## United States Court of Appeals for the Federal Circuit

04-1234

EOLAS TECHNOLOGIES INCORPORATED and THE REGENTS OF THE UNI VERSITY OF CALIFORNIA, Plaintiffs-Appellees,

v.

MICROSOFT CORPORATION, Defendant-Appellant. Martin R. Lueck , Robins, Kaplan, Miller & Ciresi L.L.P., of Minneapolis, Minnesota, argued for plaintiff-appellees. With him on the brief were Jan M. Conlin , Richard M. Martinez , and Munir R. Meghjee . Of counsel was Emily M. Rome

. Constantine L. Trela, Jr. , Sidley Austin Brown & Wood LLP, of Chicago, Illinois, argued for defendant-appellant. Wi th him on the brief were David T. Pritikin , Richard A. Cederoth , Robert N. Hochman , and Carter G. Phillips , of Washington, DC. Of counsel on the brief were H. Michael Hartmann , Brett A. Hesterberg , and Steven P. Petersen , Leydig, Voit & Mayer, Ltd., of Chica go, Illinois. Of counsel was Thomas Andrew Culbert , Microsoft Corporation, of R edmond, Washington. Gregory S. Coleman , Weil, Gotshal & Manges LLP, of Austin, Texas, for amicus curiae Oracle Corporation. With him on the brief were Matthew D. Powers and Edward R. Reines , of Redwood Shor es, California. John D. Vandenberg , Klarquist Sparkman, LLP, of Po rtland, Oregon, for amici curiae Autodesk, Inc., et al. Charles K. Verhoeven , Quinn Emanuel Urquhart Oliver & Hedges, of San Francisco, California, for amici curiae Net scape Communications Corporation, et al. With him on the brief were David A. Perlson and Jennifer A. Kash

.Gerard M. Stegmaie r, Wilson Sonsini Goodrich & Ro sati, of Reston, Virginia, for amicus curiae Association Fo r Competitive Technology. With him on the brief was Craig M. Tyler

. Appealed from: United States District C ourt for the Northern District of Illinois Judge James B. Zagel

## United States Court of Appeals for the Federal Circuit

04-1234

EOLAS TECHNOLOGIES INCORPORATED and THE REGENTS OF THE UNI VERSITY OF CALIFORNIA, Plaintiffs-Appellees,

v. MICROSOFT CORPORATION, Defendant-Appellant.

__________________ _________ DECIDED: March 2, 2005

__________________ _________ Before RADER, Circuit Judge , FRIEDMAN, and PLAGER, Senior Circuit Judges

. RADER, Circuit Judge

.

The United States District Court for the Northern District of Illinois granted final judgment to Eolas Technologies Incorporat ed and the Regents of the University of California (collectively, Eolas) after a jury found that Microsoft Co rporation (Microsoft) infringed claims 1 and 6 of U.S. Patent No. 5,838,906 (the ’906 patent) and actively induced United States users of Internet Explor er to infringe claim 1. The district court also invoked 35 U.S.C. § 271(f) to include fo reign sales of Internet Explorer in the royalty awarded to Eolas. Because the dist rict court improperly granted judgment as a matter of law (JMOL) in Eolas’ favor on Microsoft’s anticipation and obviousness defenses and improperly reject ed Microsoft’s inequitable conduct defense, this court vacates the district court’s decision and rem ands for a new trial on these issues. Inaddition, this court affirms the district court’s claim construction of “exec u table application” and finds the district c ourt did not e rr in its jury instruction with regard to the claim limita tion “utiliz e d by said b r owser to identify and locate.” Finally, this c ourt affirms the district court’s holding that “ c omponent s,” according to section 271(f)(1), include s software code on golden master disks.
I. On February 2, 1999, Eolas brought an infringement acti on against Microsoft. In particular, Eolas alleged infringement of claims 1 and 6 of the ’906 patent. 1 The ’ 906 patent carries the title “distributed hype rmedia method for automatically inv o king external applic ation provid ing interaction and display of embedded o b jects within a hypermedia document.” Eolas alleged that certain aspects of Microsoft's Internet Explorer (IE) product inco rporat e its invention. Microsoft denied infringe ment and asserted that the claims were invalid and unenforceable. Essentially, the claimed invention allows a user to use a web bro w ser in a f u lly interactive environment. For example, the in vention enables a user to view news clips or play games across the Internet. The ’9 06 claims r equire a web brows e r with certain properties. Specifically, the invention call s for a browser located in a “distributed hypermedia environment.” In operation, the claimed brows e r locates a web page, or distributed hyper m edia document, with a uniform resource locator (URL ). Then the browser parses the text of

1 The Univ ersity of California file d the ’906 Patent on October 17, 1994, which later issued on November 17, 1998. The Univ ersity later granted an exc l usiv e licens e for the ’906 Patent to Eolas. A reexamination of the ’906 Patent was ordered b y the Director and is currently pend ing in the United Stat es Pat ent and Trademark Office. See Direct o r Initiated Order for R eex amination, Control No. 90/006,831.

04-1234 2the web page inc l uding an “embed text format” specifying an object external to the web page that has “type information associated with it” (i.e., spreadsheets, databases). The browser next uses that type information to identify and locate an exec utable applicatio n that automatically enables interactive vi ewing of the object. The inventors have consistently maintained that “[t]his invent ion was the first instance wher e interactive applications were embedded in Web pages .” The district court found that the inv e ntion was reduc ed to practice no later than Januar y 27, 1994, when it was presented at a Web conference. During prosecution of the ’906 patent, the examiner r e jected the claims several times for obviousness . Besides the World Wide Web, HTTP and HTML, the examiner cited three main prior art references during prosecution: (1) the Mosaic Web Browser, which allows users to go fr om one webs ite to another by clicking links on web page s and has some capability to display objects; (2 ) U.S. Patent No. 5,206,951 to Khoyi et a l

. (Khoyi), which describes an Object Linking and Embedding System (OLE); 2 and (3) U.S. Patent No. 5,581,686 to Koppolu et al. (K oppolu), which covers some OLE technolog y where the application displa ying data may be a component, suc h as an object handle r that is implemented as a Dyna mically Linked Library ( D LL). 3 The examiner allowed the claims on March 30, 1998.

2 OLE allows a vis ual object or dat a created usin g one application to be displayed and edited in another applic ation.

3 An example of a DLL is spell che ck; a DLL is a component that can run only within another applic ation. Compare a standalone applicat ion, such as Word or Exc e l, whic h can run independen tly of another application. An implementation of OLE technology would be using a s t andalone application, such as Word whic h may then utilize a co mponent or DLL such as spell ch eck.

04-1234 3Microsoft's Invalidity Defenses At trial, Microsoft presented evidence that the Viola Web br owser (Viola), invented by Pei-Yuan Wei (Wei), was in public us e more than one year before Eolas ' invention. Microsoft asserted that this pr ior art would invalidate the invention under 35 U.S.C. § 102(b). Microsoft also used the Viola reference to challenge validity on the basis of sections 102( a), 102(g) and 103. Wei testified at trial th at he h ad written code for Viola so that the browser could handl e embedded a u tomatically-launched interactive programs in May 1993. Wei testified as well that he demonstrated t hat capability to Sun Microsystems engineers at that time. Microsoft corro borated existence of this code at trial through a computer demons tration of an archived file , dated May 12, 1993. The parties refer to this versi on of Viola as DX34. Wei demonstrated DX34 to two Sun Microsystems engineers on May 7, 1993. Wei also demonstrated a different version of Viola to the district court. This second exhibit, DX37, was allegedly Wei’s a ttempt on May 27, 1993, to improve DX34. Apparently due to a bug in the program, Wei could not make the DX37 version function in the cour troom in conjunction with the Internet. Mic r osoft's tec hnical ex pert testified that both versions of the Viola code taught all of the limitations of the claims at issue. The district court found as a mat t er of law that Wei abandone d, suppressed or concealed DX34 within the meaning of sect ion 102(g) because Wei dis c losed that version only to the Sun engi neer s and then changed it. The dist rict court extended this finding to s e ction 102( b) and found as a matter of law that since DX34 was abandon ed, showing it to the Sun engineer s could not constitute a public us e. The district court prevented Microsoft from pres enting any evidence of DX34 to the jury and later granted

04-1234 4Eolas' Ru le 50 motio n for JMOL in ruling t hat neither the antic ip ation nor obviousness defenses c ould be pr esented to the jury afte r hearing testimony on those is sues from Microsoft's ex pert. Microsoft's Inequitable Conduct Defense Michael D. Doyle (Doyle), one of the inv ent ors of the ’906 patent, knew of Viola yet did not disclos e any informati on regarding t hat reference to the United States Patent and Trademark Office (PTO). On August 31, 1994, Doyle issued a pr ess release to an e-mail list indic a ting that researchers at the Univ ersity of California had “created software for embedding interactive program objects within hypermedia documents.” That same day, Wei contacted Doyle via e-mail in res ponse to the press release. Wei alleged that his May 1993 demonstration of Vi ola (version DX34) to Sun Micr osystems engineers exhibited a way to embed inter a ctive objects and transport them over the web. Wei directed Doyle to his paper about Viola (the Viola paper ), which was available on the Internet at least by August 13, 1994. Doyle downloaded and read the paper. In a later email exc hange, Doyle attempted to get Wei to concede that he was not the first to invent. Additionally, Doyle told We i the inventions were different. On October 17, 1994, the Univers i ty of Ca lifornia filed the ’906 patent applic ation. In 1998, before issuance of the ’906 patent, Doyle did more research on Viola and made a folder labeled “Viola st uff.” This folder included press releases of two “beta” 4
versions of Viola from February and March of 1994. Although av ailable on t he Internet, Doyle nev er obtained the Viola code.

4 A “beta” release occ u rs after t he development stage and allows general users to try new s o ftware. An “alpha” releas e is a version for specialists to test to provide feedback to the software's author.

04-1234 5The district court found that Doyle’s know ledge of Viola was not enough to t r igger his obligation to bring it to t he attention of the examiner of the ’906 patent. The distric t court determined that Viola was not prior art and as such not material. Although question ing Doyle’s credib ility ab out his role in the prosecution of the patent, the trial court nonetheless found that he had acted with candor befor e the PTO bec ause “it was the law and it was too danger ous not to do so.” Claim Construction for Infringement Claim 1 is a method claim; cl aim 6 a product claim. The parties and the dis t rict court focused on claim 6 to interpret th e claims because Eolas assert ed that the computer program product in claim 6 embodies the method of claim 1. Claim 6 reads: 6. A comp uter progra m product for us e in a system h a ving at least one client wor kstation and one network server coupled to said network environment, wherein said network environment is a distributed hypermedia environment, the computer program product comprising: a computer usable medium having com puter readable progr am code physically embodied ther ein, said comput er program product further comprising: computer readable pr ogram code for c ausing said client workstation to exec ute a browser application to par se a first distributed hy permedia document to identify text formats in cluded in said distributed hypermedia document and to r e spond to predetermi ned text formats to initiat e processes specified by said text formats; computer readable pr ogram code for c ausing said client workstation to utilize sa id browser to display, on said client workstation, at least a portio n of a first hypermedia document receiv ed over said network from said server, wherein the portion of said fi rst hypermedia document is displayed within a firs t browser-controlled window on s a id client workstation, wherein said first distributed hypermedia docum ent includes an embed text format, located at a first location in said first distributed hypermedia document, that specifies the location of at leas t a portion of an object external to the first distributed hypermedia documen t, wherein said object has type information associated with it utilized by said browser to identify and locate an execut able application external to the first distributed hypermedia

04-1234 6document, and wherein said embed text format is par s ed by s a id browser to automatically invok e said execut able application to execute o n said client workstation in or der to display said objec t and enable interactive processing of said object within a disp lay area created at said first location within the portion of said first di stributed hypermedia document being displayed in said first browser-controlled window. U.S. Patent No. 5,838,906 (i ssued Nov. 17, 1998), col. 17, ll. 58 – col. 18, ll. 30 (emphases added). After a Markman hearing, the dist rict court construed the terms “executab l e application” and “u tilized by s a id brows e r to identify and loc a te.” Eolas Techs., Inc

. v. Microsoft Corp. , No. 99 C 0626 (N.D. Ill. Dec. 29, 2000). The district court determined that “executable application” as used in the ’906 patent refers to “any computer program code, that is not the operating system or a utility, that is launched to enable an end user to directly interact with data.” Id. at 35. The district court also determined that “utilized by sa id browser to identify and loc a te” means that “the enumerated functions are perfo rmed by the brows e r.” Id. Microsoft appeals the “executable application” claim c onstruction and the jury instruction giv en with regard t o the term “utiliz ed by said brow ser to identify and locate.” The jury instruction regarding “ u tilize d by said browser to identify and locate” included in relevant part: Utiliz ed by said bro w s e r to identif y and locat e means th at the enu m erated functions are performed by the browser. . . . The inventors contemplated the browser’s use of some outside resources such as the operating system as operating systems are always involved in the operation of computer programs. Nevertheless it must be the browser, not the operating s ystem, that must do the heavy li fting of identifying and locating

. . . .

04-1234 7Statutory C onstruction of 35 U.S.C. § 271(f) Eolas claimed royalt y damages for both fo reign and domestic s a les of Windows with IE. Microsoft moved, in limine, to prev ent Eolas f r om seeking damages based on foreign sales under section 271( f). Microsoft exports a limited number of golden master disks containing the software code for the Windows operating s ystem to Original Equipment Manufacturers (OEMs) abroad who use that di sk to replic ate the code onto computer hard drives for sale outside of the United States. The go lden master disk itself does not e nd up as a physical part of an infringing product. The district court denied Microsoft’s motion, finding that source code is t he legal equiv a lent of a piec e of computer hardware and that “in a legal sens e, a [sic] source code is a made part of a computer product.” The district court determined t hat the code on the golden mast er disks constitutes “components” of an infringing product for co mbination outside of the United States under section 271(f). After a jury trial, the distri ct court entered judgment in favor of Eolas. The distric t court found that: (1) Microsoft did not s h ow in v a lidity of the ’906 cla i ms; (2) Microsoft did not proffer clear and convincing ev idenc e of inequitable c o nduct; (3) Microsoft infringed c l aims 1 and 6 and actively induced Un ited States users of IE to infringe claim 1; and (4) Eolas ’ s roy a lty for Microsoft’s infr ingement s hould inc l ude foreign sales of the patented computer code under se ction 271(f). The jury awarded Eolas a royalty of $1.47 per unit of infri nging product, which amounted to a total award of $520,562,280

. In its order, the district court issued a permanent injunction against Microsoft and

04-1234 8awarded pre-judgment interest on the award. The perm anent injunction has been stayed pending this appeal. This court has ju risdiction under 28 U.S.C. § 1295(a)(1).
II. Anticipation is a question of fact, whic h this court reviews for substantial evidenc e. In re Hyatt , 211 F.3d 1367, 1371 (Fed. Cir. 2000). Obviousness is a question of law premised on under lying findings of fact. Graham v. John Deere Co. , 383 U.S. 1, 17-18 (1966). This court “review [s] a grant of JMOL de novo, reapply i ng the district court's JM OL standard anew.” Un ion Carb ide Chems. & Plastics Tech. Corp. v. Shell Oil Co. , 308 F.3d 1167, 1185 (Fed. Cir. 2002). “In evaluating a Ru le 5 0 (a) motion, this court must examine the evidenc e to determine whether a jury could properly proceed to find a ver d ict for the party produc ing it, upon whom the onus of proof is imposed. In this regard, this court must vi ew the evidence in a li ght most favorable t o the non-moving party.” Mahurkar v. C.R. Bard, Inc. , 79 F.3d 1572, 1576 (Fed. Cir. 1996) (internal quotations omitted). This court reviews inequitable conduct for an abus e of discretion; “[t]he underlying fa ctual issues of materi ality an d intent [are reviewe d ] fo r clear error.” CFMT, In c. v. Yieldup Int'l Corp. , 349 F.3d 1333, 1337 (Fed. Cir. 2003). This court reviews claim c onstruction without deference. Markman v. Westview Instruments, Inc. , 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc). “The question of whether a jury instruction on an issue of patent law is erroneous is a matter of Federal Circuit law and is reviewed de novo.” Sulzer Tex t il A.G. v. Picanol N.V. , 358 F.3d 1356, 1363 (Fed. Cir. 2004). Lastly, “[t]his court revi ews questions of statutory interpretation without def erence.” U.S. Steel Group v. United States , 225 F.3d 1284, 1286 (Fed. Cir. 2000).

04-1234 9III. PRIOR ART DEFENSES As explained above, the di strict court found as a ma tter of law that DX34 wa s abandoned, suppressed or conc ealed within the meaning of section 102( g) becaus e Wei disclosed that version to Sun Micro systems’ engineers and then changed it. The district court extended this finding to sect ion 102(b), finding that abandonment of DX3 4 meant that the disc losure to the Sun Mi cr osystems engineers could not constitute a public use. The district c ourt prevented Microsoft from presenting any evidenc e o f DX34 to the jury and later granted Eolas' Rule 50 motion for JMOL that DX37 did not anticipate or render the ’906 patent obvious. Consequently, the jury did not consider Microsoft’s anticipation and obviousness defenses. The district court erred in finding as a matter of law that DX34 was abandoned, suppressed, or concealed withi n the meaning of section 102( g). The relev a nt portion of section 102(g) states: A person shall be entit led to a patent unless-- (g) (2) before such person’s inventi on thereof, the inve ntion was made in this country by another inventor who had not abandoned, suppressed, or concealed it. 35 U.S.C. § 102(g) (2004). This court’s case law distinguishes betwe en two types of conduct that invoke the exception within section 102(g). Apotex USA, Inc. v. Merck & Co. , 254 F.3d 1031, 1038 (Fed. Cir. 2001). The first aris es when an inventor actively conceals his invention from the public. Fujikawa v. Wattan a sin , 93 F

. 3d 1559, 1567 (Fed. Cir. 1996). Active concealment “refers to situations in which an inventor designedly, and with the view of

04-1234 10apply i ng it indefinitely and exc l usively for his own profit, withholds hi s invention from the public.” Id. The second occurs when “abandonmen t, suppression, or concealment may be inferred based upon the prior inventor’s unreasonable delay in making t he inv e ntion publicly k n own.” Dow Chem. Co. v. Astro-Valcour, Inc. , 267 F.3d 1334, 1342 (Fed. Cir. 2001). This cas e does not fit into either category. The record contains no evidence that Wei either intentionally wit hheld DX34 from the public or unreasonably delaye d a patent application or public disclosur e. In cont rast, the record indicates Wei not only demonstrated DX34 to two Sun Microsyst ems engineers wit hout a confidentiality agreement (on May 7, 1993), but only twenty-f our days later (on May 31, 1993) posted DX37 on a publicly-ac c essible Internet si te and notified a Sun Microsystems engineer that DX37 was available for downloading. T he district court erroneously co ncluded that the creation and public disclosure of DX37, an improved version of DX34, “ a bandoned” the invention under section 102(g). The district court’s conclus i on inap propriately narrowed the definition of “invention,” as used in section 102(g). This court’s interference case law illus t rates this point. In interference cases, one party wil l sometimes assert t hat the other party abandoned the invention by unreas onably delaying dis c losure of the inv e ntion after first reducing it to practice. However, this cour t excus e s delay between the first reduction to practice and public dis c losure if the inventor continued to refine, pe rfect, or improve the invention. Lutzker v. Plet , 843 F.2d 1364, 1367 (Fed. Cir. 1988) (“An inference of suppression or concealment may be overcome with evidenc e that the reason for the delay was to perfect the inv e ntion.”). “T he law does not punish an i n ven t or for

04-1234 11attempting to perfect his proces s before he give s it to the public. In fact, reasonable experimentation is frequently encouraged.” Frey v. Wagner , 87 F.2d 212, 215 (CCPA 1937). In this case, DX37, which includes th e same contested feature as DX34, represents an improved version of Wei’s inv ent ion, not an entirely ne w invention, as the district court suggests. Because creating an improved version of an invention does not in any sense abandon the origi nal invention, the district court erroneously excluded DX34 as prior art. Improvements may e nhance an invention prio r to disclosure o r patent application. If impr ovements caused loss of the or iginal invention under the erroneous rule adopte d by the district court, t he public would lose the benefit of dilig ent efforts to produce a more useful product. Eo las ’ arguments that Wei’s changes to the functionality and architecture of DX34 show abandonment are unpersuasiv e because such changes merely reflect improvements in advancing versions of software code. Thus, this court remands for proceedings to c onsider whether DX34 is prior art and, if so, whether it invalidates the ’906 patent. This court also reverses the district court’s finding that Wei’s May 7, 1993, demonstration to two Sun Micros ystems empl oyees wit hout confiden tiality agreements did not constitute a public use under secti on 102(b). “Public us e [under 35 U.S.C. § 102(b)] includes any use of the c l aimed inv ent ion by a person other than the inv e ntor who is under no limitation, re striction or obligation of s e crecy to the inv entor.” Netscape Communic a tions Cor p . v. Konrad , 295 F.3d 1315, 1320 (Fed. Cir. 2002). Because the Sun Microsystems employees we re under no limitation, rest riction or obligation of secrecy to Wei, this court determines the dem onstration may constitute a public use.

04-1234 12The district court erred in linking its sect ion 102(b) public use finding to its section 102(g) abandonment finding. A public use under secti on 102(b) cannot be undone by subsequent actions. The inquiry into a sect ion 102(b) public use proceeds independent of the inquiry into a s e ction 102(g) aban donment. “[N]otwithst anding aban donment of the prior use — which may preclude a c hallenge under secti on 102( g) — prior knowledge or use by others may invalidate a patent under se ction 102(a) if the prior knowledge or use was acce ssible to the public.” Woodland Trust v. Flowertree Nursery , 148 F.3d 1368, 1370 (Fed. Cir. 1998). Similarly, third party pri o r use accessible to the public is a section 102(b) bar. See Baxter Int'l, Inc. v. COBE Labs., Inc. , 88 F.3d 1054, 1058-59 (Fed. Cir. 1996). Netscape Communic a tions Cor p . v. Konrad , 295 F.3d 1315 (Fed. Cir. 2002), informs the application of these pr inciples to this cas e . In Nets cape , Konrad owned three computer-related patents. 295 F.3d at 1318. This co urt affirmed a finding of invalidity based on Konrad's prior demonstrati on of the invention to two employees at the Univer sity of California wit hout any obligation of confidentiality. Id. at 1319. Similarly, in the case at bar, Wei demonst rated DX34 to two S un engineers who were under no c onfidentialit y obligat ion. Indeed, the Sun engine ers informed Wei that they intended t o share information gleaned from Wei with other people at Sun. Eolas attempts to distinguish Netscape on the basis that Konrad was the patentee in that case, whereas here, Wei is a third party. Ho wev e r, a third party may, and often does, initiate a p ublic use. See, e.g. , Ba xter , 88 F.3d at 1058-59. Ther efore, Wei’s third-party disclos ure may erect a public us e bar.

04-1234 13Eolas further points t o W.L. Gore & Association, Inc. v. Garlock, Inc. , 721 F.2d 1540, 1550 (Fed. Cir. 1983), to advance its position that se ction 102(b) does not apply in this case. In Gore , a third party used the patented invention more than one year prior to the patentee's application date and the court found no public us e. Id. at 1549. Gore represents a different factual si tuation. The third party in Gore deliberately chose to keep the invention as a trade se cret and avoid disc los u re through a patent application. Accordingly, the Gor e third party had a confidentiali ty agreement in place with its employees to prevent public dis c losure of t he method whos e subject matter could not otherwise be publicly discerned. Id. This court found the Gore third party could not both elect t o avoid the patent sys tem and still invoke that system to erect a t h ird-party public use bar to an inventor who disclosed the invention for patenting. Thus, the secret activity in Gore did not c onstitute public use. Id. This case, however, is very different. Wei made no attempt to maintain confidentiality or to deliber ately eva d e disclos ure. Wei’s activities may erect a third party public use bar. In addition, this court vacates the dist rict court’s JMOL that DX37 did not anticipate t he ’906 patent. To anticipate, a single refer ence must teach each and every limitation of the cl aimed invention. See EMI Group N. Am., Inc. v. Cypress Semiconductor Corp. , 268 F.3d 1342, 1350 (Fed. Cir. 2001) . When viewed in “a light most favor able” to Microsoft, the testimony by Microsoft’s ex pert, Dr. Kelly, presents a question of fact as to whether DX37 anticipates the ’906 patent. See Mahurkar v. C.R. Bard, Inc. , 79 F.3d 1572, 1576 (Fed. Cir. 1996). Dr. Kelly testified that DX37 is in a computer usable medium with a program for use in a distributed hypermedi a environment. Further, Dr. Ke lly observed k e y features

04-1234 14in DX37, s u ch as a m e thod to parse a hyper media doc ument to identify text formats, to display at least a portion of the hypermedia document on a c li ent workstation, to include an embed text format that specifies the loc a ti on of an object external to the hy permedia document, to identify and locate an executable application, and to automatically dis p lay the object and enable the user to interact with it. This testimony arguably supports Microsoft’s argument that DX37 teaches all of the limitations of the ’906 patent. The district court dismissed Dr. Kelly ’s testimony as “conclusory.” This court hesitates to disturb the district court’s role in assessing evidenc e, but anticipat ion is a question of fact. Accordingly, this particular determinat ion lay within the prov ince of the jury. The district court also erred in its gr anting JMOL on obvious nes s. Dr. Kelly’s testimony provided s u fficient evidence to su rvive JMOL. In his testimony, Dr. Kelly discussed: (1) the scope of DX34 and DX37; (2 ) the potential differences between DX34 and DX3 7 and the claimed inven t ion; and (3) the state of the art and the level of skill in the art in 1993. Dr. Kelly ’s testimony could also be r ead to prov ide a s uggestion to u s e a browser in a distributed hy permedia envir onment as in the claimed inventio n. Although Microsoft's direct examination of Dr. Kelly focused on anticipation, the information solic ited from Dr. Kelly might al so support an argum ent of obviousness in the alternat ive. In light of this court’ s determination that DX34 was not aba ndoned or concealed, Microsoft should als o have the oppor tunit y to present DX34 as part of its obvious nes s defense. See Panduit Corp. v. Dennison Mfg. Co. , 810 F.2d 1561, 1568 (Fed. Cir. 1987) (indicating that a key prelim inary legal inquiry in obvious ness analys is is: “what is the prior art?”). Weighing the facts in favor of the non-moving party, as required by Rule 50, a reasonable jury should have the opportunity to determine

04-1234 15whether the claimed inventi on would hav e been obv ious at t he time of invention base d on the record. In sum, with respect to the district court’ s prior art rulings, this court finds: the district court erred in finding as a matter of law that DX34 was abandoned, s uppressed or concealed within the meaning of section 102(g); Wei’s Ma y 7, 1993 demonstration to two Sun M i crosystems employees without c onfidentiality agreements was a public use under section 102(b); and the dist rict court erred in it s JMOL that DX37 did not as a matter of law anticipate or render the ’9 06 patent obvious. As a result, this court remands for additional proceedings on these issues. INEQUITABLE CONDUCT This court also vacates the district c ourt’s decision on inequitab l e c o nduct. Ag ain the district court based its inequitable co nduct finding on the misunderstandin g that Viola could not poss i bly constitut e prior ar t. Relying on that erroneous determination, the district court concluded tha t Viola co ul d not be material to patentability. As discussed above, the district court erred in determining that DX34 was abandoned, suppressed or concealed withi n the meaning of section 102(g). Further, the district court did not explain a reason for declining to consider DX37, also created prior to Doyle’s invention, as immate rial to patentability of t he ’906 patent. In respect to potential prior art software under section 102(b), this court has explained that the software product constitutes prior art, not necessarily the later publis hed abstract associated with that software product. In re Epstein , 32 F.3d 1559, 1567-68 (Fed. Cir. 1994). Similarly, in the case at bar, the V i ola brows e r itself, not the later developed Viola paper or “Viola st uff” file, constitutes prior art. On remand, the district court wil l

04-1234 16have an opportunity to include th is potential prior art in its i nequitable conduct inquiry. At the same time, the district court may re consider its findings on Doy l e’s intent to deceive the PTO. CLAIM CONSTRUCTI O N When interpreting dis puted claim terms, this court accords claim terms their customary meaning in the art at the time of invention. Home Diagnostics, Inc. v. LifeScan, Inc. , 381 F.3d 1352, 1355 (Fed. Cir. 2004). Fu rther, a construing court should consult the specification to determine whether the patentee gave a claim term a meaning inconsistent with t hat customary meaning in th e proper technologic a l and temporal context. Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings , 370 F.3d 1354, 1360 (Fed. Cir. 2004). The distric t court construed “executabl e application” to mean “any computer
program co de, that is not t he operating system or a utility, that is launched to enable an end user to directly interact with data.” Mi crosoft asserts that this term should be construed as “standalone programs.” Because, absent a disclaimer, the claims of the ’906 patent are not limited to the embodiments listed in the s pecification, this court affirms the district c ourt’s construction. As construed by the district court, “execu table applic ation” incl udes applications or components that are not standalone, i.e., DLLs such as spell c h eck. Such applications or components can only run when inv o ked by some other application. Microsoft asserts that its construction is c onsistent with the or dinary meaning of the term and that the specification does not otherwise define the ter m . Microsoft correctl y points out that all of the di sclos ed embodiments in the spec ification describe s t andalone

04-1234 17programs (i.e., word processors and sp readsheets) . Nonetheless, absent a clear disclaimer in the specification, the embodiment s in the specificatio n do not limit broader claim language. Liebel-Flarsheim Co. v. Medrad, Inc. , 358 F.3d 898, 907-08 (Fed. Cir. 2004). The record shows t hat the term “execu table application” does not ha ve a customary meaning in the c o mputer science field. Ther efore, the district court appropriately declined to impose a sharp limita tion on its scope. Accordingly, the trial court correctly perceiv ed that “ application” means “a computer program, that is not the operating system or a ut ility, that is des ig ned to allow an end- user to perform some specific task.” The district court also fo und support for this meaning in technical dictionaries

. For inst ance, the 1994 Micr osoft Press Comput er Dictionary defined “application” as “a computer program des igned to help people per f orm a certain type of work. An application thus differs from an oper ating s ystem (which runs a computer), a utility (whic h performs maintenance or gener al-purpose chores), and a langu a ge (with which com puter programs are created). . . .” Microsoft Press Computer Dictionary 23- 24 (2d ed. 1994). A few years later, the sa me dictionary defined “ application” as “a program designed to assist in the perform ance of a specific task, such as word processing, accounting, or inventory management. Com p are u t ility.” Microsoft Press Computer Dictionary 27 (3d ed. 1997). Still another source on the meaning of technical language defines “application” as a “program or group of programs desig ned for end users.” ZD Webopaedia, at http://www.zdwe boped ia.co m /TERM/a/application. h tml

. Neither the specification nor the prosecution history discl aims the district court’s construction of “executable application.” The ’906 patent makes no reference to the

04-1234 18phrase “executable applic ation” except in t he claims. See gener ally the ’906 patent. In addition, the specification repeatedly indicate s that the preferre d embodiment is only
one poss i bility for practice of the invention. Id. Because t h is court “consistently declines to construe c l aims acc o rding to th e preferred embodiment,” this court agrees with the district court that Microsoft’s proposed construc tion, limiting “exec u table application” to standalone program s, does not comport with the entire technological and temporal context for this term. N. Telecom Ltd. v. S a msung Elecs. Co. , 215 F.3d 12 81, 1293 (Fed. Cir. 2000). The prosecution hist ory does not disclaim the district court’s construction of “executable application,” and t hus supports the trial court’s reading of the term. According t o Microsoft, the applic ants argued t hat the Khoyi patent used libr a ry routines (i.e., components), while their invention di d not. In addition, Mi crosoft claims the applicants argued the Koppolu pat ent taught away from usi ng standalone applic ations. A review of the prosecution hi story does not show any disclaime r as Microsoft contends. The applic ants distinguished Khoyi on the grounds that t he display of the data object provided by the Khoyi func tionality was not interactive, and in the ’906 invention such interactivity could be ac hieved “without requiring Khoy i-like capabilities in the operating system.” Thus, t he applicants distinguished Kh oyi on the feature of interactivity, not on it s use of s t andalone programs. While th e applicants included language about library rout ines and DLLs in their response , they did not distinguish the ’906 invent ion bas ed on these feat ures, rather such features were merely included in language t hat outlined Khoy i’s operation. Si milarly, the applicants distinguish ed Koppolu by pointing out that the particular kind of ob ject handlers of Koppolu did not

04-1234 19allow interactive processing of the object, because Koppolu did not enable s u ch editing of the object. In light of the applicant’s arguments di stinguish ing Khoyi and Koppolu, the examiner’s statement that “the claimed external exec utable application is not a code library extension nor object handler (e.g. windows dll and OLE) as pointed out in applicant’s argument. (Paper #19 pages 12-14),” appears in the c o ntext of t h e applicant’s narrow ar gument. Thus, the examin er’s statement also d oes not evince a clear disclaimer. The argum ents the examiner cited in the Reasons for Allowance simply des cribe OLE object handlers. The applicants cite problems with OLE object handlers, but do not disclaim any thing. They simply ar gue that the cited references do “not disclose or suggest the missing featur es.” In addition, the applic ant has “no obligation t o respond to an examiner's stat ement of Reasons f o r Allowance, and the statement of an exam i ner will not necessarily limit a claim.” ACCO Brands, Inc. v. Micro Sec. Devices , 346 F.3d 1075, 1079 (Fed. Cir. 2003); see also N. Teleco m Ltd. , 215 F.3d at 1294 (requiring that prosecution history stateme n ts have “reasonable clarity and deliberateness” to nar row claim scope). Ov erall, without a narrow customary ordinary meaning f o r “execut able applic ation,” the dist rict court correctl y gleaned the prope r definition of the term from the intrinsic evidence in cluding the patent claims and prosecution history. Turning next to the jury instruction on “u tilized by said browser to identify and locate,” the district court informed the ju rors that “[t]he inv entors contemplated the browser’s use of some outside r e sources such as the operating system.” A review of the trial record shows that Microsoft wa ived its right to appeal this issue.

04-1234 20Microsoft commented on the pr oposed jur y instru ctions to the district court. In discussing the particular sentenc e Microsoft now takes issue with, Microsoft’s counsel stated to the district court, “It’ s undisputable, but it’s also immaterial . . . the fact that operating s ystems are involv ed in the oper ation of computer programs, so what?” The district court sought at that poi nt to clarify the record: “[ N]o one is arguing here that the browser cannot use the operating system . . . it simply can’t be done and, in essence, Microsoft i s not taking the crazy position that what they mean is the browser can’t us e the operating system at all.” Microsoft’s counsel resp onded, “That’s correct.” Thus, the record shows that Microsoft di d not properly preserve this issue for appeal. “It is rare indeed for appellate reli ef t o be granted when no objection was raised at trial. . . . Under s u ch circum stanc es, the question devolv e s into whether an error occurred in the conduct of the trial that was so grievous as to have render ed the trial unfair.” Norian Corp. v. Stryke r Corp. , 363 F.3d 1321 , 1329 (Fed. Cir. 2004) (internal citation and quotation omitted) . This court detects no gr ievous unfairness in this instruction despite Microsoft’ s argument that a proper ly instructed jury could not have possibly found that the accused products infri nge. As a whole, th e jury instruction properly guided the jur y . Thus, the district cour t did not err in its jury instruction on this disputed claim term. 35 U.S.C. § 271(f) This court must also decide whether software code made in the United States and ex ported abroad is a “component[] of a patent ed invention” under section 271(f). Section 271(f)(1) states: Whoever without authority supplies or c auses to be su pplied in or from the United States all or a substantial portion of t he components of a patented

04-1234 21invention, where suc h co mponents are unc ombined in whole or in part, in such a manner as to actively induce the combination of such component s outside the United States in a manner that would infringe the patent if such combination occ u rred within the United States s hall be liable as an infringer. 35 U.S.C. § 271(f)(1) (2000). Section 271(f) refers to “components of a patented invention.” This statutory language us es the broad and inc l usive term “patented invention.” Title 35, in the definitions sectio n, defines “invention” to mean “invention or discovery” – again br oad and inclusive ter m i nology. 35 U.S.C. § 100(a) (2000). The
next s e ction in Title 35, sect ion 101, explains t hat an invention includes “any new and useful process, machine, manufacture or composition of matter.” 35 U

. S.C. § 101 (2000). Without question, softw are code alone qu alifies as an invention eligible for patenting under these categories , at least as processes. See In re Alappat , 33 F.3d 1526 (Fed. Cir. 1994); AT&T Corp. v. Ex cel Communications, Inc. , 172 F.3d 1352 (Fed. Cir. 1999); MPEP § 2106.IV.B.1.a. (8th ed., rev. 2 2001) . The patented invent ion in this case is suc h a software product. ’906 patent, col. 17, ll. 58 – col. 18, ll. 30. Thus, this software code claimed in conjunction with a physi cal structure, such as a disk, fits within at least those two categories of subject matter within the broad statutory label of “patented invention.” This statutory language di d not limit section 271(f) to patented “machines” or patented “physical structures.” Rather every form of inventi on eligible for patenting falls within the protection of secti on 271(f). By the same token, the statute did not limit section 271(f) to “machine” com ponents or “structural or ph ysical” components. Rather every component of every form of inventi on deserves the protection of section 271(f).

04-1234 22In examining the statutor y language of section 271(f), this court must next examine whether the softwar e code on the golden master di sk is a “component” of the computer program invention. A “ c omponent ” of a proc ess invention would encompass method steps or acts. See, e.g. , 35 U.S.C. § 112, ¶6 ( 2000). A “component” of an article of m anufacture invention would encom pass a p a rt of that construct. Because a computer program product is a patented inv ention within the meaning of Title 35, then the “computer readable pr ogram code” claimed in claim 6 of the ’906 patent is a part or component of that pat ented invention. Exact duplicates of the software code on th e golden master disk are incorporated as an operating elem ent of the ultimate device. This part of the software code is much more than a prototype, mold, or detailed set of instructions. This operating element in effect drives the “functional nucleus of the finished computer product.” Imagexpo, L.L.C. v. Microsoft, Corp. , 299 F. Supp. 2d 550, 553 (E.D . Va. 2003). Without this aspect of the patented invention, the invent ion would not work at all and thus wou l d not even qualif y as new and “useful.” Thus, t he software code on the gol den master disk is not only a component , it is probably the key part of thi s patented inve ntion. Therefore, the language of section 271(f) i n the context of Title 35 shows that this part of the claimed computer product is a “c omponent of a patented invention.” Sound pat ent policy also supports the meani ng of section 271(f). In the first place, this court accords the sam e tr eatment to all forms of invention. See, e.g. , TRIPS Agreement, Part II, S e ction 5 (1994) (“[P]at ents shall be available and patent rights enjoyable without dis c rimination as to the pl ace of invention[ ] [and] the field of technology . . . .”). This court c annot cons truct a principled reas on for treating proces s

04-1234 23inventions different than structural products. Moreover, as the distri ct court pointed out , process and product — software and hardware — are practically interchangeable in the field of computer technology. Eolas Techs., Inc. v

. Microsoft Corp. , 274 F. Supp. 2d 972, 974 ( N .D. Ill. 2003). On a functioning computer, software morphs into hardwar e and vice versa at the touch of a button. In other words, so ftware converts its functioning code into hardware and vice versa. Thus in the context of this patented invention, the computer transforms the code on the gol den disk into a machine comp onent in operation. Thus, sound polic y again c ounsel s against var y ing th e definition of “component of a patented invent ion” accordi ng to the particular form of the part under consideration, particularly when those parts change fo rm during operation of the invention as occurs with software code. The legis l ative history of section 271(f) also supports the meaning carried by t h e language it self. Congress enacted section 271( f) in the wake of the United States Supreme Court's decision in Deepsouth Packing Co. v. Laitram Corp. , 406 U.S. 518 (1972). Deepsouth acknowledged that unauthorized manufacturers of patented products could avoid liability for infrin gement under the then -existing law by manufacturing the unassembled c o mponents of those products in t he United States and then shipping them outside the United States for assembly. Section 271(f) closed that obvious loophole in the statutory protections fo r patented inventions. Rotec Indus., Inc. v. Mitsubishi Corp. , 215 F.3d 1246, 1252 n.2 (Fed. Cir. 2000). One Congressiona l commentator stated this purpose express l y: Section 10 1 [of the Bill] makes two major changes in the patent law in order to avoid encour aging manufact urers outside the United States.

. . . .

04-1234 24[Section 2 71(f)] will prevent copiers from avoid i n g U.S. pa tents by supply i ng component s of a patented product in this country so that the assembly of the components may be com p leted a b road. This proposa l responds to the . . . decision in Deepsouth . . . concerning the need for a legis l ative solution to close a loophole in patent law. 130 Cong. Rec. H10525 ( 1984). These ref e rences again refer to correcting a loophol e for all forms of patented inventions. Microsoft and amic i ar gue that Congress’ use of “components” must be identical to the “components” of the pat ented inv e ntion in Deepsouth . In other words, sin c e Deepsouth dealt wit h the components of a physical machine, sec t ion 271(f)’s “components” are limited to phys i cal machines. This argument finds no s u pport in the language or history of the statute. As already noted, the languag e of section 271(f) does not impose a requirem e nt of “tangibility” on any component of a patented invention. Se e Ala n M. Fisch & Brent H. Alle n, The App licatio n of Dom e stic Patent Law to Exported Software: 35 U.S.C. § 271(f) , 25 U. Pa. J. Int’l Econ. L. 557, 575 (2004) . In fact, neither the statute nor the legis l ative history contains a limit ation to “components of ma chines and other structural combinations.” Id. Microsoft, in effect, asks this cour t to add the word “ physical” in front of “components” in section 27 1(f). If the statute int ended to limit the reach of “components of patented inv entio ns,” it would have expre ssly inc l uded some narrowing restriction. The statute simply does not inclu de the limitation that Micr osoft advocates. Microsoft also argues this court’s holding in Pelligrini v. Analog Devices, Inc. , 375 F.3d 1113 (Fed. Cir. 2004), imposes a requirem ent that components in section 271(f ) are physic a l. In the first place, this court in Pelligrin i did not addr ess the meaning of the

04-1234 25“components” language in secti on 271(f). Moreover, Micros oft simply mis r eads the language of Pelligrini

. In Pelligrin i , this court held that section 271( f) did not apply to components manufactured outside the United States and nev er physicall y s h ipped to or from the United States. 375 F.3d at 1118. The court then explained that ‘[s]uppl[ying] or caus[ing] to be supplied’ in § 271(f)(2) clearly refers to physical supply of co mponents, not simply to the s upply of instructions or corporate oversight. In other wo rds, alt hough Analog may be giv i ng instructions from the United States that caus e the component s of the patented invention to be s upplied, it is undisput ed that those components are not being supplied in or from the United States. Id. T hus, Pe lligrini requires only that components are physic a lly supp lied from the United Stat es. Pelligrini does not impose on section 271(f) a tangibility requirement that does not appear any where in the langua ge of that section. In sum, the language and hist ory of section 271(f)(1) as well as this court’s la w protecting software inventions support this court’s holding that section 271(f)(1)’s “components” include software code on golden master disks.
IV. In conclus i on, because the dis t ri ct court improperly granted J M OL in Eolas ’ favor on Microsoft’s antic ipation and obv iousness defenses and improperly rejected Mi crosoft’s inequitabl e c onduct defense, this court vacates the district court’s decisions and re mands for further proceedings on thes e issues. In addition, this c ourt affirms the district c ourt’s claim construction of “executable application” and finds the dist rict court did not err in its jury instruction with regard to the claim limitation “utilized by said bro w ser to ide n tify and locat e .” Finally, this c ourt affi rms the dist rict co urt’s holding that

04-1234 26“components,” according to section 271( f)(1), includes software code on golden master disks. COSTS Each party shall bear its own costs. AFFIRMED-IN-PART, VACATED -IN-PART, and REMANDED

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