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Egenera, Inc. v. Cisco Systems, Inc.

United States District Court, D. Massachusetts

May 22, 2019

EGENERA, INC.
v.
CISCO SYSTEMS, INC.

          FINDINGS OF FACT AND RULINGS OF LAW AFTER A BENCH TRIAL ON INVENTORSHIP

          RICHARD G. STEARNS UNITED STATES DISTRICT JUDGE.

         The court held a three-day bench trial confined to a single issue: Is Peter Schulter an inventor of United States Patent No. 7, 231, 430 (the '430 patent)? Based on the credible testimony and exhibits offered at trial, and the stipulations of the parties, I make the following findings of fact.

         FINDINGS OF FACT

         Background

         1. Plaintiff Egenera, Inc., is a Delaware corporation with its principal place of business in Boxborough, Massachusetts. Stipulated Facts (SF) ¶ 2.

         2. On September 6, 2000, Egenera made an employment offer to Peter Schulter. SF ¶ 3. Schulter accepted and joined Egenera on October 2, 2000. SF ¶ 5.

         3. On April 20, 2001, Egenera filed U.S. Provisional Application No. 60/285, 296 (the '296 provisional). SF ¶ 13. Schulter is listed as an inventor on the provisional application. SF ¶ 14.

         4. On January 4, 2002, Egenera filed non-provisional U.S. Patent Application No. 10/038, 353 (the '353 application). SF ¶ 15. The '353 application claims priority to the '296 provisional. SF ¶ 16.

         5. On June 12, 2007, the '430 patent issued from the '353 application. SF ¶ 19.

         6. Upon issue, the '430 patent listed Vern Brownell, Pete Manca, Ben Sprachman, Paul Curtis, Ewan Milne, Max Smith, Alan Greenspan, Scott Geng, Dan Busby, Edward Duffy, and Schulter as the inventors. SF ¶ 20.

         7. The '430 patent is directed to solving problems encountered in the manual configuration, deployment, and maintenance of enterprise and application servers, see '430 patent, col. 1, ll. 21-58, and discloses “a processing platform from which virtual systems may be deployed through configuration commands, ” id. col. 2, ll. 45-47. The patent sets out 4 system claims and 4 method claims.

         Claim 1 is representative:

1. A platform for automatically deploying at least one virtual processing area network, in response to software commands, said platform comprising:
a plurality of computer processors connected to an internal communication network;
at least one control node in communication with an external communication network and in communication with an external storage network having an external storage address space, wherein the at least one control node is connected to the internal communication network and thereby in communication with the plurality of computer processors, said at least one control node including logic to receive messages from the plurality of computer processors, wherein said received messages are addressed to the external communication network and to the external storage network and said at least one control node including logic to modify said received messages to transmit said modified messages to the external communication network and to the external storage network;
configuration logic for receiving and responding to said software commands, said software commands specifying (i) a number of processors for a virtual processing area network (ii) a virtual local area network topology defining interconnectivity and switching functionality among the specified processors of the virtual processing area network, and (iii) a virtual storage space for the virtual processing area network, said configuration logic including logic to select, under programmatic control, a corresponding set of computer processors from the plurality of computer processors, to program said corresponding set of computer processors and the internal communication network to establish the specified virtual local area network topology, and to program the at least one control node to define a virtual storage space for the virtual processing area network, said virtual storage space having a defined correspondence to a subset of the external storage address space of the external storage network; and
wherein the plurality of computer processors and the at least one control node include network emulation logic to emulate Ethernet functionality over the internal communication network.

         8. Defendant Cisco Systems, Inc., is a California corporation with its principal place of business in San Jose, California. SF ¶ 1.

         9. On August 5, 2016, Egenera filed this Complaint against Cisco, asserting infringement of three patents, including the '430 patent.[1] See Compl. (Dkt #1).

         10. On April 28, 2017, Cisco filed an IPR petition with the PTAB objecting to the '430 patent. SF ¶ 22. In the petition, Cisco argued, inter alia, that the '430 patent was obvious over several references, including U.S. Patent No. 7, 089, 293 (Grosner). SF ¶ 23. According to Cisco, the Grosner patent is entitled to a priority date of November 2, 2000. SF ¶ 24.

         11. Manca, Egenera's then-CEO, contacted Schulter in June and July of 2017. SF ¶ 25. Manca told Schulter that, upon review, he had concluded that the '296 provisional application was based solely on an Egenera document dated September 29, 2000. Tr. Day 1 (Schulter) at 105:17-20. Because this document predated Schulter's October 2, 2000, start date with Egenera, Manca told Schulter that he had not contributed to and was therefore not an inventor of the claims of the '430 patent. Tr. Day 1 (Schulter) at 104:7-105:20; see also Tr. Day 3 (Manca) at 91:12-24 (describing the conception analysis).

         12. On August 15, 2017, Schulter signed a declaration agreeing to remove himself as an inventor of the '430 patent, stating that he “[had] been erroneously named.” SF ¶ 26; JX 7 at 14.

         13. Schulter did not review any documents before signing the declaration; his decision to withdraw as an inventor of the '430 patent was based solely on Manca's representations. Tr. Day 1 (Schulter) at 107:8-24.

         14. Egenera responded to Cisco's IPR petition on August 16, 2017. SF ¶ 27. In its response, Egenera maintained that the claims of the '430 patent were not obvious over the alleged prior art. SF ¶ 28. Egenera also contended that Grosner was not prior art to the '430 patent because the claims of the '430 patent had been conceived by September 29, 2000 - before Grosner (and before Schulter's employment by Egenera). SF ¶ 29.

         15. By September 8, 2017, all of the other inventors of the '430 patent had also signed declarations agreeing or not disagreeing with removing Schulter as an inventor of the '430 patent. SF ¶ 30. One of the inventors, Max Smith, spoke to Schulter prior to giving his assent to the removal because of his unease “related to being sure we did the right thing.” Tr. Day 3 (Smith) at 61:9-20. Smith did not independently review the relevant documents. Id. at 61:21-24. Brownell, Busby, and Greenspan spoke only to Manca prior to agreeing to remove Schulter, and did not review any documents. Tr. Day 3 (Manca) at 109:23-110:20 (clip from Brownell deposition), 111:4-22 (clip from Busby deposition), 112:2-23 (clip from Greenspan deposition).

         16. At that time, all of the '430 inventors (including Schulter) were represented by Egenera's counsel at Egenera's expense, and almost all were either employed by Egenera or were paid consultants for Egenera and Egenera's counsel. Tr. Day 2 (Geng) at 146:20-23 (CTO and EVP of engineering at Egenera); JX 39-40, 42 (Busby, Duffy, Greenspan were still employed by Egenera), 65-66 (Schulter joint representation and consulting agreements), 72-73 (Smith joint representation and consulting agreements), 79-84 (Brownell joint representation agreement, Sprachman joint representation and consulting agreements, Milne joint representation agreement, and Curtis joint representation and consulting agreements). At the time of the trial, Schulter still owned Egenera stock. Tr. Day 1 (Schulter) at 149:25-150:3. Smith believed that a surviving term of his employment agreement with Egenera bound him in perpetuity to assist Egenera in defending the ‘430 patent. Tr. Day 3 (Smith) at 63:7-17.

         17. Egenera petitioned the Patent and Trademark Office (PTO) on September 11, 2017, to remove Schulter as an inventor of the '430 patent. SF ¶ 31.

         18. On January 16, 2018, the PTO granted Egenera's petition and removed Schulter as an inventor of the '430 patent.[2] SF ¶ 32.

         19. The court issued its claim construction rulings on February 5, 2018. See Dkt # 85. The court construed “logic to modify said received messages to transmit said modified messages to the external communication network and to the external storage network” as a means-plus-function limitation. Id. at 11-17. The function of the limitation is to “modify said received messages to transmit said modified received messages to the external communication network and to the external storage network.” Id. at 17. The structure is “virtual LAN server 335, virtual LAN proxy 340, and physical LAN driver 345” and equivalents for messages to the external communications network, and “storage configuration logic 605” and equivalents for messages to the external storage network. Id. at 18-19. The excerpted portion of figure 3B is illustrative. Id. at 19.

         (Image Omitted)

         20. In August of 2018, Cisco moved for summary judgment, asserting, inter alia, that the '430 patent is invalid because of the omission of Schulter as an inventor. See Dkt # 141. According to Cisco's motion, Schulter conceived of the VLAN Proxy, one of the structures underlying the “logic to modify said received messages to transmit said modified messages to the external communication network” limitation. See Dkt # 143 at 9-13.

         21. Egenera cross-moved for summary judgment, contending, inter alia, that Schulter was not an inventor of the '430 patent. See Dkt # 135. In the alternative, Egenera argued that the remedy for nonjoinder of an inventor is a correction of the patent, not its invalidation. See Dkt # 162 at 18-19.

         22. The court denied the cross motions on inventorship, and held that under the doctrine of judicial estoppel, having successfully persuaded the PTO to remove Schulter, Egenera could not now reinstate Schulter as an inventor of the '430 patent. See Egenera, Inc. v. Cisco Sys., Inc., 348 F.Supp.3d 99, 101-102 (D. Mass. 2018). This bench trial followed in January of 2019.

         The Inventive Process

         23. Egenera was founded in March of 2000 to develop a product called the Interframe platform, later renamed Bladeframe. Tr. Day 2 (Geng) at 149:2-22, 151:18-24.

         24. Development of the Interframe/BladeFrame, Egenera's sole product at the time, was a highly collaborative effort based on regular meetings throughout the summer and fall of 2000. Tr. Day 2 (Geng) at 154:11-17; Tr. 3 (Manca) at 74:6-18; Tr. Day 1 (Schulter) at 84:9-17.

         25. By June of 2000, Egenera had hired Sprachman, Busby, Brownell, Milne, Manca, Curtis, and Geng. JX 74.

         26. In June of 2000, Milne and Curtis co-authored a document entitled “The Egenera Interframe: A New Architecture” (the June Specification). SF ¶ 6; see also JX 13.

         27. The June Specification disclosed a system with “two basic modules.” JX 13 at 2.

Interframe Controller modules (IFC modules) perform I/O processing and system management functions, but do not run application software. All of the external I/O [(Input/Output)] interfaces are connected to the IFC modules. Application Processor modules (AP modules) run application software, but do not contain any I/O interfaces other than the interface card for the system interconnect. Application Processors are able to perform I/O operations via a message-passing interface to the Interframe Controllers. External network interfaces on the Interframe Controllers forward incoming TCP/IP traffic to the Application Processors by examining the fields in the packet header to route the packet to the appropriate destination.

Id. (trademark designations omitted). The IFC modules connect to the outside world through “2 redundant external network interface cables (Gigabit Ethernet or equivalent) and [] 2 redundant SAN cables (Fiber Channel).” Id. at 5.

         28. The June Specification lists as a “Functional Requirement”

[a] distributed network implementation that allows AP nodes with no physical network interface to utilize the network interfaces on the IFC nodes. The IFC nodes must be able to multiplex network traffic from several AP nodes onto one physical network interface, and demultiplex the incoming network traffic and send it to the appropriate AP nodes. Some packet filtering logic will be required.

Id. at 9.

         29. In July of 2000, Egenera hired Greenspan, Duffy, and Smith. JX 74. At that time, with the exception of Schulter, all of the inventors of the '430 patent had been recruited. See id.

         30. Smith, in his role as the Chief Architect, see Tr. Day 3 (Smith) at 33:8-10, authored a document entitled “Egenera Interframe I/O Architecture” (The September Specification), dated September 29, 2000. SF ¶ 7; see also JX 15.

         31. The September Specification memorialized the then-current state of the Interframe architecture and set out working goals for the team during Smith's upcoming month-long vacation. JX 23 at 12, Tr. ...


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