Digest of .CARDSOFT, LLC V. VERIFONE, INC. Cardsoft v. Verifone, No. 2014-1135 (Fed. Cir. Dec. 2, 2015) (precedential). On appeal from E.D. Tex. Before Prost, Taranto, and Hughes.

Procedural Posture: In a previous appeal in this case, the Federal Circuit reversed the district court’s construction of a disputed claim term and the infringement verdict based on that construction. The Supreme Court vacated and remanded after deciding Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015), which held that factual findings of a district court underlying claim construction are owed deference on appeal. The Federal Circuit again reversed the district court’s claim construction and granted defendants judgment of no infringement as a matter of law.

  • Claim construction—standard of review: Because the district court did not make any factual findings based on extrinsic evidence, the Federal Circuit reviews the district court’s claim construction de novo.
  • Claim construction: A claim term is properly construed “in the context of the entire patent,” including its specification and prosecution history. The district court construed “virtual machine” to mean “a computer programmed to emulate a hypothetical computer for applications relating to transport of data.” This construction is correct but incomplete, because it improperly conflates the claimed virtual machine with applications that run on the machine. The district court erroneously rejected the requirement that the machine run applications that process instructions independently of any specific underlying operating system or hardware, a limitation advanced by the defendants and supported by the patent specification and prosecution history.
  • Claim construction—claim differentiation: Where the ordinary meaning of a term is clear in light of the specification and prosecution history, the presumption of claim differentiation cannot change its meaning.
  • Waiver: By failing to respond to defendants’ argument that they do not infringe as a matter of law under their proposed claim construction, the patentee conceded that the accused devices do not infringe under the correct construction. As a result, the Federal Circuit granted JMOL of no infringement to defendants.