Source: https://www.schwabe.com/newsroom-publications-13552
Timestamp: 2019-04-24 08:58:31+00:00

Document:
Bosch – TheCircuit disagrees with the district court's handling of the presumption of "means plus function" claiming but affirms that the terms ‎‎"program recognition device" and "program loading device" invoke 35 U.S.C. § 112, ¶ 6. The panel determines that the ‎specification does not disclose corresponding structure for ‎these terms, so the claims are found to be indefinite and therefore invalid.
The passages in the specification on which ‎Bosch relies to discuss the "program loading device" ‎similarly provide no structural guidance. Indeed, as Snap-On ‎notes, the patent is silent on what such a "program ‎loading device" consists of; the loading could be achieved ‎by using any type of device that comprises hardware, ‎software, or both. And the specification is again silent ‎about how the "program loading device" receives and ‎processes signals; the lone mention of a serial communication protocol is actually in reference to the "diagnostic/test ‎plug." ("The control units ‎used today are equipped with a flash storage device that ‎can be programmed via the serial communication protocol ‎via the diagnostic/test plug.").
Comment: The interpretation of means-plus-function language has been a topic of interest to the Circuit this year with a number of precedential decisions. Bosch follows the guidelines of EnOcean GmbH v. Face Int'l. Corp., 742 F.3d 955 (Fed. Cir. 2014) in determining whether claims that don't use "means for" language nonetheless should be ‎construed under § 112, ¶ 6‎. The case of Elcommerce.com, Inc. v. SAP, 564 Fed. ‎Appx. 599 (Fed. Cir. 2014) noted that it was ordinarily necessary to have expert testimony as to whether one with ordinary skill in the ‎art ‎would have understood the functions described, and whether there was adequate disclosure in ‎the specification ‎to support the claims. Such testimony was unsuccessfully presented in Bosch.‎ In Chicago Board Options Exchange, Inc. v. Intl. Securities Exchange, ‎LLC, ‎748 F.3d 1134 (Fed. Cir. 2014), the Circuit set forth the tests for determining whether there was adequate support in the specification for "means" language in the claims.
The accused GoTo Products allow ‎direct encrypted communication between two computers ‎while bypassing a broker server that cannot access the ‎encrypted data. All of the GoTo Products use a broker ‎server to initialize the communication and that server ‎carries out communications between the computers.‎ The accused products are GoToMyPC, GoToAssist, and GoToMeeting. Also accused are Citrix's Access Gateway and Netscaler software products ‎that enable a computer to communicate securely with a ‎remote server.
The district court held a Markman ‎hearing in which it construed the term "destination address" as "the network address of a computer or server." The court also construed the term "encrypt files" as "to render a set of data used by a ‎program unintelligible without decrypting." The panel agrees with Citrix as to the construction of "destination address," noting that both the claim language and the specification support the district court's construction.
The panel agrees that the general verdict rule applies with ‎the same force in patent cases as it does in all other cases. ‎The panel finds, however, that there is no ‎evidence in the record from which a good faith argument ‎can be made that the Citrix GoTo Products' identifiers are ‎‎"network addresses" as that term was construed by the district court. Because that construction is affirmed, even if the court erred in its ‎construction of the other challenged limitations, the result ‎the jury reached—the finding of non-infringement—would ‎not change. In these circumstances, the panel concludes that it soundly can base ‎its conclusion that the non-infringement verdict stands ‎on the fact that the single network address limitation is not ‎practiced by the accused products.
The district court's determination of ‎whether a party is the "prevailing party" under Federal ‎Rule of Civil Procedure 54(d) and 35 U.S.C. § 285 de novo.‎ To be the ‎"prevailing party," the Circuit requires: (1) that the party "received ‎at least some relief on the merits," and (2) "[t]hat relief must ‎materially alter the legal relationship between the parties by modifying one party's behavior in a way that ‎‘directly benefits' the opposing party." A party does not need to prevail on all ‎claims to qualify as the prevailing party.
Citrix asserts that many of the infringed claims would have been obvious under Takahashi et al. The Circuit reviews the ultimate legal conclusion of obviousness de novo in light of the underlying factual ‎findings.
Citrix argues that the software in Takahashi is on the ‎applications level because it is above the TDI layer. ‎The panel disagrees. That software is located ‎above the TDI level does not make it part of the applications level. For example, the '011 Patent explains that ‎the Winsock element is located above the TDI level, but ‎the Winsock is not deemed part of the applications level. ‎ SSL's expert also testified ‎that the Winsock software, which appears above the TDI ‎level, is not in the applications level. ‎Therefore, Citrix's argument that, if Takahashi discloses ‎software above the TDI layer, it is automatically a part of ‎the applications level is unpersuasive.
To establish willful infringement, the patent holder ‎must show clear and convincing evidence that: (1) "the ‎infringer acted despite an objectively high likelihood that ‎its actions constituted infringement" and (2) "that this ‎objectively-defined risk . . . was either known or so obvious ‎that it should have been known to the accused infringer." ‎In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. ‎‎2007) (en banc). We review the first objective prong de ‎novo and the second subjective prong for substantial ‎evidence.
Citrix argues that, because its non-infringement and ‎invalidity defenses were reasonable, the district court erred ‎in denying JMOL of no willful infringement. In support, ‎Citrix relies on the fact that the court did not grant ‎summary judgment and that the USPTO rejected the relevant claims of ‎the '011 Patent multiple times over the same prior art ‎references presented at trial during the initial phases of an ‎ex parte reexamination. However, the panel rules that the court's finding that SSL met the threshold ‎objective prong is supported by the record. The jury ‎soundly rejected Citrix's invalidity argument and non-‎infringement arguments. As noted above, the Takahashi ‎reference does not disclose an applications level encryption program. Although not dispositive, the USPTO ‎similarly found Citrix's invalidity arguments unfruitful, ‎despite the lower preponderance of the evidence standard.
Citrix argues that it should receive a new trial on ‎willfulness because the court prevented the jury from ‎hearing testimony from its Chief Engineer regarding Citrix's good faith belief that its ‎products were non-infringing and that reexamination ‎had been initiated at the PTO. We find that the ‎district court did not abuse its discretion in precluding that testimony since its probative value was ‎outweighed by its potential prejudice.
Again applying Fifth Circuit law, we review evidentiary rulings and the denial of a motion for a new trial for ‎an abuse of discretion. Citrix argues that the district court ‎abused its discretion by allowing SSL's damages expert to ‎rely on the V-One Agreements, which were not patent ‎licenses, in his damages analysis. These 2000 and 2001 ‎agreements were between V-One and Citrix, and referenced the '011 Patent as intellectual property that was ‎relevant to the technology underlying the agreements. ‎Though the agreements only supplied Citrix with distribution rights to the Smartgate software product and ‎provided no patent license, the court found the agreements "sufficiently ‘comparable' to be probative of the ‎hypothetical negotiation" as they involve the actual ‎parties, relevant technology, and were close in time to the ‎date of the hypothetical negotiation.
‎"Upon finding for the claimant the court shall award ‎the claimant damages adequate to compensate for the ‎infringement, but in no event less than a reasonable ‎royalty for the use made of the invention by the infringer, ‎together with interest and costs as fixed by the court." 35‎ U.S.C. § 284. "Prejudgment interest should be awarded ‎under § 284 absent some justification for withholding ‎such an award." The purpose of prejudgment interest is to place the patentee in as good a position as he would have been had the infringer paid a reasonable royalty rather than infringe. The Circuit reviews the award of prejudgment interest for an abuse ‎of discretion.
Citrix alleges that awarding prejudgment interest was an abuse of discretion because it ‎did not receive notice of potential infringement until the ‎filing of the complaint in May 2009. As part of the willful infringement finding ‎discussed above, however, the district court found that ‎Citrix knew of the '011 Patent as early as 2000, when it ‎entered into the V-One Agreements. Consequently, we ‎find that the court did not abuse its discretion in ‎awarding prejudgment interest back to 2004—the date ‎the infringement began.
Comment: The opinion deals with a lot of issues but one of the most interesting is the ruling permitting consideration of the so-called V-One Agreements, which were not licenses under the patents in suit. Like its recent decision in VirnetX v Cisco Systems, Fed. Cir. Case 2013-1489 (September 16, 2014), the Circuit noted that the jury was told these were not licenses under the patents and therefore the jury could determine for itself how relevant the agreements were. This is very different from the other damage theories propounded by an expert in VirnetX and in other recent damages decisions where experts described theoretical formulae that were not based on the facts in the cases.
Verifone is entitled to judgment of no infringement.

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