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May 2015: Victory in Patent Action for MicroStrategy

May 2015

On April 3, 2015, in a precedential opinion, the United States Court of Appeals for the Federal Circuit affirmed a summary judgment ruling from a district court in the Northern District of California in a patent lawsuit brought by Vasudevan Software Inc. (“VSI”), which had found that Quinn Emanuel’s client, MicroStrategy, Inc., did not infringe any asserted patents.

All four of the asserted patents related to database and online analytical processing (“OLAP”) technology. The patents purported to address the problem of how to merge data from different databases “on the fly” and generate an “OLAP cube,” which is a method of storing data in a multidimensional form. Quinn Emanuel attorneys successfully argued to the district court that statements made during prosecution of the asserted patents limited the claimed invention to specialized “disparate” databases that cannot be combined using traditional techniques such as common keys.

The appeal before the Federal Circuit centered on the meaning of these prosecution history statements and whether the patentee was simply listing examples of ways databases could be “disparate” or whether the patentee was actually defining the term “disparate.” The Federal Circuit wholly adopted Quinn Emanuel’s arguments and determined that the prosecution history statement was definitional and excluded our client’s products.

This was an important decision for two reasons. First, the Federal Circuit held that our client’s marketing documents, which described its products as being able to join data from “disparate databases” (the exact language in the patent claims), were not substantial evidence of infringement. Second, we believe that this opinion is now the first appellate decision applying the formal logical rule “DeMorgan’s Theorem” to interpreting patent claims.