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Juniper Networks, Inc. v. Palo Alto Networks, Inc.

United States District Court, D. Delaware

February 6, 2014


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Jack B. Blumenfeld, Esquire and Jennifer Ying, Esquire of Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware. Counsel for Plaintiff. Of Morgan Chu, Esquire, Jonathan S. Kagan, Esquire and Lisa Glasser, Esquire of Irell & Manella LLP.

Phillip A. Rovner, Esquire and Jonathan A. Choa of Potter Anderson & Corroon LLP, Wilmington, Delaware. Counsel for Defendant. Of Daralyn J. Durie, Esquire, Ragesh K. Tangri, Esquire, Ryan M. Kent, Esquire, Sonali D. Maitra, Esquire, and Brian C. Howard, Esquire of Durie Tangri LLP.


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Sue L. Robinson, District Judge.


On December 19, 2011, Juniper Networks Inc. (" Juniper" ), a Delaware corporation involved in the design, manufacture and sale of firewall technologies, filed suit

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against Palo Alto Networks, Inc. (" PAN" ), another Delaware-based corporation in the same industry, alleging infringement of United States Patent Nos. 8,077,723 (" the '723 patent" ); 7,779,459 (" the '459 patent" ); 7,650,634 (" the '634 patent" ); 7,302,700 (" the '700 patent" ); 7,093,280 (" the '280 patent" ); and 6,772,347 (" the '347 patent" ). (D.I. 1) Defendant answered plaintiff's complaint on February 9, 2012, affirmatively asserting that the patents were invalid. (D.I. 9) On September 25, 2012, Juniper filed a first amended complaint adding claims for infringement of U.S. Patent No. 7,734,752 (" the '752 patent" ); and 7,107,612 (" the '612 patent" ).[1] (D.I. 70)

Juniper is a leading manufacturer of computer networking technologies, including firewalls. (D.I. 1 at ¶ 1) In April 2004, Juniper bought the company NetScreen, an industry innovator in high-end network security devices, for $4 billion; NetScreen's intellectual property rights were included as a part of this acquisition. ( Id. at ¶ 13) Yuming Mao (" Mao" ) and Nir Zuk (" Zuk" ), employees of NetScreen, began working for Juniper after the acquisition. ( Id. at ¶ 14) Zuk left Juniper in February 2005 to start PAN, which also develops firewall devices. (D.I. 21 at 3) In January of 2006, Mao left Juniper for employment at PAN. ( Id. )

Presently before the court are several motions: Juniper's motion for summary judgment of assignor estoppel (D.I. 172); competing motions for summary judgment of validity of the '612 and '347 patents (D.I. 170; D.I. 204); and competing motions for summary judgment regarding infringement (D.I. 176; D.I. 202). The court has jurisdiction pursuant to 28 U.S.C. § § 1331 and 1338(a).


" The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.10, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A party asserting that a fact cannot be--or, alternatively, is--genuinely disputed must support the assertion either by citing to " particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for the purposes of the motions only), admissions, interrogatory answers, or other materials," or by " showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A) & (B). If the moving party has carried its burden, the nonmovant must then " come forward with specific facts showing that there is a genuine issue for trial." Matsushita, 475 U.S. at 587 (internal quotation marks omitted). The court will " draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).

To defeat a motion for summary judgment, the non-moving party must " do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586-87; see also Podohnik v. U.S. Postal Service, 409 F.3d 584, 594 (3d Cir. 2005)

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(stating party opposing summary judgment " must present more than just bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue" ) (internal quotation marks omitted). Although the " mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment," a factual dispute is genuine where " the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). " If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (internal citations omitted); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (stating entry of summary judgment is mandated " against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial" ).


The court previously found that the doctrine of assignor estoppel negated PAN's affirmative defense of invalidity of the '634 patent. (D.I. 53, D.I. 54) The parties stipulated that this ruling applied to the '752 patent. (D.I. 80) As to the '700, '347, '723 and '459 patents, the court found that issues of material fact precluded resolution of the issue, because privity is determined based upon a balancing of the equities, a fact-sensitive inquiry that must be resolved outside the pleadings. (D.I. 80)

In Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir. 1988), the Federal Circuit reaffirmed the existence of the doctrine of assignor estoppel. As the court explained, " [a]ssignor estoppel is an equitable doctrine that prevents one who assigned the rights to a patent (or patent application) from later contending that what was assigned is a nullity. The estoppel also operates to bar other parties in privity with the assignor, such as a corporation founded by the assignor." Id. As the Court explained, the doctrine recognizes " the implicit representation by the assignor that the patent rights that he is assigning (presumably for value) are not worthless . . . . To allow the assignor to make that representation at the time of the assignment (to his advantage) and later to repudiate it (again to his advantage) could work an injustice against the assignee." Id. After concluding that assignor estoppel remained a valid defense, the Federal Circuit stated that an analysis of the doctrine " must be concerned mainly with the balance of equities between the parties." Id. at 1225.

The Federal Circuit, in Shamrock Technologies, Inc. v. Medical Sterilization, Inc., 903 F.2d 789, 793 (Fed. Cir. 1990), reiterated that " [a]ssignor estoppel is an equitable doctrine . . . that is mainly concerned with the balance of the equities between the parties . . . [and t]hose in privity with the assignor partake of that balance; hence, extension of the estoppel to those in privity is justified." [2] The Shamrock Court went on to explain that, " [p]rivity, like the doctrine of assignor estoppel itself, is determined upon a balance of equities." Id. In other words, " [i]f an inventor assigns his invention to his employer company A and leaves to join company B, whether company B is in privity and thus bound

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by the doctrine will depend on the equities dictated by the relationship between the inventor and company B in light of the act of infringement." Id. at 793. " The closer that relationship, the more the equities will favor applying the doctrine to company B." Id.

In the case at bar, Mao and/or Zuk are listed as inventors on each of the '723, '459, '700, '347, and '612 patents. ( See '723 patent listing Mao and Zuk as inventors; '459 patent listing Mao as an inventor; '700 patent listing Mao as an inventor; '347 patent listing Mao as an inventor; and '612 patent listing Mao as an inventor) With the exception of the '723 patent,[3] Mao and Zuk also signed inventor's oaths averring that they were the " first" and " original" inventors of the respectively claimed subject matter.[4] ( See D.I. 174 at exs. 1, 3, 5) Furthermore, either Mao or Zuk assigned the " entire right, title and interest" of each of the claimed inventions to either NetScreen or Juniper for " valuable consideration." [5] ( See D.I. 174 at exs. 1-7)

Mao requested and received the title " founder and chief architect" when he joined PAN. (D.I. 22 at ¶ 7) Zuk testified that he " is not a title person" and has no problem with Mao having the title founder. (D.I. 174, ex. 17 128:2-130:19) Mao has consistently held himself out as a founder (including to customers) and PAN's website describes him as such. (D.I. 174, exs. 9, 11, 12, 14, 16 at 583:24-584:7, 584:20-585:3) In 2010, PAN recognized Mao as its founder and commended his efforts in its China market. ( Id., ex. 29) While a November 2005 presentation delivered to investors did not list Mao as a founder, a December 2005 presentation listed Mao as a member of the " Founding Team." [6] (D.I. 24, ex. B at 4; D.I 174, ex. 7) The court concludes that, while Mao requested the title of sole founder when he joined PAN, he and PAN have consistently held him out to be at least a founder. Therefore, this fact is dispositive of the issue of privity. Diamond, 848 F.2d at 1224 (finding that " [t]he estoppel also operates to bar other parties in privity with the assignor, such as a corporation founded by the assignor).

For completeness, the court turns to the balance of equities and the relationship of Mao and PAN. Zuk testified that he " needed Yuming Mao to work mostly on the connections between the hardware and

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the software, because that's an area [he] had no expertise in . . . ." [7] (D.I. 174, ex. 18 at 488:24-489:25) PAN began discussions with Mao in November 2005 and Mao formally joined PAN on January 25, 2006. (D.I. 174, ex. 19 at 28:2-9, ex. 7, ex. 8) After joining PAN, Mao received an option to purchase 654,520 shares of PAN stock, which he exercised on November 22, 2006. (D.I. 174, ex. 46, 47; ex. 15 at 122:15-123:2) Mao " had the responsibility for overall architecture of the system . . . ." (D.I. 174, ex. 28 at PAN526928)

While the investment presentations outlined the core functions and schema that resulted in the PA-4000 series of products, PAN was in the early stages of product development at the time Mao started work, with " maybe 1 or 2 percent of the product . . . done . . ." and no prototype. (D.I. 201, ex. 1 at 253:24-254:16, 260:1-261:7, 264:11-266:2; D.I. 174, ex. 19 at 81:11-14, 84:15-19, ex. 27) Mao wrote an early technical specification relating to the PA-4000 series. (D.I. 174, ex. 32) That Mao could not recall if these features were implemented into the product is not dispositive, as the query is whether Mao was closely involved in the development of products and with the company. (D.I. 201, ex. 1 at 573:3-14) Mao testified to his involvement in the product's development (including specific examples of product features) and his critical role with PAN. ( See e.g., D.I. 174, ex. 15 at 289:9-290:20, 296:9-14, 300:1-10, 305:23-306:7, 516:21-519:15) Considering the balance of equities and the relationship of Mao and PAN, the evidence demonstrates that Mao is in privity with PAN, therefore, the Mao patents are subject to assignor estoppel.

As to the '723 patent, Zuk's employment contract with NetScreen included an agreement to assign his inventions to NetScreen, which PAN does not dispute. (D.I. 173 at 17; D.I. 174, exs. 20, 48) Juniper diligently sought an executed assignment and oath from Zuk, however, Zuk declined to comply with the requests. Juniper filed the application with the PTO and was allowed to proceed without Zuk's signature. The court concludes that the employment contract properly assigned the patent to Juniper.[8] Therefore, as Zuk is a founder of PAN and based on the above analysis as to Mao, the '723 patent falls squarely within the holding of Diamond and is subject to assignor estoppel.[9] (D.I. 9 at ¶ 3); Diamond, 848 F.2d at 1224-26.


A. Claim Construction

Claim construction is a matter of law. Phillips v. AWH Corp., 415 F.3d 1303, 1330 (Fed. Cir. 2005) (en banc). Claim construction focuses on intrinsic evidence - the claims, specification and prosecution history - because intrinsic evidence is " the most significant source of the legally operative meaning of disputed claim language." Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996); Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). Claims must be interpreted

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from the perspective of one of ordinary skill in the relevant art at the time of the invention. Phillips, 415 F.3d at 1313.

Claim construction starts with the claims, id. at 1312, and remains centered on the words of the claims throughout. Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001). In the absence of an express intent to impart different meaning to claim terms, the terms are presumed to have their ordinary meaning. Id. Claims, however, must be read in view of the specification and prosecution history. Indeed, the specification is often " the single best guide to the meaning of a disputed term." Phillips, 415 F.3d at 1315.

B. Infringement

A patent is infringed when a person " without authority makes, uses or sells any patented invention, within the United States . . . during the term of the patent." 35 U.S.C. § 271(a). A two-step analysis is employed in making an infringement determination. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995). First, the court must construe the asserted claims to ascertain their meaning and scope. See id. Construction of the claims is a question of law subject to de novo review. See Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1454 (Fed. Cir. 1998). The trier of fact must then compare the properly construed claims with the accused infringing product. See Markman, 52 F.3d at 976. This second step is a question of fact. See Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998).

" Direct infringement requires a party to perform each and every step or element of a claimed method or product." BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378 (Fed. Cir. 2007), overruled on other grounds by 692 F.3d 1301 (Fed. Cir. 2012). " If any claim limitation is absent from the accused device, there is no literal infringement as a matter of law." Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000). If an accused product does not infringe an independent claim, it also does not infringe any claim depending thereon. See Wahpeton Canvas Co. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed. Cir. 1989). However, " [o]ne may infringe an independent claim and not infringe a claim dependent on that claim." Monsanto Co. v. Syngenta Seeds, Inc., 503 F.3d 1352, 1359 (Fed. Cir. 2007) (quoting Wahpeton Canvas, 870 F.2d at 1552) (internal quotations omitted). A product that does not literally infringe a patent claim may still infringe under the doctrine of equivalents if the differences between an individual limitation of the claimed invention and an element of the accused product are insubstantial. See Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 24, 117 S.Ct. 1040, 137 L.Ed.2d 146 (1997). The patent owner has the burden of proving infringement and must meet its burden by a preponderance of the evidence. See SmithKline Diagnostics, Inc. v. Helena Lab. Corp., 859 F.2d 878, 889 (Fed. Cir. 1988) (citations omitted).

When an accused infringer moves for summary judgment of non-infringement, such relief may be granted only if one or more limitations of the claim in question does not read on an element of the accused product, either literally or under the doctrine of equivalents. See Chimie v. PPG Indus., Inc., 402 F.3d 1371, 1376 (Fed. Cir. 2005); see also TechSearch, L.L.C. v. Intel Corp., 286 F.3d 1360, 1369 (Fed. Cir. 2002) (" Summary judgment of noninfringement is ... appropriate where the patent owner's proof is deficient in meeting an essential part of the legal standard for infringement, because such failure will render all other facts immaterial." ).

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Thus, summary judgment of non-infringement can only be granted if, after viewing the facts in the light most favorable to the non-movant, there is no genuine issue as to whether the accused product is covered by the claims (as construed by the court). See Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1304 (Fed. Cir. 1999).

For there to be infringement under the doctrine of equivalents, the accused product or process must embody every limitation of a claim, either literally or by an equivalent. Warner-Jenkinson, 520 U.S. at 41. An element is equivalent if the differences between the element and the claim limitation are " insubstantial." Zelinski v. Brunswick Corp., 185 F.3d 1311, 1316 (Fed. Cir. 1999). One test used to determine " insubstantiality" is whether the element performs substantially the same function in substantially the same way to obtain substantially the same result as the claim limitation. See Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 608, 70 S.Ct. 854, 94 L.Ed. 1097, 1950 Dec. Comm'r Pat. 597 (1950). This test is commonly referred to as the " function-way-result" test. The mere showing that an accused device is equivalent overall to the claimed invention is insufficient to establish infringement under the doctrine of equivalents. The patent owner has the burden of proving infringement under the doctrine of equivalents and must meet its burden by a preponderance of the evidence. See SmithKline Diagnostics, Inc. v. Helena Lab. Corp., 859 F.2d 878, 889 (Fed. Cir. 1988) (citations omitted).

The doctrine of equivalents is limited by the doctrine of prosecution history estoppel. In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 122 S.Ct. 1831, 152 L.Ed.2d 944 (2002) (" Festo VII " ), the Supreme Court stated:

Prosecution history estoppel ensures that the doctrine of equivalents remains tied to its underlying purpose. Where the original application once embraced the purported equivalent but the patentee narrowed his claims to obtain the patent or to protect its validity, the patentee cannot assert that he lacked the words to describe the subject matter in question. The doctrine of equivalents is premised on language's inability to capture the essence of innovation, but a prior application describing the precise element at issue undercuts that premise. In that instance the prosecution history has established that the inventor turned his attention to the subject matter in question, knew the words for both the broader and narrower claim, and affirmatively chose the latter.

Id. at 734-735. In other words, the prosecution history of a patent, as the public record of the patent proceedings, serves the important function of identifying the boundaries of the patentee's property rights. Once a patentee has narrowed the scope of a patent claim as a condition of receiving a patent, the patentee may not recapture the subject matter surrendered. In order for prosecution history estoppel to apply, however, there must be a deliberate and express surrender of subject matter. See Southwall Tech., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1580 (Fed. Cir. 1995).

Once a court has determined that prosecution history estoppel applies, it must determine the scope of the estoppel. See id. This requires an objective examination into the reason for and nature of the surrendered subject matter. Id.; see also Augustine Med., Inc. v. Gaymar Indus., Inc., 181 F.3d 1291, 1299 (Fed. Cir. 1999). If one of ordinary skill in the art would consider the accused product to be surrendered subject matter, then the doctrine

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of equivalents cannot be used to claim infringement by the accused product; i.e., prosecution history estoppel necessarily applies. Augustine Med., 181 F.3d at 1298. In addition, a " patentee may not assert coverage of a 'trivial' variation of the distinguished prior art feature as an equivalent." Id. at 1299 (quoting Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449, 1454 (Fed. Cir. 1998)).

" [A] narrowing amendment made to satisfy any requirement of the Patent Act" creates a presumption that " the patentee surrendered all subject matter between the broader and the narrower language" and bars any equivalents. Festo VII., 535 U.S. at 736, 740; see also Honeywell Int'l, Inc. v. Hamilton Sundstrand, 370 F.3d 1131, 1139 (Fed. Cir. 2004) (prosecution history estoppel " bar[s] the patentee from asserting equivalents if the scope of the claims has been narrowed by an amendment during prosecution." ).

Thus, a presumption of prosecution history estoppel is established by showing that the patentee made a narrowing amendment and that " the reason for that amendment was a substantial one relating to patentability." Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 344 F.3d 1359, 1366 (Fed. Cir. 2003) (en banc). There are three exceptions to this presumption: (1) the equivalent was " unforeseeable at the time of the narrowing amendment" ; (2) the rationale for the amendment " bore no more than a tangential relation to the equivalent in question" ; or (3) " some other reason suggested that the patentee could not reasonably have been expected to describe the alleged equivalent." Festo VII., 535 U.S. at 740-41.


The patents-in-suit are directed to inventions for computer networks and systems using hardware, software, or combinations thereof. Physical hardware encompasses components such as circuits, wires, and computer chips (e.g., a central processing unit or " CPU" ). One chip may contain multiple hardware components, such as electronic switches (e.g., transistors or logic gates).

Computer systems use memory to facilitate the storage and manipulation of software and other data. Memory comes in numerous varieties and can be shared by multiple other components in a system. There are two primary ways of sending data in memory to parts of a computer system that need to use it. The first is to create a new copy of the data in a new memory location sometimes called " passing by value," and the second is to communicate a " pointer" to the location in memory where the data is held, sometimes called " passing by reference." Data may be structured or organized in memory to facilitate its use. For example, data may be grouped into larger structures of multiple (often related) data values, and formatted depending on how the data entries are to be looked up and accessed. Data elements can be organized sequentially in a " linked list," or for fast lookup in a " hash table."

Computers systems may be connected via networks (like the internet). Data is broken down into packets (with additional metadata) to communicate. A common format for data packets includes multiple layers of metadata information, each corresponding to a particular networking function. Firewalls are designed to permit or deny network transmissions based upon a set of rules, and are frequently used to protect networks from unauthorized access while permitting legitimate communications to pass. As such, firewalls are critical to running secure networks.

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For each of the patents-in-suit, the court will discuss any specific background technology, any necessary claim construction on summary judgment, and ...

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