Digest of SSL Services, LLC v. Citrix Systems, Inc., Nos. 2013-1419, -1420 (Fed. Cir. Oct. 14, 2014) (precedential). On appeal from E.D. Tex. Before Lourie, Linn, and O’Malley.

Procedural Posture: Following a jury trial, the district court entered final judgment that defendants Citrix Systems, Inc. and Citrix Online, LLC willfully infringed ’011 patent and did not infringe ’796 patent. Patent holder SSL Services, LLC appealed district court’s denial of a new trial regarding noninfringement of ’796 patent and denial of prevailing party status. Defendants cross-appealed district court’s denial of judgment as a matter of law of no willful infringement and denial of defendants’ motion for a new trial on the issue of willful infringement of the ’011 patent. CAFC affirmed district court’s denial of a motion for a new trial and judgment as a matter of law of no willful infringement, but vacated denial of prevailing party status to patent holder and remanded for an assessment of costs and fees.

  • Motion for new trial on noninfringement (’796 patent): The district court did not err in denying patent holder’s motion for a new trial on noninfringement of the ’796 patent, finding the district court correctly construed the “destination address” claim term and no evidence supported infringement under this construction. The CAFC stated that the general verdict rule permitted affirmance a judgment of noninfringement based on the correct construction of a single clam term only in the absence of substantial evidence to support a finding of infringement under the correct construction.
  • Prevailing party: The district court erred in finding that the patent holder was not the prevailing party under Fed. R. Civ. P. 54(d) and 35 U.S.C. § 285. The CAFC ruled that the district court failed to distinguish between eligibility for fees and the discretionary decision to award fees, and in light of the judgment of willful infringement of the ’011 patent and the jury’s award of damages, the patent holder should have been named the prevailing party. This finding does not automatically entitle the patent holder any particular level of fees or costs, but on remand the district court was instructed to assess the amount of fees or costs to award to the patent holder in connection with the claims on which it prevailed.
  • Judgment as a matter of law on willful infringement (’011 patent): On defendants’ cross-appeal, the district court did not err in finding that substantial evidence supported the jury’s infringement verdict. Defendants did not challenge the construction of the “encrypt files” claim term, and the CAFC found that patent holder’s expert provided testimony and demonstrative slides that constituted evidence that the accused products practiced this claim term. The district court also did not err in holding the asserted claims were not shown to be invalid, because substantial evidence supported the finding that the cited prior art did not disclose the claimed authentication and encryption software at the applications level.
  • Motion for new trial on willful infringement (’011 patent): The district court did not err in denying defendants’ motion for a new trial on willful infringement. The district court found that the patent holder met the objective prong of willful infringement because defendants’ invalidity arguments, which failed to address many claim limitations of the ’011 patent and raised the same invalidity arguments that the USPTO had rejected under the preponderance of the evidence standard during an ex parte reexamination, were not reasonable. The jury verdict regarding the subjective prong of willful infringement was also supported by substantial evidence, because agreements with a company acquired by the patent holder and the testimony of a former executive provided substantial evidence indicated that defendants knew of the objectively high risk that its products infringed the asserted claims. The district court did not err in excluding evidence relating to the personal view of one of defendants’ engineers regarding infringement and evidence of an ongoing reexamination as having little probative value and potentially prejudicial under Fifth Circuit law. The district court also did not err by allowing patent holder’s damages expert to rely on the above agreements, which only provided software distribution rights, as relevant to licensing policies and the parties’ competitive positions.