ERICSSON , INC . v. D - LINK SYSTEMS , INC . decision of CAFC cites to 1884 Supreme Court case concerning damages
Ericsson was the plaintiff-patentee in ED Texas. The patents concern Wi-Fi and are of relevance to standard essential patents [SEP]:
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 own
ers to pledge that they will grant licenses to an unre-
stricted number of applicants on “reasonable, and non-
discriminatory” (“RAND”) terms.
An argument by defendant:
D-Link relies on Metabolite Laboratories
, Inc. v. Laboratory 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 F.3d at 1362 (emphasis added).
D-Link omits the itali-
cized part of theMetabolite
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
As to inducing infringement:
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.
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.”).
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.
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., 235U.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. (...)
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.
As to guidance:
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
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 RAND royalty rates:
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.,
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-
WL 2111217 (W.D. Wash. Apr. 25, 2013)
As to parrots:
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. (...)
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.