On Tuesday, September 4, 2012, Apple scored a big victory at the United States Court of Appeals in their patent infringement dispute with Mirror Worlds, LLC. The Federal Circuit, in an opinion written by Judge Lourie and joined by Judge Newman, upheld the district court’s entry of judgment as a matter of law, which erased a $208.5 million damages award given by the jury. See Mirror Worlds, LLC v. Apple, Inc. (Fed. Cir., Sept. 4, 2012).
Before you start to wonder whether little Mirror Worlds was out lawyered at the CAFC you can rest assured they were MORE than adequately represented. David Boies, one of the most prominent appellate attorneys in the United States, represented Mirror Worlds. Boies was also joined by Don Dunner, who is regarded as the Dean of appellate advocates at the Federal Circuit. Of course, Apple was also capably represented by William Lee of Wilmer Cutler Pickering Hale and Dorr LLP, himself no stranger to high stakes patent litigation and appellate practice before the Federal Circuit.
Before diving into the particulars of the case, it is worth noting that the presence of Boies, who is an accomplished Supreme Court advocate, suggests that there will be an appeal to the United States Supreme Court. Dunner is no stranger to successful appellate practice before the Federal Circuit and he and his team would easily be considered the A-Team. But there is an art associated with presenting a case so that it offers maximal opportunity to achieve one of the coveted spots on the Supreme Court’s calendar, which I suspect is why Boies joined Dunner in representing Mirror Worlds. Thus, stay tuned for the next chapter!
Mirror Worlds brought a patent infringement action against Apple, seeking to enforce various claims of three patents: U.S. Patent 6,006,227 (“’227 patent”); U.S. Patent 6,638,313 (“’313 patent”); and U.S. Patent 6,725,427 (“’427 patent”). Mirror Worlds levied charges of both direct infringement and induced infringement.
At the conclusion of Mirror Worlds’ case in chief, the district court granted Apple’s oral motion for judgment as a matter of law that Apple did not induce infringement of any of the patents because Mirror Worlds did not offer any evidence of actual performance of the patented method by third parties. The issue of direct infringement by Apple was submitted to the jury. After deliberation the jury found Apple liable for willfully infringing all three asserted patents and awarded $208.5 million in damages.
After the trial, the district court granted Apple’s motion for judgment as a matter of law, vacated the jury verdict, and concluded that Mirror Worlds failed to present substantial evidence of direct infringement and damages. Specifically, the district court concluded that Mirror Worlds did not establish infringement of the asserted claims of the ’313 and ’427 patents under the doctrine of equivalents — its only offered theory of infringement relative to those patents. The district court also concluded that Mirror Worlds failed to offer substantial evidence that Apple performed each step of the claimed methods of the ’227 patent and that the evidence presented at trial was not sufficient to support the damages awarded by the jury.
Mirror Worlds appealed the JMOL entered by the district court, arguing that the Federal Circuit should reverse each of the district court’s rulings.
The Accused Features
Mirror Worlds accused all Apple computers and servers that run the Mac OS X operating system versions 10.4 (“Tiger”), 10.5 (“Leopard”), and 10.6 (“Snow Leopard”) of infringement, as well as Apple’s mobile devices that run the iOS operating system. More specifically, three specific features embedded in those operating systems were identified as infringing. They were Spotlight (a search and indexing application), Cover Flow (a graphical user interface that allows a user to flip through a stack of documents on the computer) and Time Machine (an automatic backup and archiving application).
The Patent Claims
Claim 1 of the ’313 patent is exemplary of the asserted ’313 and ’427 claims:
1. A method of utilizing a document stream operating system that in turn utilizes subsystems from at least one other operating system, comprising:
receiving documents from diverse applications in formats that are specific to the respective applications and differ as between at least some of said applications;
automatically associating time-based indicators with the documents received in the receiving step from the diverse applications;
automatically archiving the received documents;
automatically creating glance views that are abbreviated versions of respective ones of said documents;
selectively displaying at least some of said documents as a receding, foreshortened stack of partly overlapping documents so that only a part of each of said documents in the displayed stack, after the first document in the stack, is visible to the user;
said displaying further including displaying a cursor or pointer and responding to a user sliding the cursor or pointer over said displayed stack to display the glance view of the document in the stack that is currently touched by the cursor or pointer, without requiring clicking on the document; and
utilizing, in said document stream operating system, subsystems from said at least one other operating system for operations including writing documents to storage media, interrupt handling and input/output.
The asserted claims of the ’227 patent (independent claim 13 and dependent claim 22) do not contain the “cursor or pointer” limitation. Claim 13 covers a method for organizing documents as they are generated in and received by the computer:
13. A method which organizes each data unit received by or generated by a computer system, comprising the steps of:
generating a main stream of data units and at least one substream, the main stream for receiving each data unit received by or generated by the computer system, and each substream for containing data units only from the main stream;
receiving data units from other computer systems;
generating data units in the computer system;
selecting a timestamp to identify each data unit;
associating each data unit with at least one chronological indicator having the respective timestamp;
including each data unit according to the timestamp in the respective chronological indicator in at least the main stream; and
maintaining at least the main stream and the substreams as persistent streams.
Claim 22, which depends from claim 13, recites an additional limitation for “archiving data units having timestamps older than a specified time point.”
The ’313 and ’427 Patents
As mentioned above, the asserted claims of the ’313 and ’427 patents require a “cursor or pointer” to generate a glance view of a particular document in the file stack. Therefore, Mirror Worlds’ theory of infringement of the ’313 and ’427 patents relied on the doctrine of equivalents. At trial and on appeal Mirror World’s argued that there is implicitly a cursor present, pointing to the testimony of their expert, Dr. John Levy. Levy testified that there was no literal pointer present, but went on to say: “I believe it has the equivalent, because the user always is looking at the center where the glance view is going to pop up, and that is where the cursor or pointer is by default.”
The Federal Circuit found this testimony inadequate because Dr. Levy did not explain why the fact that a user may be looking at the center of the display should mean that there is a cursor there by default. The Federal Circuit said that such an assertion “amounts to an argument that the absence of a feature is equivalent to its presence, which is a negation of the doctrine of equivalents.” The Federal Circuit went on to cite footnote 8 of Warner-Jenkinson, which says: “If a theory of equivalence would entirely vitiate a particular claim element, partial or complete judgment should be rendered by the court.” With this in mind the Federal Circuit affirmed the district court, determining that there was no infringement under the doctrine of equivalents.
Direct Infringement of the ‘227 Patent
The ‘227 patent covers a method of organizing documents in a computer. At trial infringement of claims 13 and 22 were asserted, but the Federal Circuit noted that the initial brief filed by Mirror Worlds hardly mentions claim 22. Indeed, the only mention of claim 22 was in a passing reference in a footnote. With this in mind the Federal Circuit determined that the issue of whether claim 22 was infringed was not properly preserved for appeal.
Relative to claim 13, Mirror Worlds introduced a video of a January 2005 presentation by Apple’s former CEO, Steve Jobs, during which he demonstrated Spotlight to search for data on a computer. Mirror Worlds also introduced evidence that Apple tested the method by searching e-mails with Spotlight in 2004. The problem with this evidence, however, was that it was from prior to the release of the operating system that was alleged to infringe, thereby not providing probative evidence related to what was present in the allegedly infringing operating system released to the public.
In short, the evidence submitted at trial was not legally sufficient to allow a jury to find direct infringement by Apple.
Indirect Infringement of the ‘227 Patent
Mirror Worlds also alleged that Apple induced its customers to infringe claim 13. The infringement theory in play here is called inducement and is found in 35 U.S.C. § 271(b): a party who “actively induces infringement of a patent shall be liable as an infringer.” Inducement, however, requires that there be a showing of an underlying act of direct infringement. This does not require that Apple themselves engaged in direct infringement, otherwise direct infringement and inducement would be one and the same theory, which they are not. Nevertheless, in order for there to be inducement each and every step of the claim in question must be performed.
Mirror Worlds relies on user manuals describing the various accused features, software reviews allegedly showing a customer performing each step of the asserted method claims, and Apple surveys listing Spotlight as the “most beneficial feature” of Tiger, the operating system in question. Again, however, the problem was with the evidence submitted at trial by Mirror Worlds. The Federal Circuit explained that there was no trial testimony showing that customers actually used each step of the method claim being asserted.
Furthermore, the Federal Circuit explained:
It is well settled that excerpts from user manuals as evidence of underlying direct infringement by third parties of products that can be used in a non-infringing manner are by themselves insufficient to show the predicate acts necessary for inducement of infringement.
Ultimately, the Federal Circuit would also explain that the manuals themselves “do not directly instruct a user how to infringe.” Thus, there could be no inducement to infringe by Apple. In the end the Federal Circuit majority, as well as the district court, just found the evidence submitted at trial by Mirror Worlds to fall short of proving the claim of infringement.
Having said all of the above about lack of evidence, Judge Prost did dissent and charged the majority of re-writing claim 13 to find there was no infringement. Judge Prost had a rather simplistic view of what claim 13 required. She wrote:
[C]laim 13 simply requires that a search query be run in Spotlight on a computer (that at least contains one file and also that at some point has received one e-mail or other type of file from another computer), and that Spotlight filter its organized database based on the inputted query (return search results).
I think it is a little simplistic to say that is all that is required by claim 13, but Judge Prost does point out that it was undisputed that four things must occur for there to be infringement: “1) a search, 2) receiving data units from other computer systems, 3) generating data units, and 4) generating a substream.” Judge Prost went on to point out that this happens automatically for the most part, as the operating system continuously combs through every file or document, which reduces the search operation to a simple filtering of already organized data based on a user’s query.
Judge Prost focused on the manuals and a review article written for Mac World that said: “the improved speed of Spotlight, which makes searching for messages within Mail much less painful.” To Judge Prost this evidence “strongly suggests that at least one individual ran a search in Spotlight on a computer that had received data.” The majority pointed out, however, that “the reviewer might have only searched his existing mail, without sending any new mail.” Presumably, the majority was questioning whether the requirement that data be obtained from another computer was sufficiently proven other than through speculation.
Frankly, I understand Judge Prost’s concerns but would side with the majority on this one. It seems to me that there well may have been infringement, but that there was critical missing pieces of information not presented at trial to tie it all up in a bow and tell the story such that infringement was the only conclusion rather than one that seems to reasonably make sense based on a leap here or a speculation there.
As mentioned, the presence of both Boies and Dunner on the Mirror World’s appellate team makes one suspect that an appeal to the Supreme Court is likely. That together with a flurry of recent cases dealing with indirect infringement and it could be that the Supreme Court will want to weigh in on the issue. While I certainly don’t put it past the Supreme Court to take the wrong patent case to address an issue (see Bilski) or to take an inconsequential case (see Hyatt), I just don’t see the Supreme Court wanting to get involved in a case so steeped in claim construction and imperfect evidence to say anything useful about the important issues presented by indirect infringement in an era where the end consumer is the one who closes the infringement loop.