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Questions Remain Concerning Capabilities of Accused Software

September 17, 2001
Barney, James R.

Decision icon Decision

Last Month at the Federal Circuit - October 2001

Judges: Dyk (author), Rader, and Plager

In Hilgraeve Corp. v. Symantec Corp., No. 00-1373 (Fed. Cir. Sept. 17, 2001), the Federal Circuit vacated a district court’s grant of SJ of noninfringement of U.S. Patent No. 5,319,776 (“the ‘776 patent”) and affirmed the district court’s grant of SJ that Symantec Corporation (“Symantec”) was not a licensee of the ‘776 patent.

Hilgraeve Corporation (“Hilgraeve”) sued Symantec for infringement of the ‘776 patent, which claims a method for preventing the spread of computer viruses in a computer system. A key limitation of the claimed method is that transferred data is screened for viruses “prior to storage on the destination storage medium.” Symantec moved for SJ of noninfringement, arguing that its virus-protection software screens data only after the data is stored on the storage medium.

The district court had construed “storage” to mean that “the incoming data is sufficiently present on the destination storage medium so that any viruses contained in the data can spread and infect the computer system.” The parties presented expert testimony on the issue of whether the accused software screens for viruses before such “storage” occurs. The district court had concluded that the parties’ experts were in agreement that the accused software screens for viruses after the transferred data is stored and, therefore, the software could not infringe any claim of the ‘776 patent.

On appeal, the Federal Circuit noted that the term “storage” had previously been construed by the Federal Circuit in an earlier appeal involving the ‘776 patent. After an independent analysis, the Court adopted a construction of storage that included a requirement that the transferred data be “accessible by the operating system or other programs.” Using this definition, the Court reviewed the testimony of the parties’ experts and found that the experts disagreed as to whether the transferred data in the accused software is accessible by the operating system or other programs prior to its being screened for viruses.

Symantec argued that, even under the Federal Circuit’s claim construction, the accused software did not infringe. Symantec pointed to several tests performed by its expert showing that, under certain unusual circumstances, the accused software could make transferred data accessible to other programs prior to the data being screened for viruses. However, the Federal Circuit found these tests to be inconclusive because they did not prove noninfringement of the software under normal operating conditions. The Court noted that an accused device may be found to infringe, even though it may also be capable of noninpage fringing modes of operation. Because there remained a genuine issue of fact concerning the operation of the accused software under normal operating conditions, the Court vacated the district court’s grant of SJ of noninfringement.

Symantec also argued that it was an authorized licensee of the ‘776 patent by a technology transfer agreement (“the Agreement”) that transferred certain intellectual property to Delrina Delaware, an intermediary company that subsequently purported to license the ‘776 patent to Symantec. Construing the Agreement under Ontario law, the Federal Circuit held that the Agreement did not transfer any rights in the ‘776 patent because it did not explicitly mention the transfer of patent rights. Furthermore, the Court held that an agreement by Hilgraeve not to sue Delrina Delaware for patent infringement did not amount to a transferable patent license. Therefore, any purported license of the ‘776 patent from Delrina Delaware to Symantec was ineffective.