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Judge Hellerstein Upholds Infringement by Microsoft of Kaufman's “And/Or” Patent

On January 25, 2021, United States District Judge Alvin Hellerstein (S.D.N.Y.) denied Defendant Microsoft Corp. ("Microsoft")'s motion for judgment as a matter of law pursuant to FRCP 50(b) or a new trial pursuant to FRCP 59.

Plaintiff Michael Kaufman ("Kaufman") sued Microsoft for patent infringement of U.S. Patent No. 7,885,981 ("the '981 patent"). The '981 patent "describes an invention that helps users interact with relational computer databases." Kaufman explained that the invention "functions as a user-friendly way for interacting with raw, complex databases and automatically adjusting to changes in underlying database schema." Kaufman accused Microsoft's Dynamic Data application of infringing various claims of the '981 patent. The jury determined that Microsoft infringed the '981 patent, that the '981 patent was not invalid, and awarded Kaufman $7 million in damages.

Microsoft sought judgment as a matter of law, or in the alternative a new trial, as to the issues of infringement, validity, and damages. With respect to infringement, Microsoft argued that the Dynamic Data application did not "automatically" perform the claimed steps, and instead included manual inputs by the user. The Court found that the manual inputs were "preparatory and follow-up steps, and not a replacement for the automatic steps claimed in the '981 patent." Microsoft also argued that Dynamic Data "lacks a display format for the delete mode" as required by the '981 patent. The Court did not agree, finding that the delete function is an option in the display format with the retrieve function. Microsoft also argued that the phrase "integrates into each [CRUD] mode display processes for representing, navigating, and managing said relationships across tables" required that the display integrate all three modes at once. The Court determined that the display did not require representing, navigating, and managing at once; instead, there was clear evidence that the display had a mode for representing, navigating, and/or managing. As such, Dynamic Data met that claim limitation. Finally, Microsoft argued that it did not "work with relational databases of 'any arbitrary size or complexity.'" However, the jury found the testimony of Kaufman's expert credible, agreeing that "there is no limit on the number of tables that could be handled by the software there."

With respect to validity, the jury found that Microsoft failed to meet its burden of proof with respect to anticipation, obviousness, and lack of written description. Microsoft "argued that Plaintiff failed to present expert evidence of such perspective, and that its own expert was not allowed to testify fully." The Court found this argument "has no merit." The Court described ample differences between the prior art and the invention claimed in the '981 patent. "Jurors could have concluded that the lookup function in Access 2000, which a developer has to manually create, is not an 'automatic' form of managing relationships across tables as taught by the '981 patent."

Finally, the Court found the jury's calculation of damages to be reasonable. The Court found appropriate the reasonable royalty rate estimated by Kaufman's expert. While "Defendant may take issue with these methods of estimation, there was sufficient grounding in the evidence to permit the jury to make reasonable inferences rather than rely on speculation." "The very nature of a hypothetical negotiation is that it will require some projection or inference." The Court therefore ruled in favor of Kaufman on the issue of infringement, validity, and damages.

The case is Kaufman v. Microsoft, No. 16-cv-2880 (AKH) (S.D.N.Y. Jan. 25, 2021).