Patent Case Summaries October 28, 2020

Patent Case Summaries | Week Ending October 23, 2020

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

TecSec, Inc. v. Adobe Inc., et al., Nos. 2019-2192, -2258 (Fed. Cir. (E.D. Va.) Oct. 23, 2020). Opinion by Taranto, joined by Prost and Reyna.

TecSec sued Adobe for direct and indirect infringement of four TecSec patents relating to multi-level security of files being transmitted in a data network. On March 3, 2011, the district court entered a claim construction order that resulted in TecSec stipulating to noninfringement by Adobe. In 2013, the Federal Circuit reversed and remanded for further proceedings under the correct construction.

On remand, and just before trial, the district court granted Adobe’s motion in limine to preclude all evidence of Adobe’s intent to infringe after March 3, 2011 (the date of the claim construction order that resulted in the stipulation of noninfringement). The district court held that it was legally impossible for Adobe to have had, after that date, the knowledge required for inducement.

Following trial, the jury found that Adobe directly infringed but had not committed inducement of infringement, and the jury awarded TecSec damages. The district court vacated the damages amount and set it to zero on the basis that the evidence could support damages only for inducing infringement, which the jury found had not occurred. TecSec appealed, and Adobe cross-appealed on an issue of patent eligibility under 35 U.S.C. § 101.

On appeal, the Federal Circuit reversed the district court’s pre-trial evidentiary ruling. The Federal Circuit explained its reasoning: “As a logical matter, a defendant may have the liability-supporting subjective state of mind even if a person could believe, with objective reasonableness (though wrongly), that the induced conduct was not infringing. To make the point in terms of this case, Adobe may have had the requisite knowledge of infringement if it believed (as we ultimately held in 2013) that the March 3, 2011 claim construction was incorrect, even if that construction was objectively reasonable.” Thus, the district court erred when it concluded as a matter of law that Adobe could not have had the requisite intent to induce infringement.

Next, the Federal Circuit upheld the district court’s reduction of the jury’s damages award to zero. TecSec argued that 35 U.S.C. § 284 entitles TecSec to a non-zero reasonable royalty. But the Federal Circuit disagreed: “The statute does not require an award of damages if none are proven that adequately tie a dollar amount to the infringing acts.” TecSec had presented no evidence of damages caused by Adobe’s direct infringement, which was the only form of infringement that the jury found Adobe to have committed.

Lastly, the Federal Circuit upheld the district court’s denial of Adobe’s motion for summary judgment that the patent claims were ineligible under § 101. The Federal Circuit concluded that “the claims are directed to improving a basic function of a computer data-distribution network, namely, network security,” and they are “aimed at solving a particular problem of multicasting computer networks.”

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