May 2010
Finding of Noninfringement Affirmed Where Allegedly Subversive Arguments Made at Trial Did Not Subvert the Jury’s Reason or Commitment to Decide the Issues on the Evidence Received and the Law as Given
| Judges: Mayer, Linn (author), Prost |
| [Appealed from E.D. Va., Senior Judge Hilton] |
In Verizon Services Corp. v. Cox Fibernet Virginia, Inc., Nos. 09-1086, -1098 (Fed. Cir. Apr. 16, 2010), the Federal Circuit affirmed the district court’s rulings on the issues of infringement and validity of Verizon Services Corp., Verizon Communications, Inc., MCI Communications, Inc., and Verizon Business Global LLC’s (collectively “Verizon”) patents.
Verizon sued Cox Fibernet Virginia, Inc., Cox Virginia Telecom, Inc., Cox Communications Hampton Roads, LLC, Coxcom, Inc., and Cox Communications, Inc. (collectively “Cox”) for infringement of U.S. Patent Nos. 6,282,574 (“the ’574 patent”), 6,104,711 (“the ’711 patent”), 6,430,275 (“the ’275 patent”), 6,292,481 (“the ’481 patent”), 6,137,869 (“the ’869 patent”), and 6,636,597 (“the ’597 patent”). The six patents relate generally to packet-switched telephony—technology for providing telephone calls by breaking up voice signals and sending the resulting data in packets, not all of which traverse the same path through a network. The Court divided the patents into three groups: the ’711 and ’574 patents (the “Feature Patents”), the ’275, ’869, and ’481 patents (the “Network Patents”), and the ’597 patent (the “Quality of Service Patent”). None of the claims in any of the patents referred explicitly to the Internet or to a “public packet data network,” which the Federal Circuit had previously equated to the Internet in Verizon Services Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1305 (Fed. Cir. 2007). Instead, the asserted claims referred to “packet switched networks,” “circuit switched networks,” and a “system of interlinked packet data networks.”
In 2008, Verizon sued Cox for infringement of all six patents. After a jury verdict, finding all six patents not infringed, the Feature Patents invalid, and the Network Patents and the Quality of Service Patent valid, the district court denied cross motions for JMOL or a new trial and entered final judgment for Cox.
On appeal, the Federal Circuit first addressed Verizon’s argument that the jury verdicts of noninfringement and invalidity should be vacated because Cox made arguments to the jury about claim scope that subverted the jury’s ability to fairly decide the issues before it. Specifically, Verizon alleged that Cox and its experts argued that the scope of the asserted claims was limited by the intent of the inventors and invited the jury to limit the claims to the Internet. Verizon framed its challenge as a claim construction issue governed by O2 Micro International Ltd. v. Beyond Innovation Technology Co., 521 F.3d 1351 (Fed. Cir. 2007). The Court, however, distinguished O2 Micro, in which the scope of a specific claim term was in dispute beginning at the Markman hearing and continuing throughout the trial. Here, the Court found that at no time did Verizon identify any specific claim term that was misconstrued or that needed further construction. Moreover, the Court found that Cox’s allegedly improper arguments did not relate to any particular misconstrued term or invite the jury to choose between alternative meanings of technical terms or words of art or to decide the meaning of a particular claim term, as was the case in O2 Micro. The Court concluded that Cox instead made the arguments to distinguish its accused system and to rebut the charge of willful infringement by showing Cox’s understanding of the scope of Verizon’s patents at the time Cox developed the accused system.
“We cannot say that the singular or cumulative effect of these statements effectively subverted the jury’s reason or commitment to decide the issues on the evidence received and the law as given by the court.” Slip op. at 13.
While Verizon attempted to characterize the issue as one of claim construction, in the Court’s view, it was more accurately about whether Cox’s arguments to the jury were improper and offered the jury “appealingly simplifying ways to determine invalidity and infringement,” thus “invit[ing] the jury to shirk its key factfinding function.” Slip op. at 12 (alteration in original) (quoting Verizon’s Principal Br. 28-29). On this issue, the Federal Circuit applied Fourth Circuit law, which finds abuse of discretion in declining to set aside a verdict only when there is a reasonable probability that improper arguments effectively subverted “the jury’s reason or . . . its commitment to decide the issues on the evidence received and the law as given it by the trial court.” Id. at 13 (citing Arnold v. E. Airlines, Inc., 681 F.2d 186, 197 (4th Cir. 1982)). Here, Verizon admitted that each of the statements made by Cox was not necessarily objectionable on its own, but argued that, taken together, the statements prejudiced the jury deliberations.
The Federal Circuit disagreed. Indeed, the Court found that the district court specifically instructed the jury that counsel’s arguments and statements were not evidence. In addition, Verizon did not, during the trial, request a limiting instruction based on Cox’s allegedly improper claim scope arguments. Nor did Verizon object to any arguments made during Cox’s closing. Finally, Verizon had the opportunity during closing arguments to rebut any improper or misleading statements it perceived in Cox’s closing arguments, but did not do so. Looking at the entire record, the Court saw no reason to conclude that the district court abused its discretion in finding that the jury had not been deprived of its ability to decide this case.
The Federal Circuit next addressed the denial of JMOL motions regarding validity and invalidity. Verizon argued that the district court erred by allowing the jury to consider whether one prior art reference incorporated another by reference and anticipated the asserted claims. The Court held that, while it is the role of the court, not the jury, to determine whether a prior art reference incorporated another reference, the error was harmless here as the jury was presented with sufficient evidence to find the asserted claims were anticipated by other unitary references. With regard to the obviousness of combining the two references that were allegedly incorporated by reference, Verizon argued that Cox’s expert testified regarding obviousness using the wrong field of art—“Internet and network protocols”— instead of the “telephone and wireless communications” field of art correctly defined in the jury instructions. The Federal Circuit held that this difference did not matter because the relevant art contained the field of “Internet and network protocols” that Cox’s expert addressed.
The Federal Circuit turned next to Verizon’s argument for a new trial on the Feature Patents. Relying on Zenith Electronics Corp v. PDI Communication Systems, Inc., 522 F.3d 1348, 1363 (Fed. Cir. 2008), which held that “anticipation cannot be proved by merely establishing that one ‘practices the prior art,’” Verizon argued that it was entitled to a new trial because Cox had argued that the jury could find the patents invalid simply because they were identical in all material respects to what was taught in prior art references. The Court distinguished Zenith, finding that, in this case, Cox provided detailed expert testimony showing how the prior art disclosed each of the claim elements. Thus, a reasonable jury could conclude, based on evidence in the record and separate and apart from any alleged “practicing the prior art” argument, that the patents were invalid.
The Court also considered Cox’s argument for a new trial on the validity of the Network Patents and the Quality of Service Patent. Cox argued that the district court improperly excluded testimony of two named inventors of Verizon’s patents. The Court held that the district court did not abuse its discretion because it allowed testimony from the witnesses about the patents they invented based on their personal knowledge and properly excluded these same witnesses from providing expert testimony on invalidity for which they had not previously provided expert reports or been qualified as an expert.
The Federal Circuit turned next to Verizon’s arguments regarding infringement. First, the Court rejected Verizon’s argument for a new trial on the ’481 patent, holding that both parties presented evidence regarding infringement and there was a factual dispute between the experts over whether the accused products practiced two claim elements. These disputes were factual disputes that were proper for the jury to decide. Second, the Federal Circuit denied Verizon’s argument that it was entitled to a new trial on the Quality of Service Patent because of a faulty construction of one claim element. The Federal Circuit held that the jury had substantial evidence to find the ’481 patent was not infringed regardless of whether the district court correctly construed that one claim element.
