Finisar v. DirecTV: Parallel Claim Construction and Construing the Prior Art

Finisar v. DirecTV (Fed. Cir. 2008)

After a jury found that DirecTV willfully infringed Finisar’s information broadcast patent, the Eastern District of Texas court (Judge Clark) awarded over $100 million to the patentee for past damages. Instead of an injunction to stop the infringement, Judge Clark also ordered a compulsory license rate for any future infringement.

Parallel Claim Construction: On appeal, the CAFC first reversed the construction of the claim term information database – leading to an order for a new trial on both infringement and validity.  The same patent term had also been later construed by a N.D. Cal. district court in Comcast v. Finisar, and “in the interest of uniformity and correctness” the appellate panel consulted the analysis of both courts.  Here, the CAFC essentially used the Comcast decision as an amicus brief arguing for a particular result. In its decision, the appellate panel praised the Comcast court for its rejection of the DirecTV claim construction.

It is appropriate to consider here what a district court should take away from the CAFC’s process - especially with respect to the court’s stated goal of uniformity. This decision leaves execution of that goal squarely in the hands of the appellate court. In this case, the California district court is encouraged to avoid uniformity and instead focus on contrasting its decisions from those of other district courts interpreting the same terms.  When several courts are deciding the scope of identical property rights in parallel infringement actions, there is some value in having a uniform interpretation or outcome. The practical implication of this case, however, is that a district court looking at a patent that was previously construed should not consider the value of uniformity in its decision.

Construction of Prior Art: A concept ripe for further analysis is the construction of prior art — a job that is currently left to the jury. Here, the court found that the database structure textbook reference should be interpreted based on “an understanding of English grammar and usage.” Ultimately, the court decided the anticipation issue based on the comma placement in a paragraph of the prior art book. Interestingly, although the court initially terms its interpretation a “stretch” in the end its interpretation of the facts means that no reasonable jury could hold otherwise.  (Based on its grammatical holding, one claim was held invalid and the others must be revisited by a jury).

Willful Infringement: The CAFC also reversed the willfulness decision — finding that there is no requirement for an opinion of counsel, and that an opinion of counsel can appropriately ignore validity if it sufficiently addresses noninfringement.

 Notes

• Read Part II of this decision later today.

Comments

[Malcolm Mooney]

Dennis, I think I know what you are getting at wrt to your paragraph on "uniformity" but you may want to revise for clarity's sake.

For what it's worth, would-be defendant's give a lot of credit (too much in my opinion) to decisions in other cases involving the same patent, even when it's quite obvious that the judge was braindead.

The reason being, of course, that one could find themselves stuck with a similarly dense judge (or worse).

[Rich Wolfson]

Vis-a-vis your uniformity observation, I agree that the CFAC firmly established itself as the final arbiter of claim construction, but I disagree that by siding with the later construction of the California court, it was making a general statement to district courts to ignore earlier constructions proferred by other district courts. Perhaps a better way to put it would be so say that the right construction trumps the desire for uniformity.

[George]

Perhaps a better way to put it would be so say that the right construction trumps the desire for uniformity.<<<

Or, as Emerson put it:

"A foolish consistency is the hobgoblin of little minds".