Florida law. And while Zucker is right to say that insolvency itself is not an inherently wrongful act, what matters here is that an essential element of his claim—the Parent Bank’s insolvency—has a connection to some prior wrongful acts of the Parent Bank’s officers and directors that occurred before the policy’s effective date. Given that, Zucker’s fraudulent transfer claims do share “a connection with” wrongful acts covered by the Prior Acts Exclusion. Taurus Holdings, Inc., 913 So.2d at 539.

Zucker attempts to get around that connection by emphasizing that he didn’t incorporate the paragraphs describing the officers’ misconduct into Count IV (the fraudulent transfer count) of his complaint. True, but irrelevant. The Parent Bank’s insolvency is an element of his claim and that insolvency has a connection to misdeeds and misdealing of the Parent Bank’s officers before November 2008.

Zucker also points out that he would not have had to prove that the officers engaged in misconduct in order to prevail on his fraudulent transfer claim. That does not, however, mean there was no causal connection between the officers’ deeds and the demise of the Parent Bank. “[Clover-age—and the accompanying duty to indemnify—is not determined by reference to the claimant’s complaint, but rather by reference to the actual facts and circumstances of the injury.” Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So.3d 174, 181 (Fla. 4th DCA 2015) (quotation marks omitted). Zucker cannot plead himself around reality.

This is not a case where the causal connection between the prior wrongful acts and the loss was merely coincidental. See, e.g., Race v. Nationwide Mut. Fire Ins. Co., 542 So.2d 347, 351 (Fla. 1989) (holding that a motorist’s injuries did not arise out of the use of an automobile where he was attacked primarily because a fellow motorist, with whom he had collided, thought he was pulling a gun and the accident created, at most, “an atmosphere of hostility”); Martinez v. Citizens Prop. Ins. Corp., 982 So.2d 57, 59 (Fla. 3d DCA 2008) (holding that an injury did not arise out of the “maintenance, use, loading or unloading of motor vehicles” where the insured was hurt when a driveway collapsed while he was changing the oil on his car because “it was pure chance that the object upon the driveway at the time of its collapse happened to be a car”); Almayor v. State Farm Fire & Cas. Co., 613 So.2d 526, 527 (Fla. 3d DCA 1993) (holding that an injury did not arise out of the “ownership, maintenance or use of [a] motor vehicle” where plaintiff was injured in an explosion caused when a cigarette ignited gasoline fumes from gas that had been siphoned from a car, because the car “was merely the coincidental and legally remote source of a component, the gasoline, which was itself harmless until acted upon by the insured’s negligence”).

It is no coincidence that insolvency and misconduct converged on the Parent Bank. Instead, the misconduct was a significant contributing cause of the Parent Bank’s vulnerability to the 2008 financial crisis. For that reason, it is plain that Zucker’s fraudulent conveyance claims “arose from” wrongful acts that predate November 10, 2008 and therefore fell within the scope of the Prior Acts Exclusion.

B. The Policy’s Terms are Unambiguous and Its Coverage is Not Illusory

Zucker’s final effort to get around the Prior Acts Exclusion is his argument that if we adopt U.S. Specialty’s construction of the Prior Acts Exclusion, the policy’s coverage is illusory. We don’t think so.

Zucker relies primarily on Purrelli v. State Farm Fire & Casualty Co., 698 So.2d 618, 620 (Fla. 2d DCA 1997), which held that when an exclusion or limitation to an insurance policy “swallowfe] up the insuring provision” it “creat[es] the grossest form of ambiguity.” As we mentioned earlier, when insurance policies are ambiguous, Florida courts construe them in favor of coverage. Taurus Holdings, Inc., 913 So.2d at 532. So when a policy exclusion does swallow up an insuring provision, the Florida Courts conclude that the policy is ambiguous, Purrelli, 698 So.2d at 620, and resolve that ambiguity by ignoring the exclusion, see Tire Kingdom, Inc. v. First S. Ins. Co., 573 So.2d 885, 887 (Fla. 3d DCA 1990). To quote Tire Kingdom, “[a]n insurance policy cannot grant [a] right[ ] in one paragraph and then retract the very same right in another paragraph called an ‘exclusion.’ ” Id.

Zucker argues that Purrelli is on all fours with this case, but it is not. The insurance policy in Purrelli had a provision explicitly providing coverage for invasion of privacy (an intentional tort), but also had an exclusion precluding coverage for “intended” injuries. 698 So.2d at 619-20. In that way the policy’s exclusion expressly contradicted its coverage provisions, leaving the insured to wonder which provision correctly explained the scope of his coverage. Here, by contrast, the U.S. Specialty policy’s Prior Acts Exclusion does not “grant [a] right[] in one paragraph and then retract the very same right” in a later one. See Tire Kingdom, Inc., 573 So.2d at 887. Instead, it simply excludes coverage for a subset of claims that would ordinarily fall within the policy’s insuring provisions. For the same reason, Tire Kingdom doesn’t support Zucker’s position. In that case, the policy “attempt[ed] to provide coverage for certain advertising activities and then exclude those same activities.” Id. The U.S. Specialty policy doesn’t do that.

This also is not a case that falls within the common law “illusory coverage” doctrine that other jurisdictions have recognized and that we have indicated is part of Florida’s insurance law. See Interline Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962, 966-67 (11th Cir. 2014) (applying Florida law). In order for an exclusion to render a policy’s coverage illusory it must' eliminate all—or at least virtually all—coverage in a policy. See id (“According to Interline, the Exclusion’s broad scope reduces the coverage Chartis sold to Interline to a ‘facade’.... Interline overstates the extent to which the Exclusion limits coverage. Even with the broad Exclusion, the policy still contains extensive coverage.”) (quotation marks omitted); cf. Great Am. E & S Ins. Co. v. End Zone Pub & Grill of Narragansett, Inc., 45 A.3d 571, 576 (R.I. 2012) (“We will deem an exclusion to an insurance policy illusory only when it would preclude coverage in almost any circumstance.”) (quotation marks omitted); McGregor v. Allamerica Ins. Co., 449 Mass. 400, 868 N.E.2d 1225, 1228 (2007) (“As long as an insurance policy provides coverage for some acts, it is not illusory simply because it contains a broad exclusion.”); Point of Rocks Ranch, LLC v. Sun Valley Title Ins. Co., 143 Idaho 411, 146 P.3d 677, 680 (2006) (“An insurance policy’s coverage is illusory if it appears that if any actual coverage does exist it is extremely minimal and affords no realistic protection to any group or class of injured persons”) (quotation marks omitted).

U.S. Specialty overstates the case when it says that the policy “still provides coverage for a wide variety of Claims.” We need not agree with that statement. It is enough that the policy provided coverage for claims that arose exclusively from conduct that happened after the effective date of the policy. The Prior Acts Exclusion excludes a lot of coverage, but not all coverage. And regardless of what the result might have been had this exclusion been included in an adhesion policy issued to a layperson, it was not. The Parent Bank entered into this insurance contract with its eyes wide open and with its wallet on its mind. U.S. Specialty offered the Parent Bank a policy without a Prior Acts Exclusion. After weighing that offer the bank decided to reject it, having calculated that its best interests would be served by using the money it would save by accepting the exclusion to buy an increased total coverage limit. In hindsight, that decision did not work out well, but it was the decision of a sophisticated, fully informed party.

Zucker believes the Parent Bank did not get a good deal and wishes that it had paid a higher premium for a policy without a Prior Acts Exclusion. But after the fact wishes are not enough to change before the fact choices. Prior acts exclusions serve valid purposes when agreed to by consenting parties. Cf. Interline Brands, Inc., 749 F.3d at 967 (“[Ejxclusions are not necessarily harmful. Exclusions ... allow creation of a policy that provides the insured the coverage it needs at a price it can afford. Without such exclusions, coverage would undoubtedly be more expensive.”). The Parent Bank chose to rely on its old policies to cover claims against its officers connected to wrongful acts that occurred before November 2008. It chose to buy the policy that it bought. It cannot change that choice now, nor can its former corporate officers, nor can Zucker.

AFFIRMED.

      . “We relate the facts—as we must at this stage of the litigation—in the light most favorable to” the plaintiff. Goodman v. Kimbrough, 718 F.3d 1325, 1329 (11th Cir. 2013).

      . The Parent Bank actually obtained the insurance through a broker's negotiations with HCC Global Financial Products. Both U.S. Specialty and HCC Global are subsidiaries of HCC Insurance Holdings. HCC Global underwrites policies for a number of insurance companies that are subsidiaries of HCC Insurance, including U.S. Specialty. For simplicity’s sake, and because this corporate structure has no bearing on the outcome of this case, we will refer to all of these entities collectively as “U.S. Specialty.”

      . Besides the Parent Bank, there were two other debtors in the bankruptcy action, but that fact is not relevant to our decision.

      . U.S. Specialty contends that this rule of construction should not apply here because this was an insurance agreement between sophisticated parties. Because we conclude that the policy here was not ambiguous, we need not address that contention.

      . Zucker has an alternative theory that, even if the district court were correct that his claim that transferring the entire $46 million in tax refunds arose out of pre-2008 conduct and was covered by the Prior Acts Exclusion, the transfer of $17.9 million of the amount did not and was not. We will not consider that alternative theory of coverage because Zucker did not adequately raise it in the district court. See Reider v. Philip Morris USA, Inc., 793 F.3d 1254, 1258 (11th Cir. 2015) ("[Tissues raised for the first time on appeal are generally forfeited because the district court did not have the opportunity to consider them.”) (quotation marks omitted); Juris v. Inamed Corp., 685 F.3d 1294, 1325 (11th Cir. 2012) (“[I]f a party hopes to preserve a claim, argument, theory, or defense on appeal, she must first clearly present it to the district court, that is, in such a way as to afford the district court an opportunity to recognize and rule on it.”) (quotation marks omitted).

      . Zucker also makes much of the fact that the U.S. Specialty underwriter changed the title of the Prior Acts Exclusion on the quotes she sent to the Parent Bank from "Prior Acts Exclusion (Broad Form)” to "Prior Acts Exclusion (Policy Inception),” although the exclusion in the final policy still contained the "broad form” language. Zucker does not explain in his briefs to us how that change in the title could modify or clarify the meaning of the exclusion or mislead an insured. We are not persuaded that it could or did.

      . Though Hernandez predates the Florida Supreme Court's effort in Taurus Holdings to define "arising out of,” its decision in that case cited Hernandez—as well as several other older cases discussing the meaning of "arising out of”—approvingly. Taurus Holdings, Inc., 913 So.2d at 533-34.

      . "Federal courts sitting in diversity are bound to adhere to decisions of [Florida’s] intermediate appellate courts, absent some persuasive indication that the state's highest court would decide the issue otherwise.” Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 1025 (11th Cir. 2014) (quotation marks omitted) (alteration in original).

      .Our prior panel precedent rule requires us to follow a prior panel's binding interpretation of state law unless and until the state supreme court or a state intermediate appellate court issues a decision suggesting that our interpretation of state law was incorrect. EmbroidMe.com, Inc., 845 F.3d at 1105; Roboserve, Ltd. v. Tom's Foods, Inc., 940 F.2d 1441, 1450-51 (11th Cir. 1991). That has not happened in this instance.

      . At one point in his brief, Zucker suggests that "arising out of” does not mean in this policy what the Florida Supreme Court has said it means in other policies. He points to other exclusions in the policy that use the "arising out of" language and emphasizes that they also include relatedness terminology. But Zucker makes this argument only in passing, provides no authority for it, and does not adequately explain why the use of relatedness terminology in other exclusions matters in this case. As a result, he has not properly presented this argument and we do not consider it. Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014) ("We have long held that an appellant abandons a claim when he either makes only passing references to it or raises it in a perfunctory manner without supporting arguments and authority.”).

      . U.S. Specialty also contends alternatively that the fraudulent conveyance claims are barred by the policy's Prior Notice Exclusion. The district court rejected that contention. Because we conclude that the fraudulent conveyance claims do fall within the Prior Acts Exclusion and that the exclusion does not render the policy's coverage illusory, we need not address whether we would reach the same result based on the Prior Notice Exclusion.


author: STOLL, Circuit Judge.

text:
    AYLUS NETWORKS, INC., Plaintiff-Appellant v. APPLE INC., Defendant-Appellee
    2016-1599
    United States Court of Appeals, Federal Circuit.
    Decided: May 11, 2017

      Amardeep Lal Thakuk, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, argued for plaintiff-appellant. Also represented by Bruce R. Zisser; Joshua L. Sohn, Washington, DC.
    Mark D. Fowler, DLA Piper US LLP, East Palo Alto, CA, argued for defendant-appellee. Also represented by Robert Buergi, Christine K. Corbett, Erik Ryan Fuehrer; Stanley Joseph Panikowski, III, San Diego, CA.
    Before MOORE, LINN, and STOLL, Circuit Judges.
   STOLL, Circuit Judge.

Aylus Networks, Inc. appeals the United States District Court for the Northern District of California’s grant of summary judgment finding that Apple Inc.’s AirPlay feature does not infringe the asserted claims of U.S. Patent No. RE 44,412. For the reasons below, we affirm. .

Background

I.

The ’412 patent “provides systems and methods for implementing digital home networks having a control point located on a wide area network.” ’412 patent col. 5 11. 35-37. The specification explains that as bandwidth provided by wireless networks increases, these networks, such as 3G networks, “are now expected to provide broad-cast content, video telephony, multimedia conferencing, video streaming services, file upload and download services, and interactive multimedia services.” Id. at col. 4 1. 60-col. 5 1. 3. But the availability of network coverage supporting these multimedia services is uneven, because “[i]n some areas several networks may be available simultaneously that could be used by a handset, whereas in other regions there may be insufficient coverage to support a given network service.” Id. at col. 5 11. 4-8. The specification also describes “an inherent disadvantage” to using handsets due to their small screen sizes, which are not amenable to long viewing periods or being jointly viewed by multiple users. Id. at col. 5 11.14-24.

To overcome these disadvantages, the patent teaches various network architectures for streaming and displaying media content using combinations of networked components. These networked components include: (1) a media server (MS); (2) a media renderer (MR); (3) control point (CP) logic that includes logic to negotiate media content delivery with at least one of an MS and an MR; and (4) control point proxy (CPP) logic that includes:

(i) logic to negotiate media content delivery with at least one of an MS and an MR, (ii) logic to cooperate with CP logic to negotiate media content delivery between an MS and an MR, and (iii) VCR controls to control a presentation of content provided by the MS and rendered by the MR.

Id. at col. 5 11. 56-62. In one embodiment, “[t]he control point and control point proxies cooperatively negotiate media delivery from a user-selected media server, such as a home stereo or DVD player, to a user-selected media renderer, such as a TV display or the display on a handset.” Id. at col. 511. 42-48.

The specification further explains that when one of an MS and an MR are not in communication with the user endpoint device (“UE”) via a local wireless network, both the CP logic and CPP logic are invoked to cooperatively negotiate media content delivery between the MS and MR. When both an MS and an MR are in communication with the UE via a local wireless network, however, “[t]he CPP logic is invoked to negotiate media content delivery between” the MS and MR. Id. at col. 6 11. 5-8. Finally, when neither an MS nor an MR are in communication with the UE via a local wireless network, “[t]he CP logic is invoked to negotiate media content delivery between” the MS and MR. Id. at col. 6 11. 9-12.

The architecture of the networked components of one embodiment is depicted in Figure 12:

’412 patent Fig. 12. Claims 2 and 21 are at issue in this appeal. Because claim 2 is dependent upon claim 1, we reproduce both claims below:

1. A method of controlling and delivering media content from a media server (MS) to a media renderer (MR) utilizing a wide area network for control, comprising the acts of:
provisioning a serving node in the wide area network with control point (CP) logic that includes logic to negotiate media content delivery with at least one of the MS and the MR, wherein the CP logic, MS, and MR resides outside of a user endpoint (UE) and the CP logic resides in the signaling domain and serves as a first proxy;
provisioning the UE of the wide area network with control point proxy (CPP) logic that includes (i) logic to negotiate media content delivery with at least one of the MS and the MR, (ii) logic to cooperate with CP logic to negotiate media content delivery between the MS and the MR, and (iii) video cassette recorder (VCR) controls to control a presentation of content provided by the MS and rendered by the MR, wherein the CPP logic resides in the UE and serves as a second proxy;
in response to a media content delivery request, determining a network context of the UE and a network connectivity of the MS and MR;
invoking the CPP logic and the CP logic to cooperatively negotiate media content delivery between the MS and the MR if one of the MS and MR are not in communication with the UE via a local wireless network; and once media content delivery is negotiated, controlling a presentation of delivery via the VCR controls on the UE.
2. The method of claim 1, wherein the CPP logic is invoked to negotiate media content delivery between the MS and the MR if the MS and MR are both in communication with the UE via a local wireless network.

’412 patent col. 24 11. 37-67 (contested limitation emphasized).

II.

Aylus sued Apple for infringement of the ’412 patent. Apple then filed two separate petitions for inter partes review with the Patent Trial and Appeal Board, each challenging different claims of the ’412 patent. The Board instituted an IPR proceeding on the petition challenging all claims of the ’412 patent. But the Board denied institution as to claims 2, 4, 21, and 23. Following institution, Aylus filed a notice of voluntary dismissal in the district court, dismissing with prejudice its infringement contentions as to all of the asserted claims, except as to claims 2 and 21. Apple subsequently filed a motion for summary judgment of noninfringement of claims 2 and 21, arguing that it does not practice the limitation “wherein the CPP logic is invoked to negotiate media content delivery between the MS and the MR” recited in both asserted claims.

In its order on Apple’s summary judgment motion, the district court construed the limitation “wherein the CPP logic is invoked to negotiate media content delivery between the MS and the MR” to “require that only the CPP logic is invoked to negotiate media content delivery between the MS and the MR, in contrast to claims 1 and 20 which require both the CP and CPP to negotiate media content delivery.” Aylus Networks, Inc. v. Apple Inc., No. 13-cv-04700-EMC, 2016 WL 270387, at *6 (N.D. Cal. Jan. 21, 2016) (Summary Judgment Order). Based on this construction, the district court granted summary judgment of noninfringement of claims 2 and 21 of the ’412 patent. Id. at *7.

Aylus appeals, disputing the district court’s construction of “wherein the CPP logic is invoked to negotiate media content delivery between the MS and the MR” and asserting that the district court erred in granting summary judgment of nonin-fringement of claims 2 and 21 of the ’412 patent. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

Discussion

The “ultimate interpretation” of a claim term, as well as interpretations of “evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history),” are legal conclusions, reviewed by this court de novo. Teva Pharm. USA, Inc. v. Sandoz, Inc., — U.S. -, 135 S.Ct. 831, 841, — L.Ed.2d - (2015). “Subsidiary factual determinations based on extrinsic evidence are reviewed for clear error.” Info-Hold, Inc. v. Applied Media Techs. Corp., 783 F.3d 1262, 1265 (Fed. Cir. 2015) (citing Teva, 135 S.Ct. at 841).

The purpose of claim construction is to give claim terms the meaning understood by a person of ordinary skill in the art at the time of invention. Phillips v. AWH Corp., 415 F.3d 1303, 1312-14 (Fed. Cir. 2005) (en banc). “There is a heavy presumption that claim terms are to be given their ordinary and customary meaning.” Aventis Pharm. Inc. v. Amino Chems. Ltd., 715 F.3d 1363, 1373 (Fed. Cir. 2013). “Properly viewed, the ‘ordinary meaning’ of a claim term is its meaning to the ordinary artisan after reading the entire patent.” Phillips, 415 F.3d at 1321. A patent’s prosecution history, though generally “ ‘less useful for claim construction purposes’ than the claim language and written description, plays various roles in resolving uncertainties about claim scope.” SAS Inst., Inc. v. ComplementSoft, LLC, 825 F.3d 1341, 1349 (Fed. Cir. 2016) (quoting Phillips, 415 F.3d at 1317). We have recognized that “the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention.” Phillips, 415 F.3d at 1317.

In construing the “wherein the CPP logic is invoked to negotiate media content delivery between the MS and the MR” limitation, the district court relied on statements made by Aylus in its preliminary responses to Apple’s petitions for IPR of the ’412 patent, finding the statements “akin to prosecution disclaimer.” Summary Judgment Order, at *5. On appeal, Aylus argues that statements made during an IPR cannot be relied on to support a finding of prosecution disclaimer. Alternatively, Aylus argues that its statements did not constitute a clear and unmistakable disclaimer of claim scope. We address these arguments in turn.

I.

We must initially determine an issue of first impression for this court: whether statements made by a patent owner during an IPR proceeding can be relied on to support a finding of prosecution disclaimer during claim construction. As explained below, we hold that they can.

A.

Prosecution disclaimer “pre-elud[es] patentees from recapturing through claim interpretation specific meanings disclaimed during prosecution.” Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1323 (Fed. Cir. 2003). “[F]or prosecution disclaimer to attach, our precedent requires that the alleged disavowing actions or statements made during prosecution be both clear and unmistakable.” Id. at 1325-26. “Thus, when the patentee unequivocally and unambiguously disavows a certain meaning to obtain a patent, the doctrine of prosecution history disclaimer narrows the meaning of the claim consistent with the scope of the claim surrendered.” Biogen Idec, Inc. v. GlaxoSmithKline LLC, 713 F.3d 1090, 1095 (Fed. Cir. 2013). Such disclaimer can occur through amendment or argument. See Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985). In Standard Oil, we explained, in the context of disclaimer, that the prosecution history “includes all express representations made by or on behalf of the applicant to the examiner to induce a patent grant ... including] amendments to the claims and arguments made to convince the examiner.” Id.

This doctrine is deeply rooted in Supreme Court precedent. See, e.g., Roemer v. Peddie, 132 U.S. 313, 317, 10 S.Ct. 98, 33 L.Ed. 382 (1889). As the Supreme Court has explained, “when a patentee, on the rejection of his application, inserts in his specification, in consequence, limitations and restrictions for the purpose of obtaining his patent, he cannot after he has obtained it, claim that it shall be construed as it would have been construed if such limitations and restrictions were not contained in it.” Id.

Over time, prosecution disclaimer has become “a fundamental precept in our claim construction jurisprudence,” which “promotes the public notice function of the intrinsic evidence and protects the public’s reliance on definitive statements made during prosecution.” Omega Eng’g, 334 F.3d at 1323-24. The doctrine is rooted in the understanding that “[competitors are entitled to rely on those representations when determining a course of lawful conduct, such as launching a new product or de-signing-around a patented invention.” Biogen, 713 F.3d at 1095. Similarly, we have explained that the prosecution history “provides evidence of how the [PTO] and the inventor understood the patent.” Id. (quoting Edwards Lifesciences LLC v. Cook Inc., 582 F.3d 1322, 1327 (Fed. Cir. 2009) (alteration in original)). Ultimately, the doctrine of prosecution disclaimer ensures that claims are not “construed one way in order to obtain their allowance and in a different way against accused infring-ers.” Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576 (Fed. Cir. 1995).

B.

Though this doctrine arose in the context of pre-issuance prosecution, we have also applied the doctrine in other post-issuance proceedings before the PTO. We have, for example, applied the doctrine based on statements made during reissue proceedings, holding that “all express representations made by or on behalf of the applicant to the examiner to ... reissue a patent ... limit[ ] the interpretation of claims so as to exclude any interpretation that may have been disclaimed or disavowed during prosecution in order to obtain claim allowance.” Standard Oil, 774 F.2d at 452; see also E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1439 (Fed. Cir. 1988) (finding that statements made during a merged reissue/reexamination proceeding “are relevant prosecution history when interpreting claims”); Howes v. Med. Components, Inc., 814 F.2d 638, 645 (Fed. Cir. 1987).

We have also applied the doctrine based on statements made in reexamination proceedings, holding that a “patentee’s statements during reexamination can be considered during claim construction, in keeping with the doctrine of prosecution disclaimer.” Krippelz v. Ford Motor Co., 667 F.3d 1261, 1266 (Fed. Cir. 2012); see also Am. Piledriving Equip., Inc. v. Geoquip, Inc., 637 F.3d 1324, 1336 (Fed. Cir. 2011); In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1324-25 (Fed. Cir. 2011) (finding no error in district court’s claim construction based on an argument made during reexamination to avoid prior art).

It follows that we should apply the doctrine in IPR proceedings before the PTO. Extending the prosecution disclaimer doctrine to IPR proceedings will ensure that claims are not argued one way in order to maintain their patentability and in a different way against accused infringers. See Southwall Techs., 54 F.3d at 1576. In keeping with the underlying purposes of the doctrine, this extension will “promote!] the public notice function of the intrinsic evidence and protect!] the public’s reliance on definitive statements made during” IPR proceedings. Omega Eng’g, 334 F.3d at 1324.

Aylus argues that statements made during an IPR proceeding are unlike those made during a reissue or reexamination proceeding because an IPR proceeding is an adjudicative proceeding as opposed to an administrative proceeding. This argument is belied by the recent Supreme Court decision in Cuozzo Speed Technologies, LLC v. Lee, — U.S. -, 136 S.Ct. 2131, 195 L.Ed.2d 423 (2016).

In Cuozzo, the Supreme Court recognized that an IPR proceeding involves the reexamination of a patent. Id. at 2143-54. Specifically, the Supreme Court, analyzing the competing adjudicatory and administrative characteristics of an IPR proceeding, explained that, in some “significant respects, inter partes review is less like a judicial proceeding and more like a specialized agency proceeding.” Id. at 2143. These characteristics include: (1) parties that initiate an IPR need not have a concrete stake in its outcome; (2) a petitioner is not required to remain in an IPR, and the PTO may continue to conduct an IPR after a petitioner has settled; (3) the PTO can intervene in a later judicial proceeding to defend its decision; and (4) unpatentability in an IPR must be established by a preponderance of the evidence whereas invalidity in a district court must be established by clear and convincing evidence. Id. at 2143-44.

Summarizing the effect of these administrative characteristics, the Court explained that:

these features, as well as inter partes review’s predecessors, indicate that the purpose of the proceeding is not quite the same as the purpose of district court litigation. The proceeding involves what used to be called a reexamination (and ... a cousin of inter partes review, ex parte reexamination, 35 U.S.C. § 302 el seq., still bears that name). The name and accompanying procedures suggest that the proceeding offers a second look at an earlier administrative grant of a patent. Although Congress changed the name from “reexamination” to “review,” nothing convinces us that, in doing so, Congress wanted to change its basic purposes, namely, to reexamine an earlier agency decision.

Id. at 2144.

Because an IPR proceeding involves reexamination of an earlier administrative grant of a patent, it follows that statements made by a patent owner during an IPR proceeding can be considered during claim construction and relied upon to support a finding of prosecution disclaimer. See Krippelz, 667 F.3d at 1266. Of course, to invoke the doctrine of prosecution disclaimer, any such statements must “be both clear and unmistakable.” Omega Eng’g, 334 F.3d at 1326.

We' note that many district courts have addressed this issue and have likewise concluded that statements made by patent owners during an IPR can be considered for prosecution disclaimer. See Ilife Techs., Inc. v. Nintendo of Am., Inc., No. 3:13-cv-04987, 2017 WL 525708, at *7 (N.D. Tex. Feb. 9, 2017) (“[Statements during the IPR may be considered for prosecution disclaimer.”); Signal IP, Inc. v. Fiat U.S.A., Inc., No. 14-cv-13864, 2016 WL 5027595, at *16 (E.D. Mich. Sept. 20, 2016) (finding that “statements in the prosecution history, particularly during the recent IPR proceeding are unmistakable statements disavowing the plain and ordinary meaning of’ a claim term). We endorse this conclusion.

C.

Aylus next argues that its statements were not part of an IPR proceeding because they were made in a preliminary response before the Board issued its institution decision. We disagree.

An IPR proceeding is a two-step process: “the Director’s decision whether to institute a proceeding, followed (if the proceeding is instituted) by the Board’s conduct of the proceeding and decision with respect to patentability.” St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373, 1375-76 (Fed. Cir. 2014). We have said that an “IPR does not begin until it is instituted,” Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016), but for the purposes of prosecution disclaimer, we find the differences between the two phases of an IPR to be a distinction without a difference. A patent owner’s preliminary response filed prior to an institution decision and a patent owner’s response filed after institution are both official papers filed with the PTO and made available to the public. In both official papers, the patent owner can define claim terms and otherwise make representations about claim scope to avoid prior art for the purposes of either demonstrating that there is not a reasonable likelihood that the claims are unpatentable on the asserted grounds or demonstrating that the challenger has not shown by a preponderance of the evidence that the claims are unpatentable on the asserted grounds. Regardless of when the statements are made during the proceeding, the public is “entitled to rely on those representations when determining a course of lawful conduct, such as launching a new product or de-signing-around a patented invention.” Biogen, 713 F.3d at 1095.

In conclusion, we hold that statements made by a patent owner during an IPR proceeding, whether before or after an institution decision, can be considered for claim construction and relied upon to support a finding of prosecution disclaimer.

II.

Now that we have determined that prosecution disclaimer can apply to statements madé by a patent owner in a preliminary response to an IPR, we consider whether Aylus’s statements constitute a clear and unmistakable surrender of claim scope. Aylus argues that they do not. We disagree.

Apple filed two petitions for IPR to review the patentability of the ’412 patent. Aylus filed a preliminary response in both proceedings. In its response, Aylus told the PTO that there were “a number of substantial differences between the challenged claims and the asserted references.” J.A. 971. Aylus explained that independent claims 1 and 20 “require that the control point logic and control point proxy logic both be invoked to ‘cooperatively negotiate media content delivery between the MS and the MR’ if it is determined that ‘one of the MS and MR are not in communication with the UE via a local wireless network.’ ” J.A. 973, 1039 (quoting ’412 patent col. 24 11. 58-61 (claim 1)). Distin-. guishing dependent claims 2, 4, 21, and 23, Aylus explained that these claims “require that only the control point logic (or only the control point proxy logic) be invoked if it is determined that neither (or both) the MS or the MR are in communication with the UE via the local wireless network.” Id. (emphasis added). “In other words,” Aylus explained, “the challenged claims require selectively invoking the CP logic and/or CPP logic based on whether the MS and/or MR can communicate with the UE through the local network.” Id. (emphasis added). Aylus explained that “this is a key aspect of the claimed invention, which addresses an important objective, namely: reducing the use of expensive bandwidth (e.g., wide area cellular networks) by implementing a least-cost routing decision about how to negotiate media content delivery that utilizes the less costly local wireless network whenever possible.” Id. (emphasis added).

Aylus repeated these same statements later in its response when distinguishing the specific prior art references cited in the petition. Specifically, Aylus made the following statement as to claims 2 and 21: “If, however, ‘the MS and MR are both in communication with the UE via a local wireless network,’ then only ‘the CPP [logic] is invoked to negotiate media content delivery between the MS and the MR.’ ” J.A. 1004, 1068 (emphasis added) (quoting ’412 patent col. 24 11. 64-67 (claim 2)). Aylus reiterated the objective of this architecture, namely that “these steps serve the key purpose of enabling the claimed invention to use a local wireless network whenever such a network is available in order to reduce the ‘wireless spectrum-consuming communications.’ ” Id. (quoting ’412 patent col. 16 11. 33-34).

The Board did not institute IPR as to claims 2 and 21, finding that Apple had not demonstrated a reasonable likelihood that it would prevail in showing that claims 2 and 21 would have been obvious. The Board explained that it was unclear from Apple’s petition how the asserted prior art met the limitations of claims 2 and 21 in which “the CPP logic exclusively handles the negotiation of media content delivery between the MS and MR.” J.A. 842 (emphasis added).

Relying on Aylus’s statements to the Board during the IPR proceeding, which the district court described as “akin to prosecution disclaimer,” Summary Judgment Order, at *5, the district court concluded that “claims 2 and 21 require that only the CPP logic is invoked to negotiate media content delivery between the MS and the MR, in contrast to claims 1 and 20 which require both the CP and CPP to negotiate media content delivery,” id. at *6.

We agree with the district court that Aylus’s statements to the Board during the IPR proceeding regarding claims 2 and 21 constitute a clear and unmistakable surrender of methods invoking the CP logic in the negotiation of media content delivery between the MS and the MR if the MS and MR are both in communication with the UE via a local wireless network. Ay-lus’s repeated statements that claims 2 and 21 “require that ... only the control point proxy logic[ ] be invoked,” J.A. 973, 1039, and that “only ‘the CPP is invoked,’ ” J.A. 1004, 1068, represent an unequivocal and unambiguous disavowal of the CP logic’s invocation. Based on this disclaimer, we see no error in the district court’s claim construction.

Aylus argues that these statements are not a clear and unmistakable surrender of claim scope because they “can reasonably be interpreted to mean that ‘only’ the CPP logic is required to be invoked in those claims—not that the CP logic is precluded from being invoked.” Appellant Br. at 30-31. Aylus argues that this interpretation is best understood in the context of surrounding statements. After each of the. disclaiming statements, Aylus explained that these disclosed architectures accomplish a key aspect of the invention: the reduction of bandwidth. Aylus argues that, had it intended to eliminate the possible invocation of the CP logic in claims 2 and 21, it would have explained that the key aspect of the invention is the elimination of bandwidth.

We have held that, “when a prosecution argument is subject to more than one reasonable interpretation, it cannot rise to the level of a clear and unmistakable disclaimer.” Biogen, 713 F.3d at 1100. Aylus’s interpretation, however, is not reasonable. When Aylus explained that the reduction of bandwidth is a key aspect of its invention, it did so in relation to all of the various network architectures described in claims 1, 2, 4, 20, 21, and 23: (1) where the CPP logic and CP logic are invoked (claims 1 and 20); (2) where the CPP logic is invoked (claims 2 and 21); and (3) where the CP logic is invoked (claims 4 and 23). The reduction of bandwidth is consistent with all of these architectures, whereas the elimination of bandwidth would only be consistent with the architecture in claims 2 and 21. These surrounding statements do not change the plain meaning of Aylus’s disavowing statements. At oral argument, Aylus even conceded that the plain meaning of these statements suggests that the CP logic cannot be invoked. See Oral Arg. at 5:13-27, http://oralarguments.cafc. uscourts.gov/default.aspx?fl=2016-1599.mp 3. Accordingly, we hold that Aylus’s statements in the IPR proceeding are a clear and unmistakable surrender of methods invoking the CP logic in claims 2 and 21, and based on these disclaiming statements, we see no error in the district court’s claim construction or its grant of summary judgment of noninfringement.

Finally, we note that the claim language and specification of the ’412 patent are consistent with and further support the district court’s claim construction. Claims 2 and 21 disclose that “the CPP logic is invoked to negotiate media content delivery between the MS and the MR if the MS and MR are both in communication with the UE via a local wireless network.” ’412 patent col. 24 11. 64-67. These claims are narrower than the claims upon which they depend, independent claims 1 and 20, which disclose “invoking the CPP logic and the CP logic to cooperatively negotiate media content delivery between the MS and the MR if one of the MS and MR are not in communication with the UE via a local wireless network.” Id. at col. 24 11. 58-61.

The specification’s description of the embodiment corresponding to claims 2 and 21 discloses that, “[i]n the case where the UE is in the proximity of both the desired MS and the desired MR and can communicate with them via a [Personal Area Network], such as Wi-Fi, the CPP in the UE negotiates the association between the MS and MR.” Id. at col. 17 11. 50-53. The specification further explains that, “[i]n this case there is no need to involve the CP in the [serving node], since this would involve unnecessary use of wireless bandwidth.” Id. at col. 17 11. 53-55. Neither the claim language nor the specification suggests that the CP logic is invoked in the method of claims 2 and 21. This is consistent with the district court’s construction that “claims 2 and 21 require that only the CPP logic is invoked to negotiate media content delivery between the MS and the MR, in contrast to claims 1 and 20 which require both the CP and CPP to negotiate mediá content delivery.” Summary Judgment Order, at *6. Aylus concedes that Apple does not infringe claims 2 and 21 as construed by the district court. See Appellant Br. 35. Accordingly, we affirm the district court’s claim construction and grant of summary judgment of non-infringement.

Conclusion

We have considered Aylus’s remaining arguments and find them unpersuasive. Accordingly, we hold that statements made by a patent owner during an IPR proceeding, whether before or after an institution decision, can be relied upon to support a finding of prosecution disclaimer. Here, we find that Aylus’s statements during an IPR proceeding were a clear and unmistakable disavowal of claim scope. Based on this disclaimer, we affirm the district court’s claim construction and grant of summary judgment of non-infringement.

AFFIRMED

Costs

Costs to Appellee.

      . Aylus concedes that asserted claim 21 "is substantially identical to asserted claim 2 and contains the same [contested] limitation.” Appellant Br. 10. For these reasons, we only reproduce claim 2.

      . One of Apple's petitions challenged claims 1, 2, 5, 8, 9, 15, 20, 21, 27, 29, and 33 of the '412 patent, on which the Board did not institute. The other petition challenged all claims of the '412 patent.

      . See also Wonderland Nurserygoods Co. v. Kids II, Inc., No. 1:13-CV-01114-ELR, 2016 WL 4035521, at *1 (N.D. Ga. Mar. 16, 2016) (adopting report and recommendation from special master, see 2016 WL 3958733, at *6 (N.D. Ga. Feb. 10, 2016)); Anglefix, LLC v. Wright Med. Tech., Inc., No. 2:13-cv-02407-JPM-TMP, 2015 WL 9581865, at *7 (W.D. Tenn. Dec. 30, 2015); Samuels v. Trivascular Corp., No. 13-cv-02261-EMC, 2015 WL 7015330, at *6 (N.D. Cal. Nov. 12, 2015); Cellular Commc’ns Equip. LLC v. HTC Corp., No. 6:13-cv-507, 2015 WL 3464733, at *5-6 (E.D. Tex. June 1, 2015); Evolutionary Intelligence, LLC v. Sprint Nextel Corp., No. C-13-04513, 2014 WL 4802426, at *4 (N.D. Cal. Sept. 26, 2014); Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR, 2013 WL 5530573, at *2 (W.D. Wash. Oct. 7, 2013).