Federal Circuit Decision Signals Significance of Claim Construction in Statutory Subject Matter Analysis
On January 10, the United States Court of Appeals for the Federal Circuit (“the Court”) handed down its decision (“the Decision”) in Finjan, Inc. (“Finjan”) v. Blue Coat Systems, Inc. (“Blue Coat”). At issue in the case was Blue Coat’s alleged infringement of four patents owned by Finjan that were directed to identification and protections against malware including U.S. Patent No. 6,154,844 (“the ’844 patent”).
At trial, a jury found that Blue Coat infringed these four patents and awarded Finjan approximately $39.5 million for Blue Coat’s infringement. Further, after a bench trial, the district court concluded that the ’844 patent is directed to patent-eligible subject matter under 35 U.S.C. § 101. Blue Coat appealed the holdings of infringement, subject matter-eligibility and damages.
In its Decision, the Court further expounded on the standards for statutory subject matter developed in its recent McRO, Affinity Labs, and Enfish decisions while signaling the significance of claim construction in statutory subject matter analysis.
The Court interpreted the ’844 patent as being directed to a method of providing computer security by scanning a downloadable and attaching the results of that scan to the downloadable itself in the form of a “security profile.” Claim 1 of the ’844 patent, which the district court found representative for § 101 purposes, read:
1. A method comprising: receiving by an inspector a Downloadable; generating by the inspector a first Downloadable security profile that identifies
suspicious code in the received Downloadable; and linking by the inspector the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients.
Claim 1, ‘844 Patent (Emphasis added).
At claim construction, the parties agreed that “Downloadable” should be construed to mean “an executable application program, which is downloaded from a source computer and run on the destination computer.” Additionally, the district court construed “Downloadable security profile that identifies suspicious code in the received Downloadable” to mean “a profile that identifies code in the received Downloadable that performs hostile or potentially hostile operations.”
The Court noted that, previously, it had held in Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1319 (Fed. Cir. 2016), that “[b]y itself, virus screening is well-known and constitutes an abstract idea.” However, in Finjan, the Court noted that, “Here, the claimed method does a good deal more.”
The Court then went on to emphasize the district court’s claim construction. Specifically, the Court noted that:
[The district court’s claim construction decision emphasizes that this “identif[y] suspicious code” limitation can only be satisfied if the security profile includes “details about the suspicious code in the received downloadable, such as . . . ‘all potentially hostile or suspicious code operations that may be attempted by the Downloadable.’” Finjan, Inc. v. Blue Coat Sys., Inc., No. 13-CV-03999-BLF, 2014 WL 5361976, at *9 (N.D. Cal. Oct. 20, 2014). Further, this “security profile” must include the information about potentially hostile operations produced by a “behavior-based” virus scan. This operation is distinguished from traditional, “code-matching” virus scans that are limited to recognizing the presence of previously-identified viruses, typically by comparing the code in a downloadable to a database of known suspicious code.
Decision, p. 6, (Emphasis added).
As can be seen from the plain language of Claim 1, there is no recitation that the “identifies suspicious code” or the “security profile” necessarily require a “behavior-based” virus scan. It is only through the Court’s reliance on the claim construction that the “identifies suspicious code” or the “security profile” is imbued with the limitation of a “behavior-based” virus scan.
As noted above, it is the usage of this “behavior-based” virus scan that the Court views as satisfying the requirements of § 101:
"The question, then, is whether this behavior-based virus scan in the ’844 patent constitutes an improvement in computer functionality. We think it does.”
Decision, p. 6.
Such a reliance on the claim construction may put patent-holders in a Catch-22. A patent-holder may advocate for broad claim construction to avoid any potential preclusive effect with respect to present or future infringement actions. However, in light of Finjan, it appears that such broad claim constructions may run the risk of reaching subject matter which may not be statutory thereby placing validity of the claim at risk.
Suppose that Finjan had argued for a broader claim construction which included both the “behavior-based” virus scan and the “code-matching” virus scans which the Court held to be “traditional.” While Finjan may have avoided any preclusive effects for litigation against a subsequent infringer employing “code-matching” virus scans (i.e. they had not admitted that their claim was directed only to “behavior-based” virus scans), they may have simultaneously rendered their claim invalid by including subject matter which the Court ultimately deemed non-statutory.
In light of the Court’s reliance on the claim construction in its statutory subject matter analysis, it appears that rights-holders must make strategic decisions balancing limitation of the claims to a scope which provides strong arguments for statutory subject matter eligibility at the expense of the ability to cast a broad infringement net.
Suiter Swantz IP is a full-service intellectual property law firm, based in Omaha, NE, serving all of Nebraska, Iowa, and South Dakota. If you have any intellectual property questions or need assistance with any patent, trademark, or copyright matters and would like to speak with one of our patent attorneys please contact us.
Scag Power Equipment v. The Toro Company
On February 16, 2016 the Court of Appeals for the Federal Circuit (CAFC) affirmed a modified preliminary injunction against Toro and Exmark Manufacturing Co., Inc. (collectively Toro) for the companies’ infringement of U.S. Patent No. 8,186,475. The patent deals with lawnmowers equipped with platform suspension systems. The injunction prevented Toro from manufacturing, selling, using, and offering to sell lawnmowers that used a platform suspension system.
Metalcraft of Mayville, Inc., d/b/a Scag Power Equipment (Scag) manufactures commercial riding lawn mowers. As claimed and disclosed in the ‘475 patent, Scag developed a suspended operator platform for a ride-on lawnmower or other riding light utility vehicle connected to a rigid chassis by a suspension system. To compete with Scag’s new product Toro released its own line of riding lawnmowers with suspended operator platforms. On May 5, 2016, Scag filed an infringement action against Toro in the Eastern District of Washington and simultaneously filed a motion for a preliminary injunction. The court granted the motion for a preliminary injunction on August 1, 2016. Toro filed a notice of appeal and a motion to stay the preliminary injunction. The court denied Toro’s motion to stay the injunction and Toro appealed.
In order to obtain a preliminary injunction the moving party must establish: (a) that it is likely to succeed on the merits in the litigation, (b) that it is likely to suffer irreparable harm in the absence of preliminary relief; (c) that the balance of equities tips in its favor; and (d) that an injunction is in the public interest.
With respect to the issue of Scag’s likelihood of success on the merits, Toro maintained that their design did not infringe as the accused devices did not included the claimed limitation of “an entire body of an operator.” Specifically, Toro argued that the steering controls of their mower are mounted to the chassis, not the operator platform; therefore the operator’s arms and hands are not supported by the platform. Toro further contended that the district court rejected this defense erroneously because the court’s construction of “an entire body of an operator” excludes hands and arms. The CAFC disagreed with this position holding that the district court did not conclude that “an entire body of an operator” excluded arms and hands and rejected Toro’s proposed claim construction that the steering controls are not claimed as a component of the operator platform.
Toro further argued that the “entire body of an operator” limitation requires the steering controls be mounted on the operator’s platform or else the operator’s hands will not be isolated from shock load. The CAFC stated that Toro improperly equated the support of the entire body with isolating every aspect of an operator’s body from shock. However, the ‘475 patent treats the support of the entire body and shock isolation as two distinct and separate aspects.
The CAFC then examined Toro’s arguments regarding the obviousness[1] of Scag’s design. Toro alleged that claim 21 would be obvious in light of Henriksso and Sasaki patents. The CAFC rejected this argument as Toro failed to raise a substantial question of validity and stated “a patent ‘composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art’”. Toro offered “no reason, and the Court cannot imagine one, that a person of ordinary skill in this field would combine motorcycle shock with a suspended truck cab and come up with a suspended operator platform.”
Regarding the potential for Scag to suffer irreparable harm in the absence of an injunction, the CAFC found the district court did not abuse its discretion in holding that Scag would suffer such harm. While Toro argued that the district court ignored evidence it presented of at least twelve other companies that sell mowers designed to decrease shock loads, the CAFC stated “[t]he fact that other infringers may be in the marketplace does not negate irreparable harm.” They further determined that “the damage to Scag is irreparable because it is impossible to quantify the damages caused by the loss of a potentially lifelong customer.”
With respect to the balance of equities and the public interest, Toro argued that the harm an injunction would bring them far outweighs the harm denying the injunction would bring to Scag and that the injunction would harm the public because it disrupts the status quo. The CAFC that “[w]e are not persuaded that the district court’s contrary determination was an abuse of discretion and decline to disturb the grant of the preliminary injunction on these bases.”
Lastly, the court rejected Toro’s argument that the district court’s preliminary injunction was overly broad. The district court’s order enjoins Toro from “making, using, selling, and offering to sell lawnmowers equipped with platform suspension systems that infringe Scag’s patent, U.S. Patent No. 8,186,475.” The CAFC held that the injunction was not overly broad.
The CAFC concluded “[f]or the foregoing reasons, we hold that the district court did not abuse its discretion in granting Scag’s motion for a preliminary injunction.”
Click here to read the full opinion.
Suiter Swantz IP is a full-service intellectual property law firm serving all of Nebraska, Iowa and South Dakota. If you have any intellectual property questions or need assistance with any patent, trademark or copyright matters and would like to speak to one of our patent attorneys please feel free to contact us.
[1] A claim is invalid for obviousness “if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing fate of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103.