Cardsoft, LLC v. VeriFone, et al.

Docket Nos. 2014-1135

December 2, 2015

Brief Summary: On remand from SCOTUS, DC construction of “virtual machine” again reversed and VeriFone was granted JMOL of no infringement.

Summary: This opinion results from a SCOTUS remand of the FC’s 2014 decision reversing the DC infringement determination (US 6,934,945 and 7,302,683 infringed) due to an erroneous construction of “virtual machine”. That decision was vacated under Teva’s (US 2015) holding that the FC must review a DC’s “ultimate interpretation of a claim term, as well as its interpretations of “evidence extrinsic to the patent,’ de novo and its subsidiary factual findings about extrinsic evidence for clear error.” The DC decision was again reversed for the same reason because “the case does not involve factual findings to which [it] owe[s] deferenence under Teva” (thus, the decision was reviewed de novo; “it is not enough that the district court may have heard extrinsic evidence during a claim construction proceeding-rather, the district court must have actually made a factual finding in order to trigger Teva’s differential review” (Shire, FC 2015; Teva, FC 2015; see also fn1: “Although we imprecisely referred to…’extrinsic evidence’ in our previous decision, there is nothing improper about relying on decisions in previous cases to inform an understanding of a disputed term’s ordinary meaning where, as is the case here, that understanding is completely consistent with the intrinsic record” (Mars, FC 2004)). VeriFone argued the DC “erred by not requiring the claimed ‘virtual machine’ to include the limitation that the application it runs are not dependent on any specific underlying operating system or hardware”, and the FC panel agreed since that meaning is consistent with “the ordinary and customary meaning of ‘virtual machine’” (Phillips, FC 2005 (“The person of ordinary skill in the art is ‘deemed to read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent,’ including the specification and prosecution history.”); author’s note: see Straight Path, FC 2015 (“When claim language has as plain a meaning on an issue as the language does here, leaving no genuine uncertainties…it is particularly difficult to conclude that the specification reasonably supports a different meaning”, as opposed to “the common situation where claim terms are uncertain”.)) Here, the FC panel determined that “[t]he specification and prosecution history establish, and relevant precedent discussing the state of the art at the time of the invention confirms, that at the time the asserted patents were filed, the defining feature of a virtual machine was its ability to run applications that did not depend on any specific underlying operating system or hardware” (and “claim differentiation does not change its meaning”), finding the DC’s “construction improperly conflates the virtual machine with applications written to run on the virtual machine.” Thus, the DC construction was reversed and VeriFone was granted JMOL of no infringement.

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