Eplus, Inc. v. Lawson Software, Inc., 2011-1396
| Decision Date | 21 November 2012 |
| Docket Number | 2011-1396,2011-1554,2011-1456 |
| Parties | EPLUS, INC., Plaintiff-Cross Appellant, v. LAWSON SOFTWARE, INC., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Federal Circuit |
Appeal from the United States District Court for the Eastern District of Virginia in case no. 09-CV-0620, Senior Judge Robert E. Payne.
SCOTT L. ROBERTSON, Goodwin Procter, LLP, of Washington, DC, and MICHAEL G. STRAPP of Boston, Massachusetts argued for plaintiff-cross appellant. With them on the brief were JENNIFER A. ALBERT and DAVID M. YOUNG, of Washington, DC, and HENRY C. DINGER of Boston, Massachusetts.
DoNALD R. DUNNER, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, argued for defendant-appellant. With him on the brief were KARA F.STOLL, MOLLY R. SILFEN. JUSTIN R. LOWERY, and ELIZABETH ANN LAUGHTON; and ERIKA H. ARNER, of Reston, Virginia.
Before DYK, PROST, and O'MALLEY, Circuit Judges. PROST, Circuit Judge.
This is an appeal and a cross-appeal arising from an infringement suit brought by ePlus, inc. against Lawson Software, Inc. ("Lawson"), in which a jury found that Lawson infringes ePlus's method and system claims. Lawson appeals, arguing that the system claims are indefinite and that the evidence of infringement of the method claims does not support the jury's verdict. Accordingly, Lawson submits that the district court should have set aside the verdict and entered a judgment as a matter of law ("JMOL") of non-infringement. Moreover, in case the verdict withstands this appeal, Lawson urges us to at least hold that the district court erred by entering too broad an injunction to remedy the infringement. ePlus cross appeals, arguing that the district court abused its discretion in barring it from presenting any evidence of damages at trial. We agree with Lawson that the district court erred in finding that the system claims are not indefinite, and in that respect, we reverse the district court's determination. We also reverse in part the district court's denial of JMoL to Lawson and accordingly vacate the judgment of direct and induced infringement entered based on two of the asserted method claims. We remand for the district court to consider what changes are required to the terms of the injunction, consistent with this opinion. in all other aspects of the appeal and the cross-appeal, we affirm.
ePlus is the assignee of U.S. Patent Nos. 6,023,683 ("'683 patent") and 6,505,172 ("'172 patent"), (collectively, "patents in suit"). The patents in suit share a common specification and teach systems and methods for "electronic sourcing." At a high level of generality, electronic sourcing is similar to online shopping. Specifically, ePlus's patents aim to enable businesses and organizations to use computer networks to purchase goods. The specification explains that electronic sourcing systems existed in prior art, but those older systems only enabled the user to generate a single purchase order that would be submitted to a single vendor. in contrast, one of the important features of the claimed invention is its ability to divide a single requisition (or shopping list) into multiple purchase orders.
The patented invention includes a computer that maintains a catalog database of items available from at least two vendors. Vendors may be manufacturers, distributors, or resellers. The user can search vendor catalogs for items that match certain criteria, contact vendors to determine whether a particular product is available, and switch between different catalogs to look at equivalent items. The customer then purchases the desired items. The claims and the specification break down the purchasing process into three steps. First, the customer adds the desired item to an "order list" (somewhat akin to a wish list). Second, once the customer is ready to make a purchase, the system uses the order list to build a "requisition." Third, the system determines what inventory will be used to complete or "fill" therequisition and accordingly generates "purchase orders," which are submitted to vendors.
There are five claims at issue on this appeal: claim 1 of the '172 patent and claims 3, 26, 28, and 29 of the '683 patent. Claims 26, 28, and 29 of the '683 patent are method claims; the remaining two are system claims. Claim 26 of the '683 patent recites:
(Emphasis added.) independent claim 28 is similar to claim 26, except that the last limitation in claim 28 recites:
converting data relating to a selected matching item and an associated source to data relating to an item and a different source.
(Emphasis added.) The third and last method claim, claim 29, depends from claim 28. it recites:
29. The method of claim 28 further comprising the step of determining whether a selected matching item is available in inventory.
(Emphasis added.)
The two system claims are indistinguishable for the purpose of this appeal. Claim 1 of the '172 patent, which we treat as representative, recites:
1. An electronic sourcing system comprising:
Lawson sells computer software for supply chain management. Lawson's customers are often large organizations that use its products to purchase goods and services. The software products are modular—that is, they are sold in building blocks, which customers may purchase according to their needs. The "Core Procurement" unit is the basic building block; all customers must have it. Core Procurement is responsible for most of the basic operations of Lawson's system. Using Core Procurement, a customer can search an internal item database known as the "item Master" to find desired products. The desired products may be added to a requisition, which is basically a list of items to be purchased, and it may include items available from various vendors. The customer may look up whether a particular item in the item Master is available in the vendor's inventory. if the customer decides to purchase the items in the requisition, she can create purchase orders. Purchase orders will then be submitted to vendors.
Other "add-on" modules may be added to Core Procurement for additional functionality. Three of those modules are pertinent here: (1) the "Requisition Self Service" ("RSS") module, (2) "Punchout," and (3) "Electronic Data interchange" ("EDi"). RSS provides the user with a user-friendly interface for using the features offered by the Core Procurement module. RSS also allowsthe user to add the desired items to a "shopping cart" before placing the items in requisition. Similar to Core Procurement, however, RSS can only access the internal (item Master) catalog. Customers who want to search third party vendors' databases must therefore use other modules, such as Punchout. Punchout may be added to a system that includes Core Procurement and RSS. By adding Punchout, customers gain the ability to connect to a third party vendor's website to shop for products. The parties refer to this ability as "punching out." Once a customer connects to the third party vendor's website, she may use the vendor's search engine to search for items to purchase. After the customer selects an item, the third party may respond with whether that item is available in its inventory. That is, when the customer uses Punchout, it is the vendor (not the customer) who has direct access to information about whether a particular item is available in the inventory. Finally, EDi builds on Punchout by enabling customers to send purchase orders outside Lawson's system to a third party vendor.
In addition to selling procurement software, Lawson provides services to customers who purchase its products. These services may include installation and maintenance of the products as well as providing training classes (through webinars) and educational materials that aid in operating Lawson's software. Customers may also rely on Lawson for managing their system. This so called "hosting" can be arranged in two ways. Lawson may provide the customer with a computer that runs the purchased software, in which case the actual hardware and software reside at the customer's facility. Alternatively, Lawson may allow the customer to remotely access servers that are physically located within Lawson's facility and run the procurement software.
ePlus filed suit against Lawson, alleging that various combinations of Lawson's software modules infringe claim 1 of the '172 patent and claims 3 , 26, 28, and 29 of the '683 patent, as well as other patent claims not at issue on this appeal. Specifically, with respect to the two asserted system claims, ePlus alleged that certain combinations of Lawson's software modules are infringing. As...
To continue reading
Request your trial