Claim Construction

'804 claims an "upstream manager" for uploading client messages to a server, from which the server obtains the proper service to reply. The claim construction for claim 1 for the upstream manager -

The trial court construed the term “Upstream Manager” as follows:
Upstream Manager: a computer system component that (a) accepts messages from a client bound for services on a server; (b) routes messages from a client to services on a server; and (c) is distinct from the Downstream Manager.

The parties agree on this much of the construction, but SeaChange seeks further limitation. In particular, SeaChange contends that the upstream manager must (d) receive and route all messages from clients that are “bound for” services, and (e) must do so using only logical, not physical, addresses, of both sender and receiver of a message.

The trial court didn't buy the additional restrictions, and the appeals court agreed.

Claim 1 does not describe an upstream manager that requires routing only with logical addresses. To read a requirement for use of logical addresses into claim 1 would impermissibly read the “virtual connection” limitation of claim 2 into claim 1, making these claims redundant. See, e.g., LizardTech, Inc. v. Earth Res. Mapping, Inc., 424 F.3d 1336, 1344 (Fed. Cir. 2005). In this case, the claim term “upstream manager” is not “so amorphous that one of skill in the art can only reconcile the claim language with the inventor's disclosure by recourse to the specification.” Comark Commc’ns, Inc. v. Harris Corp., 156 F.3d 1182, 1187 (Fed. Cir. 1998). It is clear that the upstream manager of claim 1 routes messages. This court need not interpret what the patentee meant by “upstream manager” in this claim by importing the limitation of claim 2 into this term. See E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1433 (Fed. Cir. 1988) (holding that it is improper to read a limitation “into a claim from the specification wholly apart from any need to interpret what the patentee meant by particular words or phrases in the claim.”). The prosecution history does not contradict the district court’s interpretation. During prosecution, the inventor differentiated the invention from the prior art of Mizuhara in several ways: not only by describing the uniqueness of its use of logical addresses, but also by demonstrating that Mizuhara did not teach a partitioned architecture, separating the functions of upstream and downstream managers, and connection service.

Infringement

As to infringement, the jury heard extensive evidence, including nCube's expert witness, Dr. Schonfeld, who was found credible.

Seachange argues to this court that this expert opinion is contradicted by the factual record and thus cannot support the jury’s verdict. See Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 242 (1993) (“When an expert opinion is not supported by sufficient facts to validate it in the eyes of the law, or when indisputable record facts contradict or otherwise render the opinion unreasonable, it cannot support a jury's verdict.”). However, Dr. Schonfeld supported his opinion by relying on SeaChange’s own technical documents. Although the jury was not required to accept that opinion, even if it was not contradicted, U. S. Philips Corp. v. Windmere Corp., 861 F.2d 695, 704 (Fed. Cir. 1988), it found Dr. Schonfeld credible. This court declines to “second guess” the jury’s determinations. Comark, 156 F.3d at 1192 (“It is not the province of an appellate court to second guess the jury's credibility determinations or to reevaluate the weight to be given the evidence.”) The district court accorded the jury appropriate deference. See Fuji Photo Film Co., Ltd. v. Jazz Photo Corp., 394 F.3d 1368, 1379 (Fed. Cir. 2005). Therefore, this court sustains the district court’s denial of JMOL on the jury’s verdict of literal infringement.

Willful Infringement

A jury verdict of willfulness requires a finding “by clear and convincing evidence in view of the totality of the circumstances that [the defendant] acted in disregard of the . . . patent and lacked a reasonable basis for believing it had a right to do what it did.” Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 181 (Fed. Cir. 1994).

The jury also found willful infringement. Willfulness requires a showing that the totality of the circumstances evince the egregious conduct that constitutes willful infringement. Imonex Servs., Inc. v. W.H. Münzprüfer Dietmar Trenner GMBH, 408 F.3d 1374, 1377 (Fed. Cir. 2005).

SeaChange had obtained an clearing opinion, but under shady circumstances that made it a sham.

Actual notice of another’s patent rights triggers an affirmative duty of due care to avoid infringement. See Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1109 (Fed. Cir. 1986). Willful infringement in this case hinges on when the defendants had actual knowledge of plaintiff’s patent rights, and their actions after that time. nCube does not argue that SeaChange knew of the ’804 patent before it filed suit, but rather attacks Seacube’s reliance on the opinion letter it obtained after suit was filed. nCube asserts that the opinion letter, which counsel shared with SeaChange management, was flawed because SeaChange manipulated the information given to counsel to ensure an opinion of non-infringement. nCube also casts doubt on the trustworthiness of the letter because SeaChange produced early drafts of the letter only after trial.

The record shows that at least one important technical document was not supplied to SeaChange’s opinion counsel. Thus, “the best information [was] intentionally not made available to counsel during the preparation of the opinion, [so that] the opinion can no longer serve its prophylactic purpose of negating a finding of willful infringement.” Comark, 156 F.3d at 1191. Therefore, the record contains substantial evidence upon which a jury could have found willful infringement under the clear and convincing evidence standard.

Attorneys Fees

Rubbing salt into the wound for its bad behavior, SeaChange had to pony up two-thirds of nCube's attorneys fees.

The trial court awarded enhanced damages on the basis of the jury’s willfulness finding and the Read factors for enhancing damages. See Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992). Most importantly, the court found that the case for literal infringement was not close. Moreover, SeaChange deliberately copied the invention in its products without investigating the scope of the patent. Thus, SeaChange had not formed a good faith belief excusing its conduct. Accordingly, the trial court declared this an exceptional case under 35 U.S.C. § 285 and awarded attorney fees.