throbber
Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 1 of 21 PageID #: 9330
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`TQP DEVELOPMENT, LLC,
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`
`Plaintiff,
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`









`
`ORDER
`
`
`
`Case No. 2:11-CV-248-JRG
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`
`
`
`1-800-FLOWERS.COM, INC., et al.,
`
`
`v.
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`Defendants.
`
`Before the Court is the briefing on Newegg’s Rule 50(b) Motion for Judgment as a
`
`Matter of Law (Dkt. No. 436); Newegg’s Notice of Supplemental Authority (Dkt. No. 447);
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`Newegg’s Notice of Subsequent Authority (Dkt. No. 450); Newegg’s Second Notice of
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`Subsequent Authority (Dkt. No. 453); and TQP’s Response to Newegg’s Supplements (Dkt.
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`No. 452.) For the reasons set forth below, Newegg’s Motion for Judgment as a Matter of Law is
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`GRANTED as to non-infringement.
`
`BACKGROUND
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`The Court held a jury trial in this case and the jury entered a verdict on November 25,
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`2013. At the time of trial, the asserted claims of U.S. Patent No. 5,412,730 (“’730 Patent”)—the
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`sole patent-in-suit—were Claims 1, 6, 8, and 9. The Jury returned a verdict that the asserted
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`claims were not invalid; that the asserted claims were directly infringed and that Newegg had
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`induced its customers to infringe; and $ 2.3 MM as a “sum of money, if paid now in cash” that
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`“would fairly and reasonably compensate TQP for its damages resulting from Newegg’s
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`infringement of the ’730 Patent.”1 (Dkt. No. 407 (“Verdict”).)
`
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`1 At trial TQP had asserted that it, if damages were awarded, the proper amount was $ 5.1 MM. Newegg
`did not present its own expert testimony on damages.
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`

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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 2 of 21 PageID #: 9331
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`After trial Newegg filed a Motion for Judgment as a Matter of Law (Dkt. No. 436) and a
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`Motion for a New Trial (Dkt. No. 437). Briefing on these motions concluded on April 4, 2014.
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`After briefing completed on its Motion for Judgment as a Matter of Law, Newegg filed three
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`supplements, the last of which was filed on July 25, 2014. On June 4, 2014, Newegg filed its
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`Notice of Supplemental Authority (“First Supplement”). (Dkt. No. 447.) On June 30, 2014,
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`Newegg filed its Notice of Subsequent Authority (“Second Supplement”). (Dkt. No. 450.) On
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`July 8, 2014, the Court ordered TQP to respond to Newegg’s supplements. (Dkt. No. 451.) On
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`July 25, 2014, Newegg filed a Second Notice of Subsequent Authority (“Third Supplement”).
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`(Dkt. No. 453.) On August 7, 2014, the Court issued a Memorandum Opinion and Order on an
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`issue of Newegg’s Motion for Judgment Based on the Defense of Laches. (Dkt. No. 454.)
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`Newegg’s Notice of Subsequent Authority (Dkt. No. 450) informed the Court of a June
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`20, 2014 ruling in a related case—TQP Development, LLC v. Intuit Inc., Case No. 2:12-cv-180
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`(hereinafter (“Intuit Case”)), Dkt. No. 192 (hereinafter “Intuit SJ Order”))—in which the judge in
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`that case (J. Bryson) revised his earlier construction of a term in the ’730 Patent and granted
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`summary judgment of non-infringement.2 In this case, TQP responded that it would be filing a
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`Motion for Reconsideration of the grant of non-infringement in the Intuit Case. Newegg’s Third
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`Supplement (Dkt. No. 453) informed the Court that a Motion for Reconsideration of the Intuit SJ
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`Order had been denied: Dkt. No. 203 in the Intuit Case (hereinafter “Intuit SJ Reconsideration
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`Order”) filed on July 23, 2014. On August 21, 2014, TQP filed a Notice of Appeal to the United
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`States Court of Appeals for the Federal Circuit in the Intuit Case, which was docketed on August
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`26, 2014, appealing, among other rulings, the Intuit SJ Order and the Intuit SJ Reconsideration
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`Order. On October 2, 2014, TQP’s appeal of the orders in the Intuit Case was dismissed.
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`2 Testimony from this trial comprised part of the evidence submitted in the summary judgment briefing in
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`Intuit.
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 3 of 21 PageID #: 9332
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`Newegg’s Notice of Supplemental Authority (Dkt. No. 447) submitted the Supreme
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`Court’s, June 2, 2014, decision in Limelight Networks, Inc. v. Akamai Technologies, Inc., et al.,
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`134 S.Ct. 2111 (2014). Newegg asserted that the Supreme Court “rejected the rule of Akamai
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`Techs., Inc. v. Limelight Networks, Inc., 692 F. 3d 1301, 1305-07, 1318 (2012) (en banc) that a
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`party can be liable for active inducement of infringement of a method claim under 35 U.S.C.
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`§ 271(b) when that party is not responsible for the performance of the entire method such that it
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`would be a direct infringer under 35 U.S.C. § 271(a).” Id. The Limelight decision was reversed
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`and remanded. Id. On May 13, 2015, the decision on remand issued in Akamai Technologies.,
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`Inc. et al., v. Limelight Networks, Inc., 786 F.3d 899 (Fed. Cir. 2015). A petition for en banc
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`rehearing was filed on June 25, 2015, in that case.
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`The ’730 Patent
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`The ’730 Patent lists a sole inventor—Michael F. Jones—and is entitled “Encrypted data
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`transmission system employing means for randomly altering the encryption keys.” (Dkt.
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`No. 348 at 12.) The ’730 Patent was filed on April 23, 1992 (the patent is a continuation in part
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`of Ser. No. 418,178, which was filed on, Oct. 6, 1989, and subsequently abandoned) and issued
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`on May 2, 1995. (Id.) The ’730 Patent was originally assigned to Telequip Corporation of
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`Hollis, New Hampshire. (Id.)
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`The asserted claims—Claims 1, 6, 8, and 9—of the ’730 patent are as follows (the
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`Parties’ identifications of specific limitations (e.g., a, b, c) have been added for Claim 1):
`
`
`Claim 1. [(a)] A method for transmitting data comprising a sequence of blocks in
`encrypted form over a communication link from a transmitter to a receiver comprising, in
`combination, the steps of:
`[(b)] providing a seed value to both said transmitter and receiver,
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 4 of 21 PageID #: 9333
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`[(c)] generating a first sequence of pseudo-random key values based on said seed value at
`said transmitter, each new key value in said sequence being produced at a time dependent upon a
`predetermined characteristic of the data being transmitted over said link,
`[(d)] encrypting the data sent over said link at said transmitter in accordance with said
`first sequence,
`[(e)] generating a second sequence of pseudo-random key values based on said seed
`value at said receiver, each new key value in said sequence being produced at a time dependent
`upon said predetermined characteristic of said data transmitted over said link such that said first
`and second sequences are identical to one another a new one of said key values in said first and
`said second sequences being produced each time a predetermined number of said blocks are
`transmitted over said link,
`[(f)] and decrypting the data sent over said link at said receiver in accordance with said
`second sequence.
`
`Claim 6. The method of claim 1, wherein said provided seed value is one of a number of
`different seed values for a plurality of remote locations with which secure communication is
`required.
`
`Claim 8. The method of claim 1, further comprising:
`Associating different ones of seed values with each of a plurality of remote locations with
`which secured communication is required.
`
`Claim 9. The method of any one of claims 3, 4, 5, 6, 7, or 8, further comprising:
`Adding error control information to the data sent over said link, wherein the error control
`information is added prior to transmitting the data over said link.
`The Accused Technology
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`The technology accused of infringement in this case relates to secure communications
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`and the World Wide Web. Specifically the accused technology concerns secure Hypertext
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`Transfer Protocol (“HTTP”) communications, commonly referred to as “HTTPS.” HTTPS,
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`which one might commonly see as part of the address in a web browser (e.g. “https://”), requires
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 5 of 21 PageID #: 9334
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`one of two additional protocols: called Secure Socket Layer (“SSL”) or Transport Layer Security
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`(“TLS”).3 (11/21 PM Tr. (Stubblebine) 63:16-21.) TQP accuses Newegg’s use of either the
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`combination of the SSL protocol and the RC4 cipher or the combination of the TLS protocol and
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`the RC4 symmetric key encryption algorithm in Newegg’s external facing servers. (11/19 AM
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`Tr. 61:17-23; 128:10-129:13; see also 11/21 PM Tr. (Stubblebine) 26:1-12 (describing RC4).)
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`TQP asserts that “SSL and TLS are essentially interchangeable” but that “SSL doesn’t infringe
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`by itself” and “RC4 doesn’t meet all the limitations by itself”; “it’s only the combination” of SSL
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`with RC4 that infringes. (Id.; Id. 61:25-62:2; 130:1-4.)
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`The SSL and TLS protocols, speaking generally, define an ordered process for
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`establishing secure communications. As TQP’s expert Dr. Jager testified, the secure
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`communications of the patent are “set up when the customer puts in this URL” and “goes to the
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`website,” at which point “the customer’s computer [is] led through . . . a process by the website
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`in order to setup [] secure communication.” (11/19 PM Tr. (Jager) at 133:6-23; see also 11/21
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`PM Tr. (Stubblebine) 25:7-25 (describing SSL handshake).) Said another way, SSL and TLS are
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`the protocols that “lead[] the customer’s computer through the negotiation.” (Id.) “And as part
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`of that negotiation, an encryption algorithm [(in this case RC4) is] selected to protect the secrecy
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`of the data sent between the website and their computer.” Specifically, the SSL and TLS
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`protocols provide that the server selects the particular encryption algorithm—also referred to as a
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`“cipher suite” in this case—that will be used from among the various encryption algorithms
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`listed by the client as part a particular message called the ClientHello. (Id. 139:7-20.) As a
`
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`3 SSL and TLS are standardized protocols with published specifications that have different versions.
`(11/19 AM Tr. (Jager) 129:14-17; 130:21-25.) The evidence presented at trial concerned Newegg’s use of SSL
`version 3 and TLS version 1. (Id. at 129:18-25; 11/21 PM Tr. (Stubblebine) 77:13-17; 78:10-14.)
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 6 of 21 PageID #: 9335
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`concrete example of this process, Dr. Jager testified how, Newegg’s website, as part of the SSL
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`or TLS protocols, selects the RC4 cipher suite from among a number of other choices:
`
`Q. Okay. And what happens after the customer accesses Newegg's
`HTTP website and sends this ClientHello message?
`
`A. Right. So the ClientHello is followed by another message called
`the server hello from the – this will be from the Newegg website.
`And the server hello provides one line, it says cipher suite and has
`one entry for that.
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`And so this is the cipher suite selected by what's called the server
`in the TLS protocol and the Newegg websites are the servers in the
`-- in the TLS protocol.
`
`Q. Okay.
`
`A. And so we will use TLS and we will use RC4 for this session.
`
`Q. Okay. And where in the list of cipher suites that you provided is
`that?
`
`A. Well, there were 27, and this one is No. 19, if I'm not mistaken.
`I can't see it from here. Well, yeah, I can. I can't read it very well.
`Anyway, so this is the 19th one. So what's happening is that the
`Client -- the browser wants to work with a lot of different websites,
`and so they're going to support a number of default cipher suites so
`they can -- they can connect securely with a number of different
`websites.
`
`And they'll provide a set of these, and in -- in this protocol, the
`server is the one that selects the cipher suite. And so it will just
`select whichever one is the first one that the server wants to use, if
`it's supported in the list that's provided by the -- the browser.
`
`(11/19 PM Tr. (Jager) at 140:25-142:6; 142:17-20; see also 11/21 PM (Stubblebine) 39:27-41:4
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`(discussing the handshake process and cipher suite selection); 71:10-19.)
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`Dr. Jager testified that “the website deployer chooses how -- what protocol [(e.g., SSL or
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`TLS)] you need to use to connect to that website,” and that “[i]f you don't use the protocol that
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`they selected, then you won't be able to use their website.” (Id. 134:4-8.) In other words, a
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`“customer computer cannot connect to the Newegg https.secure.newegg.com website if it doesn't
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 7 of 21 PageID #: 9336
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`use SSL or TLS.” (11/19 PM Tr. (Jager) at 137:1-7; see also 11/21 PM (Stubblebine) 64:8-21
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`(describing that Newegg makes the decision to require that those connecting to its websites use
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`HTTPS).) However, as Dr. Stubblebine—Newegg’s expert—testified, if a user’s list of available
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`cipher suites did not include RC4, then the server would simply select another cipher. (11/21
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`PM Tr. (Stubblebine) 43:14-45:21.)
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`APPLICABLE LAW
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`Upon a party’s renewed motion for judgment as a matter of law following a jury verdict,
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`the Court asks whether “the state of proof is such that reasonable and impartial minds could
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`reach the conclusion the jury expressed in its verdict.” Fed. R. Civ. P. 50(b); Am. Home Assur.
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`Co. v. United Space Alliance, 378 F.3d 482, 487 (5th Cir. 2004). “The grant or denial of a
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`motion for judgment as a matter of law is a procedural issue not unique to patent law, reviewed
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`under the law of the regional circuit in which the appeal from the district court would usually
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`lie.” Finisar Corp. v. DirectTV Group, Inc., 523 F.3d 1323, 1332 (Fed. Cir. 2008). “A JMOL
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`may only be granted when, ‘viewing the evidence in the light most favorable to the verdict, the
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`evidence points so strongly and overwhelmingly in favor of one party that the court believes that
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`reasonable jurors could not arrive at any contrary conclusion.’” Versata Software, Inc. v. SAP
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`Am., Inc., 717 F.3d 1255, 1261 (Fed. Cir. 2013) (quoting Dresser-Rand Co. v. Virtual
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`Automation, Inc., 361 F.3d 831, 838 (5th Cir. 2004)).
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`Under Fifth Circuit law, a court is “especially deferential” to a jury’s verdict, and will not
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`reverse the jury’s findings unless they are not supported by substantial evidence. Baisden v. I’m
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`Ready Productions, Inc., 693 F.3d 491, 499 (5th Cir. 2012). “Substantial evidence is defined as
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`evidence of such quality and weight that reasonable and fair-minded men in the exercise of
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`impartial judgment might reach different conclusions.” Threlkeld v. Total Petroleum, Inc., 211
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`F.3d 887, 891 (5th Cir. 2000). A motion for judgment as a matter of law must be denied “unless
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 8 of 21 PageID #: 9337
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`the facts and inferences point so strongly and overwhelmingly in the movant’s favor that
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`reasonable jurors could not reach a contrary conclusion.” Baisden 393 F.3d at 498 (citation
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`omitted). Futhermore, “[t]here must be more than a mere scintilla of evidence in the record to
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`prevent judgment as a matter of law in favor of the movant.” Arismendez v. Nightingale Home
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`Health Care, Inc., 493 F.3d 602, 606 (5th Cir. 2007).
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`In evaluating a motion for judgment as a matter of law, a court must “draw all reasonable
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`inferences in the light most favorable to the verdict and cannot substitute other inferences that
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`[the court] might regard as more reasonable.” E.E.O.C. v. Boh Bros. Const. Co., L.L.C., 731
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`F.3d 444, 451 (5th Cir. 2013) (citation omitted). However, “[c]redibility determinations, the
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`weighing of the evidence, and the drawing of legitimate inferences from the facts are jury
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`functions, not those of a judge.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150
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`(2000). “[T]he court should give credence to the evidence favoring the nonmovant as well as
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`that ‘evidence supporting the moving party that is uncontradicted and unimpeached, at least to
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`the extent that that evidence comes from disinterested witnesses.’” Id. at 151 (citation omitted).
`
`ANALYSIS
`
`Newegg’s Motion challenges all aspects of the verdict—direct infringement, active
`
`inducement of infringement, validity, and damages—under F.R.C.P. 50(b).
`
`Direct Infringement
`
`1. The “a new key value in the first and second sequence is used each time a
`predetermined number of blocks have been sent over the communications link”
`limitation.
`
`Newegg asserts that TQP failed to prove the “have been sent” limitation of Claim 1(e)
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`(contained in the construction of the bolded portion below):
`
`generating a second sequence of pseudo-random key values based
`on said seed value at said receiver, each new key value in said
`sequence being produced at a
`time dependent upon said
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 9 of 21 PageID #: 9338
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`predetermined characteristic of said data transmitted over said link
`such that said first and second sequences are identical to one
`another a new one of said key values in said first and said
`second sequences being produced each time a predetermined
`number of said blocks are transmitted over said link.
`
`The Court instructed the jury that the bolded limitation (above) had the following construction:
`
`a new key value in the first and second sequence is used each time
`a predetermined number of blocks have been sent from the
`transmitter over the communication link.
`
`the determination of whether “a
`to
`You should note, as
`predetermined number of said blocks” have been “transmitted over
`said link,” the claim explicitly refers to transmission, not to
`encryption or to some other step of preparing for transmission.
`
`(Dkt. No. 421 at 33:23-34:9.) Generally, Newegg asserts that, in its system, “a new key value” is
`
`generated before the “predetermined number of blocks have been sent from the transmitter over
`
`the communication link,” and that such a system cannot infringe the claims because the
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`“predetermined number of block” must “have been sent” before “a new key value” is generated.
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`(Mot. at 4.) Generally, TQP asserts that the language of Claim 1(e) refers to action at the
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`receiver (not at the transmitter) and that there is no requirement in the claims that, as to the
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`transmitter, the “predetermined number of block” must “have been sent” before “a new key
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`value” is generated. (Resp. at 5 n.4.)
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`As a predicate to the evidence presented on the “have been sent” limitation (discussed
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`below), the Parties also focused on the “predetermined number of blocks” limitation, which
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`generally defines the temporal interval of the claims (as will be seen below). At trial, Dr.
`
`Jager—TQP’s expert—repeatedly
`
`testified
`
`that
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`the “predetermined number of blocks”
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`requirement of Claim Element 1(e) was met in Newegg’s system by a one block unit of 8 bits (or
`
`one byte). (11/20 AM Tr. (Jager) 23:2-24:15; see also 25:19-26:4; 11/19 PM Tr. (Jager)
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 10 of 21 PageID #: 9339
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`148:5-22.) Dr. Jager further testified the block counter in Newegg’s system was built into the
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`RC4 cipher. (11/20 AM Tr. (Jager) 63:14-24.)
`
`Having reviewed the trial record, the Court believes the following pieces of testimony
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`provide a foundation for understanding the evidence underlying the dispute as to the “have been
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`sent” limitation. At trial, Dr. Jager provided the following description of how Element 1(e) was
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`met by Newegg’s system:
`
`Q. Okay. So let's look at the Court's construction of the last part of
`Element 1(e). How does Newegg's use of SSL and RC4 meet this?
`
`A. Well, my understanding of this construction is it's stating that --
`that a new key value in the first and second sequence is used each
`time a predetermined number of blocks have been sent from --
`from
`the
`transmitter -- you can't see
`it all -- over
`the
`communication link.
`
`And this is the Court's construction. The -- you can see we were
`defining
`the
`term predetermined characteristic
`to mean
`predetermined number of blocks.
`
`So this is requiring that some number of blocks in RC4 -- one
`block is the number of blocks is -- is the predetermined
`characteristic.
`
`In addition, the way I think about – the way I understand this is
`that we're requiring a new key value in the first and second
`sequence.
`
`Now, we're -- we're using symmetric key cryptography here so the
`key value has to be the same; we've restricted the sequences to be
`the same; but we also must ensure that encryption on a particular
`block is done with the same key value as decryption.
`
`At this point, we're at claim Element 1(e) requiring that a new key
`value -- the same key value, one value -- in the first and second
`sequences is used.
`
`So it has to be -- it's already -- it's already been used in the first
`sequence, but we're requiring that the same key value be used in
`both sequences at this point in Claim Element 1(e).
`
`So let me show you how I -- how I envision this -- how I think
`about this. So we have the key values in the sequence. We're
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 11 of 21 PageID #: 9340
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`producing key value based on the predetermined characteristic in
`the transmitter.
`
`This key value encrypts a block of ciphertext. The next key value
`will be used to – to encrypt the next block of ciphertext. These are
`transmitted.
`
`So -- so the -- the same new key value has to be used in -- in both
`the first and second sequence for the decryption to come off
`properly. If you use a different key value, you're not going to
`decrypt the data.
`
`So here, when the block arrives, the same new key value is used
`also in the second sequence. So you have to use the same key value
`to decrypt the data so that the -- the invention works.
`
`(11/20 AM Tr. (Jager) at 20:12-22:9.) Dr. Jager also provided the following clarification to his
`
`testimony:
`
`Now, there's some additional constraints on -- in Claim 1(e) about
`the -- the relationship; for example, between the sequences. So
`here the bolded part says the first and second sequences are
`identical. So if there are differences in the first and second
`sequence, then we won't be able to decrypt the data properly and
`get our proper plain text back.
`
`And as was mentioned earlier this morning using this pseudo-
`random number generator, if you have the same seed value, you'll
`produce the same sequence of numbers
`
`So this requires explicitly that the first and second sequences are
`identical to one another.
`
`(11/19 PM Tr. (Jager) at 125:21-126:8.)
`
`Outside of his description of how Claim 1(e) was infringed, Dr. Jager was also
`
`questioned on specific examples. Dr. Jager testified that a set of 20 encrypted blocks (20 one-
`
`byte blocks) would be encrypted, using different keys, and would likely be placed into a
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`common packet before being sent:
`
`Q. For 2 -- I'm sorry -- for 160 bytes, do you know whether that's --
`in the Newegg system, whether that's transmitted all at once or
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 12 of 21 PageID #: 9341
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`whether it's transmitted in 160 different pieces being sent one at a
`time over the Internet?
`
`A. Well, so SSL and TLS don't determine that. But my -- my
`experience is that that's smaller than the maximum packet size, so -
`- so likely it would be transmitted in one.
`
`Q. All at one time?
`
`A. Yeah.
`
`Q. So in that instance in the Newegg system, an encryption key -- a
`new encryption key is used to encrypt Byte No. 2 before encrypted
`Byte No. 1 is sent over the Internet, correct?
`
`A. That's true, but that -- that isn't – that isn't related to the claim
`language, as I understand -- or the claim construction, as I
`understand it.
`
`(11/20 AM Tr. (Jager) At 54:22-55:14.) Dr. Jager was questioned by Newegg’s counsel as to
`
`whether he believed each encrypted block had to “have been sent” before the next block was
`
`encrypted:
`
`Q. (By Mr. Baldauf) Looking at the claim constructions in this
`case, I believe you were asked whether there was anything in the
`claims that required when a sequence of blocks could be sent.
`
`Did you say that there was nothing in the claims that limited that?
`
`A. When the blocks are -- nothing that limits when blocks can be
`sent?
`
`Q. With respect to when a key value is used, do you agree with me
`that the claim requires that a new key value can be used only when
`the previously encrypted block has been transmitted over the
`communication link?
`
`A. I see. Yeah.
`
`So what I was referring to was the transmitter -- that there wasn't a
`limit on when -- constraint on when the transmitter could send the
`block.
`
`But there is a limitation, as you point out here, that the new key
`value, which is the same value, and needs to be the same value in
`the transmitter/receiver for things to work.
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`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 13 of 21 PageID #: 9342
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`So the new key value in the first and second sequence is used -- at
`this time the block has been sent because this is part of 1(e), which
`is describing what's going on in the receiver. It's saying the
`receiver has to use the same key value as the transmitter.
`
`Q. But this construction requires -- has been sent from the
`transmitter over the communication link, correct?
`
`A. Yes.
`
`Q. So we're talking about when blocks are being sent from the
`transmitter to the receiver, correct?
`
`A. No. What we're talking about -- the fact that they have been
`sent.
`
`Q. Correct, have been sent.
`
`A. Yes.
`
`Q. Okay. Thank you.
`
`(11/20 AM Tr. (Jager) at 122:24-124:9.) TQP’s counsel then reexamined Dr. Jager on this point:
`
`Q. (By Mr. Giza) Opposing counsel has asked you about the
`Court's construction of the last part of Element 1(e), and he just
`showed you the construction.
`
`Can you explain to the jury how you understand this construction
`is met using your animation?
`
`A. Yes. So the construction requires a new key value in the first
`and second sequences. So this means that the same key value has
`to be used from the first and second sequences. We don't use the
`same key value in the first sequence and the second sequence.
`
`Then we're not going to encrypt and decrypt with the same key. So
`we're not going to get the data that we sent in the first place.
`
`So the animation -- if I turn it on – there it goes -- shows -- no. I
`turned it off. Okay. There we go -- shows a new key value.
`
`Key Value 1 in the first sequence is used, and then I believe -- and
`then for the next predetermined number of blocks, Key Value 2 is
`used. So they're used in the first sequence.
`
`. . . .
`
`- 13 -
`
`

`
`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 14 of 21 PageID #: 9343
`
`Q. So now the blocks have been transmitted to the receiver. That's
`where this limitation is referring to, right?
`
`A. Yes. The blocks now have been sent from the transmitter over
`the communication link, and so the predetermined number of
`blocks is satisfied. The key value now in the first and second
`sequence is used when the predetermined number of blocks have
`been sent from the transmitter over the communication link.
`
`Q. Okay. And what happens with the -- the next block?
`
`A. I don't think it shows it.
`
`Q. Okay. But with -- when the next block comes to the decryptor,
`what's produced?
`
`A. The -- the second key -- well, so the second key value will be
`produced.
`
`So now the second key value in the first second sequences is used
`each time a predetermined number of blocks have been sent from
`the transmitter over the communication link.
`
`(11/20 AM Tr. (Jager) at 125:1-126:21.) Newegg’s counsel then again asked whether, in Dr.
`
`Jager’s understanding, the second block was encrypted with the second key before the first
`
`encrypted block had been sent:
`
`Q. And what you have in this animation – you show that we've got
`one block, the green block, and two blocks -- the second block, the
`blue block -- block, they've been encrypted already, correct?
`
`A. As is shown here, yes.
`
`Q. And they've each been encrypted using a different key value,
`correct?
`
`A. Block 1 was encrypted with a different key value than Block 2,
`yes.
`
`Q. So Block 2, the blue block, is being encrypted using a new key
`value before Block 1 has been
`transmitted across
`the
`communication link, correct?
`
`A. That's correct.
`
`Q. Thank you.
`
`- 14 -
`
`

`
`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 15 of 21 PageID #: 9344
`
`(11/20 AM Tr. (Jager) at 130:11-24.)
`
`Dr. Subblebine—Newegg’s expert—testified that under TQP’s theory—as presented
`
`above by Dr. Jager—Newegg could not infringe, since, under Dr. Subblebine’s understanding of
`
`the claims, the claims require that the encrypted block must be sent before the second block is
`
`encrypted. (11/21 PM Tr. (Stubblebine) 32:11-33:24; 36:2-17.) Dr. Subblebine testified that, in
`
`Newegg’s system, many encrypted blocks are placed into the same Internet packet before that
`
`packet is sent over the Internet. (Id. 37:14-39:6; 88:1-20; 91:24-92:23.) Dr. Stubblebine
`
`clarified that the claims did allow for multiple blocks to be sent with the same key (e.g., where
`
`the number of blocks was greater than 1), but that Newegg had asserted that the accused number
`
`of blocks was 1. (Id. 53:22-54:6; 56:5-10.)
`
`Condensing the evidence discussed above, the Parties are in substantive agreement that,
`
`in Newegg’s system—or in SSL/TLS in combination with RC4—a first block that has been
`
`encrypted (“Block 1”) with a first key (“Key 1”) is not transmitted before a second block
`
`(“Block 2”) is encrypted with a second key (“Key 2”). Instead, as discussed above, Block 1 is
`
`placed into a packet to be transmitted along with a number of other blocks, each of which is
`
`encrypted with a different key, and is transmitted at some undefined time. The Parties’
`
`substantive dispute is not what evidence was presented at trial but whether Newegg’s system
`
`infringes the claims.
`
`The Court concludes that under either Newegg’s or TQP’s interpretation there was not a
`
`showing of substantial evidence that the claim limitation is infringed.4 The Court’s conclusion is
`
`centered on the lack of substantial evidence showing a direct causal (or temporal) link between
`
`
`4 The Court therefore does not determine whether either interpretation is solely correct or whether the claim
`supports both interpretations. The Court does note that J. Bryson, having been presented with closely related
`arguments concerning the same limitation of the ’730 Patent, concluded that the ambiguity could be resolved. See
`Intuit SJ Order; Intuit SJ Reconsideration Order.
`
`- 15 -
`
`

`
`Case 2:11-cv-00248-JRG Document 461 Filed 07/15/15 Page 16 of 21 PageID #: 9345
`
`the generation of a new key and either the transmission or receipt of the encrypted block, either
`
`in Newegg’s system, in SSL in combination with RC4, or in TLS in combination with RC4.5
`
`The Court finds that the claim limitation clearly requires such a causal (or temporal) link (e.g., “a
`
`new key value is used . . . each time a predetermined number of blocks have been sent from the
`
`transmitter”). The Court finds that this causal (or temporal) link is not simply a requirement that
`
`the same key be used in encryption and decryption, essentially a restatement of using a key, but
`
`is a required causal (or temporal) link between specific elements of the limitation.
`
`The substantial evidence presented at trial was that, in the accused system, the RC4
`
`cipher processes blocks, producing a new key with each block. The Court finds no substantial
`
`evidence that this action of the RC4 cipher is directly coupled to (or directly depends on) when,
`
`if, or the manner in which enciphered blocks are transmitted or received. In other words,
`
`regardless of whether the claim is viewed from the perspective of the transmitter or the receiver,
`
`the Court finds no substantial evidence that “a new key value . . . is used each time a
`
`predetermined number of blocks have been sent from the transmitter over the communication
`
`link.” For example, if viewed from the perspective of the transmitter, the evidence is that new
`
`keys continue to be generated as each block is processed regardless of whether or not each
`
`already enciphered block has been transmitted. As but another example, if viewed from the
`
`perspec

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