Ncube Corp. v. Seachange Intern., Inc.

• Decision Date: 09 January 2006
• Docket Number: No. 03-1341.,No. 03-1366.,03-1341.,03-1366.
• Citation: 436 F.3d 1317
• Parties: NCUBE CORPORATION (now C-COR Inc.), Plaintiff-Cross Appellant, v. SEACHANGE INTERNATIONAL, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1317

436 F.3d 1317

NCUBE CORPORATION (now C-COR Inc.), Plaintiff-Cross Appellant, v. SEACHANGE INTERNATIONAL, INC., Defendant-Appellant.

No. 03-1341.

No. 03-1366.

United States Court of Appeals, Federal Circuit.

January 9, 2006.

Robert J. Gunther, Jr., Latham & Watkins LLP, of New York, New York, argued for plaintiff-cross appellant. With him on the brief were David A. Nelson and Israel Sasha Mayergoyz, of Chicago, Illinois. Of counsel was Mary B. Graham, Morris, Nichols, Arsht & Tunnel, of Wilmington, Delaware.

Steven M. Bauer, Proskauer Rose LLP, of Boston, Massachusetts, argued for defendant-appellant. On the brief were Robert E. Hillman, Lawrence K. Kolodney, and Steven Katz, Fish & Richardson P.C., of Boston, Massachusetts.

Before RADER, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and DYK, Circuit Judge.

Opinion for the court filed by Circuit Judge RADER.

Dissenting opinion filed by Circuit Judge DYK.

Background

RADER, Circuit Judge.

After the U.S. District Court for the District of Delaware construed the relevant claims, a jury found SeaChange International, Inc. (SeaChange) to have willfully infringed, literally and under the doctrine of equivalents, claims 1-4, 6-10, 12, and 14 of nCube Corporation's (nCube's) U.S. Patent No. 5,805,804 (Sept. 8, 1998) (the '804 patent). The trial judge denied SeaChange's motions for Judgment as a Matter of Law (JMOL) on literal infringement, willfulness, and indirect infringement for incomplete systems sold to Scientific-Atlanta Corp., but vacated the jury's verdict of infringement under the doctrine of equivalents. The judge also denied SeaChange's motion requesting a new trial, and awarded nCube double its actual damages and two-thirds of its attorney fees. Because the court properly decided the JMOL motions, this court affirms. Because the trial court did not abuse its discretion in making its damages and attorney fees awards, this court also affirms those awards.

Discussion

This court applies the same standard of review as that applied by the trial court when reviewing a JMOL motion following a jury verdict. See Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361 (Fed.Cir.2005). Thus, to prevail, SeaChange must show that the jury lacked substantial evidence for its verdict, viewing the evidence most favorably to the non-movant. See Kinnel v. Mid-Atlantic Mausoleums, Inc., 850 F.2d 958, 962 (3d Cir.1988).

A jury verdict of willfulness requires a finding "by clear and convincing evidence in view of the totality of the circumstances that [the defendant] acted in disregard of the . . . patent and lacked a reasonable basis for believing it had a right to do what it did." Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 181 (Fed.Cir.1994). Therefore, "[this court] must determine whether there is substantial evidence, when viewed as a whole, upon which a jury could [find willful infringement] under the clear and convincing evidence standard." Braun, Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 822-23 (Fed.Cir.1992).

This court reviews a district court's exceptional case finding for clear error. Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 182 F.3d 1356, 1359 (Fed.Cir.1999). Criteria for declaring a case exceptional include willful infringement, bad faith, litigation misconduct, and unprofessional behavior. See Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1574 (Fed.Cir.1996). This court reviews increased damages awards or attorney fees for abuse of discretion. Electro Scientific Indus., Inc. v. Gen. Scanning Inc., 247 F.3d 1341, 1349 (Fed.Cir.2001).

The denial of a motion for a new trial is a procedural issue not unique to patent law which this court reviews under the law of the appropriate regional circuit — in this case, the United States Court of Appeals for the Third Circuit. Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 308 F.3d 1167, 1182 (Fed.Cir.2002). The Third Circuit reviews a district court's decision whether to grant a new trial on the basis that the verdict is against the weight of the evidence, for abuse of discretion. Greenleaf v. Garlock, Inc., 174 F.3d 352, 366 (3d Cir.1999).

A. Claim Interpretation

The '804 patent claims a "Method and Apparatus for Scalable, High Bandwidth Storage Retrieval and Transportation of Multimedia Data on a Network." The '804 patent provides "a better means and method for providing multimedia data in a networked system," (Col.2, ll.15-16)^* by allowing a client flexible access to various multimedia sources over a network. Claim 1 of the '804 patent teaches:

1. A high bandwidth, scalable server for storing, retrieving, and transporting multimedia data to a client in a networked system, said server comprising:

an upstream manager receiving messages from said client and routing said messages to an appropriate service on said server, said upstream manager being coupled to a first network;

a downstream manager sending a stream of said multimedia data from said appropriate service on said server to said client, said downstream manager being coupled to a second network; and

a connection service for maintaining information to connect said client, said upstream manager, said downstream manager, and said appropriate service on said server.

In the invention, as shown in Fig. 6 from the '804 patent below, the client communicates his desires to the system using a client device 110. The upstream manager 220 accepts a message, e.g., a request for a particular service, from the client device and routes them to the media server service 322, which will supply that service.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The client may request such services as interactive shopping, news, games, education, movies, etc. The downstream manager 210 sends the data, i.e., the requested service, to the client device 110. (Col.16, ll.11-18) The additional elements in the figure deal with managing the requested service data flows to the requesting client, including obtaining and associating the addresses of the client and the appropriate media server.

This court must interpret the terms governing operation of an "upstream manager" and use of addresses in the invention. As mentioned, the invention of the '804 patent allows the client to receive requested material from different types of networks. This function, in turn, requires the invention to accommodate the addressing schemes of each separate network, which may differ from one another. In order to accommodate the different types of addresses for each data link, the network protocol of the invention superimposes its own independent addresses on top of those of the nodes used in the diverse links of the various networks. (Col.13, ll.11-16.) Thus, the invention can route commands and data from the requesting client to the appropriate media server by using the system's own network protocol. As part of this scheme, the connection service described in the specification assigns a "logical" (i.e., ad hoc) address to the "physical" address (i.e., the real physical location) of a client, in the connection manager 230. (Col.17, ll.27-51). The relationship between the logical and related physical addresses is stored in the connection service table 320.

The trial court construed the term "Upstream Manager" as follows:

Upstream Manager: a computer system component that (a) accepts messages from a client bound for services on a server; (b) routes messages from a client to services on a server; and (c) is distinct from the Downstream Manager.

The parties agree on this much of the construction, but SeaChange seeks further limitation. In particular, SeaChange contends that the upstream manager must (d) receive and route all messages from clients that are "bound for" services, and (e) must do so using only logical, not physical, addresses, of both sender and receiver of a message. SeaChange also reserves an argument of noninfringement even under the court's claim construction.

The district court's claim construction correctly does not require the upstream manager to receive and route all messages from a client bound for a server. The patent claims require that the upstream manager receive messages from the client and the downstream manager send data to the client, but do not make these the exclusive functions of the units. Figures 1, 2, and 6 of the specification show that the paths from the client to the upstream manager are unidirectionally upward, and from the downstream manager to the client unidirectionally downward, and the text of the specification reflects this asymmetry. (Col.3, ll.21-22.) However, the specification describes only one embodiment of the invention, and encompasses divergence from that embodiment: "[i]t may be the case that some server process, under the direction of an external network control node, actually establishes contact with the client." (Col.17, ll.24-26). Thus, the district court correctly stated that the claims encompass this form of communication.

The trial court's construction of "upstream manager" also correctly reflects that this element may route messages using either logical or physical addresses. In the embodiment described in the specification "all routing is accomplished based on logical addresses, not physical addresses." (Col.23, ll.1-4). Thus, "packets (and therefore messages) only contain logical addresses of the sender and receiver." Id. The logical address of a client is used to establish a unique "virtual circuit" for connection with that client. (Col.17, ll.28-48). However, the upstream manager of claim 1 is broader than the upstream manager of this embodiment. The creation of a virtual circuit, or "virtual connection," appears only in dependent claim 2 as a "further" function of the connection service. The use of a client logical address first appears specifically only in claim 4. The embodiment described in the specification, in which the service request message includes the...