Last week, the United States Court of Appeals for the Federal Circuit issued a decision in ncCUBE Corporation v. SeaChange International, dealing with the failure of the district court to find SeaChange in contempt for violating a permanent injunction.
ARRIS (formerly nCUBE) commenced the present litigation on January 8, 2001, alleging the infringement of certain claims of U.S. Patent No. 5,805,804 (“’804 patent”), which discloses and claims a media server capable of transmitting multimedia information over any network configuration in real time to a client that has requested the information. The patented technology allows a user to purchase videos that are then streamed to a device such as a television.
On May 28, 2002, the jury returned a verdict in ARRIS’s favor, finding that SeaChange willfully infringed the asserted claims in the ’804 patent. The Federal Circuit later affirmed the jury verdict and the district court’s subsequent decision to enhance the damages award. Subsequent to the Federal Circuit affirmance, the district court entered a permanent injunction enjoining SeaChange 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.”
SeaChange modified its ITV system, eventually releasing a system that it believed was outside the scope of the ’804 patent. ARRIS disagreed and, after unsuccessful negotiations, filed a motion in the United States District Court for the District of Delaware seeking to hold SeaChange in contempt of the permanent injunction, alleging 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 bore the burden of proving both that the modified ITV system is not more than colorably different from the ITV system found to infringe and that the modified ITV system actually infringes.
Following the jury verdict of infringement, SeaChange modified its system so that the Connection Table in the ITV system no longer received the ClientID, as required by the claims at issue. Neverthless, ARRIS argued that while the ClientID in the modified system no longer meets the “upstream physical address” limitation because it is no longer updated in the Connection Table, the Connection Table in the modified system is still updated with the SessionID. ARRIS contends that the differences between the ClientID and the SessionID are not significant and, therefore, no more than colorable. Both the district court and the Federal Circuit disagreed.
The Federal Circuit explained that the altered SeaChange system represented a modification rather than a removal of the accused element. In the modified system, the ClientID still performed the same relevant functions, but were outside the claim because it was not updating through the Connection Table, as required by the claim language.
ARRIS also argued that the district court erred by failing to compare the Connection Table of the infringing system, which is updated with both the ClientID and the SessionID, with the Connection Table of the modified system, which is updated only with the SessionID. ARRIS argues 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.
The Federal Circuit did not find this argument persuasive, though, because ARRIS never relied on the MAC address at trial to prove infringement; thus, it was inappropriate in contempt proceedings to introduce this new theory into the case. The Federal Circuit explained that this is so because the colorable-differences standard of the test focuses on how the patentee proved infringement at trial, not what the claims may actually require. This ensures that contempt proceedings are limited.
Because the Federal Circuit found that ARRIS did not satisfy the colorable differences prong of the test, it was unnecessary to reach the question of whether the modified SeaChange system actually infringed.
Thus, this decision does not stand for the proposition that the modified SeaChange system does not infringe, but simply that contempt proceedings for violation of a permanent injunction are not appropriate. ARRIS will need to institute a new patent infringement proceeding to challenge the SeaChange modified system.
Tags: CAFC, colorable difference prong, contempt, Federal Circuit, injunction, patent, Patent Litigation, patents, permanent injunction
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