Court Opinion

ID: 4553055
Source: CourtListenerOpinion
Date Created: 2020-08-04 16:00:47.95749+00
Date Added: 2024-06-11T09:25:27.734697
License: Public Domain

Case: 19-2215   Document: 69     Page: 1   Filed: 08/04/2020

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

             GODO KAISHA IP BRIDGE 1,
                  Plaintiff-Appellee

                            v.

     TCL COMMUNICATION TECHNOLOGY
 HOLDINGS LIMITED, TCT MOBILE LIMITED, TCT
     MOBILE (US) INC., TCT MOBILE, INC.,
             Defendants-Appellants
            ______________________

                       2019-2215
                 ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:15-cv-00634-JFB-SRF, Senior
 Judge Joseph F. Bataillon.
                  ______________________

                 Decided: August 4, 2020
                 ______________________

    KEVIN JOHN POST, Ropes & Gray LLP, New York, NY,
 argued for plaintiff-appellee.  Also represented by
 ALEXANDER E. MIDDLETON, STEVEN PEPE; DOUGLAS
 HALLWARD-DRIEMEIER,     Washington,   DC;    SAMUEL
 LAWRENCE BRENNER, Boston, MA; JAMES RICHARD
 BATCHELDER, East Palo Alto, CA.

     JOHN NILSSON, Arnold & Porter Kaye Scholer LLP,
 Washington, DC, argued for defendants-appellants. Also
 represented by NICHOLAS M. NYEMAH, ANDREW TUTT.
Case: 19-2215     Document: 69     Page: 2    Filed: 08/04/2020

 2                          GODO KAISHA v. TCL COMMC’N TECH.

                   ______________________

     Before PROST, Chief Judge, NEWMAN and O’MALLEY,
                      Circuit Judges.
 O’MALLEY, Circuit Judge.
     In this appeal, the parties dispute whether the pa-
 tentee was permitted to prove that the Appellants’ prod-
 ucts infringed the claims of the asserted patent by showing
 that: (1) the patent claims are essential to mandatory as-
 pects of the Long-Term Evolution (“LTE”) standard; and (2)
 the accused products practice that standard. Appellants
 assert that, if Appellee wanted to resort to that theory of
 infringement, it was required to ask the court to decide the
 question of the claims’ essentiality to the standard in the
 claim construction context and that the court needed to de-
 cide that question as a matter of law. Unsurprisingly, Ap-
 pellee disagrees. We find no error in the submission of
 these questions to the jury in the context of an infringe-
 ment trial.
                        BACKGROUND
      This appeal arises from a patent infringement action
 filed in the United States District Court for the District of
 Delaware. Patent Owner Godo Kaisha IP Bridge 1 (“IP
 Bridge”) sued TCL Communication Technology Holdings
 Limited, TCT Mobile Limited, TCT Mobile (US) Inc., and
 TCT Mobile, Inc. (collectively, “TCL”), alleging infringe-
 ment of U.S. Patent Nos. 8,385,239 and 8,351,538.
     The district court held a jury trial in 2018. At trial, IP
 Bridge’s theory of infringement hinged on what it told the
 jury were two “bedrock facts”: that the patents-in-suit are
 essential to the LTE standard and that TCL’s accused de-
 vices are LTE-compatible. Relying on Fujitsu Ltd. v.
 Netgear Inc., 620 F.3d 1321 (Fed. Cir. 2010) (holding, on
 appeal from a summary judgment decision, that a district
 court may rely on an industry standard in analyzing
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 GODO KAISHA    v. TCL COMMC’N TECH.                        3

 infringement), IP Bridge put forth evidence to demonstrate
 that (1) the asserted claims are essential to mandatory sec-
 tions of the LTE standard; and (2) the accused products
 comply with the LTE standard. Godo Kaisha IP Bridge 1
 v. TCL Commc’n Tech. Holdings Ltd., No. CV 15-634-JFB,
 2019 WL 1879984, at *3 (D. Del. Apr. 26, 2019) (“Infringe-
 ment Op.”). As the district court pointed out, TCL did not
 present any evidence to counter that showing. Id.
     After a seven-day jury trial, the jury found that TCL
 was liable for infringement of the asserted claims by its
 sale of LTE standard-compliant devices such as mobile
 phones and tablets. The jury also awarded IP Bridge dam-
 ages in the amount of $950,000. Godo Kaisha IP Bridge 1
 v. TCL Commc’n Tech. Holdings Ltd., No. CV 15-634-JFB,
 2019 WL 1877189, at *1 (D. Del. Apr. 26, 2019) (“Damages
 Op.”). Following the verdict, both parties filed motions for
 post-trial relief.
     In its motion for judgment as a matter of law (“JMOL”),
 TCL contended that IP Bridge’s theory of infringement was
 flawed because the Fujitsu “narrow exception” to proving
 infringement in the standard way—i.e., by showing that
 each element in the asserted claim is present in the ac-
 cused devices—should not apply in this case. Infringement
 Op. at *1. Specifically, TCL argued that IP Bridge could
 not rely on the methodology approved in Fujitsu because
 Fujitsu only approved that methodology in circumstances
 where the patent owner asks the district court to assess
 essentiality in the context of construing the claims of the
 asserted patents. The district court did not accept TCL’s
 argument that IP Bridge’s theory of infringement was le-
 gally flawed. It denied TCL’s motion, concluding that sub-
 stantial evidence supported the jury’s infringement
 verdict. Id. at *3–4.
     IP Bridge also sought post-trial relief in the context of
 a motion to amend the judgment under Federal Rule of
 Civil Procedure 59(e). IP Bridge sought supplemental
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 4                          GODO KAISHA v. TCL COMMC’N TECH.

 damages and an accounting of infringing sales of all adju-
 dicated products through the date of the verdict, and ongo-
 ing royalties for TCL’s LTE standard-compliant products,
 “both adjudicated and non-adjudicated.” Damages Op.
 at *2. The court awarded the requested pre-verdict supple-
 mental damages. It also found that the jury’s award rep-
 resented a FRAND royalty rate of $0.04 per patent per
 infringing product and awarded on-going royalties in that
 amount for both the adjudicated products and certain un-
 adjudicated products. It reasoned that, because IP Bridge
 demonstrated at trial that LTE standard-compliant de-
 vices do not operate on the LTE network without infringing
 the asserted claims, the unaccused, unadjudicated prod-
 ucts “are not colorably different tha[n] the accused prod-
 ucts.” Id. at *6. TCL timely appealed the court’s
 infringement finding and its rulings regarding royalties.
 We affirm all of the court’s rulings and the verdict predi-
 cated thereon. We write only to address—and refute—
 TCL’s contention that whether a patent is essential to any
 standard established by a standard setting organization is
 a question of law to be resolved in the context of claim con-
 struction.
                         DISCUSSION
     We review a denial of JMOL under the law of the re-
 gional circuit. Energy Transp. Grp., Inc. v. William De-
 mant Holding A/S, 697 F.3d 1342, 1350 (Fed. Cir. 2012).
 “In the Third Circuit, review of denial of JMOL is plenary.”
 Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197,
 1202 (Fed. Cir. 2010) (citations omitted). JMOL is
 “‘granted only if, viewing the evidence in the light most fa-
 vorable to the nonmovant and giving it the advantage of
 every fair and reasonable inference, there is insufficient ev-
 idence from which a jury reasonably could find’ for the non-
 movant.” TransWeb, LLC v. 3M Innovative Props. Co., 812
F.3d 1295, 1301 (Fed. Cir. 2016) (quoting Lightning Lube,
 Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)). In-
 fringement is a question of fact, “reviewed for substantial
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 GODO KAISHA    v. TCL COMMC’N TECH.                          5

 evidence when tried to a jury.” ACCO Brands, Inc. v. ABA
 Locks Mfrs. Co., 501 F.3d 1307, 1311 (Fed. Cir. 2007). A
 factual finding is supported by substantial evidence if a
 reasonable jury could have found in favor of the prevailing
 party in light of the evidence presented at trial. See Tec
 Air, Inc. v. Denso Mfg. Mich. Inc., 192 F.3d 1353, 1357–58
 (Fed. Cir. 1999).
      In cases involving standard essential patents, we have
 endorsed standard compliance as a way of proving infringe-
 ment. See, e.g., Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d
1201, 1209 (Fed. Cir. 2014) (because a “standard requires
 that devices utilize specific technology, compliant devices
 necessarily infringe certain claims . . . cover[ing] technology
 incorporated into the standard”); Dynacore Holdings Corp.
 v. U.S. Philips Corp., 363 F.3d 1263 (Fed. Cir. 2004) (af-
 firming non-infringement judgment because patentee did
 not show that a particular claim limitation was mandatory
 in the standard). This appeal presents a question not ex-
 pressly answered by our case law: who determines the
 standard-essentiality of the patent claims at issue—the
 court, as part of claim construction, or the jury, as part of
 its infringement analysis?
      On appeal, as it did before the district court, TCL ar-
 gues that IP Bridge’s theory of infringement relied on an
 improper reading of our decision in Fujitsu. TCL states
 that, to establish literal infringement, a patentee must
 demonstrate that every limitation set forth in a claim is
 present in the accused product. In TCL’s view, Fujitsu
 carved out a narrow exception to this requirement by stat-
 ing that “[i]f a district court construes the claims and finds
 that the reach of the claims includes any device that prac-
 tices a standard, then this can be sufficient for a finding of
 infringement.” TCL Br. 31–32 (quoting Fujitsu, 620 F.3d
 at 1327). TCL argues that, under Fujitsu, the court must
 first make a threshold determination as part of claim con-
 struction that all implementations of a standard infringe
 the claims. It argues that IP Bridge never asked the
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 6                         GODO KAISHA v. TCL COMMC’N TECH.

 district court to conduct such an analysis and the question
 should not have gone to the jury.
      IP Bridge responds that standard-essentiality is a clas-
 sic fact issue, and is the province of the factfinder. IP
 Bridge Br. 27. In IP Bridge’s view, Fujitsu does not stand
 for the proposition that the determination of standard-es-
 sentiality must occur in the context of claim construction.
 IP Bridge asks us to read Fujitsu in the context of its pro-
 cedural posture—Fujitsu involved an appeal from sum-
 mary judgment and there was no involvement of a jury for
 that reason. We agree with IP Bridge that standard-essen-
 tiality is a question for the factfinder.
     In Fujitsu the appellant asked us to find no evidence of
 direct infringement because the district court relied on the
 standard, rather than the accused products, in assessing
 infringement. We rejected the appellant’s demand for a
 rule “precluding the use of industry standards in assessing
 infringement.” Fujitsu, 620 F.3d at 1326. The holding of
 Fujitsu, in its proper context, is illuminating:
     We hold that a district court may rely on an indus-
     try standard in analyzing infringement. If a dis-
     trict court construes the claims and finds that the
     reach of the claims includes any device that prac-
     tices a standard, then this can be sufficient for a
     finding of infringement. We agree that claims
     should be compared to the accused product to de-
     termine infringement. However, if an accused
     product operates in accordance with a standard,
     then comparing the claims to that standard is the
     same as comparing the claims to the accused prod-
     uct. We accepted this approach in Dynacore where
     the court held a claim not infringed by comparing
     it to an industry standard rather than an accused
     product. An accused infringer is free to either prove
     that the claims do not cover all implementations of
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 GODO KAISHA    v. TCL COMMC’N TECH.                         7

     the standard or to prove that it does not practice
     the standard.
Id. at 1327 (emphasis added). We recognized in Fujitsu
 that the fact that a patent’s claims cover an industry stand-
 ard does not necessarily establish that all standard-compli-
 ant devices implement the standard in the same way. And
 we noted that an asserted patent claim might not cover all
 implementations of an industry standard. In such cases,
 we guided, infringement must be proven by comparing the
 claims to the accused products, or by proving that the ac-
 cused devices “implement any relevant optional sections of
 the standard.” Id. at 1328. Thus, Fujitsu teaches that
 where, but only where, a patent covers mandatory aspects
 of a standard, is it enough to prove infringement by show-
 ing standard compliance.
     TCL’s entire appeal rests on its misreading of a single
 statement from Fujitsu. See id. at 1327 (“If a district court
 construes the claims and finds that the reach of the claims
 includes any device that practices a standard, then this can
 be sufficient for a finding of infringement.”). But we did
 not say in Fujitsu that a district court must first determine,
 as a matter of law and as part of claim construction, that
 the scope of the claims includes any device that practices
 the standard at issue. To the contrary, in reviewing the
 district court’s summary judgment decision (where no facts
 were genuinely in dispute), we stated that, if a district
 court finds that the claims cover any device that practices
 a standard, then comparing the claims to that standard is
 the same as the traditional infringement analysis of com-
 paring the claims to the accused product. That statement
 assumed the absence of genuine disputes of fact on the two
 steps of that analysis, which would be necessary to resolve
 the question at the summary judgment stage. The passing
 reference in Fujitsu to claim construction is simply a recog-
 nition of the fact that the first step in any infringement
 analysis is claim construction.
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 8                          GODO KAISHA v. TCL COMMC’N TECH.

     Our reading of Fujitsu is buttressed by that decision’s
 reference to Dynacore. There, too, we reviewed a decision
 stemming from a summary judgment motion. We affirmed
 the judgment of non-infringement because the patentee did
 not show that a particular claim limitation was mandatory
 in the standard. Dynacore, 363 F.3d at 1278. We also
 noted the district court’s finding that the patentee’s experts
 “contribute[d] little other than a conclusory opinion,” fail-
 ing to raise a dispute over material facts for trial. Id. at
 1277–78. 1 Although we referenced the claim construction
 by which the patentee was bound, Dynacore considered the
 possibility of the dispute going to the jury and rejected it
 based on undisputed facts. Thus, under Dynacore, which
 Fujitsu referenced in its holding, standard-essentiality of
 patent claims is a fact issue. Like any other fact issue, it
 may be amenable to resolution on summary judgment in
 appropriate cases. But that does not mean it becomes a
 question of law.
     Determining standard-essentiality of patent claims
 during claim construction, moreover, hardly makes sense
 from a practical point of view. Essentiality is, after all, a
 fact question about whether the claim elements read onto
 mandatory portions of a standard that standard-compliant
 devices must incorporate. This inquiry is more akin to an
 infringement analysis (comparing claim elements to an ac-
 cused product) than to a claim construction analysis (focus-
 ing, to a large degree, on intrinsic evidence and saying
 what the claims mean). As we explained in Fujitsu, one
 way an accused infringer can successfully defeat allega-
 tions of infringement in the standard essential patent

     1   Here, by contrast, IP Bridge’s expert testified at
 length about how each claim limitation is present in man-
 datory portions of the LTE standard and how TCL’s LTE
 standard-compliant devices practice mandatory portions of
 the standard.
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 GODO KAISHA    v. TCL COMMC’N TECH.                         9

 context, is by rebutting a patentee’s assertion that its pa-
 tents are essential to the standard. 620 F.3d at 1327. This
 statement would make no sense if claim construction were
 sufficient to resolve the question.
     Accordingly, we reject TCL’s reading of Fujitsu.
 Where, as here, there are material disputes of fact regard-
 ing whether asserted claims are in fact essential to all im-
 plementations of an industry standard, the question of
 essentiality must be resolved by the trier of fact in the con-
 text of an infringement trial. Viewed through this lens, we
 find that substantial evidence fully supports the jury’s in-
 fringement verdict. 2
                          CONCLUSION
     We have carefully considered TCL’s remaining argu-
 ments—including its argument that the district court
 abused its discretion in awarding on-going royalties in this
 case. We see no reason to disturb the district court’s con-
 clusions. Accordingly, we affirm.
                         AFFIRMED

     2   TCL’s own documents and marketing materials
 make clear that its products are standard-compliant—a
 conclusion TCL does not refute on appeal. And the jury
 was free to credit IP Bridge’s substantial expert evidence
 that IP Bridge’s patent claims are essential to mandatory
 portions of the standard.