Wednesday, May 01, 2013

Bad day for SAP at the CAFC

from Versata v. SAP

The most telling evidence was the expert’s demonstrative data setup. The expert used the inherent functionality of SAP’s software to conduct hierarchical pricing based on customer and product hierarchies. Specifically, the expert used the SAP interface to set up four pricing elements: a pricing calculation function; a pricing proce- dure; a condition table; and an access sequence. The expert testified that this data setup did not require any modification to SAP’s source code, and that SAP’s accused

products all included the code to accomplish his demon- stration. In essence, the expert confirmed his theories that the accused software was capable of performing the claimed functionality by making the software perform the function without modifying the software.

SAP does not dispute that its software, as set up by Versata’s expert, performed the claimed functionality. Instead, it claims that Versata did not prove that SAP’s software, as shipped to the customer, infringed the ’350 Patent. It argues that the claim language “computer instructions capable of” and “computer instructions caus- ing a computer to implement” are not directed to source code. Rather, the language requires that the software, as shipped, contain computer instructions to perform the claimed functionality. In its view, the expert’s data setup added new computer instructions to SAP’s software, thereby changing and modifying a noninfringing product into an infringing product.

SAP misinterprets the claim language.

There is an estoppel:

SAP cannot now collaterally attack the claim construction it has agreed to. Function Media L.L.C. v. Google Inc., 708 F.3d 1310, 1321–22 (Fed. Cir. 2013) (noting a party may not object to a claim construc- tion it proposed or agreed to); Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc., 628 F.3d 1359, 1376 (Fed. Cir. 2010) (“As we have repeatedly explained, litigants waive their right to present new claim construction disputes if they are raised for the first time after trial.”) (internal quotation omitted).


SAP cross-examined the expert, but the jury ultimately chose to credit the expert’s testimony and documentary evidence. SAP has not met the high standard needed to disregard the jury’s fact-finding function on this issue. See Bagby Elevator Co. v. Schindler Elevator Corp., 609 F.3d 768, 773 (5th Cir. 2010) (giving great deference to the jury’s findings and verdict); Agrizap, Inc. v. Wood- stream Corp., 520 F.3d 1337, 1342–43 (Fed. Cir. 2008) (stating that this court owes the jury great deference in its role as the factfinder).
SAP also misinterprets the expert’s data setup. As this court has previously explained, when “a user must activate the functions programmed into a piece of soft- ware by selecting those options, the user is only activating the means that are already present in the underlying software.” Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1205 (Fed. Cir. 2010); (quoting Fantasy Sports Props. v., Inc., 287 F.3d 1108, 1118 (Fed. Cir. 2002). While “a device does not infringe simply because it is possible to alter it in a way that would satisfy all the limitations of a patent claim,” High Tech Med. Instrumentation v. New Image Indus., Inc., 49 F.3d 1551, 1555 (Fed. Cir. 1995), an accused product “may be found to infringe if it is reasonably capable of satisfying the claim limitation,” Finjan, 626 F.3d at 1204 (quoting Hilgraeve Corp. v. Symentec Corp., 265 F.3d 1336, 1343 (Fed. Cir. 2001)).

Daubert comes up:

The court rejects these two arguments as improperly raised. Under the guise of sufficiency of the evidence, SAP questions the admissibility of Versata’s expert testi- mony and whether his damages model is properly tied to the facts of the case. Such questions should be resolved under the framework of the Federal Rules of Evidence and through a challenge under Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). See ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509, 515, 522–23 (2012) (affirming a trial court’s decision to exclude expert testi- mony under Daubert because it was analytically flawed and unreliable); Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1314–16 (Fed. Cir. 2011) (noting that to carry its burden under Federal Rule of Evidence 702, the pa- tentee must sufficiently “tie the expert testimony on damages to the facts of the case”).

As to the injunction:

Yet, the injunction states that SAP “shall not (a) charge to or accept payment of software maintenance from that customer with respect to any of the Infringing Products in the United States; or (b) license or sell any new ‘seats’ or otherwise charge to or accept license reve- nue from that customer in connection with any of the Infringing Products in the United States.” J.A. 5 (empha- sis added). While this court does not agree entirely with SAP’s arguments against the injunction, it appears the trial court erred by placing emphasis on SAP’s product as a whole. SAP should be able to provide maintenance or additional seats for prior customers of its infringing products, so long as the maintenance or the additional seat does not involve, or allow access to, the enjoined capability.


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