Patent Law

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.  Although uniformity is a general goal of the patent system. This decision leaves execution of that goal squarely in the hands of the appellate court. District courts, on the other hand, are encouraged to avoid uniformity and instead focus on contrasts.  A parallel district court judgment has no precedential value. However, because both courts are judging the scope of the identical property right, there is some value in having a uniform outcome. The practical implication of this case, however, is that a district court looking at a patent that was previously construed 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 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.