Egenera, Inc. v. Cisco Systems, Inc., decided July 7, 2025

Case: Egenera, Inc. v. Cisco Systems, Inc. Court: United States Court of Appeals for the Federal Circuit Date Decided: July 7, 2025 Judges: Prost, Taranto, and Stark, Circuit Judges. Appeal From: United States District Court for the District of Massachusetts (No. 1:16-cv-11613-RGS, Judge Richard G. Stearns)

I. Executive Summary

This briefing document summarizes the Federal Circuit's decision affirming a lower court's judgment that Cisco Systems, Inc. ("Cisco") did not infringe Egenera, Inc.'s ("Egenera") U.S. Patent No. 7,231,430 ("the ’430 patent"). The appeal concerned four claims of the ’430 patent (claims 1, 3, 5, and 7) related to virtualized server systems. The Federal Circuit affirmed the summary judgment of non-infringement for claims 1 and 5 and upheld the jury's verdict of non-infringement for claims 3 and 7, along with the denial of Egenera's post-trial motions for judgment as a matter of law (JMOL) or a new trial.

Key takeaways include:

• "Computer Processor" Construction: The district court defined "computer processor" as a Central Processing Unit (CPU), excluding Network Interface Cards (NICs), which was a critical factor in the summary judgment ruling.

• "Emulate Ethernet Functionality" Limitation: For claims 1 and 5, the court found insufficient evidence that Cisco's CPUs emulated Ethernet functionality, distinguishing between "knowledge and use" versus "emulation."

• Network Topology Limitation: For claims 3 and 7, the jury found Cisco's UCS did not program processors to establish the virtual local area network topology, concluding this function resided in NICs.

• Procedural Forfeiture: Egenera largely forfeited its ability to argue for a different claim construction of "emulate Ethernet functionality" on appeal, having failed to raise it sufficiently in the district court or in its appellate briefing.

• Appellate Review Standards: The court applied First Circuit law for non-patent matters (e.g., summary judgment, JMOL, new trial denials, evidentiary rulings reviewed for abuse of discretion) and Federal Circuit law for patent-specific matters (e.g., infringement as a question of fact reviewed for substantial evidence).
  

II. Background of the ’430 Patent and Accused Product

A. The ’430 Patent: The ’430 patent describes an improved server system that addresses the manual, time-consuming, and error-prone process of deploying or reconfiguring conventional server systems.

• Problem Addressed: Traditional systems required physical rewiring of "as many as '100 discrete connections,'" each a potential "failure point."

• Solution: The patent proposes a "digitalized 'processing platform from which virtual systems may be deployed through configuration commands.'" This platform provides a "large pool of processors from which a subset may be selected and configured through software commands to form a virtualized network of computers." This allows virtual management of resources "through software via configuration commands . . . rather than through physically providing servers, [and] cabling network and storage connections." As a result, physical wiring is done once, and reconfigurations are virtual.
  

B. Cisco’s Unified Computing System (UCS): Egenera alleged that Cisco's UCS infringes the ’430 patent.

• Description: Cisco’s UCS is "a scalable computer platform" with physical components like servers, CPUs, and NICs.

• Functionality: UCS virtualizes server management by connecting multiple servers via a single switch and using software (not physical cables) to group and deploy servers. It uses NICs to create virtual NICs (vNICs) which, in turn, group servers into virtual local area networks (VLANs) using software commands.
  

C. Asserted Claims: The appeal involved device claims (1, 3) and method claims (5, 7) from the ’430 patent.

• Claims 1 and 5: Require "a plurality of computer processors" and "at least one control node" that "include network emulation logic to emulate Ethernet functionality over the internal communication network."

• Claims 3 and 7: Require processors to be programmed to establish a "specified virtual local area network topology defining interconnectivity and switching functionality among the specified processors."
  

III. District Court Proceedings and Claim Construction

A. Disputed Claim Terms: Key terms disputed during claim construction included "computer processor/processor" and "emulate Ethernet functionality over the internal communication network."

• "Computer Processor/Processor": Egenera sought a broad construction ("processing node" encompassing NICs), but the court adopted the ordinary meaning of "a CPU." This was a critical ruling as it distinguished CPUs from NICs.

• "Emulate Ethernet Functionality over the Internal Communication Network": Cisco argued "emulate" implies "necessarily absent from the internal communication network," but the court rejected this, finding the specification "agnostic as to the specific architecture." Notably, the court did not define what the patent specifically means by "emulate Ethernet functionality" because neither party explicitly requested it.
  

B. Summary Judgment on Claims 1 and 5: The district court granted summary judgment of non-infringement for claims 1 and 5.

• Reasoning: Based on its construction of "computer processor" as a CPU, the court found no reasonable finding that Cisco's UCS CPUs "emulate Ethernet functionality."

• Evidence: The court held that "Ethernet emulation functionality resides with [vNICs] and interfaces – stand-alone components separate and apart from the CPUs." It further clarified that "knowledge and use of a communications network is not emulation of the functionality of that network."
  

C. Jury Trial on Claims 3 and 7: The jury found non-infringement for claims 3 and 7. Egenera's post-trial motions for JMOL or a new trial were denied.

• JMOL Denial: The court found "ample basis" to support the jury's findings, specifically noting that a reasonable jury could have found Egenera failed to prove Cisco's UCS practiced the "topology" limitation.

• New Trial Denial: The court rejected Egenera's arguments, including alleged violations of in limine orders, improper testimony, jury instruction issues, and the verdict being against the weight of the evidence.
  

IV. Federal Circuit's Analysis and Rulings

A. Claims 1 and 5 (Summary Judgment Affirmation): The Federal Circuit affirmed the grant of summary judgment of non-infringement.

• Sufficiency of Evidence: The court agreed with the district court that Egenera's evidence only showed UCS CPUs "have knowledge of, and use, Ethernet functionality, but do not – as the claims require – actually 'emulate' Ethernet functionality."

• Forfeiture of Claim Construction Argument: Crucially, the Federal Circuit noted that the dispute at summary judgment appeared to be about the construction of "emulate," but Egenera failed to preserve this argument. Egenera "did not ask the district court to construe the meaning of either 'emulate Ethernet functionality' or 'emulate' and, likewise, has not asked us to do so." Despite the court's concern that the issue "actually turned on an unresolved issue of claim construction," it declined to address it sua sponte because Egenera explicitly denied seeking a new construction on appeal, stating, "'[t]he meaning of the word ‘emulate’ is not here the issue.'" This illustrates the "party presentation principle."
  

B. Claims 3 and 7 (JMOL Affirmation): The Federal Circuit affirmed the denial of Egenera's JMOL motion for claims 3 and 7.

• General Verdict: The jury returned a general verdict, meaning it could have relied on any of Cisco's alternative non-infringement grounds. The Federal Circuit needed only to find sufficient evidence for one ground to uphold the verdict.

• Network Topology Limitation: The court focused on the "topology limitation," which requires processors to "establish the specified virtual local area network topology." The evidence supported the jury's finding that "the UCS establishes network topology at the NICs, but not at the processors." Testimony cited indicated "Cisco does not need to and does not program the CPUs" for this purpose, and "The programming of the VNIC . . . establishes the virtual local area topology specified in the claim."

• No Intent Requirement: The court dismissed Egenera's argument that the district court read an intent requirement into the claims, clarifying that the district court's statement referred only to the "functionality recited in the claims."
  

C. New Trial Denial Affirmation: The Federal Circuit affirmed the denial of a new trial, reviewing for abuse of discretion under First Circuit law.

• Verdict Against Weight of Evidence: Egenera argued the verdict was overwhelmingly against the evidence, but the court disagreed. It noted that Egenera's willful infringement claim made evidence of copying and Cisco's responses relevant, which Egenera had "denigrat[ed]." The jury was correctly instructed to compare the accused product to the claims.

• Curative Instruction for "Copying": The district court's initial statement during jury selection that "[t]o ‘infringe’ in the patent context means to copy essentially without permission" was not plain error, especially given Egenera's 10-day delay in objecting and the thorough, correct final jury instructions on infringement.

• Jury Instruction on Later Patents: Egenera's proposed instruction that "[a] product that is covered by a subsequent or later patent may still infringe an earlier patent" was denied. The Federal Circuit found no prejudice, as the court's final instructions were "thorough, accurate, and sufficient."

• Improper Lay Witness Testimony: Egenera claimed Cisco elicited improper expert testimony from lay witnesses. The Federal Circuit found Egenera waived this argument by failing to raise timely and specific objections at trial. Pretrial motions in limine were deemed "insufficient to put the district court on notice."

• Improper Closing Arguments: Egenera argued Cisco's closing arguments violated pretrial orders (e.g., "empty chair arguments," "patent troll" references, litigation financing). The court found no abuse of discretion, noting that while arguments "traveled close to the lines," Cisco "never violated the literal terms of its orders" and Egenera failed to object at the time, requiring a higher "plain error" standard. For example, Cisco's reference to Egenera as "venture capitalists trying to make good on their bad bet" was deemed not to be a direct violation.
  

V. Conclusion

The Federal Circuit affirmed all aspects of the district court's judgment, concluding that Cisco did not infringe Egenera's ’430 patent. The case highlights the importance of precise claim construction, the distinction between "use" and "emulation" in patent claims, and the critical need for parties to properly preserve legal arguments at all stages of litigation, including explicitly raising claim construction disputes when applicable.