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Packet Intelligence LLC v. Netscout Systems, Inc.

United States District Court, E.D. Texas, Marshall Division

May 31, 2019

PACKET INTELLIGENCE LLC, Plaintiff,
v.
NETSCOUT SYSTEMS, INC., TEKTRONIX COMMUNICATIONS, TEKTRONIX TEXAS, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          RODNEY GILSTRAP, UNITED STATES DISTRICT JUDGE

         Before the Court is Defendants NetScout Systems, Inc. and NetScout Systems Texas, LLC's (f/k/a Tektronix Texas, LLC d/b/a Tektronix Communications) (collectively, “NetScout”) Rule 50(b) Renewed Motion for Judgment as a Matter of Law of No. Infringement (Dkt. No. 314) and Rule 50(b) Renewed Motion for Judgment as a Matter of Law of Invalidity Under 35 U.S.C. §§ 102(a), 102(f), and 101 (Dkt. No. 317). The Court heard oral argument on the motions on May 21, 2019. (Dkt. No. 339.) Having considered the motions, briefing, the parties' oral arguments, and trial record, the Court is of the opinion that each motion should be and hereby is DENIED.

         I. BACKGROUND

         Plaintiff Packet Intelligence LLC (“PI”) sued NetScout for patent infringement on March 15, 2016. (Dkt. No. 1.) PI alleged that NetScout's GeoProbe 10 (“G10”) and GeoBlade (collectively, the “Accused Products”) literally[1] infringe Claims 10 and 17 of U.S. Patent No. 6, 665, 725 (the “'725 Patent”); Claims 1 and 5 of U.S. Patent No. 6, 839, 751 (the “'751 Patent”); and Claims 19 and 20 of U.S. Patent No. 6, 954, 789 (the “'789 Patent”) (collectively, the “Asserted Claims” or “Patents-in-Suit”).[2] (Id.) PI also alleged willful infringement and sought pre-suit damages. (Id.) NetScout asserted several defenses, including invalidity under 35 U.S.C. §§ 101, 102, 103, and 112; failure to properly name all inventors under 35 U.S.C. § 102(f); inequitable conduct; and unclean hands. (Dkt. No. 205 at 9-11.) The case proceeded to trial, and the jury returned a verdict in favor of PI, finding that the Asserted Claims were willfully infringed, none of the Asserted Claims were invalid, and that PI was entitled to damages in the amount of $5.75 million as a running royalty. (Dkt. No. 237.) Following submission of the evidence to the jury, the Court conducted a bench trial as to the equitable issues and concluded that NetScout had failed to show that PI's claims were barred under the doctrines of unclean hands or inequitable conduct. (Dkt. Nos. 242, 306.) The Court entered final judgment on September 7, 2018, designating PI as the prevailing party. (Dkt. No. 307 at 2.)

         NetScout now moves pursuant to Federal Rule of Civil Procedure 50(b) for an order that (1) the Accused Products, G10 and GeoBlade, do not infringe the Asserted Claims (Dkt. No. 314) and (2) the Asserted Claims are invalid under 35 U.S.C. §§ 102(a), 102(f), and 101 (Dkt. No. 317).[3]

         II. LEGAL STANDARDS

         A. Federal Rule of Civil Procedure 50(b)

         Judgment as a matter of law is appropriate if “the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for [a] party” on an issue. Fed.R.Civ.P. 50(a)(1). “The grant or denial of a motion for judgment as a matter of law is a procedural issue not unique to patent law, reviewed under the law of the regional circuit in which the appeal from the district would usually lie.” Finisar Corp. v. DirectTV Group, Inc., 523 F.3d 1323, 1332 (Fed. Cir. 2008). The Fifth Circuit “uses the same standard to review the verdict that the district court used in first passing on the motion.” Hiltgen v. Sumrall, 47 F.3d 695, 699 (5th Cir. 1995). Thus, “a jury verdict must be upheld unless ‘there is no legally sufficient evidentiary basis for a reasonable jury to find as the jury did.'” Id. at 700 (quoting Fed. Civ. R. P. 50(a)(1)). The jury's verdict must be supported by “substantial evidence” for each claim. Am. Home Assurance Co. v. United Space All., 378 F.3d 482, 487 (5th Cir. 2004).

         Under Fifth Circuit law, the court is to be “especially deferential” to a jury's verdict and must not reverse the jury's findings unless they are not supported by substantial evidence. Baisden v. I'm Ready Prods., Inc., 693 F.3d 491, 499 (5th Cir. 2012). “Substantial evidence is defined as evidence of such quality and weight that reasonable and fair-minded men [and women] in the exercise of impartial judgment might reach different conclusions.” Threlkeld v. Total Petroleum, Inc., 211 F.3d 887, 891 (5th Cir. 2000). The moving party is entitled to judgment as a matter of law unless “the evidence points so strongly and so overwhelmingly in favor of the nonmoving party that no reasonable juror could return a contrary verdict.” Int'l Ins. Co. v. RSR Corp., 426 F.3d 281, 296 (5th Cir. 2005) (citing Cousin v. Tran Union Corp., 246 F.3d 359, 366 (5th Cir. 2001)). However, “[t]here must be more than a mere scintilla of evidence in the record to prevent judgment as a matter of law in favor of the movant.” Arismendez v. Nightingale Home Health Care, Inc., 493 F.3d 602, 606 (5th Cir. 2007).

         In evaluating a motion under Rule 50, the court must “draw all reasonable inferences in the light most favorable to the verdict and cannot substitute other inferences that [the court] might regard as more reasonable.” E.E.O.C. v. Boh Bros. Const. Co., L.L.C., 731 F.3d 444, 451 (5th Cir. 013) (internal citation omitted). “[T]he court must give credence to the evidence favoring the nonmovant as well as that ‘evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses.'” See Ellis v. Weasler Eng'g Inc., 258 F.3d 326, 337 (5th Cir. 2001) (quoting 9A Wright & Miller § 2529). However, in doing so, the court may not make credibility determinations or weigh the evidence, as those are solely functions of the jury. See Id. (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51 (2000)).

         B. Infringement

         To prove patent infringement under 35 U.S.C. § 271, a plaintiff must show by a preponderance of the evidence the presence of every element, or its equivalent, in the accused product or service. Lemelson v. United States, 752 F.2d 1538, 1551 (Fed. Cir. 1985). First, the claim must be construed to determine its scope and meaning; and second, the construed claim must be compared to the accused device or service. Absolute Software, Inc. v. Stealth Signal, Inc., 659 F.3d 1121, 1129 (Fed. Cir. 2011) (citing Carroll Touch, Inc. v. Electro Mech. Sys., Inc., 15 F.3d 1573, 1576 (Fed. Cir. 1993)). “A determination of infringement is a question of fact that is reviewed for substantial evidence when tried to a jury.” ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1311 (Fed. Cir. 2007).

         C. Invalidity

         An issued patent is presumed valid. 35 U.S.C. § 282(a). To rebut this presumption, a party must prove invalidity by clear and convincing evidence. Id. (“The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.”); Microsoft Corp. v. I4I Ltd. P'ship, 564 U.S. 91, 95 (2011) (“We consider whether § 282 requires an invalidity defense to be proved by clear and convincing evidence. We hold that it does.”).

         i. Anticipation

         A patent claim is invalid as anticipated if “the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent.” 35 U.S.C. § 102(a) (2012) (pre-AIA). “A claim is anticipated only if each and every element is found within a single prior art reference, arranged as claimed.” Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1323 (Fed. Cir. 2014). Anticipation is a factual question reviewed for substantial evidence. Id.

         ii. Inventorship

         Under 35 U.S.C. §102(f) (pre-AIA), “[a] person shall be entitled to a patent unless-he did not himself invent the subject matter sought to be patented.” 35 U.S.C. §102(f). “[T]his subsection mandates that a patent accurately list the correct inventors of a claimed invention” and “failure to name them renders a patent invalid.” Pannu v. Iolab Corp., 155 F.3d 1344, 1349-50 (Fed. Cir. 1998). The Federal Circuit has explained that “[d]etermining ‘inventorship' is nothing more than determining who conceived the subject matter at issue.” In re VerHoef, 888 F.3d 1362, 1365 (Fed. Cir. 2018) (internal citation omitted). “When an invention is made jointly, the joint inventors need not contribute equally to its conception.” Id. at 1366. All that is required is that the joint inventor made a significant contribution to the conception or reduction to practice of the invention. Id. (quoting Pannu, 155 F.3d at 1351). Proper inventorship is reviewed for substantial evidence. Id. at 1365.

         III. DISCUSSION

         A. The Patents-in-Suit

         The Patents-in-Suit are directed to monitoring and classifying information that is transmitted over a network. (Dkt. No. 245, 10/17/17 P.M. Trial Tr. at 102:12-14.) See also '789 Patent at 1:48-51 (“The present invention relates to computer networks, specifically to the realtime elucidation of packets communicated within a data network, including classification according to protocol and application program.”); '751 Patent at 1:38-41 (same); '725 Patent at 1:41-44 (same). Information is generally transmitted over a network via groups of “packets” that flow from one connection point to another. (Dkt. No. 244, 10/17/17 A.M. Trial Tr. at 51:11- 52:13.) For example, to display an advertisement on a webpage, a request is sent over the Internet (the network) from the user's device (first connection point) to the server (second connection point). The server responds to the request by delivering the appropriate information in the form of packets back to the device. This singular flow of packets between the user and the server is called a “connection flow.” See, e.g., '789 Patent 2:41-43 (“The term ‘connection flow' is commonly used to describe all the packets involved with a single connection.”); (Dkt. No. 245, 10/17/17 P.M. Trial Tr. at 109:15-19 (Dr. Almeroth, PI's infringement expert, explained that a “connection flow” is “kind of one sequence of requests and responses” and “can involve multiple requests over the same connection”.).)

         Transmitting information over a network usually involves transferring packets across multiple connection flows. (Dkt. No. 245, 10/17/17 P.M. Trial Tr. at 108:23-111:12.) For example, if a user opens Facebook on her phone, multiple requests will be sent from the phone to individual servers to access different pieces of information that are necessary to fill in the entire webpage-e.g., a request to display images of the user's news feed, a request to play a video, a request to display an advertisement. (Id.) The individual servers will then respond to those requests by sending the appropriate packets of information back to the phone. (Id.) Each of those requests and responses are different connection flows that are ultimately assembled for display as a single website by a browser. (Id.)

         As the number of users and networks have grown over time, there has been a corresponding increase in the number of services that require multiple servers-and hence, an increase in the number of connection flows transmitted over the network. '789 Patent at 1:55-67. (See also Dkt. No. 244, 10/17/17 A.M. Trial Tr. at 53:5-56:16.) To ensure the continued operation of such services, network providers need to determine which flows are related to the same application or online service. (Dkt. No. 244, 10/17/17 A.M. Trial Tr. at 53:5-56:16.) For example, Facebook may generate two different connection flows to display information on the user's device-a first flow in which Facebook is sending pictures and a second flow in which Facebook is sending videos. If the network monitor cannot associate those two flows as belonging to Facebook, then it will have an incomplete view of how much traffic is attributable to that particular online service. (Id. at 55:23-56:16 (“[T]hat web page that you're using [is] made up of lots of these different connection flows. And the problem is . . . how do I know that that's all related to that one app or . . . web page . . . .”).)

         Network monitors that could recognize packets as belonging to the same connection flow were well-known in the prior art when the Patents-in-Suit were filed. See, e.g., '789 Patent at 2:42-44. (See also Dkt. No. 245, 10/10/2017 P.M. Trial Tr. at 181:22-182:8.) However, these prior art monitors could not identify disjointed connection flows as belonging to the same conversational flow. See, e.g., '789 Patent at 3:56-59 (“What distinguishes this invention from prior art network monitors is that it has the ability to recognize disjointed flows as belonging to the same conversational flow.”). (See also Dkt. No. 245, 10/10/2017 P.M. Trial Tr. at 189:1-5 (“Q. Would you agree that the prior art does not link, in your opinion, conversation - connection flows into conversation flows? A. Yes.”); Dkt. No. 248, 10/11/2017 P.M. Trial Tr. at 132:17- 138:16; Dkt. No. 250, 10/12/2017 P.M. Trial Tr. at 42:15-48:22.) This inability to associate different connection flows was a crucial limitation in the prior art because applications often transmit data via multiple connection flows. See '751 Patent at 3:2-5 (“[P]rior art systems cannot collect some important performance metrics that are related to a complete sequence of packets of a flow or to several disjointed sequences of the same flow in a network.”); '725 Patent at 12:29- 33 (explaining that using the disclosed inventions reveals “[w]hat may seem to prior art monitors to be some unassociated flow . . . to be a sub-flow associated with a previously encountered sub-flow”); '789 Patent at 15:31-34 (same).

         The Patents-in-Suit address this problem and describe how disjointed connection flows can be associated with a single conversational flow to more precisely associate traffic with a particular application or protocol. See '789 Patent at 1:48-51 (“The present invention relates to computer networks, specifically to the real-time elucidation of packets communicated within a data network, including classification according to protocol and application program.”); '751 Patent at 3:2-5 (“[P]rior-art systems cannot collect some important performance metrics that are related to a complete sequence of packets of a flow or to several disjointed sequences of the same flow in a network.”); '725 Patent at 1:66-2:6 (“Not only should all the packets be detected and analyzed, but for each of these packets the network monitor should determine the protocol (e.g., http, ftp, H.323, VPN, etc.), the application/use within the protocol (e.g., voice, video, data, real-time data, etc.), and an end user's pattern of use within each application or the application context (e.g., options selected, service delivered, duration, time of day, data requested, etc.).”). (Dkt. No. 245, 10/10/2017 P.M. ...


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