Opinion ID: 210220
Heading Depth: 3
Heading Rank: 2

Heading: Microsoft's Motion for JMOL of Invalidity by Anticipation

Text: Before the district court, Microsoft argued a number of points in support of its motion for JMOL of invalidity based on anticipation by its BP 98 product. The district court denied the motion based solely on its conclusion that in light of the evidence presented at trial, a reasonable jury could have concluded that BP 98 did not work for its intended purpose, to stop piracy. JMOL Opinion at 7. On appeal, Microsoft repeats many of the arguments it raised before the district court. Because we agree with the district court's determination on the point it considered and find it dispositive, we discuss only that point and need not and do not address Microsoft's other contentions. Microsoft argues that the LVP feature of its BP 98 software product anticipates the asserted claims under section 102(g)(2). That section provides that a patent is invalid if before such person's invention thereof, the invention was made in this country by another inventor. . . . 35 U.S.C. § 102(g)(2). This court has interpreted § 102(g) to provide that `priority of invention goes to the first party to reduce an invention to practice unless the other party can show that it was the first to conceive the invention and that it exercised reasonable diligence in later reducing that invention to practice.' Monsanto Co. v. Mycogen Plant Sci., Inc., 261 F.3d 1356, 1362 (Fed.Cir.2001) (quoting Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1577 (Fed. Cir.1996)). Microsoft bore the burden of demonstrating by clear and convincing evidence that BP 98 constituted an actual reduction to practice of the invention claimed in z4's patents. See, e.g., SRAM Corp. v. AD-II Eng'g, Inc., 465 F.3d 1351, 1357 (Fed.Cir.2006) (Under the patent statutes, a patent enjoys a presumption of validity, see 35 U.S.C. § 282, which can be overcome only through facts supported by clear and convincing evidence.). In order to establish an actual reduction to practice, the inventor must prove that: (1) he constructed an embodiment or performed a process that met all the limitations . . . and (2) he determined that the invention would work for its intended purpose. Cooper v. Goldfarb, 154 F.3d 1321, 1327 (Fed.Cir.1998). Testing is required to demonstrate reduction to practice in some instances because without such testing there cannot be sufficient certainty that the invention will work for its intended purpose. Slip Track Sys., Inc. v. Metal-Lite, Inc., 304 F.3d 1256, 1267 (Fed.Cir. 2002). Because the necessity and sufficiency of such testing are factual issues, see id. at 1268, substantial evidence in the record supporting a finding that Microsoft's LVP software did not work for its intended purpose will suffice to support the jury's verdict that z4's patents are not invalid for anticipation, see Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1362 (Fed.Cir.2004) (noting that when we review the denial of a post-verdict JMOL on a mixed question of law and fact . . . we must sustain the jury's conclusion unless the jury was not presented with substantial evidence to support any set of implicit findings sufficient under the law to arrive at its conclusion); Taskett v. Dentlinger, 344 F.3d 1337, 1339 (Fed.Cir.2003) (noting that reduction to practice is a question of law predicated on subsidiary factual findings). As an initial matter, Microsoft contends that the district court incorrectly defined the intended purpose of the invention as to stop piracy, and thus erred in holding that a prior invention must stop piracy to qualify as invalidating art under § 102(g). See JMOL Opinion at 7. We agree. z4's patents do not disclose a method or apparatus to completely eliminate software piracy, and the claim language indicates that the purpose of the invention is merely the reduction, rather than the elimination, of such piracy. See '471 patent claim 32 (claiming instructions to reduce use of the software by unauthorized users (emphasis added)); '825 patent claims 44 & 131 (claiming [a] method for reducing unauthorized software use (emphasis added)). We agree with z4, however, that the record contains substantial evidence for a reasonable jury to conclude that the anti-piracy feature of BP 98 did not work even to reduce piracy. For example, a reasonable juror could have relied upon the internal Microsoft presentation of April 28, 1998, which indicated that effectiveness was not known, and that Microsoft [could] only measure [effectiveness] once enabled fully in a country w/ [sic] a real product. The testimony of Microsoft's own witness, Mr. Hughes, indicates that the anti-piracy software found in the accused products was virtually a complete rewrite of the software in BP 98. Additionally, an internal Microsoft e-mail dated November 18, 1998more than five months subsequent to z4's filing dateindicated a problem with the LVP software and documented an instance of the same CD being installed in almost 40 different machines with different user names. It also noted that one user had registered 34 times, and others had registered more than 15 times. z4's expert testified at trial that this e-mail affirm[ed][his] opinion that Brazilian Publisher 98 is not prior art because there was no recognition or appreciation that it worked for its intended purpose. We also note that Microsoft failed to produce the document containing the e-mail until the day before the trial started, and then only because z4 uncovered it during a last-minute deposition, see JMOL Opinion at 40, resulting in the district court sanctioning Microsoft by instructing the jury that z4 has offered [the document containing the e-mail] into evidence to show that Brazilian Publisher 98 did not work for its intended purpose. . . . You are instructed that Microsoft, although it had knowledge of this document, did not produce it to z4 as it was required to do under controlling discovery rules. You're instructed that . . . under the law and rules of this Court, that Microsoft improperly withheld this document and you may infer, although you are not required to do so, that Microsoft improperly withheld the document because it was harmful to the positions it has taken in this case. Microsoft has not appealed this sanction. Collectively, this evidence comprises more than a mere scintilla and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) (discussing substantial evidence review); see also Teleflex, 299 F.3d at 1323-24. Because substantial evidence supports the jury verdict, we affirm the district court's denial of Microsoft's motion for JMOL of invalidity by anticipation.