EOLAS TECHNOLOGIES INC. v. CORP. 1325 Cite as 399 F.3d 1325 (Fed. Cir. 2005)

dealt only with the second prong of the patented device, we reverse the Claims Pfaff on-sale bar test, because the district Court’s judgment and remand the case for court had previously determined that a further proceedings.4 commercial offer for sale had taken place more than one year before the critical REVERSED and REMANDED. date. As such, Robotic IV ’s relevance, if any, is greatly diminished. Additionally, there is a significant factual difference be- tween the present case and the Robotics cases. In the Robotics cases, the invention had already been conceived prior to the , offer for sale, but the invention ‘‘was still in a developmental stage.’’ Robotic II, 112 F.3d at 1164. Here the patented invention had not yet been conceived when the al- leged offer for sale took place. ‘‘Plaintiff EOLAS TECHNOLOGIES INCORPO- asserts that conception of the patented RATED and the Regents of the Uni- release plate did not occur until after Mod. versity of California, Plaintiffs–Appel- 4 was adopted, and this fact is not disputed lees, by Defendant for purposes of summary judgment,’’ Sparton, No. 92–580C, slip op. v. at 16. In the Robotics cases, there was the potential that an on-sale bar could MICROSOFT CORPORATION, develop, because the invention had at least Defendant–Appellant. been conceived. That is not the case here. No. 04–1234. With no conception of an invention, there cannot be an offer for sale or a sale of that United States Court of Appeals, invention. Finally, the language used in Federal Circuit. the Robotics cases is ‘‘pursuant to an offer to sell that invention.’’ Robotic IV, 249 March 2, 2005. F.3d at 1313 (quoting Robotic II, 112 F.3d at 1168). As we have explained above, Background: Owner of patent for inter- absent any communication between Spar- net browsing software sued software man- ton and the Navy after the issuance of the ufacturer for infringement. The United ECP, the only offer for sale was of the States District Court for the Northern unpatented release plate and not that District of Illinois, Zagel, J., construed claimed in the ’120 and ’233 patents. Ac- claims, 2000 WL 1898853, rejected manu- cordingly, the Robotics cases are inappo- facturer’s inequitable conduct and invalidi- site. ty defenses, 2003 WL 22078029, included foreign sales of accused product in any Conclusion potential royalty award, 274 F.Supp.2d Because we hold that the March 17, 1971 972, and, following jury’s finding of in- ECP was not an offer for sale of the fringement, rejected manufacturer’s post-

4. Our reversal of the applicability of the on as to whether the release plate described in sale bar of § 102 does not, however, settle all the ECP would have rendered the claimed issues as to the validity of the ’120 and ’233 invention obvious by its addition to the prior patents. Under the March 30, 1998 order by art. This is still an open issue before the the Claims Court, no findings have been made Claims Court. 1326 399 FEDERAL REPORTER, 3d SERIES

trial motions, 2004 WL 170334. Manufac- 6. Federal Courts O763.1 turer appealed. Court of Appeals reviews questions of Holdings: The Court of Appeals, Rader, statutory interpretation without deference. Circuit Judge, held that: 7. Patents O82 (1) alleged prior art was not abandoned; Software inventor did not ‘‘abandon’’ (2) fact issue existed as to whether patent invention, for purpose of determining was invalid in light of prior art; and whether it was prior art that invalidated (3) software code, sent abroad by manu- third party’s subsequent patent, by creat- facturer on master disks for copying ing and publicly disclosing improved ver- on to hard drives by foreign computer sion a few weeks after he demonstrated producers, was ‘‘component’’ of infring- allegedly anticipating software to potential ing products, within meaning of statute buyers; improved version contained same proscribing foreign assembly. relevant features as original version. 35 Affirmed in part, vacated in part, and re- U.S.C.A. § 102(g). manded. See publication Words and Phras- es for other judicial constructions and definitions. 1. Patents O314(5), 324.55(4) 8. Patents O75 Patent anticipation is question of fact, reviewed for substantial evidence. 35 Software inventor’s demonstration of U.S.C.A. § 102. invention to potential buyer’s employees without confidentiality agreements consti- 2. Patents O16.13 tuted ‘‘public use,’’ for purpose of deter- Patent obviousness is question of law mining whether software was prior art premised on underlying findings of fact. that invalidated third-party’s subsequent 35 U.S.C.A. § 103. patent. 35 U.S.C.A. § 102(b). See publication Words and Phras- 3. Patents O324.54, 324.55(2) es for other judicial constructions District court’s finding that patent is and definitions. unenforceable due to inequitable conduct is 9. Patents O51(1) reviewed for abuse of discretion; its find- ings on underlying factual issues of materi- Prior knowledge or use by others may ality and intent are reviewed for clear invalidate patent if such knowledge or use error. was accessible to public, even if prior use was abandoned. 35 U.S.C.A. § 102(a, g). 4. Patents O324.5 District court’s patent claim construc- 10. Patents O75 tion is reviewed without deference. Third party prior use accessible to public can be public use bar to patentabili- 5. Courts O96(7) ty. 35 U.S.C.A. § 102(b). Patents O324.5 Question of whether jury instruction 11. Patents O72(1) on issue of patent law is erroneous is To anticipate patent, single reference matter of Federal Circuit law, and is re- must teach each and every limitation of viewed de novo. claimed invention. 35 U.S.C.A. § 102(b). EOLAS TECHNOLOGIES INC. v. MICROSOFT CORP. 1327 Cite as 399 F.3d 1325 (Fed. Cir. 2005)

12. Patents O323.2(3) so grievously unfair as to constitute re- Issue of material fact as to whether versible error; it was uncontested that prior art software enabled display of ob- operating system was involved in operation jects imbedded in Internet web pages pre- of computer programs. cluded summary judgment on question of 19. Patents O259(3) whether it anticipated or made obvious patent for Internet browsing software. 35 Software code, sent abroad by manu- U.S.C.A. §§ 102(b), 103. facturer on master disks for copying on to hard drives by foreign computer produc- 13. Patents O67.1, 73 ers, was ‘‘component’’ of infringing prod- When determining validity of software ucts, within meaning of statute proscribing patent, it is earlier software product itself foreign assembly. 35 U.S.C.A. § 271(f)(1). that constitutes prior art, rather than later See publication Words and Phras- published abstract associated with that es for other judicial constructions earlier product. and definitions. 14. Patents O161 Patents O328(2) When interpreting disputed patent 5,206,951, 5,581,686. Cited as Prior claim terms, court accords terms their cus- Art. tomary meaning in the art at time of in- vention. Patents O328(2) 5,838,906. Cited. 15. Patents O167(1.1) Construing court should consult pat- ent specification to determine whether pat- entee gave claim term meaning inconsis- tent with customary meaning in proper Martin R. Lueck, Robins, Kaplan, Miller technological and temporal context. & Ciresi L.L.P., of Minneapolis, Minneso- ta, argued for plaintiff-appellees. With 16. Patents O101(2) him on the brief were Jan M. Conlin, ‘‘Executable application’’ to be located Richard M. Martinez, and Munir R. Me- and identified, as called for in patent for ghjee. Of counsel was Emily M. Rome. Internet browser software, meant any computer program code, that was not op- Constantine L. Trela, Jr., Sidley Austin erating system or utility, that was Brown & Wood LLP, of Chicago, Illinois, launched to enable end user to directly argued for defendant-appellant. With him interact with data. on the brief were David T. Pritikin, Rich- ard A. Cederoth, Robert N. Hochman, and 17. Patents O167(1.1) Carter G. Phillips, of Washington, DC. Of Absent clear disclaimer, embodiments counsel on the brief were H. Michael Hart- in specification do not limit broader patent mann, Brett A. Hesterberg, and Steven P. claim language. Petersen, Leydig, Voit & Mayer, Ltd., of 18. Patents O324.56 Chicago, Illinois. Of counsel was Thomas Unobjected-to jury instruction, in ac- Andrew Culbert, Microsoft Corporation, of tion for infringement of Internet browser Redmond, Washington. , that inventors contem- Gregory S. Coleman, Weil, Gotshal & plated browser’s use of some outside re- Manges LLP, of Austin, Texas, for amicus sources such as operating system, was not curiae Oracle Corporation. With him on 1328 399 FEDERAL REPORTER, 3d SERIES the brief were Matthew D. Powers and conduct defense, this court vacates the dis- Edward R. Reines, of Redwood Shores, trict court’s decision and remands for a California. new trial on these issues. In addition, this John D. Vandenberg, Klarquist Spark- court affirms the district court’s claim con- man, LLP, of Portland, Oregon, for amici struction of ‘‘executable application’’ and curiae Autodesk, Inc., et al. finds the district court did not err in its jury instruction with regard to the claim Charles K. Verhoeven, Quinn Emanuel limitation ‘‘utilized by said browser to Urquhart Oliver & Hedges, of San Fran- identify and locate.’’ Finally, this court cisco, California, for amici curiae Netscape affirms the district court’s holding that Communications Corporation, et al. With ‘‘components,’’ according to section him on the brief were David A. Perlson 271(f)(1), includes software code on golden and Jennifer A. Kash. master disks. Gerard M. Stegmaier, Wilson Sonsini Goodrich & Rosati, of Reston, Virginia, for I. amicus curiae Association For Competitive On February 2, 1999, Eolas brought an Technology. With him on the brief was infringement action against Microsoft. In Craig M. Tyler. particular, Eolas alleged infringement of claims 1 and 6 of the ’906 patent.1 Before RADER, Circuit Judge, The ’906 patent carries the title ‘‘distribut- FRIEDMAN, and PLAGER, Senior ed hypermedia method for automatically Circuit Judges. invoking external application providing in- RADER, Circuit Judge. teraction and display of embedded objects within a hypermedia document.’’ Eolas The United States District Court for the alleged that certain aspects of Microsoft’s Northern District of Illinois granted final (IE) product incorpo- judgment to Eolas Technologies Incorpo- rate its invention. Microsoft denied in- rated and the Regents of the University of fringement and asserted that the claims California (collectively, Eolas) after a jury were invalid and unenforceable. found that Microsoft Corporation (Micro- soft) infringed claims 1 and 6 of U.S. Pat- Essentially, the claimed invention allows ent No. 5,838,906 (the ’906 patent) and a user to use a in a fully actively induced United States users of interactive environment. For example, Internet Explorer to infringe claim 1. The the invention enables a user to view news district court also invoked 35 U.S.C. clips or play games across the Internet. § 271(f) to include foreign sales of Internet The ’906 claims require a web browser Explorer in the royalty awarded to Eolas. with certain properties. Specifically, the Because the district court improperly invention calls for a browser located in a granted judgment as a matter of law ‘‘distributed hypermedia environment.’’ (JMOL) in Eolas’ favor on Microsoft’s an- In operation, the claimed browser lo- ticipation and obviousness defenses and cates a web page, or distributed hyperme- improperly rejected Microsoft’s inequitable dia document, with a uniform resource lo-

1. The University of California filed the ’906 Patent was ordered by the Director and is Patent on October 17, 1994, which later is- currently pending in the United States Patent sued on November 17, 1998. The University and Trademark Office. See Director Initiated later granted an exclusive license for the ’906 Order for Reexamination, Control No. Patent to Eolas. A reexamination of the ’906 90/006,831. EOLAS TECHNOLOGIES INC. v. MICROSOFT CORP. 1329 Cite as 399 F.3d 1325 (Fed. Cir. 2005)

cator (URL). Then the browser parses ed by Pei–Yuan Wei (Wei), was in public the text of the web page including an use more than one year before Eolas’ in- ‘‘embed text format’’ specifying an object vention. Microsoft asserted that this prior external to the web page that has ‘‘type art would invalidate the invention under 35 information associated with it’’ (i.e., U.S.C. § 102(b). Microsoft also used the spreadsheets, databases). The browser Viola reference to challenge validity on the next uses that type information to identify basis of sections 102(a), 102(g) and 103. and locate an executable application that Wei testified at trial that he had written automatically enables interactive viewing code for Viola so that the browser could of the object. The inventors have consis- handle embedded automatically-launched tently maintained that ‘‘[t]his invention interactive programs in May 1993. Wei was the first instance where interactive testified as well that he demonstrated that applications were embedded in Web capability to Sun Microsystems engineers pages.’’ The district court found that the at that time. Microsoft corroborated exis- invention was reduced to practice no later tence of this code at trial through a com- than January 27, 1994, when it was pre- puter demonstration of an archived file, sented at a Web conference. dated May 12, 1993. The parties refer to During prosecution of the ’906 patent, this version of Viola as DX34. Wei demon- the examiner rejected the claims several strated DX34 to two Sun Microsystems times for obviousness. Besides the World engineers on May 7, 1993. Wide Web, HTTP and HTML, the examin- er cited three main prior art references Wei also demonstrated a different ver- during prosecution: (1) the Web sion of Viola to the district court. This Browser, which allows users to go from second exhibit, DX37, was allegedly Wei’s one website to another by clicking links on attempt on May 27, 1993, to improve web pages and has some capability to dis- DX34. Apparently due to a bug in the play objects; (2) U.S. Patent No. 5,206,951 program, Wei could not make the DX37 to Khoyi et al. (Khoyi), which describes version function in the courtroom in con- an Object Linking and Embedding System junction with the Internet. Microsoft’s (OLE); 2 and (3) U.S. Patent No. 5,581,686 technical expert testified that both ver- to Koppolu et al. (Koppolu), which covers sions of the Viola code taught all of the some OLE technology where the applica- limitations of the claims at issue. tion displaying data may be a component, The district court found as a matter of such as an object handler that is imple- law that Wei abandoned, suppressed or mented as a Dynamically Linked Library concealed DX34 within the meaning of sec- 3 (DLL). The examiner allowed the claims tion 102(g) because Wei disclosed that ver- on March 30, 1998. sion only to the Sun engineers and then Microsoft’s Invalidity Defenses changed it. The district court extended At trial, Microsoft presented evidence this finding to section 102(b) and found as that the Viola Web browser (Viola), invent- a matter of law that since DX34 was aban-

2. OLE allows a visual object or data created plication, such as Word or Excel, which can using one application to be displayed and run independently of another application. An edited in another application. implementation of OLE technology would be using a standalone application, such as Word 3. An example of a DLL is spell check; a DLL which may then utilize a component or DLL is a component that can run only within an- such as spell check. other application. Compare a standalone ap- 1330 399 FEDERAL REPORTER, 3d SERIES doned, showing it to the Sun engineers and March of 1994. Although available on could not constitute a public use. The the Internet, Doyle never obtained the Vi- district court prevented Microsoft from ola code. presenting any evidence of DX34 to the The district court found that Doyle’s jury and later granted Eolas’ Rule 50 mo- knowledge of Viola was not enough to trig- tion for JMOL in ruling that neither the ger his obligation to bring it to the atten- anticipation nor obviousness defenses tion of the examiner of the ’906 patent. could be presented to the jury after hear- The district court determined that Viola ing testimony on those issues from Micro- soft’s expert. was not prior art and as such not material. Although questioning Doyle’s credibility Microsoft’s Inequitable Conduct Defense about his role in the prosecution of the Michael D. Doyle (Doyle), one of the patent, the trial court nonetheless found inventors of the ’906 patent, knew of Viola that he had acted with candor before the yet did not disclose any information re- PTO because ‘‘it was the law and it was too garding that reference to the United dangerous not to do so.’’ States Patent and Trademark Office (PTO). On August 31, 1994, Doyle issued Claim Construction for Infringement a press release to an e-mail list indicating Claim 1 is a method claim; claim 6 a that researchers at the University of Cali- product claim. The parties and the dis- fornia had ‘‘created software for embed- trict court focused on claim 6 to interpret ding interactive program objects within the claims because Eolas asserted that the hypermedia documents.’’ That same day, computer program product in claim 6 em- Wei contacted Doyle via e-mail in response bodies the method of claim 1. Claim 6 to the press release. Wei alleged that his reads: May 1993 demonstration of Viola (version 6. A computer program product for use DX34) to Sun Microsystems engineers ex- in a system having at least one client hibited a way to embed interactive objects workstation and one network server cou- and transport them over the web. Wei pled to said network environment, directed Doyle to his paper about Viola wherein said network environment is a (the Viola paper), which was available on distributed hyperrnedia environment, the Internet at least by August 13, 1994. the computer program product compris- Doyle downloaded and read the paper. In ing: a later email exchange, Doyle attempted to get Wei to concede that he was not the a computer usable medium having com- first to invent. Additionally, Doyle told puter readable program code physically Wei the inventions were different. embodied therein, said computer pro- On October 17, 1994, the University of gram product further comprising: California filed the ’906 patent application. computer readable program code for In 1998, before issuance of the ’906 patent, causing said client workstation to exe- Doyle did more research on Viola and cute a browser application to parse a made a folder labeled ‘‘Viola stuff.’’ This first distributed hypermedia document folder included press releases of two to identify text formats included in said ‘‘beta’’ 4 versions of Viola from February distributed hypermedia document and to

4. A ‘‘beta’’ release occurs after the develop- sion for specialists to test to provide feedback ment stage and allows general users to try to the software’s author. new software. An ‘‘alpha’’ release is a ver- EOLAS TECHNOLOGIES INC. v. MICROSOFT CORP. 1331 Cite as 399 F.3d 1325 (Fed. Cir. 2005)

respond to predetermined text formats utility, that is launched to enable an end to initiate processes specified by said user to directly interact with data.’’ Id. text formats; 2000 WL 1898853, at *13. The district computer readable program code for court also determined that ‘‘utilized by said causing said client workstation to utilize browser to identify and locate’’ means that said browser to display, on said client ‘‘the enumerated functions are performed workstation, at least a portion of a first by the browser.’’ Id. Microsoft appeals hypermedia document received over said the ‘‘executable application’’ claim con- network from said server, wherein the struction and the jury instruction given portion of said first hypermedia docu- with regard to the term ‘‘utilized by said ment is displayed within a first browser- browser to identify and locate.’’ controlled window on said client works- The jury instruction regarding ‘‘utilized tation, wherein said first distributed hy- by said browser to identify and locate’’ permedia document includes an embed included in relevant part: text format, located at a first location in said first distributed hypermedia docu- Utilized by said browser to identify and ment, that specifies the location of at locate means that the enumerated func- least a portion of an object external to tions are performed by the browserTTTT the first distributed hypermedia docu- The inventors contemplated the brow- ment, wherein said object has type infor- ser’s use of some outside resources such mation associated with it utilized by as the operating system as operating said browser to identify and locate an systems are always involved in the oper- executable application external to the ation of computer programs. Neverthe- first distributed hypermedia document, less it must be the browser, not the and wherein said embed text format is operating system, that must do the parsed by said browser to automatically heavy lifting of identifying and locating invoke said executable application to ex- TTTT ecute on said client workstation in order to display said object and enable interac- Statutory Construction of 35 U.S.C. tive processing of said object within a § 271(f) display area created at said first location Eolas claimed royalty damages for both within the portion of said first distribut- foreign and domestic sales of Windows ed hypermedia document being dis- with IE. Microsoft moved, in limine, to played in said first browser-controlled prevent Eolas from seeking damages window. based on foreign sales under section 271(f). U.S. Patent No. 5,838,906 (issued Nov. 17, 1998), col. 17, ll. 58—col. 18, ll. 30 (emphas- Microsoft exports a limited number of es added). After a Markman hearing, the golden master disks containing the soft- district court construed the terms ‘‘execut- ware code for the Windows operating sys- able application’’ and ‘‘utilized by said tem to Original Equipment Manufacturers browser to identify and locate.’’ Eolas (OEMs) abroad who use that disk to repli- Techs., Inc. v. Microsoft Corp., No. 99 C cate the code onto computer hard drives 0626, 2000 WL 1898853 (N.D.Ill. Dec. 29, for sale outside of the United States. The 2000). The district court determined that golden master disk itself does not end up ‘‘executable application’’ as used in the ’906 as a physical part of an infringing product. patent refers to ‘‘any computer program The district court denied Microsoft’s mo- code, that is not the operating system or a tion, finding that source code is the legal 1332 399 FEDERAL REPORTER, 3d SERIES equivalent of a piece of computer hardware could properly proceed to find a verdict for and that ‘‘in a legal sense, a[sic] source the party producing it, upon whom the code is a made part of a computer prod- onus of proof is imposed. In this regard, uct.’’ The district court determined that this court must view the evidence in a light the code on the golden master disks consti- most favorable to the non-moving party.’’ tutes ‘‘components’’ of an infringing prod- Mahurkar v. C.R. Bard, Inc., 79 F.3d uct for combination outside of the United 1572, 1576 (Fed.Cir.1996) (internal quota- States under section 271(f). tions omitted). This court reviews inequi- After a jury trial, the district court en- table conduct for an abuse of discretion; tered judgment in favor of Eolas. The ‘‘[t]he underlying factual issues of materi- district court found that: (1) Microsoft did ality and intent [are reviewed] for clear not show invalidity of the ’906 claims; (2) error.’’ CFMT, Inc. v. Yieldup Int’l Corp., Microsoft did not proffer clear and con- 349 F.3d 1333, 1337 (Fed.Cir.2003). vincing evidence of inequitable conduct; [4–6] This court reviews claim con- (3) Microsoft infringed claims 1 and 6 and struction without deference. Markman v. actively induced United States users of IE Westview Instruments, Inc., 52 F.3d 967, to infringe claim 1; and (4) Eolas’s royalty 979 (Fed.Cir.1995) (en banc). ‘‘The ques- for Microsoft’s infringement should include tion of whether a jury instruction on an foreign sales of the patented computer issue of patent law is erroneous is a matter code under section 271(f). The jury of Federal Circuit law and is reviewed de awarded Eolas a royalty of $1.47 per unit novo.’’ Sulzer Textil A.G. v. Picanol N.V., of infringing product, which amounted to a 358 F.3d 1356, 1363 (Fed.Cir.2004). Last- total award of $520,562,280. In its order, ly, ‘‘[t]his court reviews questions of statu- the district court issued a permanent in- tory interpretation without deference.’’ junction against Microsoft and awarded U.S. Steel Group v. United States, 225 pre-judgment interest on the award. The F.3d 1284, 1286 (Fed.Cir.2000). permanent injunction has been stayed pending this appeal. This court has juris- III. diction under 28 U.S.C. § 1295(a)(1). PRIOR ART DEFENSES II. [7] As explained above, the district [1–3] Anticipation is a question of fact, court found as a matter of law that DX34 which this court reviews for substantial was abandoned, suppressed or concealed evidence. In re Hyatt, 211 F.3d 1367, within the meaning of section 102(g) be- 1371 (Fed.Cir.2000). Obviousness is a cause Wei disclosed that version to Sun question of law premised on underlying Microsystems’ engineers and then changed findings of fact. Graham v. John Deere it. The district court extended this finding Co., 383 U.S. 1, 17–18, 86 S.Ct. 684, 15 to section 102(b), finding that abandon- L.Ed.2d 545 (1966). This court ‘‘review[s] ment of DX34 meant that the disclosure to a grant of JMOL de novo, reapplying the the Sun Microsystems engineers could not district court’s JMOL standard anew.’’ constitute a public use. The district court Union Carbide Chems. & Plastics Tech. prevented Microsoft from presenting any Corp. v. Shell Oil Co., 308 F.3d 1167, 1185 evidence of DX34 to the jury and later (Fed.Cir.2002). ‘‘In evaluating a Rule granted Eolas’ Rule 50 motion for JMOL 50(a) motion, this court must examine the that DX37 did not anticipate or render evidence to determine whether a jury the ’906 patent obvious. Consequently, EOLAS TECHNOLOGIES INC. v. MICROSOFT CORP. 1333 Cite as 399 F.3d 1325 (Fed. Cir. 2005) the jury did not consider Microsoft’s antic- ternet site and notified a Sun Microsys- ipation and obviousness defenses. tems engineer that DX37 was available for The district court erred in finding as a downloading. The district court errone- matter of law that DX34 was abandoned, ously concluded that the creation and pub- suppressed, or concealed within the mean- lic disclosure of DX37, an improved ver- ing of section 102(g). The relevant portion sion of DX34, ‘‘abandoned’’ the invention of section 102(g) states: under section 102(g). A person shall be entitled to a patent The district court’s conclusion inappro- unless— priately narrowed the definition of ‘‘inven- tion,’’ as used in section 102(g). This (g) (2) before such person’s invention court’s interference case law illustrates thereof, the invention was made in this this point. In interference cases, one par- country by another inventor who had ty will sometimes assert that the other not abandoned, suppressed, or concealed party abandoned the invention by unrea- it. sonably delaying disclosure of the inven- 35 U.S.C. § 102(g) (2004). tion after first reducing it to practice. This court’s case law distinguishes be- However, this court excuses delay between tween two types of conduct that invoke the the first reduction to practice and public exception within section 102(g). Apotex disclosure if the inventor continued to re- USA, Inc. v. Merck & Co., 254 F.3d 1031, fine, perfect, or improve the invention. 1038 (Fed.Cir.2001). The first arises when Lutzker v. Plet, 843 F.2d 1364, 1367 (Fed. an inventor actively conceals his invention Cir.1988) (‘‘An inference of suppression or from the public. Fujikawa v. Wattanasin, concealment may be overcome with evi- 93 F.3d 1559, 1567 (Fed.Cir.1996). Active dence that the reason for the delay was to concealment ‘‘refers to situations in which perfect the invention.’’). ‘‘The law does an inventor designedly, and with the view not punish an inventor for attempting to of applying it indefinitely and exclusively perfect his process before he gives it to the for his own profit, withholds his invention public. In fact, reasonable experimenta- from the public.’’ Id. The second occurs tion is frequently encouraged.’’ Frey v. when ‘‘abandonment, suppression, or con- Wagner, 24 C.C.P.A. 823, 87 F.2d 212, 215 cealment may be inferred based upon the (1937). prior inventor’s unreasonable delay in In this case, DX37, which includes the making the invention publicly known.’’ same contested feature as DX34, repre- Dow Chem. Co. v. Astro–Valcour, Inc., 267 sents an improved version of Wei’s inven- F.3d 1334, 1342 (Fed.Cir.2001). tion, not an entirely new invention, as the This case does not fit into either catego- district court suggests. Because creating ry. The record contains no evidence that an improved version of an invention does Wei either intentionally withheld DX34 not in any sense abandon the original in- from the public or unreasonably delayed a vention, the district court erroneously ex- patent application or public disclosure. In cluded DX34 as prior art. Improvements contrast, the record indicates Wei not only may enhance an invention prior to disclo- demonstrated DX34 to two Sun Microsys- sure or patent application. If improve- tems engineers without a confidentiality ments caused loss of the original invention agreement (on May 7, 1993), but only under the erroneous rule adopted by the twenty-four days later (on May 31, 1993) district court, the public would lose the posted DX37 on a publicly-accessible In- benefit of diligent efforts to produce a 1334 399 FEDERAL REPORTER, 3d SERIES more useful product. Eolas’ arguments Netscape Communications Corp. v. that Wei’s changes to the functionality and Konrad, 295 F.3d 1315 (Fed.Cir.2002), in- architecture of DX34 show abandonment forms the application of these principles to are unpersuasive because such changes this case. In Netscape, Konrad owned merely reflect improvements in advancing three computer-related patents. 295 F.3d versions of software code. Thus, this at 1318. This court affirmed a finding of court remands for proceedings to consider invalidity based on Konrad’s prior demon- whether DX34 is prior art and, if so, stration of the invention to two employees whether it invalidates the ’906 patent. at the University of California without any [8] This court also reverses the district obligation of confidentiality. Id. at 1319. court’s finding that Wei’s May 7, 1993, Similarly, in the case at bar, Wei demon- demonstration to two Sun Microsystems strated DX34 to two Sun engineers who employees without confidentiality agree- were under no confidentiality obligation. ments did not constitute a public use under Indeed, the Sun engineers informed Wei section 102(b). ‘‘Public use [under 35 that they intended to share information U.S.C. § 102(b) ] includes any use of the gleaned from Wei with other people at claimed invention by a person other than Sun. Eolas attempts to distinguish Net- the inventor who is under no limitation, scape on the basis that Konrad was the restriction or obligation of secrecy to the patentee in that case, whereas here, Wei is inventor.’’ Netscape Communications a third party. However, a third party Corp. v. Konrad, 295 F.3d 1315, 1320 (Fed. may, and often does, initiate a public use. Cir.2002). Because the Sun Microsystems See, e.g., Baxter, 88 F.3d at 1058–59. employees were under no limitation, re- Therefore, Wei’s third-party disclosure striction or obligation of secrecy to Wei, may erect a public use bar. this court determines the demonstration Eolas further points to W.L. Gore & may constitute a public use. Associates, Inc. v. Garlock, Inc., 721 F.2d [9, 10] The district court erred in link- 1540, 1550 (Fed.Cir.1983), to advance its ing its section 102(b) public use finding to position that section 102(b) does not apply its section 102(g) abandonment finding. A in this case. In Gore, a third party used public use under section 102(b) cannot be the patented invention more than one year undone by subsequent actions. The inqui- prior to the patentee’s application date and ry into a section 102(b) public use proceeds the court found no public use. Id. at 1549. independent of the inquiry into a section Gore represents a different factual situa- 102(g) abandonment. ‘‘[N]otwithstanding tion. The third party in Gore deliberately abandonment of the prior use—which may chose to keep the invention as a trade preclude a challenge under section secret and avoid disclosure through a pat- 102(g)—prior knowledge or use by others ent application. Accordingly, the Gore may invalidate a patent under section third party had a confidentiality agree- 102(a) if the prior knowledge or use was ment in place with its employees to pre- accessible to the public.’’ Woodland Trust vent public disclosure of the method whose v. Flowertree Nursery, 148 F.3d 1368, 1370 subject matter could not otherwise be pub- (Fed.Cir.1998). Similarly, third party pri- licly discerned. Id. This court found the or use accessible to the public is a section Gore third party could not both elect to 102(b) bar. See Baxter Int’l, Inc. v. COBE avoid the patent system and still invoke Labs., Inc., 88 F.3d 1054, 1058–59 (Fed. that system to erect a third-party public Cir.1996). use bar to an inventor who disclosed the EOLAS TECHNOLOGIES INC. v. MICROSOFT CORP. 1335 Cite as 399 F.3d 1325 (Fed. Cir. 2005)

invention for patenting. Thus, the secret The district court also erred in its grant- activity in Gore did not constitute public ing JMOL on obviousness. Dr. Kelly’s tes- use. Id. This case, however, is very differ- timony provided sufficient evidence to sur- ent. Wei made no attempt to maintain vive JMOL. In his testimony, Dr. Kelly confidentiality or to deliberately evade dis- discussed: (1) the scope of DX34 and closure. Wei’s activities may erect a third DX37; (2) the potential differences be- party public use bar. tween DX34 and DX37 and the claimed invention; and (3) the state of the art and [11, 12] In addition, this court vacates the level of skill in the art in 1993. Dr. the district court’s JMOL that DX37 did Kelly’s testimony could also be read to not anticipate the ’906 patent. To antici- provide a suggestion to use a browser in a pate, a single reference must teach each distributed hypermedia environment as in and every limitation of the claimed inven- the claimed invention. Although Micro- tion. See EMI Group N. Am., Inc. v. soft’s direct examination of Dr. Kelly fo- Cypress Semiconductor Corp., 268 F.3d cused on anticipation, the information so- 1342, 1350 (Fed.Cir.2001). When viewed licited from Dr. Kelly might also support in ‘‘a light most favorable’’ to Microsoft, an argument of obviousness in the alterna- the testimony by Microsoft’s expert, Dr. tive. In light of this court’s determination Kelly, presents a question of fact as to that DX34 was not abandoned or con- whether DX37 anticipates the ’906 patent. cealed, Microsoft should also have the op- See Mahurkar v. C.R. Bard, Inc., 79 F.3d portunity to present DX34 as part of its 1572, 1576 (Fed.Cir.1996). obviousness defense. See Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1568 Dr. Kelly testified that DX37 is in a (Fed.Cir.1987) (indicating that a key pre- computer usable medium with a program liminary legal inquiry in obviousness anal- for use in a distributed hypermedia envi- ysis is: ‘‘what is the prior art?’’). Weigh- ronment. Further, Dr. Kelly observed ing the facts in favor of the non-moving key features in DX37, such as a method to party, as required by Rule 50, a reasonable parse a hypermedia document to identify jury should have the opportunity to deter- text formats, to display at least a portion mine whether the claimed invention would of the hypermedia document on a client have been obvious at the time of invention workstation, to include an embed text for- based on the record. mat that specifies the location of an object external to the hypermedia document, to In sum, with respect to the district identify and locate an executable applica- court’s prior art rulings, this court finds: tion, and to automatically display the ob- the district court erred in finding as a ject and enable the user to interact with it. matter of law that DX34 was abandoned, This testimony arguably supports Micro- suppressed or concealed within the mean- soft’s argument that DX37 teaches all of ing of section 102(g); Wei’s May 7, 1993 the limitations of the ’906 patent. The demonstration to two Sun Microsystems district court dismissed Dr. Kelly’s testi- employees without confidentiality agree- mony as ‘‘conclusory.’’ This court hesi- ments was a public use under section tates to disturb the district court’s role in 102(b); and the district court erred in its assessing evidence, but anticipation is a JMOL that DX37 did not as a matter of question of fact. Accordingly, this particu- law anticipate or render the ’906 patent lar determination lay within the province obvious. As a result, this court remands of the jury. for additional proceedings on these issues. 1336 399 FEDERAL REPORTER, 3d SERIES

INEQUITABLE CONDUCT Labs., Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1360 (Fed.Cir.2004). [13] This court also vacates the district court’s decision on inequitable conduct. [16] The district court construed ‘‘exe- Again the district court based its inequita- cutable application’’ to mean ‘‘any comput- ble conduct finding on the misunderstand- er program code, that is not the operating ing that Viola could not possibly constitute system or a utility, that is launched to prior art. Relying on that erroneous de- enable an end user to directly interact with termination, the district court concluded data.’’ Microsoft asserts that this term that Viola could not be material to patenta- should be construed as ‘‘standalone pro- bility. As discussed above, the district grams.’’ Because, absent a disclaimer, the court erred in determining that DX34 was claims of the ’906 patent are not limited to abandoned, suppressed or concealed within the embodiments listed in the specification, the meaning of section 102(g). Further, this court affirms the district court’s con- struction. the district court did not explain a reason for declining to consider DX37, also creat- [17] As construed by the district court, ed prior to Doyle’s invention, as immateri- ‘‘executable application’’ includes applica- al to patentability of the ’906 patent. In tions or components that are not standal- respect to potential prior art software un- one, i.e., DLLs such as spell check. Such der section 102(b), this court has explained applications or components can only run that the software product constitutes prior when invoked by some other application. art, not necessarily the later published ab- Microsoft asserts that its construction is stract associated with that software prod- consistent with the ordinary meaning of uct. In re Epstein, 32 F.3d 1559, 1567–68 the term and that the specification does (Fed.Cir.1994). Similarly, in the case at not otherwise define the term. Microsoft bar, the Viola browser itself, not the later correctly points out that all of the dis- developed Viola paper or ‘‘Viola stuff’’ file, closed embodiments in the specification de- constitutes prior art. On remand, the dis- scribe standalone programs (i.e., word pro- trict court will have an opportunity to in- cessors and spreadsheets). Nonetheless, clude this potential prior art in its inequi- absent a clear disclaimer in the specifica- table conduct inquiry. At the same time, tion, the embodiments in the specification the district court may reconsider its find- do not limit broader claim language. Lie- ings on Doyle’s intent to deceive the PTO. bel–Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 907–08 (Fed.Cir.2004). CLAIM CONSTRUCTION The record shows that the term ‘‘execut- able application’’ does not have a custom- [14, 15] When interpreting disputed ary meaning in the computer science field. claim terms, this court accords claim terms Therefore, the district court appropriately their customary meaning in the art at the declined to impose a sharp limitation on its time of invention. Home Diagnostics, Inc. scope. Accordingly, the trial court cor- v. Lifescan, Inc., 381 F.3d 1352, 1355 (Fed. rectly perceived that ‘‘application’’ means Cir.2004). Further, a construing court ‘‘a computer program, that is not the oper- should consult the specification to deter- ating system or a utility, that is designed mine whether the patentee gave a claim to allow an end-user to perform some spe- term a meaning inconsistent with that cus- cific task.’’ The district court also found tomary meaning in the proper technologi- support for this meaning in technical dic- cal and temporal context. Metabolite tionaries. For instance, the 1994 Micro- EOLAS TECHNOLOGIES INC. v. MICROSOFT CORP. 1337 Cite as 399 F.3d 1325 (Fed. Cir. 2005) soft Press Computer Dictionary defined that the Khoyi patent used library routines ‘‘application’’ as ‘‘a computer program de- (i.e., components), while their invention did signed to help people perform a certain not. In addition, Microsoft claims the ap- type of work. An application thus differs plicants argued the Koppolu patent taught from an operating system (which runs a away from using standalone applications. computer), a utility (which performs main- A review of the prosecution history does tenance or general-purpose chores), and a not show any disclaimer as Microsoft con- language (with which computer programs tends. are created)TTTT’’ Microsoft Press Com- The applicants distinguished Khoyi on puter Dictionary 23–24 (2d ed.1994). A the grounds that the display of the data few years later, the same dictionary de- object provided by the Khoyi functionality fined ‘‘application’’ as ‘‘a program designed was not interactive, and in the ’906 inven- to assist in the performance of a specific tion such interactivity could be achieved task, such as word processing, accounting, ‘‘without requiring Khoyi-like capabilities or inventory management. Compare utili- in the operating system.’’ Thus, the appli- ty.’’ Microsoft Press Computer Dictionary cants distinguished Khoyi on the feature of 27 (3d ed.1997). Still another source on interactivity, not on its use of standalone the meaning of technical language defines programs. While the applicants included ‘‘application’’ as a ‘‘program or group of language about library routines and DLLs programs designed for end users.’’ ZD in their response, they did not distinguish Webopaedia, at http://www.zdwebopedia. the ’906 invention based on these features, com/TERM/a/application.. rather such features were merely included Neither the specification nor the prose- in language that outlined Khoyi’s - cution history disclaims the district court’s tion. Similarly, the applicants distin- construction of ‘‘executable application.’’ guished Koppolu by pointing out that the The ’906 patent makes no reference to the particular kind of object handlers of Kop- phrase ‘‘executable application’’ except in polu did not allow interactive processing of the claims. See generally the ’906 patent. the object, because Koppolu did not enable In addition, the specification repeatedly such editing of the object. indicates that the preferred embodiment is In light of the applicant’s arguments only one possibility for practice of the in- distinguishing Khoyi and Koppolu, the ex- vention. Id. Because this court ‘‘consis- aminer’s statement that ‘‘the claimed ex- tently declines to construe claims accord- ternal executable application is not a code ing to the preferred embodiment,’’ this library extension nor object handler (e.g. court agrees with the district court that windows dll and OLE) as pointed out in Microsoft’s proposed construction, limiting applicant’s argument. (Paper # 19 pages ‘‘executable application’’ to standalone pro- 12–14),’’ appears in the context of the ap- grams, does not comport with the entire plicant’s narrow argument. Thus, the ex- technological and temporal context for this aminer’s statement also does not evince a term. N. Telecom Ltd. v. Samsung Elecs. clear disclaimer. The arguments the ex- Co., 215 F.3d 1281, 1293 (Fed.Cir.2000). aminer cited in the Reasons for Allowance The prosecution history does not dis- simply describe OLE object handlers. claim the district court’s construction of The applicants cite problems with OLE ‘‘executable application,’’ and thus supports object handlers, but do not disclaim any- the trial court’s reading of the term. Ac- thing. They simply argue that the cited cording to Microsoft, the applicants argued references do ‘‘not disclose or suggest the 1338 399 FEDERAL REPORTER, 3d SERIES

missing features.’’ In addition, the appli- relief to be granted when no objection was cant has ‘‘no obligation to respond to an raised at trialTTTT Under such circum- examiner’s statement of Reasons for Al- stances, the question devolves into wheth- lowance, and the statement of an examiner er an error occurred in the conduct of the will not necessarily limit a claim.’’ ACCO trial that was so grievous as to have ren- Brands, Inc. v. Micro Sec. Devices, 346 dered the trial unfair.’’ Norian Corp. v. F.3d 1075, 1079 (Fed.Cir.2003); see also N. Stryker Corp., 363 F.3d 1321, 1329 (Fed. Telecom Ltd., 215 F.3d at 1294 (requiring Cir.2004) (internal citation and quotation that prosecution history statements have omitted). This court detects no grievous ‘‘reasonable clarity and deliberateness’’ to unfairness in this instruction despite Mi- narrow claim scope). Overall, without a crosoft’s argument that a properly in- narrow customary ordinary meaning for structed jury could not have possibly found ‘‘executable application,’’ the district court that the accused products infringe. As a correctly gleaned the proper definition of whole, the jury instruction properly guided the term from the intrinsic evidence in- the jury. Thus, the district court did not cluding the patent claims and prosecution err in its jury instruction on this disputed history. claim term. [18] Turning next to the jury instruc- 35 U.S.C. § 271(f) tion on ‘‘utilized by said browser to identi- fy and locate,’’ the district court informed [19] This court must also decide the jurors that ‘‘[t]he inventors contem- whether software code made in the United plated the browser’s use of some outside States and exported abroad is a ‘‘compo- resources such as the operating system.’’ nent[ ] of a patented invention’’ under sec- A review of the trial record shows that tion 271(f). Section 271(f)(1) states: Microsoft waived its right to appeal this Whoever without authority supplies or issue. causes to be supplied in or from the Microsoft commented on the proposed United States all or a substantial portion jury instructions to the district court. In of the components of a patented inven- discussing the particular sentence Micro- tion, where such components are uncom- soft now takes issue with, Microsoft’s bined in whole or in part, in such a counsel stated to the district court, ‘‘It’s manner as to actively induce the combi- undisputable, but it’s also immaterial TTT nation of such components outside the the fact that operating systems are in- United States in a manner that would volved in the operation of computer pro- infringe the patent if such combination grams, so what?’’ The district court occurred within the United States shall sought at that point to clarify the record: be liable as an infringer. ‘‘[N]o one is arguing here that the browser 35 U.S.C. § 271(f)(1) (2000). Section cannot use the operating system TTT it 271(f) refers to ‘‘components of a patent- simply can’t be done and, in essence, Mi- ed invention.’’ This statutory language crosoft is not taking the crazy position that uses the broad and inclusive term ‘‘pat- what they mean is the browser can’t use ented invention.’’ Title 35, in the defini- the operating system at all.’’ Microsoft’s tions section, defines ‘‘invention’’ to mean counsel responded, ‘‘That’s correct.’’ ‘‘invention or discovery’’—again broad Thus, the record shows that Microsoft and inclusive terminology. 35 U.S.C. did not properly preserve this issue for § 100(a) (2000). The next section in Title appeal. ‘‘It is rare indeed for appellate 35, section 101, explains that an invention EOLAS TECHNOLOGIES INC. v. MICROSOFT CORP. 1339 Cite as 399 F.3d 1325 (Fed. Cir. 2005) includes ‘‘any new and useful process, Exact duplicates of the software code on machine, manufacture or composition of the golden master disk are incorporated as matter.’’ 35 U.S.C. § 101 (2000). With- an operating element of the ultimate de- out question, software code alone qualifies vice. This part of the software code is as an invention eligible for patenting un- much more than a prototype, mold, or der these categories, at least as process- detailed set of instructions. This operat- es. See In re Alappat, 33 F.3d 1526 (Fed. ing element in effect drives the ‘‘functional Cir.1994); AT&T Corp. v. Excel Commu- nucleus of the finished computer product.’’ nications, Inc., 172 F.3d 1352 (Fed.Cir. Imagexpo, L.L.C. v. Microsoft, Corp., 299 1999); MPEP § 2106.IV.B.1.a. (8th ed., F.Supp.2d 550, 553 (E.D.Va.2003). With- rev. 2 2001). The patented invention in out this aspect of the patented invention, this case is such a software product. ’906 the invention would not work at all and thus would not even qualify as new and patent, col. 17, ll. 58—col. 18, ll. 30. ‘‘useful.’’ Thus, the software code on the Thus, this software code claimed in con- golden master disk is not only a compo- junction with a physical structure, such as nent, it is probably the key part of this a disk, fits within at least those two cate- patented invention. Therefore, the lan- gories of subject matter within the broad guage of section 271(f) in the context of statutory label of ‘‘patented invention.’’ Title 35 shows that this part of the claimed This statutory language did not limit computer product is a ‘‘component of a section 271(f) to patented ‘‘machines’’ or patented invention.’’ patented ‘‘physical structures.’’ Rather Sound patent policy also supports the every form of invention eligible for patent- meaning of section 271(f). In the first ing falls within the protection of section place, this court accords the same treat- 271(f). By the same token, the statute did ment to all forms of invention. See, e.g., not limit section 271(f) to ‘‘machine’’ com- TRIPS Agreement, Part II, Section 5 ponents or ‘‘structural or physical’’ compo- (1994) (‘‘[P]atents shall be available and nents. Rather every component of every patent rights enjoyable without discrimina- form of invention deserves the protection tion as to the place of invention[ ][and] the of section 271(f). field of technology TTTT’’). This court can- not construct a principled reason for treat- In examining the statutory language of ing process inventions different than struc- section 271(f), this court must next exam- tural products. Moreover, as the district ine whether the software code on the gold- court pointed out, process and product— en master disk is a ‘‘component’’ of the software and hardware—are practically in- computer program invention. A ‘‘compo- terchangeable in the field of computer nent’’ of a process invention would encom- technology. Eolas Techs., Inc. v. Micro- pass method steps or acts. See, e.g., 35 soft Corp., 274 F.Supp.2d 972, 974 (N.D.Ill. U.S.C. § 112, ¶ 6 (2000). A ‘‘component’’ 2003). On a functioning computer, software of an article of manufacture invention morphs into hardware and vice versa at would encompass a part of that construct. the touch of a button. In other words, Because a computer program product is a software converts its functioning code into patented invention within the meaning of hardware and vice versa. Thus in the Title 35, then the ‘‘computer readable pro- context of this patented invention, the gram code’’ claimed in claim 6 of the ’906 computer transforms the code on the gold- patent is a part or component of that en disk into a machine component in oper- patented invention. ation. Thus, sound policy again counsels 1340 399 FEDERAL REPORTER, 3d SERIES against varying the definition of ‘‘compo- invention in Deepsouth. In other words, nent of a patented invention’’ according to since Deepsouth dealt with the components the particular form of the part under con- of a physical machine, section 271(f)’s sideration, particularly when those parts ‘‘components’’ are limited to physical ma- change form during operation of the inven- chines. This argument finds no support in tion as occurs with software code. the language or history of the statute. The legislative history of section 271(f) As already noted, the language of sec- also supports the meaning carried by the tion 271(f) does not impose a requirement language itself. Congress enacted section of ‘‘tangibility’’ on any component of a 271(f) in the wake of the United States patented invention. See Alan M. Fisch & Supreme Court’s decision in Deepsouth Brent H. Allen, The Application of Domes- Packing Co. v. Laitram Corp., 406 U.S. tic Patent Law to Exported Software: 35 518, 92 S.Ct. 1700, 32 L.Ed.2d 273 (1972). U.S.C. § 271(f), 25 U. Pa. J. Int’l Econ. L. Deepsouth acknowledged that unautho- 557, 575 (2004). In fact, neither the stat- rized manufacturers of patented products ute nor the legislative history contains a could avoid liability for infringement under limitation to ‘‘components of machines and the then-existing law by manufacturing the other structural combinations.’’ Id. Micro- unassembled components of those products soft, in effect, asks this court to add the in the United States and then shipping word ‘‘physical’’ in front of ‘‘components’’ them outside the United States for assem- in section 271(f). If the statute intended bly. Section 271(f) closed that obvious to limit the reach of ‘‘components of pat- loophole in the statutory protections for ented inventions,’’ it would have expressly patented inventions. Rotec Indus., Inc. v. included some narrowing restriction. The Mitsubishi Corp., 215 F.3d 1246, 1252 n. 2 statute simply does not include the limita- (Fed.Cir.2000). One Congressional com- tion that Microsoft advocates. mentator stated this purpose expressly: Section 101 [of the Bill] makes two ma- Microsoft also argues this court’s hold- jor changes in the patent law in order to ing in Pellegrini v. Analog Devices, Inc., avoid encouraging manufacturers out- 375 F.3d 1113 (Fed.Cir.2004), imposes a side the United States. requirement that components in section TTTT 271(f) are physical. In the first place, this [Section 271(f) ] will prevent copiers court in Pellegrini did not address the from avoiding U.S. patents by supplying meaning of the ‘‘components’’ language in components of a patented product in this section 271(f). Moreover, Microsoft sim- country so that the assembly of the com- ply misreads the language of Pellegrini. ponents may be completed abroad. This In Pellegrini, this court held that sec- proposal responds to the TTT decision in tion 271(f) did not apply to components Deepsouth TTT concerning the need for a manufactured outside the United States legislative solution to close a loophole in and never physically shipped to or from patent law. the United States. 375 F.3d at 1118. The 130 Cong. Rec. H10525 (1984). These ref- court then explained that erences again refer to correcting a loop- ‘[s]uppl[ying] or caus[ing] to be supplied’ hole for all forms of patented inventions. in § 271(f)(2) clearly refers to physical Microsoft and amici argue that Con- supply of components, not simply to the gress’ use of ‘‘components’’ must be identi- supply of instructions or corporate over- cal to the ‘‘components’’ of the patented sight. In other words, although Analog HOME SAVINGS OF AMERICA v. U.S. 1341 Cite as 399 F.3d 1341 (Fed. Cir. 2005)

may be giving instructions from the United States that cause the compo- HOME SAVINGS OF AMERICA, FSB, nents of the patented invention to be and H.F. Ahmanson & Company, supplied, it is undisputed that those Plaintiffs–Cross Appellants, components are not being supplied in or from the United States. v. Id. Thus, Pellegrini requires only that UNITED STATES, Defendant– components are physically supplied from Appellant. the United States. Pellegrini does not impose on section 271(f) a tangibility re- Nos. 04–5020, 04–5032. quirement that does not appear anywhere in the language of that section. United States Court of Appeals, In sum, the language and history of Federal Circuit. section 271(f)(1) as well as this court’s law protecting software inventions support this March 7, 2005. court’s holding that section 271(f)(1)’s Background: Thrift and its holding com- ‘‘components’’ include software code on pany sued United States, alleging that en- golden master disks. actment of Financial Institutions Reform, Recovery, and Enforcement Act (FIR- IV. REA) breached government promise made In conclusion, because the district court in connection with supervisory mergers improperly granted JMOL in Eolas’ favor that supervisory goodwill could be counted on Microsoft’s anticipation and obviousness toward regulatory capital requirements. defenses and improperly rejected Micro- The Court of Federal Claims, Bruggink, soft’s inequitable conduct defense, this court vacates the district court’s decisions J., determined that government was liable, and remands for further proceedings on 50 Fed.Cl. 427, denied summary judgment these issues. In addition, this court af- on theory of lack of standing, 51 Fed.Cl. firms the district court’s claim construction 487, and awarded damages, 57 Fed.Cl. 694. of ‘‘executable application’’ and finds the Government appealed. district court did not err in its jury in- Holdings: The Court of Appeals, Prost, struction with regard to the claim limita- Circuit Judge, held that: tion ‘‘utilized by said browser to identify and locate.’’ Finally, this court affirms the (1) holding company was in privity of con- district court’s holding that ‘‘components,’’ tract with government and thus had according to section 271(f)(1), includes soft- standing; ware code on golden master disks. (2) merger contracts provided for 40-year COSTS amortization period for supervisory Each party shall bear its own costs. goodwill, not 12-year period called for in revised GAAP; AFFIRMED–IN–PART, VACATED– (3) damages award was not reducible IN–PART, and REMANDED based on post-FIRREA branch sales; , (4) District Court did not abuse its discre- tion by awarding hypothetical replace- ment costs;