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November 5, 2010

Secured

Talk about a plaintiff's dream. Finjin sued Secure Computing and Webwasher for infringing anti-malware scanning software patents 6,092,194; 6,804,780; and 7,058,822. Defendants counterclaimed 6,357,010 and 7,185,361. "A jury found that none of the patents was invalid, that Finjan did not infringe Defendants' patents, and that Defendants willfully infringed all asserted claims of Finjan's patents. The district court awarded damages to Finjan, enhanced the award under 35 U.S.C. § 284, and imposed a permanent injunction against Defendants." Appeal only slightly tarnished the victory.

Finjin v. Secure Computing and Webwasher (CAFC 2009-1576, -1594) precedential

Infringement

Defendant's noninfringement theory was that the accused software was locked away from infringement.

In a nutshell, Defendants' noninfringement theory is that they sold no infringing products because all software modules that feature proactive scanning were locked when sold. "For the customer," according to Defendants, "as a practical matter, it was the same as if it never received the source code for the 'locked down' modules and their features at all." Defs.' Principal Br. 5. Defendants argue that infringement occurred only when customers purchased keys and unlocked proactive scanning modules because "[d]isabled code, by definition, is incapable of being used." Id. 28. Thus, Defendants claim that Finjan's failure to allege indirect or joint infringement is fatal.

Defendants claim that our court has held that "locked" or disabled products cannot infringe apparatus claims. Their reliance on our precedent is misplaced.

In Southwest Software, Inc. v. Harlequin Inc., this court affirmed denial of a new trial on infringement, after a verdict of noninfringement, because the evidence showed that the accused software product "included a manual step which avoided the automatic selection feature of the patented invention even though the code for automatic selection remained in place." 226 F.3d 1280, 1291 (Fed. Cir. 2000). Defendants interpret Southwest to hold that locked code cannot infringe. However, the claim at issue in that case was a method that required performance of each claimed step. Id. at 1285. Here, the claims at issue are "system" and "storage medium" claims, which do not require the performance of any method steps. See NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1318 (Fed. Cir. 2005) ("[T]he use of a process necessarily involves doing or performing each of the steps recited. This is unlike use of a system as a whole . . . .").

Defendants insist that the asserted claims require actual operability.

As we have cautioned, "in every infringement analysis, the language of the claims, as well as the nature of the accused product, dictates whether an infringement has occurred." Fantasy Sports Props. v. Sportsline.com, Inc., 287 F.3d 1108, 1118 (Fed. Cir. 2002). Accordingly, we have held that, to infringe a claim that recites capability and not actual operation, an accused device "need only be capable of operating" in the described mode. Intel Corp. v. U.S. Int'l Trade Comm'n, 946 F.2d 821, 832 (Fed. Cir. 1991). Thus, depending on the claims, "an accused device may be found to infringe if it is reasonably capable of satisfying the claim limitations, even though it may also be capable of noninfringing modes of operation." Hilgraeve Corp. v. Symantec Corp., 265 F.3d 1336, 1343 (Fed. Cir. 2001); see also Ball Aerosol & Specialty Container, Inc. v. Ltd. Brands, Inc., 555 F.3d 984, 994 (Fed. Cir. 2009) (noting that the "reasonably capable" test applies "only to claim language that specifies that the claim is drawn to capability").

In this case, Finjan's non-method claims describe capabilities without requiring that any software components be "active" or "enabled." ... Defendants admit that program code for proactive scanning is "literally present" on all accused products.

Method claims run a different infringement track than apparatus claims. In this case, there was no track to run.

In addition to the system and storage medium claims, Finjan asserted method claims from each of the three patents in suit. "To infringe a method claim, a person must have practiced all steps of the claimed method." Lucent Techs. v. Gateway, Inc., 580 F.3d 1301, 1317 (Fed. Cir. 2009).

Finjan identifies no evidence that Defendants infringed the method claims by testing or operating any copies of the accused products in the United States.

Claim Construction

This case presented a nuanced interpretation of not construing a claim term, beyond the trial court stating that the term took its "plain and ordinary meaning."

Defendants argue that a new trial is required because the district court erred by failing to construe the term "addressed to a client." Each asserted claim of the '194 patent refers to a "Downloadable addressed to a client."

 The district court construed "addressed to a client" as having "its plain and ordinary meaning," but also observed that "the defendant's proposed construction would unjustifiably narrow the term's broad scope, which was not explicitly limited or redefined by the specification." Finjan Software, Ltd. v. Secure Computing Corp., No. 06-CV-369, slip op. at 1 & n.1 (D. Del. Dec. 11, 2007). The jury did not receive a construction of "addressed to a client" but was told to "give the rest of the words in the claims their ordinary meaning." Final Jury Instructions 13.

Restating a previously settled argument does not create an "actual dispute regarding the proper scope of the claims" within the meaning of O2 Micro. In this situation, the district court was not obligated to provide additional guidance to the jury. See Verizon Servs. Corp. v. Cox Fibernet Va., Inc., 602 F.3d 1325, 1334 (Fed. Cir. 2010) (finding no O2 Micro problem where the parties "did not invite the jury to choose between alternative meanings").

Moreover, even on appeal, Defendants do not propose an alternative construction of "addressed to a client" or explain how a different definition would negate infringement of the '194 patent. See SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006) (noting that "arguments not raised in the opening brief are waived"). "We may affirm the jury's findings on infringement . . . if correction of the errors in a jury instruction on claim construction would not have changed the result, given the evidence presented." Teleflex Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1328 (Fed. Cir. 2002). Defendants are not entitled to a new trial on this ground.

Damages

To review damages in patent cases, we apply regional circuit law to procedural issues and Federal Circuit law to substantive and procedural issues "pertaining to patent law." Aero Prods. Int'l, Inc. v. Intex Recreation Corp., 466 F.3d 1000, 1016 (Fed. Cir. 2006); see also Fiskars, Inc. v. Hunt Mfg. Co., 279 F.3d 1378, 1381 (Fed. Cir. 2002) (noting that Federal Circuit law controls "the distinctive characteristics of patent damages law"). "In reviewing the propriety of a jury verdict, our obligation is to uphold the jury's award if there exists a reasonable basis to do so." Motter v. Everest & Jennings, Inc., 883 F.2d 1223, 1230 (3d Cir. 1989).

On appeal, defendant's objected to Finjan's applying the entire market value rule for royalty base. However worthy the objection, raising it for the first time on appeal means that the argument was waived.

Defendants also objected to federal government sales being included.

This was impermissible because a patentee can recover damages only from the government for patented "use or manufacture for the United States." 28 U.S.C. § 1498(a). Nevertheless, this error does not require a new trial. The district court instructed the jury that sales "to the United States government should not be included in any damages calculation you perform." Final Jury Instructions 42. Jurors are "presumed to have followed" the instructions they were given. Jones v. United States, 527 U.S. 373, 394 (1999); see also Citizens Fin. Group, Inc. v. Citizens Nat'l Bank, 383 F.3d 110, 133 (3d Cir. 2004) ("This Court presumes that the jury followed the Court's instructions.").

A tempest in a teapot, because government sales were relatively miniscule, and the defendants "fail to rebut the presumption that the jurors followed their charge."

Based on expert witness testimony, the jury applied an 8% royalty rate. The CAFC panel found that "substantial evidence supports the jury's award."

Despite potential flaws in Finjan's damages theory, "[t]he jury was entitled to hear the expert testimony and decide for itself what to accept or reject." i4i, 598 F.3d at 856. "In setting damages, the jury's function is to weigh contradictory evidence, to judge the credibility of the witnesses, and to resolve factual disputes," C&F Packing Co. v. IBP, Inc., 224 F.3d 1296, 1304 (Fed. Cir. 2000) provided that the record does not "rest on faulty assumptions and a lack of reliable economic testimony," Oiness v. Walgreen Co., 88 F.3d 1025, 1032 (Fed. Cir. 1996). In this case, we conclude that the jury's choice was "within the range encompassed by the record as a whole." Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 519 (Fed. Cir. 1995).

Finjan cross-appealed that it was entitled to damages for the 17-month duration between filing the complaint and judgment, which the district court inexplicably left out. The CAFC corrected that.

Under 35 U.S.C. § 284, "the court shall award . . . in no event less than a reasonable royalty," and "[w]hen damages are not found by a jury, the court shall assess them" (emphases added). "Although courts have broad discretion in determining appropriate relief for patent infringement, . . . injunctions and damages must be tailored to the circumstances and be correlatively determined." Carborundum Co. v. Molten Metal Equip. Innovations, Inc., 72 F.3d 872, 881 (Fed. Cir. 1995) (quotation omitted). Accordingly, we have noted that a patentee is "not fully compensated" if "the damages award did not include future lost sales." Id. at 882; see also Fresenius USA, Inc. v. Baxter Int'l, Inc., 582 F.3d 1288, 1303 (Fed. Cir. 2009) ("A damages award for pre-verdict sales of the infringing product does not fully compensate the patentee because it fails to account for post-verdict sales of repair parts."). Therefore, the district court should have awarded compensation for any infringement prior to the injunction.

Only portions of the trial court's decision not affirmed, the CAFC found: non-infringement of the method claims; additional damages for Finjan (post-judgment, pre-injunction).

Affirmed-in-part, reversed-in-part, and remanded.

Posted by Patent Hawk at November 5, 2010 12:38 PM | Claim Construction

Comments

"Defendants appeal the verdicts of infringement of Fin-jan’s patents and damages, but do not appeal the jury’s determinations regarding noninfringement of Defendants’ patents, validity of all patents, or willfulness with respect to infringement of Finjan’s patents."

Lulz, another software company refuses to tank B claims. Who'da guessed it?

Posted by: 6000 at November 6, 2010 1:21 PM

"Lulz, another software company refuses to tank B claims. Who'da guessed it?"

Everybody with the exception of two idiots named 6 and Mooney.

Posted by: Mr. Beauregard at November 8, 2010 10:55 AM

Mr. Beauregard, this cross thread link may help:

http://www.patenthawk.com/blog/2010/11/asthmatic_injunction.html

Worth repeating (especially for you 6000):

"However, as observed by the district court, this court has long recognized an exception to this general rule: If there is a "functional relationship" between the printed matter and its substrate, the printed matter may serve to distinguish the invention from the prior art. See In re Miller, 418 F.2d 1392, 1396 (CCPA 1969); In re Gulack, 703 F.2d 1381, 1385-87 (Fed. Cir. 1983)."

Please give my regards to your beau.

Posted by: Pedantic Pete at November 8, 2010 2:39 PM

""However, as observed by the district court, this court has long recognized an exception to this general rule: If there is a "functional relationship" between the printed matter and its substrate, the printed matter may serve to distinguish the invention from the prior art. See In re Miller, 418 F.2d 1392, 1396 (CCPA 1969); In re Gulack, 703 F.2d 1381, 1385-87 (Fed. Cir. 1983).""

If B claims had a functional relationship between their printed matter and the underlying substrate then there certainly might be a cause for me to be alarmed.

However,

1. There is none
and
2. Even if there arguably was, it is not what is recited in these, or in any other B claims that I'm aware of. Instead, you find the supposed functional relationship between the information and a general purpose computer (a computer which, mind you, is not being claimed and is certainly not "the substrate").

But like I said, these jokers wouldn't want to invalidate, or make all their claims worthless, so they won't argue such things and collect their ez pickings.

Posted by: 6000 at November 9, 2010 4:07 PM

From the '194 patent, claim 65: "A computer-readable storage medium storing program code for causing..."

"for causing" destroys the "There is none" statement.

"medium storing program code" destroys the "it is not what is recited" statement.

Pull your head out of your ass.

Posted by: Pedantic Pete at November 9, 2010 6:18 PM

""for causing" destroys the "There is none" statement."

Lulz, hardly. The medium isn't "for causing" the program code is "for causing".

Tard.

"medium storing program code" destroys the "it is not what is recited" statement"

Lulz, hardly. What is recited is the function of the program code, not the function of the medium storing it.

You and I both know that the only function of the medium is ""forlol" causing information to be stored thereupon". And that doesn't change depending on what information is stored thereupon.

tard.

Just for kicks lets look at the claim in total:

A computer-readable storage medium storing program code for causing a server that serves as a gateway to a client to perform the steps of:

receiving an incoming Downloadable addressed to a client;

comparing Downloadable security profile data pertaining to the Downloadable against a security policy to determine if the security policy has been violated; and

preventing execution of the Downloadable by the client if the security policy has been violated.


Plainly the "computer-readable storage medium" is not "for" any of the nonsense in the claim. The "program code" is.

Again, tard, your b claims are ripe for the picking.

Posted by: 6000 at November 10, 2010 3:06 PM

Also, btw tard, learn to read before you go head to head with me. I'm tired of discussing such banal matters with you when you're plainly not capable of grasping the perniciousness of your situation when those with greater capacity to understand plainly are.

Posted by: 6000 at November 10, 2010 3:11 PM

Well, professional Tard that you are, please explain the length of time that these creatures have survived, given how plainly awful they are.

Oh, that's right - you have to descend to the mass comspiracy theory.

Your name isn't sarah by the way, is it?

Posted by: Pedantic Pete at November 10, 2010 3:36 PM

"Again, tard, your b claims are ripe for the picking."

You and Mooney must be having a grand old time in his mom's basement fantasizing about the demise of Beauregard claims.

Do you play an elf or a dwarf? And which one of you gets to be the Dungeon Master.

Lulz

Posted by: Mr. Beauregard at November 10, 2010 3:36 PM

"Well, professional Tard that you are, please explain the length of time that these creatures have survived, given how plainly awful they are."

They survive precisely as long as it takes for someone to have sufficient financial interest to take them down.

"Oh, that's right - you have to descend to the mass comspiracy theory."

Dolla dolla bills does not equal mass conspiracy.

Funny you should bring up DnD Mr. B, I just met this chic that I'm going to try to *have inappropriate relations with* and so I agreed to play DnD with her. I don't actually know how to play just yet though.

The other chic I'm talking to, a 2L at GW, is sooooo slow at getting to the appropriate activities. Cute girl tho.

Posted by: 6000 at November 10, 2010 4:07 PM

"Dolla dolla bills does not equal mass conspiracy."

It sure does when you have to have all the players on both sides of numerous lawsuits purposefully avoiding this tactic. Time to wake up and face reality. Here's a hint - you will never seethe time of "someone to have sufficient financial interest" to take them down, when that someone is only crackpots who post incessantly (only the only action ever taken is to post incessantly) on Patent blog comment sections.

I guess you might find some small consolation in knowing that you cannot be a has-been because you were a never-been.

Posted by: Pedantic Pete at November 10, 2010 8:40 PM

"The other chic I'm talking to, a 2L at GW, is sooooo slow at getting to the appropriate activities."

So an apparently intelligent woman isn't exactly taken with a misogynistic blowhard like you.

I'm shocked.

Lulz

Posted by: Mr. Beauregard at November 11, 2010 8:17 AM