Court Opinion

ID: 2757602
Source: CourtListenerOpinion
Date Created: 2014-12-04 17:01:05.154299+00
Date Added: 2024-06-11T11:26:55.425010
License: Public Domain

United States Court of Appeals
    for the Federal Circuit
           ______________________

ERICSSON, INC., TELEFONAKTIEBOLAGET LM
      ERICSSON, AND WI-FI ONE, LLC,
             Plaintiffs-Appellees,

                     v.

D-LINK SYSTEMS, INC., NETGEAR, INC., ACER,
  INC., ACER AMERICA CORPORATION, AND
              GATEWAY, INC.,
            Defendants-Appellants,

                    AND

                DELL, INC.,
            Defendant-Appellant,

                    AND

TOSHIBA AMERICA INFORMATION SYSTEMS,
    INC. AND TOSHIBA CORPORATION,
           Defendants-Appellants,

                    AND

          INTEL CORPORATION,
            Intervenor-Appellant,

                    AND

      BELKIN INTERNATIONAL, INC.,
                Defendant.
          ______________________
2                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

              2013-1625, -1631, -1632, -1633
                 ______________________

   Appeals from the United States District Court for the
Eastern District of Texas in No. 10-CV-0473, Judge
Leonard Davis.
                ______________________

               Decided: December 4, 2014
                ______________________

    DOUGLAS A. CAWLEY, McKool Smith, P.C., of Dallas,
Texas, argued for plaintiffs-appellees Ericsson Inc., et al.
With him on the brief were THEODORE STEVENSON, III and
WARREN LIPSCHITZ, and JOHN B. CAMPBELL and KATHY H.
LI, of Austin, Texas. Of counsel on the brief was JOHN M.
WHEALAN, of Chevy Chase, Maryland.

    WILLIAM F. LEE, Wilmer Cutler Pickering Hale and
Dorr LLP, of Boston, Massachusetts, argued for defend-
ants-appellants and intervenor-appellant. With him on
the brief for intervenor-appellant Intel Corporation were
JOSEPH J. MUELLER, MARK C. FLEMING, and LAUREN B.
FLETCHER, of Boston, Massachusetts; and JAMES L.
QUARLES, III, of Washington, DC. Of counsel on the brief
were GREG AROVAS, Kirkland & Ellis LLP, of New York,
New York, ADAM R. ALPER, of San Francisco, California,
and JOHN C. O’QUINN, of Washington, DC. On the brief
for defendants-appellants D-Link Systems, Inc., et al.,
were ROBERT A. VAN NEST, STEVEN A. HIRSCH, EUGENE M.
PAIGE and MATAN SHACHAM, Keker & Van Nest LLP, of
San Francisco, California; CHRISTINE M. MORGAN, DOYLE
B. JOHNSON, JONAH D. MITCHELL, SCOTT D. BAKER, Reed
Smith LLP, of San Francisco, California; and JAMES C.
MARTIN, of Pittsburgh, Pennsylvania. On the brief for
defendants-appellants Toshiba Corporation, et al., were
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 3

JOHN J. FELDHAUS and PAVAN K. AGARWAL, Foley &
Lardner LLP, of Washington, DC.

   MICHAEL J. NEWTON, Alston & Bird LLP, of Dallas,
Texas, argued for defendant-appellant, Dell, Inc. With
him on the brief were DWAYNE C. NORTON and SHAUN W.
HASSETT; and FRANK G. SMITH, III, of Atlanta, Georgia.

    MICHAEL A. LINDSAY, Dorsey & Whitney LLP, of Min-
neapolis, Minnesota, for amicus curiae The Institute of
Electrical and Electronics Engineers, Incorporated. Of
counsel on the brief was EILEEN M. LACH, IEEE, General
Counsel and Chief Compliance Officer, of New York, New
York.

   RICHARD M. BRUNELL, for amicus curiae American
Antitrust Institute, of Washington, DC.

    JEFFREY BLUMENFELD, Lowenstein Sandler LLP, of
New York, New York, for amici curiae, Cisco Systems,
Inc., et al. Of counsel on the brief was MARTA BECKWITH,
Cisco Systems, Inc., San Jose, California. On the brief for
amicus curiae Hewlett-Packard Company was BARRY K.
SHELTON, Bracewell & Giuliani, of Austin, Texas.

   T. ANDREW CULBERT, Microsoft Corporation, of Red-
mond, Virginia, for amicus curiae Microsoft Corporation.
With him on the brief was DAVID E. KILLOUGH.

    DAN L. BAGATELL, Perkins Coie LLP, of Phoenix, Ari-
zona, for amici Broadcom Corporation. With him on the
brief was AMANDA TESSAR, of Denver, Colorado. On the
brief for Marvell Semiconductor, Inc. was DONALD M.
FALK, Mayer Brown LLP, of Palo Alto, California. On the
brief for Media Tek Inc. was STEVEN C. HOLTZMAN, Boies,
Schiller & Flexner LLP, of Oakland, California.
4                       ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

    RICHARD S. TAFFET, Bingham McCutchen LLP, of New
York, New York, for amicus curiae Dolby Laboratories,
Inc. On the brief was PATRICK STRAWBRIDGE, of Boston,
Massachusetts.

    ROGER G. BROOKS, Cravath, Swaine & Moore LLP, of
New York, New York, for amicus curiae Qualcomm Incor-
porated.

    DARYL L. JOSEFFER, King & Spalding LLP, of Wash-
ington, DC, for amici curiae Nokia Corporation, et al.
With him on the brief was ETHAN P. DAVIS.
                ______________________

Before O’MALLEY, TARANTO, and HUGHES, Circuit Judges.
    Opinion for the court filed by Circuit Judge O’MALLEY.
      Opinion dissenting in part filed by Circuit Judge
                         TARANTO.
O’MALLEY, Circuit Judge.
    Ericsson, Inc. & Telefonaktiebolaget LM Ericsson (col-
lectively, “Ericsson”) brought suit against D-Link Sys-
tems, Inc.; Netgear, Inc.; Acer, Inc.; Acer America Corp.;
Gateway, Inc.; Dell, Inc.; Toshiba America Information
Systems, Inc.; and Toshiba Corp., with Intel Corp. inter-
vening (collectively, “D-Link”), in the United States
District Court for the Eastern District of Texas, alleging
infringement of, inter alia, certain claims from U.S.
Patent Nos. 6,424,625 (“the ’625 patent”); 6,466,568 (“the
’568 patent”); and 6,772,215 (“the ’215 patent”). All of the
patents at issue generally relate to Wi-Fi technology
employed by electronic devices to wirelessly access the
Internet. Ericsson alleged that all of the patents at issue
were essential to the Wi-Fi standard, which would mean
that all Wi-Fi-capable devices infringe Ericsson’s patents.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 5

    The case progressed to a jury trial, where the jury
found that D-Link infringed the asserted claims of the
three patents and assigned roughly $10 million in damag-
es—approximately 15 cents per infringing device. After
post-trial motions, the district court upheld the jury’s
infringement and validity findings and refused to grant a
new trial based on an alleged violation of the “entire
market value rule” (“EMVR”) and allegedly deficient jury
instructions regarding the standard-setting context and
Ericsson’s “reasonable and non-discriminatory” licensing
obligations derived from that context. For the reasons
explained below, we affirm-in-part, reverse-in-part, va-
cate-in-part, and remand.
                        I. BACKGROUND
        A. Technology and Standards Background
    Interoperability is an essential requirement for many
electronic devices. For example, if a user brings her
laptop to a local coffee shop, she expects that her laptop
will charge when she plugs it in and that she will be able
to access the Internet when she connects to the coffee
shop’s wireless network. For the user to be able to charge
her laptop, the plug must be in the correct shape and the
laptop charger must be able to accept the voltage output
of the outlet. For the user to be able to connect to the
Internet, her laptop must know, inter alia, what frequen-
cy to search for the wireless signal, what messages to
send to the network to set up a connection, and how to
interpret the messages sent from the network. Though
most users take for granted that their electronic devices
will be able to charge and connect to the wireless Internet
anywhere, interoperability does not happen automatical-
ly. Because of the multitude of devices, device designers,
and manufacturers, there must be an established stand-
ard mode of operation to ensure compatibility among all of
these different devices.
6                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

    Standards development organizations (“SDOs”) pub-
lish standards, which are lists of technical requirements.
Compliance with these technical requirements ensures
interoperability among compliant devices. Of course, at
least a critical mass of device developers must adopt the
standard in order to ensure mass interoperability. 1
Relevant to this case, the Institute of Electrical and
Electronics Engineers, Inc. (“IEEE”) publishes the 802.11
standards, more commonly known as “Wi-Fi.” Br. of
Amici Curiae Institute of Electrical and Electronics
Engineers, Inc. (“IEEE Br.”) at 1–2. The 802.11 standard
is the prevailing wireless internet standard and has
already reached widespread adoption. A device is consid-
ered 802.11-compliant if it adheres to the IEEE’s techno-
logical requirements stated in the 802.11 standard.
Requiring all 802.11-compliant devices to operate in a
certain way ensures that every compliant device can
communicate with all other 802.11-compliant devices. 2
    For example, an 802.11-compliant laptop will be able
to establish a connection with an 802.11-compliant router.
The 802.11 standards also govern how subsequent data is
passed between the laptop and the router once that

    1   A single standard will often emerge even if initial-
ly there are competing standards. For example, the Blu-
ray standard won out over the HD DVD standard in the
high-definition optical disc war. Martin Fackler, Toshiba
Acknowledges Defeat as Blu-ray Wins Format Battle, N.Y.
TIMES, February 20, 2008, at C1.
    2   The 802.11 standard is not a static set of require-
ments. Indeed, it has been updated multiple times.
When the 802.11 standard is updated, it is given a letter
to indicate the version of the standard, e.g., 802.11(g).
Devices are typically compliant with a specific version of
the 802.11 standard, indicated by the letter. This case
specifically addresses the 802.11(n) standard.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  7

connection is established. This includes, inter alia, data
formatting, prioritization, error handling, and flow con-
trol.
    Importantly for this case, data files are not sent be-
tween a router and a laptop in a single transmission. For
example, if a laptop user wants to download a video, the
router does not send the entire file in a single huge
transmission. Instead, each data file is broken into
“packets,” where each packet is sent in a different trans-
mission. Small files may only require a single packet,
whereas large files, e.g., video and sound, may require
thousands of packets. The receiving device then reassem-
bles the file out of the packets. The data from the file in
the packet is called the “payload.” Because packets may
be lost or arrive out of order, the 802.11 standard provides
ways to handle these errors. For example, each packet
has a “header” that is sent to the receiving device with the
packet. The header contains, inter alia, a sequence num-
ber so the receiving device knows the order in which to
reassemble the payload of the packets.
    Creating some standards, like IEEE’s 802.11 stand-
ard, is a complicated process that involves the collabora-
tion and can involve cooperation of a number of interested
parties. IEEE Br. 4–12. Due to the collaborative nature
of this process, the chosen standard may include technol-
ogy developed by a number of different parties. Some-
times that technology is covered by patents. Because the
standard requires that devices utilize specific technology,
compliant devices necessarily infringe certain claims in
patents that cover technology incorporated into the
standard. These patents are called “standard essential
patents” (“SEPs”). IEEE Br. 13–14.
    SEPs pose two potential problems that could inhibit
widespread adoption of the standard: patent hold-up and
royalty stacking. Patent hold-up exists when the holder
of a SEP demands excessive royalties after companies are
8                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

locked into using a standard. Royalty stacking can arise
when a standard implicates numerous patents, perhaps
hundreds, if not thousands. If companies are forced to
pay royalties to all SEP holders, the royalties will “stack”
on top of each other and may become excessive in the
aggregate. To help alleviate these potential concerns,
SDOs often seek assurances from patent owners before
publishing the standard. IEEE, for example, asks SEP
owners to pledge that they will grant licenses to an unre-
stricted number of applicants on “reasonable, and non-
discriminatory” (“RAND”) terms. IEEE Br. at 16–18.
                    B. Ericsson’s SEPs
    Ericsson has asserted that all of the patents at issue
are SEPs for IEEE’s 802.11(n) standard. Ericsson prom-
ised to offer licenses for all of its 802.11(n) SEPs at a
RAND rate via letters of assurance to the IEEE. In its
letters, Ericsson pledged to “grant a license under reason-
able rates to an unrestricted number of applicants on a
worldwide basis with reasonable terms and conditions
that are demonstrably free of unfair discrimination.”
Joint Appendix (“J.A.”) 17253. The parties agree that this
commitment is binding on Ericsson. See also IEEE Br.
19–20.
                    1. The ’568 Patent
    The ’568 patent, titled “Multi-Rate Radio-
communication Systems and Terminals,” describes priori-
tizing packets based on the type of payload in the packet.
The prioritization of packets is important because net-
works all have a bandwidth limitation. Bandwidth refers
to the amount of data that can be sent across the network
at one time. When a network receives multiple requests
at the same time, it must be able to respond to all of the
requests in a timely fashion. Due to the network’s band-
width limitation, however, the messages cannot be sent
all at once. Though networks can deal with the band-
width limitation problem in different ways, each method
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                    9

involves dividing the available bandwidth among the
outstanding requests.
    The ’568 patent explains that networks transmit a va-
riety of different types of payloads, including “voice, video,
and data.” According to the ’568 patent, networks in the
prior art did not have the ability to prioritize certain types
of data over others. Because certain types of transmis-
sions are less preferable when delayed—e.g., voice call-
ing—the ’568 patent discloses transmitting the type of
transmission as part of the header. This would allow the
network to dedicate more bandwidth to the higher priori-
ty transmission types, thereby sending those packets
more quickly.
    Claims 1 and 5 are at issue in this appeal. Claim 1 is
representative:
    1. A communications station comprising:
    a processor for arranging information for trans-
    mission including providing at least one first field
    in which payload information is disposed and
    providing at least one second field, separate from
    said first field, which includes a service type iden-
    tifier which identifies a type of payload infor-
    mation provided in said at least one first field; and
    a transmitter for transmitting information re-
    ceived from said processor including said at least
    one first field and said at least one second field.
’568 patent col. 13 ll. 11–21 (emphasis added).
                       2. The ’215 Patent
    As described above, files are broken into packets,
which are sent to the receiving device with sequence
numbers so the receiving device can reassemble the
payload in the correct order. Packets, however, are often
lost or corrupted during transmission. To ensure that the
receiver receives the payload in those lost or corrupted
10                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

packets, the transmitter will have to resend those pack-
ets. For the transmitter to know which packets need to be
resent, the receiving device must tell the transmitting
device which packets it did not receive or are corrupted.
This may be done using an “Automatic Repeat Request”
(“ARQ”) protocol. In an ARQ protocol, the receiving
device will send a “feedback response” to the transmitting
device. Though feedback response messages can be in
different formats, the feedback response will generally
indicate which packets, if any, are missing or corrupted.
The transmitting device will then retransmit those miss-
ing packets.
     Although ARQ protocols existed in the prior art, the
’215 patent, titled “Method for Minimizing Feedback
Responses in ARQ Protocols,” asserts that those prior art
ARQ protocols wasted bandwidth because they were
“static” and not adaptable. By making the feedback
response type dynamic, the ’215 patent discloses that the
response could be formatted in the most efficient response
type. For example, if 1 packet out of 100 is missing, just
the missing packet number could be sent. Conversely, if
50 out of 100 packets are missing, the response could be a
bitmap with a bit set to one to indicate the missing pack-
ets, instead of a list of all 50 missing packet numbers. To
solve this alleged deficiency in the prior art, the ’215
patent discloses adding a “type identifier field” (“TIF”) to
the feedback response that identifies the format of that
feedback response. This would allow the receiver to
choose dynamically between different types of feedback
responses based on which response would be most effi-
cient, e.g., a list of packet numbers or a bitmap.
     Claim 1 is the independent claim at issue:
     1. A method for minimizing feedback responses in
     an ARQ protocol, comprising the steps of:
     sending a plurality of first data units over a com-
     munication link;
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                   11

    receiving said plurality of first data units; and
    responsive to the receiving step, constructing a
    message field for a second data unit, said message
    field including a type identifier field and at least
    one of a sequence number field, a length field, and
    a content field.
’215 patent col. 10 ll. 19–28 (emphasis added).
                       3. The ’625 Patent
    Due to technical limitations, prior art receiving devic-
es used a limited “reception window” for keeping track of
which packets it had received. Because this reception
window was finite, if the receiving device received a
packet outside of the window, it would not accept the
packet. The window would not move forward until it
received all of the packets in the current window. This
process ensures that the receiver will receive all of the
missing packets. For certain “delay sensitive applica-
tions,” however, a 0% packet loss rate is not required and
significantly delayed packets provide no benefit—e.g.,
“telephony, video conferencing, and delay sensitive control
systems.” ’625 patent col. 3 ll. 51–53.
     According to the ’625 patent, prior art transmitting
devices had no way to tell the receiving device to ignore
unnecessary, missing packets and shift the receiving
window forward. The ’625 patent discloses adding a way
for the transmitting device to force the receiving device to
accept packets that may be out of its reception window.
This will also shift the reception window forward and the
receiving device will forget about the delayed or lost
packets that would no longer provide any benefit.
    Claim 1 is at issue in this appeal:
    1. A method for discarding packets in a data net-
    work employing a packet transfer protocol includ-
12                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

     ing an automatic repeat request scheme, compris-
     ing the steps of:
     a transmitter in the data network commanding a
     receiver in the data network to a) receive at least
     one packet having a sequence number that is not
     consecutive with a sequence number of a previous-
     ly received packet and b) release any expectation of
     receiving outstanding packets having sequence
     numbers prior to the at least one packet; and
     the transmitter discarding all packets for which
     acknowledgment has not been received, and which
     have sequence numbers prior to the at least one
     packet.
’625 patent col. 10 ll. 13–26 (emphases added).
                 C. The Accused Products
    The accused infringers in this case produce a variety
of electronic devices, including laptop computers and
routers (“the end products”), which incorporate 802.11(n)
wireless chips made by Intel. Because all of these end
products incorporate 802.11(n)-compliant chips, they
must be capable of the functionality mandated by the
802.11(n) standard.
    For example, the standard requires that, in the head-
er of an 802.11(n)-compliant packet, there must be a
traffic identifier (“TID”) field that indicates the priority of
the data. This TID field has a value from 0–7, which
indicates its priority. Packages with higher priority
typically will be sent more quickly or given more band-
width than those with lower priority. And the standard
explains that one use of this TID identifier is to associate
particular values with particular types of information
inside packages—to correspond to a particular kind of
payload—as indicated in the following table giving an
example:
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.              13

J.A. 15781. In this table, each priority is given an in-
formative “Designation.” For example, priority levels 4
and 5 are given the designation “Video.”
    For further examples of required functionality, the
802.11(n) standard also requires feedback response head-
ers to include information about the type of feedback
response in the BlockAck field:

J.A. 16778. The 802.11(n) standard allows three different
types of feedback responses: Basic BlockAck, Compressed
BlockAck, and Multi-TID BlockAck. Sending this infor-
mation as part of the header is mandatory for interopera-
bility between devices.
14                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

     All 802.11(n)-compliant devices, moreover, must be
capable of accepting any packets they receive. In other
words, 802.11(n)-compliant devices do not use a limited
reception window. The receiver is just programmed to
receive automatically all packets, regardless of the pack-
et’s sequence number.
           D. The Dell-Ericsson AB Agreement
    Dell argues on appeal that it has a license to practice
the patents at issue based on its prior agreement with
Ericsson AB. Ericsson AB is a Swedish manufacturing
and development subsidiary of LM Ericsson. LM Ericsson
is the Swedish parent corporation of Ericsson AB and
owns the patents-in-suit. LM Ericsson and its North
American subsidiary, Ericsson, Inc., are the two plaintiffs-
appellees in the suit.
     On February 13, 2008, Ericsson AB and Dell executed
a Master Purchase Agreement (“MPA”), under which
Ericsson AB would provide Dell with mobile broadband
products for three years from the date of execution of the
MPA. Ericsson AB is the only named “supplier” listed in
the MPA, as well as the only signatory to the MPA aside
from Dell. The MPA also separately defined Ericsson
AB’s “Affiliates.” At issue in this appeal, Section 12.1 of
the MPA, entitled “Dispute Resolution,” stated that
“[s]upplier will not commence any lawsuit or seek any
judicial order affecting Dell or add Dell as a party to any
pending legal or administrative proceeding that is not
directly related to Dell’s purchase of Products or that may
prevent Dell from shipping any Dell or third-party prod-
ucts.” J.A. 6348 (emphasis added).
                  E. Procedural History
    On September 14, 2010, Ericsson filed suit in the
United States District Court for the Eastern District of
Texas, accusing D-Link of infringing nine patents that,
according to Ericsson, were essential to the 802.11(n)
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 15

wireless standard. Intel, the wireless internet chip sup-
plier for the accused products, intervened. On March 8,
2013, the magistrate judge issued a claim construction
order, which the district court judge adopted. Ericsson
Inc. v. D-Link Corp. (“Claim Construction Order”), No.
6:10-cv-473, 2013 WL 949378 (E.D. Tex. Mar. 8, 2013).
Shortly before trial, the trial judge denied D-Link’s mo-
tion to exclude the testimony of Ericsson’s damages
expert, over D-Link’s argument that the testimony violat-
ed the EMVR. Prior to trial, the court also granted sum-
mary judgment against Dell, rejecting its argument that
it had a license based on the MPA.
     Although the parties were forced to narrow the case
for trial, Ericsson still accused D-Link of infringing 5
different patents at trial. On June 13, 2013, after a 7-day
jury trial, the jury found that D-Link infringed the assert-
ed claims in three of Ericsson’s patents—the ’568, ’215,
and ’625 patents. The jury also found that the ’625 patent
was valid over a prior art publication (“the Petras refer-
ence”). As past damages for that infringement, the jury
awarded Ericsson approximately $10 million—roughly 15
cents per infringing device. After the jury trial, the trial
court conducted a separate bench trial regarding several
RAND issues. 3

    3    At the bench trial, D-Link asked the district court
to: (1) determine an appropriate RAND rate, (2) find that
Ericsson breached its RAND agreement by refusing to
license Intel, and (3) find that Ericsson is not entitled to
an injunction. D-Link concedes that it proffered evidence
to the trial court regarding Ericsson’s RAND obligations
that it did not offer to the jury, despite its argument to
the jury that any royalty rate chosen must be reflective of
those RAND obligations. It is unclear why D-Link made
this choice, particularly because D-Link refused to be
bound by any court-determined royalty rate. Once the
16                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

     Following the bench trial, D-Link filed a motion for
judgment as a matter of law (“JMOL”) and a new trial,
arguing that the jury’s findings of infringement and no
invalidity, as well as its damages award, were not sup-
ported by substantial evidence. D-Link further contended
that Ericsson’s expert violated the EMVR by relying on
licenses that were based on the value of the end products.
D-Link asserted, moreover, that the jury was inadequate-
ly instructed regarding Ericsson’s RAND obligation.
    The trial court denied D-Link’s post-trial motions,
finding that substantial evidence supported: (1) the jury’s
findings of infringement; (2) the validity of the ’625 pa-
tent; and (3) the jury’s $10 million award. The judge also
concluded that Ericsson’s damages testimony was not
inconsistent with the EMVR and that the jury instruction
regarding Ericsson’s RAND obligations was adequate.
The judge further found that, based on the jury’s award,
15 cents per product was an appropriate ongoing RAND
rate for the three infringed patents. Ericsson Inc. v. D-
Link Corp. (“JMOL Order”), No. 6:10-cv-473, 2013 WL
4046225 (E.D. Tex. Aug. 6, 2013). According to the trial
court, moreover, Ericsson did not violate its RAND obliga-
tions by offering Intel a license at the rate of 50 cents per
unit. In fact, the court concluded that it was Intel that
violated its obligation to negotiate a royalty rate in good
faith. Id. at *16.
    D-Link timely appealed to this court. We have juris-
diction under 28 U.S.C. § 1295(a)(1) (2012).

jury had set the RAND rate, the judge rejected D-Link’s
invitation to separately determine the award at the bench
trial. D-Link does not appeal that ruling, arguing only
that the jury was not adequately instructed about Erics-
son’s RAND obligations, not that the court should have
made that decision.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                    17

                         II. DISCUSSION
     On appeal, D-Link raises a number of issues: (1)
whether the jury had substantial evidence to find that D-
Link infringed claims 1 and 5 of the ’568 patent; (2)
whether the district court properly construed the term
“responsive to the receiving step, constructing a message
field for a second data unit, said message field including a
type identifier field” in the ’215 patent, and, if the district
court correctly construed that term, whether the jury had
substantial evidence to find that D-Link infringed claims
1 and 2 of the ’215 patent; (3) whether the jury had sub-
stantial evidence to find that D-Link infringed claim 1 of
the ’625 patent and that the Petras reference did not
anticipate the ’625 patent; (4) whether Ericsson’s damag-
es theory was presented in violation of the EMVR; (5)
whether the jury was instructed properly regarding
Ericsson’s RAND obligations; and (6) whether Dell had a
license to practice the patents at issue based on its
agreement with Ericsson AB. We address each issue in
turn.
                        A. Infringement
    We first address D-Link’s challenges to the infringe-
ment findings. We review the trial court’s decision on a
motion for JMOL under the law of the regional circuit, in
this case, the Fifth Circuit. Verizon Servs. Corp. v. Cox
Fibernet Va., Inc., 602 F.3d 1325, 1331 (Fed. Cir. 2010).
The Fifth Circuit reviews the denial of a motion for JMOL
de novo, but the “jury’s verdict can only be overturned if
there is no legally sufficient evidentiary basis for a rea-
sonable jury to find as the jury did.” Miller v. Raytheon
Co., 716 F.3d 138, 144 (5th Cir. 2013). We review issues
of patent law applying this court’s case law. Claim con-
struction is an issue of law reviewed de novo. Lighting
Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744
F.3d 1272, 1276–77 (Fed. Cir. 2014) (en banc). Infringe-
ment and anticipation are issues of fact reviewed for
18                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

substantial evidence. 01 Communique Lab., Inc. v. Log-
MeIn, Inc., 687 F.3d 1292, 1296 (Fed. Cir. 2012); In re
Montgomery, 677 F.3d 1375, 1379 (Fed. Cir. 2012).
                    1. The ’568 Patent
     D-Link contends that the jury did not have substan-
tial evidence to find infringement of the asserted claims of
the ’568 patent, specifically with respect to the “service
type identifier which identifies a type of payload infor-
mation” limitation. Neither party challenges the district
court’s construction of that limitation as “an identifier
that identifies the type of information conveyed in the
payload. Examples of types of information include, but
are not limited to, video, voice, data, and multimedia.”
Claim Construction Order, 2013 WL 949378, at *11.
    To prove literal infringement, the patentee must show
that the accused device contains each and every limitation
of the asserted claims. Presidio Components, Inc. v. Am.
Tech. Ceramics, Corp., 702 F.3d 1351, 1358 (Fed. Cir.
2012).
     Before the jury, Ericsson relied on the TID field value
in the 802.11(n) standard to meet the service type identi-
fier limitation. Ericsson’s expert testified that each TID
field contains an integer that establishes a priority of
service. According to Ericsson’s expert, each TID value
may be assigned an “informative” designation: Back-
ground, Best Effort, Video, or Voice. Ericsson’s expert
further stated that devices need to implement the TID
field in order to be compliant with the 802.11(n) standard.
Ericsson’s expert pointed to several programs that “take
advantage” of the “informative” use of the TID capability
to assign TID values to payloads of a particular type. J.A.
1395–96 (testifying that CSipSimple, Skype, Ekiga, and
Windows Media take advantage of the TID capability).
Ericsson also presented an Intel document, recommend-
ing that developers utilize the TID field based on the
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  19

informative designation categories described by the
802.11(n) standard.
     D-Link’s expert, on the other side, countered that the
TID designations are used to prioritize packets, but do not
identify the type of information contained in the payload’s
packet, e.g., a text email can be sent using the Video
designation. D-Link’s expert testified that the he ran
tests on video and voice programs that did not assign
different TID numbers for video and voice data. In other
words, the program assigned a TID designation of zero,
regardless of the type of data in the payload. On cross
examination, however, D-Link’s expert admitted that he
also observed some traffic in which the TID designation
did correspond to the content of the payload. Indeed,
when presented with his own expert report, D-Link’s
expert admitted that at least one program—Ekiga, a video
conferencing program—used the video TID designation
for its packets with a video payload. In fact, D-Link’s own
expert testified that Ekiga was “using the [’568] inven-
tion.” J.A. 1568 (“A. Ekiga is using the invention, you
said? Q. Yes. That’s what you tested, right? A. Yes.”).
     The jury, using the district court’s construction for
service type identifier, found that D-Link infringed claims
1 and 5 of the ’568 patent. The district court denied D-
Link’s subsequent JMOL motion, explaining that D-Link’s
evidence that the TID designation does not always corre-
spond to the payload is, “[a]t best, . . . evidence show[ing]
[its] products can be configured in a non-infringing man-
ner.” JMOL Order, 2013 WL 4046225, at *6.
    On appeal, D-Link first argues that, under the district
court’s proper construction, the service type identifier
must “identif[y] the type of information conveyed in the
payload.” Claim Construction Order, 2013 WL 949378, at
*11 (emphasis added). D-Link insists that the TID field
relates only to priority and does not identify the payload
of the packet. D-Link asserts that Ericsson’s infringe-
20                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

ment contentions for the ’568 patent are thus premised on
the mere “capability of infringement.” According to D-
Link, it was an error for the judge to instruct the jury that
“[a]n accused system or product directly infringes a claim
if it is reasonably capable of satisfying the claim elements
even though it may also be capable of non-infringing
modes of operation.” Appellants’ Br. 35. D-Link argues
that mere capability does not constitute infringement
unless the claim language is “drawn to capability.” Appel-
lants’ Br. 36 (citing Finjan, Inc. v. Secure Computing,
Corp., 626 F.3d 1197, 1204 (Fed. Cir. 2010); Ball Aerosol
& Specialty Container, Inc. v. Limited Brands, Inc., 555
F.3d 984, 994 (Fed. Cir. 2009)). D-Link asserts, moreover,
that Ericsson failed to show any programs that actually
assign TID values according to their informative designa-
tions, e.g., voice and video.
     Ericsson responds that the jury’s finding of infringe-
ment of the asserted claims of the ’568 patent was sup-
ported by substantial evidence, including testimony by
Ericsson’s expert and the chart showing the informative
designations presented to the jury. Ericsson further
contends that D-link’s own technical expert’s tests re-
vealed traffic that corresponded to the correct TID desig-
nations.     Ericsson also points to Intel’s instruction
manual that urges developers to use the correct TID
designations for the various types of data. According to
Ericsson, moreover, this court has repeatedly held that a
product infringes if it is reasonably capable of satisfying
the claimed elements. For example, Ericsson argues that,
in Finjan, this court “held that where an apparatus claim
is styled as a component ‘for’ performing some function,
the claim is drawn to capability and the reasonable capa-
bility test applies.” Appellees’ Br. 33 (citing Finjan, 626
F.3d at 1204–05).
    We are unpersuaded by D-Link’s argument that the
jury did not have substantial evidence to find infringe-
ment of claims 1 and 5 of the ’568 patent. We recognize
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 21

that the evidence showed that the TID field does not
always identify its payload type. Indeed, D-Link’s ex-
pert’s testimony that many programs did not utilize the
TID field according to the informative designations was
unchallenged. D-Link’s expert, however, also admitted
that at least one video calling program “us[ed] the inven-
tion.” J.A. 1568. Furthermore, Ericsson’s expert testified
as to several examples of programs running on the ac-
cused devices where the TID field indicated the type of
payload.
    We understand that the TID field may be inherently
only a priority field. But that field necessarily has the
capability to be used to identify the payload type, as
shown by the informative example in the standard and by
the proof that it was in fact so used by some device users.
Crucially, this capability satisfies the patent claim lan-
guage here, which means all accused devices could be
found by the jury to infringe.
    In Fantasy Sports Properties, Inc. v. Sportsline.com,
Inc., 287 F.3d 1108 (Fed. Cir. 2002), we held that software
for playing fantasy football could infringe a claim covering
a “computer for playing football.” 287 F.3d at 1118.
Though a user must install and activate functions in the
software to infringe the claims, the Fantasy Sports opin-
ion explained that the user is only activating means that
are already present in the underlying software. Id. In
Ball Aerosol, on the other hand, the patent claimed an
apparatus arranged in a certain manner. We reversed a
grant of summary judgment of infringement because the
claims were not drawn to capability and there was no
evidence that the accused device “was ever placed in the
infringing configuration.” 555 F.3d at 995.
    In Finjan, we found that the system claims at issue
described “capabilities,” without describing any software
components that must be “active” or “enabled.” For
example, the claim language in Finjan required “a logical
22                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

engine for preventing execution” and “a communications
engine for obtaining a Downloadable.” Finjan, 626 F.3d
at 1204–05 (emphases added in opinion). In Finjan, we
found that, in order for the accused system to infringe, the
logical engine only needed to be reasonably capable of
“preventing execution” and the communications engine
only needed to be reasonably capable of “obtaining a
Downloadable.” Id. Our court explained further in Versa-
ta, that, “[w]hile ‘a device does not infringe simply be-
cause it is possible to alter it in a way that would satisfy
all the limitations of a patent claim,’ . . . an accused
product ‘may be found to infringe if it is reasonably capa-
ble of satisfying the claim limitation.’” Versata Software,
Inc. v. SAP Am., Inc., 717 F.3d 1255, 1262 (Fed. Cir. 2013)
(quoting Finjan, 626 F.3d at 1204). In Versata, we found
that the patentee presented evidence that, if a user fol-
lowed the accused infringer’s own instructions, the system
would operate in an infringing manner. Id. at 1263. In
sum, when the asserted claims recite capability, our case
law supports finding infringement by a “reasonably
capable” accused device on a case-by-case basis particular-
ly where, as here, there is evidence that the accused
device is actually used in an infringing manner and can be
so used without significant alterations. See J.A. 1568 (“A.
Ekiga is using the invention, you said? Q. Yes. That’s
what you tested, right? A. Yes.”); see also Ball Aerosol,
555 F.3d at 995.
    The asserted claims of the ’568 patent are most simi-
lar to the claim at issue in Finjan. Both use language
reciting capability, as opposed to actual operation. Com-
pare Finjan, 626 F.3d at 1204–05 (system claims reciting
“a logical engine for preventing execution” and “a commu-
nications engine for obtaining a Downloadable” (empha-
ses added)), with ’568 patent col. 13 ll. 12–18 (“a processor
for arranging information for transmission . . . which
identifies a type of payload information . . . .” (emphasis
added)). Accordingly, just as the accused system in Fin-
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 23

jan only needed to have components that are reasonably
capable of “preventing execution” and “obtaining a Down-
loadable” to infringe, Finjan, 626 F.3d at 1204–05, D-
Link’s products only need to have a component that is
reasonably capable of “arranging information for trans-
mission . . . which identifies a type of payload information
. . . .” ’568 patent col. 13 ll. 12–18. Furthermore, similar
to the evidence the patentee presented in Versata, Erics-
son presented evidence that Intel—the 802.11-compliant
chip producer—instructed developers to use the TID field
in an infringing manner. See Versata, 717 F.3d at 1263.
We therefore find that the jury could properly base its
infringement finding on the reasonable capability of the
unmodified accused devices.
    For the foregoing reasons, we hold that substantial
evidence supports the jury’s finding that D-Link infringed
claims 1 and 5 of the ’568 patent.
                       2. The ’215 Patent
    D-Link challenges the district court’s construction of
the term “responsive to the receiving step, constructing a
message field for a second data unit, said message field
including a type identifier field” in the ’215 patent. Even
if we affirm the district court’s construction of that term,
according to D-Link, the jury did not have substantial
evidence to find infringement of claims 1 and 2 of the ’215
patent. We first consider the proper scope of the claims
before comparing the construed claims to the accused
devices. See Absolute Software, Inc. v. Stealth Signal,
Inc., 659 F.3d 1121, 1129 (Fed. Cir. 2011).
                     a. Claim Construction
    Generally, claim terms should be given their ordinary
and customary meaning to a person having ordinary skill
in the art at the time of the effective date of the patent
application. Phillips v. AWH Corp., 415 F.3d 1303, 1312–
13 (Fed. Cir. 2005) (en banc). To ascertain the scope and
24                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

meaning of the asserted claims, we look to the words of
the claims themselves, the specification, the prosecution
history, and any relevant extrinsic evidence. Id. at 1315–
17. This inquiry typically begins and ends with the
intrinsic evidence. In fact, the specification is the single
best guide to the meaning of the claim terms; it is usually
dispositive. Id. at 1318 (“[T]he specification ‘is always
highly relevant to the claim construction analysis. Usual-
ly, it is dispositive . . . .” (internal citations omitted)).
     D-Link challenges the district court’s construction of
“responsive to the receiving step, constructing a message
field for a second data unit, said message field including a
type identifier field” as “responsive to the receiving step,
generating a message field including a field that identifies
the message type of the feedback response message from a
number of different message types.” Claim Construction
Order, 2013 WL 949378, at *4–6. D-Link argues that the
district court should have adopted its proposed construc-
tion: “responsive to the receiving step, generating a mes-
sage field including a field identifying the type of feedback
response that is selected from multiple available feedback
responses in order to minimize the size or number of
feedback responses.” Id. at *4 (emphasis added). In
essence, D-Link contends that the “type identifier field”
must be used to “select[] from multiple available feedback
responses” and “minimize the size or number of feedback
responses.” Id.
    D-Link asserts that, because the entire specification
of the ’215 patent emphasizes that the point of the inven-
tion is to select the feedback response that minimizes the
size or number of feedback responses, we must limit the
scope of the claims to capture the scope of the actual
invention. Ericsson responds that the district court
properly excluded the two extraneous limitations—
selecting and minimizing—in its construction. Because
none of the language cited by D-Link amounts to a clear
disavowal of the claim scope, Ericsson contends that we
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  25

should not read limitations from the specification into the
claims.
     We agree with Ericsson that D-Link’s proposed con-
struction improperly reads limitations from the specifica-
tion into the claims. Although the claims must be read in
light of the specification, it is important that we “avoid
importing limitations from the specification into the
claims.” Phillips, 415 F.3d at 1323. We recognize that
there is a fine distinction between these two concepts, but
we must, as always, draw this distinction from the point
of a view of a person of ordinary skill in the art. Id.
Although the ’215 patent envisions that the type identifier
field be used to select the most efficient format of feed-
back response, the specification never requires the selec-
tion of the feedback response type that minimizes the size
or number of feedback responses. See id. at 1326–27
(“The fact that the written description of the [] patent sets
forth multiple objectives to be served by the baffles recited
in the claims confirms that the term ‘baffles’ should not be
read restrictively to require that the baffles in each case
serve all of the recited functions.”). The type identifier
field actually serves another purpose—one distinct from
the proposed selecting and minimizing functions—it must
identify the type of feedback response. This purpose is
encompassed by the district court’s construction. Alt-
hough the type identifier field may be used to select and
minimize, a person of ordinary skill would not read those
limitations into the claims when the field has another
purpose as well.
    D-Link relies on Metabolite Laboratories, Inc. v. La-
boratory Corp. of America Holdings, 370 F.3d 1354 (Fed.
Cir. 2004) to argue that we should use the preamble of the
asserted claim to limit our construction. In Metabolite, we
stated that “[a] preamble may provide context for claim
construction, particularly, where as here, that preamble’s
statement of intended use forms the basis for distinguish-
ing the prior art in the patent’s prosecution history.” 370
26                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

F.3d at 1362 (emphasis added). D-Link omits the itali-
cized part of the Metabolite quote in its briefs, likely
because the selection and minimization requirements
were not used as the basis for distinguishing the prior art
in the prosecution history of the ’215 patent. Indeed, the
addition of the type identifier field, which identifies the
type of feedback response, is a sufficient basis for distin-
guishing the prior art. This is reflected in the district
court’s correct construction because the message field
must “includ[e] a field that identifies the message type of
the feedback response message from a number of different
message types.” Claim Construction Order, 2013 WL
949378, at *4 (emphasis added).
    We therefore hold that the district court correctly did
not read the additional limitations D-Link identifies into
the “type identifier field” term of the ’215 patent; we adopt
the district court’s construction.
                     b. Infringement
     D-Link argues that, even under the district court’s
construction, the jury did not have substantial evidence to
find that the accused devices met the “responsive to the
receiving step, constructing a message field for a second
data unit, said message field including a type identifier
field” step in the asserted claims of the ’215 patent.
    A method claim is directly infringed when someone
practices every step of the patented method. Cardiac
Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348,
1359 (Fed. Cir. 2009). In order to prove induced in-
fringement, the patentee must show that the alleged
infringer performs, or induces another party to perform,
every single step in the method. Limelight Networks, Inc.
v. Akamai Techs., Inc., 572 U.S. __, 134 S. Ct. 2111, 2117
(2014). Inducement requires that the alleged infringer
“knowingly induced infringement and possessed specific
intent to encourage another’s infringement.” DSU Med.
Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006).
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  27

    At trial, Ericsson presented evidence in the form of
expert testimony that all 802.11(n)-compliant products,
including the accused products, must send an appropriate
response in the BlockAck field. Furthermore, Ericsson
presented evidence that the BlockAck field must indicate
one of three different feedback response types. D-Link, to
the contrary, presented evidence that, although the
accused devices send messages that contained the Block-
Ack field, the accused products only use one type of feed-
back response type. D-Link argued that, because its
products only use a single feedback response, the accused
product could not satisfy the “from a number of different
message types” limitation.
    The jury found that D-Link infringed claims 1 and 2
of the ’215 patent. In denying D-Link’s subsequent JMOL
motion, the district court explained that whether the use
of a single feedback response meets the “from a number of
different message types” limitation is precisely the type of
factual question that is to be resolved by a jury. The
district court clarified that the jury was authorized to find
direct infringement of a method claim by D-Link if its
products automatically perform the disputed steps with-
out user modification. JMOL Order, 2013 WL 4046225,
at *9 (citing SiRF Tech., Inc. v. Int’l Trade Comm’n, 601
F.3d 1319, 1331 (Fed. Cir. 2010)). The district court
reasoned that, because the accused products performed
the claimed method when operated by D-Link’s customers
without any modification, a finding of direct infringement
was justified.      Regarding indirect infringement, the
district court found that Ericsson had presented substan-
tial evidence that D-Link possessed the requisite intent
because they continued to sell 802.11(n)-compliant devices
even after receiving notice of the patents.
    On appeal, D-Link argues that, under the district
court’s construction, the feedback response message type
must be generated “from a number of different message
types.” Claim Construction Order, 2013 WL 949378, at *4
28                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

(emphasis added). According to D-Link, because the
accused products always send a single type of feedback
response, a jury did not have substantial evidence to find
infringement. D-Link further asserts that, under Federal
Circuit law, a party that sells a product containing in-
structions to perform a patented method does not directly
infringe the method. Appellants’ Br. 46–47 (citing Aristo-
crat Techs. Australia Pty Ltd. v. Int’l Game Tech., 709
F.3d 1348, 1362 (Fed. Cir. 2013); Ricoh Co. v. Quanta
Comp. Inc., 550 F.3d 1325 (Fed. Cir. 2008)). Regarding
induced infringement, moreover, D-Link contends that
Ericsson did not present sufficient facts from which a jury
could conclude that it knew the induced acts constituted
infringement. According to D-Link, knowledge of the
patents plus advertising compliance with 802.11(n) is not
enough evidence upon which to base a finding of induced
infringement.
     Ericsson responds that the claim language does not
require that the accused products send multiple types of
feedback responses, only that they have a field that
“identifies the message type.” According to Ericsson,
because the accused products must utilize the BlockAck
field to be compliant with the 802.11(n) standard, the jury
had substantial evidence to find infringement. According
to Ericsson, moreover, the Ricoh case relied on by D-Link
applies only to software, not to “hard-wired” devices that
will automatically perform the infringing steps. Ericsson
asserts that, like the accused products in SiRF, D-Link
designs the accused products to perform the method steps
automatically whenever the products are used. According
to Ericsson, substantial evidence supports the finding of
induced infringement, including evidence that D-Link
advertises 802.11(n) compliance and submits its products
for interoperability testing and certification.
     We must address two different issues: (1) whether the
jury had substantial evidence to find that the BlockAck
field was selected “from a number of different message
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                29

types” and (2) whether the jury had substantial evidence
to find direct or indirect infringement by D-Link. First,
we agree with the district court and Ericsson that the jury
had substantial evidence to find that using the BlockAck
field meets the “from a number of different message
types” step. Claim Construction Order, 2013 WL 949378,
at *4. Nothing in the court’s proper construction requires
that multiple different feedback response types actually
be used. Indeed, we have already rejected D-Link’s
proposed construction that would have added this re-
quirement. At trial, Ericsson presented evidence that the
802.11(n) standard allows multiple types of feedback
responses. It is undisputed, moreover, that the accused
devices send the code identifying the feedback response
type in the BlockAck field, as required by the 802.11(n)
standard. Although the accused devices only use one type
of feedback response, the jury had substantial evidence to
find that the accused devices can perform the method
claimed in the ’215 patent. Indeed, this is precisely the
type of factual dispute that a jury should be resolving.
    Because the asserted claim is a method claim, howev-
er, the accused devices must also actually perform that
method. See Cardiac Pacemakers, 576 F.3d at 1359.
Although the jury was instructed on both direct and
indirect infringement, the verdict form only indicated that
the jury found that D-Link infringed claims 1 and 2 of the
’215 patent. In other words, the verdict did not distin-
guish between direct and indirect infringement. For the
reasons explained below, we must address both D-Link’s
direct and indirect infringement arguments.
    The district court relied on SiRF to conclude that the
jury properly found that D-Link directly infringed the
method claim by selling the accused products. In SiRF,
this court affirmed the International Trade Commission’s
finding that the manufacturer of GPS systems directly
infringed the asserted method claims. SiRF, 601 F.3d at
1331. The method claims at issue in SiRF required some,
30                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

but not all, of the steps of the claim to be executed by a
satellite, which was controlled by the accused infringers.
The remaining steps were then automatically performed
by the accused GPS products, which were in possession of
the end users. Id. at 1329–30. In SiRF, accordingly, we
concluded that, on these facts, it was the accused infring-
ers that performed all the steps required for direct in-
fringement, not the customers who possessed the GPS
products. Id. at 1331.
     In Ricoh, on the other hand, we held “that a party
that sells or offers to sell software containing instructions
to perform a patented method does not infringe the patent
under § 271(a).” Ricoh, 550 F.3d at 1335. The Ricoh
court explained that there is a difference between the
instructions contained in software and the process within
the meaning of § 271(a). Our other decisions echo the
idea from Ricoh that the direct infringer must actually
perform the steps in the method claim. See, e.g., Aristo-
crat Techs., 709 F.3d at 1362 (noting that to prove direct
infringement the patentee must show “each and every
step of the method or process was performed” by either
the accused infringer personally or “through another
acting under [the accused infringer’s] direction or con-
trol”); Akamai Techs., Inc. v. Limelight Networks, Inc.,
692 F.3d 1301, 1307 (Fed Cir. 2012) (“[F]or a party to be
liable for direct patent infringement under 35 U.S.C.
§ 271(a), that party must commit all the acts necessary to
infringe the patent, either personally or vicariously.”),
overruled on other grounds, 134 S. Ct. 2111; Travel Sen-
try, Inc. v. Tropp, 497 F. App’x 958, 965 (Fed. Cir. 2012)
(holding that a party is liable for direct infringement of a
method claim only if that party exercises “control or
direction” over the performance of each step of the claim,
including those the party does not itself perform); Lucent
Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1317 (Fed.
Cir. 2009) (finding sale of software alone does not directly
infringe method claims of patent and seller can only be
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                31

liable for infringement as contributor and/or inducer);
Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311
(Fed. Cir. 2006) (“Method claims are only infringed when
the claimed process is performed, not by the sale of an
apparatus that is capable of infringing use.”).
    Contrary to Ericsson’s assertions, our decision in
SiRF did not create direct infringement liability whenever
an alleged infringer sells a product that is capable of
executing the infringing method. Our decision in SiRF is
not applicable here because all of the steps of the method
in claims 1 and 2 of the ’215 patent are performed on the
end product, which is controlled by a third party. See
SiRF, 601 F.3d at 1331. Unlike the method in SiRF,
there are no steps automatically performed by equipment
controlled by D-Link. In fact, none of our decisions have
found direct infringement of a method claim by sales of an
end user product which performs the entire method, and
we decline to do so here. Because Ericsson cannot point to
any evidence in the record that D-Link performed the
infringing steps, or that any of its customers were under
its direction or control, the jury did not have substantial
evidence to find direct infringement of claims 1 and 2 of
the ’215 patent.
    Importantly, however, the district court did not in-
struct the jury that D-Link could directly infringe a
method claim if the accused products were used to execute
the patented steps. D-Link does not dispute the legal
propriety of the direct infringement instructions. This
means that, if the jury found direct infringement, it was a
factual error, not a legal error. Although we think that it
would have been a factual error for the jury to find direct
infringement of the method claims by D-Link itself, that
error is not enough to set aside the jury verdict because
the jury’s finding also could have been premised on indi-
rect infringement. See i4i Ltd. P’ship v. Microsoft Corp.,
598 F.3d 831, 849 (Fed. Cir. 2010) (stating that a general
verdict will not be set aside “‘simply because the jury
32                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

might have decided on a ground that was supported by
insufficient evidence,’” but rather jury verdict should be
upheld if there is sufficient evidence to support any of the
plaintiff’s alternative factual theories) (quoting Walther v.
Lone Star Gas Co., 952 F.2d 119, 126 (5th Cir. 1992)); cf.
Griffin v. United States, 502 U.S. 46 (1991) (holding that a
general verdict should be invalidated when one of the
possible bases was based on legal error).
    We agree with the district court and Ericsson that the
jury had substantial evidence to find that D-Link induced
infringement of claims 1 and 2 of the ’215 patent. Erics-
son presented evidence that D-Link knew about the
patents and knew that the patents potentially were
essential to the 802.11(n) standard—a standard with
which D-Link intentionally complied. D-Link countered
by presenting evidence that it did not think its actions
constituted infringement of any of the claims of the ’215
patent. Making findings of fact by weighing evidence—
such as the evidence presented by the parties regarding
induced infringement—is the role of the jury. Questions
of intent are quintessential jury questions. See Allen
Organ Co. v. Kimball Int’l, Inc., 839 F.2d 1556, 1567 (Fed.
Cir. 1988) (“Intent is a factual determination particularly
within the province of the trier of fact.”). We cannot say
that the jury did not have substantial evidence to find
induced infringement and we decline to supplant the
jury’s factual findings with our own. E.g., Lucent, 580
F.3d at 1323 (“Having perused the evidence, we agree
with Microsoft that the evidence is not strong, but we are
not persuaded that the jury was unreasonable in finding
that Microsoft possessed the requisite intent to induce at
least one user of its products to infringe the claimed
methods.”).
    For these reasons, we affirm the jury’s finding of in-
fringement of claims 1 and 2 of the ’215 patent.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 33

                       3. The ’625 Patent
    D-Link argues on appeal that the jury did not have
substantial evidence to find that the accused devices
infringed claim 1 of the ’625 patent or find the patent
valid over the Petras prior art reference. We examine
each of the jury’s findings in turn.
                        a. Infringement
     At trial, Ericsson argued that every transmitted data
packet acts as its own “command to receive” from the
transmitter. Ericsson’s expert testified that all 802.11(n)-
compliant receivers automatically accept all packets, even
if those packets are out of order. Ericsson contended that
this was just like an embodiment of the ’625 patent where
every packet is commanding the receiver to accept an out-
of-order packet. D-Link countered that, because the
normal operation of 802.11(n)-compliant receivers is to
accept all packets, there is no “command to receive” from
the transmitter. D-Link insisted that Ericsson failed to
present any evidence that a normal packet will release
the receiver from expectations of receiving outstanding
packets.
    The jury found that D-Link infringed claim 1 of the
’625 patent. The district court refused to grant D-Link’s
request for a JMOL, explaining that the jury was entitled
to credit Ericsson’s expert over D-Link’s expert.
    D-Link argues on appeal that the accused products
are already programmed to accept all valid data packets
and do not need to be commanded by the transmitter to
accept out-of-order packets. D-Link contends that this
means the jury’s finding is not supported by substantial
evidence. According to D-Link, Ericsson’s expert admit-
ted that regular packet transmissions could not act as a
command to receive because the receivers already had the
ability to receive the packets. D-Link explains that,
34                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

because the receiver already had the ability to receive, the
transmitter did not command the receiver to do anything.
     Ericsson responds that its expert testified at trial that
the accused products met each and every limitation of the
claims in the ’625 patent. According to Ericsson, the fact
that a receiver must receive a packet from the transmit-
ter, even if out of order, qualifies the message as a “com-
mand to receive.” Ericsson emphasizes that the patent
conceived of an embodiment where the “command to
receive” is sent with every single message.
     We agree with D-Link that the jury did not have sub-
stantial evidence to find that the accused products in-
fringe claim 1 of the ’625 patent. The asserted claim of
the ’625 patent requires that “a transmitter . . . com-
mand[] a receiver . . . to a) receive at least one packet . . .
and b) release any expectation of receiving outstanding
packets. . . .” ’625 patent col. 10 ll. 16–21 (emphases
added). But there is no evidence in the record that it is
the transmitter in the accused devices that commands the
receiver to receive the out-of-order packets and release
expectations of receiving earlier packets. Instead, all of
Ericsson’s evidence confirms that the receiver automati-
cally handles out-of-order packets. In other words, the
transmitter does not command the receiver to do any-
thing. The receiver just operates as programmed to
handle out-of-order packets, regardless of the messages
that the transmitter sends. Indeed, Ericsson’s expert
admitted that the receivers already have the ability to
accept all packets. J.A. 1412–13 (“Question: If a receiver
could receive a packet that a transmitter was sending to
it, is it correct that you would not need the command to
receive in the ’625 patent to command or force the receiv-
er to receive the packet? Answer: I mean, that almost
seems like a tautology. If it could receive, then would you
need to insist that it receives it? No, because it could
already receive it.”). In other words, the transmitter does
not command the receiver to accept the packets.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  35

    Because no reasonable jury could have found that the
accused products meet each and every limitation of claim
1 of the ’625 patent, we reverse the district court’s refusal
to grant JMOL of no infringement as to that patent.
                          b. Invalidity
    D-Link argued at trial that the Petras reference, a
prior art publication, anticipated claim 1 of the ’625
patent. A claim is anticipated only if each and every
limitation is found either expressly or inherently in a
single prior art reference. Whitserve, LLC v. Computer
Packages, Inc., 694 F.3d 10, 21 (Fed. Cir. 2012). Because
patents are presumed valid, anticipation must be proven
by clear and convincing evidence. Id.
    The Petras reference discloses one type of ARQ proto-
col where the transmitter can send a “discard message” to
the receiver. The discard message informs the receiver
that a message will not be resent. The following figure
from Petras is illustrative:

J.A. 15041. In this figure, the transmitter first sends
packets 0–3 to the receiver before the receiver sends back
its first feedback responses. Due to delay and packet loss,
when the transmitter is first notified that the receiver did
not receive packet number 2—the second I(X)-SREJ(2)
message—the transmitter has already deleted packet 2.
The transmitter will then inform the receiver that it can
ignore packet number 2 by sending the discard packet
message—the I(5)-DISCARD(2) message.
36                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

    At trial, D-Link argued that a discard message acts as
the “command to receive” from the transmitter. Erics-
son’s expert testified against this theory, explaining that
the discard messages were not commands to receive;
discard messages were merely notifications that the
transmitter had discarded a packet. The jury found that
Petras did not anticipate the ’625 patent, and the district
court refused to overturn that finding.
    On appeal, D-Link argues that Petras discloses send-
ing a discard message, which “commands” the receiver to
stop waiting for delayed packets and shift its reception
window forward to receive later packets. Ericsson re-
sponds that substantial evidence supports the jury’s
finding of no anticipation, pointing to its expert’s testimo-
ny that packet discard messages were well known in the
prior art. Ericsson also asserts that D-Link’s expert
testimony was inconsistent, so the jury was correct to
discredit his testimony.
    We agree with the district court and Ericsson that
substantial evidence supports the jury’s finding that
Petras did not anticipate the ’625 patent. D-Link’s argu-
ments on appeal essentially ask us to credit its position on
discard messages over Ericsson’s. We decline to do so.
Both parties presented expert testimony regarding
whether Petras anticipates the ’625 patent, and we see no
reason why the jury was not entitled to credit Ericsson’s
evidence over D-Link’s evidence. We therefore see no
reason to disturb the jury’s verdict.
                       B. Damages
    Having affirmed infringement with respect to two pa-
tents, we must also address the damages issues raised by
D-Link. As explained below, we vacate the jury’s damag-
es award and remand for further proceedings consistent
with this opinion.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 37

    We review decisions on motions for a new trial and
the admission of expert testimony under the law of the
regional circuit. Verizon, 602 F.3d at 1331. The Fifth
Circuit reviews the denial of a new trial motion for abuse
of discretion, reversing only if there is an “an absolute
absence of evidence to support the jury’s verdict.” Duff v.
Werner Enters., Inc., 489 F.3d 727, 729 (5th Cir. 2007).
The Fifth Circuit reviews the trial court’s admission or
exclusion of expert testimony for an abuse of discretion.
Snap-Drape, Inc. v. Comm’r, 98 F.3d 194, 197 (5th Cir.
1996).
    We review de novo the legal sufficiency of a jury in-
struction on an issue of patent law. Sulzer Textil A.G. v.
Picanol N.V., 358 F.3d 1356, 1363 (Fed. Cir. 2004). A
jury verdict will be set aside only if the jury instructions
were “legally erroneous” and the “errors had prejudicial
effect.” Id.
           1. Admissibility of License Evidence
    Before trial, D-Link moved to exclude certain testi-
mony by Ericsson’s damages expert, arguing that it
violated the EMVR. Specifically, D-Link argued that,
because the damages calculations were, in part, based on
licenses which were themselves tied to the entire value of
the licensed products, even though the technology being
licensed related to only a component of those products, the
testimony was impermissible as a matter of law. In
denying that motion, the district court explained that
Ericsson’s expert’s reference to those prior licenses was
not improper because the expert properly apportioned
any damages calculations based on those licenses to
account for the value of the patents at issue. D-Link
noted its objection to this line of testimony at trial by
entering a continuing objection to Ericsson’s expert’s
testimony to the extent it was predicated on or made any
reference to these licenses. J.A. 1437–38 at 4:37–5:13. At
trial, both Ericsson and D-Link then referred to the value
38                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

of laptops generally. J.A. 1325 at 11:24–12:21; J.A. 1332
at 37:22–38:11. After the jury found infringement and
awarded Ericsson 15 cents per infringing device, D-Link
moved for JMOL and for a new trial, arguing that the
admission of this expert testimony violated the EMVR.
The district court denied both motions.
    On appeal, D-Link argues that the district court prej-
udicially erred by: (1) not excluding Ericsson’s damages
expert’s testimony on the challenged licenses, and (2)
allowing Ericsson’s counsel to compare the cost of the end
product to the requested royalty at trial. According to D-
Link, because Ericsson did not dispute that the asserted
claims are practiced entirely by the Wi-Fi chips—not by
other components of the accused end products—Ericsson
should never have been allowed to base its damages
award or its arguments at trial on the price of the end
products.
    Ericsson responds that the jury award of 15 cents per
infringing product is consistent with comparable Ericsson
licenses, insisting that our court has found comparable
licenses to be the best evidence of a reasonable royalty
rate. Ericsson further argues that the jury award is
consistent with “industry norms” and in accord with its
damages expert’s testimony. According to Ericsson, its
expert conducted a rigorous analysis, which separated the
value of the patents at issue from any other patents
covered by the licenses he referenced. Because of this
apportionment, Ericsson asserts that neither its damages
calculation nor its expert’s reference to actual industry
licenses was improper, under the EMVR or otherwise.
With respect to counsel’s reference to the cost of laptops at
trial, Ericsson argues that D-Link never objected to these
references, and made similar references itself.
    We conclude that the district court properly admitted
evidence of the licenses to which D-Link objects and that
any objection to counsel’s references to the cost of items
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 39

incorporating the allegedly infringing chips was waived.
While a number of our cases have referred to the concept
of an entire market value “rule,” the legal standard actu-
ally has two parts, which are different in character.
There is one substantive legal rule, and there is a sepa-
rate evidentiary principle; the latter assisting in reliably
implementing the rule when—in a case involving a per-
unit royalty—the jury is asked to choose a royalty base as
the starting point for calculating a reasonable royalty
award.
     As we explained recently in VirnetX, Inc. v. Cisco Sys-
tems, Inc., 767 F.3d 1308 (Fed. Cir. 2014), where multi-
component products are involved, the governing rule is
that the ultimate combination of royalty base and royalty
rate must reflect the value attributable to the infringing
features of the product, and no more. 767 F.3d at 1326
(citing Garretson v. Clark, 111 U.S. 120, 121 (1884)). As a
substantive matter, it is the “value of what was taken”
that measures a “reasonable royalty” under 35 U.S.C.
§ 284. Dowagiac Mfg. Co. v. Minn. Moline Plow Co., 235
U.S. 641, 648 (1915). What is taken from the owner of a
utility patent (for purposes of assessing damages under
§ 284) is only the patented technology, and so the value to
be measured is only the value of the infringing features of
an accused product.
    When the accused infringing products have both pa-
tented and unpatented features, measuring this value
requires a determination of the value added by such
features. Indeed, apportionment is required even for non-
royalty forms of damages: a jury must ultimately “appor-
tion the defendant’s profits and the patentee’s damages
between the patented feature and the unpatented fea-
tures” using “reliable and tangible” evidence. Garretson,
111 U.S. at 121. Logically, an economist could do this in
various ways—by careful selection of the royalty base to
reflect the value added by the patented feature, where
that differentiation is possible; by adjustment of the
40                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

royalty rate so as to discount the value of a product’s non-
patented features; or by a combination thereof. The
essential requirement is that the ultimate reasonable
royalty award must be based on the incremental value
that the patented invention adds to the end product.
    Our cases have added to that governing legal rule an
important evidentiary principle. The point of the eviden-
tiary principle is to help our jury system reliably imple-
ment the substantive statutory requirement of
apportionment of royalty damages to the invention’s
value. The principle, applicable specifically to the choice
of a royalty base, is that, where a multi-component prod-
uct is at issue and the patented feature is not the item
which imbues the combination of the other features with
value, care must be taken to avoid misleading the jury by
placing undue emphasis on the value of the entire prod-
uct. It is not that an appropriately apportioned royalty
award could never be fashioned by starting with the
entire market value of a multi-component product—by,
for instance, dramatically reducing the royalty rate to be
applied in those cases—it is that reliance on the entire
market value might mislead the jury, who may be less
equipped to understand the extent to which the royalty
rate would need to do the work in such instances. See
LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d
51, 67, 68 (Fed. Cir. 2012) (barring the use of too high a
royalty base—even if mathematically offset by a “‘low
enough royalty rate’”—because such a base “carries a
considerable risk” of misleading a jury into overcompen-
sating, stating that such a base “‘cannot help but skew the
damages horizon for the jury’” and “make a patentee’s
proffered damages amount appear modest by comparison”
(quoting Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d
1292, 1320 (Fed. Cir. 2011))). Thus, where the entire
value of a machine as a marketable article is “properly
and legally attributable to the patented feature,” the
damages owed to the patentee may be calculated by
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  41

reference to that value. Id. Where it is not, however,
courts must insist on a more realistic starting point for
the royalty calculations by juries—often, the smallest
salable unit and, at times, even less. VirnetX, 767 F.3d at
1327–28.
     We apply these concepts to a challenge to expert tes-
timony regarding licenses in which royalties were set by
reference to the value of an end product. We conclude
that the expert testimony about which D-Link complains
violated neither the rule from Garretson regarding appor-
tionment, nor the evidentiary principle demanding an
appropriate balance between the probative value of ad-
mittedly relevant damages evidence and the prejudicial
impact of such evidence caused by the potential to mis-
lead the jury into awarding an unduly high royalty. We
find, accordingly, that the district court did not err by
failing to exercise its discretion under Federal Rule of
Evidence 403 to exclude the license testimony at issue
here. Uniloc, 632 F.3d at 1320; see LaserDynamics, 694
F.3d at 77–78 (finding that the district court abused its
discretion by failing to exclude a license under Federal
Rule of Evidence 403).
    This court has recognized that licenses may be pre-
sented to the jury to help the jury decide an appropriate
royalty award. See, e.g., Monsanto Co. v. McFarling, 488
F.3d 973, 978 (Fed. Cir. 2007) (“An established royalty is
usually the best measure of a ‘reasonable’ royalty for a
given use of an invention . . . .”); Georgia-Pacific Corp. v.
U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y.
1970) (finding that “royalties received by the patentee for
the licensing of the patent in suit” is a relevant factor for
the jury to consider). Prior licenses, however, are almost
never perfectly analogous to the infringement action.
VirnetX, 767 F.3d at 1330. For example, allegedly compa-
rable licenses may cover more patents than are at issue in
the action, include cross-licensing terms, cover foreign
intellectual property rights, or, as here, be calculated as
42                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

some percentage of the value of a multi-component prod-
uct. Testimony relying on licenses must account for such
distinguishing facts when invoking them to value the
patented invention. Recognizing that constraint, howev-
er, the fact that a license is not perfectly analogous gener-
ally goes to the weight of the evidence, not its
admissibility. See Apple Inc. v. Motorola, Inc., 757 F.3d
1286, 1326 (Fed. Cir. 2014) (“Here, whether these licenses
are sufficiently comparable such that Motorola’s calcula-
tion is a reasonable royalty goes to the weight of the
evidence, not its admissibility.”); accord ActiveVideo
Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312,
1333 (Fed. Cir. 2012) (“Although we may not have decided
these evidentiary issues the same way had we presided
over the trial, the district court did not abuse its discre-
tion.”). In each case, district courts must assess the
extent to which the proffered testimony, evidence, and
arguments would skew unfairly the jury’s ability to ap-
portion the damages to account only for the value at-
tributable to the infringing features.
    As the testimony at trial established, licenses are
generally negotiated without consideration of the EMVR,
and this was specifically true with respect to the Ericsson
licenses relating to the technology at issue. Making real
world, relevant licenses inadmissible on the grounds D-
Link urges would often make it impossible for a patentee
to resort to license-based evidence. Such evidence is
relevant and reliable, however, where the damages testi-
mony regarding those licenses takes into account the very
types of apportionment principles contemplated in Gar-
retson. In short, where expert testimony explains to the
jury the need to discount reliance on a given license to
account only for the value attributed to the licensed
technology, as it did here, the mere fact that licenses
predicated on the value of a multi-component product are
referenced in that analysis—and the district court exer-
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 43

cises its discretion not to exclude such evidence—is not
reversible error. 4
    We do conclude, however, that, when licenses based
on the value of a multi-component product are admitted,
or even referenced in expert testimony, the court should
give a cautionary instruction regarding the limited pur-
poses for which such testimony is proffered if the accused
infringer requests the instruction. The court should also
ensure that the instructions fully explain the need to
apportion the ultimate royalty award to the incremental
value of the patented feature from the overall product. As
to the first, while D-Link did ask for a generic instruction
on the EMVR, it did not ask for an instruction specifically
referencing the licenses or the testimony relating thereto
about which it objected. On the second, while the court
told the jury about the Georgia-Pacific factors—which do
take the concepts of apportionment into account to some
extent—it did not separately caution the jury about the
importance of apportionment. 5 As explained in Section
B.2 below, we need not determine whether D-Link pre-
served its objections to these instructions or, if it did,
whether it was prejudiced by the instructions actually
given on these issues, because we vacate the damages
award for other reasons.
    As noted, D-Link also argues that the district court
prejudicially erred by allowing Ericsson’s counsel to

    4   Because D-Link does not challenge the methodol-
ogy used by Ericsson’s damages expert, we need not
consider the propriety of his apportionment analysis. See
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 597
(1993).
    5   While factors 9 and 13 of the Georgia-Pacific fac-
tors allude to apportionment concepts, we believe a sepa-
rate instruction culled from Garretson would be preferable
in future cases.
44                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

reference the total cost of a laptop when discussing the
requested royalty rate. We find that D-Link waived this
argument. D-Link’s continuing objection only applied to
Ericsson’s expert’s reference to the prior licenses. See J.A.
1437–38 at 4:37–5:13. Nowhere in the record does D-Link
object to counsel’s reference to the market value of a
laptop at trial. In fact, D-Link actually referred to the
value of its own end products on crossexamination. And
D-Link failed to raise this issue in its post-trial motions.
See J.A. 1332 at 37:22–38:11. We see no prejudice or
injustice that would require us to address this issue for
the first time on appeal and we therefore decline to do so.
See Novo Nordisk A/S v. Becton Dickinson & Co., 304
F.3d 1216, 1220 (Fed. Cir. 2012) (“Although appellate
tribunals are not prohibited from taking remedial action
when it is apparent that prejudice or unfairness entered
the trial and the interest of justice requires, ‘counsel for
the defense cannot as a rule remain silent, interpose no
objections, and after a verdict has been returned seize for
the first time on the point that the comments to the jury
were prejudicial.’” (quoting United States v. Socony-
Vacuum Oil Co., 310 U.S. 150, 238–39 (1940))).
     2. The District Court’s RAND Jury Instruction
    Because Ericsson was obligated to license the patents
at issue on RAND terms, D-Link asked the district court
to instruct the jury on that RAND obligation. Among
other things, D-Link requested that the district court
instruct the jury regarding the dangers of patent hold-up
and royalty stacking in RAND-related contexts. Rather
than adopt the language D-Link proposed, the district
court granted D-Link’s request only in part. The court
added a sixteenth factor to the 15 Georgia-Pacific factors
on which it instructed the jury, telling the jury that it
“may consider . . . Ericsson’s obligation to license its
technology on RAND terms.” J.A. 226. After the jury
returned its infringement verdict and assigned damages,
the district court denied D-Link’s motions for JMOL and a
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  45

new trial based on its failure to provide more detailed
instructions on RAND issues.
    On appeal, D-link argues that enforcing RAND com-
mitments is critical to preserving the benefits of stand-
ards and must be considered in any damages award.
According to D-Link, the district court reversibly erred by
giving the jury the customary Georgia-Pacific factors
because many of those either are not applicable, or may
be misleading, in the RAND context. D-Link further
contends that the district court erred by refusing to
instruct the jury to consider patent hold-up and royalty
stacking.
    Ericsson responds that the district court did not err in
refusing to instruct the jury about patent hold-up and
royalty stacking because the Georgia-Pacific factors
already encompassed these concerns, and to the extent
they did not, the inclusion of a “sixteenth” factor referring
to Ericsson’s RAND obligations was sufficient. According
to Ericsson, a jury instruction regarding patent hold-up or
royalty stacking would have been inappropriate because
D-Link failed to present any evidence regarding either
patent hold-up or royalty stacking to the jury. We agree
with both D-Link and Ericsson, to some extent.
    This is an issue of first impression for us. To our
knowledge, only three other courts have considered the
issue of appropriate RAND royalty rates—all district
courts. See Realtek Semiconductor, Corp. v. LSI Corp.,
No. C-12-3451, 2014 WL 2738216, at *5–6 (N.D. Cal. June
16, 2014); In re Innovatio IP Ventures, LLC Patent Litig.,
No. 11 C 9308, 2013 WL 5593609 (N.D. Ill. Oct. 3, 2013);
Microsoft Corp. v. Motorola, Inc., No. C10-1823JLR, 2013
WL 2111217 (W.D. Wash. Apr. 25, 2013). 6

    6  The issue in Microsoft was whether Motorola had
breached its contractual obligation to offer a RAND
46                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

license to Microsoft. Because the jury needed to deter-
mine whether Motorola’s offer letters were in fact RAND
offers, the Microsoft court analyzed the facts to find a
range of appropriate values. In doing so, the court creat-
ed a modified set of Georgia-Pacific factors to consider
when the patents are encumbered by RAND contracts,
noting that a number of the unmodified factors do not
adequately address the RAND situation. Microsoft, 2013
WL 2111217, at *18–20.
     In Innovatio, the parties asked the district court to
calculate the appropriate RAND royalty rate for a group
of 802.11 SEPs. The Innovatio court largely adopted the
methodology used in Microsoft, but made a few modifica-
tions. Innovatio, 2013 WL 5593609, at *6–7. The Innova-
tio court presented the concepts relevant to a RAND rate,
including patent hold-up, royalty stacking, and incentiviz-
ing inventors to participate in the standard-setting pro-
cess. The court then explained that, based on these
considerations, the royalty rate: (1) must distinguish
between the intrinsic value of the technology and the
value of the standardization of that technology; (2) take
into account what part of the standard the patent actually
covers; and (3) must be high enough to ensure that inno-
vators have appropriate incentive to invest in future
developments and contribute their inventions to the
standard-setting process. Id. at *8–12.
     In Realtek, the district court upheld the jury’s patent
infringement damages award in a RAND patent case,
explaining that the jury’s award was supported by sub-
stantial evidence. Realtek, 2014 WL 2738216, at *5–6.
The Realtek court’s jury instruction informed the jury it
“should not consider LSI’s advantage resulting from the
standard’s adoption, if any. However, you may consider
any advantage resulting from the technology’s superiori-
ty.” Realtek Semiconductor, Corp. v. LSI Corp. (“Realtek
Jury Instruction”), No. C-12-3451, ECF No. 267, 21 (N.D.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                   47

 a. The district court’s use of the Georgia-Pacific factors
    Although we have never described the Georgia-Pacific
factors as a talisman for royalty rate calculations, district
courts regularly turn to this 15-factor list when fashioning
their jury instructions. Indeed, courts often parrot all 15
factors to the jury, even if some of those factors clearly are
not relevant to the case at hand. And, often, damages
experts resort to the factors to justify urging an increase
or a decrease in a royalty calculation, with little explana-
tion as to why they do so, and little reference to the facts
of record. See WhitServe, LLC v. Computer Packages,
Inc., 694 F.3d 10, 31–32 (Fed. Cir. 2012) (“We do not
require that witnesses use any or all of the Georgia-
Pacific factors when testifying about damages in patent
cases. If they choose to use them, however, reciting each
factor and making a conclusory remark about its impact
on the damages calculation before moving on does no
more than tell the jury what factors a damages analysis
could take into consideration.”). In this case, the district
court included all 15 Georgia-Pacific factors in its damag-
es instruction—over objection—without considering their
relevance to the record created at trial.
    In a case involving RAND-encumbered patents, many
of the Georgia-Pacific factors simply are not relevant;
many are even contrary to RAND principles. See Br. of
Amici Curiae American Antitrust Institute (“AAI Br.”)
11–20 (arguing that the Georgia-Pacific factors are not

Cal. February 10, 2014). The Realtek court further in-
structed the jury to use a two-step approach to determine
the RAND royalty rate: (1) “compar[e] the technical
contribution of the two LSI patents to the technical con-
tributions of other patents essential to the standard” and
(2) “consider the contribution of the standard as a whole
to the market value of Realtek’s products utilizing the
standard.” Id. at 23.
48                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

appropriate for determining RAND royalties). For exam-
ple, factor 4 is “[t]he licensor’s established policy and
marketing program to maintain his patent monopoly by
not licensing others to use the invention or by granting
licenses under special conditions designed to preserve
that monopoly.” Georgia-Pacific, 318 F. Supp. at 1120.
Because of Ericsson’s RAND commitment, however, it
cannot have that kind of policy for maintaining a patent
monopoly. See Microsoft, 2013 WL 2111217, at *18.
Likewise, factor 5—“[t]he commercial relationship be-
tween the licensor and licensee”—is irrelevant because
Ericsson must offer licenses at a non-discriminatory rate.
Georgia-Pacific, 318 F. Supp. at 1120; see Microsoft, 2013
WL 2111217, at *18.
     Several other Georgia-Pacific factors would at least
need to be adjusted for RAND-encumbered patents—
indeed, for SEP patents generally. For example, factor 8
accounts for an invention’s “current popularity,” which is
likely inflated because a standard requires the use of the
technology. Georgia-Pacific, 318 F. Supp. at 1120. Factor
9—“utility and advantages of the patented invention over
the old modes or devices,” J.A. 225—is also skewed for
SEPs because the technology is used because it is essen-
tial, not necessarily because it is an improvement over the
prior art. Factor 10, moreover, considers the commercial
embodiment of the licensor, which is also irrelevant as the
standard requires the use of the technology. Other factors
may also need to be adapted on a case-by-case basis
depending on the technology at issue. Consequently, the
trial court must carefully consider the evidence presented
in the case when crafting an appropriate jury instruction.
In this case, the district court erred by instructing the
jury on multiple Georgia-Pacific factors that are not
relevant, or are misleading, on the record before it, includ-
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 49

ing, at least, factors 4, 5, 8, 9, and 10 of the Georgia-
Pacific factors. 7
    Trial courts should also consider the patentee’s actual
RAND commitment in crafting the jury instruction.
Ericsson agrees that it is under a binding obligation to
license the patents at issue on the RAND terms it pledged
to the IEEE. The district court should have turned to the
actual RAND commitment at issue to determine how to
instruct the jury. In this case, Ericsson promised that it
would “grant a license under reasonable rates to an
unrestricted number of applicants on a worldwide basis
with reasonable terms and conditions that are demon-
strably free of unfair discrimination.” J.A. 17253. Rather
than instruct the jury to consider “Ericsson’s obligation to
license its technology on RAND terms,” J.A. 226, the trial
court should have instructed the jury about Ericsson’s
actual RAND promises. “RAND terms” vary from case to
case. A RAND commitment limits the market value to
(what the patent owner can reasonably charge for use of)
the patented technology. The court therefore must inform
the jury what commitments have been made and of its
obligation (not just option) to take those commitments
into account when determining a royalty award.
    To be clear, we do not hold that there is a modified
version of the Georgia-Pacific factors that should be used
for all RAND-encumbered patents. Indeed, to the extent
D-Link argues that the trial court was required to give
instructions that mirrored the analysis in Innovatio or
Microsoft, we specifically reject that argument. See Oral
Argument at 16:16, Ericsson, Inc. v. D-Link Sys., Inc.,

    7    Reference to irrelevant Georgia-Pacific factors
would not—in most instances—be sufficiently prejudicial
to warrant reversal. Here, however, we find the combina-
tion of errors in the jury instructions merit the remand we
order.
50                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

2013-1625,       available   at    http://oralarguments.cafc.
uscourts.gov/default.aspx?fl=2013-1625.mp3 (“Our argu-
ment was the following on RAND and it doesn’t rely upon
any of the evidence that went in during the two hour jury
wave portion. It relies upon the request for instructions,
basically building on the Innovatio decision by Judge
Holderman and the Microsoft decision by Judge Robart . .
. .”). 8 We believe it unwise to create a new set of Georgia-
Pacific-like factors for all cases involving RAND-
encumbered patents. Although we recognize the desire
for bright line rules and the need for district courts to
start somewhere, courts must consider the facts of record
when instructing the jury and should avoid rote reference
to any particular damages formula.
           b. Apportionment analysis for SEPs
     As with all patents, the royalty rate for SEPs must be
apportioned to the value of the patented invention.
Garretson, 111 U.S. at 121; see also Westinghouse Elec. &
Mfg. Co. v. Wagner Elec. & Mfg. Co., 225 U.S. 604, 617
(1912) (“[Plaintiff] was only entitled to recover such part
of the commingled profits as was attributable to the use of
its invention.”). When dealing with SEPs, there are two
special apportionment issues that arise. First, the pa-
tented feature must be apportioned from all of the unpat-
ented features reflected in the standard. Second, the
patentee’s royalty must be premised on the value of the
patented feature, not any value added by the standard’s

     8  We express no opinion on the methodologies em-
ployed in these district court cases—which may yet come
before this court—or on their applications to the facts at
issue there. The facts in those cases, and the decision-
makers involved, differ from those at issue here. We
address only the record before us and what a jury must be
instructed when RAND-encumbered patents are at issue
and the jury is asked to set a RAND royalty rate.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  51

adoption of the patented technology. These steps are
necessary to ensure that the royalty award is based on the
incremental value that the patented invention adds to the
product, not any value added by the standardization of
that technology. 9
    Just like modern electronic devices, technological
standards include multiple technologies. We know that
patents often claim only small portions of multi-
component products and we have precedent which covers
apportionment of damages in those situations. See, e.g.,
Garretson, 111 U.S. at 121; Uniloc, 632 F.3d at 1318;
Lucent, 580 F.3d at 1336. Similarly, SEPs can, and, often
do, claim only limited aspects of the overall standard.
    For example, the 802.11 standard encompasses nu-
merous technologies to enable devices to communicate
with each other via wireless network connection. This
includes, among many other things, technologies on link
establishment, security protocols, error control, and flow
control. By way of example, the ’568 patent, at best, only
covers the ability of the system to prioritize time-sensitive
payloads by informing the system what type of data is in
each transmission. This is only a small aspect of the
802.11(n) standard. Indeed, based on the record in this
case, it is undisputed that some programs do not even
take advantage of this 802.11(n) standard capability. The
’215 patent, moreover, at best covers the ability to send
different feedback response types. Again, based on the

    9   As we recognized in VirnetX, these tasks are not
always easy and would be difficult to do with precision.
We accept the fact that the jury should be told of its
obligation to approximate the value added by the patent-
ed invention and that a degree of uncertainty in setting
that value is permissible. VirnetX, 767 F.3d at 1328
(citing Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512,
517 (Fed. Cir. 1995)).
52                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

undisputed record, some 802.11(n) standard products do
not use more than one type of feedback message.
    Just as we apportion damages for a patent that covers
a small part of a device, we must also apportion damages
for SEPs that cover only a small part of a standard. In
other words, a royalty award for a SEP must be appor-
tioned to the value of the patented invention (or at least
to the approximate value thereof), not the value of the
standard as a whole. A jury must be instructed accord-
ingly. Our decision does not suggest that all SEPs make
up only a small part of the technology in the standard.
Indeed, if a patentee can show that his invention makes
up “the entire value of the” standard, an apportionment
instruction probably would not be appropriate. Garretson,
111 U.S. at 121.
    Turning to the value of a patent’s standardization, we
conclude that Supreme Court precedent also requires
apportionment of the value of the patented technology
from the value of its standardization. In Garretson, the
Supreme Court made clear that, “[w]hen a patent is for an
improvement, and not for an entirely new machine or
contrivance, the patentee must show in what particulars
his improvement has added to the usefulness of the ma-
chine or contrivance. He must separate its results dis-
tinctly from those of the other parts, so that the benefits
derived from it may be distinctly seen and appreciated.”
Garretson, 111 U.S. at 121 (emphases added). In other
words, the patent holder should only be compensated for
the approximate incremental benefit derived from his
invention.
     This is particularly true for SEPs. When a technology
is incorporated into a standard, it is typically chosen from
among different options. Once incorporated and widely
adopted, that technology is not always used because it is
the best or the only option; it is used because its use is
necessary to comply with the standard. In other words,
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                   53

widespread adoption of standard essential technology is
not entirely indicative of the added usefulness of an
innovation over the prior art. Id. This is not meant to
imply that SEPs never claim valuable technological
contributions. We merely hold that the royalty for SEPs
should reflect the approximate value of that technological
contribution, not the value of its widespread adoption due
to standardization.
     Because SEP holders should only be compensated for
the added benefit of their inventions, the jury must be
told to differentiate the added benefit from any value the
innovation gains because it has become standard essen-
tial. Although the jury, as the fact finder, should deter-
mine the appropriate value for that added benefit and
may do so with some level of imprecision, we conclude
that they must be told to consider the difference between
the added value of the technological invention and the
added value of that invention’s standardization. Indeed,
Ericsson admitted at oral argument that the value of
standardization should not be incorporated into the
royalty award. Oral Argument at 55:25 (“Q: You agree
that it is error to allow [the jury] to include the value from
the standardization? A: In the rate, not in the base. . . .
The rate must be attributable to the value of the inven-
tion.”). By way of example, the Realtek court instructed
the jury that it “should not consider LSI’s advantage
resulting from the standard’s adoption, if any. However,
you may consider any advantage resulting from the
technology’s superiority.” Realtek Jury Instruction, ECF
No. 267, 21.
  c. Instructions on patent hold-up and royalty stacking
    D-Link argues that the jury should have been in-
structed on the concepts of patent hold-up and royalty
stacking because it argues that the jury should know the
mischief that can occur if RAND royalty rates are set too
high. Many of the amicus briefs echo D-Link’s concerns.
54                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

See AAI Br. 4–9; Br. of Amici Curiae Cisco Sys., Inc., et al.
(“Cisco Br.”) 14–19; Br. of Amici Curiae Broadcom Corp.,
et al. (“Broadcom Br.”) 10–14.
    In deciding whether to instruct the jury on patent
hold-up and royalty stacking, again, we emphasize that
the district court must consider the evidence on the record
before it. The district court need not instruct the jury on
hold-up or stacking unless the accused infringer presents
actual evidence of hold-up or stacking. Certainly some-
thing more than a general argument that these phenome-
na are possibilities is necessary. Indeed, “a court should
not instruct on a proposition of law about which there is
no competent evidence.” See Nestier Corp. v. Menasha
Corp.-Lewisystems Div., 739 F.2d 1576, 1579–80 (Fed. Cir.
1984); see also Br. of Amici Curiae Nokia Corp., et al.
(“Nokia Br.”) 9–12. Depending on the record, reference to
such potential dangers may be neither necessary nor
appropriate.
     In this case, we agree with the district court that D-
Link failed to provide evidence of patent hold-up and
royalty stacking sufficient to warrant a jury instruction.
JMOL Order, 2013 WL 4046225, at *25–26 (“Defendants
failed to present any evidence of actual hold-up or royalty
stacking.” (emphasis in original)). If D-Link had provided
evidence that Ericsson started requesting higher royalty
rates after the adoption of the 802.11(n) standard, the
court could have addressed it by instructing the jury on
patent hold-up or, perhaps, setting the hypothetical
negotiation date before the adoption of the standard. 10 D-

     10 One amicus suggests that the jury always should
be told to place the date of the hypothetical negotiation as
of the date of the adoption of the standard (if that date
predates the infringement) so as to discount any value
added by the standardization. See, e.g., AAI Br. 13–16;
see also Microsoft, 2013 WL 2111217, at *19 (“[T]he
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 55

Link, however, failed to provide any such evidence.
Absent evidence that Ericsson used its SEPs to demand
higher royalties from standard-compliant companies, we
see no error in the district court’s refusal to instruct the
jury on patent hold-up or to adjust the instructions ex-
pressly to take patent hold-up into account. Indeed, as
noted above, the court found that Ericsson complied with
its RAND obligations and did not demand an unreasona-
ble royalty for use of its technology.
    A jury, moreover, need not be instructed regarding
royalty stacking unless there is actual evidence of stack-
ing. The mere fact that thousands of patents are declared
to be essential to a standard does not mean that a stand-
ard-compliant company will necessarily have to pay a
royalty to each SEP holder. In this case, D-Link’s expert
“never even attempted to determine the actual amount of
royalties Defendants are currently paying for 802.11
patents.” JMOL Order, 2013 WL 4046225, at *18. In
other words, D-Link failed to come forward with any
evidence of other licenses it has taken on Wi-Fi essential
patents or royalty demands on its Wi-Fi enabled products.
Because D-Link failed to provide any evidence of actual
royalty stacking, the district court properly refused to
instruct the jury on royalty stacking.
    We therefore hold that the district court did not err by
refusing to instruct the jury on the general concepts of
patent hold-up and royalty stacking.

parties to a hypothetical negotiation under a RAND
commitment would consider alternatives that could have
been written into the standard instead of the patented
technology.”). D-Link did not request any such instruc-
tion, however. Accordingly, we do not address whether
shifting the timing of the hypothetical negotiation is
either appropriate or necessary.
56                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

                           * * *
     In sum, we hold that, in all cases, a district court
must instruct the jury only on factors that are relevant to
the specific case at issue. There is no Georgia-Pacific-like
list of factors that district courts can parrot for every case
involving RAND-encumbered patents. The court should
instruct the jury on the actual RAND commitment at
issue and must be cautious not to instruct the jury on any
factors that are not relevant to the record developed at
trial. We further hold that district courts must make
clear to the jury that any royalty award must be based on
the incremental value of the invention, not the value of
the standard as a whole or any increased value the pa-
tented feature gains from its inclusion in the standard.
We also conclude that, if an accused infringer wants an
instruction on patent hold-up and royalty stacking, it
must provide evidence on the record of patent hold-up and
royalty stacking in relation to both the RAND commit-
ment at issue and the specific technology referenced
therein.
     As explained above, in this case, we find that the dis-
trict court committed legal error in its jury instruction by:
(1) failing to instruct the jury adequately regarding Erics-
son’s actual RAND commitment; (2) failing to instruct the
jury that any royalty for the patented technology must be
apportioned from the value of the standard as a whole;
and (3) failing to instruct the jury that the RAND royalty
rate must be based on the value of the invention, not any
value added by the standardization of that invention—
while instructing the jury to consider irrelevant Georgia-
Pacific factors. We think that these errors collectively
constitute prejudicial error. See Eviron Prods., Inc. v.
Furon Co., 215 F.3d 1261, 1265 (Fed. Cir. 2000) (“Prejudi-
cial error is an error that, in the words of the Federal
Rules of Civil Procedure, ‘appears to the court incon-
sistent with substantial justice.’” (quoting Fed. R. Civ. P.
61)). We therefore vacate the jury’s damages award and
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                 57

remand for further proceedings consistent with this
opinion. On remand, the court should also be careful to
assure that the jury is properly instructed on the appor-
tionment principles laid out in Garretson and on the
proper evidentiary value of licenses tied to the entire
value of a multi-component product. Because we vacate
the jury’s damages award, moreover, we also vacate the
court’s ongoing royalty award.
                   C. The Dell Agency Issue
    Finally, Dell argues that the district court erred by
granting summary judgment on Dell’s claim that it was
licensed under the MPA to practice the claims asserted
against it. Because the MPA says it is governed by New
York law, both Ericsson and Dell agree that New York
agency law governs. The parties further agreed that, in
order for Dell to have a license to practice the patents at
issue based on the MPA, LM Ericsson, the parent compa-
ny, must have been acting as an agent of its subsidiary,
Ericsson AB, when it filed this lawsuit. The district court
granted summary judgment because it found that this
agency relationship did not exist as a matter of law.
    The Fifth Circuit reviews summary judgment deci-
sions de novo. United States v. Caremark, Inc., 634 F.3d
808, 814 (5th Cir. 2011). Summary judgment is appropri-
ate if, in viewing the evidence in a light most favorable to
the non-moving party, the court finds that “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a).
    The existence of an agency relationship—where one
party has legal authority to act for another—is a mixed
question of law and fact. See Cabrera v. Jakabovitz, 24
F.3d 372, 385–86 (2d Cir. 1994) (applying New York law).
In order to establish an agency relationship, the facts
must show that: (1) the principal manifested intent to
grant authority to the agent, and (2) the agent agreed or
58                     ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

consented to the agency relationship. See Commercial
Union Ins. Co. v. Alitalia Airlines, S.p.A., 347 F.3d 448,
462 (2d Cir. 2003) (citations omitted) (applying New York
law). Further, the principal must retain control and
direction over key aspects of the agent’s actions. See In re
Shulman Transport Enters., Inc., 744 F.2d 293, 295 (2d
Cir. 1984) (applying New York law); Meese v. Miller, 436
N.Y.S.2d 496, 499 (N.Y. App. Div. 1981). A principal
cannot, moreover, grant authority to an agent if the
principal does not itself possess the power granted. See
Mouawad Nat’l Co. v. Lazare Kaplan Int’l Inc., 476 F.
Supp. 2d 414, 423 (S.D.N.Y. 2007) (applying New York
Law).
    On appeal, Dell argues that it presented sufficient ev-
idence that Ericsson AB directed LM Ericsson to sue Dell,
pointing to the fact that, even though the patents were
assigned to LM Ericsson, the inventors of the patents
were primarily Ericsson AB employees. Dell further
contends that it presented evidence that Ericsson AB
maintained control over key aspects of this litigation.
Finally, Dell asserts that the district court improperly
made factual inferences regarding the strength of Dell’s
arguments in favor of Ericsson, pointing to an alleged
decision to sue Dell made by an Ericsson AB employee.
     Ericsson responds that there is no material dispute of
fact that LM Ericsson—the parent company and patent
owner—is not an agent of Ericsson AB—the subsidiary
company and signatory to the MPA. Ericsson asserts that
Ericsson AB never had authority to sue Dell for infringe-
ment of these patents on its own. Ericsson insists that
this means the alleged principal never had the authority
it allegedly granted. According to Ericsson, even if an
Ericsson AB employee helped make the decision to file the
law suit, there is no evidence that he had the authority to
file those suits.
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  59

    We agree with Ericsson that Dell has failed to raise
genuine issues of material fact regarding whether LM
Ericsson is an agent of Ericsson AB. It is undisputed that
LM Ericsson is the owner of the patents in suit. As the
owner, it is LM Ericsson that has the authority to sue for
infringement; no other entity need grant it the authority
to sue. See 35 U.S.C. § 281 (“A patentee shall have reme-
dy by civil action for infringement of his patent.”). Even
assuming that an Ericsson AB employee suggested suing
Dell for infringement, LM Ericsson indisputably had that
authority prior to any suggestion. See Mouawad, 476 F.
Supp. 2d at 423 (“[T]he principal itself must possess the
power that it is attempting to confer on the agent.” (citing
3 Am. Jur. 2d Agency § 9 (2014))). Because LM Ericsson
is not a signatory to the MPA, any license Dell might have
thereunder does not excuse any acts of infringement
involving the patents in suit.
    For the foregoing reasons, we affirm the district
court’s conclusion that Dell does not, as a matter of law,
have a license to practice the patents at issue under the
MPA.
                        III. CONCLUSION
    For the foregoing reasons, we affirm the infringement
findings relating to the ’568 and ’215 patents, but reverse
the infringement finding with respect to the ’625 patent.
We also affirm the jury’s finding that the ’625 patent was
not invalid over the Petras reference. We vacate the
jury’s damages award and the ongoing royalty award and
remand for proceedings consistent with this decision.
With respect to Dell’s appeal, we affirm the district court’s
grant of summary judgment to Ericsson on Dell’s license
defense.
    Accordingly, we affirm-in-part, reverse-in-part, va-
cate-in-part, and remand for further proceedings.
60               ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

     AFFIRMED IN PART, REVERSED IN PART,
       VACATED IN PART, AND REMANDED
United States Court of Appeals
    for the Federal Circuit
           ______________________

ERICSSON, INC., TELEFONAKTIEBOLAGET LM
      ERICSSON, AND WI-FI ONE, LLC,
             Plaintiffs-Appellees,

                     v.

D-LINK SYSTEMS, INC., NETGEAR, INC., ACER,
  INC., ACER AMERICA CORPORATION, AND
              GATEWAY, INC.,
            Defendants-Appellants,

                    AND

                DELL, INC.,
            Defendant-Appellant,

                    AND

TOSHIBA AMERICA INFORMATION SYSTEMS,
    INC. AND TOSHIBA CORPORATION,
           Defendants-Appellants,

                    AND

          INTEL CORPORATION,
            Intervenor-Appellant,

                    AND

      BELKIN INTERNATIONAL, INC.,
                Defendant.
          ______________________
2                       ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

              2013-1625, -1631, -1632, -1633
                 ______________________

   Appeals from the United States District Court for the
Eastern District of Texas in No. 10-CV-0473, Chief Judge
Leonard Davis.
                 ______________________

TARANTO, Circuit Judge, dissenting-in-part.
    I join all of the court’s opinion except part II.A.2,
which upholds the judgment of infringement of the ’215
patent. I conclude that the district court incorrectly
construed the ’215 patent’s claim language pertaining to
the invention’s message field. And there is no infringe-
ment under the construction that I think is correct. On
this one issue, I respectfully dissent.
    The dispute over the proper construction of claim 1 of
the ’215 patent involves two related issues. The first is
whether the phrase “responsive to the receiving step,
constructing a message field for a second data unit, said
message field including a type identifier field” requires
that the device “select” a message type depending on the
received data—which requires that it have at least two
message-type options it can select from. The second is
whether the message field must be constructed specifical-
ly to minimize either the size or the quantity of feedback
responses. It is undisputed that if the claims are read to
require either selection or minimization, the accused
devices do not infringe.
    Selecting. I begin with the claim language. See Phil-
lips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005)
(en banc). Claim 1 requires the act of “constructing a
message field” to be “responsive to the receiving step”—
that is, responsive to “receiving said plurality of first data
units.” ’215 Patent, col. 10, lines 23–26. At a minimum,
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                    3

the “responsive” language allows, indeed suggests, selec-
tion or choice about what to include in the constructed
message field, based on potentially varying characteristics
of the data received. And the specification and Ericsson’s
own assertions during litigation not only confirm the
requirement of choice but make clear what the choice is: it
is a choice from a range of possible message types.
    Claims must be interpreted in the context of the pa-
tent as a whole, and the specification is central to per-
forming the interpretive task. See Phillips, 415 F.3d at 21
(“[T]he specification is the single best guide to the mean-
ing of a disputed term . . . .”) (internal quotation omitted).
The specification of the ’215 patent pervasively describes
what Ericsson had invented as optimizing feedback
responses through the receiver’s choice among feedback-
response message types—specifically to minimize the size
of the responses and thereby increase efficiency. Even
without regard to the more specific objective of minimiz-
ing, the receiver’s optimizing task requires selecting.
    Thus, the abstract describes constructing feedback re-
sponses “so as to optimize performance in accordance with
certain criteria,” with those criteria consisting of minimiz-
ing size and maximizing efficiency of the feedback re-
sponses. ’215 Patent, abstract. The summary of the
invention similarly teaches that the receiver constructs
feedback response data units “so as to optimize system
performance,” with the optimization consisting of “mini-
mizing [] size” while “maximizing the number of [sequence
numbers]” included in a smaller-sized data unit. Id. col.
4, lines 48–53. Neither of the two stated optimization
criteria may be met unless the receiver makes choices
among a plurality of message types. Further, the specifi-
cation describes the patent’s advance over the prior art as
reducing the “waste of bandwidth” and “unnecessary
overhead” resulting from Automatic Repeat Request
(ARQ) protocols that are “static in construction,” i.e., not
varying as a function of the incoming data. Id. col. 3,
4                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

lines 46–47. And the four technical advantages specifical-
ly enumerated—saving bandwidth, minimizing overhead,
increasing system capacity, and minimizing the number
of feedback responses—derive from the invention’s opti-
mizing of feedback responses. Id. col. 4, lines 54–62. The
specification nowhere discloses any contrary embodiment.
    The claim language thus suggests a requirement of
selecting, and the specification pervasively indicates that
what is required is selecting among message types.
Construing the claim to require receiver selecting is “the
correct construction” because it “stays true to the claim
language and most naturally aligns with the patent’s
description of the invention.” Renishaw PLC v. Marposs
Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998),
adopted by Phillips, 415 F.3d at 1316.
    Ericsson’s own statements about the invention con-
firm that the receiver’s choosing among message types, in
response to incoming data, is essential. During claim
construction, in an apparent effort to prevent the addi-
tional “minimizing” requirement from being read into the
claim, Ericsson conceded—indeed, repeatedly insisted in
clear terms—that selecting among message types by the
receiver was a required element of the invention. See J.A.
6473 (“[T]he invention is to build in choice at the receiver
side of a type of feedback response.”); J.A. 6475 (Given
“the advantage . . . gained from incorporating this mes-
sage field that allows a choice, does the advantage of
minimizing the size or number of feedback responses
necessarily have to be read in when it doesn’t appear in
the claim element[?]”); J.A. 6478 (“[T]he invention is, as
expressed in the claims, giving the receiver a choice and
constructing a message field that has a type identifier so
it can express what it has chosen to use as a format for
communicating the packets that have been dropped.”).
    For those reasons, I conclude, the method of claim 1 of
the ’215 patent claim requires that the receiver engage in
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.                  5

selection among message types in response to receipt of
data. It is undisputed that the accused devices do not do
so. Ericsson did not argue otherwise in its brief, and it
conceded the point at oral argument, stating: “[I]f the
court concludes that the receiver must make a choice, [the
’215 patent is] not infringed.” Oral Argument at 34:45–
35:00, Ericsson, Inc. v. D-Link Sys., Inc., No. 2013-1625.
    Minimizing. Claim 1 of the ’215 patent also requires
“minimizing feedback responses,” as expressly stated in
the preamble. ’215 Patent, col. 10, line 19. The presence
of that language indirectly reinforces the requirement of
selection: to minimize, choices must be made. But it also
adds to the selection requirement and independently
requires a judgment of non-infringement.
    The “minimizing” language is a claim limitation un-
less the fact that it appears in the preamble makes it non-
limiting, as sometimes is true for preamble language. See
Catalina Mktg. Int’l, Inc. v. Coolsavings.com, Inc., 289
F.3d 801, 808 (Fed. Cir. 2002). For claim 1, however, the
preamble must be limiting, as only the preamble gives
content to what the constructed message field is. See
Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298,
1306 (Fed. Cir. 1999) (preamble is limiting when neces-
sary to “give life, meaning, and vitality” to the claim)
(internal quotation and citation omitted). The claim
recites constructing a “message field,” but only in the
preamble does the claim indicate that the message field is
to be understood as a “feedback response[] in an ARQ
protocol.” ’215 Patent, col. 10, lines 19–20, 24–27. The
phrase “feedback response,” appearing nowhere but the
preamble, is crucial to making sense of the rest of the
claim. See Griffin v. Bertina, 285 F.3d 1029, 1033 (Fed.
Cir. 2002) (holding as limiting a method claim’s preamble
reciting “diagnosing an increased risk for thrombosis,”
where claim covering nucleic-acid tests performed on a
“test subject” was meaningless without understanding
that “[d]iagnosis is . . . the essence of [the] invention”).
6                      ERICSSON, INC.   v. D-LINK SYSTEMS, INC.

     The construction proposed by Ericsson and adopted by
the district court implicitly recognizes that the preamble
is limiting. The adopted construction of the “responsive”
step requires “including a field that identifies the message
type of the feedback response message.” Ericsson, Inc. v.
D-Link Corp., No. 6:10-cv-473, 2013 WL 949378, at *5
(E.D. Tex. Mar. 8, 2013) (emphasis added). The phrase
“feedback response,” in the adopted claim construction,
comes from nowhere in the claim except the preamble.
Where the district court erred was in parsing the pream-
ble to include only one phrase as limiting—“feedback
responses”—while excluding the word “minimizing” that
appears immediately before the phrase “feedback re-
sponses.” I see no sound basis for that distinction.
    Indeed, the specification, as described above, shows
that the invention is centrally about minimizing such
responses—which can be done either by minimizing the
size of individual response messages (status protocol data
units) or by minimizing the number of such messages by
packing more information, i.e., sequence numbers, into
messages of fixed size. ’215 Patent, col. 4, lines 49–54
(summary of the invention identifying precisely those two
ways of “optimiz[ing] system performance”). Ericsson’s
only specific argument against the “minimizing” construc-
tion is to note the two ways of minimizing the specifica-
tion identifies. Ericsson Br. at 39. But that is not an
argument against D-Link’s proposed construction—which
covers both of those ways of minimizing. J.A. 5084 (“se-
lected from multiple available feedback responses in order
to minimize the size or number of feedback responses”). I
conclude, therefore, that it was error for the district court
to reject D-Link’s “minimizing” claim construction.
    It is undisputed that if claim 1 requires “minimizing,”
the accused devices do not infringe. Ericsson never ar-
gues otherwise in its brief. Ericsson Br. at 38–40. This is
an additional ground for reversing the judgment of in-
ERICSSON, INC.   v. D-LINK SYSTEMS, INC.              7

fringement of the ’215 patent, and requiring judgment of
non-infringement instead.