CARDSOFT (assignment for the Benefit of Creditors), LLC, Plaintiff-Appellee,
VERIFONE, INC., HYPERCOM CORP., and VERIFONE SYSTEMS INC., Defendants-Appellants, AND INGENICO S.A., INGENICO CORP., INGENICO INC., AND WAY SYSTEMS, INC., Defendants
Appeal from the United States District Court for the Eastern District of Texas in No. 2:08-CV-00098, Magistrate Judge Roy S. Payne.
DONALD R. MCPHAIL, Cozen O'Connor, of Washington, DC, argued for plaintiff-appellee. With him on the brief were BARRY P. GOLOB and KERRY B. MCTIGUE. Of counsel on the brief was WILLIAM E. DAVIS, III, Davis Firm P.C., of Longview, Texas.
E. JOSHUA ROSENKRANZ, Orrick, Herrington & Sutcliffe LLP, of New York, New York, argued for defendants-appellants. With him on the brief were MARK S. DAVIES, RICHARD A. BIERSCHBACH, BRIAN D. GINSBERG, and CAM T. PHAN. Of counsel on the brief was ROBERT W. KANTNER, Jones Day, of Dallas, Texas.
Before PROST, Chief Judge, TARANTO and HUGHES, Circuit Judges.
Hughes, Circuit Judge.
CardSoft alleges that Appellants infringe two patents directed to software for small, specialized computers, like payment terminals. In construing the patent
claims, the district court adopted CardSoft's proposed construction for the claim term " virtual machine." Applying the district court's construction, a jury returned a verdict for Card-Soft. Because the district court erred in its construction of " virtual machine," and because CardSoft waived any argument that Appellants infringe under the correct construction, we reverse.
CardSoft (Assignment for the Benefit of Creditors), LLC (CardSoft) filed suit in March 2008 against Appellants VeriFone, Inc., VeriFone Systems Inc., and Hypercom Corp. (collectively, VeriFone), asserting infringement of U.S. Patent Nos. 6,934,945 (the '945 patent) and 7,302,683 (the '683 patent). The district court held a Markman hearing in July 2011 and conducted a jury trial in June 2012. The jury determined that certain VeriFone devices infringed claim 11 of the '945 patent and claim 1 of the '683 patent and that these claims were not invalid. VeriFone moved for a new trial and for judgment as a matter of law, but the district court denied both motions. VeriFone appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
The '683 patent is a continuation of the '945 patent and shares the same specification. Both patents describe software for controlling a payment terminal. See '945 patent col. 1 ll. 10-17. Payment terminals are small, specialized computers, and include a processor, peripheral units like a card reader, a display, a printer, or a communications interface, and a software operating system to control the hardware components. Id. at col. 2 l. 64-col. 3 l. 1.
According to the patents, prior art payment terminals used a variety of " different hardware/software architectures." Id. at col. 2 ll. 34-37. But this variety of different architectures meant that each application program for a payment terminal needed to be written specifically for that terminal. Id. at col. 3 ll. 5-11. " [P]rogramming alterations are not ...