Sri Int'l, Inc. v. Cisco Sys., Inc.

• Decision Date: 25 May 2017
• Docket Number: Civ. No. 13-1534-SLR.
• Citation: 254 F.Supp.3d 680
• Parties: SRI INTERNATIONAL, INC., Plaintiff, v. CISCO SYSTEMS, INC., Defendant.
• Court: U.S. District Court — District of Delaware

254 F.Supp.3d 680

SRI INTERNATIONAL, INC., Plaintiff,

v.CISCO SYSTEMS, INC., Defendant.

Civ. No. 13-1534-SLR.

United States District Court, D. Delaware.

Signed May 25, 2017

Filed June 1, 2017

Thomas L. Halkowski, Esquire and Susan E. Morrison, Esquire of Fish & Richardson P.C., Wilmington, Delaware. Of Counsel: Frank Scherkenbach, Esquire, Joanna M. Fuller, Esquire, Philip W. Goter, Esquire, David M. Hoffman, Esquire, David Kuznick, Esquire, David S. Morris, Esquire, Howard G. Pollack, Esquire, and

Michael Sobolev, Esquire of Fish & Richardson P.C. Counsel for Plaintiff.

Jack B. Blumenfeld, Esquire and Michael J. Flynn, Esquire of Morris, Nichols, Arsht & Tunnell L.L.P., Wilmington, Delaware. Of Counsel: Adam R. Alper, Esquire, Oliver C. Bennett, Esquire, Steven Cherny, Esquire, Michael W. De Vries, Esquire, Sarah K. Tsou, Esquire, and Jason M. Wilcox, Esquire of Kirkland & Ellis, L.L.P. and William F. Lee, Esquire of Wilmer Cutler Pickering Hale and Dorr L.L.P. Counsel for Defendant.

MEMORANDUM OPINION

Sue L. Robinson, Senior District Judge

I. INTRODUCTION

On September 4, 2013, plaintiff SRI International, Inc. ("SRI") filed suit against defendant Cisco Systems Inc. ("Cisco"), alleging infringement of U.S. Patent No. 6,711,615 ("the '615 patent") and 6,484,203 ("the '203 patent") (collectively, "the patents"). (D.I. 1) On December 18, 2013, Cisco answered the complaint and counterclaimed for non-infringement and invalidity. (D.I. 9) SRI answered the counterclaims on January 13, 2014. (D.I. 11) The court issued a claim construction order on May 14, 2015. (D.I. 138) In a memorandum opinion and order dated April 11, 2016, the court resolved several summary judgment motions. (D.I. 301; D.I. 302)

The court held an eight-day jury trial from May 2–11, 2016 on infringement, validity, willfulness, and damages of claims 1, 2, 13, and 14 of the '615 patent and claims 1, 2, 12, and 13 of the '203 patent ("the asserted claims"). On May 12, 2016, the jury returned a verdict that Cisco intrusion protection system ("IPS") products, Cisco remote management services, Cisco IPS services, Sourcefire IPS products, and Sourcefire professional services directly and indirectly infringe the asserted claims of the '615 and '203 patents. (D.I. 337 at 1–4) The jury determined that the asserted claims are not invalid. (D.I. 337 at 6–7) As a consequence of this infringement, the jury awarded SRI a 3.5% reasonable royalty amounting to $8,680,000 for sales of Cisco products and services and $14,980,000 for sales of Cisco/Sourcefire products and services, for a total of $23,660,000. (D.I. 337 at 8) The jury also found that SRI had established, by clear and convincing evidence, that Cisco's infringement was willful. (D.I. 337 at 5)

Presently before the court are the following motions: (1) Cisco's motion for judgment as a matter of law, new trial, and remittitur (D.I. 351); (2) SRI's motion for attorney fees (D.I. 349); and (3) Cisco's motion to supplement the record (D.I. 385). The court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a).

II. BACKGROUND

A. The Parties

SRI is an independent, not-for-profit research institute incorporated under the laws of the State of California, with its principal place of business in Menlo Park, California. (D.I. 1 at ¶ 1) SRI conducts client-supported research and development for government agencies, commercial businesses, foundations, and other organizations. (Id. at ¶ 6) Among its many areas of research, SRI has engaged in research related to computer security and, more specifically, to large computer network intrusion detection systems and methods. (Id. ) Cisco is a corporation organized and existing under the laws of the State of California, with its principal place of business in San Jose, California. (Id. at ¶ 2) Cisco provides various intrusion prevention and intrusion detection products and services. (Id. at ¶ 14)

B. The Technology

The patents relate to the monitoring and surveillance of computer networks for intrusion detection. In particular, the patents teach a computer-automated method of hierarchical event monitoring and analysis within an enterprise network that allows for real-time detection of intruders. Upon detecting any suspicious activity, the network monitors generate reports of such activity. The claims of the patents focus on methods and systems for deploying a hierarchy of network monitors that can generate and receive reports of suspicious network activity.

The '615 patent (titled "Network Surveillance") is a continuation of the '203 patent (titled "Hierarchical Event Monitoring and Analysis"), and the patents share a common specification and priority date of November 9, 1998. (D.I 179 at 1) The asserted claims include independent claims 1 and 13 of the '615 patent, which claims read as follows:

1. A computer-automated method of hierarchical event monitoring and analysis within an enterprise network comprising:

deploying a plurality of network monitors in the enterprise network;

detecting, by the network monitors, suspicious network activity based on analysis of network traffic data selected from one or more of the following categories: {network packet data transfer commands, network packet data transfer errors, network packet data volume, network connection requests, network connection denials, error codes included in a network packet, network connection acknowledgements, and network packets indicative of well-known network-service protocols};

generating, by the monitors, reports of said suspicious activity;

and automatically receiving and integrating the reports of suspicious activity, by one or more hierarchical monitors.

( '615 patent, 15:1–21)

13. An enterprise network monitoring system comprising:

a plurality of network monitors deployed within an enterprise network, said plurality of network monitors detecting suspicious network activity based on analysis of network traffic data selected from one or more of the following categories: {network packet data transfer commands, network packet data transfer errors, network packet data volume, network connection requests, network connection denials, error codes included in a network packet, network connection acknowledgements, and network packets indicative of well-known network-service protocols};

said network monitors generating reports of said suspicious activity; and

one or more hierarchical monitors in the enterprise network, the hierarchical monitors adapted to automatically receive and integrate the reports of suspicious activity.

( '615 patent, 15:56–16:6)

III. STANDARD OF REVIEW

A. Renewed Motion for Judgment as a Matter of Law

The Federal Circuit "review[s] a district court's denial of judgment as a matter of law under the law of the regional circuit. WBIP, LLC v. Kohler Co. , 829 F.3d 1317, 1325 (Fed. Cir. 2016) (citation omitted). In the Third Circuit, a "court may grant a judgment as a matter of law contrary to the verdict only if ‘the record is critically deficient of the minimum quantum of evidence’ to sustain the verdict." Acumed LLC v. Advanced Surgical Servs., Inc. , 561 F.3d 199, 211 (3d Cir. 2009) (citing Gomez v. Allegheny Health Servs., Inc. , 71 F.3d 1079, 1083 (3d Cir. 1995) ); see also McKenna v. City of Philadelphia , 649 F.3d 171, 176 (3d Cir. 2011). The court should grant judgment as a matter of law "sparingly" and "only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability." Marra v. Philadelphia Hous. Auth. , 497 F.3d 286, 300 (3d Cir. 2007) (citing Moyer v. United Dominion Indus., Inc. , 473 F.3d 532, 545 n.8 (3d Cir. 2007) ). "In performing this narrow inquiry, [the court] must refrain from weighing the evidence, determining the credibility of witnesses, or substituting [its] own version of the facts for that of the jury. Id. (citing Lightning Lube, Inc. v. Witco Corp. , 4 F.3d 1153, 1166 (3d Cir. 1993) ). Judgment as a matter of law may be appropriate when there is "a purely legal basis" for reversal "that does not depend on rejecting the jury's findings on the evidence at trial." Acumed , 561 F.3d at 211.

B. Motion for a New Trial

Federal Rule of Civil Procedure 59(a) provides, in pertinent part:

A new trial may be granted to all or any of the parties and on all or part of the issues in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States.

Fed. R. Civ. P. 59(a). The decision to grant or deny a new trial is within the sound discretion of the trial court and, unlike the standard for determining judgment as a matter of law, the court need not view the evidence in the light most favorable to the verdict winner. See Allied Chem. Corp. v. Daiflon, Inc. , 449 U.S. 33, 36, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980) ; Leonard v. Stemtech Int'l Inc. , 834 F.3d 376, 386 (3d Cir. 2016) (citing Olefins Trading, Inc. v. Han Yang Chem. Corp. , 9 F.3d 282 (3d Cir. 1993) ); LifeScan Inc. v. Home Diagnostics, Inc. , 103 F.Supp.2d 345, 350 (D. Del. 2000) (citations omitted); see also 9A Wright & Miller, Federal Practice and Procedure § 2531 (2d ed. 1994) ("On a motion for new trial the court may consider the credibility of witnesses and the weight of the evidence."). Among the most common reasons for granting a new trial are: (1) the jury's verdict is against the clear weight of the evidence, and a new trial must be granted to prevent a miscarriage of justice; (2) newly-discovered evidence exists that would likely alter the outcome of the trial; (3) improper conduct by an attorney or the court unfairly influenced the verdict; or (4) the jury's verdict was facially inconsistent. See Zarow–Smith v. N.J. Transit Rail Operations , 953 F.Supp. 581, 584–85 (D.N.J. 1997) (citations omitted). The court must proceed cautiously, mindful that it should not simply...