United States: O2 Micro Does Not Apply When Jury Explicitly Told By Court To Use Only The Court’s Claim Construction

In Function Media, L.L.C. v. Google Inc., No. 12-1020 (Fed. Cir. Feb. 13, 2013), the Federal Circuit affirmed the district court's determination that one patent was invalid as indefinite and the jury's verdict that two other patents were invalid and not infringed.   The Court also held that the district court did not abdicate its responsibility to construe the disputed claim terms or incorrectly deny a motion for new trial, finding that the verdicts of infringement and invalidity were not irreconcilable.

Function Media, L.L.C. ("FM") filed suit against Google Inc. ("Google"), claiming that Google infringed U.S. Patent Nos. 6,446,045 ("the '045 patent"); 7,240,025 ("the '025 patent"); and 7,249,059 ("the '059 patent").  The purpose of the invention is to facilitate advertising on multiple advertising outlets, such as newspapers and websites, by automatically formatting the ads to fit each publisher's requirements and sending them out for publication.  After claim construction, the district court held that the '045 patent was indefinite and therefore invalid because the specification lacked sufficient structure for the claim's mean-plus-function term, "means for transmitting."  The jury found the claims of the '025 and '059 patents to be invalid and not infringed.  In post-trial motions, FM argued that the verdict was against the great weight of evidence and irreconcilable.  The district court granted JMOL for certain claims of the '025 patent, finding that Google did not submit sufficient evidence for the jury to find that those claims were invalid.  Therefore, these claims remained valid and not infringed.  FM appealed.

"While it may seem harsh, requiring objections to be made before the jury is dismissed is the only way to efficiently cure potential inconsistencies when there is not a detailed special verdict to review."  Slip op. at 32.

Turning first to the means-plus-function claim, the Federal Circuit held that, "[a]t most, the '045 Patent specification discloses that the structure behind the function of transmitting is a computer program that transmits," but beyond the program's function, no algorithm describing the transmission function is disclosed.  Slip op. at 10-11.  Citing Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 521 F.3d 1328, 1333 (Fed. Cir. 2008), the Court disagreed with FM's argument that a person skilled in the art could provide an operative software program for the specified function, holding that the patentee is not absolved of providing an explanation about the structure of a function just because someone of ordinary skill in the art can devise a means with which to perform the claimed function.

In addition to arguing that the district court's claim constructions were incorrect, FM argued that the court improperly sent the construction to the jury, running afoul of O2 Micro International v. Beyond Innovation Technology Co., 521 F.3d 1351, 1362 (Fed. Cir. 2008).  In O2 Micro, the Federal Circuit held that "[w]hen the parties present a fundamental dispute regarding the scope of a claim term, it is the court's duty to resolve it."  Slip op. at 21 (alteration in original) (quoting O2 Micro, 521 F.3d at 1362).  Here, FM attempted to establish such an unresolved dispute by relying on the district court's denial of SJ of noninfringement, a disagreement by the parties over expert testimony misstating the court's claim construction, and by certain statements made by Google during closing argument.  But, the Federal Circuit did find that O2 Micro did not apply.  In O2 Micro, the district court did not settle a claim construction dispute, so the parties presented their arguments to the jury, and the Federal Circuit found this was error and remanded for the district court to construe the claims in the first instance.  But, the Court concluded that this case was more like Verizon Services Corp. v. Cox Fibernet Virginia, Inc., 602 F.3d 1325 (Fed. Cir. 2010), where the issue was whether there were improper attorney arguments, not whether questions of claim scope were submitted to the jury.  The Court decided that in this case, as in Verizon, "the jury was explicitly told by the court to use only the court's claim construction."  Slip op. at 24.

Finally, the Federal Circuit considered FM's argument that the verdicts of noninfringement and invalidity were irreconcilable because Google's technology worked the same way as the prior art, and, thus, FM contended that the jury had to rely on differing claim constructions for infringement and invalidity.  Because FM failed to object to the verdict's irreconcilability when the jury returned its verdict, applying Fifth Circuit law, the Federal Circuit held that FM could only avoid waiver if the verdict form was considered special.  But the Court found that "the portion of the verdict in which the jury applied facts to law on the question of obviousness was clearly a general verdict because it is a legal question resting on underlying factual questions."  Id. at 29.  Further, the Court reasoned that, "[a]lthough the jury was technically finding only 'facts,' we hold that the verdict is a general verdict because like the questions in [Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506 (Fed. Cir. 1984)], the questions on anticipation and validity require legal instruction, the application of legal principles, and are more than 'simply written finding[s] upon each issue of fact.'"  Slip op. at 31 (third alteration in original) (citing Bettecher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629, 641-42 (Fed. Cir. 2011)).  Thus, in dismissing FM's claim, the Federal Circuit concluded that, "[w]hile it may seem harsh, requiring objections to be made before the jury is dismissed is the only way to efficiently cure potential inconsistencies when there is not a detailed special verdict to review . . . ."  Slip op. at 31-32.

The Federal Circuit also affirmed a number of the court's claim constructions, relying on the plain language of the claims and found that sufficient evidence supported the verdict of noninfringement; thus, the district court did not abuse its discretion in denying FM's motion for a new trial.  In sum, the Federal Circuit affirmed the judgment that FM's patents are invalid and not infringed.

Judges:  Rader, Newman, Reyna (author)

[Appealed from E.D. Tex., Magistrate Judge Everingham IV]

This article previously appeared in Last Month at the Federal Circuit, March 2013.

Copyright © 2013 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP | All rights reserved

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