by Dennis Crouch
It appears that the Federal Circuit has sharpened its blades and is now slicing the bologna extra thin. This results-oriented decision unfortunately shades-facts and provides no clarity in its legal analysis of eligibility. While I agree that this network security invention should be eligible for patenting – the court’s analysis does not provide a convincing foundation for that result.
SRI International, Inc. v. Cisco Systems, Inc. (Fed. Cir 2019)
At the close of trial, the jury issued its verdict favoring the patentee and awarding $23 million in reasonable royalty damages that were then doubled by the D.Del. Judge Robinson based upon the adjudged willful infringement. On appeal, a 2-1 Federal Circuit panel has sided with the patentee on eligibility, but rejected the enhanced damages.
The eligibility outcome here fits expectations with the majority opinion penned by Judge Stoll and joined by Judge O’Malley while Judge Lourie stood in dissent.
SRI’s asserted claims are directed to methods of “hierarchical event monitoring” used within a computer network. U.S. Patent 6,711,615. The basic approach is (1) using a “plurality of network monitors” to detect “suspicious network activities”; (2) generate a report at the network monitor levele; and (3) a “hierarchical monitor” “automatically receiving and integrating the report.” The specification makes clear that the “integrating” step might be simply looking for commonalities in the intrusion reports or might further involve “countermeasures.” The specification does not appear to define “hierarchical monitor” other than contrasting them with peer-to-peer.
In considering the claims, the Federal Circuit found that the focus of the claim is on “providing a network defense system that monitors netowrk traffic in real-time to automatically detect large scale attacks.”
Contrary to Cisco’s assertion, the claims are not directed to just analyzing data from multiple sources to detect suspicious activity. Instead, the claims are directed to an improvement in computer network technology. Indeed, representative claim 1 recites using network monitors to detect suspicious network activity based on analysis of network traffic data, generating reports of that suspicious activity, and integrating those reports using hierarchical monitors. The “focus of the claims is on the specific asserted improvement in computer capabilities”—that is, providing a network defense system that monitors network traffic in real-time to automatically detect large-scale attacks. Quoting Enfish.
The majority opinion goes on to justify its conclusions based upon platitudes from the specification — that the invention provides “a framework for the recognition of more global threats to inter-domain connectivity, including coordinated attempts
to infiltrate or destroy connectivity across an entire network enterprise.”
Writing in dissent, Judge Lourie argued that the claims are effectively data collection methods.
The claims here recite nothing more than deploying network monitors, detecting suspicious network activity, and generating and handling reports. The detecting of the suspicious activity is based on “analysis” of traffic data, but the claims add nothing concerning specific means for doing so. The claims only recite the moving of information. The computer is used as a tool, and no improvement in computer technology is shown or claimed. There is no specific technique described for improving computer network security.
Lourie drew a tight analogy to the Electric Power Group eligibility decision that invalidated claims directed toward a “method of detecting events on an interconnected electric power grid in real time over a wide area and automatically analyzing the events on the interconnected electric power grid.” Seemingly, this case here could also be seen as a close analogy to the court’s recent cases distinguishing between methods of diagnosis and methods of treatment. See Vanda and Natural Alternatives.
The Majority opinion here attempted to distinguish Electric Power Group as in invention “using computers as tools to solve a power grid problem, rather than improving the functionality of computers and computer networks themselves.” What the majority fails to do here is to point to any particular aspects of the claimed invention that provide anything more than what other panels have identified as abstract ideas – receiving data; reporting data; and correlating data.
= = = =
The appellate panel rejected the willfulness finding and, as a consequence, the resulting doubling of damages.
While the jury heard evidence that Cisco was aware of the patents in May 2012, before filing of the lawsuit, we do not see how the record supports a willfulness finding going back to 2000. As the Supreme Court recently observed, “culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.” Halo, 136 S. Ct. at 1933. Similarly, Cisco’s allegedly aggressive litigation tactics cannot support a finding of willful infringement going back to 2000, especially when the litigation did not start until 2012. Finally, Cisco’s decision not to seek an advice-of-counsel defense is legally irrelevant under 35 U.S.C. § 298. . . .
We leave it to the district court to decide in the first instance whether the jury’s presumed finding of willful infringement after May 8, 2012 is supported by substantial evidence.
Although willfulness is missing, the court still affirmed the award of attorney fees to the patentee based dupon Cisco’s litigation tactics. Judge Robinson had written:
Cisco pursued litigation about as aggressively as the court has seen in its judicial experience. While defending a client aggressively is understandable, if not laudable, in the case at bar, Cisco crossed the line in several regards.
The appellate panel gave deference to district court conclusions on this final point and affirmed the award of fees.
= = = =
Note: In a separate case, Judge Robinson had previously held the claims invalid under 102/103. However, that decision was vacated on appeal SRI International, Inc. v. Internet Security Systems, Inc., 511 F.3d 1186 (Fed. Cir. 2008). Here, interestingly, Judge Robinson sua sponte issued summary judgment that the claims were not anticipated. That holding was affirmed here on appeal.