10/10/13

NCube v. Seachange: Modification of Infringing Product Avoids Permanent Injunction Order

Category: Injunctions
 
 
 
By: Jesus Hernandez, Blog Editor/Contributor  
 
TitleNCube Corp. v. Seachange Int'l Inc., No. 2013-1066 (Fed. Cir. Oct. 10, 2013) (NCube changed name to "ARRIS Group, Inc.").
IssueThe thrust of ARRIS’s argument with respect to the colorable-differences prong [of a contempt motion] is that while [a] ClientID [address identifier] in the modified system no longer meets the “upstream physical address” limitation because it is no longer updated in the Connection Table, the Connection Table in the modified system is still updated with the SessionID[, a design-around address identifier].
NCube, at *7 (text added).
Holding[Seachange's design around is more than a colorable difference because] the ClientID was moved out of the Connection Table and placed elsewhere in the modified system […] this modification [is] significant because the ClientID still performs the same relevant functions in both systems, but does so in a way that all parties admit puts the ClientID outside the claim, i.e., not through updating in the Connection Table. That is a significant change to the system [that satisfies the colorable-differences prong in a permanent injunction contempt hearing].
Id. at *8-9 (text added).
 
Procedural HistoryOn July 31, 2009, ARRIS Group, Inc. (“ARRIS”)1 filed a motion to hold SeaChange International Inc. (“SeaChange”) in contempt of a permanent injunction order. The United States District Court for the District of Delaware found that ARRIS failed to meet its burden of showing contempt by clear and convincing evidence and declined to hold SeaChange in contempt.
NCube, at *2.
 
 
 
Legal Reasoning (Rader, CJ, Prost, Taranto)
Background
Claim feature at issue[…] updating a connection service table with said upstream physical address, said downstream physical address, and said downstream logical address for said client.
NCube, at *4.
ClientID v SessionIDIn order to function, the ITV system utilizes a series of identifiers, including one known as the ClientID and another known as the SessionID. The ClientID is a 20- byte data field containing addressing information including, inter alia, a 6-byte MAC address. The SessionID is a 10-byte data field that also includes the 6-byte MAC address. At the May 2002 trial, ARRIS’s expert, Dr. Schonfeld testified that the ClientID met the upstream physical address limitation of claim 4 […] Notably, neither ARRIS, nor its expert, ever mentioned the SessionID as potentially being the upstream physical address.
Id. at *5-6.
Design-Around BackdropFollowing the jury verdict of infringement, SeaChange modified its system so that the Connection Table (i.e. the “connection service table”) in the ITV system no longer received the ClientID [which was found to be encompassed by the "upstream physical address" feature]. Instead, the processing of the ClientID that previously occurred in the Connection Table in SeaChange’s infringing ITV system was relocated and performed elsewhere in SeaChange’s modified ITV system.
Id. at *5.
Legal Standard for Contempt Motion Regarding a Permanent Injunction
Legal Standard, GenerallyOn a contempt motion, the party seeking to enforce the injunction bears the burden of proving by clear and convincing evidence “both that the newly accused product is not more than colorably different from the product found to infringe and that the newly accused product actually infringes.” TiVo Inc. v. EchoStar Corp., 646 F.3d 869, 882-83 (Fed. Cir. 2011) (en banc). […]
NCube, at *6.
"Colorable Differences" Standard Where one or more of those elements previously found to infringe has been modified, or removed, the court must make an inquiry into whether that modification is significant. If those differences between the old and new elements are significant, the newly accused product as a whole shall be deemed more than colorably different from the adjudged infringing one, and the inquiry into whether the newly accused product actually infringes is irrelevant. Contempt is then inappropriate.
Id. at *7 (citing TiVo Inc., 646 F.3d at 883 (en banc).).
Finding "Colorable Differences" of a Device Previously Found Infringing, and Modified to Avoid a Permanent Injunction
Design-Around a Significant ChangeThe relevant element of the adjudged infringing system is the Connection Table, which was updated with the ClientID. Neither the Connection Table, nor the ClientID were removed from the infringing device. Rather, the ClientID was moved out of the Connection Table and placed elsewhere in the modified system. The district court found this modification significant because the ClientID still performs the same relevant functions in both systems, but does so in a way that all parties admit puts the ClientID outside the claim, i.e., not through updating in the Connection Table. That is a significant change to the system.
NCube, at *8-9.
Colorable Differences Inquiry limited to Previous Infringement Reasoning[T]he determination of whether more than colorable differences are present requires the court to focus “on those elements of the adjudged infringing products that the patentee previously contended, and proved, satisfy specific limitations of the asserted claims.” TiVo, 646 F.3d at 882. As the separation of the colorable-differences and infringement components in TiVo indicates, the colorable-differences standard focuses on how the patentee in fact proved infringement, not what the claims require. In this way, the TiVo standard preserves values of notice and preservation of trial rights by keeping contempt suitably limited. Here, as already described, ARRIS’s infringement proof focused specifically on the ClientID, not the Mac address or the SessionID […]
Id. at *10.
Conclusion
For the foregoing reasons, we conclude that the dis- trict court did not err in its factual findings and, there- fore, did not abuse its discretion in denying ARRIS’s motion for contempt.
NCube, at *10.
 
 
 Image Attribution Statement: Michael Johnson, "An apple and an orange," available under Creative Commons Attribution 2.0 Generic license, http://commons.wikimedia.org/wiki/File:Apple_and_Orange_-_they_do_not_compare.jpg (last visited Oct. 10, 2013).  
 
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