Tecsec, Inc. v. Int'l Bus. Machs. Corp.

• Decision Date: 26 December 2013
• Docket Number: No. 2012–1415.,2012–1415.
• Citation: 731 F.3d 1336
• Court: U.S. Court of Appeals — Federal Circuit
• Parties: TECSEC, INC., Plaintiff–Appellant, v. INTERNATIONAL BUSINESS MACHINES CORPORATION and Ebay Inc., Defendants, and Cisco Systems, Inc., SAS Institute, Inc., Sun Microsystems, Inc. (now known as Oracle America, Inc. ), Oracle Corporation, and Paypal, Inc., Defendants–Appellees, and SAP America, Inc., SAP AG, and Sybase, Inc., Defendants–Appellees and Software AG and Software AG, Inc., Defendants–Appellees, and Adobe Systems, Inc., Defendant–Appellee.

731 F.3d 1336

TECSEC, INC., Plaintiff–Appellant,

v. INTERNATIONAL BUSINESS MACHINES CORPORATION and Ebay Inc., Defendants,andCisco Systems, Inc., SAS Institute, Inc., Sun Microsystems, Inc. (now known as Oracle America, Inc. ), Oracle Corporation, and Paypal, Inc., Defendants–Appellees,andSAP America, Inc., SAP AG, and Sybase, Inc., Defendants–AppelleesandSoftware AG and Software AG, Inc., Defendants–Appellees,andAdobe Systems, Inc., Defendant–Appellee.

No. 2012–1415.

United States Court of Appeals,Federal Circuit.

Oct. 2, 2013.

Rehearing En Banc Denied Dec. 26, 2013.

Michael A. Oakes, Hunton & Williams, LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief was Michael A. O'Shea. Of counsel on the brief was Gregory N. Stillman, of Norfolk, VA. Of counsel was Adam Price and Andrew DiNovo, DiNovo, Price Ellwanger & Hardy, LLP, of Austin, TX.

Steven C. Cherny, Kirkland & Ellis, LLP, of Washington, DC, argued for defendants-appellees, Cisco Systems, Inc., et al. With him on the brief were Michael W. De Vries, of Los Angeles, CA, and John C. O'Quinn, of Washington, DC; Jeffrey K. Sherwood and Megan S. Woodworth, Dickstein Shapiro LLP, of Washington, DC, for defendants-appellees, SAP AG, et al; Michael W. Robinson and Jeffri A. Kaminski, Venable LLP, of Vienna, VA, for defendants-appellees, Software AG, et al; and Henrey C. Bunsow and Christina M. Finn, Bunsow, De Mory, Smith & Allison, LLP, of San Francisco, CA, for defendant-appellee, Adobe Systems, Inc. Of counsel was William G. Burgess, Kirkland & Ellis, LLP, of Washington, DC.

Before MOORE, LINN, and REYNA, Circuit Judges.

Opinion for the court filed by Circuit Judge LINN.

Dissenting opinion filed by Circuit Judge REYNA.

LINN, Circuit Judge.

TecSec, Inc. appeals from the district court's entry of judgment that the defendant-appellees (the “defendants”) do not infringe various claims of three TecSec patents: U.S. Patent Nos. 5,369,702 (the “'702 Patent”); No. 5,680,452 (the “'452 Patent”); and No. 5,898,781 (the “'781 Patent”). Because the district court incorrectly construed the claims, this court affirms-in-part, reverses-in-part, and remands for further proceedings.

Background

This case relates to methods and systems that secure computer data. The ' 702, '452, and '781 Patents derive from a common parent application and disclose a method and a system for providing security in a data network by nesting encrypted objects into other objects which are also encrypted. '702 Patent col. 4. ll. 25–28. This allows a system to employ different security levels to restrict access to specific compartments of data. Id.

Claim 8 of the '702 Patent is representative of the system claims at issue:

A system for providing multi-level multimedia security in a data network, comprising:

A) digital logic means, the digital logic means comprising:

1) a system memory means for storing data;

2) an encryption algorithm module, comprising logic for converting unencrypted objects into encrypted objects, the encryption algorithm module being electronically connected to the system memory means for accessing data stored in the first system memory;

3) an object labelling subsystem, comprising logic means for limiting object access, subject to label conditions, the object labelling subsystem being electronically connected to the system memory means for accessing data stored in the system memory means and the object labelling subsystem being further electronically connected to the encryption algorithm module to accept inputs from the encryption algorithm module;

4) a decryption algorithm module, comprising logic for converting encrypted objects into unencrypted objects, the decryption algorithm module being electronically connected to the system memory means for accessing data stored in the system memory means; and

5) an object label identification subsystem, comprising logic for limiting object access, subject to label conditions, the object label identification subsystem being electronically connected to the system memory means for accessing data stored in the system memory means and the object label identification subsystem being further electronically connected to the decryption algorithm module to accept inputs from the decryption algorithm module;

B) the encryption algorithm module working in conjunction with the object labelling subsystem to create an encrypted object such that the object label identification subsystem limits access to an encrypted object.

'702 Patent col. 12 l. 45–col. 13 l. 13 (emphases added). The parties dispute the construction of the phrase “multilevel multimedia security,” which appears in every asserted claim. The parties also dispute a number of limitations in the '702 Patent drafted in means-plus-function format, including the terms “digital logic means” and “system memory means” recited in independent claim 8, and fourteen other means-plus-function limitations in dependent claims 9, 12, 14, and 15.

TecSec filed suit in the Eastern District of Virginia, alleging that the defendants' internet servers and related software products infringed. In addition to the defendants, TecSec also alleged infringement by International Business Machines Corp. (“IBM”). Early in the case, the district court severed TecSec's claims against IBM and stayed proceedings against the defendants. It considered the cross-motions relating to infringement, ultimately granting IBM's motion for summary judgment of noninfringement. See TecSec, Inc. v. Int'l Bus. Machs. Corp., 769 F.Supp.2d 997 (E.D.Va.2011) (“Summary Judgment Order ”). In granting summary judgment, the court held that TecSec failed to produce any evidence that IBM itself ever performed every step of the asserted method claims or ever made, used, sold or offered for sale within the United States, or imported into the United States, any products containing all of the limitations of the asserted system claims. Because IBM was selling software and because the claims required both hardware and software, the district court ruled as a matter of law that TecSec failed to present a triable issue of fact that IBM's software contained every limitation of any asserted claim. The court also found insufficient evidence of indirect infringement. Both of those conclusions were independent of the present disputes about claim construction. As an alternate ground, the district court construed the claims and concluded, again as a matter of law, that TecSec failed to show that IBM's accused software met the relevant limitations of the claims as construed. The court entered final judgment in IBM's favor pursuant to Federal Rule of Civil Procedure 54(b). See id. at 1028.

TecSec appealed, challenging the district court's claim construction as well as its conclusion that TecSec failed to prove infringement by IBM. This court affirmed the district court's judgment without opinion pursuant to Federal Circuit Rule 36. TecSec, Inc. v. Int'l Bus. Machs. Corp., 466 Fed.Appx. 882 (Fed.Cir.2012) (the “IBM appeal”).

On remand, proceedings resumed as to the defendants that remained. TecSec then stipulated that it could not prove infringement by defendants under the claim construction adopted by the district court during the proceedings with IBM. Based on TecSec's stipulation, the district court entered judgment of noninfringement as to the defendants. TecSec, Inc. v. Int'l Bus. Machs. Corp., No. 1:10–cv–00115–LMB/TCB (E.D.Va. Apr. 24, 2012). TecSec appeals. This court has jurisdiction under 28 U.S.C. § 1295(a)(1).

Discussion

The parties agree that claim construction is a legal issue that this court reviews de novo on appeal. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1455–56 (Fed.Cir.1998) (en banc). To ascertain the scope and meaning of the asserted claims, this court looks to the words of the claims themselves, the specification, the prosecution history, and, lastly, any relevant extrinsic evidence. Phillips v. AWH Corp., 415 F.3d 1303, 1315–17 (Fed.Cir.2005) (en banc).

Whether claim language invokes § 112, ¶ 6 is an exercise of claim construction and is therefore a question of law, subject to de novo review. Personalized Media Commc'ns, LLC v. Int'l Trade Comm'n, 161 F.3d 696, 702 (Fed.Cir.1998). “If § 112 ¶ 6 is applicable, the determination of the corresponding structure is also a question of law.” Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 1311, 1318 (Fed.Cir.2004).

We interpret our own mandate de novo. Laitram Corp. v. NEC Corp., 115 F.3d 947, 950 (Fed.Cir.1997). The application of general collateral estoppel principles is an issue of regional circuit law. Applied Med. Res. Corp. v. U.S. Surgical Corp., 435 F.3d 1356, 1360 (Fed.Cir.2006). The Fourth Circuit reviews de novo the application of collateral estoppel. Tuttle v. Arlington Cty. Sch. Bd., 195 F.3d 698, 703 (4th Cir.1999).

I. Claim Construction

On appeal, the parties dispute whether TecSec may reargue the claim constructions arrived at by the district court during the proceeding with IBM and that were at issue, inter alia, in the IBM appeal. The parties did not raise this issue below, and the district court did not pass on the issue.

The district court made several rulings in granting IBM's motion for summary judgment. First, the court construed a number of claim terms. Summary Judgment Order, 769 F.Supp.2d at 1003–09. The court then addressed TecSec's direct infringement claims, ruling in IBM's favor for two reasons, neither dependent on rejecting TecSec's constructions of the claim terms at issue here: (1) TecSec “failed to come forward with any evidence that IBM itself performed any of the steps of the method claims”; and (2) TecSec failed to adduce any evidence that IBM “made, used, sold, offered for sale, or imported” the entire accused system. Id. at 1010–12. The court next turned to TecSec's indirect infringement claims and, again without reliance on rejecting TecSec's constructions of the claim terms at issue here, determined that...