Cardsoft, LLC v. Verifone, Inc. et al.

Docket Nos. 2014-1135

October 17, 2014

Brief Summary: The FC panel concluded “the district court erred by failing to give ‘virtual machine’ its ordinary and customary meaning”. It therefore reversed the DC claim construction and granted Verifone JMOL of no infringement.

Summary: Verfifone appealed jury verdict of infringement based on DC construction of the claim term “virtual machine” in US Pat. Nos. 6,934,945 and 7,302,683 (a continuation of the ‘945 patent) relating to software for controlling a payment terminal. The specification describes an improved “virtual machine” that acts as an “interpreter” between a merchant’s payment processing software and a payment system’s underlying hardware and operating system. The virtual machine eliminates the need to write software specific to each combination of systems. The improvements include a “virtual message processor” and a “virtual function processor”. The DC defined the claimed virtual machine as “a computer programmed to emulate a hypothetical computer for applications relating to transport of data” not requiring that the application it runs are not dependent on any specific operating system or software. Based on intrinsic and extrinsic evidence, the FC panel concluded that the DC definition “improperly conflates the claimed virtual machine with applications that run on the virtual machine.” The opinion explains that the specification pointed out that a problem with the prior art was that applications were hardware or operating system dependent and that the “virtual machine” solved that problem, and the prosecution history emphasized this point. CardSoft argued that the claims state that the virtual machine “includes” certain “instructions” which means it can be operating system or hardware dependent but the FC panel concluded that “this conflates the virtual machine itself with applications (or instructions) running on” it (as did the DC definition) and CardSoft’s definition “would leave ‘virtual machine’ essentially meaningless.” CardSoft also argued claim differentiation “mandates a broader construction” but the opinion explained that “[c]laim differentiation is merely a presumption” (Eon-Net, FC 2011 and Marine Polymer Techs., FC 2012) and since “the ordinary meaning of ‘virtual machine’ is clear in light of the specification and prosecution history, claim differentiation does not change its meaning.” Verifone argued that it does not infringe under this claim construction and, as CardSoft did not respond to that point in its brief, it “effectively conceded” that point. Thus, “[b]ecause the district court erred by failing to give ‘virtual machine’ its ordinary and customary meaning”, the DC claim construction was reversed and Verifone granted JMOL of no infringement.

This entry was posted in Appeal, Claim Construction, Claim Differentiation, Infringement. Bookmark the permalink.

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