Cardsoft (Assignment for the Benefit of Creditors), LLC v. VeriFone, Inc.
807 F.3d 1346
| Fed. Cir. | 2015Background
- CardSoft sued VeriFone asserting infringement of U.S. Patents ’945 and ’683, which claim a "virtual machine" for payment terminals that lets applications run across different hardware/OS.
- The district court construed "virtual machine" broadly (a computer emulating a hypothetical computer for data-transport applications) and a jury found infringement.
- On appeal the Federal Circuit initially reversed, holding the district court misconstructed "virtual machine." The Supreme Court vacated and remanded for consideration under Teva’s claim-construction standard.
- On remand the Federal Circuit reviewed claim construction de novo (no district-court factual findings based on extrinsic evidence) and held the proper meaning requires applications to be OS/hardware-independent (the ordinary meaning of "virtual machine").
- CardSoft failed to respond on appeal to VeriFone’s argument that the accused devices run OS/hardware-dependent applications; the court treated that failure as waiver and entered JMOL of noninfringement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper construction of "virtual machine" | District court's broader construction suffices; virtual machine need not require apps be OS/hardware independent | "Virtual machine" should be given ordinary meaning: runs applications independent of underlying OS/hardware | Reversed district court; "virtual machine" requires applications that are independent of underlying OS/hardware |
| Role of intrinsic vs extrinsic evidence post-Teva | Reliance on prior cases/industry examples improperly elevates extrinsic evidence | Intrinsic record controls; Teva deference not triggered because no subsidiary factual findings were made | Reviewed claim construction de novo; intrinsic evidence (specification/prosecution history) supports ordinary meaning |
| Effect of claim differentiation and dependent claims | Dependent claims permit broader meaning; instructions included in VM may be hardware-dependent | Claim differentiation cannot override clear specification and prosecution history defining VM | Claim differentiation not persuasive; specification and prosecution history control |
| Sufficiency of respondent's briefing on infringement under correct claim construction | CardSoft argued district construction was correct, but did not dispute that under correct construction noninfringement is compelled | VeriFone argued noninfringement under the correct construction | CardSoft waived the argument by failing to respond; JMOL of noninfringement granted |
Key Cases Cited
- Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (U.S. 2015) (claim construction: legal questions reviewed de novo; subsidiary factual findings reviewed for clear error)
- Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) (claim terms given ordinary and customary meaning in view of intrinsic record)
- Oracle Am., Inc. v. Google Inc., 750 F.3d 1339 (Fed. Cir. 2014) (discussing Java VM as conventional example of "write once, run anywhere")
- Nazomi Commc'ns, Inc. v. ARM Holdings, PLC, 403 F.3d 1364 (Fed. Cir. 2005) (describing virtual machine concept in prior art)
- Shire Dev., LLC v. Watson Pharm., Inc., 787 F.3d 1359 (Fed. Cir. 2015) (post-Teva guidance on when appellate review defers to district-court factual findings)