04-1147, 04-1148 Leon Stambler v. Rsa Security, Inc.

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not
citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
04-1129, 04-1147, 04-1148
LEON STAMBLER,
Plaintiff- Appellant,
v.
RSA SECURITY, INC.,
Defendant-Cross Appellant,
and
VERISIGN, INC.,
Defendant-Cross Appellant.
__________________________
DECIDED: February 11, 2005
__________________________
Before RADER, Circuit Judge, ARCHER, Senior Circuit Judge, and BRYSON, Circuit
Judge.
ARCHER, Senior Circuit Judge.
Leon Stambler (“Stambler”) appeals the judgment of the United States District
Court for the District of Delaware denying his motion for judgment as a matter of law
(“JMOL”) or, in the alternative, for a new trial. Contrary to Stambler’s argument, RSA
Security, Inc. and VeriSign, Inc. (“RSA”) did not argue to the jury a construction of claim
34 of U.S. Patent No. 5,793,302 (“the ‘302 patent”) counter to that set forth by the
district court. As discussed below, we conclude 1) substantial evidence supports the
jury’s noninfringement verdict; 2) Stambler did not show that defense counsel

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improperly influenced the jury; and 3) the district court did not abuse its discretion in
bifurcating the issues of validity and infringement. Accordingly, we affirm the judgment
of the district court. Stambler v. RSA Security, No. 01-0065-SLR (D. Del. 2003).
Background
Stambler sued RSA for, inter alia, infringement of the ‘302 patent based on its
use of Secure Sockets Layer version 3.0 (“SSL 3.0”). The patented methods enable
parties to a transaction to assure the identity of an absent party and the accuracy of
information involved in the transaction, thus providing for secure transactions and
preventing fraud. Id. at 2. SSL 3.0 is widely considered to be the standard method for
conducting secured communications via the Internet. Id. at 5. The SSL 3.0 protocol
addresses two security issues pertaining to Internet communications. Id. The protocol
insures that parties communicating over the Internet are certain of each other’s identity
and that communications between the parties cannot be intercepted and deciphered by
an unauthorized party. Id.
Claim 34 of the ‘302 patent is at issue here. Claim 34 is dependent upon claim
33, which states the following:
A method for authenticating a first party by using information stored in a
credential, the credential being previously issued to the first party by a
second party, wherein information previously stored in the credential
comprises at least a non-secret variable authentication number (VAN) and
other non-secret credential information, the method comprising:
previously generating a first error detection code (EDC1) by using at least
a portion of the other non-secret credential information;
previously coding the first error detection code (EDC1) with first
information associated with the second party to derive a variable
authentication number (VAN);
previously storing the VAN and the other non-secret credential information
in the credential;
retrieving the VAN and the other non-secret credential information stored
in the credential;
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deriving a second error detection code (EDC2) by using at least a portion
of the retrieved other non-secret credential information;
retrieving second information associated with the second party previously
stored in a storage means associated with at least one of the parties;
uncoding the VAN using the second information associated with the
second party to derive a third error detection code (EDC3);
and authenticating the first party and at least a portion of the non-secret
information stored in the credential if the second error detection code
(EDC2) corresponds to the third error detection code (EDC3).
‘302 patent, col. 30 ll. 35-65. Claim 34 states that it is a “method of claim 33 wherein
the first information associated with the second party comprises a public key, and the
second information associated with the second party comprises a non-secret key.” Id.
at col. 30, line 66 – col. 31, line 2.
Following a verdict of non-infringement, Stambler filed a renewed motion for
JMOL and, in the alternative, for a new trial. The district court denied the motions, and
Stambler now appeals. We have jurisdiction pursuant to 38 U.S.C. § 1295(a)(1).
Discussion
Stambler argues that the district court erred in denying his renewed motion for
judgment as a matter of law because the district court permitted defendants to add
limitations to the claim language. Stambler further asserts he should be accorded a
new trial because defense counsel improperly influenced the jury and because
bifurcation of the infringement and validity issues resulted in a fundamentally unfair trial
in violation of his rights under the Seventh Amendment.
The denial of JMOL is reviewed without deference and reversed only if
substantial evidence does not support a jury’s factual findings or if the law cannot
support the legal conclusions underpinning the jury’s factual findings. Moba, B.V. v.
Diamond Automation, Inc., 325 F.3d 1306, 1312 (Fed. Cir. 2003). The denial of a
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motion for a new trial is reviewed under the abuse of discretion standard. Motorola, Inc.
v. Interdigital Tech. Corp., 121 F.3d 1461, 1468 (Fed. Cir. 1997), as is the propriety of
the district court’s order bifurcating infringement and validity, Barr Labs., Inc. v. Abbott
Labs., Inc., 978 F.2d 98, 105 (3d Cir. 1992).
Stambler argues that the district court erred in denying his renewed motion for
judgment as a matter of law because, according to Stambler, it upheld the jury’s verdict
of non-infrignement based on a finding that it was “reasonable” for the jury to adopt
additional claim limitations.
Experts from both sides offered testimony as to the three disputed limitations,
“credential,” “storage means associated with one of the parties,” and “authenticating the
first party.” RSA’s expert did not change the district court’s claim construction as to any
of these elements by adding further claim limitations. To the contrary, RSA’s expert
simply took the district court’s claim construction and provided detailed testimony as to
why the accused device did not meet the claim limitations.
For example, the district court construed “credential” to mean “a document or
information obtained from a trusted source that is transferred or presented to establish
the identity of a party.” RSA’s expert explained that SSL 3.0 does not possess a
“credential” as construed by the district court because in SSL 3.0 when the credential is
presented it does not verify a user’s identity. This argument neither narrows nor is
inconsistent with the district court’s claim construction. Rather, it is a reasonable
interpretation of the court’s claim construction given that “establish” means “1. to bring
into being on firm or permanent basis; found; . . . 3. to cause to be accepted or
recognized. 4. to show to be valid or true.” Random House Col. Dictionary 452
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(revised ed. 1980). Therefore, we are not persuaded by Stambler’s arguments that the
district court permitted RSA to argue a position to the jury that added further claim
limitations and was inconsistent with the court’s claim construction.1
Stambler argues the digital certificate created by SSL 3.0 is a credential within
the meaning of claim 34. However, as noted by the district court “a reasonable jury
could have concluded that the digital certificate is not a credential . . ., because [it] could
reasonably conclude that the identity of the website is not established in SSL 3.0 at the
time the [digital certificate] is presented or transferred.” Stambler, slip op at 13. Based
on the record, including the testimony of RSA’s expert, we conclude that substantial
evidence supports the jury’s verdict of non-infringement. 2
Stambler asserts two grounds for granting him a new trial: defense counsel’s
“misconduct” of discussing independent development and dedication to the public
prejudiced the jury against Stambler and the court’s bifurcation of the validity and
infringement issues.
Stambler argues that “from opening to close” a “false theme” was emphasized by
RSA, namely, a finding of infringement would mean that the patent-in-suit covers work
done by others and which was placed in the public domain and, therefore, is freely used
today by millions of people on a daily basis. As such, a verdict in Stambler’s favor
would allow him to usurp that which had already been dedicated to the public. Stambler
1 We note that our discussion of this issue presumes that RSA’s expert’s
testimony was properly before the jury – an issue discussed at great length at oral
argument. Stambler’s counsel did not adequately object to this testimony at trial, and
therefore, there is no basis for saying that the testimony was improperly before the jury.
2 Because substantial evidence supports the finding that SSL 3.0 does not
contain a “credential” as construed by the district court, we need not discuss the other
disputed limitations, as a product must contain each and every limitation of a claim in
order to infringe that claim.
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contends that this “message” was highly improper and extremely prejudicial and, as a
result, the court erred by finding that defense counsel’s mention of these issues did not
reach the threshold of misconduct requiring a new trial.
Any purported improper mention of the dedication to the public and independent
invention issues was cured by the trial judge. Specifically, the judge stated
Defendants have spoken in their opening statements about plaintiff’s
motivation in bringing the litigation and about the industry’s response to
the litigation. Those issues, if proven, may be relevant to the issue of
damages should you reach that issue, but keep in mind that the question
of infringement is the first and primary determination you will need to
make. . . . And I also remind you that you cannot let sympathy or bias or
other irrelevant matters interfere with your duty to impartially review the
evidence consistent with my instructions of the law that you will receive at
the end of the evidence.
Further, the jury instructions expressly included the following statement: “[e]vidence
that SSL may have been developed through independent research is not relevant to the
question of literal infringement. An independently developed product or process that
falls within the scope of the asserted patent claims nevertheless infringes.” A11466.
Because we presume the jury follows the instructions provided by the district court,
United States v. Hakim, 344 F.3d 324, 326 (3rd Cir. 2003), there is no reason to believe
the jury improperly considered testimony related to independent development or public
dedication in reaching its finding of noninfringement.
Accordingly, we agree with the district court that there was “not prejudice to
[Stambler] of the quality and quantity that would demand the jury’s verdict to be set
aside.” Stambler, slip op at 19.
Stambler’s final contention is that he should receive a new trial based on the
violation of his Seventh Amendment rights. The thrust of his argument is that he did not
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receive a trial based solely on infringement because RSA was unable to separate
issues of validity from infringement. The result was that “separate trial[s] allowed
defendants to tarnish the validity of the patents-in-suit gratuitously during the
infringement trial, freed from the presumption of validity and the burden of proving
invalidity by clear and convincing evidence.” As discussed above, the district court told
the jury that the “first and primary” issue at trial was infringement, and the jury was
specifically instructed that “[e]vidence that SSL may have been developed through
independent research is not relevant to the question of literal infringement.” Because
there is nothing in the record to suggest that the jury was confused, we cannot say that
the district court abused its discretion in bifurcating the invalidity and infringement
aspects of the trial.
Because we discern no error in the district court’s denial of Stambler’s renewed
motion for JMOL and his motion for a new trial, we affirm the judgment of the district
court.
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