Packet Intelligence LLC v. Netscout Systems, Inc.

Case: 19-2041 Document: 56 Page: 1 Filed: 07/14/2020
United States Court of Appeals
for the Federal Circuit
______________________
PACKET INTELLIGENCE LLC,
Plaintiff-Appellee
v.
NETSCOUT SYSTEMS, INC., NETSCOUT SYSTEMS
TEXAS, LLC, FKA TEKTRONIX TEXAS, LLC DBA
TEKTRONIX COMMUNICATIONS,
Defendants-Appellants
______________________
2019-2041
______________________
Appeal from the United States District Court for the
Eastern District of Texas in No. 2:16-cv-00230-JRG, Judge
J. Rodney Gilstrap.
______________________
Decided: July 14, 2020
______________________
PAUL SKIERMONT, Skiermont Derby LLP, Dallas, TX,
for plaintiff-appellee. Also represented by SADAF R.
ABDULLAH, STEVEN WAYNE HARTSELL, STEVEN UDICK;
MIEKE K. MALMBERG, Los Angeles, CA.
ERIC KRAEUTLER, Morgan, Lewis & Bockius LLP, Phil-
adelphia, PA, for defendants-appellants. Also represented
by JULIE S. GOLDEMBERG; JASON D. FRANK, Boston, MA;
KARON NICOLE FOWLER, Chicago, IL; WILLIAM R.
PETERSON, Houston, TX; AHREN CHRISTIAN HSU-HOFFMAN,
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2 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
MICHAEL JOHN LYONS, THOMAS Y. NOLAN, Palo Alto, CA;
MICHAEL FRANCIS CARR, Milpitas, CA.
______________________
Before LOURIE, REYNA, and HUGHES, Circuit Judges.
Opinion for the court filed by Circuit Judge LOURIE.
Opinion concurring in part and dissenting in part filed by
Circuit Judge REYNA.
LOURIE, Circuit Judge.
NetScout Systems, Inc. and NetScout Systems Texas,
LLC (“NetScout”) appeal from the judgment of the U.S.
District Court for the Eastern District of Texas after a jury
verdict and bench trial that (1) NetScout willfully infringed
claims 10 and 17 of U.S. Patent 6,665,725 (“the ’725 pa-
tent”), claims 1 and 5 of U.S. Patent 6,839,751 (“the ’751
patent”), and claims 19 and 20 of U.S. Patent 6,954,789
(“the ’789 patent”); (2) no asserted claim is invalid under 35
U.S.C. §§ 101, 102(a), 102(f); (3) Packet Intelligence LLC
(“Packet Intelligence”) is entitled to $3.5 million in dam-
ages for pre-suit infringement; (4) Packet Intelligence is en-
titled to post-suit damages of $2.25 million; (5) Packet
Intelligence is entitled to $2.8 million in enhanced dam-
ages; and (6) Packet Intelligence is entitled to an ongoing
royalty for future infringement of 1.55%. Packet Intelli-
gence LLC v. NetScout Sys., Inc., No. 2:16-cv-230-JRG,
2018 WL 4286193, at *1 (E.D. Tex. Sept. 7, 2018).
Because the district court erred in denying NetScout’s
motion for judgment as a matter of law on pre-suit dam-
ages, we reverse the district court’s pre-suit damages
award and vacate the court’s enhancement of that award.
We affirm the district court’s judgment in all other re-
spects.
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 3
BACKGROUND
Packet Intelligence owns the ’725, ’751, and ’789 pa-
tents, which teach a method for monitoring packets ex-
changed over a computer network. A stream of packets
between two computers is called a connection flow. ’789
patent col. 2 ll. 43–45. Monitoring connection flows cannot
account for disjointed sequences of the same flow in a net-
work. Id. col. 3 ll. 56–59. The specifications explain that it
is more useful to identify and classify “conversational
flows,” defined as “the sequence of packets that are ex-
changed in any direction as a result of an activity.” Id. col.
2 ll. 45–47. Conversational flows provide application-spe-
cific views of network traffic and can be used to generate
helpful analytics to understand network load and usage.
See ’751 patent col. 3 l. 2–col. 4 l. 11.
The claims of the’725, ’751, and ’789 patents asserted
in the district court describe apparatuses and methods for
network monitoring. The ’789 patent recites apparatus
claims, and claims 19 and 20 were asserted. Claim 19 of
’789 patent is drawn to a “packet monitor”:
19. A packet monitor for examining packets pass-
ing through a connection point on a computer net-
work, each packet[] conforming to one or more
protocols, the monitor comprising:
(a) a packet acquisition device coupled to
the connection point and configured to re-
ceive packets passing through the connec-
tion point;
(b) an input buffer memory coupled to and
configured to accept a packet from the
packet acquisition device;
(c) a parser subsystem coupled to the input
buffer memory and including a slicer, the
parsing subsystem configured to extract se-
lected portions of the accepted packet and
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4 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
to output a parser record containing the se-
lected portions;
(d) a memory for storing a database com-
prising none or more flow-entries for previ-
ously encountered conversational flows,
each flow-entry identified by identifying in-
formation stored in the flow-entry;
(e) a lookup engine coupled to the output of
the parser subsystem and to the flow-entry
memory and configured to lookup whether
the particular packet whose parser record
is output by the parser subsystem has a
matching flow-entry, the looking up using
at least some of the selected packet por-
tions and determining if the packet is of an
existing flow; and
(f) a flow insertion engine coupled to the
flow-entry memory and to the lookup en-
gine and configured to create a flow-entry
in the flow-entry database, the flow-entry
including identifying information for fu-
ture packets to be identified with the new
flow-entry, the lookup engine configured
such that if the packet is of an existing
flow, the monitor classifies the packet as
belonging to the found existing flow; and if
the packet is of a new flow, the flow inser-
tion engine stores a new flow-entry for the
new flow in the flow-entry database, in-
cluding identifying information for future
packets to be identified with the new flow-
entry,
wherein the operation of the parser subsystem de-
pends on one or more of the protocols to which the
packet conforms.
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 5
’789 patent col. 36 l. 31–col. 37 l. 2. Claim 20 of the ’789
patent depends from claim 19 and further requires that
“each packet passing through the connection point is ac-
cepted by the packet buffer memory and examined by the
monitor in real time.” Id. col. 37 ll. 3–6.
In contrast to the apparatus claims of the ’789 patent,
the ’725 and ’751 patents recite method claims. The ’725
patent claims recite a method for performing protocol-spe-
cific operations on a packet through a connection point on
a network, comprising receiving a packet and executing
protocol specific operations on it, including parsing and ex-
traction to determine whether the packet belongs to a con-
versational flow. And the ’751 patent claims recite
methods of analyzing a flow of packets with similar steps.
Although the asserted claims include varied language, the
parties treat claim 19 of the ’789 patent as representative
of all of the asserted claims for infringement and invalidity.
Thus, we focus on claim 19 in our analysis.
Packet Intelligence asserted claims 19 and 20 of the
’789 patent, claims 10 and 17 of the ’725 patent, and claims
1 and 5 of the ’751 patent against NetScout’s “G10” and
“GeoBlade” products in the United States District Court for
the Eastern District of Texas. The case was tried to a jury
on the issues of infringement, damages, willfulness, and in-
validity under 35 U.S.C. § 102. The jury found all claims
willfully infringed, rejected NetScout’s invalidity defenses,
and awarded pre-suit and post-suit damages. Following
the jury verdict, the district court issued findings of fact
and conclusions of law under Fed. R. Civ. P. 52 rejecting
NetScout’s § 101 invalidity defense. The court also en-
hanced damages in the amount of $2.8 million and, in ac-
cordance with the jury’s verdict, awarded an ongoing
royalty for post-verdict infringement.
NetScout appealed, and we have jurisdiction under 28
U.S.C. § 1295(a)(1).
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6 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
DISCUSSION
In reviewing issues tried to a jury, we review the dis-
trict court’s denial of post-trial motions for judgment as a
matter of law and for a new trial under the law of the re-
gional circuit—here, the Fifth Circuit. See Finjan, Inc. v.
Secure Computing Corp., 626 F.3d 1197, 1202 (Fed. Cir.
2010) (citing Revolution Eyewear, Inc. v. Aspex Eyewear,
Inc., 563 F.3d 1358, 1370 (Fed. Cir. 2009)). Under Fifth
Circuit law, we review de novo the denial of a motion for
judgment as a matter of law, applying the same legal
standard as the district court. Baisden v. I’m Ready Prods.,
Inc., 693 F.3d 498, 499 (5th Cir. 2012). Judgment as a mat-
ter of law should be granted if “a reasonable jury would not
have a legally sufficient evidentiary basis to find for the
party on that issue.” Fed. R. Civ. P. 50(a).
We are “especially deferential” to a jury’s verdict, re-
versing only for lack of substantial evidence. Baisden, 693
F.3d at 498–99. “Substantial evidence” is “evidence of such
quality and weight that reasonable and fair-minded men in
the exercise of impartial judgment might reach different
conclusions.” Threlkeld v. Total Petroleum, Inc., 211 F.3d
887, 891 (5th Cir. 2000) (quoting Gaia Techs., Inc. v. Recy-
cled Prods. Corp., 175 F.3d 365, 374 (5th Cir. 1999)). We
“draw all reasonable inferences in the light most favorable
to the verdict and cannot substitute other inferences that
we might regard as more reasonable.” EEOC v. Boh Bros.
Constr. Co., 731 F.3d 444, 452 (5th Cir. 2013) (citing
Westlake Petrochems., L.L.C. v. United Polychem, Inc., 688
F.3d 232, 239 (5th Cir. 2012)). “Credibility determinations,
the weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a
judge.” Reeves v. Sanderson Plumbing Prods., Inc., 530
U.S. 133, 150–51 (2000) (quoting Anderson v. Liberty Lobby
Inc., 477 U.S. 242, 255 (1986)).
On appeal from a bench trial, we review a district
court’s conclusions of law de novo and its findings of fact
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 7
for clear error. Braintree Labs., Inc. v. Novel Labs., Inc.,
749 F.3d 1349, 1358 (Fed. Cir. 2014) (citing Brown & Wil-
liamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120,
1123 (Fed. Cir. 2000)). “A factual finding is clearly errone-
ous when, despite some supporting evidence, we are left
with a definite and firm conviction that the district court
was in error.” Alcon Research Ltd. v. Barr Labs., Inc., 745
F.3d 1180, 1186 (Fed. Cir. 2014) (citing Alza Corp. v. Mylan
Labs., Inc., 464 F.3d 1286, 1289 (Fed. Cir. 2006)). “The
burden of overcoming the district court’s factual findings
is, as it should be, a heavy one.” Polaroid Corp. v. Eastman
Kodak Co., 789 F.2d 1556, 1559 (Fed. Cir. 1986). “Where
there are two permissible views of the evidence, the fact-
finder’s choice between them cannot be clearly erroneous.”
Anderson v. City of Bessemer City, 470 U.S. 564, 574 (1985)
(citing United States v. Yellow Cab Co., 338 U.S. 338, 342
(1949)).
In this appeal, NetScout challenges the district court’s
judgment on the issues of infringement, invalidity under
§ 101, invalidity under § 102, pre-suit damages, and will-
fulness. We address each issue in turn.
I. Infringement
We first address NetScout’s claim that it did not in-
fringe the asserted patents. An infringement analysis re-
quires two steps. Clare v. Chrysler Grp. LLC, 819 F.3d
1323, 1326 (Fed. Cir. 2016). First, the court construes the
asserted claims. Claim construction is a question of law
that may involve underlying factual questions. Teva
Pharm. USA, Inc. v. Sandoz, Inc., 574 U.S. 318, 332 (2015).
Second, the court determines whether the accused product
meets each limitation of the claim as construed, which is a
question of fact. Wright Med. Tech., Inc. v. Osteonics Corp.,
122 F.3d 1440, 1443 (Fed. Cir. 1997).
NetScout’s two-step theory concerning why it is not an
infringer relies entirely on claim 19’s memory limitation.
First, NetScout argues that the limitation requires
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8 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
correlating connection flows into conversational flows. Ap-
pellant’s Br. 36. Then, under NetScout’s understanding of
the claim language, NetScout submits that its products
cannot infringe because no accused products meet that lim-
itation. In NetScout’s view, the record establishes that the
accused products track connection flows but never join
them together.
Packet Intelligence responds that it presented thor-
ough evidence supporting the jury’s infringement verdict.
In response to NetScout’s claim construction argument,
Packet Intelligence counters that the claims do not require
joining flows into a single conversational flow.
We first agree with Packet Intelligence that the claims
do not require the joining of connection flows into conver-
sational flows. The term “conversational flow” appears in
claim 19’s memory limitation: “a memory for storing a da-
tabase comprising none or more flow-entries for previously
encountered conversational flows, each flow-entry identi-
fied by identifying information stored in the flow entry.”
’789 patent col. 36 ll. 45–48. Contrary to NetScout’s argu-
ment, however, a limitation requiring memory for storing
flow entries for previously encountered conversational
flows does not require the added action of correlating con-
nection flow entries into conversational flows.
Even if NetScout were correct that the claims require
correlating connection flows into conversational flows,
however, the jury’s infringement verdict is supported by
substantial evidence. Dr. Almeroth testified that the ac-
cused products contain a “flow state block” (“FSB”), “corre-
sponding” to source code “Fsb.c.” J.A. 1265:1–1266:20.
According to Dr. Almeroth, the FSB contains flow entries
and the information in the flow record can be used to cor-
relate or associate flow entries into conversational flows.
J.A. 1265:1–10; 1266:25–1267:2. This testimony alone is
substantial evidence supporting the jury’s verdict.
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 9
As further confirmation that the accused products in-
fringe, Dr. Almeroth also provided an “example” of how
NetScout’s products use the information in memory to cre-
ate a “key performance index” in a NetScout white paper
titled “Subscriber Web Page Download Time Estimation in
Passive Monitoring Systems.” J.A. 1267:8–1268:11.
Dr. Almeroth testified that the feature “demonstrate[d]
that information in the flow record is sufficient to identify
the flow-entry and also to allow it to associate with previ-
ously-encountered conversation flows.” Id.
Given the evidence presented to the jury on claim 19’s
memory limitation and because NetScout has challenged
no other aspect of the jury’s infringement finding, we can-
not conclude that the jury’s verdict lacked substantial evi-
dence.
II. Patent Eligibility
NetScout claims that the patents it is accused of in-
fringing cover ineligible subject matter. Patent eligibility
under § 101 “is ultimately an issue of law that we review
de novo,” Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed.
Cir. 2018) (citing Intellectual Ventures I LLC v. Capital One
Fin. Corp., 850 F.3d 1332, 1338 (Fed. Cir. 2017)), although
it may involve underlying fact findings, id. (citing Mortg.
Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314,
1325 (Fed. Cir. 2016)). Under 35 U.S.C. § 101, “[w]hoever
invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and
useful improvement thereof, may obtain a patent therefor,
subject to the conditions and requirements of this title.” In
evaluating eligibility, we first determine whether the
claims at issue are directed to a patent-ineligible concept.
Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217 (2014) (cit-
ing Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
566 U.S. 66, 77 (2012)). If so, we then “examine the ele-
ments of the claim to determine whether it contains an ‘in-
ventive concept’ sufficient to ‘transform’ the claimed
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10 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
abstract idea into a patent-eligible application.” Id. at 221
(quoting Mayo, 566 U.S. at 72–73, 78).
The parties submitted the issue of eligibility to be tried
to the bench, and the district court issued findings of fact
and conclusions of law under Fed. R. Civ. P. 52. Packet
Intelligence LLC v. NetScout Sys., Inc., No. 2:16-cv-230-
JRG (E.D. Tex. Feb. 14, 2018), ECF No. 298 (“Eligibility
Decision”). The parties agree that claim 19 is representa-
tive of the asserted claims, so we begin by reviewing the
district court’s analysis for this claim.
The district court first made a series of factual findings
about the claimed inventions’ advantages over the prior
art. According to the district court, to measure the amount
or type of information being transmitted by a particular ap-
plication or protocol, a network monitor must measure “all
of the connection flows through which that application or
protocol transmits packets.” Id. slip op. at 5. The court
found that prior art monitors could not identify disjointed
connection flows as belonging to the same conversational
flow. Id. slip. op. at 9.
The patents addressed this “problem” in the art by
parsing packets to extract information that can be used to
associate packets with single conversational flows, which
correspond to particular applications or protocols. Id. slip
op. at 6. A “parser subsystem ‘parses the packet and deter-
mines the protocol types and associated headers for each
protocol layer,’ ‘extracts characteristic portions (signature
information) from the packet,’ and builds a ‘unique flow sig-
nature’ (also called a “key”)’ based on the packet.” Id. slip
op. at 7 (citing first ’789 patent col. 12 l. 19–col. 13 l.28;
then id. col. 33 l. 30–col. 34 l. 33). An “analyzer subsystem”
then “determines whether the packet, based on this signa-
ture or key, has a corresponding entry in the flow-entry da-
tabase.” Id. (citing ’789 patent col. 13 l. 60–col. 16 l. 52). If
there is a corresponding entry, the flow-entry is updated,
and additional operations may be performed to “fully
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 11
characterize” the associated conversational flow. Id. (citing
’789 patent col. 14 ll. 54–61). If there is no corresponding
entry, a new entry is created and “protocol and state iden-
tification process 318 further determines . . . the protocols”
and part of the state sequence the packet belongs to. Id.
slip. op. at 8 (citing ’789 patent col. 14 ll. 44–53).
According to the district court, prior art monitors could
not identify disjointed connection flows as belonging to the
same conversational flow, but the claimed invention could
provide a granular, nuanced, and useful classification of
network traffic. Id. slip op. at 10. The court found that the
metrics made possible by the recited invention improved
quality and performance of traffic flows. Id. slip. op. at 11.
Specifically, the monitors had an improved ability to clas-
sify and diagnose network congestion while providing in-
creased network visibility to identify intrusions and
malicious attacks. Id.
With this factual background, the court applied the Al-
ice framework. First, the court rejected NetScout’s argu-
ment that claim 19 is directed to the collection, comparison,
and classification of information. The court instead held
that the claim was directed to “solving a discrete technical
problem: relating disjointed connection flows to each
other.” Id. slip. op. at 30. The court determined that the
claim was directed to “specific technological solutions, such
as identifying and refining a conversational flow so that
different connection flows can be associated with each
other and ultimately an underlying application or proto-
col.” Id. At step one, the district court also rejected
NetScout’s argument that the claims are directed to an ab-
stract idea because they do not explain how to determine
whether packets belong to a conversational flow. Accord-
ing to the district court, NetScout’s argument focused on
the claims in isolation instead of the claims as read in light
of the specification. In the court’s view, the claims and
specification “[t]aken together . . . teach how to identify
that certain packets belong to the same conversational
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12 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
flow,” especially in light of NetScout’s expert’s testimony
that the patents describe how one would identify and clas-
sify different connections into a conversational flow. Id.
slip op. at 32.
Despite finding that the claims were not directed to an
abstract idea, the court proceeded to step two of the Alice
analysis, holding that NetScout failed to show that the
combination of elements in the claims would have been re-
garded as conventional, routine, or well-known by a skilled
artisan at the time of the invention.
In this appeal, NetScout maintains that the claims are
directed to the abstract idea of collecting, comparing, and
classifying packet information. NetScout submits that,
even if the claims are directed to a technical problem—the
need to correlate disjointed connection flows—they are not
directed to a specific implementation of a solution of that
problem. According to NetScout, the district court erred by
considering the specification’s teachings of how to identify
packets belonging to the same conversational flow.
NetScout then argues that, at step two, the claims lack an
inventive concept because the recited components in the
claim are standard, off-the-shelf components, used in every
probe.
Packet Intelligence counters that the district court cor-
rectly held that the claims are not directed to an unpatent-
able abstract idea. Packet Intelligence faults NetScout for
oversimplifying the claims and maintains that the district
court was correct to consider the specification in its analy-
sis. Packet Intelligence further submits that the claims are
directed to a technical problem and, as the district court
found, recite an unconventional technological solution, con-
structing conversational flows that associate connection
flows with each other and ultimately specific applications
or protocols. Even if the claims were directed to an abstract
idea, however, Packet Intelligence argues that NetScout
has failed to show clear error in the district court’s fact
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 13
findings at step two that the invention’s components were
not routine or conventional.
We agree with Packet Intelligence that claim 19 is not
directed to an abstract idea. In our eligibility analysis, we
consider the claim as a whole, Diamond v. Diehr, 450 U.S.
175, 188 (1981), and read it in light of the specification,
Data Engine Techs. LLC v. Google LLC, 906 F.3d 999, 1011
(Fed. Cir. 2018). We have recognized that “software-based
innovations can make ‘non-abstract improvements to com-
puter technology’ and be deemed patent-eligible subject
matter at step 1.” Finjan, Inc. v. Blue Coat Sys., Inc., 879
F.3d 1299, 1304 (Fed. Cir. 2018) (quoting Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335–36 (Fed. Cir. 2016)).
And at step one, we consider whether the “focus of the
claims is on [a] specific asserted improvement in computer
capabilities . . . or, instead, on a process that qualifies as
an ‘abstract idea’ for which computers are invoked merely
as a tool.” Enfish, 822 F.3d at 1335–36. In Enfish, for ex-
ample, we held that a claim to a self-referential table was
not directed to an abstract idea because the table embodies
an improvement in the way computers operate. Id. In
reaching that conclusion, we explained that the specifica-
tion taught that the self-referential table functioned differ-
ently from conventional databases, providing increased
flexibility, faster search times, and smaller memory re-
quirements. Id. at 1337.
Likewise, in SRI International, Inc. v. Cisco Systems,
Inc., 930 F.3d 1295 (Fed. Cir. 2019), cert. denied, 140 S. Ct.
1108 (2020) (Mem.), we held claims drawn to a method of
hierarchical computer network monitoring to be patent-el-
igible. The SRI claims recited a series of steps, including
“deploying” network monitors, which detect “suspicious
network activity based on analysis of network traffic data,”
and generate and integrate “reports of . . . suspicious activ-
ity.” Id. at 1301. At step one, we held that the claims were
not directed to an abstract idea because they were “neces-
sarily rooted in computer technology in order to solve a
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14 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
specific problem in the realm of computer networks.” Id.
at 1303. We recognized that the claims were not using a
computer as a tool but, instead, recited a specific technique
for improving computer network security. In informing our
understanding of the technology and its relationship to the
art, we relied on statements in the specification that the
claimed invention purported to solve weaknesses in the
prior art by providing a framework for recognition of global
threats to interdomain connectivity. As relevant here, the
SRI claims recited general steps for network monitoring
with minimal detail present in the claim limitations them-
selves.
Like the SRI claims, claim 19 purports to meet a chal-
lenge unique to computer networks, identifying disjointed
connection flows in a network environment. The claim
solves a technological problem by identifying and refining
a conversational flow such that different connection flows
can be associated with each other and ultimately with an
underlying application or protocol. The claims detail how
this is achieved in several steps. The claimed “parser sub-
system” extracts information from the packet. This packet
information is checked against “flow-entry memory” by the
claimed “lookup engine.” The flow insertion engine coupled
to the memory and the lookup engine determines whether
the packet matches an entry in the flow-entry database. If
there is a match, the flow insertion engine updates the
matching entry with data from the new packet. If there is
no match, the engine creates a new entry.
The asserted patents’ specifications make clear that
the claimed invention presented a technological solution to
a technological problem. The specifications explain that
known network monitors were unable to identify disjointed
connection flows to each other, and the focus of the claims
is a specific improvement in computer technology: a more
granular, nuanced, and useful classification of network
traffic. See, e.g., ’751 patent col. 2 ll. 53–56; col. 3 l. 2–
col. 4 l. 6. The specifications likewise explain how the
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 15
elements recited in the claims refer to specific technological
features functioning together to provide that granular, nu-
anced, and useful classification of network traffic, rather
than an abstract result. See, e.g., ’789 patent col. 23 l. 38—
col. 27 l. 50 (describing the technological implementation of
the lookup engine and flow insertion engine as used in the
claims); see also ’725 patent col. 10 l. 3—col. 13 l. 4.
In its argument regarding step one of the Alice analy-
sis, NetScout argues that Two-Way Media Ltd. v. Comcast
Cable Commc’ns, LLC, 874 F.3d 1329 (Fed. Cir. 2017), lim-
its our consideration of the specification’s concrete embod-
iments, including Figure 2. But we need not rely on the
specific data disclosed in Figure 2 of the specification to de-
termine that claim 19 is not directed to an abstract idea.
Regardless, Two-Way Media does not support NetScout’s
view. In Two-Way Media, this court commented that at
step two, the claim, not the specification, must include an
inventive concept. Id. at 1338 (“The main problem that
Two-Way Media cannot overcome is that the claim—as op-
posed to something purportedly described in the specifica-
tion—is missing an inventive concept.”). Here, because we
have concluded that the claims are not directed to an ab-
stract idea, we do not reach step two. SRI, 930 F.3d at 1304
(citing Enfish, 822 F.3d at 1339). Because the parties treat
claim 19 as representative of all asserted claims, we there-
fore conclude that all asserted claims are patent-eligible.
III. Invalidity under § 102
At trial, NetScout presented the jury with its theory
that the asserted patents are invalid under § 102(f) for fail-
ure to list the RMON Working Group as inventors. Specif-
ically, NetScout argued that the RMON Working Group
devised the “Track Sessions” probe functionality that re-
lates connection flows into conversational flows as claimed
in the patents. Track Sessions allows probe software to join
together first connections starting on well-known ports
with second connections that are on dynamically assigned
Case: 19-2041 Document: 56 Page: 16 Filed: 07/14/2020
16 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
ports by remembering the port assignments. Version 4.5
of Track Sessions was available in October 1998, before the
June 30, 1999 priority date of the asserted patents.
To support its inventorship theory, NetScout relied on
testimony from its expert, Mr. Waldbusser, who main-
tained that the Track Sessions Probe as implemented could
correlate packets associated with an activity, even though
those packets were exchanged via different connection
flows with different port numbers. NetScout also points to
testimony from a named inventor of the asserted patents,
Mr. Dietz, who stated that he was aware of the RMON
Working Group’s publications, including Track Sessions.
NetScout also submits that the claims are at least antici-
pated by the Track Sessions probe.
Packet Intelligence contends that the jury’s rejection of
NetScout’s § 102 challenge is supported by substantial ev-
idence. Packet Intelligence faults Mr. Waldbusser for fail-
ing to consider the limitations of claim 19, instead focusing
more generally on “conversational flows,” and points to
Dr. Almeroth’s testimony that Track Sessions counts all of
the packets in a conversational flow as a single flow entry,
as opposed to correlating several connection flows. Packet
Intelligence also cites Dr. Almeroth’s testimony that Track
Sessions fails to provide visibility into application content
and is limited to providing network layer information.
The district court rejected NetScout’s motion for judg-
ment as a matter of law on its inventorship and anticipa-
tion defenses, holding that the jury’s verdict is supported
by substantial evidence. In support, the court cited Dr. Al-
meroth’s testimony that Mr. Waldbusser failed to analyze
the claim language as written and that the NetScout probe
did not associate connection flows but, instead, replaced
one flow with another.
We agree with the district court that the jury’s verdict
is supported by substantial evidence. While NetScout asks
us to accept its interpretation of the record, the jury was
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 17
permitted to weigh Dr. Almeroth’s testimony over that of
Mr. Waldbusser. Reeves, 530 U.S. at 150–51. Specifically,
Dr. Almeroth testified that Track Sessions attributes all
packets of a protocol that starts sessions on well-known
ports or sockets and then transfers them to dynamically
assigned ports or sockets thereafter. In Dr. Almeroth’s
view, this generates one flow entry, which is different from
a conversational flow that relates different independent
flows to each other. J.A. 1924. Dr. Almeroth further testi-
fied that Track Sessions requires knowledge of the port
number to determine an application identity and does not
work unless the initial port is well known. J.A. 1925. Ac-
cording to Dr. Almeroth, Track Sessions describes “just
having one flow-entry that’s changed, as opposed to main-
taining existing flow-entries, creating new flow-entries,
and then correlating and relating those flow-entries to-
gether to create conversational flows,” instead providing
for “just swap[ping] out the port number and maintain[ing]
one flow-entry.” J.A. 1940. Dr. Almeroth also disagreed
with Mr. Waldbusser that Track Sessions had visibility
into application data itself and faulted Mr. Waldbusser for
combining source code from two references—Versions 4.5.0
and 4.5.3 of Track Sessions—in his anticipation analysis.
The jury was entitled to credit Dr. Almeroth’s testimony
over Mr. Waldbusser’s, and, drawing all inferences in favor
of the jury verdict and accepting the jury’s credibility de-
terminations, the jury’s verdict on NetScout’s inventorship
defense is supported by substantial evidence.
Likewise, the jury was permitted to credit Dr. Alme-
roth’s testimony that Track Sessions fails to meet claim
19’s memory limitation, and the jury’s verdict regarding
anticipation is also accordingly supported by substantial
evidence.
NetScout also appears to argue that the district court’s
acceptance of Dr. Almeroth’s testimony regarding separate
flow entries for a single conversational flow is a new issue
of claim construction. But a review of the trial transcript
Case: 19-2041 Document: 56 Page: 18 Filed: 07/14/2020
18 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
reveals that NetScout failed to object during the challenged
portion of Dr. Almeroth’s testimony, including during his
testimony regarding his understanding of what the claims
require. Contrary to NetScout’s view, if it understood
Dr. Almeroth to be testifying inconsistently with the dis-
trict court’s claim construction order or testifying to mate-
rial beyond of the scope of his report, NetScout was
required to object at trial to preserve its arguments for
judgment as a matter of law. And NetScout’s failure to ob-
ject amounts to waiver of these issues. See, e.g., Hewlett-
Packard Co. v. Mustek Sys., Inc., 340 F.3d 1314, 1321 (Fed.
Cir. 2003) (“[W]here the parties and the district court elect
to provide the jury only with the claim language itself, and
do not provide an interpretation of the language in the light
of the specification and the prosecution history, it is too late
at the JMOL stage to argue for or adopt a new and more
detailed interpretation of the claim language and test the
jury verdict by that new and more detailed interpreta-
tion”); Solvay S.A. v. Honeywell Int’l Inc., 742 F.3d 998,
1004 (Fed. Cir. 2014) (holding claim construction argument
waived when party failed to request modification or clarifi-
cation of the claim construction when the issue surfaced at
trial). Thus, our analysis is confined to whether substan-
tial evidence supports the jury’s verdict under the undis-
puted claim construction at trial, Hewlett-Packard, 340
F.3d at 1320, and we conclude that it does.
IV. Pre-suit damages
NetScout asserts that is not subject to pre-suit dam-
ages because Packet Intelligence’s licensees failed to
properly mark their patent-practicing products. Before fil-
ing the instant suit, Packet Intelligence licensed the as-
serted patents to Exar, Cisco, and Huawei, which were
alleged to have produced unmarked, patent-practicing
products. The ’789 patent is subject to the marking re-
quirement of 35 U.S.C. § 287(a), and the availability of pre-
suit damages for the ’789 patent hinges on whether Exar’s
MeterFlow product was appropriately marked. If pre-suit
Case: 19-2041 Document: 56 Page: 19 Filed: 07/14/2020
PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 19
damages cannot be supported for the ’789 patent, Packet
Intelligence submits that we can uphold the jury’s damages
award based on infringement of the ’725 and ’751 patents,
method patents that are not subject to the marking re-
quirement.
A. Marking
When the district court charged the jury in this case,
this court had not yet ruled on which party bears the bur-
den of proving compliance with the marking statute. After
the verdict, we held that an alleged infringer “bears an in-
itial burden of production to articulate the products it be-
lieves are unmarked ‘patented articles’ subject to [the
marking requirement]” in Arctic Cat Inc. v. Bombardier
Recreational Prods. Inc., 876 F.3d 1350, 1368 (Fed. Cir.
2017). We held that the initial burden was a “low bar” and
that the alleged infringer needed only to put the patentee
on notice that certain licensees sold specific unmarked
products that the alleged infringer believes practice the pa-
tent. Id. The burden then fell on the patentee to prove that
the identified products do not practice the patent-at-issue.
Id.
Here, the district court’s jury instruction is in tension
with the later decision in Arctic Cat, as it appears to place
the burden on NetScout to show that the Exar, Huawei,
and Cisco products practice the ’789 patent:
Any damages for infringement of the ’789 patent
commence on the date that NetScout has both in-
fringed and been notified of the alleged infringe-
ment of the ’789 patent. In considering if NetScout
has been notified of the alleged infringement,
NetScout must first show the existence of a patented
article. A patented article is a licensed product that
practices one or more claims of the ’789 patent. If
NetScout does not show the existence of a patented
article, Packet Intelligence is permitted to collect
Case: 19-2041 Document: 56 Page: 20 Filed: 07/14/2020
20 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
damages going six years before the filing of the com-
plaint in this case for the ’789 patent.
However, if you find that Packet Intelligence’s li-
censed products include the claimed invention of
the ’789 patent, you must determine whether
Packet Intelligence required that those products be
marked with the ’789 patent number. . . .
Packet Intelligence has the burden of establishing
that it substantially complied with the marking re-
quirement. This means Packet Intelligence must
show that it made reasonable efforts to ensure that
its licensees who made, offered for sale, or sold
products under the ’789 patent marked the prod-
ucts. If you find that Packet Intelligence has not
made reasonable efforts to ensure that its licensees
who made, offered for sale, or sold products under
the ’789 patent marked the products, then the par-
ties agree that NetScout first received actual notice
of the ’789 patent and that actual notice was on
March 15, 2016, and any damages for the ’789 pa-
tent can only begin on that date.
Transcript of Jury Trial at 47:11–48:20, Packet Intelligence
LLC v. NetScout Sys., No. 2:16-cv-230-JRG (E.D. Tex. Oct.
13, 2017), ECF No. 252 (emphasis added). After receiving
this instruction, the jury rejected NetScout’s marking de-
fense, awarding Packet Intelligence $3,500,000 in damages
to compensate for pre-suit infringement. Verdict Form,
Packet Intelligence LLC v. NetScout Sys., Inc., No. 2:16-cv-
230-JRG (Oct. 13, 2017), ECF No. 237.
NetScout moved for judgment as a matter of law, argu-
ing that Packet Intelligence failed to present any evidence
to the jury that the Exar, Huawei, and Cisco products do
not practice the patent or were not properly marked, but
the district court denied NetScout’s motion. The district
court found that the jury had a substantial evidentiary ba-
sis to conclude that Packet Intelligence was not obligated
Case: 19-2041 Document: 56 Page: 21 Filed: 07/14/2020
PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 21
to mark the MeterFlow products. Packet Intelligence LLC
v. NetScout Sys., Inc., 2019 WL 2375218, at *5 (E.D. Tex.
June 5, 2019). We will consider Exar’s MeterFlow product
alone, as it is dispositive in our analysis.
NetScout argues that Packet Intelligence is not enti-
tled to pre-suit damages for the ’789 patent because it
failed to prove that MeterFlow, an unmarked product, did
not practice the ’789 patent. Specifically, NetScout faults
the court for relying on Mr. Dietz’s testimony because he
testified about MeterWorks, not MeterFlow, and because
he did not testify that the MeterFlow product did not prac-
tice the patent.
In response to NetScout’s argument, Packet Intelli-
gence appears to argue that NetScout bears the burden of
establishing that the MeterFlow products practiced any
claims of the ’789 patent because it failed to object to the
district court’s jury instruction or seek a new trial based on
Arctic Cat.
As a preliminary matter, we disagree that the failure
to object decides this matter. We are bound by the law, not
by the jury charge, even if the charge was not objected to.
Markman v. Westview Instruments, Inc., 52 F.3d 967, 975
n.5 (Fed. Cir. 1995) (en banc). And NetScout’s failure to
object to the district court’s jury instruction does not render
the instruction law of the case for evaluating the suffi-
ciency of the evidence. Boyle v. United Techs. Corp., 487
U.S. 500, 514 (1988) (citing City of St. Louis v. Praprotnik,
485 U.S. 112, 120 (1988) (plurality opinion)).
Under the standard articulated in Arctic Cat, NetScout
bore the preliminary burden of identifying unmarked prod-
ucts that it believed practice the ’789 patent. It is undis-
puted that NetScout adequately identified Exar’s
MeterFlow product. Packet Intelligence then bore the bur-
den of proving that MeterFlow did not practice at least one
claim of the ’789 patent. See Arctic Cat, 876 F.3d at 1369.
Case: 19-2041 Document: 56 Page: 22 Filed: 07/14/2020
22 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
Packet Intelligence submits that it met its burden in
two ways: (1) by showing that the MeterFlow product was
mentioned in a provisional application that the ’789 patent
claims priority from and that the inventors removed that
reference before filing non-provisional applications, and (2)
with testimony from Mr. Dietz, a named inventor, who
stated that MeterWorks, a different product, did not em-
body his invention. This evidence is, however, insufficient
to carry Packet Intelligence’s burden of proving that the
MeterFlow product does not practice the ’789 patent. The
fact that the inventors chose to cease referencing Meter-
Flow in later patent applications does not support the in-
ference that MeterFlow does not practice the patent.
Mr. Dietz testified that the reference to MeterFlow was re-
moved because MeterFlow was software that “evolved,”
and using the term would have suggested that past ver-
sions of the software using the “marketing term” Meter-
Flow “were the current version.” J.A. 1122:15–24.
Crediting Mr. Dietz’s testimony, it appears that the exclu-
sion of MeterFlow was to prevent “confusion” about an
evolving product, J.A. 1122:21–22, not to comment on
whether MeterFlow practiced the ’789 patent.
Packet Intelligence also relies on Mr. Dietz’s testimony
that MeterWorks did not embody the invention. But
Mr. Dietz was not qualified as an expert in this case and
did not provide an infringement opinion regarding the Me-
terFlow product. Mr. Dietz testified to the ultimate ques-
tion of noninfringement about a different Exar product,
MeterWorks. Even if Mr. Dietz had testified about the cor-
rect product and was permitted to offer an expert opinion
on whether MeterFlow practiced the asserted claims, his
conclusory testimony failed to address what claim limita-
tions were purportedly missing from the product and would
have been insufficient to carry Packet Intelligence’s burden
of proving that MeterFlow did not practice the ’789 patent.
Because Packet Intelligence failed to present substan-
tial evidence to the jury that matched the limitations in
Case: 19-2041 Document: 56 Page: 23 Filed: 07/14/2020
PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 23
any claim of the ’789 patent to the features of the Meter-
Flow product, NetScout is entitled to judgment as a matter
of law that it is not liable for pre-suit damages based on
infringement of the ’789 patent.
B. Method Patents
In an attempt to preserve the jury verdict, Packet In-
telligence argues that the pre-suit damages award can be
supported by evidence of direct infringement of the’725 and
’751 patent. The district court agreed with Packet Intelli-
gence, relying on Dr. Almeroth’s testimony that the
NetScout products were used for testing and in the field,
Mr. Marwaha’s testimony that NetScout technicians im-
plement the accused products at customer sites, and
Mr. Lindahl’s testimony that NetScout customers pay
NetScout to use its equipment to monitor their networks
and do analyses or troubleshooting. The court also cited
Mr. Bergman’s testimony that these activities drive the
sales of products and revenue to NetScout, which sup-
ported that NetScout’s own use of the claimed methods
drove the U.S. sales of the accused products and justified
pre-suit damages for infringement of the method patents.
NetScout maintains that its internal use and testing of
allegedly infringing methods cannot support pre-suit dam-
ages under these patents. According to NetScout, there
was no evidence of specific instances of NetScout’s use of
the accused products, and the district court relied on evi-
dence that was too general regarding field use. Packet In-
telligence counters that there was ample evidence
presented at trial that NetScout used its own products to
drive the sales of products and revenue to NetScout and
that this activity contributed to the product sales that com-
prise the royalty base.
We disagree with Packet Intelligence. Method claims
are “not directly infringed by the mere sale of an apparatus
capable of performing the claimed process.” Joy Techs.,
Inc. v. Flakt, Inc., 6 F.3d 770, 773 (Fed. Cir. 1993).
Case: 19-2041 Document: 56 Page: 24 Filed: 07/14/2020
24 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
Therefore, Packet Intelligence cannot simply count sales of
the software accused of infringing the ’789 patent as sales
of the method claimed in the ’725 and ’751 patents. In-
stead, Packet Intelligence was required to produce evi-
dence that the claimed method was actually used and
hence infringed. Packet Intelligence advanced a theory
that NetScout’s internal testing, customer support, and
customer training was pre-suit activity infringing the
method patents and thus supporting damages. But there
is no evidence supporting damages caused by or resulting
from these pre-suit activities. Mr. Bergman, Packet Intel-
ligence’s damages expert, applied a calculated reasonable
royalty to revenue from NetScout’s sales of the GeoBlade
and GeoProbe G10 products—occurring both before and af-
ter the suit was filed. The damages base was not tailored
to any alleged internal use of the claimed methods.
The district court held that the jury had a sufficient ba-
sis to find that NetScout’s internal use of the claimed meth-
ods “drove U.S. sales of the Accused Products and justified
an award of pre-suit damages for the ’725 and ’751 method
patents.” Packet Intelligence LLC v. NetScout Sys., Inc.,
2019 WL 2375218, at *7 (E.D. Tex. June 5, 2019). In con-
cluding that the jury had a reasonable basis for its pre-suit
damages award, the court relied on its instruction to the
jury that it “may consider ‘the effect of selling the patented
specialty in promoting sales of other products of the licen-
see, the existing value of the invention to the licensee as a
generator of sales of its non-patented items, and the extent
of such derivative or convoyed sales.’” Id. But Mr. Berg-
man did not present a damages theory to the jury based on
derivative or convoyed sales. Mr. Bergman did testify that
some non-accused NetScout products would be degraded if
NetScout did not have access to the accused technology, but
after taking those products into account, Mr. Bergman only
concluded “that the reasonable royalty in this case . . .
would be three and a half percent.” J.A. 1439–40. At no
point did Mr. Bergman opine that non-accused products
Case: 19-2041 Document: 56 Page: 25 Filed: 07/14/2020
PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 25
should be included in the royalty base, and Packet Intelli-
gence’s current damages theory is wholly unsupported by
the record.
Even if NetScout’s own use of the patented method
drove sales for the GeoBlade and GeoProbe G10 products,
that fact would only justify instances of internal use being
counted as part of the royalty base. Packet Intelligence is
barred from recovering damages for pre-suit sales of the
GeoBlade and GeoProbe G10 products because it failed to
comply with the marking requirement. It cannot circum-
vent § 287 and include those products in its royalty base
simply by arguing that NetScout’s infringement of related
method claims drove sales. Because neither the record nor
the law supports Packet Intelligence’s recovery of pre-suit
damages for any of the asserted patents, NetScout is enti-
tled to judgment as a matter of law on this issue.
V. Willfulness
Finally, NetScout appeals the willfulness judgment.
The jury returned a verdict finding that NetScout’s in-
fringement was willful. NetScout moved for judgment as a
matter of law on willfulness, but the district court denied
its motion. NetScout maintains that its infringement was
not willful, challenging the jury’s evaluation of the facts.
Specifically, NetScout contests that its executives’ lack of
knowledge regarding the patents and continued infringing
activity after this suit was filed cannot support willfulness.
Packet Intelligence responds that the jury’s willfulness
verdict was supported by substantial evidence and should
be accorded deference.
We agree with Packet Intelligence. At trial, NetScout’s
corporate representative, Mr. Kenedi, admitted that he did
not read the patents but still testified that he believed
Mr. Dietz lied and stole the claimed inventions. NetScout’s
CEO, Mr. Singhal, testified that he could not recall ever re-
viewing the asserted patents and confirmed that, even
though NetScout was phasing out the accused products, he
Case: 19-2041 Document: 56 Page: 26 Filed: 07/14/2020
26 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
would sell one to a customer if the product was demanded.
The jury was permitted to credit this evidence and to draw
the inference that NetScout willfully infringed Packet In-
telligence’s patent rights. In reviewing a motion for judg-
ment as a matter of law, we draw all reasonable inferences
most favorable to the verdict, and, under this standard of
review, we conclude that the jury’s willfulness verdict is
supported by substantial evidence.
CONCLUSION
We have considered the parties’ remaining arguments
but find them unpersuasive. Accordingly, the judgment of
the district court is affirmed as to infringement, validity,
and willfulness. The district court’s award of pre-suit dam-
ages is reversed, and any enhancement thereof is vacated.
AFFIRMED-IN-PART, REVERSED-IN-PART,
VACATED-IN-PART, AND REMANDED
COSTS
No costs.
Case: 19-2041 Document: 56 Page: 27 Filed: 07/14/2020
United States Court of Appeals
for the Federal Circuit
______________________
PACKET INTELLIGENCE LLC,
Plaintiff-Appellee
v.
NETSCOUT SYSTEMS, INC., NETSCOUT SYSTEMS
TEXAS, LLC, FKA TEKTRONIX TEXAS, LLC DBA
TEKTRONIX COMMUNICATIONS,
Defendants-Appellants
______________________
2019-2041
______________________
Appeal from the United States District Court for the
Eastern District of Texas in No. 2:16-cv-00230-JRG, Judge
J. Rodney Gilstrap.
______________________
REYNA, Circuit Judge, concurring-in-part, dissenting-in-
part.
I join the majority’s reasoning and conclusions as to all
issues except the patentability of the asserted claims under
§ 101. In my view, the claims are directed to the abstract
idea of identifying data packets as belonging to “conversa-
tional flows” rather than discrete “connection flows.” While
the claimed implementations of this idea may ultimately
contain inventive concepts that save the claims, it was
clear error for the district court to base its finding of inven-
tiveness on the abstract idea itself and its attendant bene-
fits. Accordingly, I would vacate the district court’s
Case: 19-2041 Document: 56 Page: 28 Filed: 07/14/2020
2 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
judgment of patent eligibility and remand for the court to
make factual findings as to whether the components and
operations actually recited in each claim amount to more
than what was merely routine and conventional in the art.
I
In assessing the subject matter eligibility of patent
claims under § 101, we first begin at Step 1 of Alice by de-
termining whether the claims at issue are “directed to” a
patent-ineligible concept. Alice Corp. Pty. v. CLS Bank
Int’l, 573 U.S. 208, 218 (2014). To do so, we look to “the fo-
cus of the claimed advance over the prior art” to determine
if the character of the claim as a whole, considered in light
of the specification, is directed to excluded subject mat-
ter. Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378,
1384 (Fed. Cir. 2019); see also Intellectual Ventures I LLC
v. Capital One Fin. Corp., 850 F.3d 1332, 1338 (Fed. Cir.
2017) (quoting Affinity Labs of Tex., LLC v. DIRECTV,
LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016)); Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016).
Here, claim 19 of U.S. Patent No. 6,954,789 (the “’789
patent”), which the parties treat as representative of the
asserted claims, recites a “packet monitor for examining
packets” with various components. The components are
configured to extract information from passing packets;
store “flow-entries for previously encountered conversa-
tional flows,” each “identified by identifying information”;
compare information extracted from each passing packet to
flow-entries in the flow-entry memory; and either classify
the packet as belonging to an existing flow if there is a
match, or create a new flow-entry if there is not.
The specification makes clear that “[w]hat distin-
guishes this invention from prior art network monitors is
that it has the ability to recognize disjointed flows as be-
longing to the same conversational flow.” ’789 patent, col.
3 ll. 56–59. That term, “conversational flow,” is one coined
by the inventors to describe “the sequence of packets that
Case: 19-2041 Document: 56 Page: 29 Filed: 07/14/2020
PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 3
are exchanged in any direction as a result of any activity.”
Id. at col. 2 ll. 45–47. The specification contrasts this type
of flow with the “connection flows” that were tracked by
prior art monitors, which merely represented “all packets
involved with a single connection.” Id. at col. 2 ll. 42–50.
In other words, the asserted advance over the prior art is
the classification of data packets according to the flow of
data associated with given activities rather than poten-
tially disjointed exchanges transmitted over individual
connections.
The majority characterizes this as a “technological so-
lution to a technological problem” in the form of a “more
granular, nuanced, and useful classification of network
traffic.” Slip Op. 14. On that basis, the majority concludes
that the asserted claims are not directed to an abstract idea
at Alice Step 1. But if the technological problem at issue
was that prior art monitors could not recognize packets
from multiple connections as belonging to the same conver-
sational flow, then the “solution” of classifying network
traffic according to conversational flows rather than con-
nection flows is conceptual, not technological, in the ab-
sence of specific means by which that classification is
achieved.
Here, claim 19 recites computer components that per-
form the operations of extracting, storing, and comparing
unspecified “identifying information” in order to “classify”
data packets by flow. Other than the bare statement that
the flow entries stored in the database are “for previously
encountered conversational flows,” the claimed operations
describe only a general method of sorting data packets ac-
cording to any flow, not a specific means of sorting packets
by conversational flow. Crucially, the claim does not recite
how the individual packets are actually “identified” as be-
longing to a conversational flow beyond the functional re-
quirement that “identifying information” is used. ’789
patent, col. 36 l. 31—col. 37 l. 2. Yet, the specification ex-
plains that to implement the invention, the information
Case: 19-2041 Document: 56 Page: 30 Filed: 07/14/2020
4 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
necessary for identifying a conversational flow must be
“adaptively determined” through an iterative process in
which increasingly specific “signatures” are generated
through analysis of patterns in the sequence of passing
packets. Id. at col. 4 ll. 10–13; col. 10 l. 16—col. 11 l. 34. In
the preferred embodiment, the pattern analysis process is
governed by a “parsing-pattern-structures and extraction-
operations database” compiled from “protocol description
language files” that describe “patterns and states of all pro-
tocols that [c]an occur at any layer, including . . . what
information to extract for the purpose of identifying a flow,
and ultimately, applications and services.” See id. at col.
11 l. 66—col. 12 l. 62. None of these processes or compo-
nents are recited in claim 19, and the claim elements have
not been construed as limited to the structures and pro-
cesses disclosed in the embodiments.
Standing alone, the components and operations actu-
ally recited in the claims do not provide “the specificity re-
quired to transform a claim from one claiming only a result
to one claiming a way of achieving it.” SAP Am., Inc. v.
InvestPic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018); see
also McRO, Inc. v. Bandai Namco Games Am. Inc., 837
F.3d 1299, 1314 (Fed. Cir. 2016) (explaining that courts
must “look to whether the claims in these patents focus on
a specific means or method that improves the relevant
technology or are instead directed to a result or effect that
itself is the abstract idea and merely invoke generic pro-
cesses and machinery”). In the absence of specific techno-
logical means for achieving the desired results, we have
described the mere collection, analysis, and display of in-
formation as falling within the realm of abstract ideas. See
Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354
(Fed. Cir. 2016); see also Two-Way Media Ltd. v. Comcast
Cable Commc’ns, LLC, 874 F.3d 1329, 1337 (Fed. Cir. 2017)
(finding a claim directed to an abstract idea when it “re-
quires the functional results of ‘converting,’ ‘routing,’ ‘con-
trolling,’ ‘monitoring,’ and ‘accumulating records,’ but does
Case: 19-2041 Document: 56 Page: 31 Filed: 07/14/2020
PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 5
not sufficiently describe how to achieve these results in a
non-abstract way”).
The absence of a concrete technological solution in
claim 19 distinguishes it from the claims at issue in SRI.
See SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1300
(Fed. Cir. 2019). There, the patents addressed the problem
of detecting hackers and network intruders who simulta-
neously attempt to access multiple computers in a network
without triggering the alert threshold for any single secu-
rity monitor at any given location. Id. The solution, and
the claimed advance over the prior art, was to deploy and
integrate reports from multiple network monitors that
each analyze specific types of data on the network. Id. at
1303. This specific technique was expressly recited in the
claims. See id. at 1301 (reciting “deploying a plurality of
network monitors in the enterprise network” and “detect-
ing, by the network monitors, suspicious network activity
based on analysis of network traffic data selected from one
or more of the following categories [specified in the claim]”
and “integrating the reports of suspicious activity, by one or
more hierarchical monitors” (quoting U.S. Patent No.
6,711,615, col. 15 ll. 2–21) (emphasis added)). The claims
in SRI disclose how “detecting” by the claimed plurality of
the monitors is achieved. In this case, the claims do not
disclose how the desired result of “identif[ying]” packets as
belonging to a conversational flow is achieved.
In asserting that the claims are nonetheless directed to
a specific technological solution, the district court deter-
mined that “[t]aken together, the claims and the specifica-
tion do teach how to identify that certain packets belong to
the same conversational flow.” J.A. 390 (CL59) (emphasis
added). But the relevant inquiry for § 101 purposes is not
whether the patent as a whole teaches a concrete means for
achieving an abstract result, but whether such a concrete
means is claimed. While a claim must be read “in light of
the specification” to understand what is claimed and the
relative significance of the claimed components, see, e.g.
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6 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
Enfish, 822 F.3d at 1335, a court cannot rely on unclaimed
details in the specification as the “focus” of the claim for
§ 101 purposes. Our case law is clear that the § 101 inquiry
must be based “on the language of the Asserted Claims
themselves, and the specification cannot be used to import
details from the specification if those details are not
claimed.” ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d
759, 769–70 (Fed. Cir. 2019) (citing Synopsys, Inc. v. Men-
tor Graphics Corp., 839 F.3d 1138, 1149 (Fed. Cir. 2016)).
Indeed, this focus on the claimed subject matter distin-
guishes the § 101 inquiry from the enablement and written
description inquiries under § 112, which focus on the spec-
ification as a whole. Contrary to the majority’s suggestion,
Slip Op. 15, this principle is not limited solely to the Alice
Step 2 inquiry. See Am. Axle & Mfg., Inc. v. Neapco Hold-
ings LLC, 939 F.3d 1355, 1363 (Fed. Cir. 2019) (“We have
repeatedly held that features that are not claimed are ir-
relevant as to step 1 or step 2 of the Mayo/Alice analysis.”).
Indeed, it would be an anomalous result if we were not per-
mitted to look to unclaimed details at Alice Step 2 in deter-
mining whether an asserted claim recites an inventive
concept, but could use the same details as the “focus” of the
claim at Alice Step 1 to avoid reaching Step 2.
For these reasons, I believe the asserted claims fail at
Alice Step 1 and must be examined at Alice Step 2.
II
The majority’s opinion does not reach Step 2 of the Al-
ice framework because it concludes that the claims are not
directed to an abstract idea at Step 1. Because I conclude
that the asserted claims are directed to an abstract idea at
Step 1, and the district court’s analysis at Step 2 was
flawed, I would vacate and remand for the district court to
conduct the appropriate analysis as set forth below.
At Alice Step 2, the court must examine the elements
of each claim, both individually and as an ordered combi-
nation, to determine whether it contains an “inventive
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PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC. 7
concept,” beyond what was “well-understood,” “routine,”
and “conventional,” that transforms the nature of the claim
into a patent eligible application. Alice, 573 U.S. at 217,
225. The issue of “[w]hether something is well-understood,
routine, and conventional to a skilled artisan at the time of
the patent is a factual determination.” Berkheimer v. HP
Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018).
Here, the district court concluded that NetScout failed
to show that the combination of elements recited in the as-
serted claims would have been regarded as conventional,
routine, or well-known by skilled artisans in the relevant
field. J.A. 391–392. However, the district court expressly
found that “network monitors that could recognize various
packets as belonging to the same connection flow were
well-known in the prior art.” J.A. 367 (FF28). The only
things identified by the district court as distinguishing the
claimed monitors from these well-known prior art monitors
was the ability to identify disjoined connection flows as be-
longing to the same conversational flow and the attendant
benefits of that concept. See J.A. 367–368 (FF28–31); J.A.
392 (CL 67–68). 1 These distinctions are based on nothing
more than the abstract idea itself, and thus cannot serve
as inventive concepts supporting patentability at Alice
Step 2. See BSG Tech LLC v. Buyseasons, Inc., 899 F.3d
1281, 1291 (Fed. Cir. 2018) (concluding that an alleged in-
novation of the claim that “simply restates what we have
1 While the district court found that “the inventions
recited by the Asserted Claims, in contrast to the prior art,
make this more granular classification possible,” this find-
ing referenced functions and features that are not recited
in the majority of the asserted claims, including claim 19.
See J.A. 368–369 (FF 32) (citing to portions of the patents
discussing “maintaining statistical measures in the flow-
entries related to a conversational flow” and collecting “im-
portant performance metrics”).
Case: 19-2041 Document: 56 Page: 34 Filed: 07/14/2020
8 PACKET INTELLIGENCE LLC v. NETSCOUT SYSTEMS, INC.
already determined is an abstract idea” cannot serve as an
inventive concept at Alice Step 2).
Accordingly, the district court’s analysis at Alice Step 2
was clearly erroneous, and remand is required for the court
to conduct the proper analysis in the first instance. On re-
mand, the salient factual inquiry should be whether the
components and operations recited in each claim contain
anything inventive beyond the abstract concept of classify-
ing by conversational flow. For example, if the words “con-
versational flows” were omitted from each asserted claim,
and replaced with the prior art term, “connection flow,”
would the ordered combination of recited claim elements
amount to something more than the generic and routine
aspects of examining and classifying network traffic? That
inquiry must be conducted at the level of specificity pre-
sented by each claim.
For these reasons, I concur-in-part and dissent-in-part
from the majority opinion.