429 F.3d 1344 (Fed. Cir. 2005), 04-1572, MicroStrategy Inc. v. Business Objects, S.A.

Docket Nº:04-1572.
Citation:429 F.3d 1344
Party Name:77 U.S.P.Q.2d 1001 MICROSTRATEGY INCORPORATED, Plaintiff-Appellant, v. BUSINESS OBJECTS, S.A. and Business Objects Americas, Inc., Defendants-Appellees.
Case Date:November 17, 2005
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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429 F.3d 1344 (Fed. Cir. 2005)

77 U.S.P.Q.2d 1001

MICROSTRATEGY INCORPORATED, Plaintiff-Appellant,

v.

BUSINESS OBJECTS, S.A. and Business Objects Americas, Inc., Defendants-Appellees.

No. 04-1572.

United States Court of Appeals, Federal Circuit.

Nov. 17, 2005.

        Appealed from: United States District Court for the Eastern District of Virginia Judge Jerome B. Friedman

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        Carter G. Phillips, Sidley Austin Brown & Wood, LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Kathi A. Cover and Brian T. Fitzpatrick .

        Daniel J. Furniss, Townsend and Townsend and Crew LLP, of Palo Alto, California, argued for defendants-appellees. With him on the brief were Gary H. Ritchey and Joseph A. Greco . Of counsel were Dana Johannes Finberg, LeClair Ryan, of Richmond, Virginia, and Robert D. Luskin, Patton Boggs LLP, of Washington, DC.

        Before NEWMAN, Circuit Judge, ARCHER, Senior Circuit Judge, and RADER, Circuit Judge .

        RADER, Circuit Judge .

        MicroStrategy and Business Objects are competitors in the field of business intelligence software. MicroStrategy initially sued Business Objects, S.A., a French corporation, and Business Objects Americas, Inc. (collectively Business Objects), its wholly-owned American subsidiary, in the United States District Court for the Eastern District of Virginia for infringement of MicroStrategy's U.S. Patent No. 6,260,050 (the '050 patent) and U.S. Patent No. 6,270,033 (the '033 patent). MicroStrategy later amended its complaint to add four business tort claims stemming from the hiring of several MicroStrategy employees by Business Objects. Although a trial took place on some claims, the district court ultimately disposed of both the patent claims and business tort claims without a jury verdict. For separate reasons on each issue, this court affirms the district court on all matters, except one. Because the district court erroneously determined that Virginia law would not acknowledge MicroStrategy's contractual non-solicitation clause, this court reverses on that issue and remands for further proceedings consistent with this opinion.

        I.

        This court reviews the grant or denial of a motion for judgment as a matter of law (JMOL) "under the law of the regional circuit where the appeal from the district court normally would lie." Riverwood Int'l Corp. v. R.A. Jones & Co., 324 F.3d 1346, 1352 (Fed. Cir. 2003). Under the law of the United States Court of Appeals

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for the Fourth Circuit, this court reviews the denial of a motion for judgment as a matter of law without deference. Johnson v. MBNA Am. Bank, NA, 357 F.3d 426, 431 (4th Cir. 2004). "We must view the evidence in the light most favorable to . . . the nonmovant, and draw all reasonable inferences in [the non-movant's] favor without weighing the evidence or assessing the witnesses' credibility." Id. "The question is whether a jury, viewing the evidence in the light most favorable to [the nonmovant], could have properly reached the conclusion reached by this jury." Baynard v. Malone, 268 F.3d 228, 235 (4th Cir. 2001). "We must reverse [the denial of a motion for JMOL] if a reasonable jury could only rule in favor of [the movant]; if reasonable minds could differ, we must affirm." Id.        This court reviews the district court's grant or denial of summary judgment under the law of the regional circuit. Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1191 (Fed. Cir. 2004). Under the law of the Fourth Circuit, this court reviews the grant or denial of summary judgment without deference. Gallagher v. Reliance Standard Life Ins. Co., 305 F.3d 264, 268 (4th Cir. 2002).

        This court reviews a district court's evidentiary rulings under the law of the regional circuit. Sulzer Textil A.G. v. Picanol N.V., 358 F.3d 1356, 1363 (Fed. Cir. 2004). Under the law of the Fourth Circuit, this court reviews the district court's exclusion of evidence for an abuse of discretion. United States v. Wilkerson, 84 F.3d 692, 696 (4th Cir. 1996).

        II.

        With respect to the patent claims, MicroStrategy voluntarily dismissed its infringement claim on the '030 patent before trial. On the '050 patent, however, the district court granted summary judgment of non-infringement in favor of Business Objects. The district court reached this result after interpreting the claims to require an association of output devices with a "device-specific style" on a device-by-device basis. See MicroStrategy, Inc. v. Business Objects, S.A., 331 F.Supp.2d 432 (E.D.Va.Aug. 6, 2004) (Patent Judgment). This court agrees with the district court's construction.

        The '050 patent is directed at a system and method for automatic broadcasting of information to multiple types of subscriber output devices and formatting output for those devices using configurable parameters. '050 patent, col. 1, ll. 26-32. The invention allows companies to access and mine enormous volumes of data generated by their business operations. The '050 patent gives some idea of the problems addressed by the invention:

The availability of large volumes of data presents various challenges. One challenge is to avoid inundating an individual with unnecessary information. Another challenge is to ensure all relevant information is available in a timely manner.

'050 patent, col. 1, ll. 39-44. The '050 patent further specifies that the data must be available to "multiple types of subscriber output devices, including electronic mail, personal digital assistants (PDA), pagers, facsimiles, printers, mobile phones, and telephones." Id. , col. 1, ll. 28-31. The parties dispute whether, as claimed, the system and method must associate these various output devices with a "device-specific style" on a device-by-device basis. Moreover if each device - printer, pager, etc. - requires its own presentation style, this requirement suggests that the invention also requires support for multiple types of output devices. Claim 8 is representative of the disputed language; it reads:

8. A method for generating output from an on-line analytical processing

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system to user output devices comprising the steps of:

processing at least one scheduled service in an on-line analytical processing system according to a schedule established for the service and generating a service output, each service comprising at least one query to be performed by the on-line analytical processing system and at least one user device subscribed to that service;

enabling a plurality of subscribers to subscribe to the scheduled service and enabling the subscriber to specify at least one user output device at which to receive service outputs from the service;

wherein each user device subscribed to that service is associated with a device-specific style that designates the format in which that particular type of user device is to output to the service outputs to a user to maintain the integrity of the service outputs;

determining whether to forward the generated output to one or more user devices based on output conditions specified for each user device subscribed to the service;

creating a device-specific formatted output for each user device subscribed to the service selected to receive the output according to a selection of predefined values specified for each of a plurality of predefined parameters provided by the style specified for the user output device, and

automatically forwarding a device-specific formatted service output to each of the user output devices selected to receive the output for that service;

wherein the determining step comprises determining whether each user device subscribed to the service is an alert subscription or a periodic subscription and selecting the user device if it is a periodic subscription or if an alert condition specified in the alert subscription has been satisfied.

Id., col. 18, l. 51-col. 19, l. 21 (emphases added).

        The district court first construed the term "device-specific style" during a Markman proceeding. During that proceeding, MicroStrategy argued that the term meant "[o]ne or more parameters that designate the format in which a particular type of output device receives service outputs." After a careful review of the claim language and relevant statements in the specification and file wrapper, the district court largely adopted MicroStrategy's proposed definition. Thus, the district court construed "device-specific style" to mean "[t]he format in which a particular type of output device receives and displays service output, consisting of values of a plurality of parameters." MicroStrategy, Inc. v. Business Objects, S.A., Civil Action No. 2:01cv826, slip op. at 27 (E.D.Va.Mar. 18, 2004) (Claim Construction Order).

        The district court construed the remaining claim language on summary judgment. Patent Judgment, 331 F.Supp.2d at 439. Based on the claim language, the district court "conclude[d] . . . that the system or method [must] function on a device-by-device basis." Id. at 440. The district court's interpretation focused on two aspects common to the three independent claims: "(1) each user device is associated with a device-specific style, and (2) output is created for each user device according to the style specified for the user output device." Id. (emphasis in original). Thus, the district court concluded that the claim language requires association of output devices with a device-specific style on an individual, device-by-device basis. Id. In other words, the invention requires a particular format and presentation for one device, e.g. mobile phone data, that could differ from the format for a second device,

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e.g., electronic mail...

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