TecSec, Inc. v. Adobe Inc.

Opinion

 [*1282]  Taranto, Circuit Judge.

TecSec, Inc. brought this case in 2010 against several companies, including Adobe Inc., alleging that the companies directly and indirectly infringed claims of four TecSec patents. Aspects of the case have been before this court three times already. The present appeal involves Adobe only and several rulings of the district court, of which two are central. Specifically, before trial, in response to a motion in limine by Adobe, the court excluded all evidence of induced infringement from March 3, 2011, through the expiration of the patents at issue in October 2013. Earlier, [**2]  the court had rejected Adobe's challenge to the asserted claims as ineligible under 35 U.S.C. § 101.

A jury found for TecSec on direct infringement, but not induced infringement; rejected Adobe's prior-art validity challenges; and awarded damages. The district court, though generally denying Adobe's post-trial motions, reduced the damages award to zero on the ground that there was no proof of any damages from direct infringement and the jury had rejected induced infringement.

TecSec appeals. It challenges the district court's motion-in-limine ruling, as well as certain jury instructions and the post-trial damages reduction. Adobe cross-appeals, challenging the district court's ruling on eligibility. We reverse the evidentiary ruling that eliminated TecSec's inducement case for a substantial period, and we reject Adobe's challenge to the district court's eligibility ruling. For those reasons, and others stated in this opinion, we

reverse the judgment in part and remand for further proceedings on TecSec's claim of induced infringement.

TecSec owns U.S. Patent Nos. 5,369,702, 5,680,452, 5,717,755, and 5,898,781, the patents asserted in this case. The patents are entitled "Distributed Cryptographic Object Method" (the "DCOM patents") and claim particular [**3]  systems and methods for multi-level security of various kinds of files being transmitted in a data network. See '702 patent, col. 3, lines 12-24; id., col. 12, lines 2-16; id., col. 12, line 45, through col. 13, line 20. In particular, the DCOM patents describe a method in which a digital object—e.g., a document, video, or spreadsheet—is assigned a level of security that corresponds to a certain combination of access controls and encryption. Id., col. 3, line 58, through col. 4, line 2; id., col. 4, lines 18-25; id., col. 5, lines 42-51. The encrypted object can then be embedded or "nested" within a "container object," which, if itself encrypted and access-controlled, provides a second layer of security. Id., col. 4, lines 25-34.

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