Last week, the U.S Court of .Appeals for the Federal Circuit issued another decision in Tecsec, Inc. v. Adobe Inc., Nos. 2019-2192, -2258 (Oct. 23, 2020). It was the Federal Circuit’s third decision in the case since Tecsec filed its complaint for patent infringement against Adobe in 2010. The first ruling reversed the district court’s claim construction order. The second ruling remanded the district court’s subsequent award of summary judgment of non-infringement to Adobe.
In November 2018, as trial was approaching, the district court granted Adobe’s motion in-limine and precluded all argument and evidence about Adobe’s intent to induce or willfully infringe the patents after the court’s initial claim construction order. The court reasoned that “Adobe was entitled to rely” on the previous claim construction ruling and the parties’ resulting stipulation of non-infringement “as proof that the relevant induced acts were non-infringing.” According to the district court, such reliance made it a legal impossibility for Adobe to have had the requisite intent to induce infringement of the patents after that ruling. It further found that admission of the erroneous claim construction order and stipulation of non-infringement would confuse the jury and prejudice Tecsec. The jury thereafter returned a verdict of only direct infringement and awarded Tecsec damages.
Tecsec appealed. On appeal, it argued that Adobe’s reliance on the initial claim construction order did not prevent Tecsec from proving the intent element through subjective bad faith. Tecsec argued Adobe may have had the requisite knowledge of infringement if it believed the district court’s initial claim construction was incorrect, even if that construction was objectively reasonable. The Federal Circuit agreed, holding that the earlier claim construction could, at most, create a question of fact about the intent element for inducement. The Court further held the district court had failed to consider the totality of Tecsec’s admissible evidence related to intent and other “possible measures for effectively but fairly reducing jury confusion.” The Court reversed and remanded for a new trial on the issue of induced infringement. Tecsec also appealed the district court’s adoption of certain jury instructions and its post-trial reduction of damages. Adobe cross-appealed, challenging a prior ruling on patent eligibility. The Court affirmed the district court’s judgment on these other issues.