Godo Kaisha IP Bridge 1 v. TCL Communication Technology, 19-2215 (Fed. Cir. 2020)
After a seven-day trial, the jury sided with the patentee IP Bridge — concluding that TCL’s LTE-standard compliant devices for mobile telephony infringed IP Bridge’s U.S. Patent Nos. 8,385,239 and 8,351,538. The jury also awarded $950,000 in damages.
[Jury Verdict redacted]. The judge denied TCL’s post-verdict motions for Judgment as a Matter of Law (JMOL) and also awarded an ongoing royalty of 4¢ per infringing device.
In the case the patentee proved infringement by showing (1) that the claims-in-suit are essential to the LTE standard and (2) that TCL’s accused devices are LTE-compatible. The patentee did not walk through the elements of the claims and prove how each element is found in the accused product. In several prior cases, the Federal Circuit has held that this standard-essential-therefore-infringing approach is proper. See, e.g., Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1209 (Fed. Cir. 2014) (because a “standard requires that devices utilize specific technology, compliant devices necessarily infringe certain claims . . . cover[ing] technology incorporated into the standard”).
On appeal here, the court focused on the question of “who decides: Judge or Jury?”
This appeal presents a question not expressly answered by our case law: who determines the standard-essentiality of the patent claims at issue—the court, as part of claim construction, or the jury, as part of its infringement analysis?
Slip. Op. In the case, the issue was given to the jury — and that clearly seems to be the correct answer because infringement is a classic fact-based question subject to a right to a jury trial under the 7th Amendment of the U.S. Constitution.
In its appeal, TCL pointed to a prior Federal Circuit decision suggesting that whether or not the claims are standard-essential is a claim construction question. In Fujitsu, the court wrote:
If a district court construes the claims and finds that the reach of the claims includes any device that practices a standard, then this can be sufficient for a finding of infringement.
Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321 (Fed. Cir. 2010). This quote, according to TCL, shows that it is the judge’s claim construction role to consider whether the claims cover the standard.
On appeal, the Federal Circuit sided with the patentee — holding that the issue was properly before the jury and that “TCL’s entire appeal rests on its misreading of a single statement from Fujitsu.” Basically, the court explains that it spoke loosely in Fujitsu because that case was decided on summary judgment in a situation with no material facts in dispute. When no facts are in dispute, all remaining issues are left for the judge to decide:
[W]e did not say in Fujitsu that a district court must first determine, as a matter of law and as part of claim construction, that the scope of the claims includes any device that practices the standard at issue. To the contrary, in reviewing the district court’s summary judgment decision (where no facts were genuinely in dispute), we stated that, if a district court finds that the claims cover any device that practices a standard, then comparing the claims to that standard is the same as the traditional infringement analysis of comparing the claims to the accused product. That statement assumed the absence of genuine disputes of fact on the two steps of that analysis, which would be necessary to resolve the question at the summary judgment stage. The passing reference in Fujitsu to claim construction is simply a recognition of the fact that the first step in any infringement analysis is claim construction. . . .
Like any other fact issue, it may be amenable to resolution on summary judgment in appropriate cases. But that does not mean it becomes a question of law.
Slip Op. The conclusion: whether all products complying particular industry standard would infringe a particular patent claim is a question of fact that will typically go to the jury (or decided by the fact finder).
Essentiality is, after all, a fact question about whether the claim elements read onto mandatory portions of a standard that standard-compliant devices must incorporate. This inquiry is more akin to an infringement analysis (comparing claim elements to an accused product) than to a claim construction analysis (focusing, to a large degree, on intrinsic evidence and saying what the claims mean).
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After the verdict was issued, the Judge Bataillon (D.Del.) considered the jury verdict award of $950k and determined that it represented an award of 4¢ per infringing device. The Judge then awarded that amount as an ongoing royalty for any post-verdict infringement through the expiration of the patents.
On appeal, TCL made two interesting arguments about the ongoing royalty award:
- First, TCL argues that the $950k verdict represents a fully-paid-up license and that there should be no ongoing royalty. I looked through the jury verdict form and the Jury Instructions and found nothing to indicate whether these are associated with past damages.
- Second, TCL argues that the award of ongoing royalties is a type of permanent injunction controlling TCL’s future behavior. As such, the district court should have considered the factors set forth in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).
The appellate panel did not court did not delve into these questions but rather dismissed them in a 1-paragraph note:
We have carefully considered TCL’s remaining arguments—including its argument that the district court abused its discretion in awarding on-going royalties in this case. We see no reason to disturb the district court’s conclusions.
Infringement and Ongoing Royalty Affirmed.