NOTE: This disposition is nonprecedential.

 

United States Court of Appeals 

for the Federal Circuit ______________________ 

TRUSTID, INC.,

Plaintiff-Appellant

v.

NEXT CALLER, INC.,

Defendant-Appellee

______________________ 

2022-1433

______________________ 

Appeal from the United States District Court for the 

District of Delaware in No. 1:18-cv-00172-MN, Judge 

Maryellen Noreika.

______________________ 

Decided: March 1, 2023

______________________ 

WILLIAM MILLIKEN, Sterne Kessler Goldstein & Fox, 

PLLC, Washington, DC, argued for plaintiff-appellant. 

Also represented by MICHAEL D. SPECHT, JONATHAN 

TUMINARO. 

 SARAH CHAPIN COLUMBIA, McDermott Will & Emery 

LLP, Boston, MA, argued for defendant-appellee. Also represented by IAN BARNETT BROOKS, PAUL WHITFIELD 

HUGHES, Washington, DC; JACK B. BLUMENFELD, MEGAN 

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2 TRUSTID, INC. v. NEXT CALLER, INC. 

DELLINGER, Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE. 

 ______________________ 

Before LOURIE, PROST, and CHEN, Circuit Judges.

LOURIE, Circuit Judge. 

TRUSTID, Inc. (“TRUSTID”) appeals from a decision of 

the United States District Court for the District of Delaware denying TRUSTID’s motion for judgment as a matter 

of law (“JMOL”) on a claim of infringement of U.S. Patents 

8,238,532 (the “’532 patent”) and 9,001,985 (the “’985 patent”) and granting Next Caller, Inc.’s (“Next Caller’s”) motion for JMOL on a claim of false advertising under the 

Lanham Act. See TRUSTID, Inc. v. Next Caller, Inc., No. 

1:18-cv-00172, 2022 WL 318299 (D. Del. Jan. 5, 2022) (“Decision”). For the following reasons, we affirm. 

BACKGROUND

In the late 2000s, TRUSTID developed a caller identification product known as the Authenticator and described 

that system and a method of using it in the ’532 and ’985 

patents. Next Caller later entered the caller identification

market at a lower price point than the Authenticator with 

a product known as VeriCall. 

Both products detect fraudulent or “spoofed” calls while 

authenticating those from a business’s genuine callers. 

TRUSTID advertised that such authentication could prove 

beneficial for businesses that utilize automated Interactive 

Voice Response (“IVR”) technology to answer calls. In particular, TRUSTID advertised that use of the Authenticator 

could lead to a 5–10 percent improvement in IVR containment rates, a measure of callers who can have their issues 

resolved by the automated system without having to speak 

to a live agent. Such increases in IVR containment may 

save businesses money because, if a caller has her issue 

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TRUSTID, INC. v. NEXT CALLER, INC. 3

resolved by the automated system, the business need not 

pay an agent to provide that caller with additional service. 

After learning about TRUSTID’s IVR-containment 

marketing, which had been confirmed via extensive testing, Next Caller’s Head of Sales instructed his team to “jack

that stat or make up a number like 8%” for Next Caller’s 

product. J.A. 8557. Thereafter, Next Caller advertised 

VeriCall as providing a 10 percent increase in IVR containment rates. 

TRUSTID sued, asserting that Next Caller falsely advertised VeriCall’s ability to increase IVR containment by 

10 percent. J.A. 6294, 6540. At trial, the jury found Next 

Caller’s 10 percent IVR containment statements to be literally, and willfully, false, ultimately finding in favor of 

TRUSTID on its claim for false advertising under the Lanham Act. The jury subsequently awarded TRUSTID $1.44 

million in damages, plus an additional $1.44 million in punitive damages.

TRUSTID also sued for infringement of the ’532 and 

’985 patents. The ’532 patent relates to TRUSTID’s callerID system. Representative claim 32 is presented below:

32. A system for performing forensic analysis 

on calling party number information associated with an incoming call from a telephonic 

device, before the incoming call is answered, 

comprising

an interface for receiving calling party 

number information associated with the 

incoming call;

a memory configured to store a plurality of 

expected call patterns; and

one or more processors configured to:

gather operational status information 

associated with the calling party number information, and

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4 TRUSTID, INC. v. NEXT CALLER, INC. 

assign a source origin confidence metric to the calling party number using 

the operational status information and 

an expected call pattern in the plurality of expected call patterns. 

’532 patent at col. 16 l. 62–col. 17 l. 9 (emphasis added). 

The ’985 patent relates to TRUSTID’s caller-ID 

method. Representative claim 1 is presented below:

1. A method of determining a source origin 

confidence metric of a calling party number or 

a billing number associated with an incoming 

call to a called party telephonic device from a 

calling party telephonic device, comprising:

receiving by an electronic system associated with the called party telephonic device the calling party number or billing 

number, wherein the electronic system receives the calling party number or billing 

number from the called party telephonic 

device;

after receiving the calling party number or 

billing number and before the incoming 

call is answered, gathering by the electronic system associated with the called 

party telephonic device operational status 

information associated with the calling 

party number or billing number; and 

determining by the electronic system associated with the called party telephonic device the source origin confidence metric for 

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TRUSTID, INC. v. NEXT CALLER, INC. 5

the calling party number or billing number.

’985 patent at col. 15 ll. 2–19 (emphasis added). 

Next Caller focused its noninfringement arguments on

three claim limitations, one of which is shared across the 

two asserted patents. In particular, Next Caller asserted 

that VeriCall did not perform its authentication analysis 

“before the incoming call is answered,” as required by both 

asserted patents, because its analysis is performed after an 

IVR system answers incoming calls. At trial, the jury accordingly found TRUSTID’s patents valid but uninfringed. 

TRUSTID and Next Caller both moved for JMOL, with 

Next Caller moving for a finding of no false advertising and 

no punitive damages, and TRUSTID moving for a finding 

of infringement. The district court denied TRUSTID’s motion but granted Next Caller’s motion, finding no false advertising while upholding the jury’s finding of 

noninfringement. TRUSTID appealed the grant of JMOL 

finding no false advertising and the denial of JMOL regarding infringement. We have jurisdiction under 28 U.S.C. 

§ 1292(c)(1).

DISCUSSION

We review decisions on motions for JMOL under the 

law of the regional circuit. MobileMedia Ideas v. Apple, 780 

F.3d 1159, 1164 (Fed. Cir. 2015). The Third Circuit reviews 

district court JMOL decisions de novo, viewing the record 

in the light most favorable to the verdict winner and drawing all reasonable inferences in its favor. Id. “Only if the 

record is ‘critically deficient of the minimum quantum of 

evidence’ on which a jury could reasonably base its verdict 

does the Third Circuit affirm a grant of JMOL.” Id. (citing 

Pitts v. Delaware, 646 F.3d 151, 155 (3d Cir. 2011)). 

TRUSTID contends that the district court erred in entering JMOL overturning the jury verdict that Next Caller 

willfully engaged in false advertising under the Lanham 

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6 TRUSTID, INC. v. NEXT CALLER, INC. 

Act. TRUSTID also contends that the district court erred 

in upholding the jury’s findings of noninfringement. 

I.

We turn first to the district court’s grant of Next 

Caller’s motion for a JMOL of no false advertising under 

the Lanham Act. Section 43 of the Lanham Act provides:

Any person who, on or in connection with 

any goods or services, or any container for 

goods, uses in commerce . . . any false designation of origin, false or misleading description of fact, or false or misleading 

representation of fact, which . . . in commercial advertising or promotion, misrepresents 

the nature, characteristics, qualities, or geographic origin of his or her or another person’s 

goods, services, or commercial activities, shall 

be liable in a civil action by any person who 

believes that he or she is or is likely to be damaged by such an act.

15 U.S.C. § 1125(a)(1)(B).

In the Third Circuit, a Lanham Act false advertising 

claim requires a showing of five elements:

1) that the defendant made false or misleading statements as to his own product or another’s;

2) that there is actual deception or at least a tendency

to deceive a substantial portion of the intended audience;

3) that the deception is material in that it is likely to 

influence purchasing decisions;

4) that the advertised goods travelled in interstate 

commerce; and

5) that there is a likelihood of injury to the plaintiff in 

terms of declining sales, loss of good will, etc.

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TRUSTID, INC. v. NEXT CALLER, INC. 7

Warner-Lambert v. Breathassure, 204 F.3d 87, 91−92 (3d 

Cir. 2000).

Although the district court agreed with the jury that 

Next Caller willfully made literally false statements concerning IVR containment (element one), it found insufficient evidence of deception (element two), materiality 

(element three), and injury (element five). The district 

court therefore entered JMOL reversing the jury’s verdict. 

TRUSTID contends that sufficient evidence exists to 

support the jury’s finding of false advertising, and thus

that the district court erred in overturning that verdict. In 

addition, TRUSTID contends that the jury may have based 

its verdict on a separate legal theory involving price disgorgement. At oral argument, TRUSTID further contended 

that such a theory does not require proving actual deception or materiality. We address these arguments in turn.

A.

We first address whether there was a deficiency of 

proof in establishing any of the five elements of a Lanham 

Act claim under Third Circuit law. We begin and end with 

element three: materiality.

The parties dispute what is required for the materiality 

prong to be met. TRUSTID argues that a showing of actual 

reliance on a false statement is not required to establish 

materiality. Rather, the false statement need only be 

“likely to influence the purchasing decision.” U.S. 

Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898 

F.2d 914, 922 (3d Cir. 1990). However, the seminal Lanham Act case in the Third Circuit, Parkway Baking v. Freihofer Baking Co., 255 F.2d 641 (3d Cir. 1958) holds that, 

for cases involving monetary damages, “there must be a 

showing of some customer reliance on the false advertisement.” Id. at 648; see also Decision at *9 (framing the materiality element as requiring that “the purchasing decision 

of the deceived party [be] impacted by the deceptive 

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8 TRUSTID, INC. v. NEXT CALLER, INC. 

statement”). We find it unnecessary, however, to determine whether TRUSTID needed to demonstrate actual reliance on Next Caller’s false statements or just a likelihood 

that they would influence purchasing decisions because, 

under either theory, there is insufficient evidence to support a finding of materiality.

First, we look to the record, viewing it in the light most 

favorable to TRUSTID, to determine whether it is critically 

deficient in the minimum quantum of evidence on which a 

jury could reasonably find that the 10 percent IVR containment statements actually influenced customers’ purchasing decisions. See MobileMedia Ideas, 780 F.3d 1164. In 

performing the same analysis, the district court held that 

“there is a dearth of evidence that any customer relied on 

or was impacted by the 10% IVR statement in connection 

with making purchasing decisions.” Decision at *9. In particular, the court noted that “the only evidence for [] customers that addressed IVR containment suggested that 

IVR containment was not important or relevant to their 

purchasing decisions.” Id. We agree.

The record contains evidence relating to only four Next 

Caller customers: Capital One, Dish Network, Comcast, 

and BBVA. TRUSTID has not pointed us to any part of the 

record establishing that any of these customers’ decisions 

to purchase a call authenticator product were influenced by 

Next Caller’s false statements. 

Indeed, Capital One made its purchasing decision before the false statements were ever made. J.A. 60 (finding 

the false IVR statement was first made in September 

2017), 6443−47 (establishing that Capital One made its 

purchasing decision no later than April 2017); see also id.

6509. The false statements therefore could not have influenced Capital One’s purchasing decision.

For Dish Network, a company representative expressly 

testified that it did not rely on Next Caller’s false IVR containment claims when making its purchasing decision. 

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TRUSTID, INC. v. NEXT CALLER, INC. 9

J.A. 6550−51. Instead, it relied on a positive referral from 

Capital One, which had conducted two pilot trials to test 

VeriCall’s authentication capabilities, including one headto-head test with TRUSTID’s Authenticator product. J.A. 

6446−47, 6481. After completing these trials, Capital One 

determined that VeriCall “demonstrate[ed] better accuracy” at a fraction of the cost of TRUSTID’s Authenticator 

product. J.A. 6522−24; see also J.A. 6312−13, 7877−78, 

6525 (finding that VeriCall caught non-authentic, “spoof” 

calls that the Authenticator missed). After Capital One 

provided this positive referral, Dish Network performed its 

own independent evaluation of VeriCall, and subsequently 

decided to purchase it. Id. 6550−51. 

Representatives from Comcast and BBVA further testified that they did not use VeriCall for IVR containment 

purposes. See J.A. 6532 (testimony that BBVA had not 

used VeriCall for “[IVR] containment purposes at all”); id.

6540-41, 6544 (testimony that Comcast did not consider using VeriCall for IVR containment because Comcast does 

not “use IVR authentication to drive IVR containment”). 

These company representatives further testified that their 

companies elected to purchase VeriCall based on a variety 

of factors, including independent testing, relating to call 

authentication, not their application to IVR containment. 

See, e.g., J.A. 6436−37, 6438. 

Thus, whether because of the timing of the purchase 

(Capital One), independent testing (Capital One, Dish Network, Comcast), reliance on positive referrals (Dish Network), use of the product for authentication rather than 

IVR containment (Comcast, BBVA), or explicit testimony 

that the marketing materials containing the false statement were not relied upon for making purchasing decisions 

(Dish Network), none of these customers showed any actual reliance on the false 10 percent IVR containment 

statements. 

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10 TRUSTID, INC. v. NEXT CALLER, INC. 

Even assuming that Third Circuit law required 

TRUSTID to establish only that customer purchasing decisions were likely to be impacted by the false statements, we 

still find a deficiency of evidence. TRUSTID has not 

pointed to any evidence suggesting that any one of these 

four customers was likely to be influenced by the false 

statements after having performed their own independent 

testing of the product or in deciding to purchase VeriCall 

for implementation outside of the IVR context. TRUSTID 

also has not pointed to any evidence suggesting that Next 

Caller had or was likely to procure other customers interested in purchasing VeriCall for application in an IVR context such that their purchasing decisions were likely to

have been affected by the false statements. 

Evidence in the record established that “[i]f one vendor 

has [a] better IVR containment metric than the other, that 

might be something that [a customer] would consider when 

selecting a vendor.” J.A. 6531−32. However, whether a 

metric “might be something” to consider when selecting between two vendors is insufficient to establish a likelihood 

of influencing a decision to purchase one authentication 

product over another. Although TRUSTID’s CEO testified 

that IVR containment is “the single key metric for companies that use it,” the record fails to provide testimony from

a Next Caller customer that did use or consider using VeriCall for that purpose. See J.A. 6295−95. At best, the record reflects that it was possible that, sometime within the 

three-and-a-half-year window during which Next Caller 

falsely claimed unproven IVR containment improvements, 

a potential customer interested in purchasing an authenticator for use within an IVR context could have had its purchasing decision influenced by Next Caller’s false

statements. That is not enough to establish materiality. 

See, e.g., Allen Organ Co. v. Galanti Organ Builders Inc., 

798 F. Supp. 1162, 1164–65, 1169–70 (E.D. Pa. 1992) (holding that testimony from plaintiff’s corporate president on 

the perceived effect that false advertising had on 

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consumers, along with an economist’s testimony on the alleged effects on plaintiff’s sales due to the defendant’s entry 

into the market, was insufficient to establish an “impact of 

the offensive materials directly on the purchasing public”), 

aff’d, 995 F.2d 215 (3d Cir. 1993) (affirming without written opinion). 

Because of the deficiency in proof to establish materiality, we affirm the district court’s decision finding no Lanham Act violation under Third Circuit law. 

B.

We next turn to TRUSTID’s profit disgorgement theory. According to TRUSTID, under Williamson-Dickie 

Manufacturing Co. v. Davis Manufacturing Co., 251 F.2d

924 (3d Cir. 1958), if a plaintiff successfully establishes 

that the defendant committed a willful violation of the Lanham Act, then the plaintiff is entitled to disgorgement of 

profits. At oral argument, TRUSTID asserted that profit 

disgorgement was available even absent a showing of materiality of that false statement. We are not persuaded. 

The decision in Williamson-Dickie was predicated on a 

finding of trademark infringement, that is, an actual finding of injury, with a resulting right to recover any resulting 

damages. Id. at 927. Here, although TRUSTID is correct 

that there was a finding of a willfully false statement, as 

discussed above in Section I.A, TRUSTID failed to establish that it had a right to recover under the Lanham Act

under the operable Third Circuit law. The willfully false 

statement, standing alone, does not establish this right; 

TRUSTID still had to show each of the other four elements 

of the claim to be on par with the finding of trademark infringement in Williamson-Dickie. Because TRUSTID 

failed in that respect, the price disgorgement theory advanced in Williamson-Dickie is inapposite. 

II.

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12 TRUSTID, INC. v. NEXT CALLER, INC. 

We turn next to the decision denying TRUSTID’s motion for JMOL of infringement, which we review de novo, 

viewing the record in the light most favorable to the verdict 

winner, which, for this issue, was Next Caller. See MobileMedia, 780 F.3d at 1164.

The dispute over infringement focused on three distinct

claim elements across the two asserted patents. One of 

those claim elements—performing an authentication analysis “before the incoming call is answered”—is common to 

both asserted patents, and our findings on it are dispositive

in both patents. 

TRUSTID asserts that Next Caller infringes the “incoming call” limitation because VeriCall performs its authentication analysis before the call is answered by a live

agent. Next Caller argues that by the time the agent answers the call, it is no longer an “incoming call” because it

has already been “answered” by the IVR. 

Although the district court construed “call” to mean 

“any connection” over a network, and construed “is answered” to mean “actually or virtually goes off the hook,” it 

did not construe “incoming.” See J.A. 12−13. Thus, although TRUSTID frames this dispute as a legal one concerning the proper construction of the incoming call 

limitation, we find the actual question on appeal is whether 

the jury could have reasonably determined that a call already answered by the IVR still constituted an “incoming 

call” when it was later answered by a human agent. That

is not a question of law, but rather a question of fact challenging the sufficiency of the evidence of noninfringement. 

See ePlus v. Lawson Software, 700 F.3d 509, 520 (Fed. Cir. 

2012); ACCO Brands, Inc. v. ABA Locks Mfrs. Co., 501 F.3d 

1307, 1311 (Fed. Cir. 2007); see also Kaufman v. Microsoft, 

34 F.4th 1360, 1369−70 (Fed. Cir. 2022). 

In denying TRUSTID’s motion for JMOL, the district 

court concluded that the jury was presented with sufficient 

evidence to support its verdict. Decision at *5; see also, e.g., 

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TRUSTID, INC. v. NEXT CALLER, INC. 13

J.A. 6439−40, 6826−27, 6839−40, 7667−68, 7680, 7801. Although the court found that there was conflicting testimony, 

it reasoned that the “jury was free to credit the evidence 

presented that the ‘call’ was no longer an ‘incoming call’ 

once it was answered by the IVR.” Decision at *5. We 

agree. Because that claim limitation is common to all independent claims of the asserted patents, we need not assess any additional limitations to affirm the district court’s 

denial of JMOL as to infringement. 

CONCLUSION

We have considered TRUSTID’s remaining arguments 

and find them unpersuasive. For the foregoing reasons, we 

affirm. 

AFFIRMED

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