Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01011/USCOURTS-ca13-14-01011-0/pdf.json

Parties Involved:
JVC Kenwood Corporation
Appellant
Nero, Inc.
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

JVC KENWOOD CORPORATION,

Plaintiff-Appellant

v.

NERO, INC.,

Defendant-Appellee

______________________ 

2014-1011

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 2:12-cv-03662-MRPJC, Senior Judge Mariana R. Pfaelzer.

______________________ 

Decided: August 17, 2015

______________________ 

EVAN FINKEL, Pillsbury Winthrop Shaw Pittman LLP,

Los Angeles, CA, argued for plaintiff-appellant. Also 

represented by JAMES CHANG. 

ADRIAN MARY PRUETZ, Glaser Weil, Fink, Jacobs, 

Howard, Avchen & Shapiro LLP, Los Angeles, CA, argued 

for defendant-appellee. Also represented by ANDREW 

YOUNG CHOUNG, ERICA J. VAN LOON, CHARLES CHRISTIAN

KOOLE. 

______________________ 

Before NEWMAN, DYK, and REYNA, Circuit Judges.

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2 JVC KENWOOD CORPORATION v. NERO, INC. 

NEWMAN, Circuit Judge. 

JVC Kenwood Corporation (“JVC”) sued Nero, Inc. 

and Arcsoft, Inc. for contributory and induced infringement (“indirect infringement”) of certain JVC patents 

directed to various uses of DVD and Blu-ray optical discs. 

The charge of indirect infringement is based on Nero’s 

sale of software to end users of DVD and Blu-ray discs, 

who allegedly directly infringe the JVC patents. The 

district court summarized JVC’s infringement theory as 

follows:

JVC’s theory of infringement rests on the compliance of Nero’s software with the same DVD and 

Blu-ray standards deemed essential to the manufacture, sale, and use of the licensed DVD and 

Blu-ray optical discs. This theory states that each 

Patent is essential to playing, copying, and recording data on an optical disc compliant with the 

DVD or Blu-ray standard. The Nero software 

must practice the Patents because the Nero software is used in conjunction with standardscompliant DVD or Blu-ray optical discs.

JVC Kenwood Corp. v. Arcsoft, Inc., 966 F. Supp. 2d 1003, 

1014 (C.D. Cal. 2013) (“Dist. Ct. Op.”). 

The district court did not accept JVC’s theory. The 

court held, on summary judgment, that JVC is “barred 

from asserting claims of direct infringement against end 

users for use of Nero software with DVD and Blu-ray 

optical discs made or sold by a party whose products have 

been expressly released from claims of infringement by 

JVC with regard to the Patents.” Id. at 1018. The court 

held that, absent direct infringement, Nero cannot be 

liable for indirect infringement. Id. The court alternatively held that: “End users’ use of Nero software with 

DVD and Blu-ray optical discs licensed under the Patents 

is subject to the complete affirmative defense of patent 

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JVC KENWOOD CORPORATION v. NERO, INC. 3

exhaustion with regard to infringement of the Patents.” 

Id.

We conclude that the district court correctly held that, 

on JVC’s theory and proffered evidence of infringement, 

summary judgment of non-infringement was properly 

granted. However, facts material to the issue of patent 

exhaustion were insufficiently developed to warrant 

summary judgment on that alternative ground. 

DISCUSSION

Summary judgment is appropriate when, drawing all 

justifiable inferences in favor of the non-movant, “there is 

no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 

Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 

242, 255 (1986). We give plenary review to the district 

court’s grant of summary judgment. Earl v. Nielsen 

Media Research, Inc., 658 F.3d 1108, 1112 (9th Cir. 2011) 

(Ninth Circuit standard); see Lexion Med., LLC v. 

Northgate Techs., Inc., 641 F.3d 1352, 1358 (Fed. Cir. 

2011) (applying regional circuit standard of review).

The district court’s action to reject a proffered expert 

declaration is reviewed on the standard of abuse of discretion. Maffei v. N. Ins. Co. of N.Y., 12 F.3d 892, 897 (9th 

Cir. 1993); see Anchor Wall Sys., Inc. v. Rockwood Retaining Walls, Inc., 340 F.3d 1298, 1313 (Fed. Cir. 2003) 

(applying regional circuit standard of review).

A 

THE JVC PATENTS

Six JVC Patents are at issue, directed to optical discs 

and specific structures, methods, or systems used with 

optical discs: U.S. Patent No. 6,141,491 (the ’491 Patent), 

No. 5,535,008 (the ’008 Patent), No. 6,522,692 (the ’692 

Patent), No. 6,212,329 (the ’329 Patent), No. 6,490,404 

(the ’404 Patent), and No. 6,788,881 (the ’881 Patent). 

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4 JVC KENWOOD CORPORATION v. NERO, INC. 

JVC states that users of Nero’s software-implemented 

systems and methods, in conjunction with DVD and Bluray optical discs, directly infringe relevant Patents. Thus 

JVC argues that Nero, as provider of the software, is 

liable for contributory or induced infringement.

The ’008 and ’491 Patents 

JVC asserted claims 1, 2, and 4 of the ’491 Patent and 

claims 1, 2, 7, and 8 of the ’008 Patent. The ’491 Patent is 

a division of the ’008 Patent and both relate to “jump 

reproduction”–e.g., fast-forwarding, fast-rewinding, etc.–

through moving picture data that is stored on a disc in a 

coded and compressed format. The specifications of the 

’491 and ’008 Patents state: “An object of the present 

invention is to provide a recording medium, a reproduction method and a reproduction system, which are suitable for jump reproducing video data coded with high 

efficiency by an MPEG method or the like.” ’008 Patent

col. 6 ll. 13-26; ’491 Patent col. 6 ll. 12-25.

The ’491 Patent includes claims to methods for recording and reproducing moving picture data, as well as 

claims to optical discs containing moving picture data. 

For example, claim 1 of the ’491 Patent is directed to an 

optical disc coded with moving picture data according to a 

specified method or format, and claim 2 is directed to the

“method of recording moving picture data on a recording 

medium.” ’491 Patent col. 21 l. 54 to col. 24 l. 19. The 

’008 Patent claims methods for reproducing data, as well 

as “reproduction systems” for “outputting a plurality of 

data groups.” ’008 Patent col. 21 l. 62 to col. 24 l. 56. 

Only the method claims of the ’008 Patent are asserted, 

while both product and method claims of the ’491 Patent

are asserted.

JVC states that when end-users use Nero software 

with blank optical discs to record moving picture data, 

they directly infringe by practicing the specified “method 

of recording moving picture data on a recording medium,” 

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claim 2 of the ’491 Patent, thereby making a “recording 

medium on which moving picture data is recorded,” as 

recited in claim 1. JVC Br. 33.

JVC states that Nero’s accused products meet the “for 

reproducing data from a plurality of data groups having 

at least a first data group and a second data group” limitation of claim 1 of the ’008 patent because the accused 

products enable playback of media on a disk recorded in 

compliance with DVD specifications. JVC states that 

“when the end-user then uses Nero software to reproduce 

(playback) the moving picture data and to fast forward (or 

fast reverse) through the content, the end-user directly 

infringes claim 4 of the ’491 Patent and claims 1, 2, 7 and 

8 of the [’008] Patent, all directed to a reproduction method.” JVC Br. 33.

The ’692 and ’329 Patents 

JVC asserted claim 2 of the ’692 Patent and claims 3 

and 6 of the ’329 Patent. The ’692 Patent is a division of 

the ’329 Patent, and both Patents relate to regional and 

parental controls on content-bearing optical discs. The 

asserted claims are directed to methods of controlling 

whether certain kinds of content, such as a movie on an 

optical disc, should be decoded and played according to 

preconditions, e.g., “R” rated content or “PG13” rated 

content. JVC states that when an end-user uses Nero 

software to perform the parental/regional control functions as recited in the claims, the end-user directly infringes the ’692 and ’329 Patents.

The ’404 Patent

JVC asserted claim 1 of the ’404 Patent. The ’404 Patent is directed to the recording regions on an optical disc 

and a method and apparatus for editing data on a disc 

that is formatted in accordance with the claims. Claim 1 

is directed to a rewritable optical disc comprising two 

recording regions on which data are recorded according to 

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6 JVC KENWOOD CORPORATION v. NERO, INC. 

a specified format. JVC states that when an end-user 

uses Nero software to record to a blank rewritable optical 

disc in accordance with the format set out in claim 1, the 

end-user directly infringes the claim.

The ’881 Patent

JVC asserted claims 1 and 2 of the ’881 Patent. The 

’881 Patent relates to editing audio data recorded on a 

storage medium such as a rewritable optical disc. Claim 1 

is directed to a writable storage medium including a first 

and second storage area containing multiplexed packs of 

compressed audio and moving picture video data, and a 

third storage area containing specified additional information; as follows:

1. A writable storage medium comprising:

a first storage area divided into a plurality of 

sectors having the same data capacity; 

a second storage area involved in the first 

storage area, storing a plurality of moving picture 

packs of moving picture data encoded by variable 

bit rate compression encoding and a plurality of 

audio packs of audio data encoded by constant bit 

rate compression encoding, the moving picture 

packs and the audio packs being multiplexed per 

pack and stored sequentially from a specific sector 

among the sectors, each pack corresponding to a 

unit of data transfer and containing data an 

amount of which is equal to the data capacity of 

each sector; and

a third storage area involved in the first storage area but located different from the second 

storage area, the third storage area storing a table 

listing at least first information indicating whether after-recording to the audio data is allowable, 

second information indicating an encoding method 

by which the audio data has been encoded and 

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JVC KENWOOD CORPORATION v. NERO, INC. 7

third information indicating the number of audio 

channels of the audio data.

JVC states that when an end user uses Nero software to 

store data to an optical disc in accordance with the 

claimed format, the end user directly infringes the claim 

“by making (creating) a writable storage medium (recorded optical disc) as recited in claim 1.” JVC Br. 37.

For all six Patents, JVC states that since Nero’s software customers are direct infringers, Nero is liable for 

induced or contributory infringement.

B 

JVC’S THEORY OF INFRINGEMENT

JVC did not provide or proffer evidence of specific direct infringement by any end user, but instead advanced a 

standards-compliance theory of infringement; viz., that 

use of Nero’s software for the purposes described in any of 

the Patents, and in compliance with the DVD and Blu-ray 

industry standards, directly infringes the relevant Patent. 

JVC’s Complaint states: 

¶9. . . . . The right to relief is asserted, in part, on 

the defendants’ common compliance with industry 

standard specifications, known generally as the 

“DVD Specification” and the “BD Specification.” 

This is not an action where joinder is based solely 

on allegations that multiple parties have infringed 

the patents in suit. In addition, it is based on the 

allegation that compliance with an industry 

standard, which is co-terminous with asserted patent claim language, has commonly occurred 

among infringers.

First Am. Compl. at 5, ECF 32. 

JVC stresses that its theory of infringement is that 

end users of Nero’s software, when used with DVD and 

Blu-Ray discs, comply with the DVD and Blu-ray standCase: 14-1011 Document: 55-2 Page: 7 Filed: 08/17/2015
8 JVC KENWOOD CORPORATION v. NERO, INC. 

ards to which the JVC Patents are essential, whereby the 

end users “must necessarily” infringe the Patents. At the 

claim construction hearing JVC stated:

We’ve asserted essential patents to which if a user 

does what the user must do with the Nero software, that use must indeed infringe the DVD 

specification which is called for in the patents and 

also—I’m sorry, complies with DVD specifications 

and, therefore, infringes the patents, or must 

comply with Blu-ray specification which then infringes the patents. And they must necessarily do 

so.

Nero Br. 7, quoting Claim Const. Hr’g. Tr. at 5-6, ECF 74. 

The district court probed JVC’s “Theory of the Case” 

and secured additional briefing and argument, for JVC 

relied on this theory to “necessarily” establish infringement. The district court summarized that, according to 

JVC, “When an end user uses Nero’s software on that 

licensed disc according to the DVD6C standards specification, that end user necessarily directly infringes one or 

more Patents not included in the license.” Dist. Ct. Op. at 

1011.

The court further summarized JVC’s position: “The 

Nero software must practice the Patents because the Nero 

software is used in conjunction with standards-compliant 

DVD or Blu-ray optical discs.” Id. at 1014. JVC’s claim 

charts consistently reference that Nero’s software complies with relevant DVD or Blue-ray specifications, and 

that the Patents are included in the licensing pools for 

DVD and Blu-ray disc products. 

The record describes two licensing pools for optical 

disc technology, viz., the DVD Patent Licensing Group 

(also called DVD6C), and One Blue LLC for Blu-ray 

technology. JVC is a member of both groups, and the 

Patents in suit are included in both pools. 

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JVC KENWOOD CORPORATION v. NERO, INC. 9

The pools and the standard pool license agreements 

received extensive exploration in the district court. For 

the DVD6C pool, a licensee designates the product categories for which a license is desired. The categories from 

which the licensee may select are: DVD-Video Players; 

DVD-Audio Players; DVD-ROM Drives; DVD-ROM Discs; 

DVD-Video Discs; DVD Audio Discs; DVD Decoders; DVD 

Video Recorders; DVD (Recordable Disc Drives); DVD 

Encoders; DVD-R Discs; DVD-RW Discs; DVD-RAM 

Discs; DVD Recordable Disc Cases; +R Discs; +RW Discs. 

Koole Decl. Ex. 73, at Art. 2 §2.1.3, Ex. 3-1, ECF 90-23. 

The DVD6C license agreement grants a “nonexclusive, nontransferable license, without any sublicense 

right, to make, have made, use, import, offer to sell, sell 

and otherwise dispose of DVD Products under the DVD 

patents or any of their claims.” Id. at Art. 2 §2.1.1. The 

license for DVD Patents “extends only to the structure, 

features and functions of a DVD Product used to practice 

those DVD Standard Specifications or +R/+RW Standard 

Specifications applicable to that DVD Product and for 

which the DVD Patents are Essential.” Id. at Art. 2 

§2.1.2. The DVD Standard Specifications are a series of 

documents setting forth the technical qualifications for 

standards-compliant products. They are published by the 

DVD Forum, an international association tasked with 

defining the DVD Specifications.

“DVD Patents” are defined as “all patents owned by 

members of the Group, now, or hereafter during the term 

of this Agreement that are Essential to make, use or sell 

DVD Products.” Id. at Ex. 2-2 §1.9. The DVD6C license

agreement provides that “Essential” “with respect to the 

definition of DVD Patents shall mean necessarily infringed when implementing the DVD Standard Specifications and/or the +R/+RW Standard Specifications or 

claiming technologies for which there is no realistic alternative in implementing the DVD Standard Specifications

and/or the +R/+RW Standard Specifications.” Id. at Ex. 

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10 JVC KENWOOD CORPORATION v. NERO, INC. 

2-2 §1.16. The agreement further provides that “[t]he 

license conferred . . . covers only the DVD Products selected . . . and does not cover any other DVD Products.” Id. at 

Art. 2 §2.1.3. 

The One Blue patent licensing arrangement is similar. One-Blue licenses can be obtained for specific categories of Blu-ray products, including patents that are 

“Technically Essential” or “Commercially Essential.” 

“Technically Essential Patents” is defined as those patents “containing one or more claims that is/are necessarily infringed in an implementation of the relevant BDR/RE Disc Standards.” Koole Decl. Ex 75, at 10, ECF 90-

25. “Commercially Essential Patents” is defined as those 

patents “that contain[] one or more claims that is/are 

necessary as a practical matter on the basis that there are 

no economically viable substitutes to implement the 

relevant BD-R/RE Disc Standards.” Id. at 6. 

The One Blue agreement further provides that the license “applies only to the extent the structure, features 

and functions of a BD Registered Product are used to 

practice” the applicable standards. Id. at 7. “BD Registered Product” refers to the Blu-ray disc product covered 

by the applicable license agreement; e.g., BD-ROM (Bluray read only memory) movie or data discs, BD-R and BDRE (Blu-ray recordable and rewritable) discs, etc. The 

Blu-ray Disc Association is an industry consortium that 

establishes the Blu-ray standards specifications.

JVC points out that Nero is a licensed member of the 

DVD Format/Logo Licensing Corporation (“DVD FLLC”), 

the licensing agent for the DVD Forum, which is responsible for licensing the Format Books setting forth the 

DVD standards specifications and the DVD logo. JVC 

states that Nero is bound by the terms of the DVD FLLC 

license agreement, which requires all products manufactured or sold by the licensee to comply with the standards 

set forth in the Format Books.

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In its infringement contentions, JVC alleged that 

since Nero’s software necessarily complies with the 

standards specifications, end users necessarily infringe 

the asserted Patents, which are standards-compliant.

Reasoning from JVC’s theory of infringement, the district court accepted JVC’s position that the Patents’ 

claims to software-implemented methods are embodied by 

the discs, stating: “If these claims are essential to the 

licensed DVD and Blu-ray optical discs, then those discs 

must embody the elements described in those claims.” 

Dist. Ct. Op. at 1014. The court further stated, as to the 

only Patent that contained no claims that included an 

optical disc, the ’008 Patent, that its novel aspects may be 

embodied by an optical disc “that contains or is manufactured to be capable of containing data ordered, grouped, 

and accessed as described in the ’008 Patent.” Id. at 1015.

On these premises, the district court held that direct 

infringement of the patented systems, methods, and 

apparatuses, as “generally alleged” by JVC, is negated by 

the “extensive licensing program, both as part of the 

DVD6C and One Blue patent pools as well as through 

JVC’s individual licensing program.” Id. at 1018. The 

court observed that licensees cannot be infringers.

JVC now argues that licensees to the DVD6C pool only receive a license to those patents related to particular 

products, selected by the licensee, which “practice the 

DVD Standard Specifications” applicable to the licensee’s 

products, citing the DVD6C License Agreement at Art. 2 

§§2.1.1 and 2.1.2. JVC Br. 13-14. Nero points out that 

the pool license structure was the basis for the JVC 

argument that infringement “must necessarily” be inferred because the Patents are included in these licensing 

pools, and Nero’s software implements the Patents.

The district court held that infringement could not be 

inferred. The court stated:

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12 JVC KENWOOD CORPORATION v. NERO, INC. 

Nero has shown an extensive licensing program, 

both as part of the DVD6C and One Blue patent 

pools as well as through JVC’s individual licensing program. Therefore, without specific allegations and evidence showing use of unlicensed 

optical discs, Nero has established a complete defense to all of JVC’s allegations of infringement 

under the Patents.

Dist. Ct. Op. at 1018. JVC cited no “specific allegations 

and evidence” of unlicensed discs, and the district court 

correctly rejected JVC’s argument that it was not its 

burden to make such a showing. Having failed to present 

any evidence of unlicensed disks, JVC argues that the 

district court erred in denying JVC’s request for additional discovery to “collect specific information regarding 

customers that are using Nero software with unlicensed 

optical disks.” JVC Opp’n Summ. J. 16, ECF No. 93 

(emphasis omitted); see also id. at 25. Under Rule 56(d), 

the party requesting discovery must show, inter alia, that 

“the facts sought exist.” Family Home & Fin. Ctr., Inc. v. 

Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir. 

2008) (setting forth the requirements of Rule 56(d)). The 

district court reasoned that with respect to unlicensed 

disks, JVC “has failed to present such evidence or even 

specifically allege these facts.” Dist. Ct. Op. at 1009. In 

light of that failure, the district court did not abuse its 

discretion in refusing to grant additional discovery on the 

issue of unlicensed disks.

On JVC’s premise that these Patents are essential

and are directly infringed by users of Nero software, it 

was JVC’s burden to proffer at least plausible evidence in 

support of its position. On the summary judgment record, 

the district court correctly held that: 

JVC cannot have it both ways—either the Patent 

is essential and licensed or JVC cannot rely on the 

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JVC KENWOOD CORPORATION v. NERO, INC. 13

standards to show infringement as it has chosen 

to do.

Dist. Ct. Op. at 1011. 

We agree with the district court that, on JVC’s theory 

of the case, summary judgment of non-infringement was 

properly granted.

C 

PATENT EXHAUSTION

The district court alternatively relied on patent exhaustion, holding that the conditions for exhaustion, as 

set forth by the Supreme Court in Quanta Computer, Inc. 

v. LG Electronics, Inc., 553 U.S. 617 (2008), were met on 

JVC’s theory of infringement. The district court concluded that the “use of Nero software with DVD and Blu-ray 

optical discs licensed under the Patents is subject to the 

complete affirmative defense of patent exhaustion with 

regard to infringement of the Patents.” Dist. Ct. Op. at 

1018.

We conclude that the summary judgment record does 

not clearly establish the conditions for patent exhaustion, 

for it is silent as to some essential aspects. As the Court 

explained: “Exhaustion is triggered only by a sale authorized by the patent holder,” 553 U.S. at 636, whereby if the 

thing that is sold “substantially embodies” patented 

subject matter owned by the entity that authorized the 

sale, then the patent is exhausted as to the thing sold. Id.

at 638. “Substantial embodiment” is established if (1) the 

only reasonable and intended use of the article is to 

practice the allegedly exhausted patent; and (2) the 

article embodies the essential or inventive features of the 

allegedly exhausted patent. See id. at 631; LifeScan 

Scotland, Ltd. v. Shasta Techs., LLC, 734 F.3d 1361, 

1368-70 (Fed. Cir. 2013). The Court in Quanta explained 

that, to determine whether the article sold has a reasonable and intended use that does not practice the patent, 

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14 JVC KENWOOD CORPORATION v. NERO, INC. 

“the features partially practicing the patent are what 

must have an alternative use.” Quanta, 553 U.S. at 632 

n.6.

JVC argued, and the district court found, that the intended use of DVD and Blu-ray optical discs is to “play, 

copy, and record data in conformance with the DVD and 

Blu-ray standards specifications.” Dist. Ct. Op. at 1013. 

The court concluded that since the optical discs comply 

with the standards, and their use complies with the 

standards to which JVC alleges its asserted Patents are 

essential, the asserted Patents are exhausted. The district court observed:

As in Quanta, “here, [JVC] has suggested no reasonable use for the [licensed DVD and Blu-ray optical discs] other than . . . practice[ing] the [JVC] 

Patents.” . . . In addition, the only reasonable 

and intended use of an optical disc, licensed under 

standards-essential patents must be to practice 

those patents because there is no alternative use.

Id. (alteration and emphasis in original) (quoting Quanta, 

553 U.S. at 632).

JVC argues that it was not established that the discs

sold to Nero’s customers were licensed, and that it was 

not established that the licensed aspects of the ’491, ’404, 

and ’881 Patents are essential to all uses of the DVD6C or 

One Blue discs. JVC states that users of the Nero software could have been using unlicensed discs, and that the 

sale of unlicensed discs would not trigger exhaustion of 

even “standards essential” software patents. The district 

court remarked that JVC provided no support for the 

existence of unlicensed manufacturers of unlicensed 

standards-compliant discs, and correctly rejected JVC’s 

argument that it did not bear the burden of coming forward with such evidence.

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JVC states that Nero’s software, not the disc sellers or 

users, practices the Patents, and thus that patent exhaustion does not apply. JVC does not resolve the contradiction on which the district court focused, that if the 

Patents represent a “substantial embodiment” of the 

optical discs as sold—as JVC argued in support of infringement—then the Patents are exhausted on sale of 

the discs. However, in arguing that the district court 

improperly applied the criteria of patent exhaustion, JVC 

also negated its own theory of infringement—as the 

district court recognized.

On the sketchy record, contradictory arguments, and 

undeveloped facts before us, we decline to expand the 

theory of patent exhaustion to reach this case. “Patent 

exhaustion is a judicially fashioned doctrine without a 

specific source in congressionally enacted text stating the 

terms of this limitation on patent rights.” Helferich 

Patent Licensing, LLC v. New York Times Co., 778 F.3d 

1293, 1305 (Fed. Cir. 2015).

On application of the principle of exhaustion as set 

forth in Quanta, the threshold criterion is that the product whose sale is suggested to exhaust the patent must 

have originated from or through the patentee; the record 

of this case does not so establish. See Quanta, 553 U.S. at 

636 (“Exhaustion is triggered only by a sale authorized by 

the patent holder.”).

In this case, where the district court clearly and effectively determined that infringement had not been shown 

on JVC’s theory and argument of the case, we affirm on 

that ground. Thus we vacate the district court’s ruling

with respect to patent exhaustion.

D 

MOTIONS TO STRIKE DECLARATIONS

In responding to Nero’s motion for summary judgment, JVC submitted the declarations of technical expert 

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16 JVC KENWOOD CORPORATION v. NERO, INC. 

Dr. Faramarz Azadegan, JVC employee Tetsuro Fuse, 

and attorney James Chang. The district court granted 

Nero’s motion to strike the declarations. JVC states that 

the district court abused its discretion, and that these 

Declarations provide any missing support for JVC’s 

position. 

Dr. Azadegan declared that standards-compliant DVD 

and Blu-ray optical discs have uses other than those 

specified and claimed in the asserted Patents. He declared that the essential features of the asserted Patents 

are not embodied in clean discs. The district court observed that the position presented by Dr. Azadegan is 

inconsistent with JVC’s statements on claim construction, 

and that: “This hardware/software distinction that JVC 

now offers is exactly the distinction that JVC has argued 

to overcome in applying its hardware claims to Nero’s 

software product.” Dist. Ct. Op. at 1017. The court also 

referred to JVC’s theory, fundamental to its case, that the 

asserted Patents are “necessarily infringed” because the 

claimed subject matter is “essential.” The district court 

had accepted these positions in refusing to dismiss at the 

claim construction stage, and declined to accept the 

contrary position in response to Nero’s motion for summary judgment.

With respect to the declarations of Mr. Fuse and Mr. 

Chang, Mr. Fuse presented statistical reports of the 

worldwide licensing of the Patents, and Mr. Chang provided website information “purporting” to list parties and 

terms of the patent pool licenses. The district court

rejected these declarations as irrelevant and as inadmissible hearsay.

We discern no abuse of discretion in the court’s treatment of these declarations in the context of the pleadings, 

the argument, and JVC’s theory of the case.

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CONCLUSION

On the summary judgment record, direct infringement was not established, and thus Nero was not shown 

to be potentially liable for indirect infringement. The 

district court’s judgment is affirmed.

AFFIRMED

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