Federal
Circuit Reverses Judgment Of Infringement
In CardSoft, LLC v. VeriFone, Inc. (Appeal No. 2014-1135), the Federal
Circuit held that the district court erred in its construction of “virtual
machine,” and reversed the judgment of infringement.
In 2008, CardSoft sued Verifone for infringement of two U.S. patents. The patents-in-suit generally disclose
software for controlling a payment terminal. Payment terminals are small,
specialized computers and include a processor, peripheral units like a card
reader, a display, a printer, or a communications interface, and a software
operating system to control the hardware components. The district court construed “virtual
machine” as a “computer programmed to emulate a hypothetical computer for
applications relating to transport of data”.
The
Federal Circuit held that the district court’s construction
improperly conflated the claimed virtual machine with applications written to
run on the virtual machine. The claimed virtual machine is operating system
or hardware dependent because it must communicate directly with the
underlying operating system or hardware. But the applications written to run
on the virtual machine are not correspondingly dependent because the
applications are written to communicate with the virtual machine, not the
actual underlying operating system or hardware. Thus, the Federal Circuit
held that the intrinsic and extrinsic evidence established that at the time
the asserted patents were filed, the defining feature of a virtual machine
was its ability to run applications that did not depend on any specific
underlying operating system or hardware.
Because
the district court erred by failing to give “virtual machine” its ordinary
and customary meaning, the Federal Circuit reversed the district court’s construction
of this term. Additionally, because CardSoft waived
any argument that Appellants infringed under the correct construction, the
Federal Circuit granted judgment of no infringement as a matter of law.
Federal Circuit Affirms Claim
Construction
In World Class Tech. Corp.
v. Ormco Corp. (Appeal Nos. 2013-1679, 2014-1692), the Federal Circuit affirmed
the district court’s claim construction.
The
district court construed two claim terms—“support surface” and “ledge.” In
view of the court’s constructions, the parties stipulated to a judgment of
non-infringement of the Ormco patent.
The Ormco patent describes a
bracket for orthodontic braces that avoids or reduces interference with the
gums even when being mounted on a molar tooth. Ormco sued World Class for infringement of its patent. World Class moved for
declaratory judgment of noninfringement.
The parties disputed the meaning of the term “support surface” in a claim to an
orthodontic bracket that slides away from the tooth when open, instead of upward
towards the gums. World Class argued that the “support surface” must support
the slide as it moves along its path. Ormco argued
that such a support would contact the gums, which is “out of keeping with the
description of the invention.”
The district court construed the term “support surface”
to mean “at least partially supports and guides the movable member during movement
between the open position and the closed position.” The district court adopted
a complementary construction of “ledge” as contacting the slide only when the
slide is in the closed position.
The Federal Circuit held that the specification makes
clear that the district court correctly resolved the uncertainties in the
claim language, adopting a construction that aligns with the description of
the invention. In view of the district court’s claim construction, the
Federal Circuit affirmed.
Federal Circuit Affirms Judgment Of Noninfringement
In Halo
Electronics, Inc. v. Pulse Electronics, Inc. (Appeal No. 2013-1472, 1656),
the Federal Circuit held that the sale of a patented component to a foreign
buyer and delivered outside the U.S. is not a “sale” or “offer for sale”
under U.S. patent law, even if price and contract negotiations, delivery of
product samples for pre-approval, customer support and other activities took
place in the U.S.
Halo and Pulse compete in the market for surface mount
electronic packages. Halo owns three patents directed to surface mount
electronic packages containing transformers for mounting on a printed circuit
board inside electronic devices such as computers and internet routers. Pulse
designs and sells surface mount packages and manufactures those products in
Asia. Some of Pulse’s products were delivered by Pulse to customers in the
U.S., but the majority of them were delivered outside the U.S. Pulse was
engaged in various activities in the U.S. – including price negotiations,
meetings with customer design engineers, delivery of product samples for
pre-approval, attending sales meetings with customers, and post-sale support
for its products.
In 2007, Halo sued Pulse for patent infringement. Pulse moved for summary judgment of noninfringement and invalidity. Pulse also counterclaimed
that Halo Electronics infringed its patent directed to microelectronic
connectors.
The district court granted Pulse’s motion for summary
judgment of noninfringement and denied JMOL of
invalidity.
On appeal, the Federal Circuit held that when substantial
activities of a sales transaction, including the final formation of a
contract for sale encompassing all essential terms as well as the delivery
and performance under that sales contract, occur entirely outside the U.S.,
pricing and contracting negotiations in the U.S. alone do not constitute or
transform those extraterritorial activities into a “sale” within the U.S. for purpose of §271(a). Pricing and
contracting negotiations alone are insufficient to constitute a “sale” within the U.S. According to the
Federal Circuit, if a sale outside the U.S. is not an infringement of a U.S.
patent, an offer to sell, even if made in the U.S., when the sale would occur
outside the U.S., similarly would not be an infringement of a U.S. patent.
In this case, the negotiations took place in the U.S.,
but the sales were realized entirely outside the U.S. Therefore, Pulse did not offer to sell the
products at issue within the U.S. and did not infringe the patents. Pulse’s
activities in the U.S. were therefore insufficient to constitute a “sale” or an “offer to sell” within the U.S. to support direct infringement.
Accordingly,
the Federal Circuit affirmed the judgment that Pulse did
not directly infringe the Halo patents by selling or offering to sell within
the U.S. those accused products that Pulse
manufactured, shipped, and delivered outside the U.S.
Federal Circuit Vacates District Court
Decision
In SSL Services,
LLC. v. Citrix Systems, Inc. (Appeal Nos. 2013-1419. 1420), the Federal
Circuit vacated a district court’s finding of no prevailing party for the
purpose of attorneys’ fees and costs.
The patents-in-suit generally disclose a virtual private
network which is a “system for securing
communications between computers over an open network such as the Internet”.
The claimed methods and system consists of an authentication and encryption
program that encrypts computer files using a “session key” before transmitting data over the Internet. Once the
other client computer has received the encrypted files, it can decrypt those
files using the same session key. This approach allows the transfer of encrypted
data directly from one client computer to another client computer over the
open network.
In 2008, SSL sued Citrix for infringement. At trial, SSL alleged that Citrix’s GoTo products willfully infringed claims of two patents-in-suit.
The GoTo products allow direct encrypted
communication between two computers while bypassing a broker server that
cannot access the encrypted data.
The jury found that Citrix’s GoTo products infringed one of the patents-in-suit but not the other, and awarded
$5 million in damages. The district court also awarded an additional $5
million to SSL as enhanced damages for willful infringement but declined to consider
SSL the “prevailing party” for the purpose of awarding costs. Both parties
appealed.
On appeal, the Federal Circuit found that SSL was the
prevailing party because the actual relief on the merits, i.e., the judgment
for damages against Citrix, materially altered the relationship between the
parties in a way that directly benefited SSL. The Federal Circuit, therefore, vacated the
district court’s decision to deny SSL “prevailing party” status and remanded
the case to the district court to consider the fees to award SSL.
Federal Circuit Affirms Finding Of Indefiniteness
In Robert Bosh LLC v. Snap-On Incorporated (Appeal No. 2014-1040), the
Federal Circuit affirmed the district court’s judgment that Bosh’s patent claims
were indefinite because they were means-plus-function elements with no
corresponding structure disclosed in the specification.
Bosh sued Snap-On for infringement
of its patent covering a diagnostic tester for motor vehicles that determines
whether the computerized control unit in a motor needs to be reprogrammed. The
external diagnostic tester is described in a sole independent claim called
for a “program recognition device”
in which the version of the program in a programmable control unit in a motor
vehicle is queried and recognized “by
means of” the program recognition device. If the program is recognized
and found not to be the latest and most current version, then a “program loading device” loads the most
current version into the control unit. The specification of the patent did
not contain any figures and did not provide a description of the program
recognition device or the program loading device.
The district court held that
these claim terms were means-plus-function terms and indefinite for failing
to disclose corresponding structure. The district court held that these limitations presumptively invoked §
112(f) due to the “by means of” language. Moreover, the claim terms,
construed in light of the specification, failed to provide
sufficiently definite structure to one of skill in the art.
On appeal, the Federal Circuit
upheld the district court decision that the claims were indefinite. The Federal
Circuit noted that the district court erred in applying a presumption that “program recognition device” was a
means-plus-function term. The presumption has been applied “when a claim uses
the word ‘means’ as a noun in the claim”, but not for the wording “by means
of”. The claim language overcame a
strong presumption against invoking section 112(f), however, because “program
recognition device” lacked sufficiently definite structure.
Thus, the Federal Circuit
affirmed the finding of indefiniteness. |
