Consideration of Competing Claim Constructions By Different Courts Required to Ensure Uniformity

In Finisar Corp. v. The DirecTV Group, Inc. (Nos. 2007-1023,-1024; April 18, 2008), a Federal Circuit panel vacates an infringement verdict that resulted in a jury award of $78.9 million in reasonable royalty damages and $25 million in enhanced damages. It finds that the district court incorrectly construed the vital term "downloading into a memory storage device" present in each asserted claim of a patent directed to an information broadcasting system that gives subscribers access to video and audio programs through high-speed satellites or cable links. The district court in this case was not the only court to have construed the same claim term. Given the importance of uniformity in the treatment of a given patent, observes the panel, the Federal Circuit would be remiss to overlook another court's construction of the same term in the context of the same patent. This is found to be particularly so here where the other court--the Northern District of California-- repeatedly referred back to the constructions by the district court--the Eastern District of Texas-- that are the subject of the current appeal. The Texas lower court construed the vital term to mean only data transfer, but the California lower court construed that term to require both transfer and retention of data for later access. In accepting the California court's construction, the panel looks to the specification of the patent in suit as well to the doctrine of claim differentiation. Because the jury instruction concerning the claim term did not require the retention capacity and the record is insufficient to sort this out, the verdict is vacated and the case remanded.

In addition, the panel finds that the lower court erred in ruling that the prior art did not anticipate one of the asserted claims which "infects" the scope of the prior art for assessing the validity of the other asserted claims. On appeal, the panel examines the anticipatory reference-- The Architecture of Videotex Systems-- in some detail and employs the grammatical guidelines used in statutory construction known as the "doctrine of the last antecedent" and its corollary "the rule of punctuation" to avoid slipping into a realm of ambiguity that could render jury verdicts unreviewable. The focus on appeal is the interrelationship among steps of dividing information into tiers, transmitting that information and scheduling transmissions. Although the panel acknowledges that its reading of the reference "seems a stretch even at first blush," using these general principles of English grammar allows it to conclude that the reference does teach the claimed interrelated scheduling, transmitting and dividing steps. With that finding, the panel orders a remand to have the anticipation and obviousness of other claims of the suit patent considered.