by Dennis Crouch
Michael Kaufman v. Microsoft Corp. (Fed. Cir. 2022)
Kaufman’s US7885981 has a 2000 priority date and claims a method of automatically creating a database front-end for user access. Kaufman sued Microsoft–asserting that its Dynamic Data product infringed the claims. A jury agreed, finding the patent claims valid and infringed and awarded $7 million in damages. Both parties appealed.
The broadest claim has three steps that basically require
- providing an output stream from from the server that defines a user interface paradigm (including user-interaction modes, such as “create, retrieve, update and delete” and display formats for each mode)
- scanning the database to create a data model; and
- using the data model to construct a client application also with the user interface paradigm.
The body of the claim does not include the an “automatic” requirement, but the preamble does: “A method for operating a server comprising a processor for automatically generating an end-user interface for working with the data within a relational database … , said method comprising …”
Much of Microsoft’s argument focuses on the term “automatic.” During claim construction, Microsoft had asked for the term to be construed as meaning “no human labor required.” At the summary judgment motion hearing, the Judge found no disagreement about the meaning of “automatic,” but rather concluded that the disagreement was about which parts of the process had to be automatic. Microsoft’s counsel then asked, “Can we resolve the claim construction issue?” and the district court responded , “You agreed on a definition.” At that point, Kaufman’s counsel agreed with the court “I think we have resolved it.” There was no further briefing on the issue pre trial.
Preserving o2Micro Issue for Appeal: On appeal, Microsoft argued that the district court should have resolved the claim construction issue as required by O2Micro. The Federal Circuit has refused to consider the argument — holding that Microsoft failed to preserve the issue.
Once litigation extends beyond pre-trial and into trial, claim construction should be seen as an issue of jury instructions. In general, pre-trial objections made during the pleadings or summary judgment stage must be reiterated during trial in order to preserve those objections for appeal. FRCP Rule 51(c) requires a timely objection on the trial record to any jury instructions (or the failure to provide sufficient instructions). Here, the Federal Circuit holds that same approach should apply to claim construction.
A proper claim construction provides a legal standard for the jury to apply, and so the requirement of clear, timely raising of an argument for a claim construction reflects the strong requirement of timely raising of distinct objections to jury instructions.
Kaufman, Slip Op. One problem with this panel decision is that there are quite a few cases where the appellate court has permitted claim construction appeals despite the absence of on-point jury instruction objection. Here, the appellate panel recognized that situation as “an exception to [the] requirement” that can apply when the issue was “sufficiently raised and settled earlier.” In particular, as the Court wrote in 02Micro, the trial-objection requirement is only preserved in a situation where the claim construction arguments had been “made clear to the district court” and then “fully litigated in and decided” by the district court in such a way that further objection would be “futile [and] unnecessary.” Id.
On appeal, Microsoft also argued that the jury verdict of infringement was not supported by substantial evidence since its Dynamic Data program required substantial user input – and thus was not automatic. On appeal though, the Federal Circuit concluded that claim language permitted some human actions (i.e., triggering the various operations). And, the jury heard expert testimony that separated out the human actions of setting-up the operation from the claimed automatic steps of scanning”, etc.
And: One of the more litigated claim terms is the word “and.” Here, the claims require several display modes: “create, retrieve, update and delete.” Later, the claims require that “each said mode display processes for representing, navigating, and managing” data relationships. The question here is whether the claims actually require each display mode provide the user all three options: represent, navigate, and manage. Microsoft’s product includes some modes that do not display all the options as required by the claims and so argues that it does not infringe.
The district court concluded in a post-verdict ruling that the term “and” should be construed as including “or.” On appeal, the Federal Circuit has affirmed. In its decision, the court particularly noted that the sole working embodiment described in the specification would only be covered by the claims under an “or” interpretation. “A claim construction that excludes a preferred embodiment is rarely, if ever correct and would require highly persuasive evidentiary support.” Epos Technologies Ltd. v.
Pegasus Technologies Ltd., 766 F.3d 1338 (Fed. Cir. 2014). The court also noted that the specification repeatedly used the word “and” in ways that clearly included “or.”
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Although Kaufman won at trial, he appealed the district court’s denial of pre-judgment interest that could potentially double the award. The patent statute particularly identifies interest as an element of compensation:
Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
35 U.S.C. § 284. “Generally, prejudgment interest should be awarded from the date of infringement to the date of judgment.” Nickson Industries, Inc. v. Rol Mfg., 847 F.2d 795 (Fed. Cir. 1988). The Supreme Court interpreted this provision in its 1983 General Motors case, concluding that prejudgment interest is “typically” awarded in patent cases. The Supreme Court also noted that the statute indicates interest is “fixed by the court” and may be denied by a district court based upon “some justification.” General Motors Corp. v. Devex Corp., 461 U.S. 648 (1983). In Nickson the Federal Circuit found that undue delay by the patentee in bringing the lawsuit could justify denying interest. See also, Crystal Semiconductor Corp. v. Tritech Microelectronics International, Inc., 246 F.3d 1336 (Fed. Cir. 2001).
Here, the district court gave two reasons for denying the award of pre-judgment interest.
- The jury verdict took into account the interest (because the instructions asked the jury to provide an award “discounted to present value”).
- Kaufman was responsible for undue delay in bringing the lawsuit.
On appeal, the Federal Circuit found the denial of interest a clear abuse of discretion. The discounting portion of the verdict was tied to testimony regarding standard discount rates, but did not include any evidence or basis for the jury to also calculate or award interest.
Regarding undue delay, the district court identified a delay, but did not identify evidence that the delay was “undue,” i.e,. that it caused some prejudicial impact on the defendant. In particular, Microsoft indicated that it “could have” altered its product back in 2011, but did not produce evidence that it “would have” done so.
On remand, the district court will need to add up that interest (and, likely add post-judgment interest as well based upon the appeal).