Court Opinion

ID: 2669420
Source: CourtListenerOpinion
Date Created: 2014-04-10 15:13:09.082947+00
Date Added: 2024-06-11T12:35:31.884800
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                 ______________________

     UNIVERSITY OF PITTSBURGH OF THE
    COMMONWEALTH SYSTEM OF HIGHER
   EDUCATION (doing business as University of
                Pittsburgh),
              Plaintiff-Appellee,

                            v.

         VARIAN MEDICAL SYSTEMS, INC.,
               Defendant-Appellant.
              ______________________

                       2012-1575
                 ______________________

   Appeal from the United States District Court for the
Western District of Pennsylvania in No. 08-CV-1307,
Judge Arthur J. Schwab.
                 ______________________

                 Decided: April 10, 2014
                 ______________________

    THOMAS M. PETERSON, Morgan, Lewis & Bockius LLP,
of San Francisco, California, argued for plaintiff-appellee.
With him on the brief were BRADFORD A. CANGRO, of
Washington, DC; WILLIAM P. QUINN, JR., of Philadelphia,
Pennsylvania; and WILLIAM S.W. CHANG, of Houston,
Texas.
2       UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

    DONALD R. DUNNER, Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP, of Washington, DC, argued for
defendant-appellant. With him on the brief was KARA F.
STOLL. Of counsel on the brief was JAMES T. CANFIELD, of
Palo Alto, California.
                  ______________________

       Before LOURIE, DYK, and O’MALLEY, Circuit Judges.
    Opinion for the court filed by Circuit Judge O’MALLEY.
        Dissenting opinion filed by Circuit Judge DYK.
O’MALLEY, Circuit Judge.
     The University of Pittsburgh of the Commonwealth
System of Higher Education d/b/a/ University of Pitts-
burgh (“Pitt”) filed suit against Varian Medical Systems,
Inc. (“Varian”), alleging infringement of various claims of
U.S. Patent No. 5,727,554 (“the ’554 patent”). After
construing numerous terms of the ’554 patent, the district
court entered partial summary judgment in favor of Pitt,
finding that Varian’s accused products infringe the as-
serted claims of the ’554 patent as a matter of law. The
district court also found that Pitt had proven as a matter
of law that Varian’s defenses were not objectively reason-
able. The district court then held a trifurcated trial. The
same jury presided over a willfulness trial, followed by a
damages trial, and finally a validity trial. Pitt prevailed
at each phase, culminating with the jury awarding Pitt
approximately $37,000,000.       After the district court
accounted for post-judgment sales, willfulness, and pre-
judgment interest, it awarded Pitt a total sum slightly
over $100,000,000. The district court also awarded Pitt
attorneys’ fees totaling $9,200,000.
    Varian contests the trial court’s claim construction of
claims 20 and 22. Varian also contests the district court’s
finding that its accused products infringe claim 20 as a
matter of law and that its infringement was willful.
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS        3

Varian finally contests the damages award in connection
with claims 22 and 38. We find that the district court’s
construction of claim 20 was correct and find no error in
the district court’s finding that Varian infringes claim 20
as a matter of law. We do, however, reverse the finding
that Varian’s infringement was willful. We also hold that
the district court erred in its construction of claim 22,
which consequently requires that the damages award
associated with that claim be vacated and remanded. We
finally hold that the damages award in connection with
claim 38 was not erroneous.
                      I. BACKGROUND
    Pitt is the assignee of the ’554 patent, entitled
“[a]pparatus responsive to movement of a patient during
treatment/diagnosis.” In practice, the claimed technology
is intended to improve radiation therapy by reducing
damage to healthy tissue during treatment. The inven-
tion reduces damage to healthy tissue by synchronizing a
radiation treatment beam with a patient’s movements.
According to the invention, the radiation treatment beam
can be synchronized with a patient’s breathing, for exam-
ple, so that tumors are irradiated only when in treatment
range. In other words, the radiation beam will turn on
and off in synchronicity with the patient’s breathing.
    The ’554 patent generally describes using natural or
artificial “fiducials” to detect patient movement. See ’554
patent col. 3, ll. 55–56. Natural fiducials can be scars or
moles on a patient’s skin. See id. at col. 3, ll. 57–58.
Artificial fiducials can be structures attached to a pa-
tient’s skin that have a highly reflective surface under low
light conditions. See id. at col. 3, ll. 58–64. The patent
explains that only one fiducial is necessary to practice the
invention, but that it is advantageous to use multiple
fiducials. See id. at col. 3, l. 65 – col. 4, l. 10. A patient
movement detector tracks fiducials to provide information
to the system regarding patient movement, allowing
4     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

synchronization with those movements. See id. at col. 4,
ll. 21–47.
    Varian manufactures and sells equipment and soft-
ware used for radiation treatment and diagnosis. Varian
has sold the alleged infringing system, the Real-Time
Position Management (“RPM”) Respiratory Gating Sys-
tem (“RPM System”) in the United States since June
1999. Varian’s RPM System is a video-based system that
monitors and tracks patient respiratory movement during
treatment. The system uses an infrared tracking camera,
infrared illuminator rings, and reflective markers that
measure a patient’s respiratory pattern and range of
motion. The patient’s motions are displayed as a wave-
form on a work station monitor. The RPM System can
generate signals that switch a radiation therapy beam on
and off in synchronization with a patient’s movements.
    Varian’s RPM System includes a marker block that
has multiple reflective markers on a plastic base. During
radiotherapy treatment, the marker block is placed on a
patient who is within view of the camera. The block
moves with the patient’s breathing. The RPM System
tracks the movement of the marker block and displays the
movement in an amplitude-based display. During radio-
therapy treatment, the RPM System sends a signal (“gat-
ing signal”) to a linear accelerator to start or stop the
radiation beam based on the patient’s movement.
    The RPM System is designed for use with Varian’s
Clinac and Trilogy radiotherapy treatment machines. The
RPM System can be bought separately or in combination
with the Clinac or Trilogy devices. The Clinac accelerator
is a medical linear accelerator used to provide radiothera-
py treatment to patients. The Trilogy System is a suite of
products that includes a Clinac iX linear accelerator. The
Clinac linear accelerator includes many components, one
of which is a beam generator. The Clinac and Trilogy
devices may be used with a RPM System, but they can
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS         5

also be purchased or used without a RPM System. The
RPM System was bundled with the Trilogy device be-
tween 2005 and 2006, but otherwise was merely an option
to be sold with the system.
     In 2008, Pitt filed suit against Varian alleging in-
fringement of the ’554 patent. That action was dismissed
for lack of standing. While that case was on appeal before
this court, Pitt filed a second suit against Varian, again
alleging infringement of the ’554 patent. The district
court dismissed that case on res judicata grounds. While
the second case was on appeal to this court, we decided
the first appeal, reversed the dismissal, and remanded to
the district court. The parties then agreed to dismiss the
first case and second appeal, and proceed before the
district court on the second filed case only. This appeal is
from that second filed suit.
     While the appeals were pending before this court, in
July 2009, Varian petitioned the PTO for ex parte reexam-
ination of claims 20–22 of the ’554 patent. The ’554
patent originally contained 22 claims. See ’554 patent at
col. 8, l. 29 – col. 10, l. 62. In relevant part, Varian relied
on Finnish Patent Application No. 861600 (“Peltola”).
The PTO rejected claims 20–22 of the ’554 patent in view
of Peltola in a first office action. But, the PTO ultimately
confirmed the patentability of claims 20–22 and noted
that Peltola did not teach the precise “camera means”
claimed in the ’554 patent. Pitt also added new claims
23–38 during the reexamination process.
    Pitt asserted some claims against Varian’s RPM Sys-
tem alone, and other claims against the Clinac or Trilogy
devices sold in combination with the RPM System.
Namely, Pitt alleged that Varian’s RPM System infringed
claims 20, 21, 25, 26, and 36 of the ’554 patent. Pitt
further alleged that when Varian’s Clinac or Trilogy
devices incorporated the RPM System therein, those
devices infringed claims 22 and 38 of the ’554 patent.
6      UNIVERSITY OF PITTSBURGH    v. VARIAN MEDICAL SYSTEMS

The district court appointed a special master to conduct a
claim construction hearing.
    For purposes of this appeal, claims 20, 22, and 38 are
the most relevant. Independent claim 20 reads:
    20. Apparatus responsive to movement of a pa-
    tient positioned on a patient positioning assembly,
    said apparatus comprising:
    camera means generating digital image signals
    representative of an image of said patient; and

    processing means comprising means determining
    movement of said patient from said digital image
    signals, including movement associated with
    breathing by said patient, and gating means gen-
    erating gating signals synchronized with said
    movement associated with breathing by said pa-
    tient.
’554 patent, col. 10, ll. 41–52.
    The parties agreed that the “means determining
movement of said patient” limitation is a means-plus-
function term, but did not agree on what structure in the
patent’s written description performed the claimed func-
tion. At the claim construction phase, the parties disput-
ed whether the disclosed structure was a computer
processor programmed to perform a two-step algorithm as
Pitt contended, or a thirty-step algorithm, as Varian
contended. See Univ. of Pittsburgh v. Varian Med. Sys.,
Inc., Civ. No. 2:08–cv–1307, ECF No. 283 (W.D. Pa. Apr.
6, 2011) (“Special Master Report”). The special master
recommended that the correct structure was “[a] comput-
er processor programmed as a patient motion detector
that (1) identifies at least one fiducial from the image
signals; and (2) tracks its movement; and equivalents.”
Id. Varian objected to the special master’s recommenda-
tion, and urged the district court to adopt a four-step
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS    7

algorithm instead, abandoning its argument regarding a
thirty-step algorithm. See Univ. of Pittsburgh, ECF No.
302 (W.D. Pa. May 16, 2011). 1 The district court over-
ruled Varian’s objection and adopted the special master’s
proposed construction. See id.
   Claim 22 is also relevant to this appeal. Claim 22 de-
pends from claim 20 and reads:
    22. The apparatus of claim 20 adapted for use
    during treatment of said patient with a radiation
    beam generated by a beam generator, wherein
    said gating means comprises means generating
    said gating signals synchronized to actuate said
    beam generator in synchronism with patient
    breathing.
’554 patent col. 10, ll. 57–62.
    The special master construed claim 22 consistently
with the construction of claim 20. At the summary judg-
ment phase, however, a dispute arose between the parties
as to whether the scope of claim 22 actually included the
“beam generator” mentioned in claim 22’s preamble (i.e.,
whether Varian’s Clinac or Trilogy devices were within
the scope of the claim for infringement purposes). See
Univ. of Pittsburgh, ECF No. 432 (W.D. Pa. Dec. 30,
2011). The district court determined that the scope of
claim 22 included the beam generator. Id.
   The special master also construed claim 38, which
was added during reexamination. Claim 38 reads:

    1   The court did not find that Varian had waived this
new claim construction argument by not raising it before
the Special Master and Pitt does not rely on waiver on
appeal. We, accordingly, proceed on the assumption that
Varian properly preserved its ability to urge a four-step
algorithm as the corresponding structure it proposes.
8      UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

    38. The apparatus of claim 20, further comprising
    a beam generator configured to provide computer-
    controlled multi-beam conformal dynamic radio
    therapy for said patient, wherein said gating sig-
    nals are synchronized to actuate said beam gener-
    ator in synchronism with patient breathing.
‘554 patent reexamination, col. 2, ll. 33–38. The special
master construed that claim as:
    a beam generator configured to provide radiation
    therapy under computer control. The radiation
    therapy treatment involves using radiation beams
    corresponding to the shape of the target. The
    beam generator is configured to be repeatedly re-
    positioned to irradiate the target with multiple
    treatment beams, each from a different direction.
See Univ. of Pittsburgh, ECF No. 432.
    The parties then filed cross-motions for summary
judgment. The district court granted summary judgment
in favor of Pitt that: (1) Varian’s RPM System infringed
independent claim 20 and dependent claims 21, 25, 26,
and 36; (2) those Varian Clinac or Trilogy devices that
incorporated the RPM System infringed dependent claims
22 and 38; and (3) Varian acted despite an objectively
high likelihood that its actions constituted infringement
of the ’554 patent (i.e., that the objective component of the
willfulness inquiry was satisfied). The trial court then
ordered the remaining issues to trial and trifurcated the
proceedings.
    The district court held a willfulness trial for the jury
to answer the question of whether Varian knew or should
have known that it was infringing the ’554 patent and
that the patent was valid (i.e., the subjective component
of the willfulness inquiry). The jury found that Varian
knowingly acted despite the risk of infringing a valid
patent. The same jury then returned for a second trial,
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS      9

heard the damages evidence, and assessed an award of a
10.5% royalty on the RPM System and a 1.5% royalty on
the sale of the Clinac and Trilogy devices which incorpo-
rated the RPM System. The same jury returned a third
time to hear Varian’s invalidity evidence, and returned a
verdict that the ’554 patent was not invalid. The district
court subsequently doubled the jury’s damages award,
awarded attorneys’ fees and pre-judgment interest, and
granted a compulsory license at the rates determined by
the jury. The total award amounted to $101,431,292.
                      II. DISCUSSION
    Varian contends that the district court erred in a
number of ways. First, Varian contends that the district
court erred in its construction of claim 20. Varian argues
that, under the proper construction of claim 20, its RPM
System does not infringe the ’554 patent. Varian also
contends that, even if the district court properly construed
claim 20, the summary judgment of infringement cannot
stand. We disagree on both contentions.
    Next, Varian contends that its non-infringement and
invalidity defenses were reasonable and that the trial
court erred in finding that Varian acted despite an objec-
tively high likelihood that its actions constituted in-
fringement of a valid patent. Varian thus requests that
we reverse the trial court’s willfulness holding. We agree
with Varian that the court erred in its assessment of the
objective prong of its willfulness determination because
Varian’s validity defense under 35 U.S.C. § 103 was not
objectively baseless.
    Varian further contends that the damages award
based on claim 22 should be vacated because the district
court improperly construed that claim to include beam
generators when sold in combination with the RPM
System. According to Varian, when claim 22 is properly
construed, Pitt is not entitled to damages based on the
sales of the linear accelerators, but only the separate
10     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

RPM System. We again agree with Varian. Varian also
claims that the damages award regarding claim 38 was
improper because Pitt was obligated to apportion its
damages according to damages jurisprudence originating
from Garretson v. Clark, 111 U.S. 120 (1884). We do not
agree.
    Varian finally asserts that it is entitled to a new trial
based on a laundry list of allegedly erroneous evidentiary
rulings and jury instructions. We disagree with all such
assertions.
     We discuss each appellate issue below.
               A. CONSTRUCTION OF CLAIM 20
    Claim construction is a legal issue that this court re-
views without deference on appeal. See Lighting Ballast
Control LLC v. Philips Elecs. N. Am. Corp., No. 12-1014,
slip. op. at 6–7 (confirming standard of de novo review of
claim construction as set out in Cybor Corp. v. FAS
Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998)) (en banc).
This court consults the words of the claim, the written
description, the prosecution history, and any relevant
extrinsic evidence when determining the proper scope and
meaning of claim terms. See Phillips v. AWH Corp., 415
F.3d 1303, 1315–17 (Fed. Cir. 2005) (en banc).
    At the district court, the parties agreed that the
phrase “means determining movement of said patient
from said digital image signals, including movement
associated with breathing by said patient” in claim 20 of
the ’554 patent was drafted in means-plus-function for-
mat. See Special Master Report; see also Univ. of Pitts-
burgh, ECF No. 302. The district court found the function
to be “determining movement of the patient from the
digital image signals of the patient, including movement
associated with breathing by the patient.” See Special
Master Report at 18–19. As for the corresponding struc-
ture, both parties agreed that it was an algorithm, but
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS     11

they disputed which portions of the disclosed algorithm
performed the claimed function. Varian first proposed a
thirty-step algorithm, then a four-step algorithm when
urging reconsideration, while Pitt consistently proposed a
two-step algorithm. See id.
    The district court identified a two-step algorithm as
the corresponding structure. Specifically, the district
court held that the structure corresponding to the claimed
function was “a computer processor programmed as a
patient motion detector” which utilizes the following two
step process of: (1) identifying at least one fiducial from
the image signals, and (2) tracking the movement of the
fiducial(s), and equivalents. See id. On appeal, Varian
contends that the district court erred by relying on an
introductory sentence in the written description and
ignoring the more detailed description of the algorithm in
other portions of the patent. According to Varian, one of
ordinary skill in the art would not identify the broad
corresponding algorithm the district court specified.
Varian also asserts that the district court improperly
relied on claim differentiation because that doctrine
cannot be used in the context of means-plus-function
limitations.
    Varian instead argues that this court should adopt its
view of the corresponding structure as entailing an algo-
rithm with four steps. 2 In particular, Varian contends

   2    Confusingly, at points in its brief, Varian seems to
fall back to its contention that the full corresponding
structure is a thirty-step algorithm, calling the four steps
highlighted to the district court the “key” steps of this
larger algorithm. Varian’s vacillation is not helpful.
Because its most recent argument to the district court
urged a four-step computer implemented process, we hold
Varian to that argument. See Interactive Gift Express,
Inc. v. Compuserve Inc., 256 F.3d 1323, 1346 (Fed. Cir.
12     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

that the algorithm should include: (1) detecting at least
one fiducial using templates and successive levels of
resolution; (2) fine-tuning the templates; (3) tracking the
fiducial(s) at successive levels of resolution using the fine-
tuned templates; and (4) determining movement of the
patient by estimating the fiducial’s direction and distance
and comparing changes in its spatial pattern from one
image to another.
    Once a court has identified the function in a means-
plus-function limitation, it must then identify the corre-
sponding structure for that function in the written de-
scription. See Med. Instrumentation & Diagnostics Corp.
v. Elekta AB, 344 F.3d 1205, 1210 (Fed. Cir. 2003). The
written description must contain a structure serving as
the claimed means. See Atmel Corp. v. Info. Storage
Devices, Inc., 198 F.3d 1374, 1378 (Fed. Cir. 1999) (“All
one needs to do in order to obtain the benefit of [§ 112, ¶
6] is to recite some structure corresponding to the means
in the specification, as the statute states, so that one can
readily ascertain what the claim means and comply with
the particularity requirement.”).       The corresponding
structure must be linked to the function recited in the
claim. See B. Braun Med., Inc. v. Abbott Labs., 124 F.3d
1419, 1424 (Fed. Cir. 1997).
    The special master rejected Varian’s thirty-step algo-
rithm by relying on our guidance in Harris v. Ericsson
Inc., 417 F.3d 1241 (Fed. Cir. 2005). See Special Master
Report at 19–20. In Harris, we identified a corresponding
algorithm to a function recited in the claims and deter-
mined that a disclosed two-step algorithm was sufficient
corresponding structure to satisfy the particularity re-
quirement. Harris, 417 F.3d at 1254. We noted in Harris
that aspects of the disclosed algorithm could vary based

2001) (noting that parties are precluded from adopting
new claim construction positions on appeal).
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS     13

on implementation, as the written description implied,
but that the two-step algorithm was disclosed as “the
invention.” Id. As such, the algorithm did not need to
include every possible implementation of the function, so
long as it was linked to and encompassed the claimed
function.
     The ’554 patent discloses—and specifically links—the
function of detecting patient movement to the two-step
algorithm identified by the district court. In particular,
the written description discloses that patient movement is
detected by first identifying fiducials and then tracking
those fiducials, consistent with the special master’s con-
struction. See ’554 patent, col. 4, ll. 21–23 (“As will be
discussed fully, the patient motion detector 47 detects and
identifies the fiducials 39 and then tracks their move-
ment.”). As the district court found, the written descrip-
tion links this algorithm to the function of determining
patient movement. Varian, on the other hand, relies
heavily on the figures in the ’554 patent to support its
proposed construction. The ’554 patent specifically states,
however, that the figures in the patent are merely imple-
mentations of the algorithm. See ’554 patent, col. 5, ll.
14–15 (“Flow charts of suitable software 100 for imple-
menting the invention are illustrated in FIGS. 6–16.”).
     Varian’s proposed steps further incorporate “specific
embodiments of the invention.” ’554 patent, col. 8, ll. 19–
22. While those steps are described in the written de-
scription, they are not required. In other words, while the
written description describes certain implementations of
the algorithm, it expressly notes that other implementa-
tions are possible. And, much like Harris, while certain
conditions may dictate use of the particular implementa-
tions identified by Varian in the written description, those
implementations are not required. See ’554 patent, col. 5,
ll. 19–20 (“The templates are then fine tuned at 120 for
the specific patient and environmental conditions.”). The
district court properly located the disclosure of an algo-
14     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

rithm that covered what was necessary to perform the
claimed function of detecting patient movement and
nothing more. Varian’s attempt to pick and choose which
steps it deems necessary by synthesizing steps from
disparate portions of the written description is too limit-
ing. The algorithm need only include what is necessary to
perform the claimed function. See Wenger Mfg., Inc. v.
Coating Mach. Sys., Inc., 239 F.3d 1225, 1233 (Fed. Cir.
2001) (“Under § 112, ¶ 6, a court may not import func-
tional limitations that are not recited in the claim, or
structural limitations from the written description that
are unnecessary to perform the claimed function.”) (citing
Micro Chem., Inc. v. Great Plains Chem., Co., 194 F.3d
1250, 1258 (Fed. Cir. 1999)).
    Importantly, Varian does not appeal the trial court’s
description of the function as limited only to “determining
movement of said patient from the digital image signals of
the patient, including movement associated with breath-
ing by said patient.” J.A. at 115; see Appellant’s Br. 48.
While the steps of “fine tuning templates” and “comparing
recorded spatial patterns” may be useful to optimizing the
potential of the invention, neither step is necessary to
perform this particular identified—and uncontested—
function.
    Varian also contends that the special master improp-
erly relied on claim differentiation, which it contends
should have no bearing on interpreting means-plus-
function claims. While it is true that “the judicially
created doctrine of claim differentiation cannot override
the statutory requirements of § 112 ¶ 6,” Wenger Manu-
facturing, 239 F.3d at 1233 (citing Laitram Corp. v.
Rexnord, Inc., 939 F.2d 1533, 1538 (Fed. Cir. 1991)), a
court is entitled to interpret a means-plus-function limita-
tion in light of the other claims of the patent. Id. And,
that is precisely what the trial court did in this case. The
court did not attempt to override the requirements of
§ 112 ¶ 6 with its construction and did not use claim
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS     15

differentiation to ignore corresponding structure in the
specification; it merely examined the other claims in the
patent seeking “guidance and context for interpreting a
disputed means-plus-function limitation.” Id. at 1234.
    We find Varian’s arguments regarding the construc-
tion of claim 20 to be without merit.
              B. INFRINGEMENT OF CLAIM 20
    Varian alternatively contends that, even if the district
court’s construction of claim 20 was correct, the undisput-
ed facts demonstrate that Varian’s RPM System does not
infringe. In particular, Varian argues that its RPM
System does not meet the “determin[ing] movement of the
patient from the digital image signals of the patient”
limitation, i.e., the patient image, because its RPM Sys-
tem processes the patient image to identify and extract
only the portions representing the fiducial(s). Varian
concludes that this fact demonstrates that no reasonable
jury could find that Varian’s RPM System infringes. In
short, Varian argues that its RPM System does not use
patient images, but only fiducials, to determine patient
movement.
    We review the grant of summary judgment under the
law of the regional circuit. Lexion Med., LLC v. Northgate
Techs., Inc., 641 F.3d 1352, 1358 (Fed. Cir. 2011). The
Third Circuit reviews a district court’s grant of summary
judgment de novo. See Doe v. Luzerne Cnty., 660 F.3d
169, 174 (3d Cir. 2011). We must view all reasonable
inferences in the light most favorable to the nonmoving
party, and conclude that summary judgment is appropri-
ate only when there is no genuine dispute as to any
material fact. See Burton v. Teleflex, Inc., 707 F.3d 417,
425 (Fed. Cir. 2013).
   Infringement is determined, even at summary judg-
ment, through a two-step inquiry. See Abbott Labs. v.
Sandoz, Inc., 566 F.3d 1282, 1288 (Fed. Cir. 2009). First,
16    UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

the claims are properly construed and then those con-
strued terms are compared to the accused product. Id.
    Varian’s infringement argument is belied by its own
admission. Varian admits that the RPM System camera
captures patient images to identify the location of the
fiducials and only then eliminates the image of the pa-
tient. In other words, the RPM System uses the image of
the patient and then processes that image to identify and
extract from it the portions representing the fiducials. As
such, Varian’s argument that it does not use the image of
the patient is easily rejected. Accordingly, the district
court’s construction of, and grant of summary judgment of
infringement regarding, claim 20 was not erroneous.
    The district court also found that “image of said pa-
tient” in claim 20 includes both images of fiducials and
images of the patient image. See Univ. of Pittsburgh,
ECF No. 302. Varian’s argument, therefore, that its RPM
System only uses the image of the fiducial(s) and not of
the patient is irrelevant because, under the court’s con-
struction—which Varian has not challenged on appeal—
fiducials alone can satisfy the “patient image” limitation.
And, Varian concedes that it uses the fiducials to deter-
mine patient movement. The district court’s finding that
the RPM System infringes claim 20 is thus supported on
this ground as well.
                     B. WILLFULNESS
     Establishing that a defendant has willfully infringed
a valid patent is a two-step inquiry. First, “a patentee
must show by clear and convincing evidence that the
infringer acted despite an objectively high likelihood that
its actions constituted infringement of a valid patent.” In
re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir.
2007) (en banc). After the “threshold objective standard is
satisfied, the patentee must also demonstrate that this
objectively-defined risk . . . was either known or so obvi-
ous that it should have been known to the accused in-
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS      17

fringer.” Id. The threshold objective prong “is a question
of law based on underlying questions of law and fact and
is subject to de novo review.” Bard Peripheral Vascular,
Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1005
(Fed. Cir. 2012).
    At the summary judgment stage, the district court
held that Pitt had proven as a matter of law, by clear and
convincing evidence, that the objective prong of the will-
fulness test was met. See Univ. of Pittsburgh v. Varian
Med. Sys., Inc., ECF No. 432. In particular, the trial
court found that Varian’s non-infringement and invalidity
defenses were both objectively unreasonable. Id.
    On appeal, Varian contends that its non-infringement
defense (largely based on its claim construction argu-
ments regarding claim 20) and its invalidity defense
(based on the Finnish Peltola patent) were reasonable.
While we have, as noted, rejected Varian’s proposed
construction of claim 20, we need not decide whether it
was error for the district court to characterize Varian’s
infringement defense as frivolous. Because we find that
that Varian’s unsuccessful invalidity defense based on
Peltola was not objectively unreasonable, we vacate the
trial court’s willfulness finding on that ground.
    There is no dispute that Peltola is prior art to the ’554
patent. Peltola is directed to a method of eliminating
errors caused by patient motion during radiation therapy.
Joint Appendix (“J.A.”) at 5520. Peltola teaches a method
by which a “mark,” described as a “laser line,” is placed or
projected on the patient’s treatment area. Id. The laser
line is continually tracked during therapy. See id. The
treatment device receives a signal when the location
coordinates of the laser line indicate the treatment area is
within a desired area, so that the radiation beam can be
turned on and off in conjunction with patient movement.
See id. at 5531. Peltola tracked the laser line with a video
camera that connects to a display for viewing. See id. at
18       UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

5523. The camera uses a filter such that only the laser
line can be seen on the display. See id. at 5524. Figure 1
of Peltola depicted an embodiment of the invention:

In sum, Peltola was directed to solving the same problem
as the ’554 patent and did so by tracking patient move-
ment.
    We conclude that, the testimony during the district
court trial demonstrates that, while unsuccessful, Vari-
an’s invalidity defense was not objectively unreasonable. 3

     3  While not of substantial weight, it is at least
worth noting that the PTO initially rejected the claims of
the ’554 patent in light of Peltola during reexamination.
While the PTO ultimately found that Peltola did not
invalidate the asserted claims of the ’554 patent, the
PTO’s actions during reexamination lend some credibility
to Varian’s argument that its invalidity defense based on
Peltola was not objectively unreasonable when the PTO
went so far as to issue an initial rejection of the claims.
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS      19

At trial, the sole dispute between the parties was whether
Peltola’s camera actually “generat[ed] digital image
signals representative of an image of said patient,” a
limitation of claim 20. Peltola discloses that the camera
“has a filter 8, which allows only the laser wavelength
through, so that the monitor 8 connected with the camera
shows only the light line 5.” Id. at 5524. The district court
did not explicitly explain why Varian’s reliance on Peltola
as invalidating prior art was objectively unreasonable.
See Univ. of Pittsburgh v. Varian Med. Sys., Inc., ECF No.
909 (W.D. Pa. June, 29, 2012). In defense of the district
court’s willfulness finding, however, Pitt argues that
Varian’s own expert, Dr. Martin J. Murphy (“Dr. Mur-
phy”) admitted that Peltola does not meet the “capture
image of the patient” limitation of claim 20 because
Peltola explains that the camera filter works so that only
the “light line” is displayed on the monitor. But, Dr.
Murphy did not admit what Pitt contends.
     Dr. Murphy testified that Pitt’s contention that Pel-
tola’s camera filter only passes light from the laser was an
incorrect reading of a single sentence from that patent.
See J.A. 1485–88. According to Dr. Murphy, the camera
filter would admit light of a particular wavelength, that
is, the wavelength of the laser. But, because the laser
wavelength was within the “visible” range, at least a dim
image of the patient would naturally pass through also
and be displayed on the monitor. See id.; see also J.A.
2582–85; 2588–93. And, while the display could be con-
figured to display primarily the laser line, the camera
nevertheless, would capture a faint image of the patient.
Id. While Dr. Murphy did explain that there was a possi-
bility that a specific type of filter could be placed on the
Peltola camera that would prevent the image of the
patient from passing through, that mere possibility is not
enough to demonstrate that Varian’s reliance on Peltola
was objectively baseless.
20     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

     Given the highly factual nature of the inquiry and the
cogent view Dr. Murphy took regarding whether Peltola
met the patient image limitation of claim 20, the district
court’s unexplained conclusion that Varian’s invalidity
defense was objectively unreasonable was improper. We
find that Varian did not act despite a high likelihood that
it infringed a valid ’554 patent. As such, we reverse the
district court’s finding that Pitt clearly and convincingly
demonstrated that Varian willfully infringed the asserted
claims of the ’554 patent.
                       C. DAMAGES
    The jury calculated two separate reasonable royalty
rates when it calculated its damages award. First, the
jury found that Pitt was entitled to 10.5% of RPM System
sales from June 16, 2002 to March 31, 2011 based on its
infringement of claim 20. Next, the jury awarded Pitt a
1.5% royalty on Varian’s Clinac and Trilogy devices when
sold in combination with, or incorporating the, RPM
Systems based on its infringement findings related to
claims 22 and 38, respectively. Varian now attacks the
jury’s award in a number of ways.
    Though Varian argues that it did not infringe claim
20, it does not otherwise object to the 10.5% royalty figure
for independent RPM sales. Varian contends, however,
that we should vacate the portion of the damages award
that is based on the sale of Varian’s Clinac and Trilogy
devices. The damages award for those sales was based on
claims 22 and 38 of the ’554 patent. Varian now argues
that the damages awards for those sales should be vacat-
ed for three reasons.
    First, Varian contends that the damages award for
the period prior to the issuance of the reexamination
certificate of the ’554 patent must be vacated. The dam-
ages prior to the reexamination certificate are based only
on claim 22 and Varian contends that the district court
erred in its construction of claim 22 by including a “beam
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS    21

generator” (a component of a linear accelerator) within
the scope of the claim. Next, Varian argues that the
damages award based on both claims 22 and 38 must be
vacated because they were improperly calculated—either
because they failed to account for the entire market value
rule (“EMVR”), or in light of a “second-line” of damages
jurisprudence Varian says can be gleaned from Garretson
v. Clark, 111 U.S. 120 (1884) and its progeny. Varian
finally argues, very briefly, that the damages award
violates 35 U.S.C. § 284 and that the record evidence does
not support the jury award.
                      1. CLAIM 22
    At the summary judgment phase, the district court
concluded that claim 22, which depends from claim 20,
included a beam generator within its scope. See Univ. of
Pittsburgh, ECF No. 432. The trial court noted that claim
20 refers to a gating means, but does not specifically
include a beam generator. The court ruled that claim 22,
in contrast, specifically recites a beam generator and that
the beam generator is actuated by the gating signals
generated by the RPM. Id. Consequently, the district
court held that, because claim 22 included the beam
generator, Varian’s Clinac and Trilogy devices, when sold
in combination with the RPM System, infringe claim 22.
Id.
    The trial court later provided more reasoning for its
holding that claim 22 included the beam generator when
the court denied Varian’s motion in limine to exclude
sales of Varian’s Clinac and Trilogy devices from Pitt’s
royalty base. The district court noted that the latter
portion of claim 22 made explicit that the claimed appa-
ratus comprises a beam generator that is actuated by a
gating system. Thus, claim 22 must include the actual
beam generator within its scope. The trial court further
held that the preamble of claim 22, which recited the
beam generator, gives life and meaning to the claim.
22     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

    Varian argues that the district court’s inclusion of the
beam generator in the scope of claim 22 was error. We
agree. Claim 22 provides that the apparatus of claim 20
is adapted for use with a beam generator during patient
treatment. ’554 patent, col. 10, ll. 57–60 (“The apparatus
of claim 20 adapted for use during treatment of said
patient with a radiation beam generated by a beam
generator.”) (emphasis added). The claim, therefore,
requires that the apparatus of claim 20 be configured for
use with a beam generator. The claim does not, however,
require the beam generator to be part of the claimed
apparatus. Claim 22 further requires that the apparatus
of claim 20 include gating means that generates signals
synchronized to actuate a beam generator. Again, howev-
er, requiring the apparatus to include such gating means
does not also require that the beam generator actually be
part of the claimed apparatus. Claim 22 is drawn to a
specific intended use of the apparatus of claim 20, but
does not, as the trial court concluded, claim the beam
generator as part of the apparatus.
     As such, the district court erred in its construction of
claim 22. The jury awarded a reasonable royalty of 1.5%
on Varian’s sales of its Clinac and Trilogy devices sold in
combination with RPM Systems from June 16, 2002 to
March 31, 2011. Consequently, we must vacate the
portion of the damages award based on the infringement
of claim 22 and the sales of the Clinac and Trilogy devices
in combination with the RPM System that predate the
issuance of the reexamination certificate.
                       2. CLAIM 38
    Claim 38 was added during reexamination and is dif-
ferent from claim 22 in one critical way. While claim 22
merely claimed the apparatus disclosed in claim 20 fur-
ther adapted for use with a beam generator, claim 38
explicitly includes the beam generator as a component of
the claim. See ‘554 patent reexamination, col. 2, ll. 33–38.
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS     23

Thus, claim 38 contemplates that the RPM System and
beam generator are incorporated into one apparatus.
Varian does not contend otherwise. Varian argues, how-
ever, that the district court erred in not granting it judg-
ment as a matter of law (“JMOL”) on damages.
Specifically, Varian contends that the policy concerns
behind Garretson v. Clark, 111 U.S. 120 (1884), required
Pitt to demonstrate its damages based on application of
the EMVR. Varian alternatively argues that, even if the
EMVR did not apply to Pitt’s damages theory, Garretson
spawned a second line of case law that requires limiting
damages to only the value of the claimed improvement
and mandated the court to instruct the jury that it must
exclude the value of any conventional or prior art ele-
ments recited in the claim language. We will discuss each
issue in turn.
     We review a district court’s denial of JMOL based on
the law of the regional circuit. See Marine Polymer Techs.
v. HemCon, Inc., 672 F.3d 1350, 1357 (Fed. Cir. 2012).
The Third Circuit exercises “plenary review” over a dis-
trict court’s order denying a motion for JMOL. See ZF
Meritor, LLC v. Eaton Corp., 696 F.3d 254, 268 (3d Cir.
2012) (citing LePage’s Inc. v. 3M, 324 F.3d 141, 145 (3d
Cir. 2003)).
    Varian’s first argument that the EMVR must be ap-
plied fails. Lucent requires the patentee to separate or
apportion damages attributable to the patented features
contained in the accused device to the exclusion of any
damages attributable to unpatented features. See Lucent
Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1337 (Fed.
Cir. 2009) (quoting Garretson, 111 U.S. at 121) (“The
patentee . . . must in every case give evidence tending to
separate or apportion the defendant’s profits and the
patentee’s damages between the patented feature and the
unpatented features.”). Varian contends that the royalty
base must exclude the entire value of the linear accelera-
tors because the claims are drawn to the apparatus in
24    UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

claim 20, not the beam generator. Claim 38, however,
uses open-ended language and explicitly includes the
beam generator as a claimed component of the apparatus.
See ‘554 patent reexamination, col. 2, ll. 33–38 (“the
apparatus of claim 20, further comprising a beam genera-
tor”). As such, Varian’s argument fails because Pitt is not
attempting to include the value of unpatented features
within its royalty base. The beam generator is incorpo-
rated into the linear accelerator in claim 38; it is the
combination apparatus that is claimed.
    Notably, as the district court explained, claim 38 does
not just claim beam generators as “an accessory used in
conjunction with the RPM System.” Univ. of Pittsburgh,
ECF No. 600 at 18 (W.D. Pa. Feb. 10, 2012). Instead, it
claims an apparatus where the beam generator and the
RPM System operate via a gating signal where one actu-
ates the other. Indeed, the evidence at trial shows that
Varian itself has acknowledged the value added by the
function of the combined apparatus.
    Varian asserts, nonetheless, that damages should not
turn on claim draftsmanship such that the owner of an
improvement patent may deliberately add dependent
claims directed to unimproved conventional devices to
expand the royalty base. We do not disagree. But, Geor-
gia–Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp.
1116, 1120 (S.D.N.Y. 1970), addresses that specific prob-
lem by requiring the patentee to provide tangible evidence
regarding the relative value of his or her invention in
combination with, but distinct from, any conventional
elements recited in the claim. A number of the Georgia-
Pacific factors are directed to that specific point and
require the jury to reward the inventor only for the value
of his or her innovation. In other words, if the claimed
invention only adds an incremental value to the conven-
tional element(s), the damages awarded must also be so
limited. But, if the claimed invention adds significant
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS       25

value to the conventional element(s), the damages award
may reflect that value.
     For example, factor six covers the “effect of selling the
patented specialty in promoting sales of other products of
the licensee; th[e] existing value of the invention to the
licensor as a generator of sales of his non-patented items;
and the extent of such derivative or convoyed sales.” Id.
Factors nine and ten require an assessment of the “utility
and advantages of the patent property over the old modes
or devices” and “[t]he nature of the patented invention;
the character of the commercial embodiment of it as
owned and produced by the licensor, and the benefits to
those who have used the invention,” respectively. Id.
Most importantly, factor thirteen requires an assessment
of “[t]he portion of realizable profit that should be credited
to the invention as distinguished from non-patented
elements, the manufacturing process, business risks, or
significant features or improvement added by the infring-
er.” Id.
    The jury heard substantial evidence regarding appli-
cation of the Georgia-Pacific factors to the sales of the
apparatus claimed in claim 38. Pitt’s damages expert,
Mr. John L. Hansen, testified regarding the incremental
value he believed the RPM System added to a standard
linear accelerator when operated in conjunction with a
beam generator, and testified to the royalty rate he be-
lieved would reflect this incremental value. See e.g., J.A.
at 1917–18; 1951; 1996; 2004–05; 2011–16; 11288–89. He
testified, moreover, based in part on the Varian internal
documents referenced above, that the combination devices
claimed in claim 38 were more valuable to Varian than
was the RPM System and linear accelerator when sold
separately, i.e., that there was a value a would be pur-
chaser would find in the combination system claimed in
claim 38 that would not be found when the components
were sold separately and not designed to be immediately
interoperable. See e.g., J.A. 1917–18. Importantly, as
26     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

explained in more detail below, Varian offered no expert
testimony on this issue.
    Much like its theory regarding the construction of
claim 20, Varian’s damages arguments at the trial court
kept shifting. Varian first moved to exclude the sales of
the Clinac and Trilogy linear accelerators from Pitt’s
royalty base as a violation of “the EMVR.” See Univ. of
Pittsburgh, ECF No. 567 (W.D. Pa. Feb. 3, 2012). The
trial court correctly denied Varian’s motion, as explained
above. See Univ. of Pittsburgh, ECF No. 600 at 13–20.
Varian’s expert Mr. McFarlane, moreover, failed to pro-
vide an opinion in a timely manner as to an alternative
royalty base for the combination devices. See id. at 13.
Varian was, thus, left with no viable argument under
which it had urged exclusion of Pitt’s expert testimony
and no testimony to contradict it.
     Varian then moved for clarification of, and some relief
from, the trial court’s ruling. See Univ. of Pittsburgh,
ECF No. 609 (W.D. Pa. Feb. 13, 2012). In particular,
Varian argued that, because Pitt did not invent the linear
accelerators, Varian should be permitted to argue that
Pitt’s damages should be limited only to its “contribution
to [the linear accelerators], i.e., a royalty on RPM.” Id. at
4. Most importantly, Varian argued that it should be
permitted to present such testimony and argument re-
garding Varian’s own contributions to the claimed ele-
ments because they fell squarely within the
contemplation of Georgia-Pacific factor 13. See id. Only
then did Varian first cite Garretson. See id. at 4–5.
Varian then argued that, if Pitt was allowed to include
the linear accelerators in its royalty base, Varian should
be able to offer evidence and argument that the jury
should award no royalty on the same. See id.
    Thus, Varian chose only to seek exclusion of testimo-
ny that purported to seek a royalty based on anything
other than the cost of a stand-alone RPM sale. It did not
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS    27

argue or offer evidence that some other royalty base was
more appropriate, however. Varian, thus, depended on an
all or nothing argument—i.e., that the court should
exclude any testimony that would use any royalty base
other than that applicable to stand alone RPM sales.
Because that argument ignored the actual nature of claim
38, the trial court rejected it. In response to Varian’s
motion for reconsideration, however, the trial court
agreed to allow Varian’s expert to testify that Pitt’s pro-
posed royalty was too high, and to do so premised, among
other things, on Varian’s own contribution to the claimed
limitations. The trial court also permitted Varian to
argue—on those same grounds—that the jury should
award zero damages on the Clinac and Trilogy sales. At
trial, Varian’s expert did attack the royalty rate Pitt
proposed (i.e., 3%). And, its counsel did argue that the
royalty rate should be zero on the sales covered by claim
38, albeit only briefly. See J.A. at 2334, 8185.
    Following testimony and argument, the jury was
instructed that it could award damages on sales of linear
accelerators incorporating the RPM System, based on
whatever royalty percentage it deemed justified under the
Georgia-Pacific factors. For example, the jury heard
instructions on Georgia-Pacific factor 13, regarding the
portion of “profits that should be considered attributable
to the invention,” as distinguished from unpatented
elements and features provided by Varian. See J.A. 2384.
And, the verdict form required the jury to separately
assess royalties on the stand-alone sales of the RPM
System and the sales of the Clinac and Trilogy devices
incorporating the RPM System, i.e., the combination
devices. See Univ. of Pittsburgh, ECF No. 666 (W.D. Pa.
Feb. 23, 2012). During deliberations, moreover, the jury
asked the district court to clarify the allowable range of
royalties it may award in each damages category and the
district court amended the jury instructions to confirm
that the jury was entitled to award a zero percent royalty
28     UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

on sales of the linear accelerators. See Univ. of Pitts-
burgh, ECF No. 867 (W.D. Pa. April 25, 2012).
    Put simply, the evidence the jury heard regarding the
Georgia-Pacific factors and how those factors might
impact any value added by the RPM System to the combi-
nation devices claimed in claim 38, the evidence and
argument it heard regarding the need to guard against
application of an unduly high royalty rate on sales of
linear accelerators so as to not award Pitt for what it did
not invent, and the fact that the jury was instructed on all
the Georgia-Pacific factors and was instructed that it was
free to award a zero percent royalty on the linear acceler-
ators, were sufficient to guard against any unduly exces-
sive damages award in this case. On this record, the
Georgia-Pacific factors were sufficient to safeguard
against over compensation for the infringing combination
sales at issue.
    Varian cites a handful of circuit cases that pre-date
Georgia–Pacific and argues that they reflect a distinct
line of damages jurisprudence originating from the Su-
preme Court’s decision in Garretson which it says prohib-
its any consideration of the value added to claimed
conventional features. Varian argues that this “second-
line” of damages jurisprudence requires that, when a
claim is directed to an improvement, but also claims other
conventional elements, the royalty base must be limited
to the sales cost of the improvement alone. In other
words, Varian argues that the jury may not use reduc-
tions in the royalty rate to take account of the fact that
conventional elements are recited in the claims. It argues
that the beam generators must be extracted from the
combination apparatuses claimed in claim 38 and that the
royalty base must be based only on the value the RPM
System could command if sold separately. Not only is this
argument one which was only first made to the district
court in a motion for reconsideration, it is also contrary to
several arguments Varian did make in reliance on the
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS      29

Georgia-Pacific factors. If we were to adopt Varian’s
position, moreover, we impliedly would render many of
the Georgia-Pacific factors superfluous to the extent they
address the precise issue of limiting damages to the value
of the improvement in an invention which includes con-
ventional elements. While we do not disagree that it is
important to guard against compensation for more than
the added value attributable to the invention, Varian’s
proposed rule assumes that no conventional element can
be improved or rendered more valuable by its use in
combination with an invention. That argument goes too
far.
    A close inspection of the cases Varian cites reveals,
moreover, that they were decided under an antiquated
damages regime. Indeed, the cases that Varian relies
upon ask the question of whether an owner of an in-
fringed improvement patent is entitled to disgorge all of
the infringer’s profits from sale of an accused device that
incorporates the improvement. Not surprisingly, those
cases counsel in favor of apportioning the profits between
the infringer and the patentee according to the value of
the improvement. See Garretson, 111 U.S. at 121 (“[T]he
plaintiff proved the cost of his mop-heads, and the price at
which they were sold, and claimed the right to recover the
difference as his damages.”); Herman v. Youngstown Car
Mfg., Co., 216 F. 604, 606–09 (6th Cir. 1914) (rejecting
special master’s award of all profits made on the sale of
the accused device); see also Dunn Mfg. Co. v. Standard
Computing Scale Co., 204 F. 617, 618–19 (6th Cir. 1913)
(same); Metallic Rubber Tire Co. v. Hartford Rubber
Works Co., 275 F. 315, 325–26 (2d Cir. 1921) (same);
Seeger Refrigerator Co. v. American Car & Foundry Co.,
212 F. 742, 745 (D.N.J. 1914) (taking the special master’s
reasoning “to a logical extreme, would show that the
[patentee] is entitled to recover the entire profits realized
by the defendant”). In the context of a reasonable royalty,
that is precisely what the Georgia–Pacific factors purport
30     UNIVERSITY OF PITTSBURGH    v. VARIAN MEDICAL SYSTEMS

to do. Pitt, additionally, did not claim that it is entitled to
all of Varian’s profits gained from sale of Varian’s Clinac
and Trilogy devices which incorporate the RPM System.
And, Pitt did not argue that it was entitled to a 10.5%
royalty on the sales of those devices, even though it asked
for that level of royalty on the stand alone RPM sales.
Instead, Pitt claimed that its patented improvement
increased the overall value of Varian’s Clinac and Trilogy
devices by a certain percentage (i.e., 3%), and argued that
it was entitled to a royalty sufficient to reflect that added
value. The jury, properly instructed on the Georgia-
Pacific factors and aware of its option to award a zero
royalty rate on such sales, chose a smaller number (1.5%)
to reflect its assessment of the law and the evidence
presented. There is simply no reason on this record to
further complicate our damages jurisprudence based on
reasoning from isolated circuit court decisions from the
early 1900s decided under a different damages regime.
We therefore affirm the jury’s damages award based on
the infringement of claim 38.
    We emphasize the fact- and record-specific nature of
our holding. Varian did not submit expert testimony
refuting the expert testimony Pitt offered regarding the
value added to Varian’s products by the incorporation of
the RPM Systems into them. See Univ. of Pittsburgh,
ECF No. 600 at 13. Varian originally only sought to
exclude Pitt’s chosen royalty base on EMVR grounds—
and no other. Varian also did not seek to exclude the
royalty percentage chosen by Pitt’s expert, complaining
only about using any royalty base other than that at-
tributable to stand alone RPM sales. On reconsideration,
Varian expressly relied on Georgia-Pacific factor 13 to
convince the trial court that Varian should be permitted
to urge a zero royalty on the linear accelerators, but failed
to explain that concept to the jury other than in passing.
And, despite having relied on Georgia-Pacific factor 13 in
support of its motion for reconsideration, it now seeks to
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS    31

abandon reliance on Georgia-Pacific. Finally, Varian
received the additional jury instruction it sought regard-
ing the jury’s right to find that no value was added by the
combination claimed in claim 38. On this precise record,
we affirm the damages award as to claim 38.
    We have reviewed Varian’s remaining arguments and
do not find them persuasive. We note, moreover, that
those arguments were not properly raised in any event.
See SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d
1312, 1320 (Fed. Cir. 2006) (“[M]ere statements of disa-
greement with the district court . . . do not amount to a
developed argument.”).
                     III. CONCLUSION
    Based on the foregoing, we affirm the district court’s
construction of claim 20 of the ’554 patent. We also find
no error in the district court’s grant of summary judgment
regarding infringement of claim 20. We reverse the
district court’s finding that Varian’s infringement was
willful and we also reverse the district court’s construc-
tion of claim 22. Consequently, we vacate the portion of
the damages award based on claim 22, but affirm the
portion based on claim 38. As such, we remand to the
district court for recalculation of the damages award and
prejudgment interest calculations consistent with our
holdings. Because we have vacated the trial court’s
finding of willful infringement, moreover, on remand, the
trial court shall reconsider the propriety of its award of
enhanced damages and its attorneys’ fee award. We
express no opinion as to whether or to what extent such
awards might still be appropriate. Finally, we find Vari-
an’s request that we specify that a new trial judge be
assigned to this case wholly unsupported and decline to
enter such an order.
    AFFIRMED IN PART, REVERSED IN PART,
      VACATED IN PART, AND REMANDED
        NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                  ______________________

     UNIVERSITY OF PITTSBURGH OF THE
    COMMONWEALTH SYSTEM OF HIGHER
   EDUCATION (doing business as University of
                Pittsburgh),
              Plaintiff-Appellee,

                             v.

         VARIAN MEDICAL SYSTEMS, INC.,
               Defendant-Appellant.
              ______________________

                        2012-1575
                  ______________________

   Appeal from the United States District Court for the
Western District of Pennsylvania in No. 08-CV-1307,
Judge Arthur J. Schwab.
                 ______________________
DYK, Circuit Judge, dissenting.
    I agree with the majority’s decision to reverse the will-
fulness finding. However, I respectfully dissent from the
majority’s decision to affirm the construction of claim 20.
In my view, the majority’s construction is plainly incor-
rect, and the resulting infringement findings as to claim
20 as well as claims 22 and 38, which depend from and
recite the same apparatus as claim 20, should be set
aside.
2      UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

     Claim 20 recites a “processing means comprising
means determining movement of said patient from digital
image signals, including movement associated with
breathing by said patient.” ’554 patent col. 10 ll. 46–49.
The parties do not dispute that claim 20 is a means-plus-
function claim governed by 35 U.S.C. § 112(f). In constru-
ing functional claim language, the first step is to “‘deter-
mine the claimed function’” and the second is to “‘identify
the corresponding structure in the written description of
the patent that performs the function.’” Noah Sys., Inc. v.
Intuit Inc., 675 F.3d 1302, 1311 (Fed. Cir. 2012) (quoting
Applied Med. Res. Corp. v. U.S. Surgical Corp., 448 F.3d
1324, 1332 (Fed. Cir. 2006)). The corresponding structure
must be “‘capable of performing the claimed function’’’ and
“‘[t]he specification must be read as a whole to determine’”
what that structure is. Default Proof Credit Card Sys.,
Inc. v. Home Depot U.S.A., Inc., 412 F.3d 1291, 1298 (Fed.
Cir. 2005) (quoting Budde v. Harley–Davidson, Inc., 250
F.3d 1369, 1379 (Fed. Cir. 2001)). Accordingly, the proper
construction “must include all structure that actually
performs the recited function.” Id. (citing Cardiac Pace-
makers, Inc. v. St. Jude Med., Inc., 296 F.3d 1106, 1119
(Fed. Cir. 2002)).
     Here, because the claimed function is implemented by
a “processing means,” i.e., a computer, the specification
must “‘disclose an algorithm for performing the claimed
function.’” Noah, 675 F.3d at 1302, 1312 (quoting Net
MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1367 (Fed.
Cir. 2008)); see also Aristrocrat Techs. Austl. Pty Ltd. v.
Int’l Game Tech., 521 F.3d 1328, 1333 (Fed. Cir. 2008).
The algorithm may be disclosed “‘in any understandable
terms including as a mathematical formula, in prose, or
as a flow chart, or in any other manner that provides
sufficient structure.’’’ Noah, 675 F.3d at 1312 (quoting
Finisar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1340
(Fed. Cir. 2008) (internal citation omitted in original)). As
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS     3

the majority concludes, the algorithm “need only include
what is necessary to perform the claimed function.” Maj.
Op. 14 (citing Wenger Mfg., Inc. v. Coating Mach. Sys.,
Inc., 239 F.3d 1225, 1233 (Fed. Cir. 2001). Contrary to the
majority, what is “necessary” is not what is in theory
“necessary” to perform the function. Rather, the structure
must include what the specification discloses as “neces-
sary” to perform the function. See Harris Corp. v. Ericsson
Inc., 417 F.3d 1241 (Fed. Cir. 2005) (discussed below).
    The district court correctly identified the function as
“determining movement of the patient from the digital
image signals of the patient, including movement associ-
ated with breathing by the patient.” Maj. Op. 10 (quoting
Special Master Report at 18–19). But the district court
and the majority on appeal incorrectly identify the struc-
ture for performing that function as a two-step algorithm.
Those two steps do not accomplish the claimed function of
determining a patient’s movement. Rather, the specifica-
tion describes additional steps that are necessary to
accomplish that function. The construction must include
those steps as well.
    The majority’s identification of structure—the two
steps of detecting and tracking fiducials—relies on a
single statement in the specification that “[a]s will be
discussed fully, the patient motion detector 47 detects and
identifies the fiducials 39 and then tracks their move-
ment.” Maj. Op. 13 (quoting ’554 patent col. 4 ll. 21–23).
The majority concludes that this disclosure identifies the
corresponding structure as a two-step algorithm because
the specification “links this algorithm to the function of
determining patient movement.” Id. But the statement in
the specification does not explain how the fiducials are
detected and tracked or how performing those steps
accomplishes the function of determining a patient’s
movement during radiation treatment.
4      UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

    Other portions of the ’554 patent’s specification de-
scribe how the claimed “invention” determines patient
movement using fiducials:
    Detection of motion of a patient using passive fi-
    ducials requires an implementation which is ro-
    bust enough to accommodate for the variations in
    the shapes, appearance and lighting conditions to
    which the fiducials are subjected and, at the same
    time, is fast enough to provide real time tracking
    of patient movement. The invention satisfies these
    requirements by utilization of successive levels of
    filtering and templates which are modified to ac-
    commodate for actual conditions. The result is a
    system which can track patient movement at 20
    Hz or better.
’554 patent col. 5 ll. 4–13 (emphasis added). The invention
must accommodate variation among fiducials because it
can use either natural fiducials (such as scars) or artificial
fiducials (such as plastic marker-blocks). As a result, the
fiducials may not all look the same. The determination of
what the fiducials are must occur before the fiducials can
be tracked. To do this, “templates are used to identify the
locations of the fiducials. The templates indicate what the
pattern of digital signals representing the fiducial should
look like.” Id. col. 5 ll. 41–46. Although “[t]here are sever-
al ways in which the templates can be generated,” id. col.
5 ll. 49–50, “[o]ne template is used for each family of
fiducials.” Id. col. 5. ll. 55–56. Templates are the mecha-
nism through which the fiducials are initially detected
and subsequently tracked.
     Before the fiducials can be tracked, the templates
must be fine tuned. Fine tuning is “[a]n important aspect
of the invention” that “adapts the selection of the template
to be used for tracking to the actual conditions existing at
the time of the selection.” Id. col. 6 ll. 63–64 (emphasis
added) and col. 7 ll. 5–6. Figure 10 illustrates the details
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS       5

of fine tuning, which is “accomplished for each template
family.” Id. col. 6 ll. 64–65 and col. 7 ll. 11–12. The fine-
tuning step requires matching each fiducial to the tem-
plate that will be used to track its movement and record-
ing the fiducial’s appearance and initial position. The
specification explains that it is only after fine tuning the
templates that “[t]he program then enters the tracking
loop.” Id. col. 7 ll. 4–14; see also id. col. 5 ll. 19–23.
    Even after the fiducials have been tracked, the pa-
tient’s movement cannot be determined. The specification
explains that after tracking:
    The direction and distance traveled by each cur-
    rently actively tracked fiducial since the detection
    step is estimated at 201. The special pattern of
    the actively tracked fiducials is compared with the
    initial pattern and previous patterns at 202. Any
    quasi-periodic motion associated with the individ-
    ual fiducials and/or the special pattern is predict-
    ed at 203 such as by using past data analysis.
    This would include movement associated with
    breathing or tremor of the patient.
Id. col. 8 ll. 8–17. This final step is when the claimed
function—determining patient movement, including
movement associated with breathing—is accomplished. It
does not occur before this final step.
    The majority concludes that “[w]hile those steps are
described in the written description, they are not re-
quired.” Maj. Op. 13. This is inconsistent with the specifi-
cation in two respects. First, that conclusion ignores the
detailed description in the specification quoted above and
the flow chart in figure 6. Figure 6 is the only depiction of
the necessary steps; it is not an alternative implementa-
tion, as the majority suggests. See Maj. Op. 13. The speci-
fication states that “FIGS. 6–16 are flow charts of
software used in implementation of the invention,” ’554
6      UNIVERSITY OF PITTSBURGH    v. VARIAN MEDICAL SYSTEMS

patent col. 2 ll. 41–42 (emphasis added), and that “FIG. 6
illustrates the main routine of the software 100.” Id. col. 5
ll. 15–16 (emphasis added). The flow charts in figures 7–
16 illustrate the steps shown in figure 6 in greater detail,
but none of them encompasses the function of determin-
ing patient movement as figure 6 does.
    Figure 6 requires “detecting fiducials on the patient’s
body [] in the current camera image at 110,” which “is
accomplished utilizing templates.” Id. col. 5 ll. 15–19.
“The templates are then fine tuned at 120 for the specific
patient and environmental conditions.” Id. col. 5 ll. 19–20.
After fine tuning, “a loop is entered in which each indi-
vidual fiducial is tracked as indicated at 140.” Id. col. 5 ll.
21–23. After tracking, “[t]he direction and distance trav-
eled by each currently actively tracked fiducial . . . is
estimated at 201” and “[t]he special pattern of the actively
tracked fiducials is compared with the initial pattern and
previous patterns.” Id. col. 8 ll. 8–12. Only then is it
possible to predict “quasi-periodic motion associated with
the individual fiducials . . . includ[ing] movement associ-
ated with breathing or tremor of the patient.” Id. col. 8 ll.
13–17. The steps of (1) detecting fiducials, (2) fine tuning
templates, (3) tracking fiducials, and (4) comparing the
recorded spatial patterns are not optional—they are
required to perform the function of determining patient
movement.
    Second, the additional steps were included because
they were necessary to distinguish the prior art. The prior
art used markings to track a patient’s movement during
radiation treatment more than ten years before the ’554
patent’s priority date. In the initial office action rejecting
the application that issued as the ’554 patent, the exam-
iner cited U.S. Patent No. 5,446,548, which disclosed
“camera means 130, 160, passive fiducials 111–114, and
processing means 200” as part of a “position/movement
detection system subsidiary to the main (treatment)
UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS       7

system.” Examiner’s Initial Rejection of Patent Applica-
tion at 4, 5, Ser. No. 08/715,835, (P.T.O. Feb. 28, 1997).
The examiner also identified three other prior art refer-
ences—U.S. Patent Nos. 5,295,483; 5,558,430; and
5,389,101—disclosing “[p]lural cameras used to track
patient position in conjunction with camera-identifiable
fiducials.” Id. at 5. The application for the ’554 patent
included the additional steps, described above, to distin-
guish the abundance of prior art. Claim 20 cannot be
construed broadly to cover all methods of determining
patient movement by tracking markings that are visible
on a patient.
     The majority relies on Harris Corp. v. Ericsson Inc.,
417 F. 3d 1241 (Fed. Cir. 2005) to support its exclusion of
required steps described by the specification on the
ground that the claimed function does not require them.
See Maj. Op. 14. In Harris, the question was whether to
construe the structure corresponding to the claimed “time
domain processing means” as a one- or two-step algo-
rithm. 417 F. 3d at 1254. The court reached the conclu-
sion opposite to the majority here, and “reject[ed] [the
patentee’s] argument that the disclosed algorithm is
broad enough to literally encompass one-step processes.”
Id. at 1254. The court explained that the specification
“characterize[d] the two-step process as ‘the invention,’
not merely an implementation of the invention.” Id.
(citing U.S. Patent No. 4,365,338 col. 5 ll. 50–55 and col. 7
ll. 18–27 (describing “functions implemented by way of
processor 37” and “employed in accordance with the
invention”)). As a result, a one-step process could not
constitute the corresponding structure.
    Far from supporting the majority’s approach, Harris
demonstrates the majority’s error. In Harris, we ex-
plained that “Figure 9 illustrates how th[e] algorithm is
implemented” and relied on that figure in construing the
algorithm as a two-step procedure. Id. Here, “FIG. 6
8      UNIVERSITY OF PITTSBURGH   v. VARIAN MEDICAL SYSTEMS

illustrates the main routine of the software.” ’554 patent
col. 5 ll. 15–16. As in Harris, the additional steps are
characterized as the “invention,” not merely an imple-
mentation. See also, e.g., ’554 patent col. 6 ll. 63–64 (“An
important aspect of the invention is the fine tuning of the
tracking templates called for at 120 in FIG. 6.”); id. col. 5
ll. 9–12 (“The invention satisfies these requirements by
utilization of successive levels of filtering and templates
which are modified to accommodate for actual condi-
tions.”). The structure for determining patient movement
must be a four-step process that includes those steps.
    I respectfully dissent from the majority’s affirmance of
the district court’s construction of claim 20. Because
Varian’s system does not use templates to detect or track
fiducials, does not fine tune templates, and does not
compare recorded spatial patterns of fiducials, it appears
not to infringe. I would vacate the findings of infringe-
ment as to claims 20, 22 and 38, and remand for a deter-
mination of infringement under the correct claim
construction.