Federal Circuit Affirms Patent Invalidity and District Court’s Denial of Post-Judgment Motions

TVIIM, LLC v. McAfee, Inc., (Fed. Cir. Mar. 21, 2017)  (Before Prost, C.J., Clevenger, and Reyna, J.) (Opinion for the court, Reyna, J.) C

A unanimous panel of the Federal Circuit affirmed jury determinations of non-infringement and patent invalidity and affirmed the district court’s denial of motions for judgment as a matter of law (“JMOL”) and for a new trial.

TVIIM, LLC is the owner of a patent that describes a “security system which identifies security vulnerabilities and discrepancies for a computing system.” The claims recite “perform[ing] various utility functions with regards to the computer apparatus in response to the identified vulnerabilities.” (emphasis in opinion).

TVIIM sued McAfee, Inc., alleging infringement of its patent by McAfee’s “Program Updates” software. Program Updates detects and installs updates for various non-Windows programs. It scans a Windows computer for non-Windows programs, and upon detecting one, determines whether the National Vulnerability Database (“NVD”) lists any vulnerabilities in the installed version of that program. If an update is available, it is installed, whether or not the NVD lists any vulnerabilities. If a vulnerability is detected, Program Updates “tells the user whether an update is ‘Critical’ or merely ‘Recommended.’” Conversely, “if no software update is available, Program Updates will not provide users with any information about a detected vulnerability.”

McAffee’s defense to infringement included that “the presence of a known vulnerability is irrelevant to whether Program Updates installs an update.” The update function did not “respond” to the vulnerability.

McAfee also argued that TVIIM’s patent is invalid as anticipated by, or obvious from, two prior art references, Host GUARD and S3. These references identified vulnerabilities, but the user (not the software) takes any desired corrective action.

Three claim terms in TVIIM’s patent were highlighted. The parties agreed that the applicable ordinary meaning of “vulnerability,” is an “exploitable weakness in a computer system.” Both parties said no further construction was necessary, and the jury was told that “various utility functions” and “in response to” each have their ordinary meaning. The jury found that McAfee did not infringe and that TVIIM’s patent is invalid, without distinguishing between obviousness and anticipation. TVIIM filed motions for JMOL and a new trial.

TVIIM argued that “the jury could not have arrived at both a non-infringement and invalidity determination using a single construction” of the three claim terms. The district court denied TVIIM’s motions, finding both verdicts to be supported by substantial evidence.

On appeal, TVIIM argued that claim terms must be construed the same way for invalidity and infringement, but the jury could not have done so here, because the three claim terms each have more than one ordinary meaning, leading to inconsistent results. The Court found no inconsistencies. The ordinary meaning of “in response” encompassed corrective action by the user (prior art), while McAffee’s expert testimony supported that McAffee’s software took no such action because its only “utility function” (an update) was not “in response” to a vulnerability. Furthermore, there was no meaningful difference between “all” vulnerabilities and “potential” vulnerabilities. Thus, the jury’s verdict of non-infringement to be supported by substantial evidence. With respect to invalidity, McAfee’s expert also testified that the prior art performs different utility functions in response to vulnerabilities, which was sufficient to support the jury’s verdict.

The Federal Circuit “review[s] denials of motions for JMOL and motions for a new trial under the law of the regional circuit—here, the Ninth Circuit.” Under Ninth Circuit law, “[a] district court must uphold a jury’s verdict ‘if it is supported by substantial evidence,’” and denial of a motion for a new trial is reversed “only if the record lacks any evidence supporting the verdict or if the district court makes mistake of law.”

The Court noted that TVIIM never showed that the three claims terms at issue are open to varying interpretations, and the Court was “not persuaded that any of the three terms has multiple ordinary meanings.” Thus, the Court “discern[ed] no error in the district court submitting them to the jury without specific instructions.” The Court found that, in light of the evidence presented at trial, there was “a uniform construction [that] would allow the jury to arrive at verdicts of non-infringement and invalidity, as both are supported by substantial evidence.”

The Court additionally held that any potential claim construction error was harmless. According to TVIIM’s brief, “[A]ny single ordinary meaning construction could support either infringement or invalidity.” This concession was determinative “because even if [the Court] were to find an inconsistent verdict, substantial evidence under ‘any’ construction supports the jury’s verdict of invalidity.” Consequently, any potential error with respect to the non-infringement verdict would be harmless.

Litigators risk jury confusion by relying on “ordinary meaning” for a key claim term, without articulating what that meaning is. An alternative “ordinary meaning” will not be considered for the first time on appeal. Furthermore, alternative meanings may be considered harmless, if substantial evidence nevertheless supports a finding of invalidity under any construction.

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