Cordance v. Amazon (CAFC 2010-1502, -1545) precedential; Judges Lourie, Linn (author), Dyk

Cordance accused Amazon's "1-Click®" ("1-Click") purchasing features of infringing claims 1-3, 5, and 7-9 of the '710 Patent. Amazon's customers can store payment information and shipping addresses in their Amazon customer accounts. This information can then be retrieved later when that customer uses the 1-Click features. Cordance also alleged that Amazon's features allowing customers to enter reviews of products for sale on Amazon's website and to enter reviews of transactions with third-party sellers infringe the Feedback Patents.

After the district court construed the claims, Cordance Corp. v. Amazon.com, Inc., No. 06-491 (D. Del. Dec. 5, 2008), ECF No. 279 ("Claim Construction Order"), a jury trial was conducted in August 2009. At trial, Cordance's expert, Dr. Shamos ("Shamos"), explained how Amazon's 1-Click features infringed the asserted claims of the '710 Patent. Amazon's expert, Dr. Alvisi ("Alvisi"), presented evidence that all asserted claims of the '710 Patent were invalid for derivation and for failure to satisfy the written description requirement and that claims 1, 3, 5, 7, and 8 were also invalid as anticipated.

The jury rendered a verdict concluding that Amazon infringed claims 1, 3, 5, 7, and 8 of the '710 Patent, but that claims 1-3, 5, and 7-9 of the '710 Patent were invalid. The verdict form did not specify the basis for the invalidity finding. The jury also found that Amazon's feedback features did not infringe any claims of the Feedback Patents.

The district court granted JMOL that Amazon failed to provide sufficient evidence to support a finding that (1) claims 7-9 of the '710 Patent lacked written description; (2) claims 1-3, 5, and 7-9 of the '710 Patent are invalid as anticipated; and (3) claims 1, 3, 5, 7, and 8 of the '710 Patent are invalid under § 102(f). JMOL Opinion at 20-45. The court denied Cordance's motion challenging the construction of "feedback information." Id. at 47-49.

Hence appeal and cross-appeal.

Priority date determination on '710 & '205, which were CIPs, went Amazon's way - denying the earlier date, thus setting up for more prior art to apply.

In favoring Amazon's anticipation arguments, the CAFC overturned the district court judge.

Finally, contrary to Cordance's allegations, Amazon's theory of invalidity was not akin to the "practicing the prior art" theory rejected by this court in Tate Access Floors, Inc. v. Interface Architectural Resources, Inc., 279 F.3d 1357 (Fed. Cir. 2002). A "practicing the prior art" defense typically refers to the situation where an accused infringer compares the accused infringing behavior to the prior art in an attempt to prove that its conduct is either noninfringing or the patent is invalid as anticipated because the accused conduct is simply "practicing the prior art." In Tate, this court explained that accused infringers "are not free to flout the requirement of proving invalidity by clear and convincing evidence by asserting a 'practicing the prior art' defense to literal infringement under the less stringent preponderance of evidence standard." Id. at 1367. Instead "[a]nticipation requires a showing that each element of the claim at issue, properly construed, is found in a single prior art reference. 'It is the presence of the prior art and its relationship to the claim language that matters for invalidity.'" Zenith Electrs. Corp. v. PDI Commc'n Sys., Inc., 522 F.3d 1348, 1363 (Fed. Cir. 2008) (quoting Tate, 279 F.3d at 1367). Here, as explained above, Amazon's experts explained how each of the claim elements is disclosed by Amazon's 1995 System. Amazon adequately satisfied its burden to show by clear and convincing evidence that each limitation of claims 1, 3, 5, 7, and 8 was found in its 1995 System and thus, these claims are invalid as anticipated.

The CAFC showdown came down with some fancy footwork - legalistic conniptions to twist the ruling to Amazon's favor. The appeals court saddles up on the jury failing to state how they found a claim invalid, as a loophole to overrule the judge, and find in favor of the large corporation. The long-winded justification is the new case law that readily allows an appeals court to overrule a district court on a whim of bias.

After the district court's JMOL rulings, the jury's finding of invalidity as to claim 2 was not disturbed by any of the district court's subsequent JMOL rulings and remains in place. The remaining issue is the impact on claim 9 of the district court's grant of Cordance's JMOL motion on one theory (§ 112), but not on the other (§ 102(f)).

When reviewing a general jury verdict, different rules apply depending upon whether the flaw is in the legal theory or the evidence. In Griffin v. United States, 502 U.S. 46 (1991), the Supreme Court explained, in the context of a criminal case, that "[j]urors are not generally equipped to determine whether a particular theory of conviction submitted to them is contrary to law." Id. at 59. "When, therefore, jurors have been left the option of relying upon a legally inadequate theory, there is no reason to think that their own intelligence and expertise will save them from that error." Id. A "legal error," which requires overturning a general verdict, "means a mistake about the law, as opposed to a mistake concerning the weight or the factual import of the evidence." Id. "Quite the opposite is true, however, when they have been left the option of relying upon a factually inadequate theory, since jurors are well equipped to analyze the evidence." Id. In that situation, a court should not negate a verdict "merely on the chance . . . that the jury convicted on a ground that was not supported by adequate evidence when there existed alternative grounds for which the evidence was sufficient." Id. at 59-60 (quoting United States v. Townsend, 924 F.2d 1385, 1414 (7th Cir. 1991)).

This court and other circuits have applied this rationale to uphold general jury verdicts in the civil context as well. See, e.g., Northpoint Tech. v. MDS Am., 413 F.3d 1301, 1311-12 (Fed. Cir. 2005) (collecting cases). The Third Circuit has applied Griffin in the criminal context, see, e.g., United States v. Syme, 276 F.3d 131, 144 (3d Cir. 2002), but has not yet directly addressed this question, post-Griffin, in the civil context. This court believes that the Third Circuit would likely find the rationale of Griffin persuasive and applicable in the civil context. See Agere Sys., Inc. v. Atmel Corp., Case No. 02-cv-864, 2005 WL 2994702 (E.D. Pa. Aug. 17, 2005) (concluding that Griffin's principle is equally applicable in the civil context), see also Hofkin v. Provident Life & Accident Ins. Co., 81 F.3d 365, 369 (3d Cir. 1996) ("A Rule 50 motion must be denied if there is evidence reasonably tending to support the recovery by [a party] as to any of its theories of liability." (emphasis added) (internal citation omitted)).

A general jury verdict of invalidity should be upheld if there was sufficient evidence to support any of the alternative theories of invalidity. "A failure of proof with respect to any single item of evidence does not justify a grant of either JMOL or a new trial; even if some of the proposed factual grounds . . . are not generally sufficient to support a verdict, that is not fatal, because the critical question is whether the evidence, taken as a whole, was sufficient to support the jury's verdict." Northpoint Tech., 413 F.3d at 1311. In the absence of any ruling on the sufficiency of the evidence on both theories presented to the jury with respect to claim 9, the district court had no basis to find the jury's general verdict unsustainable on the written description theory alone. The JMOL ruling on written description was, thus, improper and is vacated.

Amazon prevails.