Commil USA, Llc v. Cisco Systems, Inc.

720 F.3d 1361, 107 U.S.P.Q. 2d (BNA) 1290, 2013 WL 3185535, 2013 U.S. App. LEXIS 12943
CourtCourt of Appeals for the Federal Circuit
DecidedJune 25, 2013
Docket2012-1042
StatusPublished
Cited by41 cases

This text of 720 F.3d 1361 (Commil USA, Llc v. Cisco Systems, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commil USA, Llc v. Cisco Systems, Inc., 720 F.3d 1361, 107 U.S.P.Q. 2d (BNA) 1290, 2013 WL 3185535, 2013 U.S. App. LEXIS 12943 (Fed. Cir. 2013).

Opinions

Opinion for the court filed by Circuit Judge PROST.

[1364]*1364Opinion concurring-in-part, dissenting-in-part filed by Circuit Judge NEWMAN.

Opinion concurring-in-part, dissenting-in-part filed by Circuit Judge O’MALLEY.

PROST, Circuit Judge.

Cisco Systems, Inc. appeals from the final judgment of the United States District Court for the Eastern District of Texas, which was based on the findings of two separate jury verdicts finding that: Cisco directly and indirectly infringed specified claims of Commil USA, LLC’s U.S. Patent No. 6,430,395 (“'395 patent”); the specified claims of the '395 patent are not invalid as indefinite, for lack of enablement, or as lacking adequate written description; and that Cisco was liable for $63,791,153 in damages as well as prejudgment interest and costs. We find that the district court gave the jury a legally erroneous instruction with respect to indirect infringement. Additionally, we find that Cisco’s evidence of a good-faith belief of invalidity may negate the requisite intent for induced infringement. However, we find that the district court did not err in granting a partial new trial. Thus, we affirm-in-part, vacate-in-part, and remand for further proceedings consistent with this opinion.

I. BACKGROUND

A. The Patent and Acoused Products

In a wireless system, mobile devices such as phones and laptop computers communicate with fixed “base stations” according to standardized procedures that govern the way in which data exchanged between devices is formatted, ordered, maintained, and transmitted. These procedures are referred to as “protocols.” Effective wireless communication requires that the transmitting device and the receiving device follow the same protocol.

The '395 patent relates to a method of providing faster and more reliable han-doffs of mobile devices from one base station to another as a mobile device moves throughout a network area. The '395 patent teaches that the communication protocol is divided based on time sensitivity. The portions of the protocol requiring accurate time synchronization — “real-time capabilities” — are performed at the base station. This part of the protocol is called the “low-level protocol.” Other parts of the protocol that are not time-sensitive comprise the “high-level protocol,” which is performed on another device called a switch. The base station and switch cooperate to handle a connection with a mobile unit. To implement the full communications protocol, the base station runs an instance of the low-level protocol for the connection and the switch runs a corresponding instance of the high-level protocol.

Cisco is a major supplier of WiFi access points and controllers. Commil alleges that certain Cisco access points and controllers infringe claims 1, 4, and 6 of the '395 patent. Claim 1, the patent’s sole independent claim, provides:

In a wireless communication system comprising at least two Base Stations, at least one Switch in communication with the Base Stations, a method of communicating between mobile units and the Base Stations comprising:
dividing a short-range Communication protocol into a low-level protocol for performing tasks that require accurate time synchronization and a highlevel protocol which does not require accurate time synchronization; and
[1365]*1365for each connection of a mobile unit with a Base Station, running an instance of the low-level protocol at the Base Station connected with the mobile unit and running an instance of the high-level protocol at the Switch.

B. The District Coukt Prooeedings

A jury trial commenced on May 10, 2010. On May 17, 2010, the jury returned a verdict rejecting Cisco’s invalidity contentions, finding Cisco liable for direct infringement, and awarding Commil $3.7 million in damages. The jury also found that Cisco was not liable for induced infringement. Commil filed a motion for a new trial on the issues of induced infringement and damages, which the court granted on December 29, 2010.

On April 5, 2011, a second trial was held with réspeet to indirect infringement and damages. On April 8, 2011, the jury returned a verdict in favor of Commil on both issues and this time awarded $63.7 million in damages. On September 28, 2011, the district court entered an amended final judgment granting $63.7 million in actual damages, $10.3 million in prejudgment interest, and $17,738 in costs. This appeal followed.

II. Discussion

Cisco appeals the district court decision on several grounds. First, .Cisco contends that an erroneous instruction allowed the jury to find inducement based on mere negligence. Second, Cisco argues that the district court erroneously precluded Cisco from presenting evidence of its good-faith belief of invalidity to show that it lacked the requisite intent to induce infringement of the asserted claims. Third, Cisco argues that the district court abused its discretion in granting a new trial and that the district court violated the Seventh Amendment by granting a new trial on certain issues, but not others. Fourth, Cisco claims the court erred in cqnstruing the term “short-range communication protocol.” Fifth, Cisco argues that there is not substantial evidence to sustain the jury verdict on infringement. Sixth, Cisco contends the claims are indefinite, not enabled, and lacking adequate written description. ' Finally, Cisco objects to the damages award on the grounds that Corn-mil’s royalty basé violates the entire market value rule. We take each of these issues in turn.

A. The Jury InstruotioN

Before the district court and on appeal, Cisco challenged the second trial’s jury instruction on induced infringement. The district court denied Cisco’s motion for a new trial on the jury instruction issue. We review the denial of a motion for a new trial under the law of the regional circuit. Riverwood Int’l Corp. v. R.A. Jones & Co., 324 F.3d 1346, 1352 (Fed.Cir.2003). In the Fifth Circuit, the denial of a motion for a new trial “will not be disturbed absent an abuse of discretion or a misapprehension of the law.” Prytania Park Hotel v. Gen. Star Indem. Co., 179 F.3d 169, 173 (5th Cir.1999). Whether a jury instruction on an issue of patent law is erroneous is a matter of Federal Circuit law that is reviewed de novo. Sulzer Textil A.G. v. Picanol N.V., 358 F.3d 1356, 1363 (Fed.Cir.2004) (citing Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed.Cir.2000)). ■ We will set aside the jury verdict, “if the movant can establish that ‘those instructions were legally erroneous,’ and that ‘the errors had prejudicial effect.’ ” Id. (citations omitted). In reviewing jury instructions, we review [1366]*1366the trial record and the jury instructions in their entirety. Id.

At the second trial, the court instructed the jury that it could find inducement if “Cisco actually intended to cause the acts that constitute direct infringement and that Cisco knew or should have known that its actions would induce actual infringement.” J.A. 6389 (98:24-99:2).

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720 F.3d 1361, 107 U.S.P.Q. 2d (BNA) 1290, 2013 WL 3185535, 2013 U.S. App. LEXIS 12943, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commil-usa-llc-v-cisco-systems-inc-cafc-2013.