Our Patent Case Summaries provide 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.
Exafer Ltd. v. Microsoft Corp.
No. 2024-2296 (Fed. Cir. (W.D. Tex.) Mar. 6, 2026). Opinion by Moore, joined by Taranto and Stoll.
Exafer owns, and accused Microsoft of infringing, two patents related to systems and methods for optimizing communication paths between virtual network devices by controlling data forwarding rules at intelligent switches.
After discovery, Microsoft filed a Daubert motion to exclude the opinions of Exafer’s damages expert, Mr. Blok. The district court granted the motion because the expert had used unaccused virtual machines (VMs) as the royalty base for his damages estimate. Exafer then moved to reopen fact and expert discovery to present an alternative damages theory, which the district court denied. Microsoft in turn moved for summary judgment based on absence of a remedy, which the district court granted. Exafer appealed.
The Federal Circuit reversed the district court’s order excluding Mr. Blok’s damages opinions, and vacated as moot both the order denying Exafer’s motion to reopen discovery and the grant of summary judgment based on absence of a remedy.
As to the expert’s damages opinions, the Federal Circuit concluded that “the district court abused its discretion in excluding Mr. Blok’s damages opinions as unreliable under Rule 702 for using VMs as its royalty base.” The opinions were based on Microsoft’s VM pricing rate (VMs per hour, or VM-hours), which Exafer argued reliably reflect how Microsoft valued the accused features at the time of the hypothetical negotiation. The Federal Circuit agreed, noting that “Microsoft’s own documents demonstrate that Mr. Blok’s VM-hour royalty base was based on a causal connection between the Accused Features of the [accused] Azure Platform and VMs.”
The Federal Circuit explained that “a reasonable royalty is not necessarily unreliable under Rule 702 because it uses a royalty base associated with an unaccused product.” Instead, “the facts associated with the alleged infringing activity must be assessed on a case-by-case basis to determine how the parties would value the accused technology during the hypothetical negotiation.” Applied here, “Mr. Blok’s methodology for estimating a reasonable royalty did not improperly include activities that do not amount to patent infringement. Instead, Mr. Blok accounted for the causal connection between the Accused Features and VMs in his valuation of the Accused Features.”
Magnolia Medical Technologies, Inc. v. Kurin, Inc.
No. 2024-2001 (Fed. Cir. (D. Del.) Mar. 6, 2026). Opinion by Lourie, joined by Hughes and Freeman (sitting by designation).
Magnolia sued Kurin for infringement of two patents, the ’483 and ’001 patents, directed to devices designed to counter certain contamination issues in blood tests.
For the ’001 patent, the district court construed the claim term “diverter” to be in means-plus-function format under 35 U.S.C. § 112(f). Based on that construction, the parties entered into a stipulation of no infringement by Kurin.
The ’483 patent proceeded to trial, where a jury found that Kurin infringed. The district court, however, granted Kurin’s post-trial motion for judgment as a matter of law (JMOL) of no infringement. Magnolia appealed.
Starting with the ’483 patent, Magnolia argued that the district court erred by adopting an untimely claim construction that the patent’s “vent” and “seal” limitations must be met by separate structures. Magnolia also argued that the construction was incorrect.
The Federal Circuit disagreed and thus affirmed. The court relied on precedent that “stands for the proposition that when claim limitations are separately listed within a claim, that implies that the claim’s plain and ordinary meaning requires separate corresponding structures.” By adhering to that same view, the district court “did not impermissibly ‘announce . . . for the first time’ that the ‘vent’ and ‘seal’ limitations should be construed as requiring two separate corresponding structures in granting Kurin’s JMOL of no infringement.” Instead, the district court “only clarified what was inherent in the construction,” which was permissible.
The Federal Circuit also ruled that the district court’s construction was correct. First, “the text and structure of claim 1 demonstrate the separateness of the ‘vent’ and ‘seal’ limitations.” For example, both limitations are preceded by the word “a” and connected by the word “and,” which “suggest[s] that the ‘vent’ structure is in addition to, i.e., separate from, the ‘seal’ structure.” Second, the Federal Circuit determined that “the specification is consistent with the separate-structure construction.” Lastly, the doctrine of claim differentiation did not alter the analysis.
Turning next to the ’001 patent, the Federal Circuit upheld the construction of “diverter” as a means-plus-function term, and thus affirmed. Foremost, the parties agreed that the function of the “diverter” is to “direct bodily fluid down one of two paths.” The Federal Circuit explained that, because the “diverter” term does not include the word “means,” § 112(f) presumptively does not apply, and to overcome that presumption, “Kurin must show that claim 1 does not recite sufficient structure to perform that function.”
Addressing the structure, the Federal Circuit acknowledged “it is true that claim 1 recites some structural elements of the ‘diverter.’” But the recited structure alone was “insufficient to perform its directing function,” and thus Kurin rebutted the presumption.
Also, although Magnolia relied on an opinion by its technical expert, the Federal Circuit ruled that the expert’s opinion was “an admission that the term ‘diverter’ would not be understood by a person of ordinary skill to have a ‘sufficiently definite’ structural meaning, . . . but rather as a generic term that captures any structure that performs that function.”