Plaintiff Waives Infringement Under Proper Claim Construction

The Federal Circuit recently issued a decision in CardSoft v. Verifone, which the Court overturned the district court’s claim construction. Overturning a district court’s claim construction is hardly unusual, and perhaps more typical than it really should be, but that is another story for another day. What was unique about this particular case was that the Federal Circuit also went on to rule that CardSoft had waived any argument that the defendants had infringed under what they determined to ultimately be the correct claim construction.

CardSoft filed this patent infringement suit in March 2008 against VeriFone, Inc., VeriFone Systems Inc., and Hypercom Corp. (collectively, “Defendants”), asserting infringement of U.S. Patent Nos. 6,934,945 (“the ’945 patent”) and 7,302,683 (“the ’683 patent”). The district court held a Markman hearing in July 2011 and conducted a jury trial in June 2012. The jury determined that certain of the Defendants’ devices infringed claim 11 of the ’945 patent and claim 1 of the ’683 patent and that these claims were not invalid. The Defendants moved for a new trial and for judgment as a matter of law, but the district court denied both motions.

Claim 1 of the ’945 patent was deemed representative of the asserted claims by CardSoft:

A communication device which is arranged to process messages for communications, comprising a virtual machine means which includes

a virtual function processor and function processor instructions for controlling operation of the device, and

message in[str]uction means including a set of descriptions of message data;

a virtual message processor, which is arranged to be called by the function processor and which is arranged to carry out the message handling tasks of assembling the messages, disassembling messages and comparing the messages under the direction of the message instruction means that is arranged to provide directions for operation of the virtual message processor, whereby when a message is required to be handled by the communications device the message processor is called to carry out the message handling task,

wherein the virtual machine means is emulatable in different computers having incompatible hardwares or operating systems.

(emphasis added).

The critical term in the claim was “virtual machine,” which the district court construed to mean “a computer programmed to emulate a hypothetical computer for applications relating to transport of data.” The Federal Circuit, with Judge Hughes writing and being joined by Chief Judge Prost and Judge Taranto, explained that this construction by the district court was correct insofar as it went, but that the definition was not complete. The Federal Circuit explained that the district court improperly rejected the Defendants’ argument that the “virtual machine” must “process instructions expressed in a hardware/operating system-independent language.” This incomplete construction lead the district court to incorrectly rule (in the opinion of the Federal Circuit) that the claimed “virtual machine” need not run applications or instructions that are hardware or operating system independent. The Federal Circuit explained that such a claim construction improperly conflated the claimed virtual machine with applications written to run on the virtual machine. Not surprisingly, the Defendants argued that, under the proper claim construction, there could be no infringement.

The Federal Circuit pointed out that in its brief CardSoft recognized the gravity of the Defendants’ arguments, saying: “Appellants argue that, under their construction of ‘virtual machine,’ ‘a ruling of noninfringement [sic] is compelled.’” Instead of arguing an alternative theory of infringement under the claim interpretation offered by the defendants, CardSoft merely argued that the district court’s construction was accurate and the jury verdict should stand.

The Federal Circuit explained that arguments not developed in a party’s briefing may be deemed waived. By failing to respond to the Defendants’ argument, the Federal Circuit said that CardSoft had effectively conceded that the accused devices run applications that depend on a specific underlying operating system or hardware. As a result, the Federal Circuit found that CardSoft had waived argument under the proper claim construction, and thus the court granted the Defendants judgment of no infringement as a matter of law.

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7 comments so far.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 20, 2014 12:27 pm

    For piss sake Joebarto… if you don’t like what we publish don’t read it. Simple solution. I guess you couldn’t figure it out on your own though. LOL.

  • [Avatar for Joebarto Flabbergast]
    Joebarto Flabbergast
    November 17, 2014 09:09 am

    For piss’s sake, the past tense of “lead” is “led”. Hire a copy editor, Gene!

  • [Avatar for Joachim Martillo]
    Joachim Martillo
    November 16, 2014 12:06 am

    Still have an incorrect version of the third link.

    This version has all the “and”‘s.

    https://drive.google.com/file/d/0B7t3h6mcvpPEbFVxcUZNYy1jZ00/view?usp=sharing

  • [Avatar for Joachim Martillo]
    Joachim Martillo
    November 15, 2014 11:23 pm

    Oops! Missed the “and” after processor in the third link. Here is the corrected version of the third link.

    https://drive.google.com/file/d/0B7t3h6mcvpPEWklpYTVERE1wRGc/view?usp=sharing

  • [Avatar for Joachim Martillo]
    Joachim Martillo
    November 15, 2014 11:14 pm

    Here is my comment with links to images.

    While the decision is extremely important, I have to comment on a lesser issue that has irritated me since I first started studying patents at Bell Labs in the early 80s.

    Here is the subordination analysis of claim 1 as presented in the patent.

    [Original claim with subordination analysis.]

    https://drive.google.com/file/d/0B7t3h6mcvpPEbC1uLWd4VDJjNjg/view?usp=sharing

    I don’t understand why at allowance the examiner and the applicants could not do the 5 min of analysis to make sure grammar and punctuation are consistent with English Patentese grammar and punctuation.

    Here are the minimal changes that should be made to the claim.

    [Corrected claim.]

    https://drive.google.com/file/d/0B7t3h6mcvpPEQmhMQmljYm9xZmc/view?usp=sharing

    Here is how I would have written the claim. The “wherein” clause does not really add much. I moved it to the real antecedent. I did not reanalyze the subordination at “the virtual machine means”-limitation element because I wanted to keep the comparison clear. Patents use commas considered extraneous in standard English punctuation. There should probably be a comma after OPERATING SYSTEM. I restructured the whereby clause for greater comprehensibility.

    I have not checked the prosecution history, but the examiner should have looked very carefully at this claim from the standpoint of MPEP 2181.

    [How I would have written the claim.]

    https://drive.google.com/file/d/0B7t3h6mcvpPEaERyN0dEazJmVDA/view?usp=sharing

  • [Avatar for Joachim Martillo]
    Joachim Martillo
    November 15, 2014 10:48 pm

    Oh well, HTML does not work with this comment system. I will turn my comment into 3 images.

  • [Avatar for Joachim Martillo]
    Joachim Martillo
    November 15, 2014 10:47 pm

    While the decision is extremely important, I have to comment on a lesser issue that has irritated me since I first started studying patents at Bell Labs in the early 80s.

    Here is the subordination analysis of claim 1 as presented in the patent.

    A communication device

    which is arranged to process messages for communications,

    comprising

    a virtual machine means which includes

    a virtual function processor and function
    processor instructions for controlling operation of
    the device, and

    message induction means including a set of
    descriptions of message data;

    a virtual message processor,

    which is arranged to be called by the function processor and

    which is arranged to carry out the message handling tasks of

    assembling the messages,

    disassembling messages and

    comparing the messages under the direction of
    the message instruction means

    that is arranged to provide directions
    for operation of the virtual message
    processor,

    whereby when a message is
    required to be handled by the
    communications device the
    message processor is called to
    carry out the message handling
    task,

    wherein the virtual machine means is emulatable in different
    computers having incompatible hardwares or operating systems.

    I don’t understand why at allowance the examiner and the applicants could not do the 5 min of analysis to make sure grammar and punctuation are consistent with English Patentese grammar and punctuation.

    Here are the minimal changes that should be made to the claim.

    A communication device

    which is arranged to process messages for communications,

    comprising

    a virtual machine means which includes

    a virtual function processor and function
    processor instructions for controlling operation of
    the device, and

    message induction means including a set of
    descriptions of message data;

    a virtual message processor,

    which is arranged to be called by the function processor and

    which is arranged to carry out the message handling tasks of

    assembling the messages,

    disassembling messages and

    comparing the messages under the direction of
    the message instruction means

    that is arranged to provide directions
    for operation of the virtual message
    processor,

    whereby when a message is
    required to be handled by the
    communications device the
    message processor is called to
    carry out the message handling
    task,

    wherein the virtual machine means is emulatable in different
    computers having incompatible hardwares or operating systems.

    Here is how I would have written the claim. The “wherein” clause does not really add much. I moved it to the real antecedent. I did not reanalyze the subordination at “the virtual machine means”-limitation element because I wanted to keep the comparison clear. Patents use commas considered extraneous in standard English punctuation. There should probably be a comma after OPERATING SYSTEM. I restructured the whereby clause for greater comprehensibility.

    I have not checked the prosecution history, but the examiner should have looked very carefully at this claim from the standpoint of MPEP 2181.

    A communication device

    which is arranged to process messages for communications,

    WHICH COMPRISES:

    a virtual machine means, WHICH IS EMULATABLE ON
    ANOTHER COMPUTER SYSTEM HAVING INCOMPATIBLE HARDWARE
    OR OPERATING SYSTEM AND which includes

    a virtual function processor and function
    processor instructions for controlling operation of
    the device, and

    message induction means including a set of
    descriptions of message data; AND

    a virtual message processor,

    which is arranged to be called by the function processor and

    which is arranged to carry out the message handling tasks of

    assembling the messages,

    disassembling messages, AND

    comparing the messages under the direction of
    the message instruction means

    that is arranged to provide directions
    for operation of the virtual message
    processor,

    whereby the message processor
    is called to carry out the
    message handling task WHEN A
    MESSAGE IS REQUIRED TO BE
    HANDLED BY THE COMMUNICATIONS
    DEVICE.