Friday, March 29, 2013

Fostering a corporate culture of copying

From Power Integrations v. Fairchild

In claim construction, one starts with the intrinsic record:

We are not persuaded that the claims inform a plain
and ordinary meaning of the term “frequency variation
signal,” nor do we agree with Fairchild that we need only
a dictionary to discern the meaning of “frequency variation
signal.” Unless the inventor intended a term to cover
more than the ordinary and customary meaning revealed
by the context of the intrinsic record, it is improper to read
the term to encompass a broader definition simply because
it may be found in a dictionary, treatise, or other
extrinsic source. Nystrom v. TREX Co., Inc., 424 F.3d
1136, 1145 (Fed. Cir. 2005). In any event, our inquiry
here starts with the intrinsic record, including the specification,
and not with a dictionary definition of the disputed
term. Phillips, 415 F.3d at 1321 (“The problem is that if
the district court starts with the broad dictionary definition
in every case and fails to fully appreciate how the
specification implicitly limits that definition, the error
will systematically cause the construction of the claim to
be unduly expansive.”). (...)

The intrinsic record thus clearly indicates the
patentee’s precise conception and formulation, which here
must control our construction. See Renishaw, 158 F.3d at
1250 (“Ultimately, the interpretation to be given a term
can only be determined and confirmed with a full understanding
of what the inventors actually invented and
intended to envelop with the claim.”).

Of means plus function claiming:

If a claim term does not use the
word “means,” we presume that means-plus-function
claiming does not apply. See CCS Fitness, Inc. v. Brunswick
Corp., 288 F.3d 1359, 1369 (Fed. Cir. 2002). If,
however, the claim term recites a function without reciting
sufficient structure for performing that function, the
presumption falls and means-plus-function claiming
applies. See, e.g., Watts v. XL Sys., Inc., 232 F.3d 877, 880
(Fed. Cir. 2000). We assess whether a claim limitation
recites sufficient structure to avoid means-plus-function
claiming from the vantage point of an ordinarily skilled
artisan. See Inventio, 649 F.3d at 1357; Apex Inc. v.
Raritan Computer, Inc., 325 F.3d 1364, 1372 (Fed. Cir.

As to nomenclature:

In 2011, Congress reformatted the paragraphs of §
112 as subsections. Leahy-Smith America Invents Act
(“AIA”), Pub. L. No. 112-29, 125 Stat. 284 (2011). Section
112, ¶ 6, is now codified as § 112(f). To maintain consistency
with the district court’s opinion, we refer to §
112, ¶ 6.

Of secondary considerations:

Our inquiry does not end here, however, and we next
turn to objective considerations, which we sometimes
refer to as “secondary considerations,” as essential components
of our obviousness analysis. In re Cyclobenzaprine,
676 F.3d at 1076–79. Objective evidence of
nonobviousness can include copying, long felt but unsolved
need, failure of others, commercial success, unexpected
results created by the claimed invention,
unexpected properties of the claimed invention, licenses
showing industry respect for the invention, and skepticism
of skilled artisans before the invention. In re
Rouffet, 149 F.3d 1350, 1355 (Fed. Cir. 1998) (collecting
cases). These objective considerations can protect against
the prejudice of hindsight bias, which often overlooks that
“[t]he genius of invention is often a combination of known
elements which in hindsight seems preordained.” McGinley
v. Franklin Sports, Inc., 262 F.3d 1339, 1351 (Fed. Cir.

Of copying:

Significantly, Fairchild competed with Power Integrations
by reverse engineering and copying of Power Integrations’
products. One Fairchild engineer testified to
“looking at the circuit” of the ’876 Patent while developing
the accused products. He testified that Fairchild obtained
Power Integrations’ products and datasheets for “benchmarking,”
which he said is “the same” as reverse engineering.
Internal documents indicate that Fairchild kept
track of at least some of its efforts to reverse engineer
Power Integrations’ products. The record indicates that
Fairchild fostered a corporate culture of copying, which was not limited to the ’876 Patent.

Of scope of damage:

Power Integrations’ argument that the broad principles
of “full compensation,” extend to cover Fairchild’s
worldwide sales is not persuasive
. It is axiomatic that
U.S. patent law does not operate extraterritorially to
prohibit infringement abroad. Deepsouth Packing Co. v.
Laitram Corp., 406 U.S. 518, 531 (1972), superseded by
statute, Patent Law Amendments Acts of 1984, Pub. L.
No. 98-622, 98 Stat. 3383 (codified at 35 U.S.C. § 271(f)),
as recognized in Microsoft Corp. v. AT&T Corp., 550 U.S.
437 (2007); see also Brown v. Duchesne, 60 U.S. (19 How.)
183, 195 (1856) (“Our patent system makes no claim to
extraterritorial effect; these acts of Congress do not, and
were not intended to, operate beyond the limits of the
United States . . . .” (internal quotation marks omitted)).

Power Integrations’ “foreseeability” theory of worldwide
damages sets the presumption against extraterritoriality
in interesting juxtaposition with the principle of
full compensation. Nevertheless, Power Integrations’
argument is not novel, and in the end, it is not persuasive.
Regardless of how the argument is framed under the facts
of this case, the underlying question here remains whether
Power Integrations is entitled to compensatory damages
for injury caused by infringing activity that occurred
outside the territory of the United States. The answer is

Evidence from the internet:

Fairchild further argues that
the document on which Dr. Troxel relied for Samsung’s
sales data was an unauthenticated hearsay “press release”
retrieved from the Internet.

Daubert is cited:

In determining damages, a jury may rely on expert
testimony. 35 U.S.C. § 284. District courts, as gatekeepers,
must nevertheless ensure that all expert testimony is
rooted in firm scientific or technical ground. Daubert v.
Merrell Dow Pharm., Inc., 509 U.S. 579, 589–90 (1993);
Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 148
(1999). To that end, the Federal Rules of Evidence require
that an expert’s testimony be the product of reliable
principles and methods applied to sufficient facts or data.
Fed. R. Evid. 702(b),(c). The trial judge must ensure that
the expert has “reliably applied the principles and methods
to the facts of the case.” Id. at 702(d). Data relied on
by the expert “need not be admissible for the opinion to be
admitted” if experts in the field would reasonably rely on
such data. Fed. R. Evid. 703. The trial judge must have
considerable leeway in deciding how to determine whether
the expert’s testimony is sufficiently reliable. Kumho
Tire, 526 U.S. at 152.

Of documents from the internet:

disagree with Power Integrations that the source and
reliability of data relied upon by an expert is otherwise
immaterial. Our rules of evidence require that an expert’s
testimony be “the product of reliable principles and
methods” applied to “sufficient facts or data.” Fed. R.
Evid. 702(b),(c). Thus, while an expert’s data need not be
admissible, the data cannot be derived from a manifestly
unreliable source. See Montgomery County v. Microvote
Corp., 320 F.3d 440, 448 (3d Cir. 2003) (finding expert’s
data source unreliable where “some of the things that
were shown to [the expert] he didn't seem to know where
they were from or what the source of them were”); cf.
Emigh v. Consol. Rail Corp., 710 F. Supp. 608, 612 (W.D.
Pa. 1989) (“[W]hen the underlying source is so unreliable
as to render it more prejudicial than probative, . . . Rule
703 cannot be used as a backdoor to get the evidence
before the jury.”).
While Dr. Troxel’s data source was unreliable, so was
his methodology. Here, Dr. Troxel made two speculative
leaps. First, the document on which Dr. Troxel relied for
his worldwide damages estimate indicated worldwide
shipments of Samsung’s mobile phones. As Dr. Troxel
testified, however, the infringing power circuits were
found in mobile phone chargers, not in mobile phones.

In the end, we are left with an expert opinion derived
from unreliable data and built on speculation. Without
more, Dr. Troxel’s testimony and data regarding worldwide
shipments of Samsung’s mobile phones are too far
removed from the facts of this case, which involves
Fairchild’s infringing power circuits. Dr. Troxel’s layered
assumptions lack the hallmarks of genuinely useful
expert testimony. Kumho Tire, 526 U.S. at 156. Such
unreliable testimony frustrates a primary goal of expert
testimony in any case, which is meant to place experience
from professional specialization at the jury’s disposal, not
muddle the jury’s fact-finding with unreliability and

Chiuminatta is cited:

Thus, the
evidence demonstrates no direct connection between
Samsung’s worldwide sales of mobile phones and sales of
Fairchild’s infringing power circuits. See Chiuminatta
Concrete Concepts, Inc. v. Cardinal Indus., Inc., 1 F. App’x
879, 883–84 (Fed. Cir. 2001) (“[I]n cases in which there is
a question whether every sale leads to an instance of
direct infringement, a patentee must . . . establish the
connection between sales and direct infringement.”).

The 7th Amendment is cited:

Where, as here, the jury returns a general verdict, we
must “presume[] the existence of fact findings implied
from the jury's having reached that verdict.” Starceski v.
Westinghouse Elec. Corp., 54 F.3d 1089, 1100 (3d Cir.
1995) (quoting R.R. Dynamics, Inc. v. A. Stucki Co., 727
F.2d 1506, 1516 (Fed. Cir. 1984)). Infringement and
damages are findings of fact, and we review a jury’s
findings on both issues for substantial evidence. Lucent
Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1309–10
(Fed. Cir. 2009). Here, we must presume that the jury’s
original $33 million award was based on a finding of
direct infringement, and we must honor’s the jury’s
determination of damages to the extent supported by
substantial evidence. See U.S. Const. amend. VII;
Starceski, 54 F.3d at 1100.


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