Precedents informing the meaning of a claim term are not extrinsic evidence when those precedents are consistent with the intrinsic record

Cardsoft, LLC v. Verifone, Inc., No. 2014-1135 (Fed. Cir. Dec. 2, 2015)

After a jury finding of infringement, the alleged infringer appealed the district court’s construction of the claim term “virtual machine.” On appeal, the Federal Circuit reversed the construction. The patentee sought a petition for writ of mandamus, and the Supreme Court vacated and remanded this decision for consideration in light of the standard for claim construction in the Court’s decision in Teva Pharm. USA, Inc. v. Sandoz, Inc. On remand, the Federal Circuit again reversed the construction and granted a finding of no infringement as a matter of law.

The Federal Circuit reiterated its view that under Teva, “it is not enough that the district court may have heard extrinsic evidence during a claim construction proceeding—rather, the district court must have actually made a factual finding in order to trigger Teva’s deferential review.” In this case, the district court made no factual findings based on the extrinsic evidence. Accordingly, the district court’s decision was subject to de novo review.

Further, the court rejected the patentee’s argument that reliance on precedent defining a “virtual machine” was extrinsic evidence contradicting the district court’s factual findings. Although the court’s previous opinion had imprecisely referred to its prior precedents as “extrinsic evidence,” reliance on precedents is not improper when those precedents are consistent with the intrinsic record. Here, the precedents were entirely consistent with the intrinsic record’s meaning of a “virtual machine.” The court then held that patentee waived any arguments that alleged infringer infringed under the correct construction of that term and granted a finding of no infringement to the alleged infringer as a matter of law.

A copy of the opinion can be found here ►