CAFC Reverses District Court’s Finding of Eligibility for Columbia Antivirus Software Claims

The U.S. Court of Appeals for the Federal Circuit (CAFC) today issued two precedential decisions in The Trustees of Columbia University of the City of New York v. Gen Digital Inc., reversing, vacating and remanding a district court judgment that Columbia’s patent claims were patent eligible in one, and reversing a contempt order against the Defendant’s counsel, Quinn Emanuel Urquhart & Sullivan, LLP, in another.

Columbia Claims Fail at Alice Step One

In the first decision, Columbia brought suit against Gen Digital, which markets Norton brand software, claiming Gen Digital and Norton infringed several claims of its U.S. Patent Nos. 8,601,322 and 8,074,115, which are “related primarily to protecting computer systems from viruses and other malicious activity.” The U.S. District Court for the Eastern District of Virginia denied Norton’s motion for judgment on the pleadings that the claims were ineligible under 35 U.S.C. § 101, finding that they were not directed to an abstract idea at step one. A jury ultimately returned a verdict of willful infringement on four of the claims, and awarded $185.11 million in damages, including sales to customers outside the United States. The district court then awarded enhanced damages and attorneys’ fees, partially due to “a negative inference imposed” by the contempt finding in the separate case.

On appeal, the CAFC found that, at Alice step one, Columbia’s claims did not claim a new method of virus screening or improve upon existing methods, and did not “improve or change the way a computer functions,” and therefore were directed to an abstract idea. Norton argued the claims were directed to the abstract idea of “identifying a deviation in data based on a comparison” in connection with virus scanning, while Columbia argued they were directed to “specific steps and a technique for improving computer security that departs from earlier approaches.” On appeal, Columbia reiterated the district court’s holding that the claims’ use of multiple computers made them non-abstract, arguing that “the use of a model that is created using different computers is more efficient and allows a computer to be more resistant to viruses because viruses are detected more quickly,” according to the CAFC opinion.

However, the CAFC said that Columbia had conceded that the claimed “emulator,” which “executes a portion of a program and compares how the emulated program performs with a ‘model of function calls’ reflecting how the program is typically expected to perform,” was conventional, and that “a divide-and-conquer approach where multiple computers collaborate on a single task is an abstract idea.” And, according to the opinion, “the claimed invention’s efficiency gain from the use of multiple computers is no more than this concededly abstract idea.” While Columbia cited a number of other technological improvements that render the claims non-abstract, “these supposed improvements are not what the claims are directed to, i.e., the supposed improvements are not required by the language of the asserted claims at all,” said the CAFC.

Columbia argued in part that Finjan, Inc. v. Blue Coat Systems, Inc. supports a finding that the claims are not abstract, but the CAFC said that the “improvements found to be non-abstract in Finjan bear no resemblance to the purportedly non-abstract claims in this case.”

Hope at Step Two on Remand?

At Alice step two, however, the CAFC said Columbia raised one argument that “merits further attention” on remand. Columbia argued the “model of function calls” element of the claims provides an inventive concept in itself. While the argument was forfeited with respect to the step one analysis at the CAFC, it was not forfeited as to step two, and the CAFC said the district court should decide the issue on remand in the first instance because factual issues remain as to step two. “Drawing all reasonable inferences in Columbia’s favor, the parties’ dispute over whether this feature was conventional is a question of fact that precludes judgment on the pleadings,” said the CAFC.

The opinion went on to address a number of remaining issues that may be relevant on remand if the patent claims are found eligible. The CAFC found that the district court properly construed the “emulator” as not requiring simulating a computer system; that the district court did not err in denying JMOL for Norton on the issue of willful infringement; that the district court’s grounds supporting the jury’s award of foreign damages failed; that the award of enhanced damages should be reversed based on the CAFC’s separate decision reversing the contempt order; and that, on remand, with respect to the award of attorneys’ fees, “the district court must reconsider the issue of fees unburdened by the negative inference from the contempt finding.”

Attorney-Client Privilege Survives Conflict of Interest

In the separate precedential ruling regarding the contempt order, a panel of the same three judges, with Judge Dyk again authoring, found that Quinn was not in contempt. The CAFC said the district court’s Disclosure Order requiring Quinn to disclose any conflict of interest with respect to the inventorship dispute over U.S. Patent No. 8,549,643, owned by Norton, was invalid and therefore “cannot be the basis for a finding of civil contempt.” Specifically, “[t]he relevant cases hold that the attorney-client privilege is not vitiated because of the existence of an attorney-client conflict,” said the opinion.

Image Source: Deposit Photos
Image ID: 10042948
Author: almoond