Vasudevan Software, Inc. v. MicroStrategy, Inc. et al.

Addressing an appeal by a patent owner of a summary judgment of invalidity, the U.S. Court of Appeals for the Federal Circuit affirmed the district court’s claim construction and stipulated judgment of non-infringement, but reversed a grant of summary judgment of invalidity finding that genuine issues of material fact as to whether the asserted claims were enabled or supported by a sufficient written description remain. Vasudevan Software, Inc. v. MicroStrategy, Inc. et al., Case Nos. 14-1094; -1096 (Fed. Cir., Apr. 3, 2015) (Linn, J.) 

Vasudevan Software (VSi) sued MicroStrategy and TIBCO Software, alleging infringement of its patents on database systems. On the key claim construction dispute, the district court sided with the defendants on the construction of the claim term “disparate databases.” As a consequence, VSi stipulated to non-infringement. In addition, the district court granted defendants’ motion for summary judgment of invalidity, concluding that the claimed “disparate databases” were not enabled and lacked written description support in the specification. VSi appealed.

The Federal Circuit reviewed the district court claim construction rulings based on intrinsic evidence de novo. The Court also took note of VSi’s claims that extrinsic evidence, in the form of the stipulated construction of the term from a previous litigation, as well as extrinsic marketing materials and expert testimony, supports its construction. However, without clearly articulating the review standard on which such evidence was considered, the Court concluded that even these materials left the meaning of the term “disparate databases” uncertain. In terms of claim construction, VSi argued that the term “disparate databases” should be given its plain and ordinary meaning of “incompatible databases having different schemas.” The Federal Circuit disagreed and concluded that the plain and ordinary meaning left open the question of how “disparate” or “incompatible” the databases must be. In particular, the specification provided no guidance as to what is meant by “disparate databases,” and VSi’s own expert conceded that the meaning was dependent on context and had no consistent usage in the field.
Thus the Court turned to the prosecution history and agreed with the district court that certain remarks made by the applicant during prosecution amounted to definitional language. In particular, the Federal Circuit found that the applicant’s use of the phrase “refers to” when describing the “disparate nature of the [databases]” indicated an intention to define the term “disparate databases.”

The Federal Circuit also affirmed the district court’s finding that VSi was estopped from arguing that another claim term, “incompatible database of a different types,” had a meaning different from “disparate databases,” because VSi consistently argued that “disparate databases” were synonymous with “incompatible databases” and never offered an independent construction for “incompatible databases.” The court noted, however, that under the circumstances, VSi’s failure to raise an issue distinguishing the two terms was more appropriately characterized as a waiver than estoppel.

On the issue of invalidity, the Federal Circuit found that there remained a genuine issue of fact as to whether the written description conveyed to a person of skill in the art that VSi had possession of a means for accessing “disparate databases” at the time of filing. VSi offered expert testimony that the patent specification showed how to access disparate databases, and defendants offered no contrary expert testimony. The district court dismissed the expert testimony as “conclusory.” The Federal Circuit, however, drawing all reasonable inferences in favor of VSi (as the non-movant), and after noting the operable “clear and convincing evidence” standard and that there is no need for in haec verba support of the claim term, found that the district court had summarily dismissed the testimony of VSi’s expert, which had at least raised a genuine issue of material fact regarding whether the patents at issue disclosed how to access disparate databases.

The Federal Circuit also concluded that on the issue of enablement, VSi had at least raised a genuine dispute of fact. In finding invalidity on summary judgment, the district court relied on evidence that it took the inventor three years from the time of filing the patent to build a functioning embodiment of the invention in addition to other evidence relating to the time it took the inventor to reduce the invention to practice. Thus, in the view of the district court, the claimed invention required undue experimentation to practice. The Federal Circuit disagreed, again drawing all reasonable inferences in favor of VSi. The Court concluded that the inventor’s efforts to reduce the invention to practice did not necessarily prove a lack of enablement. For example, the Court noted that the inventor spent the three years of development making a commercial-grade embodiment. In addition, VSi had introduced evidence that the experimentation period was not undue.

Although it was a close call on the merits, the Federal Circuit concluded that VSi’s evidence of enablement and written description raised issues of material fact sufficient to defeat summary judgment of invalidity.