Opinion ID: 209477
Heading Depth: 2
Heading Rank: 1

Heading: Existence of Disclosure Duty

Text: We review questions of law de novo, Wang Labs., Inc. v. Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1581 (Fed. Cir.1997), and factual findings for clear error, Fed.R.Civ.P. 52(a). The existence of a disclosure duty is a legal question with factual underpinnings. See Rambus, 318 F.3d at 1087 n. 3 (stating that the existence of a disclosure duty may well be a legal question with factual underpinnings). In the present case, one such factual underpinning is the JVT participants' understanding of the meaning of the JVT IPR policies.
Determining whether Qualcomm had a duty to disclose the '104 and '767 Patents to the JVT involves two questions. First, we must determine whether the written JVT IPR policies impose any disclosure obligations on participants (apart from the submission of technical proposals). Second, to the extent the written JVT IPR policies are ambiguous, we must determine whether the JVT participants understood the policies as imposing such obligations. The district court first considered the written JVT IPR policies. Specifically, the district court considered the JVT ToR, which encompass patent and copyright IPR. [2] As the district court noted, the IPR disclosure provisions of the JVT IPR policies apply to Qualcomm, as a member of the ITU-T and participant in the JVT. As the district court observed, it is clear from a review of the JVT IPR policies that identification of IPR by JVT participants is critical to the development of an effective industry standard. While more advanced profiles of the JVT standard may include patents on a reasonable terms and conditions basis, the goal of the JVT was to develop a royalty free baseline profile. See J.A. 8176 (The JVT codec should have a simple royalty free `baseline' profile.). The district court recognized that [t]he non-disclosure of a participant's core patents in such a program could put the participant in a position in which it could literally block the use of the published H.264 standard by any company unless the company obtained a separate license from the participant. Waiver Order at . As previously mentioned, however, the district court determined that the written JVT IPR policies provide no express requirement to disclose patents unless a member submits a technical proposal. Id. at . On appeal, the threshold dispute between the parties is whether the written JVT IPR policies impose any disclosure duty on participants apart from the submission of technical proposals. Qualcomm argues that the written JVT IPR policies require disclosure only when a technical proposal is made, and that disclosure is merely encouraged from participants not submitting technical proposals. Broadcom, however, argues that the written policies of both the JVT and its parent organizations impose disclosure obligations on participants (apart from the submission of technical proposals). Additionally, Broadcom submits that, to the extent there is any ambiguity in the written policies, the understanding of the JVT participants controls. One of the key inquiries regarding the meaning of the written JVT IPR policies centers on the following language of subsection 3.2 of the JVT ToR: According to the ITU-T and ISO/IEC IPR policy, members/experts are encouraged to disclose as soon as possible IPR information (of their own or anyone else's) associated with any standardization proposal (of their own or anyone else's). Such information should be provided on a best effort basis.  J.A. 8176 (emphases added). Pointing to subsection 3.2, Qualcomm argues that the express language of the written JVT policies only requires disclosure when a technical proposal is made, and that disclosure is merely encouraged from participants not making technical proposals. Thus, Qualcomm argues that the district court erred in holding that Qualcomm waived patent rights by breaching an unwritten JVT disclosure duty. In addition to the language of subsection 3.2, Qualcomm points to the JVT patent disclosure form, which states: JVT requires that all technical contributions be accompanied with this form. Anyone with knowledge of any patent affecting the use of JVT work, of their own or any other entity (`third parties'), is strongly encouraged to submit this form as well.  J.A. 8179 (first, third, and fourth emphases added). As Broadcom notes, however, subsection 3.2 expressly incorporates a best effort[s] standard. Appellee's Br. 36; J.A. 8176 (stating that IPR information should be provided on a best effort basis). When asked at oral argument whether there is any evidence in the record that Qualcomm made any efforts, let alone best efforts, to disclose IPR information associated with any standardization proposal, Qualcomm responded, No, we didn't because we did not view that as imposing a duty on us. Oral Arg. at 9:27, available at http://oralarguments.cafc.uscourts.gov/mp3/XXXX-XXXX.mp3. On rebuttal, Qualcomm clarified this response by arguing that the use of best efforts is merely encouraged, not required. See Oral Arg. at 35:09, available at http://oralarguments.cafc.uscourts.gov/mp3/XXXX-XXXX.mp3; see also Appellant's Br. 25 (The use of best efforts to identify essential patents, like the disclosure thereof, is merely encouraged, not required.). We disagree with Qualcomm's reading of subsection 3.2. While Qualcomm places much emphasis on the use of the word encouraged in subsection 3.2, we agree with Broadcom that, when considered in light of the relevant context, this language applies to the timing of the disclosure (i.e., encouraged to disclose as soon as possible), not the disclosure duty itself. Thus, while the language of the JVT IPR policies may not expressly require disclosure by all participants in all circumstances (e.g., if relevant IPR is not disclosed despite the use of best efforts), it at least incorporates a best efforts standard (even apart from the submission of technical proposals). By Qualcomm's own admission, it did not present evidence of any efforts, much less best efforts, to disclose patents associated with the standardization proposal (of their own or anyone else's) to the JVT prior to the release of the H.264 standard. Moreover, in addition to the disclosure obligations provided in the JVT IPR policies, Qualcomm has disclosure obligations under the rules of the JVT parent organizations. Subsection 3.2 of the JVT IPR policies states that the JVT Patent Disclosure form at the proposal stage does not have the same formal status as the final IPR declaration to the ITU TSB and ISO/IEC, which must be done in the approval process for the ITU-T Recommendation and ISO/IEC International Standard. J.A. 8176 (emphasis added). Broadcom submits that the must be done language in subsection 3.2 is a mandatory final approval process requiring all participants to make disclosure prior to final approval of the standard. Indeed, Broadcom claims that Qualcomm made arguments to the trial court that should preclude it from arguing on appeal that there is not a must be done requirement. Specifically, Broadcom asserts that, in the following argument to the district court, Qualcomm conceded that JVT participants had a duty to disclose patents to the ISO/IEC and the ITU-T when a standard was approved: There's also some requirement language down here [in subsection 3.2 of the JVT policy] having to do withthere's a must-be-done clause, must be done in the approval process. So if you're participating when a standard is approved, then you have to submit a form to the parent bodies. But as I mentioned a moment ago and as I'll get to later, Qualcomm wasn't participating prior to approval, so this language didn't apply. J.A. 26421. We now know, however, that Qualcomm actually was participating in the JVT prior to approval of the H.264 standard. On appeal, Qualcomm responds that its trial counsel acknowledged that the `must be done' language is mandatory but did not make any representations as to the nature of the disclosure duty or what constitutes the relevant participation in parent organizations. Appellant's Reply Br. 8 n. 1. Qualcomm's trial counsel clearly indicated, however, that its position was, if you're participating when a standard is approved, then you have to submit a form to the parent bodies. J.A. 26421. We reject its contrary arguments on appeal. The rules of the JVT parent organizations provide that an ITU-T and ISO/IEC Patent Statement and Licensing Declaration should be submitted separately to the ITU-T and ISO/IEC prior to final approval of a standard created by the JVT. Remedy Order at 1219. The ITU-T and ISO/IEC patent policy provides that any party participating in the work of the ITU, ISO or IEC should identify patents embodied fully or partly in a standard under consideration. Id. As the district court noted, this language applies to Qualcomm as a party participating in the work of the ITU, ISO or IEC. [3] Id. In light of the foregoing, we agree with the district court that JVT participants also had to disclose patents prior to final approval of a standard under the rules of the JVT parent organizations. [4] In sum, we conclude that Qualcomm, as a participant in the JVT prior to the release of the H.264 standard, did have IPR disclosure obligations, as discussed above, under the written policies of both the JVT and its parent organizations.
Even if we were to read the written IPR policies as not unambiguously requiring by themselves the aforementioned disclosure obligations, our conclusion as to the disclosure obligations of JVT participants would nonetheless be the same. That is because the language of the JVT IPR policies coupled with the district court's unassailable findings and conclusions as to the JVT participants' understanding of the policies further establishes that the policies imposed disclosure duties on participants (apart from the submission of technical proposals). As previously discussed, even though the Rambus court determined that there was not an express disclosure duty in the JEDEC patent policy in that case, it treated the policy as imposing a disclosure duty because the members treated it as imposing a disclosure duty. Rambus, 318 F.3d at 1098. In the present case, while the district court concluded that there was no express disclosure requirement in the written policies apart from the submission of technical proposals, it found clear and convincing evidence that JVT participants treated the JVT IPR Policies as imposing a duty to disclose, Waiver Order at , and that Qualcomm was aware of this treatment as early as August 2002, prior to the release of the H.264 standard in May 2003, Remedy Order at 1224. Specifically, the district court noted that, like Rambus, in addition to the written guidelines, JVT participants also learned of the patent disclosure policy from attendance of JVT meetings. Waiver Order at . The district court considered witness testimony, including testimony from Qualcomm employees, indicating that it was the practice of the chairman of the JVT, Gary Sullivan, to discuss the JVT IPR policies at every meeting. The district court also considered testimony indicating that JVT participants sometimes submitted disclosures without an accompanying technical proposal. Qualcomm attempts to distinguish Rambus by arguing that the JEDEC patent policy in Rambus was silent as to whether members had a disclosure duty, while the written JVT IPR policies are unambiguous, Appellant's Reply Br. 15, and expressly specify disclosure duties only in conjunction with a submission, Appellant's Br. 28. Thus, Qualcomm argues that the district court erred by inferring a disclosure duty that is directly contrary to the written JVT policy. Appellant's Br. 26. As previously discussed, however, we disagree with Qualcomm's interpretation of the written JVT IPR policies in the present case. Moreover, even if we were to read the written IPR policies as not unambiguously requiring by themselves the aforementioned disclosure obligations, the disclosure duty found by the district court based on the understanding of the JVT participants is certainly not directly contrary to the written JVT policy. Id. Having rejected Qualcomm's argument that the understanding of JVT participants is contrary to the written JVT IPR policies, we are left with reviewing the sufficiency of the district court's factual finding that JVT participants understood the JVT IPR policies as imposing a disclosure duty. Qualcomm argues that the evidence relied upon by the district court does not support its finding that the JVT participants understood the JVT IPR policies as imposing a disclosure duty. It asserts that Broadcom offered no testimony of the other JVT participants as to their understanding of the policy. Broadcom responds that it offered, inter alia, the testimony of Gary Sullivan (the JVT chair) and Stephen Gordon (a JVT participant) indicating that they understood the patent disclosure duty to be mandatory. Qualcomm offers a different interpretation of this testimony, as well as the testimony expressly relied upon by the district court regarding the discussion of the JVT IPR policies at every meeting and the submission of disclosures without accompanying technical proposals. We are not persuaded, however, by Qualcomm's arguments that the district court's findings lacked sufficient evidentiary support, or that the evidence should be interpreted differently. The district court was in the best position to determine the significance and implications of the record testimony in the first instance, and the cited testimony provides sufficient evidentiary support for its findings. [5]