Opinion ID: 3178457
Heading Depth: 2
Heading Rank: 5

Heading: Substantial Embodiment

Text: Finally, we conclude that the district court correctly determined that licensed equipment substantially embodied all purportedly inventive elements in the asserted claims. See District Court Decision, 53 F. Supp. 3d at 810. “[M]aking a product that substantially embodies a patent is, for exhaustion purposes, no different from making the patented article itself.” Quanta, 553 U.S. at 637; see also United States v. Univis Lens Co., 316 U.S. 241, 251 (1942) (emphasizing that the authorized sale of an article which “embodies essential features of [a] patented invention” terminates a patent holder’s rights in that article). When a patent holder authorizes the sale of a product that embodies a patent’s inventive elements, he forfeits the right to exact royalties at subsequent points along the product’s distribution chain. See, e.g., Univis, 316 U.S. at 251 (emphasizing that “the patentee has received his reward for the use of his invention by the sale of the article”). Before the district court, High Point conceded that its right to assert infringement of claims 28, 29, and 31 of the ’090 patent—which describe an individual “cell” within a radio-telephone communications system––was exhausted if the sales of Node Bs by Nokia Siemens Networks U.S. and Ericsson U.S. were authorized. See District Court Decision, 53 F. Supp. 3d at 809; see also J.A. 6194 n.14 (“High Point acknowledges that the accused Node Bs substantially embody the claimed inventions of [claims 28, 29, and 31], such that the licensed sale of a Node B would exhaust High Point’s rights with respect to those patent claims.”). As to the remaining asserted claims, T- Mobile persuasively established that, in view of High Point’s own infringement contentions, the accused Node HIGH POINT SARL v. T-MOBILE USA, INC. 23 Bs, RNCs, and MGWs substantially embodied every purportedly inventive element of the claimed inventions. J.A. 2724–814. Dr. Anthony Acampora, T-Mobile’s expert, analyzed the asserted claims on a claim-by-claim basis, see J.A. 6050–98, and demonstrated that, according to High Point’s infringement allegations, the accused Node Bs read on the cell-related elements in the asserted claims, see, e.g., J.A. 1831, 1837, 1872–73, 1883, 1889–90, and the accused RNCs and MGWs read on the switching system elements of the asserted claims, see, e.g., J.A. 1821–29, 1891–92, 1914. On appeal, High Point argues that additional discovery might reveal that unlicensed routers and interconnect equipment in T-Mobile’s system perform inventive features of the asserted claims. High Point notes that some asserted claims contain limitations that require transmitting and receiving packets in statistically multiplexed form, and argues that unlicensed routers and interconnect equipment could potentially be used to perform a “novel application of statistical multiplexing within a cellular voice telephone system architecture.” Reply Br. of Plaintiff-Appellant at 26; see J.A. 6307 (declaration of High Point’s expert, Richard A. Chandler). In the Third Circuit, whose law governs our summary judgment review, “[s]peculation and conclusory allegations” are insufficient to defeat summary judgment. Ridgewood Bd. of Educ. v. N.E. ex rel. M.E., 172 F.3d 238, 252 (3d Cir. 1999); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (emphasizing that a party seeking to avoid summary judgment “must do more than simply show that there is some metaphysical doubt as to the material facts”); Fireman’s Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982) (explaining that a party opposing a motion for summary judgment may not “rely merely upon bare assertions, conclusory allegations or suspicions”). Despite being given ample opportunity to conduct discovery, High 24 HIGH POINT SARL v. T-MOBILE USA, INC. Point failed to adduce any credible evidence that unlicensed routers or interconnect equipment performed any inventive feature of the asserted claims. “What is ‘inventive’ about patent claims in the patent exhaustion context is what distinguishes them from the prior art.” LifeScan Scotland, Ltd. v. Shasta Techs., LLC, 734 F.3d 1361, 1369 (Fed. Cir. 2013); see also Quanta, 553 U.S. at 633 (explaining that licensed products will substantially embody a patent when “the only step necessary to practice the patent is the application of common processes or the addition of standard parts”). Here, it is undisputed that statistical multiplexing was well-known in the art at the time of the claimed inventions, see, e.g., J.A. 6060-61, 6211–14, and there is nothing in the record to even arguably suggest that unlicensed routers or interconnect equipment were used in the performance of any novel statistical multiplexing application.