“Colorable Difference” in Contempt Proceedings

Sadao Kinashi | November 4, 2013

nCube Corp. v. SeaChange Int’l Inc. (nCube Corp. is now ARRIS Group)

October 10, 2013

 JUDGES: Rader, Prost and Taranto; OPINION BY: Prost

SUMMARY

In the infringement suit, SeaChange was found to have infringed of ARRIS’s patent.  In the infringing system, ClientID was updated in the connection service table.  SeaChange soon began to sell modified products in which SessionID was updated in the connection service table.  SeaChange was enjoined from making, using, selling any devices “not more than colorably different” from the infringing product.

ARRIS filed a motion to hold SeaChanger in contempt of a permanent injunction order.  The district court found that ARRIS failed to meet its burden of showing contempt by clear and convincing evidence and declined to hold the infringer in contempt and ARRIS appealed.

CAFC affirmed denial of the contempt motion.  CAFC found that it was more than a colorable difference from the patented product that the infringer modified its product such that ClientID was no longer updated in the connection service table.  CAFC ruled that the fact that SessionID continued to be updated in the connection service table with similar information, which had not been challenged at trial as infringing the patent, did not provide a basis for finding contempt.

   特許侵害訴訟でSeaChangeはARRISの特許を侵害すると判断された。侵害製品は接続サービス表のClientIDをアップデートするものだった。ARRISはすぐに改良製品を販売し始め、それは接続サービス表のSessionIDをアップデートするものだった。SeaChangeは侵害製品から「colorably different」を超えない製品の製造・使用・販売の差止を命じられた。ARRISは侵害者が永久差止命令を侮辱するものとする決定を求める申立をした。地裁は、ARRISが、明白で説得力のある立証をしていないとして、申立を棄却した。CAFCは、地裁の決定を維持した。CAFCは、SeaChangeが、接続サービス表のClientIDが更新されないよう改変したことは、colorable differenceを超えるものであると判断した。そして、CAFCは、公判で侵害を立証するために使用されなかったSessionIDが引続き更新されていることは、法廷侮辱の認定の根拠にならないとした。

DETAILS

ARRIS and SeaChange are providers of video-on-demand products and services. ARRIS owns U.S. Patent No. 5,805,804 (“‘804 patent”), which discloses and claims a media server capable of transmitting multimedia information over network to a client.  The patented technology allows a user to purchase videos that are streamed to a device such as a television.

ARRIS sued SeaChange in 2001, alleging the infringement of the ‘804 patent by SeaChange’s Interactive Television (“ITV”).  In 2002, the jury found that SeaChange willfully infringed the ‘804 patent, and the district court’s enhanced the damages award, which were affirmed by CAFC.

In 2006, the district court entered a permanent injunction, and SeaChange was enjoined from “making, using, selling, or offering to sell . . . the SeaChange Interactive Television System . . . as well as any devices not more than colorably different therefrom that clearly infringe the Adjudicated Claims of the ‘804 patent.”

Soon after the 2002 jury verdict (four years before the permanent injunction), SeaChange began to modify its ITV system, and it released a modified system.  In 2009, ARRIS filed a motion in the district court seeking to hold SeaChange in contempt of the permanent injunction.  ARRIS alleged that SeaChange’s modifications were minor changes that did not remove any key components or the relevant functionality that formed the basis for the jury’s infringement verdict.  The district court found that ARRIS failed to prove contempt by clear and convincing evidence and, therefore, declined to hold SeaChange in contempt. ARRIS appealed.

The claim 4 of the ‘804 patent at issue was as follows:

    4. A computer-implemented method for retrieving and transporting multimedia data between a client and a server on a network, said computer-implemented method comprising the steps of:receiving a client request for initialization in a message to an upstream manager in said server, said upstream manager being coupled to a first network; obtaining an upstream physical address for said client as said client request enters said server;allocating a downstream physical address and downstream logical address to said client corresponding to the upstream physical address obtained for said client, said downstream physical address being used by a downstream manager for sending a stream of said multimedia data from a service on said server to said client, said downstream manager being coupled to a second network; and updating a connection service table with said upstream physical address, said downstream physical address, and said downstream logical address for said client.

‘804 patent col. 25, lines 22-42 (emphasis added).

The ITV system utilizes a series of identifiers, including the ClientID and the SessionID.  The ClientID and SessionID both include the 6-byte MAC address. At the May 2002 trial, ARRIS’s expert testified that the ClientID met the upstream physical address limitation of claim 4, and that the system’s Connection Table met the connection service table limitation.  Neither ARRIS, nor its expert, ever mentioned the SessionID as potentially being the upstream physical address.  Although a SeaChange witness stated that the SessionID was another identifier of the client, ARRIS’s infringement proof  and argument included no contention that the system found to infringe used the SessionID as such an identifier, and ARRIS does not contend that the modified system does so either.

Following the jury verdict, SeaChange modified its system so that the Connection Table (i.e. the “connection service table”) in the system no longer received the ClientID.  Instead, the processing of the ClientID that previously occurred in the Connection Table in the infringing system was relocated and performed elsewhere in SeaChange’s modified system.

The district denied ARRIS’s motion for contempt.

CAFC noted that, in a contempt motion, the party seeking 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.”  CAFC also noted that the court reviews the finding as to whether two products are more than colorably different for clear error, and that a district court abuses its discretion.  CAFC further noted that, in determining the issue, the court focuses “on those elements of the adjudged infringing products that the patentee previously contended, and proved, satisfy specific limitations of the asserted claims.”  CAFC cited the following portion in TiVo:

 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.

CAFC emphasized that the court must be mindful that contempt “is a severe remedy, and should not be resorted to where there is a fair ground of doubt as to the wrongfulness of the defendant’s conduct.”

Although the ClientID in the modified system no longer meets the claimed limitation because it is no longer updated in the Connection Table, ARRIS’s argued that the Connection Table in the modified system is still updated with the SessionID, and that the differences between the ClientID and the SessionID are not significant and, therefore, no more than colorable.  CAFC noted as follows:

Prior to beginning its analysis, the district court noted that only the ClientID was previously accused at trial as satisfying the “upstream physical address” limitation. The ClientID in the modified system performs the same task as it did in the old system, but it does so in a way that all parties agree is non-infringing.  Thus, the court held that ARRIS did not prove by clear and convincing evidence that there is no colorable difference between the ClientID in the two systems. The court also found that ARRIS could not rely on the SessionID to meet this prong of TiVo because it was not identified at trial as meeting this limitation.

The 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. CAFC agreed with district court in finding this modification significant because the ClientID still performs the relevant functions in both systems, but does so in a way that puts the ClientID outside the claim, i.e., not through updating in the Connection Table.

ARRIS argued that the ClientID and SessionID each contain the same 6-byte MAC address information and, therefore, the Connection Table in both versions of the system is updated with the MAC address. In the infringing system the Connection Table was updated with the two MAC addresses and in the modified system it is updated with only one. That, according to ARRIS, is an insignificant difference.

CAFC pointed out that ARRIS never relied on the MAC address at trial to prove infringement, and that ARRIS relied on the ClientID to prove infringement.

Finally, to ARRIS’s argument that Patentee need not prove every possible avenue of infringement at trial and, as such, it was under no obligation to prove that the SessionID also met the upstream physical address of the claim, CAFC responded that the 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,”  not what the claims require.

Thus, CAFC concluded that the district court did not err in its factual findings and, therefore, did not abuse its discretion in denying ARRIS’s motion for contempt.   CAFC ruled that CAFC need not consider actual infringement by the modified ITV system.

TAKEAWAY

A contempt action should not be considered as an extension of patent litigation.  The issue is not whether the modified product still infringes the patent, but whether the differences are more than colorable.

The determination on colorable differences 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.”

It does not seem to be relevant whether ClientID, SessionID and the MAC address are equivalents for the claimed invention.  Because the patentee previously contended and proved on ClientID, the court is required to focus on ClientID in a contempt action.  However, infringer can still be liable for the infringement by the more than colorably different products.

Question: Which is the patentee required to prove: (1) there is no colorable difference, or (2) there is not more than colorable difference?

Patentee did not prove that there is no colorable difference.

= Colorable difference can be sufficient for infringer to avoid contempt.

Patentee bears the burden of proving that the new product is not more than colorably different.

= Colorable difference is not sufficient for infringer to avoid contempt.

Full Opinion

US5805804

 

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