Oct 17 (Reuters) - A federal appeals court said it overturned a $15.4 million verdict against card payments company VeriFone Systems Inc because a lower court judge improperly interpreted the patents it had allegedly infringed.
The U.S. Court of Appeals for the Federal Circuit on Friday said a jury in 2012 had wrongly concluded that VeriFone infringed the patents of CardSoft Inc because it had relied on a judge's interpretation of a patent term that was too broad.
CardSoft in 2008 sued San Jose, California-based VeriFone, a maker of credit card swipe machines, and Hypercom Corp -- which VeriFone later acquired -- for allegedly infringing two of its patents covering payment terminals.
In 2012, a Texas jury awarded CardSoft $15.4 million from the two companies. The jury said another defendant, Ingenico SA, did not infringe the patents.
CardSoft's patents referred to a "virtual machine" used to operate payment software. The appeals panel said, however, the district judge's interpretation did not reflect the "ordinary and customary meaning" of the term.
The appeals panel decision reflects its authority to second- guess lower court determinations of a patent's meaning. The U.S. Supreme Court is currently weighing a case called Teva Pharmaceuticals v. Sandoz on whether that authority is appropriate.
Attorneys for CardSoft and VeriFone were not immediately available for comment.
The case is CardSoft Inc v. Verifone Systems Inc et al, U.S. District Court for the Eastern District of Texas, No. 8-cv-98.
Reporting By Andrew Chung; Editing by Ted Botha and Alan Crosby