Quarterhill Inc T.QTRH

The Full Appeal

[v_guerriero]

Someone just asked if I could copy and paste the text.  I hope this works.  I just copied and pasted it.  

Enjoy the read.  This is a $10 stock if we win this.  

Case: 20-2011 Document: 23 Page: 1 Filed: 02/12/2021

Nos. 20-2011, -2094 IN THE

United States Court of Appeals

FOR THE FEDERAL CIRCUIT

APPLE INC., Plaintiff-Appellant,

V. WI-LAN INC.,

Defendant-Cross-Appellant.

On Appeal from the United States District Court for the Southern District of California

No. 3:14-cv-02235-DMS-BLM

Hon. Dana M. Sabraw

NON-CONFIDENTIAL RESPONSE AND OPENING CROSS-APPEAL BRIEF FOR DEFENDANT-CROSS-APPELLANT WI-LAN INC.

   Mike McKool

MCKOOL SMITH, PC

300 Crescent Court, Suite 1500 Dallas, TX 75201

[phone] (telephone) [phone] (facsimile) [e-mail]

Jeffrey A. Lamken

Counsel of Record

Lucas M. Walker

Rayiner I. Hashem

MOLOLAMKEN LLP

The Watergate, Suite 500

600 New Hampshire Avenue, N.W. Washington, D.C. 20037

[phone] (telephone) [phone] (facsimile) [e-mail] [e-mail] [e-mail]

Counsel for Defendant-Cross-Appellant Wi-LAN Inc. (Additional Counsel Listed on Inside Cover)

 

Case: 20-2011

Document: 23

Page: 2 Filed: 02/12/2021

Brett E. Cooper

MCKOOL SMITH, PC

One Manhattan West

395 9th Avenue, 50th Floor New York, NY 10001 [phone] (telephone) [phone] (facsimile) [e-mail]

Leonid Grinberg MOLOLAMKEN LLP

430 Park Avenue

New York, NY 10022

[phone] (telephone) [phone] (facsimile) [e-mail]

Counsel for Defendant-Cross-Appellant Wi-LAN Inc.

REPRESENTATIVE PATENT CLAIM AT ISSUE ON APPEAL U.S. Patent No. 8,457,145, Claim 26:

A subscriber unit for a wireless communication system, comprising:

a plurality of queues for buffering user traffic according to a traffic parameter, each queue having an Asociated logical state;

a media access control (MAC) element capable of

transmitting an uplink (UL) bandwidth request based on the logical state of the queues during a bandwidth request opportunity, and

allocating between the queues a bandwidth allocation received in response to the UL bandwidth request, based on the current state of the queues.

 

Case: 20-2011 Document: 23 Page: 3 Filed: 02/12/2021

FORM 9. Certificate of Interest

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

CERTIFICATE OF INTEREST CaseNumber 2020-2011(lead);2020-2094

Short Case Caption Apple Inc. v. Wi-LAN Inc. Filing Party/Entity Wi-LAN Inc.

Form 9 (p. 1) July 2020

     Instructions: Complete each section of the form. In answering items 2 and 3, be specific as to which represented entities the answers apply; lack of specificity may result in non-compliance. Please enter only one item per box; attach additional pages as needed and check the relevant box. Counsel must immediately file an amended Certificate of Interest if information changes. Fed. Cir. R. 47.4(b).

   I certify the following information and any attached sheets are accurate and complete to the best of my knowledge.

Jeffrey A. Lamken

02/12/2021 /s/ Jeffrey A. Lamken

Date: _________________ Signature: Name:

  

Case: 20-2011

Document: 23 Page: 4

Filed: 02/12/2021

FORM 9. Certificate of Interest

Provide the full names of all entities represented by undersigned counsel in this case.

Wi-LAN Inc.

Provide the full names of all real parties in interest for the entities. Do not list the real parties if they are the same as the entities.

None/Not Applicable

Form 9 (p. 2) July 2020

Provide the full names of all parent corporations for the entities and all publicly held companies that own 10% or more stock in the entities.

None/Not Applicable Quarterhill Inc.

 1. Represented Entities.

Fed. Cir. R. 47.4(a)(1).

   2. Real Party in Interest.

Fed. Cir. R. 47.4(a)(2).

    3. Parent Corporations and Stockholders. Fed. Cir. R. 47.4(a)(3).

     

                                       Additional pages attached

 

Case: 20-2011

Document: 23 Page: 5

Filed: 02/12/2021

FORM 9. Certificate of Interest

Patterson Law Group: Allison Goddard McKool Smith PC:

James R. Patterson Robert Auchter

Form 9 (p. 3) July 2020

Jennifer French Robert Cote

 4. Legal Representatives. List all law firms, partners, and Asociates that (a) appeared for the entities in the originating court or agency or (b) are expected to appear in this court for the entities. Do not include those who have already entered an appearance in this court. Fed. Cir. R. 47.4(a)(4).

None/Not Applicable Additional pages attached

               5. Related Cases. Provide the case titles and numbers of any case known to be pending in this court or any other court or agency that will directly affect or be directly affected by this court’s decision in the pending appeal. Do not include the originating case number(s) for this case. Fed. Cir. R. 47.4(a)(5). See also Fed. Cir. R. 47.5(b).

 

None/Not Applicable Additional pages attached

             6. Organizational Victims and Bankruptcy Cases. Provide any information required under Fed. R. App. P. 26.1(b) (organizational victims in criminal cases) and 26.1(c) (bankruptcy case debtors and trustees). Fed. Cir. R. 47.4(a)(6).

 

None/Not Applicable Additional pages attached

         

Case: 20-2011 Document: 23 Page: 6 Filed: 02/12/2021

Form 9 – Certificate of Interest (Continuation Sheet) 4. Legal Representatives

McKool Smith PC Lawrence Hadley Seth Hasenour Drew Hollander Gayle Klein

Elisa Lee

Warren Lipschitz Chris McNett Ashley Moore Steven Pollinger Courtland Reichman Kevin Schubert Dirk Thomas

John Yang

Jonathan Yim

  

Case: 20-2011 Document: 23 Page: 7 Filed: 02/12/2021

TABLE OF CONTENTS

Page ISSUES PRESENTED........................................................................................... 1 STATEMENT ....................................................................................................... 1

I. Technological Background .......................................................................... 1

A. The Problem of Allocating Scarce Bandwidth ................................... 1

B. Prior-Art Solutions............................................................................. 3

II. Wi-LAN’s Patented Innovations .................................................................. 5

A. The ’145 Patent: Prioritization of Time-Sensitive

Voice Traffic ..................................................................................... 5

B. The ’757 Patent: Efficient Adaptive Modulation...............................11

III. Procedural History ......................................................................................12

A. The -798 Action Against Older iPhones............................................12

B. This Action Against VoLTE-Compatible iPhones ............................14

1. Claim Construction .................................................................15

2. The First Trial (Infringement and Damages) ...........................16

3. The Damages-Only Retrial .....................................................20

SUMMARY OF ARGUMENT ............................................................................23 ARGUMENT........................................................................................................26 I. The District Court Properly Construed The Claims.....................................28

A. The District Court Properly Gave the Claims Their

Ordinary Meaning.............................................................................29

 i

 

Case: 20-2011 Document: 23 Page: 8 Filed: 02/12/2021

B. Apple’s Contrary Arguments Lack Merit ..........................................35

1. Apple Cannot Import a “CPE” Limitation...............................36

2. The Invention’s Benefits Do Not Require a

Separate Box...........................................................................41

3. Widegren Undermines Apple’s Position .................................44

4. Apple’s Invocation of Wi-LAN I Backfires..............................45

5. Apple Has Not Shown “CPE” Would Require

Standalone Equipment Separate from a User Device ..............46

II. The Accused iPhones Infringe ....................................................................48

A. Substantial Evidence Supports the Infringement Verdict ..................48

B. Apple’s Contrary Arguments Lack Merit..........................................50

III. The District Court Properly Sustained Damages .........................................55

A. Apple’s Apportionment Challenges Lack Merit ................................56

1. Kennedy’s Methodology Satisfied Apportionment Requirements ..........................................................................56

2. Kennedy Addressed Differences in Numbers of

Covered Patents ......................................................................59

3. Other Case-Specific Adjustments Were Proper.......................63

B. Wi-LAN Was Not Required To Rely on Lump-Sum Licenses..........62

CONCLUSION ....................................................................................................68 CROSS-APPEAL .................................................................................................69 JURISDICTIONAL STATEMENT......................................................................69 ISSUES PRESENTED..........................................................................................69

ii

 

Case: 20-2011 Document: 23 Page: 9 Filed: 02/12/2021

STATEMENT ......................................................................................................69

I. The District Court Holds Intel-Based Phones Non-Infringing .....................69

II. The District Court Vacates The Original Damages Verdict.........................71

A. Wi-LAN’s Damages Evidence at the First Trial................................71

B. The New-Trial Order ........................................................................74

SUMMARY OF ARGUMENT ............................................................................75 ARGUMENT........................................................................................................76

I. The Original Damages Verdict Should Be Reinstated.................................77

II. The District Court Misconstrued the Intel License ......................................80

A. Intel Chipsets Sold After January 2017 Were Not Licensed..............81

B. Contrary Arguments Lack Merit .......................................................82

CONCLUSION ....................................................................................................85

iii

 

Case: 20-2011 Document: 23 Page: 10 Filed: 02/12/2021

CONFIDENTIAL MATERIAL OMITTED

Material has been redacted in the Non-Confidential Brief for Plaintiffs- Cross-Appellants Wi-LAN Inc. This material is confidential commercial informa- tion pursuant to the Confidentiality Order entered by the district court. AppxI. Redacted material on pages 22, 66, 71, 74, and 77 contains confidential informa- tion regarding commercial patent-license royalties.

 iv

 

Case: 20-2011 Document: 23 Page: 11 Filed: 02/12/2021

TABLE OF AUTHORITIES CASES

 Page(s) 350 F.3d 1365 (Fed. Cir. 2003)........................................................................35

 3M Innovative Props. Co. v. Avery Dennison Corp., Apple, Inc. v. Motorola, Inc.,

757 F.3d 1286 (Fed. Cir. 2014)........................................................................56

Aqua Shield v. Inter Pool Cover Team,

774 F.3d 766 (Fed. Cir. 2014)..........................................................................77

Auto. Body Parts  v. Ford Global Techs., LLC,

930 F.3d 1314 (Fed. Cir. 2019)........................................................................81

Ball Aerosol and Specialty Container, Inc. v. Ltd. Brands, Inc.,

555 F.3d 984 (Fed. Cir. 2009)..........................................................................54

Bancorp Servs., L.L.C. v. Hartford Life Ins. Co.,

359 F.3d 1367 (Fed. Cir. 2004)........................................................................40

Bank of N.Y. Mellon v. Commerzbank Cap. Funding Tr. II,

65 A.3d 539 (Del. 2013) ..................................................................................83

Bio-Rad Labs., Inc. v. 10X Genomics, Inc.,

967 F.3d 1353 (Fed. Cir. 2020)............................................................59, 60, 62

Braun v. Dep’t of Health & Hum. Servs.,

983 F.3d 1295 (Fed. Cir. 2020)........................................................................47

C.R. Bard, Inc. v. U.S. Surgical Corp.,

388 F.3d 858 (Fed. Cir. 2004)..........................................................................40

Catalina Lighting v. Lamps Plus, Inc.,

295 F.3d 1277 (Fed. Cir. 2002)........................................................................84

Commonwealth Sci. & Indus. Rsch. Org. v. Cisco Sys., Inc.,

809 F.3d 1295 (Fed. Cir. 2015)............................................................56, 58, 76

Cont’l Circuits LLC v. Intel Corp.,

915 F.3d 788 (Fed. Cir. 2019)..........................................................................31

v

 

Case: 20-2011 Document: 23 Page: 12 Filed: 02/12/2021

Creative Computing v. Getloaded.com, LLC,

386 F.3d 930 (9th Cir. 2004)............................................................................67

Cross Med. Prods., Inc. v. Medtronics Sofamor Danek, Inc.,

424 F.3d 1293 (Fed. Cir. 2005)........................................................................54

Desper Prods., Inc. v. QSound Labs, Inc.,

157 F.3d 1325 (Fed. Cir. 1998)........................................................................35

Dowagiac Mfg. Co. v. Minnesota Moline Plow Co.,

235 U.S. 641 (1915).........................................................................................62

E.I. Du Pont De Nemours & Co. v. Unifrax I LLC,

921 F.3d 1060 (Fed. Cir. 2019)........................................................................34

Eagle Indus., Inc. v. DeVilbiss Health Care, Inc.,

702 A.2d 1228 (Del. 1997) ..............................................................................80

Elbit Sys. of Am., LLC v. Thales Visionix, Inc.,

881 F.3d 1354 (Fed. Cir. 2018)........................................................................44

Elbit Sys. Land & C4I Ltd. v. Hughes Network Sys., LLC,

927 F.3d 1292 (Fed. Cir. 2019) ...................................................... 55, 57, 58, 63

Eon Corp. IP Holdings v. Silver Spring Networks,

815 F.3d 1314 (Fed. Cir. 2016)........................................................................38

Ericsson, Inc. v. D-Link Systems, Inc.,

773 F.3d 1201 (Fed. Cir. 2014) ...................................................... 53, 54, 59, 77

Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp., LLC,

879 F.3d 1332 (Fed. Cir. 2018)........................................................................61

Fantasy Sports Props., Inc. v. Sportsline.com, Inc.,

287 F.3d 1108 (Fed. Cir. 2002)........................................................................52

Finjan, Inc. v. Secure Computing Corp.,

626 F.3d 1197 (Fed. Cir. 2010).................................................................pAsim

GMG Cap. Invs., LLC v. Athenian Venture Partners I, L.P.,

36 A.3d 776 (Del. 2012) ..................................................................................84

vi

 

Case: 20-2011 Document: 23 Page: 13 Filed: 02/12/2021

Harper v. City of Los Angeles,

533 F.3d 1010 (9th Cir. 2008)..........................................................................75

HTC Corp. v. Cellular Commc’ns Equip., LLC,

877 F.3d 1361 (Fed. Cir. 2017)........................................................................33

Impression Prods., Inc. v. Lexmark Int’l, Inc.,

137 S. Ct. 1523 (2017).....................................................................................83

Inline Plastics Corp. v. EasyPak LLC,

799 F.3d 1364 (Fed. Cir. 2015)........................................................................44

Int’l Brotherhood of Teamsters v. NASA Servs., Inc.,

957 F.3d 1038 (9th Cir. 2020)..........................................................................80

InterDigital Commc’ns, Inc. v. ITC,

690 F.3d 1318 (Fed. Cir. 2012)........................................................................32

LaserDynamics, Inc. v. Quanta Comput., Inc,

694 F.3d 51, (Fed. Cir. 2012)....................................................................61, 65

Liebel-Flarsheim v. Medrad, Inc.,

358 F.3d 898 (Fed. Cir. 2004) ........................................................ 34, 36, 37, 39

Lucent Techs., Inc. v. Gateway, Inc.,

580 F.3d 1301 (Fed. Cir. 2009)............................................................58, 63, 65

Mallinckrodt, Inc. v. Medipart, Inc.,

976 F.2d 700 (Fed. Cir. 1992)..........................................................................83

Medsim Ltd. v. BestMed, LLC,

758 F.3d 1352 (Fed. Cir. 2014)........................................................................75

Monsanto Co. v. McFarling,

488 F.3d 973 (Fed. Cir. 2007)..........................................................................56

Motorola, Inc. v. Interdigital Tech. Corp.,

121 F.3d 1461 (Fed. Cir. 1997)..................................................................32, 64

Nat’l As’n of Regulatory Util. Comm’rs v. FCC,

880 F.2d 422 (D.C. Cir. 1989) .........................................................................46

vii

 

Case: 20-2011 Document: 23 Page: 14 Filed: 02/12/2021

On Demand Machs. Corp. v. Ingram Indus., Inc.,

442 F.3d 1331 (Fed. Cir. 2006)........................................................................43

Ortiz v. Jordan,

562 U.S. 180 (2011).........................................................................................64

Osborn ex rel. Osborn v. Kemp,

991 A.2d 1153 (Del. 2010) ..............................................................................84

ParkerVision, Inc. v. Qualcomm Inc.,

903 F.3d 1354 (Fed. Cir. 2018)........................................................................54

Phillips v. AWH Corp.,

415 F.3d 1303 (Fed. Cir. 2005)............................................................29, 35, 45

ResQNet.com, Inc. v. Lansa, Inc.,

594 F.3d 860 (Fed. Cir. 2010)..........................................................................65

Revolution Eyewear, Inc. v. Aspex Eyewear, Inc.,

563 F.3d 1358 (Fed. Cir. 2009)........................................................................52

Rothschild Connected Devices Innovations, LLC v. Coca-Cola Co.,

813 F. App’x 557 (Fed. Cir. 2020).............................................................47, 52

SEB S.A. v. Montgomery Ward & Co.,

594 F.3d 1360 (Fed. Cir. 2010)........................................................................40

Straight Path IP Grp., Inc. v. Sipnet EU S.R.O.,

806 F.3d 1356 (Fed. Cir. 2015)........................................................................29

Summit 6, LLC v. Samsung Elecs. Co.,

802 F.3d 1283 (Fed. Cir. 2015)........................................................................56

Tehrani v. Hamilton Med., Inc.,

331 F.3d 1355 (Fed. Cir. 2003), Br.31-32 ........................................................40

Teleflex, Inc. v. Ficosa N. Am. Corp.,

299 F.3d 1313 (Fed. Cir. 2002)..................................................................29, 36

Thorner v. Sony Comput. Ent. Am. LLC,

669 F.3d 1362 (Fed. Cir. 2012)..................................................................36, 37

viii

 

Case: 20-2011 Document: 23 Page: 15 Filed: 02/12/2021

Transocean Offshore Deepwater Drilling, Inc. v. Maersk

Contractors USA, Inc.,

617 F.3d 1296 (Fed. Cir. 2010)........................................................................84

Uniloc USA, Inc. v. Microsoft Corp.,

632 F.3d 1292 (Fed. Cir. 2011)............................................................60, 61, 67

Unisplay, S.A. v. Am. Elec. Sign. Co.,

69 F.3d 512 (Fed. Cir. 1995)......................................................................56, 67

V-Formation, Inc. v. Benetton Grp. SpA,

401 F.3d 1307 (Fed. Cir. 2005)........................................................................33

Vectura Ltd. v. Glaxosmithkline LLC,

981 F.3d 1030 (Fed. Cir. 2020)........................................................................64

Versata Software, Inc. v. SAP Am., Inc.,

717 F.3d 1255 (Fed. Cir. 2013)........................................................................51

ViaTech Techs. Inc. v. Microsoft Corp.,

773 F. App’x 542 (Fed. Cir. 2018)...................................................................54

In re Viking Pump, Inc.,

148 A.3d 633 (Del. 2016) ................................................................................83

VirnetX Inc. v. Apple Inc.,

792 F. App’x 796, (Fed. Cir. 2019)......................................................51, 52, 55

VirnetX, Inc. v. Cisco Sys., Inc.,

767 F.3d 1308 (Fed. Cir. 2014).................................................................pAsim

Whitserve, LLC v. Comput. Packages, Inc.,

694 F.3d 10 (Fed. Cir. 2012)............................................................................76

Wi-LAN USA, Inc. v. Apple Inc.,

830 F.3d 1374 (Fed. Cir. 2016).................................................................pAsim

Wordtech Sys., Inc. v. Integrated Network Sols., Inc.,

609 F.3d 1308 (Fed. Cir. 2010)..................................................................64, 65

STATUTES AND RULES

35 U.S.C. § 112(a) ................................................................................................37 ix

 

Case: 20-2011 Document: 23 Page: 16 Filed: 02/12/2021

Fed. R. App. P. 4(a)(3)..........................................................................................68

OTHER AUTHORITIES

Vincent Chiappetta, The Desirability of Agreeing to Disagree,

21 Mich. J. Int’l L. 333, 347-48 (2000)............................................................82

Webster’s New International Dictionary 28 (2d ed. 1954) ....................................82

x

 

Case: 20-2011 Document: 23 Page: 17 Filed: 02/12/2021

STATEMENT OF RELATED CASES

No other appeal in or from the same civil action was previously before this or any other appellate court. Wi-LAN’s counsel is unaware of any cases pending in this or any other court that will directly affect or be directly affected by this Court’s decision in these appeals.

 xi

 

Case: 20-2011 Document: 23 Page: 18 Filed: 02/12/2021

ISSUES PRESENTED

1. Whether the district court properly declined to import a “customer premises equipment” limitation into the claims.

2. Whether substantial evidence supports the jury’s infringement finding.

3. Whether the district court permissibly exercised its discretion in

admitting Wi-LAN’s damages evidence.

STATEMENT

This case involves Wi-LAN’s patented technology for improving wireless

communications by efficiently allocating bandwidth to time-sensitive communica-

tions. After trial in 2018, a jury found that Apple’s iPhones infringe Wi-LAN’s

patents and awarded $145.1 million. The district court found the infringement

verdict amply supported. The court vacated the damages award and conducted a

damages-only retrial. On retrial, the jury awarded $85.23 million.

I. TECHNOLOGICAL BACKGROUND

Today’s wireless devices run multiple bandwidth-hungry applications at once. While making a call, a device may also be retrieving emails or uploading photos to the cloud. Wi-LAN’s patented technology ensures time-sensitive data, such as voice calls, reliably arrives on time, despite competition for bandwidth.

A. The Problem of Allocating Scarce Bandwidth

Wireless networks operate using radio transmissions between “subscriber

units” (or subscriber stations)—such as “cellular telephone” and other wireless 1

  

Case: 20-2011 Document: 23 Page: 19 Filed: 02/12/2021

devices—and “base stations” such as cell towers. Appx308(1:36-47); Appx10082- 10083. Base stations are connected to fixed network infrastructure (such as the Internet and telephone networks) by fiber or other means. Appx308(1:36-47).

Streams of digital data between subscriber units and base stations are divided into “packets.” During a phone call, your voice is typically digitized into packets containing 40 milliseconds of audio. Appx10075. Other kinds of data— emails, webpages, etc.—are divided into packets as well. Appx10080.

Any given base station has limited “bandwidth” for transmissions to and from the subscriber units it supports; those subscriber units must share the band- width. Appx312(9:8-10); Appx10073. To do so, each subscriber unit sends a “bandwidth request” for enough bandwidth to transmit the information it seeks to send. Appx312(9:1-43). The base station responds with a “bandwidth grant” telling the subscriber unit how much bandwidth it has been allotted. Id.

Those “bandwidth request and grant messages” themselves consume band- width. Appx310(5:41-60); Appx308(2:54-58). It is thus desirable to have a “bandwidth allocation method” that “consume a minimum percentage of availa- ble uplink bandwidth.” Appx310(5:51-58).

When subscriber units seek to send more data than available bandwidth allows, congestion results. Appx10111-10114. The base station may then grant subscriber units less bandwidth than requested—for example, a subscriber unit

2

 

Case: 20-2011 Document: 23 Page: 20 Filed: 02/12/2021

requesting bandwidth for 10 packets may be granted only enough for 5 packets. Appx318(10:49-59). Remaining packets must wait for additional bandwidth to become available, delaying their transmission. Id.

Transmission delays are problematic for “real-time service applications” like voice calls. Appx312(10:23-25). Delays in sending voice packets can lead to dropped calls or lags. Appx10084-10085; Appx10092-10094. By contrast, other “data service applications,” such as email and photos, “are relatively delay- tolerant.” Appx312(10:21-22). Half-second delays for email are imperceptible; half-second delays during a phone call are excruciating. Appx10110.

B. Prior-Art Solutions

Older mobile-phone technology, such as 2G and 3G, avoided voice-packet delays by using wholly separate pathways for voice calls and other data. When someone made a call, dedicated circuits (uplink and downlink) were created between the phone and base station:

3

 

Case: 20-2011 Document: 23 Page: 21 Filed: 02/12/2021

 Appx7679; Appx10074-10075. The dedicated circuits reserved bandwidth for the voice call. That way, call quality would not be degraded by voice packets being delayed due to congestion. Appx10074-10075. But that approach wasted band- width. Nothing else could use the reserved bandwidth for the call’s duration, even when no voice packets were being sent. Appx10077.

One alternative was to transmit voice packets using Internet protocols, without dedicated voice circuits, sharing pathways with other data. Appx10084. That improved network efficiency by allowing other data to utilize unused band- width that otherwise would be reserved for voice calls. Appx10084. But it reduced voice quality: Without dedicated circuits, voice packets had to “compete [for] bandwidth [with] other packets,” delaying voice packets in times of congestion. Appx10082; Appx10091-10094.

4

 

Case: 20-2011 Document: 23 Page: 22 Filed: 02/12/2021

II. WI-LAN’S PATENTED INNOVATIONS

Ken Stanwood, Wi-LAN’s chief technology officer, spent his career improv- ing wireless-communications technology. After studying computer science at Stanford, he worked on military radio-signal processing, before developing cell- phone chips and software. Appx10069-10073; Appx10078. In 1998, Stanwood joined Ensemble Communications, which Wi-LAN later acquired. Appx10082- 10083. There, Stanwood and his team developed the technology underlying this case.

A. The ’145 Patent: Prioritization of Time-Sensitive Voice Traffic

1. Stanwood worked on providing high-speed Internet access using wireless technology. Appx10082. He needed, however, to improve the quality of voice calls transmitted over the Internet. Appx10085-10095. Prior-art subscriber units typically transmitted packets in the order generated. Appx10094. Time- sensitive voice packets thus would be “intermixed” with other, non-time-sensitive packets (e.g., data uploads). Appx10093. That created problems during conges- tion. If a base station granted a cellphone less bandwidth than needed, voice packets could be delayed as earlier-generated packets were transmitted. That “degrad[ed] . . . voice quality.” Appx10094.

5

 

Case: 20-2011 Document: 23 Page: 23 Filed: 02/12/2021

For example, suppose a subscriber unit had 10 packets queued for trans- mission—4 voice packets (in green below) intermixed with 6 other packets (blue). The subscriber unit would request bandwidth for all 10 packets:

Appx7696. If the network were congested, the base station might grant bandwidth only for 5 packets:

Appx7697. A prior-art subscriber unit would transmit the first 5 packets in its queue—here, 1 voice packet and 4 other packets—leaving voice packets behind:

  6

 

Case: 20-2011 Document: 23 Page: 24 Filed: 02/12/2021

 Appx7698.

Stanwood’s solution was an “express lane” that allows “voice packets to

bypAs the other packets that are causing congestion.” Appx10094. Instead of transmitting packets first-come-first-served, Stanwood separated voice and non- voice packets into separate “queues.” Appx10092-10096; see Appx318(22:24-60). Those queues allow the subscriber unit to give time-sensitive voice packets “priority over the other data.” Appx10095.

For example, suppose a subscriber unit requests bandwidth for 10 packets (5 voice and 5 other), but is granted bandwidth only for 6. By queuing voice packets separately, Stanwood’s invention allows the subscriber unit to prioritize voice packets, transmitting all 5, even if they were generated after other packets:

7

 

Case: 20-2011 Document: 23 Page: 25 Filed: 02/12/2021

 Appx7699.

The invention offers particular benefit when users multitask, such as making

calls while emailing files. The emailed files could generate numerous data packets that, in the prior art, might be sent ahead of later-generated voice packets. With Stanwood’s multi-queue subscriber unit, transmission of non-voice packets can be “temporarily paused” as new voice packets take priority, preventing time-sensitive voice packets from being delayed. Appx10095; see Appx318 (22:50-60).

Having the subscriber unit allocate bandwidth increases efficiency. The alternative would be for the base station to decide how much bandwidth should be allocated to each connection type—voice or data—for each subscriber unit, “giv[ing each] subscriber station explicit instructions” to that effect. Appx10164. That would require more processing by the base station. And all of the resulting instructions (bandwidth request/grant messages) “themselves use up bandwidth.” Appx10124; see Appx308(2:40-60). Stanwood’s solution “move[d] the brains” of

8

 

Case: 20-2011 Document: 23 Page: 26 Filed: 02/12/2021

that process to the subscriber unit. Appx10164; see Appx310(5:40-6:2). The subscriber unit would receive a single bandwidth allocation from the base station, then divide that allocation among its individual connections itself, relieving the base station of responsibility. Appx10164; Appx311(7:39-54).

2. Stanwood’s team tackled another problem: that requesting bandwidth itself consumes bandwidth. Appx310(5:40-60). To avoid delay, subscriber units might “send a bandwidth request” to a base station “every time a new packet was generated.” Appx10124. If 8 packets were generated, the subscriber unit might make 8 separate requests:

Appx7701; Appx10126. Those requests add up. A phone call typically generates 25 packets per second—resulting in 25 bandwidth requests every second for each of “hundreds of phones” potentially connected to a base station. Appx10125. “If uncontrolled,” Stanwood recognized, “bandwidth allocation requests will detri-

 9

 

Case: 20-2011 Document: 23 Page: 27 Filed: 02/12/2021

mentally affect system performance,” occupying bandwidth needed for “transmis- sion of substantive traffic data.” Appx308 (2:53-58); see Appx10125-10126.

The solution was to add a “timer” to subscriber units to “prevent bandwidth requests from being transmitted too frequently.” Appx321(27:10-11). Instead of sending separate requests for each packet, the subscriber unit waits until “expiration of the timer” and sends a single request for all packets generated since its prior request. Appx10127.

Appx7702. That approach produces “fewer bandwidth requests”—freeing band- width for substantive transmissions. Appx10126-10128.

3. U.S. Patent No. 8,457,145 (“the ’145 patent”) is directed to the bandwidth-allocation and timer inventions. Claim 26 claims a “subscriber unit” that can allocate bandwidth across different queues of user data according to their Asigned priority. The claim recites:

 10

 

Case: 20-2011 Document: 23 Page: 28 Filed: 02/12/2021

A subscriber unit for a wireless communication system, comprising:

[1] a plurality of queues for buffering user traffic according to a traffic parameter, each queue having an Asociated logical state;

[2] a media access control (MAC) element capable of

[a] transmitting an uplink (UL) bandwidth request based on the logical state of the queues during a bandwidth request opportunity, and

allocating between the queues a bandwidth allocation received in response to the UL bandwidth request, based on the current state of the queues.

Appx324 (numbering added). Claim 27 further recites a “timer” for determining when to transmit “an aggregate bandwidth request” to a base station. Appx324 .

Claim 9 similarly recites a “subscriber unit” that groups packets into queues based on data type (referred to as “quality of service” or “QoS”). Appx323(32:32- 37); Appx10115. The claim includes functionality for setting a “timer Asociated with [each] queue” to “periodically . . . transmit . . . bandwidth request.” Appx324(34:13-25).

B. The ’757 Patent: Efficient Adaptive Modulation

Stanwood also improved “adaptive modulation.” Interference can distort radio signals used for wireless communications, increasing the risk they will be misunderstood. Appx10171-10173. Subscriber units and base stations thus use “adaptive modulation” to respond to changes in signal quality. Appx10076-10078. Where signal quality is good, they use a modulation scheme that maximizes data-

11

 

Case: 20-2011 Document: 23 Page: 29 Filed: 02/12/2021

transmission rates but offers less error protection. Where signal quality is poor, they use a modulation scheme that offers greater error protection but lower data- transmission rates. Id.

Stanwood invented a more efficient way to communicate modulation changes to subscriber units. Appx10178. To coordinate transmissions, base sta- tions periodically send connected subscriber units a “map” specifying a specific time interval when each subscriber unit may transmit. Appx336(5:57-6:11). Stanwood used those maps to specify not only when each subscriber unit can transmit, but what modulation scheme to use.

The ’757 patent discloses a subscriber unit capable of using those improved maps. Claim 1 recites a “subscriber station” with components “configured” to determine a preferred modulation scheme (“PHY mode”) based on signal quality, and transmit that preference to a base station. Appx342(17:46-62). It is further configured to “identify,” in the “map received from the base station,” the modulation scheme the base station “selected for the subscriber station,” and use that scheme to receive data from the base station. Appx342(17:63-18:5).

III. PROCEDURAL HISTORY

A. The -798 Action Against Older iPhones

Wi-LAN sued Apple in 2013, accusing then-current iPhone models of

infringing U.S. Patent Nos. 8,311,040 and 8,315,640. Wi-LAN USA, Inc. v. Apple 12

 

Case: 20-2011 Document: 23 Page: 30 Filed: 02/12/2021

Inc., 13-cv-798 (S.D. Cal.) (the “-798 action”). Those patents—not Aserted here—are related to the Aserted ’145 and ’757 patents. The ’040 patent claims a “node” that allocates bandwidth for a “specified connection.” Wi-LAN USA, Inc. v. Apple Inc., 830 F.3d 1374, 1377 (Fed. Cir. 2016) (“Wi-LAN I ”). The ’640 patent claims a method for requesting bandwidth for a “wireless subscriber radio unit.” Id. at 1378.

Apple argued that “wireless subscriber radio unit” is limited to “customer premises equipment” (“CPE”). Appx8006; see Wi-LAN I, 830 F.3d at 1379 n.2. The district court found no evidence supporting that position. It construed “wireless subscriber radio unit” as a “module that receives UL bandwidth from a base station, and allocates the bandwidth across its user connections.” Appx8006- 8007.

The district court agreed with Apple, however, that the “node” or “wireless subscriber radio unit” must allocate bandwidth among more than one “specified connection.” 830 F.3d at 1379. Wi-LAN had alleged the “node” and “wireless subscriber radio unit” corresponded to the iPhones’ “baseband processor,” “which handles communications with the 4G network.” Id. at 1378. It alleged the “specified connection” was the “connection between an iPhone’s baseband pro- cessor and application processor.” Id. at 1378-79. But the iPhones accused there allocated bandwidth to “only one connection between a baseband processor and an

13

 

Case: 20-2011 Document: 23 Page: 31 Filed: 02/12/2021

application processor”; accordingly, the district court ruled they did not infringe. Id. (emphasis added).

This Court affirmed. Because the claims used the terms “allocate” and “priority,” it stated, that “impl[ied] . . . distribut[ion of ] bandwidth among multiple selected connections.” 830 F.3d at 1382-83 (emphasis added). Apple did not contest the district court’s ruling that a wireless subscriber radio unit is not limited to CPE. See id. at 1379 n.2.

B. This Action Against VoLTE-Compatible iPhones

This case concerns newer iPhones that utilize multiple connections to support a new feature: high-quality Internet-protocol voice calls, using VoLTE (Voice-over-LTE). The older iPhones in the -798 case supported only 2G/3G voice calling, using dedicated circuits. Appx10246-10247. Apple’s newer, VoLTE-compatible iPhones can send voice packets over the Internet pathways used for other data. Appx10252-10253. To do so, the new iPhones allocate band- width across two connections—one for voice and one for other data—unlike older models with only one such connection (which were thus held non-infringing).

In May 2014, Apple sued for declaratory judgment of non-infringement. Wi-LAN responded by alleging that the newer iPhones infringe the ’145 and ’757 patents (among others). The cases were consolidated before Judge Sabraw, who had presided over the -798 case.

14

 

terms.

Case: 20-2011 Document: 23 Page: 32 Filed: 02/12/2021

1. Claim Construction

The parties disputed the claims’ “subscriber unit” and “subscriber station”

1

The district court adopted the same construction it adopted in the -798 case: A “subscriber unit” is “a module that receives UL bandwidth from a base station, and allocates the bandwidth across its user connections.” Appx5-6 (emphasis added). The court again rejected Apple’s position that “subscriber unit” means “fixed or portable customer premises equipment [‘CPE’] that wirelessly receives UL bandwidth from a base station, and allocates the bandwidth across connected user devices.” Appx5 (emphasis added).

The district court’s rationale was “two-fold.” Appx6. First, Apple’s construction erroneously limited the claimed “subscriber units” to—and equated them with—“CPE.” The inventors “did not use the term ‘CPE’ in the patent claims,” but the broader term “subscriber units.” Appx6. By contrast, the inventors had used “CPE” in other patents. Id. The court saw “no evidence” of “clear intention” to restrict the “subscriber unit” to CPE. Appx6-7. Prosecution history confirmed that. Appx7.

Second, Apple’s construction erroneously required each subscriber unit to “allocat[e] bandwidth across connected user devices.” Appx5 (emphasis added).

1 The parties agreed the “subscriber” terms “should be construed consistently across the Patents” (including additional patents Aserted below). Appx5. This brief generally uses “subscriber unit.”

 15

 

Case: 20-2011 Document: 23 Page: 33 Filed: 02/12/2021

Under that construction, Apple argued, the subscriber units must be physically separate from (and serve multiple) “user devices.” Apple, however, “fail[ed] to cite any evidence to support” requiring separate “connected user devices.” Appx7. “The claims themselves do not use this language but instead use the term connec- tion.” Id. And the term “connection” did not support Apple’s theory, because there “there could be multiple ‘connections’ [between components] in one device.” Appx8. The claims do not require “separate user devices.” Id.

2. The First Trial (Infringement and Damages)

After trial in 2018, the jury returned a verdict finding infringement and

awarding Wi-LAN $145.1 million.

’145 Patent Infringement. Wi-LAN’s expert, Dr. Vijay Madisetti, testified

that the accused iPhones infringe claims 9, 26, and 27 of the ’145 patent. The key dispute was whether iPhones have “subscriber units” that allocate bandwidth among multiple “user connections.” As Madisetti explained, those elements are satisfied by the iPhones’ “baseband processor” (in purple below), which has multiple connections to the phones’ “application processor” (in blue).

 16

 

Case: 20-2011 Document: 23 Page: 34 Filed: 02/12/2021

 Appx818. Madisetti explained that the baseband processor corresponds to the “subscriber unit”; it communicates with base stations (cell towers) using radio signals. Appx10283-10288; Appx7616. User applications, such as a phone and browser, execute on the application processor. Appx10251-10252. The baseband processor has two connections to the application processor. Appx10288-10289.

Madisetti showed how the baseband processor allocates bandwidth across two connections to prioritize voice traffic. The image below, presented to the jury, shows the application processor (gray rectangle at left) executing two applica- tions—a phone (green) and browser (blue). Those applications generate packets

(green and blue boxes) containing voice and other data, respectively. Appx10254. 17

 

Case: 20-2011 Document: 23 Page: 35 Filed: 02/12/2021

Separate connections carry those packets from their respective applications to the baseband processor (peach rectangle at right), which transmits them to the base station (far right):

Appx7561; Appx10287-10289.

As Madisetti explained, the separate connections between the application

processor and baseband processor include a “VoLTE Connection” (in green above) that carries voice audio data across an “I2S bus,” and a “Data Connection” (in blue) that uses a “PCIE bus” for other data. Appx10288-10289. The “two connec- tions are separate” at the “hardware” level. Id. “100 percent of the audio samples go across” the I2S bus, and “100 percent of the data packets” are sent over the PCIE bus. Appx10897.

The VoLTE and Data Connections deliver their respective packets to separate “queues,” with different priority levels, in the baseband processor.

 18

 

Case: 20-2011 Document: 23 Page: 36 Filed: 02/12/2021

Appx10251-10254; Appx10287-10289. Using those queues, the baseband processor’s media access control unit “allocates bandwidth across the two connections.” Appx10254. It prioritizes “the VoLTE voice connection by allocat- ing more bandwidth to the queue [for] the VoLTE connection,” while giving “less priority [to] the other data, the LTE data connection.” Id.

The accused iPhones, Madisetti thus concluded, satisfy each limitation of claim 26 of the ’145 patent. Appx10314. They also infringe claims 9 and 27 by including timers to control sending of bandwidth requests. Appx10268-10273.

Madisetti explained that Apple’s iPhones infringe the Aserted apparatus claims “as sold.” Appx10258. The iPhones are “configured and designed to perform” the claimed “capabilities.” Appx10257. Performing those capabilities does not require “modification of the software or hardware”; the iPhones “contain all the hardware and the software to satisfy all the claim limitations” straight “out of the box.” Appx10258; Appx10291. That includes phones Apple supplied to carriers like Sprint, whose networks did not support VoLTE at time of trial. Appx10414. “The phone that [Apple] sell to Sprint is exactly like any other phone, it is capable of VoLTE.” Id. Indeed, a user need only have the phone “unlock[ed]” to “support VoLTE on any other network.” Appx10415.

’757 Patent Infringement. Dr. Madisetti similarly demonstrated infringe- ment of claim 1 of the ’757 patent. He explained that the baseband processor

 19

 

Case: 20-2011 Document: 23 Page: 37 Filed: 02/12/2021

corresponds to the claimed “subscriber station.” He examined source code, executed on the baseband processor, that uses signal-quality measurements to choose a PHY mode (modulation) and send that preference to the base station. Appx10335-10337. The baseband processor also contains code to identify, in the “map” sent by the base station, “the PHY mode that was selected for it.” Appx10341-10342. Based on that and other evidence, Madisetti explained each claim limitation is satisfied. Appx10371-10372.

Damages. Wi-LAN’s damages experts calculated a $0.85/unit royalty, or $145.1 million total. Appx46. That evidence is discussed in Wi-LAN’s cross appeal, pp. 71-80, infra.

Verdict. The jury found all claims infringed and awarded Wi-LAN $145.1 million. Appx630. The district court denied Apple’s challenges to the infringe- ment verdict. As discussed in Wi-LAN’s cross-appeal, the court vacated the damages award, resulting in a damages-only retrial. Appx38; p.74, infra.

3. The Damages-Only Retrial

At the damages retrial, Wi-LAN’s and Apple’s experts both used a

comparable-license methodology.

Wi-LAN’s Expert. Wi-LAN’s expert, David Kennedy, started with 150

prior Wi-LAN licenses, and narrowed them down to those: (1) from 2013 or later, around the hypothetical-negotiation date; (2) that “just included phones” and not

   20

 

Case: 20-2011 Document: 23 Page: 38 Filed: 02/12/2021

dissimilar devices; (3) that covered LTE, because only LTE-compatible iPhones infringe; and (4) that post-dated issuance of at least one Aserted patent. Appx15220-15223.

That left three comparable licenses—all covering the Aserted patents—with phone makers Doro, Vertu, and Unnecto. Appx15223-15227; Appx15238. Those companies’ phones ranged from budget to luxury models. Appx15022. Their licenses all specified the same royalty: $0.50/phone. Appx15527-15528.

Kennedy conducted a Georgia-Pacific analysis to account for differences between those licenses and Apple’s hypothetical license. Appx15229. He applied an upward adjustment because, in Apple’s case, the patents are Asumed valid and infringed. Id. He applied a downward adjustment because the prior licenses covered a portfolio, while Apple’s hypothetical license would cover only two patents. Appx15231-15232. That discount was tied to Wi-LAN’s typical practice, when licensing patents of interest, of “add[ing] in the rest of the portfolio” for “a small upcharge.” Appx15238-15239. Apple, moreover, had no feasible non- infringing alternative. Appx15236-15237.

Kennedy considered other adjustments. Doro, Vertu, and Unnecto received an “early adopter discount” by quickly signing a license; Apple would not be eligible for such a discount. Appx15240-15242. Conversely, Apple could have sought a sales-volume discount that the other, smaller licensees could not.

21

 

Case: 20-2011 Document: 23 Page: 39 Filed: 02/12/2021

CONFIDENTIAL MATERIAL FILED UNDER SEAL REDACTED

Appx15242-15244. Those factors pointed in opposite directions and produced no net adjustment. Appx15244.

Based on his analysis, Kennedy computed a $0.45-per-phone royalty. Appx15245-15247.

Apple’s Expert. Apple’s expert, Lance Gunderson, proposed a $5-10 million lump-sum royalty. Appx15555-15556. He invoked Wi-LAN licenses with other companies. Those licenses, not limited to phones, included lump-sum payments to settle litigation. Gunderson calculated “per unit” rates for each license and presented them to the jury in the chart below. The rate for HTC was $0.50/unit—the same rate Doro, Vertu, and Unnecto paid, and more than Wi-LAN’s proposed royalty:

Appx7743 (annotated); Appx15592-15595; Appx15633-15638. 22

   Confidential Royalty Payments

 Confidential Royalty Payments

 

Case: 20-2011 Document: 23 Page: 40 Filed: 02/12/2021

But Gunderson ignored those per-unit rates. Instead, he devised a “per patent” royalty, dividing the lump sum each licensee paid by the number of patents Wi-LAN had Aserted. Appx15592. He then multiplied that “per-patent” figure by the two patents Apple infringed. Appx15592. Gunderson insisted Apple would have paid the same “per-patent” lump sum as other licensees—even if Apple derived immensely more value by including the technology on vastly more phones. Appx15592-15593.

Verdict. The jury adopted Kennedy’s $0.45/unit rate. Appx756. Applying that rate to the stipulated 189.4 million infringing units, it awarded Wi-LAN $85.23 million. Id. The district court denied Apple’s post-trial motions. Appx62.

SUMMARY OF ARGUMENT

I.A. Apple improperly seeks to import limitations into the claims. The claims recite “subscriber units.” They do not recite “customer premises equip- ment,” or require subscriber units to be physically separate from phones or user devices. The specifications, prosecution history, and this Court’s decisions make clear subscriber units can be (or be in) cellphones.

B. Apple never addresses the ordinary meaning of “subscriber unit.” It seeks to depart from ordinary meaning by importing a “CPE” limitation from the specification. But the specification uses “CPE” to describe exemplary embodi- ments, not the entire invention. Nor do the patents equate “subscriber unit” and

  23

 

Case: 20-2011 Document: 23 Page: 41 Filed: 02/12/2021

“CPE”—rather, CPE is one possible type of subscriber unit. Apple’s attempted distinction between “mobile” and “portable” equipment is nonsensical—the claims don’t use those words, and they mean the same thing anyway.

The invention’s benefits—avoiding delay, preserving base-station resources, and more—are fully realized when bandwidth is allocated by a subscriber unit within a cellphone. Apple’s suggestion that the patents disparage that arrangement misreads the patents.

The Widegren reference cited during prosecution makes clear the claimed subscriber units can correspond to cellphones. Apple says the district court misread Widegren, but fails to show clear error.

Apple’s invocation of Wi-LAN I backfires. After obtaining a construction requiring bandwidth allocation across multiple connections, Apple released iPhones with precisely that feature. Apple is reduced to rehashing the unfounded “CPE” construction rejected in Wi-LAN I itself.

Apple Asumes but never shows that “CPE” would require “standalone” equipment separate from a phone or user device. Nor did Wi-LAN concede the point. While a different aspect of Apple’s proposed construction would have required “separate user devices” (and thus a separate subscriber unit), the district court rejected that construction—and Apple abandons it on appeal.

24

 

Case: 20-2011 Document: 23 Page: 42 Filed: 02/12/2021

II. Ample evidence supports the infringement verdict. While Apple argues the required “user connections” do not exist until the phone is turned on and receives configuration parameters, it ignores that the connections include hardware built into the phones. Moreover, a need to activate or configure the phones cannot defeat infringement. The Aserted apparatus claims are directed to capability, and accused iPhones are capable of all recited functionality. Nor can Apple distinguish Sprint iPhones, which are identical to those sold to other carriers, equally capable of infringement, and can work on other networks.

III.A. Wi-LAN’s comparable-license evidence was properly admitted. Wi-LAN’s expert relied on prior licenses covering the same patents and products. He adjusted for relevant differences, such as discounting portfolio rates to cancel out sums paid for other patents. No more was required. While Apple insists the discount represented an impermissible “rule of thumb,” it was based on Wi-LAN’s actual practice. All other adjustments were routine.

B. Apple’s suggestion that running-royalty licenses must be excluded because Apple was entitled to a lump-sum royalty is waived. Nor is that a permis- sible basis for excluding prior licenses covering the patents-in-suit. While Apple dismisses other licensees as “niche” phonemakers, it fails to show their rates reflected anything other than the patented technology’s value. Apple’s expert

25

 

Case: 20-2011 Document: 23 Page: 43 Filed: 02/12/2021

admitted, moreover, that HTC paid the same per-unit rate. Insofar as bargaining- power differences mattered, Wi-LAN’s expert accounted for them.

ARGUMENT

In wireless communications, bandwidth is king. For years, wireless net- works wasted bandwidth by reserving dedicated swaths for voice calls, crowding out other transmissions. Initial efforts to have voice and other data share band- width avoided that inefficiency, but sacrificed voice quality. Time-sensitive voice packets had to compete for bandwidth, suffering delays that caused laggy or dropped calls. Additional bandwidth consumption by messages requesting and allocating bandwidth exacerbated the problem.

Ken Stanwood and his team overcame those obstacles. They invented an innovative approach that provides different “queues” for voice and other data, allowing a subscriber unit to allocate bandwidth to time-sensitive voice packets on a priority basis. They developed a timer that, by limiting bandwidth-request messages, frees up bandwidth for substantive communications. And they devised a more efficient way to identify modulation schemes.

The accused iPhones satisfy all limitations of the claimed “subscriber units.” They include distinct “queues” for voice and other data packets, and a “media access control” module for allocating bandwidth preferentially to queues with time-sensitive voice packets. They include a “timer” for regulating bandwidth

 26

 

Case: 20-2011 Document: 23 Page: 44 Filed: 02/12/2021

requests. And they are configured to identify modulation schemes in a “map.” Each limitation is satisfied.

So Apple invents a new limitation: that the “subscriber unit” must be “customer premises equipment” or “CPE.” Not only that, Apple says the CPE must be “standalone,” residing in a separate box from any phone or user device. But “CPE” appears nowhere in the claims. Subscriber units are not limited to CPE as a matter of ordinary meaning. The specifications use “CPE” only in describing exemplary embodiments. And nothing in the claims, specification, prosecution history, or common sense supports Apple’s contrived “separate box” requirement.

Apple’s infringement argument fares no better. Apple says iPhones lack the requisite “connections” until users turn them on. But Apple ignores the hardware and functionality that exist in the phones as sold. And even if users must “activate” relevant functionality, that cannot defeat infringement.

As for Apple’s damages arguments, this Court said it best: Wi-LAN’s expert analyzed licenses that “relate to the actual patents-in-suit,” and “all of the other differences that Apple complains of were presented to the jury.” VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1330 (Fed. Cir. 2014). “No more is required in these circumstances.” Id.

27

 

Case: 20-2011 Document: 23 Page: 45 Filed: 02/12/2021

I. THE DISTRICT COURT PROPERLY CONSTRUED THE CLAIMS

Unable to dispute that the accused iPhones satisfy the claims’ recited limita- tions, Apple tries to rewrite the claims. It is not enough for a subscriber unit to include the recited queues for allocating bandwidth and timer for regulating bandwidth requests. Instead, Apple insists, a “subscriber unit” must be “customer premises equipment” (“CPE”)—a term appearing nowhere in the claims. In Apple’s conception, moreover, CPE must be a physically separate box from any user device; a cellphone cannot include or be a subscriber unit. Apple thus reads the claims as mandating three totally separate components: (1) a “base station,” (2) a “subscriber unit” that is “standalone” equipment, and (3) “user devices” sepa- rate from the subscriber unit.

That theory is unsupported. Apple never contends that “subscriber units” are limited to standalone CPE as a matter of ordinary meaning. Nor is the invention here a subscriber unit encased in a separate box. It is a subscriber unit designed to allocate bandwidth to different user connections, employ a timer to regulate bandwidth requests, and efficiently communicate modulation changes. Nothing about those features requires the subscriber unit to be physically separated from a user device. Indeed, the patents make clear the invention can be “combined” with other system components, such as cellphones. Appx335(3:5-23).

28

 

Case: 20-2011 Document: 23 Page: 46 Filed: 02/12/2021

And the district court roundly rejected any “separate user devices” requirement, Appx8, in a ruling Apple does not challenge on appeal.

Apple seeks to limit the claims, in defiance of their plain meaning, by “importing limitations from the written description.” Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1324 (Fed. Cir. 2002). The district court properly declined to commit that “ ‘cardinal sin’ of claim construction.” Id.

A. The District Court Properly Gave the Claims Their Ordinary Meaning

The “‘bedrock principle’” of claim construction is that the “words of the claims” “define the scope of the patented invention.” Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005). Claims should be given their “ordinary and customary meaning,” as understood by skilled artisans. Id. at 1312-13. “When claim language has” a plain meaning, “leaving no genuine uncertainties on inter- pretive questions relevant to the case, it is particularly difficult to conclude that the specification reasonably supports a different meaning.” Straight Path IP Grp., Inc. v. Sipnet EU S.R.O., 806 F.3d 1356, 1361 (Fed. Cir. 2015). Those principles control here.

1. Each infringed claim is directed to a “subscriber unit” (or “subscriber station”) for a wireless communication system. Appx323-324 (claims 9, 26-27); Appx342 (claim 1). As the claims recite, that subscriber unit comprises a

“plurality of queues” and a media access controller that can transmit bandwidth 29

 

Case: 20-2011 Document: 23 Page: 47 Filed: 02/12/2021

requests and “allocate bandwidth” between queues. The district court thus construed the term “subscriber unit” as a “module that receives [uplink] bandwidth from a base station, and allocates the bandwidth across its user connections.” Appx288. That construction accurately reflects the term’s plain meaning, as understood by skilled artisans in light of the patent as a whole.

There is no serious dispute the baseband-processor module of the accused iPhones (in purple below) satisfies that construction.

Appx818. As the evidence showed, the baseband processor receives uplink bandwidth allotments from a base station and allocates that bandwidth across user

 30

 

Case: 20-2011 Document: 23 Page: 48 Filed: 02/12/2021

connections to voice and other applications on the phones’ application processor (in blue above). Appx10253-10254; pp. 16-19, supra.

2. Apple argues that the baseband processor cannot be the claimed sub- scriber unit—even though it is designed to do everything the claimed subscriber unit does—because it is part of a cellphone. According to Apple, “subscriber unit” really means “CPE.” And Apple insists CPE must be a “standalone component,” physically separate from a phone or other user device. Br.25.

The claims’ plain language refutes that argument. The claims refer broadly to “subscriber unit” and “subscriber station.” Appx323-324 (claims 9, 26- 27); Appx342 (claim 1). They nowhere mention “CPE,” “customer premises equipment,” or “standalone” equipment. And they nowhere suggest the subscriber unit must be physically separate from a mobile phone. Thus, “based on the plain language, the claims are not limited to” CPE—much less “standalone” CPE distinct from the phone. See Cont’l Circuits LLC v. Intel Corp., 915 F.3d 788, 796 (Fed. Cir. 2019).

The specification makes clear the inventors did not limit “subscriber units” to CPE that is physically separate from a phone. The specification describes “subscriber units” in wireless communications networks like “mobile cellular telephone systems.” Appx308(1:41-42). Those wireless systems, the specification states, “provide communication channels on demand between . . . subscriber units

31

 

Case: 20-2011 Document: 23 Page: 49 Filed: 02/12/2021

and their respective base stations” (cell towers). Appx308(1:39-47) (emphasis added). In that description, the “subscriber unit” is plainly the phone itself (or a component thereof). As Apple concedes, in “cellular telephone systems,

2

cellphones communicate directly with a base station.” Br.27 (emphasis added). Thus, in the specification, “subscriber units” can encompAs user devices like phones. If the “subscriber units” described in the specification can include phones (or components within), there is no reason the “subscriber unit” recited in the claims cannot.

This Court’s opinions illustrate that “subscriber units” and “subscriber stations” are ordinarily understood in the art as equipment that communicates with a base station, without being limited to “standalone” CPE separate from the phone itself. See, e.g., Motorola, Inc. v. Interdigital Tech. Corp., 121 F.3d 1461, 1464 (Fed. Cir. 1997) (“subscriber stations are remote units that may be fixed or movable”). Cases specifically recognize that subscriber units include cellphones. See id. (“the subscriber stations are portable cellular telephones”); InterDigital

2 The specification explains that “ubscriber units typically communicate with the base station using a ‘duplexing’ scheme thus allowing for the exchange of information in both directions.” Appx308(1:51-63). Duplexing is how cellphones communicate with cell-tower base stations. Louis E. Frenzel Jr., Electronics Explained 161, 199-200 & fig.8.3 (2d ed. 2018). The specification also mentions typical “cordless telephones,” where the handset connects wirelessly to an in-home “base station” that plugs into the “fixed network infrastructure” (the “wire-line system”). Appx308(1:42-47). There too, the “subscriber unit” that communicates with the base station is a handheld phone.

 32

 

Case: 20-2011 Document: 23 Page: 50 Filed: 02/12/2021

Commc’ns, Inc. v. ITC, 690 F.3d 1318, 1320 (Fed. Cir. 2012) (“cellphones . . . referred to as ‘subscriber units’”); HTC Corp. v. Cellular Commc’ns Equip., LLC, 877 F.3d 1361, 1363 (Fed. Cir. 2017) (“subscriber station, i.e., a mobile device”). While not “controlling,” those decisions “confirm the correctness of [the district court’s] construction.” V-Formation, Inc. v. Benetton Grp. SpA, 401 F.3d 1307, 1312 (Fed. Cir. 2005).

3. The ’757 patent’s specification, moreover, explains that the invention “can be implemented as . . . a hardware component configured to perform one or more functions.” Appx335(3:7-8) (emphasis added). Such “[h]ardware com- ponents can include ... [an] Application-Specific Integrated Circuit (ASIC),” Appx335(3:9-11)—a clAs of hardware that includes iPhones’ baseband proces- sors, Appx10380. While Apple protests that “this tells us nothing about where the subscriber unit is and whether it may be a subcomponent of the user’s device,” Br.41, the specification answers those questions. It says the “functionality provided for in the components and modules [of the described system] may be combined into fewer components and modules,” and never suggests an ASIC cannot reside within a multifunction device like a phone. Appx335(3:20-22) (emphasis added). That is irreconcilable with Apple’s contention that the patents “dictate” a rigid “three-component construction” under which subscriber units and user devices must be kept separate. Br.26.

33

 

Case: 20-2011 Document: 23 Page: 51 Filed: 02/12/2021

4. Patents “involving ‘common subject matter’” reinforce the district court’s construction. E.I. Du Pont De Nemours & Co. v. Unifrax I LLC, 921 F.3d 1060, 1070 (Fed. Cir. 2019). The inventors “used the term ‘CPE’ in the claims of two of [their] prior patents.” Appx6 (citing Appx5352; Appx5383). Their “decision not to use that term here counsels against construing the ‘subscriber’ terms as CPEs.” Appx6 (emphasis added).

Moreover, an ancestor of the ’761 and ’020 patents Aserted below includes an independent claim reciting a “subscriber station,” followed by a dependent claim with the additional limitation that “the subscriber station is a customer premise equipment (CPE) station.” U.S. Patent No. 7,751,437 (claims 1, 5); see Appx5052; Appx552; Appx5508. If the term “subscriber station” itself meant CPE, the dependent claim would be superfluous. Under claim-differentiation prin- ciples, those claims “provid[e] strong support” that the inventors did not consider “subscriber station” and “CPE” synonymous. See Liebel-Flarsheim v. Medrad, Inc., 358 F.3d 898, 910 (Fed. Cir. 2004). CPE is merely one possible kind of subscriber station.

5. Prosecution history confirms the inventors did not equate “subscriber unit” with “CPE.” As Apple admits, Br.29, the claims here initially used the term “CPE,” but were amended—before substantive office action—to use “subscriber unit” instead. That “broadening claim amendment . . . supports a plain-meaning

34

 

Case: 20-2011 Document: 23 Page: 52 Filed: 02/12/2021

construction” of the issued claims “without [the ‘CPE’] limitation” that the amendment removed. 3M Innovative Props. Co. v. Avery Dennison Corp., 350 F.3d 1365, 1372 (Fed. Cir. 2003) (emphasis added).

As the district court observed in the -798 case, moreover, “[t]hroughout the prosecution history” of the ’640 patent (an ancestor of the ’723 patent Aserted below), “the Examiner compared the ‘wireless subscriber radio unit/wireless communication radio unit’ to prior art containing a mobile device.” Appx8011 (emphasis added); see Appx5001. That “contemporaneous exchange between the applicant and the examiner” shows they both understood the claimed subscriber unit to encompAs mobile devices like cellphones. Desper Prods., Inc. v. QSound Labs, Inc., 157 F.3d 1325, 1337 (Fed. Cir. 1998). The district court adopted that reasoning again below. Appx7. Apple ignores it entirely.

B. Apple’s Contrary Arguments Lack Merit

Apple never—not once—addresses the “ordinary and customary meaning” of the relevant claim language. Phillips, 415 F.3d at 1312. (By contrast, it twice purports to invoke the “ordinary meaning” of “customer premises equipment,” Br.34, 38, a term nowhere in the claims.) Apple ignores the ordinary meaning of “subscriber unit” because it does not support Apple’s position.

Apple instead demands that “subscriber unit” be given something other than its ordinary meaning—to cover only standalone CPE separate from user devices.

35

 

Case: 20-2011 Document: 23 Page: 53 Filed: 02/12/2021

But Apple can achieve that only by committing a “ ‘cardinal sin’ of claim construc- tion”: “importing limitations from the written description into the claims.” Tele- flex, 299 F.3d at 1324. A patentee is entitled to “the full scope of [a claim term’s] plain and ordinary meaning unless the patentee explicitly redefines the term or disavows its full scope.” Thorner v. Sony Comput. Ent. Am. LLC, 669 F.3d 1362, 1367 (Fed. Cir. 2012). Claims will “not be read restrictively unless the patentee has demonstrated a clear intention to limit the claim scope using ‘words or expressions of manifest exclusion or restriction.’” Liebel-Flarsheim, 358 F.3d at 906 (emphasis added). Apple does not come close to meeting that standard.

1. Apple Cannot Import a “CPE” Limitation

Apple never disputes that the Aserted claims nowhere mention “customer

premises equipment” or “CPE”—even though the claims of other Wi-LAN patents do. And Apple never contends that “subscriber unit” is limited to CPE as a matter of ordinary meaning. Apple thus must identify “‘words or expressions of manifest exclusion or restriction’” demonstrating the inventors’ “clear intention to limit the claim scope” to CPE. Liebel-Flarsheim, 358 F.3d at 906 (emphasis added). It cannot make that showing.

Apple first Aserts that “‘subscriber unit’” is “described [in the specifica- tion] as equipment ‘positioned at fixed customer sites.’” Br.27 (quoting Appx308(2:13-14)). But that description refers to “[o]ne exemplary” embodi-

36

 

Case: 20-2011 Document: 23 Page: 54 Filed: 02/12/2021

ment—not the entire invention. Appx308(2:4-5). The patents are clear that the “examples shown should be considered as exemplars rather than limitations on the present invention.” Appx311(8:65-67); see Appx323(31:61-63); Appx342(17:32- 43). And it is black-letter law that embodiments do not limit the claims. Even when “the only embodiments, or all of the embodiments, contain a particular limi- tation,” that is “not enough” to justify importing the limitation into the claims. Thorner, 669 F.3d at 1366.

The references to CPE at most suggest the inventors “contemplated” CPE as the “best mode . . . of carrying out the invention.” 35 U.S.C. § 112(a). They do not show the inventors took the more drastic step of “restrict[ing]” the invention to CPE. Liebel-Flarsheim, 358 F.3d at 906. Apple ignores, moreover, that the specification uses “subscriber unit” to describe a phone (or part thereof), that the subscriber unit can be a chip “combined” with other components, and clear prosecution history. See pp. 31-35, supra. The district court correctly found that references to CPE provide “no evidence” of a “‘“clear intention to limit the claim scope.”’” Appx6.

Apple’s insistence that the inventors “equat[ed] the claimed subscriber unit with ‘customer premises equipment,’” Br.29, rests on a logical fallacy. The specification is clear that “subscriber unit” can include CPE. But it does not follow that “subscriber unit” includes only CPE. When the specification refers to

37

 

Case: 20-2011 Document: 23 Page: 55 Filed: 02/12/2021

“Customer Premises Equipment (CPE),” it does so in the context of describing a specific type of subscriber unit—“fixed subscriber stations” “positioned at fixed customer sites.” Appx308(2:3-14) (emphasis added). An example describing a fixed subscriber unit as CPE does not require all subscribers units to be CPE, any more than it requires them all to be fixed. The invention expressly encompAses a variety of “subscriber radio stations or subscriber units (fixed and portable).” Appx308(1:38-39) (emphasis added). It thus includes portable subscriber units, such as those in cellphones.

Apple is reduced to arguing that, while a subscriber unit can be fixed or portable, it cannot be mobile (like a cellphone). Br.33. That makes no sense. The claims do not use the terms “fixed” or “portable”; Apple never justifies importing them into the claims. And Apple’s effort to distinguish between “portable” and “mobile” devices is self-defeating. The definitions Apple cites show those terms mean the same thing: “movable.” Br.33 (defining “portable” as “[c]apable of being moved” and “mobile” as “movable”); cf. Eon Corp. IP Holdings v. Silver Spring Networks, 815 F.3d 1314, 1317 n.1 (Fed. Cir. 2016) (no dispute “the terms ‘portable’ and ‘mobile’ carry the same meaning”). Thus, when the patents refer to “fixed and portable” subscriber units, they sweep in all kinds of subscriber units— movable and immovable. They do not carve out an unmentioned category of “mobile-but-not-portable” subscriber units. The invention is intended to be used

38

 

Case: 20-2011 Document: 23 Page: 56 Filed: 02/12/2021

with “mobile cellular telephone systems,” where the subscriber units are mobile phones themselves. See pp. 31-32, supra.

Apple’s concocted example of temporary CPE at a ballgame—to imagine equipment that is supposedly “portable” but not “mobile,” Br.28—does not help it. While the equipment Apple imagines would infringe, nothing in the patents limits the invention to such equipment—much less does so “‘manifest[ly],’” Liebel- Flarsheim, 358 F.3d at 906. Apple’s hypothetical is also backward. It imagines equipment that might be called “portable but not mobile.” But “portable” equip- ment concededly falls within the claims. For iPhones to fall outside the claims, Apple would have to show that the phones’ subscriber units are “mobile but not portable.” Apple does not even try to explain how cellphones and their compo- nents are not “portable.”

That the patents use other terms interchangeably (e.g., “subscriber unit,” “wireless subscriber unit,” “subscriber radio unit,” “subscriber station,” and “sub- scriber radio station”), Br.30, is irrelevant. Those terms all encompAs cellphones and their components. That the inventors used virtually identical terms inter- changeably does not suggest those terms are interchangeable with the different term “CPE.” When the patents use “CPE,” they use it to describe certain kinds of subscriber units in exemplary “embodiments”—not “the invention as a whole.”

39

 

Case: 20-2011 Document: 23 Page: 57 Filed: 02/12/2021

C.R. Bard, Inc. v. U.S. Surgical Corp., 388 F.3d 858, 864 (Fed. Cir. 2004); pp. 36- 37, supra.

Apple’s reliance on Tehrani v. Hamilton Medical, Inc., 331 F.3d 1355, 1361 (Fed. Cir. 2003), Br.31-32, is misplaced. Tehrani involved truly interchangeable usage: One claim referred to data “indicative of” certain information, while the specification referred to data “representing” the same information; another claim referred to data “indicative of” certain factors, while the specification referred “to the same data as ‘representing’ those factors.” There is no similarly interchange- able usage here. In SEB S.A. v. Montgomery Ward & Co., 594 F.3d 1360, 1369 (Fed. Cir. 2010), aff’d sub nom. Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011), the Court construed “completely free” as “practically free,” so as not “to exclude th[e] preferred embodiment.”

In Bancorp Services, L.L.C. v. Hartford Life Insurance Co., 359 F.3d 1367, 1373 (Fed. Cir. 2004), the Court relied on close linguistic “correspondence between the claim language . . . and the language of the specification” to determine that “the terms ‘stable value protected investment,’ ‘surrender value protected investment,’ and ‘SVP’ are equivalent.” There is no linguistic correspondence between “subscriber unit” and “CPE.” Bancorp, moreover, found that the claim term’s plain meaning was “essentially the same” as another term’s. Id. at 1372.

40

 

Case: 20-2011 Document: 23 Page: 58 Filed: 02/12/2021

Apple, by contrast, never suggests that “subscriber unit” and “CPE” are synony- mous as a matter of ordinary meaning.

2. The Invention’s Benefits Do Not Require a Separate Box

Apple errs in suggesting (Br.27-28, 34-35) that the invention’s benefits

require the subscriber unit to be a standalone box. The claimed subscriber unit avoids harmful transmission delays by allocating bandwidth to time-sensitive “real-time service applications, such as voice,” over more “delay-tolerant” applica- tions. Appx312(10:21-25). That advantage is fully realized when the subscriber unit is allocating bandwidth between queues of voice and non-voice packets inside a phone.

A subscriber unit inside a phone also reduces network strain. When a baseband processor inside a cellphone “determine how to distribute its allocated bandwidth” between the phone’s voice and non-voice data streams, “it relieves the base station from performing this task.” Appx311(7:46-48). It also “eliminate” the “communication overhead” that would be needed for the base station to direct bandwidth distribution. Appx311(7:48-51). And when a cellphone uses the claimed timer to regulate bandwidth requests, it frees bandwidth for “substantive traffic data.” Appx308(2:55-58); see Appx320(26:55-60). None of those benefits requires the subscriber unit to be housed separately from phone components. Indeed, making the subscriber unit a separate box that communicates wirelessly

41

 

Case: 20-2011 Document: 23 Page: 59 Filed: 02/12/2021

with cellphones—as in Apple’s ballpark hypothetical, Br.28—would consume more bandwidth, by requiring two sets of transmissions: from cellphones to the separate box, and from the separate box to a base station.

Allowing the baseband processor itself to allocate bandwidth between connections “free” it “to use the uplink bandwidth that was allocated to it in a manner that is different than was originally requested,” based on “current band- width requirements.” Appx311(7:41-53); Appx320(25:19-21). That way, if addi- tional voice packets are generated between when bandwidth is requested and when it is granted, the baseband processor can allocate more bandwidth for the new voice packets—avoiding delay—without further communication with the base station. The benefits of “allocat[ing] bandwidth locally and dynamically,” Br.28, are fully realized. And Apple does not dispute that subscriber units in cellphones benefit from the ’757 patent’s improvements to adaptive modulation.

Apple’s contention that “the specifications disparage the prior-art systems in which bandwidth allocation must be performed by either the base station or the user device,” Br.35 (emphasis altered), misreads the patents. The cited pAsages criticize prior art requiring all bandwidth allocation to be performed by the base station. Appx311(7:46-53); Appx314(14:8-18) (“advantage” of invention is “reliev[ing] the base station from performing th[e] task”); see Appx308(2:40-60) (prior art “burdensome and complex” because it strained “base station”). Apple

42

 

Case: 20-2011 Document: 23 Page: 60 Filed: 02/12/2021

identifies nothing that criticizes—much less disavows—bandwidth allocation by subscriber units within mobile phones.

Apple’s citation of On Demand Machines Corp. v. Ingram Industries, Inc., 442 F.3d 1331 (Fed. Cir. 2006), Br.37-38, is further afield. The claims there recited a “‘method of high speed manufacture of a single copy of a book’” “‘in response to a customer’s selection.’” 442 F.3d at 1336 (emphasis added). The claims themselves thus showed the invention was directed to “immediate single- copy printing and binding initiated by the customer and conducted at the customer’s site,” and did not “embrace the remote large-scale production of books for publishers and retailers” the defendants performed. Id. at 1340. The specification expressly “distinguishe[d]” the invention from machinery (like the defendants’) “‘not specifically designed to be consumer operated for the on demand, automatic manufacturing of a single book at the point of sale.’” Id. (quoting specification). Apple, by contrast, does not pretend its construction is grounded in claim language. Nothing in the specification expressly (or implicitly) distinguishes the invention from the accused products. And the “advantage and distinction of the invention,” id., has nothing to do with whether the subscriber unit is separate from, or combined with, a phone.

43

 

Case: 20-2011 Document: 23 Page: 61 Filed: 02/12/2021

3. Widegren Undermines Apple’s Position

The Widegren reference further undermines Apple’s position. During prose-

cution of the ’020 patent Aserted below, the examiner mapped the claimed “sub- scriber station” to Widegren’s “mobile station” for a “cellular telephone network”—i.e., a cellphone. See Appx5258; Appx422(2:62-63); Appx424(5:19- 24). As the district court found, that “refutes” Apple’s contention that a subscriber station cannot be a mobile user device. Appx7 n.3.

While Apple urges “[t]he district court misread Widegren,” Br.39, “factual determinations” about the scope of “prior art” are reviewed only for “clear error,” Inline Plastics Corp. v. EasyPak LLC, 799 F.3d 1364, 1368 (Fed. Cir. 2015). By “fail[ing] to argue” clear error, Apple waived the argument. Elbit Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354, 1359 (Fed. Cir. 2018). Regardless, there was no error. Apple says Widegren’s mobile station is a “literal installation, manned by a ‘mobile station human operator.’” Br.39. But Widegren plainly depicts its mobile station (“MS”) as a cellphone. Appx413; Appx424(5:53-55); Appx5513. And the pAsage Apple cites describes “a personal computer” “running multiple different processes or applications,” with a “mobile station human

44

 

Case: 20-2011 Document: 23 Page: 62 Filed: 02/12/2021

operator” who is simply someone “ ‘surfing the Web.’ ” Appx426(9:42-46). That

3 4. Apple’s Invocation of Wi-LAN I Backfires

readily encompAses cellphones—handheld personal computers.

Apple harps on Wi-LAN I, Br.1, 13-14, 36, 41, but nothing in that decision supports importing limitations into the claims. In holding that “the term ‘specified connection’ ” required multiple connections, 830 F.3d at 1381, Wi-LAN I looked to the claims themselves. The claims recited a node that “ ‘allocate bandwidth . . . based on the priority of the [specified] connection.’” Id. at 1382. The Court reasoned that “allocat[ion]” connotes “multiple recipients,” while “[p]riority” requires “comparison to other specified connections’ priorities.” Id. at 1383 (emphasis added). While the specification “reinforce[d]” and “weigh[ed] in favor” of its construction, the Court made clear “the words of the claim” are paramount. Id. at 1381-83. Apple, by contrast, all but ignores the words of the claims.

Apple’s apparent motive in citing Wi-LAN I is to suggest Wi-LAN is retreading old ground. The opposite is true. After receiving a claim construction requiring multiple connections, Apple released new iPhones that do have multiple connections. See pp. 13-14, supra. Consequently, Apple now seeks to relitigate issues it previously lost. In Wi-LAN I, the district court rejected Apple’s attempt

3 Apple quibbles that the district court’s footnote mentioning Widegren did not expressly discuss different claim-construction standards. Br.39 n.4. But the court understood that Phillips governs, Appx5, and Apple fails to explain how a different standard would have altered the outcome.

 45

 

Case: 20-2011 Document: 23 Page: 63 Filed: 02/12/2021

“to further limit its construction with the term ‘CPE.’” 830 F.3d at 1379 n.2. Yet Apple presses the same unfounded construction again here. The district court properly “declined to limit the subscriber terms to CPEs” before, and properly “decline[d] to do so here.” Appx7.

5. Apple Has Not Shown “CPE” Would Require Standalone Equipment Separate from a User Device

Apple’s proposed “CPE” limitation is ultimately futile. Apple fails to show that “CPE” would actually require the sort of “standalone equipment” on which its arguments hinge. While Apple Asumes “CPE” must be totally separate from a cellphone, it never proposed a claim construction that would express such a requirement. Nor has Apple shown that the term “CPE” inherently carries that meaning. It cites only a dictionary definition of the word “premise,” Br.34, which says nothing about how “customer premises equipment” is understood in the art. It does not address that “‘customer premises equipment’ or ‘CPE’” can refer to “the customer’s telephone.” Nat’l As’n of Regulatory Util. Comm’rs v. FCC, 880 F.2d 422, 425 (D.C. Cir. 1989). Nor does it address the patent’s statement that the invention “may be combined” with other components. Appx335(3:20-22); see Appx7687; p. 33, supra.

Apple insists that “the parties agree” CPE “is a standalone device” separate

from a phone. Br.29. Wi-LAN made no such concession (nor has Wi-LAN

conceded non-infringement under Apple’s “CPE” construction, contra Br.42). 46

 

Case: 20-2011 Document: 23 Page: 64 Filed: 02/12/2021

While Wi-LAN acknowledged below that Apple’s proposed construction would

“require a three stand-alone device system,” it was addressing a different—and

now abandoned—aspect of that construction. Appx393-394. Below, Apple

argued not only that the claims required “CPE,” but also that the subscriber unit

had to allocate bandwidth among separate “user devices.” Appx6; pp. 15-16,

supra. Wi-LAN agreed that, if separate user devices were required, the subscriber

unit would have to be separate from them. Appx517 (“If it is stand-alone those

connections would be multiple devices, which is what [Apple is] rearguing again”).

But the district court properly rejected that construction, ruling the claims do not

4

the district court’s rejection. See Braun v. Dep’t of Health & Hum. Servs., 983 F.3d 1295, 1305 (Fed. Cir. 2020). Apple instead invokes a supposed “CPE” limitation. But Apple fails to justify importing that limitation into the claims. It never shows that limitation would require “standalone” subscriber units. And it cannot fill the gap with a concession Wi-LAN never made.

4 Apple “fail[ed] to cite any evidence” in support. Appx8. “The claims themselves do not” employ the term “user devices,” but “instead use the term ‘connections.’” Appx7. And one patent “recites ‘user applications,’ ” indicating that “ ‘users’ are not confined to ‘user devices.’ ” Appx8 (emphasis added).

require “separate user devices.” Appx8.

Apple abandons that construction on appeal—failing to identify any error in

 47

 

Case: 20-2011 Document: 23 Page: 65 Filed: 02/12/2021

II. THE ACCUSED iPHONES INFRINGE

The district court correctly ruled that substantial evidence supports the jury’s infringement verdict. Appx30. Apple does not seriously dispute the iPhones meet each limitation of the apparatus claims when users make VoLTE calls. Apple Aserts, however, that the claimed “user connections” do not exist until a user “turns the phone on” and “connects to the user’s network of choice.” Br.45. But the “user connections” include hardware in iPhones as sold. And all claimed functionality is programmed into the devices. “The fact that users nee[d] to ‘activate the functions programmed’ ” into iPhones—by turning them on—does not defeat infringement. Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1205 (Fed. Cir. 2010).

A. Substantial Evidence Supports the Infringement Verdict

Wi-LAN’s expert, Dr. Madisetti, testified that the iPhone’s baseband proces- sor (in peach below) corresponds to the claimed “subscriber unit” and allocates bandwidth across “user connections.” Appx10285-10286. The baseband processor, he explained, has two physical connections to the application processor (in gray) that executes user applications. Appx10287-10289. Those connections include the “VoLTE connection” (which traverses the “I2S bus”) and the “data connection” (which uses the “PCIE” bus). Appx10287-10289; Appx10366-10368.

48

 

Case: 20-2011 Document: 23 Page: 66 Filed: 02/12/2021

 Appx7561.

Madisetti explained that the baseband processor allocates bandwidth across

those two connections. The VoLTE connection carries voice packets from the application processor’s phone application (green) into the baseband processor, where they are stored in a “priority queue.” Appx10287. Packets from other applications (blue) are sent over the “data connection” and stored in a different queue. Id. Each queue is labeled with a “logical channel,” with VoLTE having “higher priority.” Appx10291; Appx10302; Appx10313-10314. The baseband processor reads packets from the queues, in order of priority; stores them in “MAC packets” (depicted as a truck); and transmits them to the base station. Appx10253.

The accused iPhones satisfy every limitation of claim 26 of the ’145 patent. The baseband processor includes a “plurality of queues for buffering user traffic.” Appx10301; see Appx324(34:16). It includes a MAC “element capable of . . .

49

 

Case: 20-2011 Document: 23 Page: 67 Filed: 02/12/2021

transmitting an uplink (UL) bandwidth request” to the base station. Appx10306; Appx324(34:19-20). And it “allocates between the queues a bandwidth allocation received in response to the UL bandwidth request”: When the baseband processor receives a bandwidth grant, it allocates that bandwidth across different user connections based on each queue’s priority. Appx10312-10313. Madisetti also testified that the accused iPhones meet the remaining limitations of claims 9 and 27 of the ’145 patent and claim 1 of the ’757 patent, Appx10326-10346, and that Apple further infringes through use and testing, Appx10382-10385—none of which Apple contests.

B. Apple’s Contrary Arguments Lack Merit

Apple contends that the requisite “user connections” are absent “until the user turns the phone on and connects to the user’s network of choice.” Br.45. That argument fails factually and legally.

1. Apple acknowledges (at 43) that Wi-LAN identified the “VoLTE” and “data” connections as the “accused user connections.” Apple ignores, however, that those connections—which include “hardware” from the baseband processor to the application processor (including an I2S bus for the VoLTE con- nection and PCIE bus for the data connection)—exist on the phone as sold. Appx10287-10288; Appx10391; pp. 17-19, 48-49, supra. Insofar as the phone must be turned on and receive “configuration parameters” from the network, Br.46,

50

 

Case: 20-2011 Document: 23 Page: 68 Filed: 02/12/2021

that is irrelevant. As Madisetti testified, when “you turn on [the] phone,” it auto- matically “receives a set of parameter values from the base station.” Appx10258. Those parameters are like a “connection ID” used to guide packets. Id. But the connections themselves are built into the phone. No “modification” of “software

5

ment. This Court has upheld infringement where far more configuration was required than the automatic process here. See Finjan, 626 F.3d at 1205 (requiring user to “unloc[k]” feature); Versata Software, Inc. v. SAP Am., Inc., 717 F.3d 1255, 1262-63 (Fed. Cir. 2013) (requiring user to “follow[ ] . . . directions” to “activate” feature). In VirnetX Inc. v. Apple Inc., for example, this Court found infringement despite Apple’s protest that “configuration” by “an ‘IT person’” was needed. 792 F. App’x 796, 806, 809 (Fed. Cir. 2019). A fortiori, configuration that merely requires a consumer to turn on the phone does not defeat infringement.

2. Apple’s infringement argument defies the claims’ language. Where a claim “recites capability and not actual operation, an accused device ‘need only be capable of operating’ in the described mode.” Finjan, 626 F.3d at 1204. For

5 Apple mischaracterizes the record in Aserting that phones “‘cannot build’ the ‘software structures’ necessary to establish a connection” until configuration. Br.46. Apple’s expert was talking about “logical channels,” not “connections.” Appx11039. Neither expert identified “logical channels” as the “user connec- tions.” See Appx10409 (Madisetti: “logical channel” is “label” for specifying “priority”); Appx10932.

or hardware” is required. Appx10258.

The need to “configure” or “activate,” moreover, does not defeat infringe-

 51

 

Case: 20-2011 Document: 23 Page: 69 Filed: 02/12/2021

apparatus claims like those here, “infringement ‘do[es] not require the performance of any method steps.’” VirnetX, 792 F. App’x at 808 (quoting Finjan, 626 F.3d at 1204). A product infringes where the accused feature is “‘present in the under- lying software’” when sold. Finjan, 626 F.3d at 1205 (emphasis omitted); see Fantasy Sports Props., Inc. v. Sportsline.com, Inc., 287 F.3d 1108, 1118 (Fed. Cir. 2002).

Claim elements “for,” “capable of,” or “configured to” perform particular functions are directed to capability. Finjan, 626 F.3d at 1205 (apparatus claim “drawn to capability” where styled as component “for performing the claimed functions”); Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358, 1369 (Fed. Cir. 2009) (“capable of”); Rothschild Connected Devices Innovations, LLC v. Coca-Cola Co., 813 F. App’x 557, 559 (Fed. Cir. 2020) (“configured to”). Here, every claim element recites capability:

Claims 26 and 27 recite a “subscriber unit” comprising a:

“plurality of queues for buffering user traffic”; and

MAC “element capable of” transmitting bandwidth requests and allocating bandwidth among queues. Appx324 (emphasis added).

Claim 9 recites a “subscriber unit” comprising a:

“plurality of queues . . . for grouping data”; and

MAC module “configured to” transmit bandwidth requests upon expiration of a timer. Appx323 (emphasis added).

52

 

Case: 20-2011 Document: 23 Page: 70 Filed: 02/12/2021

Claim 1 of the ’757 patent recites a “subscriber station” comprising a:

“modem section configured to” receive downlink data;

“receive signal quality module configured to” monitor signal strength; and

“control section configured to” send and receive the preferred PHY mode. Appx342 (emphasis added).

Madisetti testified that the accused iPhones, “as sold,” “contain those capabilities” and are “configured and designed to perform those capabilities.” Appx10257.

The claims here are indistinguishable from those in Ericsson, Inc. v. D-Link Systems, Inc., which recited a “processor for arranging information” with a “second field” comprising a “service type identifier which identifies a type of payload.” 773 F.3d 1201, 1210 (Fed. Cir. 2014). The “second field” did not exist until a device was operational, and even then it did not necessarily use a service type identifier to identify the payload. Id. at 1215-16. This Court nonetheless held that “all accused devices . . . infringe[d]” because they had “capability” to use the field to “identify the payload type.” Id. at 1216. Here, as in Ericsson, the claims recite capability to perform bandwidth allocation and adaptive modulation. Here, as in Ericsson, the accused devices contain hardware and software with those capa- bilities as sold. Here, as in Ericsson, “all accused devices could be found by the jury to infringe.” Id.

53

 

Case: 20-2011 Document: 23 Page: 71 Filed: 02/12/2021

Apple’s protestation that “the term at issue here—‘user connections’—is structural rather than functional,” Br.47, misses the point. Any structural aspect of the user connections is satisfied by hardware built into the phones. See pp. 48-51, supra. Insofar as Apple complains that the connections must do something—such as have “data . . . flow,” Br.46—any such functional aspect is satisfied because iPhones are built and programmed to be capable of that function.

Ball Aerosol and Specialty Container, Inc. v. Limited Brands, Inc., 555 F.3d

984, 994 (Fed. Cir. 2009), is inapposite for the reason identified in Ericsson, 773

F.3d at 1216. The claims in Ball did not recite elements “for,” “capable of,” and

“configured to” perform certain functions. 555 F.3d at 995. They required a

specific physical arrangement: “the cover being used as a base underneath a candle

holder with feet.” Id. That is “fundamentally dissimilar” to the claim language

6

here. ParkerVision, Inc. v. Qualcomm Inc., 903 F.3d 1354, 1362 (Fed. Cir. 2018). 3. Apple’s arguments regarding phones sold to Sprint, Br.44-45, similar- ly fail. As Madisetti explained, the “phone that [Apple] sell to Sprint is exactly like any other phone, it is capable of VoLTE.” Appx10414. Those phones can easily be “unlock[ed]” to “support VoLTE on any other network.” Appx10414- 10415 (emphasis added). That a user can “‘unlock’ the infringing mode” without

 6 Cross Medical Products, Inc. v. Medtronics Sofamor Danek, Inc., 424 F.3d 1293, 1311 (Fed. Cir. 2005), likewise required a specific physical layout, not capability. In ViaTech Technologies Inc. v. Microsoft Corp., 773 F. App’x 542, 551 (Fed. Cir. 2018), the claimed database was absent entirely, even in operation.

54

 

Case: 20-2011 Document: 23 Page: 72 Filed: 02/12/2021

“need[ing] to ‘modify the underlying code’” is enough to establish infringement. VirnetX, 792 F. App’x at 809 (quoting Finjan, 626 F.3d at 1205).

That Sprint’s network did not support VoLTE is irrelevant. The claims

recite a subscriber unit, not a network. Regardless, Apple misapprehends what

would be needed to make VoLTE calls on Sprint’s network. Apple’s engineer

testified that, if “Sprint turned on its commercial VoLTE network,” iPhones would

require “configuration changes.” Appx10889. But a need to activate functionality

already present in the phones’ code, through configuration, does not defeat

infringement. See p. 51, supra. And while Apple’s engineer mentioned possible

“software changes,” he was referring to “software changes to improve the user

experience.” Appx10889 (emphasis added). The jury was not required to find that

any software changes were required to install the infringing capability.

III. THE DISTRICT COURT PROPERLY SUSTAINED DAMAGES

Apple’s challenge to the evidence underlying the jury’s damages verdict is without merit. Wi-LAN’s expert, David Kennedy, reasonably relied on compara- ble Wi-LAN licenses covering the same patents. Apple’s arguments reduce to whether the prior licenses were sufficiently similar to the hypothetical license Apple would have negotiated. That is not a basis for excluding Wi-LAN’s evidence. The prior licenses “relate[d] to the actual patents in suit,” and “all of the other differences that Apple complains of were presented to the jury, allowing the

55

 

Case: 20-2011 Document: 23 Page: 73 Filed: 02/12/2021

jury to fully evaluate the relevance of the licenses.” VirnetX, 767 F.3d at 1330. “No more is required in these circumstances.” Id.

A. Apple’s Apportionment Challenges Lack Merit

“Estimating” patent value “is not an exact science,” and “necessarily involves an element of approximation and uncertainty.” Summit 6, LLC v. Sam- sung Elecs. Co., 802 F.3d 1283, 1296 (Fed. Cir. 2015); Unisplay, S.A. v. Am. Elec. Sign. Co., 69 F.3d 512, 517 (Fed. Cir. 1995). Admission of expert damages testi- mony is committed to district-court “discretion.” Monsanto Co. v. McFarling, 488 F.3d 973, 981 (Fed. Cir. 2007). The district court acted well within that discretion here. Apple’s objections are “more properly the subject of cross-examination rather than a basis for excluding Kennedy’s opinions.” Appx58-59.

1. Kennedy’s Methodology Satisfied Apportionment Requirements “[T]he essential requirement for reliability under Daubert is that the ultimate

reasonable royalty award must be based on the incremental value that the patented invention adds to the end product.” Commonwealth Sci. & Indus. Research Org. v. Cisco Sys., Inc., 809 F.3d 1295, 1301 (Fed. Cir. 2015) (“CSIRO”) (quotation marks omitted). This Court has “held many times” that calculating reasonable royalties using “comparable licenses is a generally reliable method.” Apple, Inc. v. Motorola, Inc., 757 F.3d 1286, 1325 (Fed. Cir. 2014). Because a licensee will not pay more than the licensed technology is worth, a royalty rate from a prior license

56

 

Case: 20-2011 Document: 23 Page: 74 Filed: 02/12/2021

has “already built in apportionment.” Elbit Sys. Land & C4I Ltd. v. Hughes Network Sys., LLC, 927 F.3d 1292, 1301 (Fed. Cir. 2019).

Selecting Licenses. Kennedy identified three comparable licenses, with phone makers Doro, Vertu, and Unnecto. Appx15228; pp. 20-21, supra. Each of those licenses covered the Aserted patents. Appx15223-15227; Appx15238. Each “just included phones,” like the accused iPhones. Appx15222. Each was from the relevant time period. Appx15222. And each specified the same royalty: $0.50 per phone. Appx15022; Appx15164. That corresponded to the $0.50/unit rate Apple’s expert calculated for another licensee, HTC. See p. 66, infra.

Case-Specific Tailoring. Kennedy applied adjustments to account for case- specific facts. See pp. 21-22, supra. Wi-LAN’s (now-retired) CEO, Jim Skippen testified that, based on Wi-LAN’s licensing history, 0-35% of the royalty in prior licenses could be attributed to patents other than the patents of interest. Appx15157-15158; Appx15238; Appx15337. At the relevant time, the ’145 and ’757 patents were “crown jewels,” “key patents” that phone makers like Doro “focus[ed] on” in negotiations. Appx15157-15158; see Appx15163-15164. By contrast, some other patents were less valuable due to expiration or exhaustion, or had undetermined value because the parties had not focused on them. Appx15203- 15205. Wi-LAN thus would often “throw in the rest” of its portfolio for free, or for a small premium of 5-35%. Id. Accordingly, Kennedy discounted the prior

  57

 

Case: 20-2011 Document: 23 Page: 75 Filed: 02/12/2021

licenses’ rates by 25%, canceling out any sums paid for other patents.

7

tainty” over validity and infringement. Appx15229; see Appx15168. Here, that “uncertainty has been removed,” warranting an upward adjustment. Appx15229- 15230; see Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1339 (Fed. Cir. 2009). Prior licensees also negotiated “early adopter discounts” that Apple could not claim. Appx15240. Unlike those prior licensees, Apple may have been eligible for a “volume discount.” Appx15242. Kennedy concluded those factors “cancel[ed] each other out.” Appx15244.

Accounting for all adjustments, Kennedy computed a $0.45-per-unit royalty. Appx15216. His methodology plainly met “the essential requirement” of ensuring the royalty rate reflected the “incremental value that the patented invention adds.” CSIRO, 809 F.3d at 1301. Kennedy based his proposed royalty on what real licensees agreed to pay for the same patented technology for the same uses. And he accounted for differences between the prior licenses and the license Apple would have negotiated.

7 If one Asumes the maximum 35% premium for other patents, applying a 25% discount effectively cancels out that premium, isolating the value of the relevant patents (1.35 x 0.75 ≈ 1). If a prior license reflected less than a 35% premium (e.g., Wi-LAN “thr[e]w in the rest” for free), the 25% discount would under- estimate the value of the relevant patents.

Appx15231.

Prior licensees “negotiate[d] for a very large discount” because of “uncer-

 58

 

Case: 20-2011 Document: 23 Page: 76 Filed: 02/12/2021

2. Kennedy Addressed Differences in Numbers of Covered Patents Apple’s apportionment argument largely reduces to a complaint that the

prior licenses covered additional, non-Aserted patents. Br.56-64. Where “comparable licenses . . . cover more patents than are at issue in the action,” the testimony must “account for” that difference. Ericsson, 773 F.3d at 1227-28. But once that requirement is met, as it was here, the difference “goes to the weight of the evidence, not its admissibility.” Id.

This Court rejected virtually identical objections in VirnetX. There, Apple sought to exclude expert testimony about prior licenses that were “much broader than the license to four patents Apple would be seeking.” 767 F.3d at 1330. This Court refused. The “licenses . . . relate[d] to the actual patents-in-suit,” and “all of the other differences Apple complain[ed] of were presented to the jury, allowing the jury to fully evaluate the relevance of the licenses.” Id. “No more [was] required in these circumstances.” Id.

Similarly, in Bio-Rad Labs., Inc. v. 10X Genomics, Inc., the defendant argued that a prior license was “not comparable” because it “involved 500+ patents relating to” different technology, not just the “three patents dealing with [the] specific” technology at issue. 967 F.3d 1353, 1375 (Fed. Cir. 2020). This Court found “no abuse of discretion.” Id. at 1374. Because the license covered “related” technology, it “met a showing of ‘baseline comparability’” warranting admission.

59

 

Case: 20-2011 Document: 23 Page: 77 Filed: 02/12/2021

Id. The expert also reasonably “accounted for the difference in the number of patents”—even though he ultimately made “no adjustment.” Id. at 1375-77.

Insofar as the prior licenses here covered more than the patents-in-suit, Kennedy addressed those differences: He applied a discount that effectively removed any sum Asociated with other patents. Apple’s arguments go to the evidence’s weight, not admissibility.

Apple erroneously characterizes the 25% discount Kennedy used as an “arbitrary rule of thumb” of the sort rejected in Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011). The discount was based on the evidence in this case. Skippen explained that the ’145 and ’757 patents were “very, very important”—the “crown jewels” of Wi-LAN’s portfolio. Appx15153. They came up in negotiations, and were expressly named in the Doro and Vertu licenses. Appx15226. Skippen explained why other patents were of lesser or indeterminate

8

the highest possible markup. See pp. 57-58 & n.7, supra.

8 By 2013, Wi-Fi patents had “long expired” and Bluetooth patents “were expiring.” Appx15204. “All the Bluetooth chip makers,” moreover, “had taken licenses to the Bluetooth patents.” Phone makers thus did not require Bluetooth licenses if they used licensed chips. Appx15204-15205.

Wi-LAN sometimes secured a “5 percent to 35 percent” additional royalty for those patents, but often included them for free. Appx15158. Kennedy’s 25% discount off the portfolio license rates effectively eliminated even

value to phone makers.

 60

 

Case: 20-2011 Document: 23 Page: 78 Filed: 02/12/2021

This case is the opposite of Uniloc. The expert there arbitrarily selected

25% of the defendant’s profits as a rule-of-thumb, with no basis in the record. 632

F.3d at 1312. That percentage was based on abstract academic theory, untethered

from the facts, comparable licenses, or patents and products in that case. Id.; see

VirnetX, 767 F.3d at 1331 (rejecting similarly theoretical 50% profit-share di-

9

comparable licenses,” Uniloc, 632 F.3d at 1318—exactly what Kennedy did here. Apple’s claim that Kennedy chose 25% based merely on experience with “licensing negotiation generally,” Br.59, is false. While Kennedy’s approach was “consistent with” industry practice, Appx15231-15234, he expressly relied on “what Mr. Skippen said” about Wi-LAN’s actual licensing history, Appx15238;

see Appx15337 (“25 percent is specific to this particular matter”).

Apple’s effort to impugn Skippen’s “qualitative judgment,” Br.63, fails. Skippen based his estimate on actual negotiation histories. And apportionment does not require “mathematical exactness.” Dowagiac Mfg. Co. v. Minnesota

9 Similarly, in Exmark Manufacturing Co. v. Briggs & Stratton Power Products Group, LLC, 879 F.3d 1332, 1350 (Fed. Cir. 2018) (cited Br.63), the expert chose a 5% rate untethered from any concrete anchor, such as comparable licenses. In LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 69 (Fed. Cir. 2012), the Court found testimony about importance insufficient to justify the entire- market-value rule. Kennedy did not invoke the entire-market-value rule.

Nothing in Uniloc forbids relying on testimony about the portion of prior licenses attributable to relevant patents. It is entirely proper to rely on past licensing “practice” or “other licenses involving the patent at issue or

vorced from case’s facts).

 61

 

Case: 20-2011 Document: 23 Page: 79 Filed: 02/12/2021

Moline Plow Co., 235 U.S. 641, 647 (1915). “[R]easonable approximation,” based on “testimony of experts and persons informed by experience,” suffices. Id.; see Bio-Rad, 967 F.3d at 1353 (“no blanket rule of quantitative apportionment”).

Apple’s claim that “Kennedy would have applied the same ‘25 percent dis- count’ to ‘any subset of patents in Wi-LAN’s portfolio,’” Br.60, misleads. Responding to a hypothetical posed by Apple’s counsel, Kennedy stated that a 25% discount would apply to a different subset of patents, but only where “those [patents] were the ones that [the parties] were negotiating over.” Appx15338. Not all patents fit that bill. When Apple’s counsel asked what the rate would be if Apple needed to license Bluetooth patents, Kennedy explained “that would never happen.” Appx15337-15338. Bluetooth chipmakers were licensed, so phone makers like Apple would not need licenses. Appx15204-15205; see p. 60 & n.8, supra. Insofar as Apple urges the ’145 and ’757 patents were less important than Wi-LAN claimed—because Wi-LAN initially Aserted additional patents—that reprises Apple’s unsuccessful jury pitch. Appx15342. It does not support exclusion. Bio-Rad, 967 F.3d at 1373.

3. Other Case-Specific Adjustments Were Proper

In a section heading (at 64), Apple Aserts that Kennedy’s other adjustments

were “untethered from the facts.” But Apple never identifies the allegedly “untethered” adjustments. Adjustments to account for infringement and validity

62

 

Case: 20-2011 Document: 23 Page: 80 Filed: 02/12/2021

are routine. Lucent, 580 F.3d at 1325. No adjustment for global versus U.S. license rates was needed; the Doro license specified a U.S. rate. Appx15239- 15240. Kennedy reasonably determined that Apple might be eligible for a volume discount, but not an early-adopter discount, and that those two factors would cancel out. Appx15240-15244. Apple does not take exception to any of that. It appears to acknowledge such considerations are ordinary. Br.66-67.

Apple’s complaint seems to be that those adjustments are not further “appor- tionment.” Br.65-67. But Kennedy’s $0.45/unit royalty was apportioned because he relied on comparable licenses covering the Aserted patents and similar products. See pp. 56-62, supra. Such licenses reflect apportionment, because they reflect the value the technology provides. See Elbit, 927 F.3d at 1301. Kennedy’s further case-specific adjustments merely fine-tuned the rate.

B. Wi-LAN Was Not Required To Rely on Lump-Sum Licenses

Apple also argues the licenses are “not sufficiently comparable.” Br.76. Apple cannot dispute that the licenses cover the same patents (the ’145 and ’757 patents) and same products (cellphones) at issue here. Instead, Apple complains that the licenses provide for running royalties, instead of the lump sum Apple says it was entitled to receive.

1. Apple’s argument is waived. Apple’s Daubert motion did not argue that the Doro, Vertu, and Unnecto licenses were non-comparable because they did

63

 

Case: 20-2011 Document: 23 Page: 81 Filed: 02/12/2021

not specify lump-sum payments. Appx701-714. Apple’s expert raised the issue at trial, Appx15669-15670, but Apple’s post-trial motions did not, Appx757-773. Any argument the licenses should have been excluded, Vectura Ltd. v. Glaxosmith- kline LLC, 981 F.3d 1030, 1042 (Fed. Cir. 2020), or that the evidence is insufficient, Ortiz v. Jordan, 562 U.S. 180, 190 (2011), is thus foreclosed.

The district court, moreover, used “Apple’s proposed verdict form,” Appx15532, which allowed either a per-unit or a lump-sum royalty, Appx756. Having invited the jury to award a per-unit royalty, Apple cannot complain that it did just that. Motorola, 121 F.3d at 1467.

2. Regardless, Apple offers no authority holding that a court can—let alone must—exclude running-royalty licenses covering the same patents and the same kinds of products, upon finding it “likely that the parties would have entered into a lump-sum agreement.” Br.75. In Wordtech Systems, Inc. v. Integrated Network Solutions, Inc., 609 F.3d 1308, 1320 (Fed. Cir. 2010), which Apple cites as support, “[t]he jury awarded . . . a lump-sum royalty”; the Court did not force one upon the parties. And while the Court held particular running-royalty licenses did not support the verdict, that was because the royalties bore no resemblance to the per-unit or percentage rate implicit in the jury’s lump-sum award. Id. at 1320. Here, by contrast, the jury’s running-royalty award closely tracks comparable running-royalty licenses.

64

 

Case: 20-2011 Document: 23 Page: 82 Filed: 02/12/2021

Apple’s other authorities are likewise inapposite. In Lucent, the plaintiff failed “to recalculate in a meaningful way the value of any of the running royalty agreements” so as to support “the jury’s lump-sum damages award,” and failed to show other licenses were “in any way similar to the technology being litigated.” 580 F.3d at 1329-30. In ResQNet and LaserDynamics, the Court rejected licenses with “no relationship to the claimed invention.” ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 870 (Fed. Cir. 2010); see LaserDynamics, 694 F.3d at 80. Here, by contrast, the jury’s award closely tracked Wi-LAN’s comparable licenses covering the same patents and products. Appx15220-15224.

While there was evidence Apple and Wi-LAN often employed lump-sum royalties, both also entered into licenses with per-unit rates. Appx15669-15670. Apple’s expert could not rule out a per-unit license—he testified only that, in his view, “the preponderance of the evidence” supported a lump-sum agreement. Appx15670. The jury could reasonably find otherwise.

3. Apple denigrates Doro, Vertu, and Unnecto as “niche” phone makers. But their licenses covered the same patents and products at issue here. While their phones range from budget to ultra-luxury models, they all paid the same $0.50/unit for Wi-LAN’s technology. Apple offers no reason to think that represented anything other than the technology’s value.

65

 

Case: 20-2011 Document: 23 Page: 83 Filed: 02/12/2021

CONFIDENTIAL MATERIAL FILED UNDER SEAL REDACTED

Besides, Apple’s expert admitted that HTC was “similarly situated to Apple,” and he presented evidence that HTC paid $0.50/unit—the same as Doro, Vertu, and Unnecto, and more than Kennedy’s $0.45/unit rate:

Appx7743 (annotated); Appx15636; p. 22, supra. And Wi-LAN’s license with Samsung—Apple’s closest competitor—supported a higher royalty, which is why Apple strove to have it excluded. See pp. 71-72, 77-78, infra. While Apple urges that its “HTC figure is not apportioned to take into account the portfolio nature of the license,” Br.70, its expert calculated that rate the same way he did for the other licenses Apple invoked. Having presented HTC’s $0.50/unit rate to the jury, Apple cannot retract it now. While Apple contends the jury could consider only Gunderson’s “ultimate opinion,” not any specific “data point,” Br.69, the jury could “accept all, part, or none of [an] expert witness’s testimony,” Creative

  Confidential Royalty Payments

 Confidential Royalty Payments

66

 

Case: 20-2011 Document: 23 Page: 84 Filed: 02/12/2021

Computing v. Getloaded.com, LLC, 386 F.3d 930, 936 (9th Cir. 2004), and was so

10

Br.74, but cites no authority that different “bargaining power” justifies excluding otherwise-comparable licenses. Uniloc, cited at Br.74, does not say that. It discussed licenses that lacked any “link to the technology” at issue. 632 F.3d at 1316-1317. Regardless, Kennedy accounted for bargaining power. He testified that Apple’s large size and sales volume would put “downward pressure on the rate”—pressure that completely neutralized the early-adopter discount that Doro, Vertu, and Unnecto could claim but Apple could not. Appx15243-15244.

Apple’s “cherry-picking” accusation, Br.73, is misdirected. Kennedy relied on licenses covering the same patents and same products. He utilized licenses with per-unit rates to avoid the need to “projec[t]” sales volumes, as would be required to calculate an effective per-unit royalty rate from lump-sum licenses. Appx15248. Gunderson, by contrast, relied on licenses with lump-sum payments and ignored differences in sales volumes. Appx15662-15663; pp. 22-23, supra. The district court properly allowed the jury to weigh those competing approaches.

10 Nor was the jury bound by Gunderson’s characterization of HTC’s license as an “outlier.” Br.69. Gunderson considered HTC’s license comparable. Appx15636. While he elected to omit the highest (HTC) and lowest (Blackberry) rates in his analysis, Appx15592-15593, the jury was entitled to award any royalty “within the range encompAsed by the record as a whole,” Unisplay, 69 F.3d at 519.

instructed, Appx5447-5449.

Apple protests that smaller companies lacked Apple’s “bargaining power,”

 67

 

Case: 20-2011 Document: 23 Page: 85 Filed: 02/12/2021

CONCLUSION

The judgment should be affirmed.

 68

 

Case: 20-2011 Document: 23 Page: 86 Filed: 02/12/2021

CROSS-APPEAL

The district court erred in overturning the $145.1 million verdict from the first trial. It also erred in granting summary judgment against Wi-LAN for iPhones containing Intel baseband-processor chipsets, based on a term license that expired January 21, 2017. Phones with chipsets Intel supplied after that date are not shielded from infringement.

JURISDICTIONAL STATEMENT

Wi-LAN timely filed its notice of cross-appeal on July 28, 2020. Fed. R. App. P. 4(a)(3); Appx5472.

ISSUES PRESENTED

1. Whether the district court erred in vacating the original damages verdict based on perceived inadmissibility of certain damages evidence.

2. Whether the district court erred in holding certain Intel-based iPhones non-infringing based on Wi-LAN’s expired term license with Intel.

STATEMENT

I. THE DISTRICT COURT HOLDS INTEL-BASED PHONES NON-INFRINGING

Before the first trial, the district court granted Apple summary judgment of no infringement for iPhones with Intel chipsets (i.e., baseband processors), based

11

11 Only Intel-based iPhone 6 and 7 models, not later models with different chips, are at issue here.

    on a 2011 license agreement between Wi-LAN and Intel. Appx23-25.

 69

 

Case: 20-2011 Document: 23 Page: 87 Filed: 02/12/2021

Section 3.1 of the agreement granted Intel “Perpetual Licenses” to patents— unrelated to those Aserted here—at issue in then-pending litigation. Appx5432. Section 3.2 granted Intel a “Term License” to the rest of Wi-LAN’s portfolio, including the patents Aserted here. Appx5432. Section 3.2 provides:

3.2 Term License for Wi-LAN Patent Portfolio. For the Term License Period, Wi-LAN ... grants to Intel ... a worldwide ... license, without the right to sublicense, under the Licensed Patents to directly or indirectly engage in Licensed Activities. For clarity, . . . the licenses granted pursuant to this Section 3.2 with respect to Licensed Activities that were actually engaged in during the Term License Period shall survive the expiration of the Term License Period . . . .

Appx5432 (emphasis added). The “Term License Period” expired January 21, 2017. Appx5429; Appx5431.

Everyone agreed that iPhones containing chipsets Intel sold Apple during the Term License Period were covered by Section 3.2 and thus non-infringing. The parties disputed whether Section 3.2—specifically, the “survival clause” italicized above—covers chipsets Intel sold after January 21, 2017. Wi-LAN argued it did not, because Intel had not “actually engaged in” the sale of those chipsets during the Term License Period. Apple argued that the clause “gives Intel a perpetual license to the patents in suit.” Appx24.

The district court granted Apple summary judgment of no infringement. Appx25. It reasoned that “the clause at issue specifically states that ‘the licenses granted . . . shall survive the expiration of the Term License Period.’ ” Appx25

 70

 

Case: 20-2011 Document: 23 Page: 88 Filed: 02/12/2021

CONFIDENTIAL MATERIAL FILED UNDER SEAL REDACTED

(ellipsis and emphasis by district court). The court did not address, and omitted from the quotation using an ellipsis, the language providing that licenses would survive only for activities “actually engaged in during the Term License Period.” Appx24.

II. THE DISTRICT COURT VACATES THE ORIGINAL DAMAGES VERDICT

A. Wi-LAN’s Damages Evidence at the First Trial

At the first trial, Wi-LAN’s expert Kennedy applied the hypothetical-ne-

gotiation framework to compute a royalty of $0.85/unit, or $145.1 million total. Appx10617-10670. In addition to the comparable licenses presented at the 2020 retrial, pp. 20-22, supra, Kennedy considered:

Rate Sheets. Wi-LAN used rate sheets to guide license negotiations. Appx10636; Appx10462-10466. Those rate sheets specified royalties of $0.65- 1.10/unit. Appx10636.

Samsung License. Wi-LAN licensed the Aserted patents to Samsung, “Apple’s closest competitor,” for lump-sum payments totaling $ Royalty . Appx10655; Appx10659. The license included an “adjustment right” allowing Samsung to reduce its payments if Apple received a cheaper license (relative to market share). Appx7511; Appx10657. Thus, Kennedy explained, $ Royalty was a “practical limitation on what Wi-LAN could accept” from Apple; otherwise, it would “lose a lot of money” from Samsung. Appx10665.

    71

 

Case: 20-2011 Document: 23 Page: 89 Filed: 02/12/2021

Kennedy addressed differences between Samsung’s license and the hypo- thetical Apple license. “Apple [was] almost twice as big as Samsung,” warranting a “large upward adjustment” in the total payment. Appx10659-10660. Asuming infringement and validity justified upward adjustment. Appx10660. Downward adjustments were warranted because Samsung received a worldwide portfolio license, while Apple needed only a U.S. license for two patents. Appx10661; Appx10664.

Direct Valuation. Kennedy confirmed the reasonableness of his $0.85/unit through testimony from Wi-LAN’s other experts. Dr. Madisetti estimated the benefits of the ’145 patent’s bandwidth-allocation technology by comparing VoLTE, which uses that technology, to Skype, which does not. Appx10260.

Appx7566.

  72

 

Case: 20-2011 Document: 23 Page: 90 Filed: 02/12/2021

Testing showed that Skype performs well—earning a “Mean Opinion Score” (“MOS”) of 3.1 out of 5—absent “background applications” and “load on the network.” Appx10262; Appx10265. But “Skype performs very poorly”—scoring only 1.4—when many “background applications” compete for bandwidth or the network is “loaded.” Appx10265-10266. By contrast, VoLTE excels under such multitasking conditions, achieving a 3.7 MOS—2.3 points higher than Skype, or “more than twice as good.” Appx10262-10267.

Dr. Jeff Prince valued that benefit through consumer surveys. Appx10511. He found consumers would pay up to $121.37/phone for the 2.3-point improve- ment in call quality “while multitasking” enabled by the ’145 patent. Appx10528; see p. 8, supra. Kennedy estimated that, in a hypothetical negotiation, Apple would have “negotiating leverage” to pay just 1% of the value added by Wi-LAN’s

12

technology in “multitasking” scenarios—about $1.22/unit. Appx10628-10629. Royalty. Weighing all of the evidence—prior licenses, rate sheets, and

direct valuation—Kennedy proposed a $0.85/unit royalty. Appx10626-10629.

  12 Madisetti estimated the timer invention yielded 16% faster “uploads,” Appx10268, which Prince found worth $1.90-$3.65, Appx10511. The adaptive- modulation invention increased “download speed” 6%, Appx10271, worth $2.44- $4.02, Appx10511. Under a $0.85/unit rate, Apple would be paying far less than the technology was worth. Appx10629-10639.

73

 

Case: 20-2011 Document: 23 Page: 91 Filed: 02/12/2021

CONFIDENTIAL MATERIAL FILED UNDER SEAL REDACTED

  Royalty

Appx7781.

Verdict. The jury awarded Wi-LAN a lump-sum award of $145.1 million,

corresponding to the $0.85/unit rate Kennedy calculated. Appx630.

B. The New-Trial Order

On Apple’s motion, the district court vacated the damages award. Appx29- 38; Appx39-43. It concluded that Madisetti “overstated the footprint of the inven- tion” by measuring the benefit of VoLTE generally, and not “confin[ing]” his opinion “to improved voice quality during loading.” Appx35; Appx40. Prince and Kennedy had relied on Madisetti. Appx37-38. The court further opined that the Samsung license was “‘irrelevant’” because it was not “comparable,” and that admission of Wi-LAN’s rate sheets was “similarly prejudicial.” Appx42.

The district court ordered conditional remittitur to $10 million. Appx38. Wi-LAN declined, electing to retry damages before a new jury. Appx5437.

 74

 

Case: 20-2011 Document: 23 Page: 92 Filed: 02/12/2021

SUMMARY OF ARGUMENT

I. Vacatur of the initial $145 million verdict rested on an erroneous belief that certain damages evidence should have been excluded. Wi-LAN’s rate sheets were permissible evidence of licensing practices. They sought less than some past Wi-LAN licenses.

It was error to declare Wi-LAN’s Samsung license “not relevant.” The license’s adjustment right made it uneconomical to grant Apple a cheaper license. That was plainly relevant to the hypothetical-negotiation analysis. Kennedy also explained Samsung was Apple’s most comparable competitor and addressed relevant differences.

The district court erroneously believed Wi-LAN’s direct-valuation evidence measured VoLTE’s benefits generally. Madisetti limited his analysis to improved call quality during multitasking, where the bandwidth-allocation invention matters most.

II. The district court misconstrued Intel’s term license. That license expired in January 2017; chipsets Intel sold after expiration were not licensed. The “survival clause” applies only to activities “actually engaged in” during the license period, not sales “actually engaged in” after that term. The court overlooked that requirement. Instead, it effectively converted a term license into a perpetual license, contrary to the agreement’s text, structure, and purpose.

 75

 

Case: 20-2011 Document: 23 Page: 93 Filed: 02/12/2021

ARGUMENT

I. THE ORIGINAL DAMAGES VERDICT SHOULD BE REINSTATED

The district court recognized the evidence amply supported the jury’s $145 million award. Appx31 n.1. It vacated that award only because it thought three pieces of evidence—Wi-LAN’s rate sheets, Samsung license, and direct-valuation evidence—were improperly admitted. But that evidence was admissible. Nothing so “‘substantially prejudiced’” Apple as to justify discarding the jury verdict after a full trial. Harper v. City of Los Angeles, 533 F.3d 1010, 1030 (9th Cir. 2008). Overturning a verdict based on legal or clear factual error constitutes an abuse of discretion. Medsim Ltd. v. BestMed, LLC, 758 F.3d 1352, 1355 (Fed. Cir. 2014).

A. The rate sheets were plainly admissible. As Skippen explained, Wi-LAN prepared those rate sheets based on market analysis, and used them in actual negotiations. Appx10462-10464. This Court has repeatedly upheld use of licensing practices—including rate sheets—when determining royalties. CSIRO, 809 F.3d at 1303 (upholding reliance on “Rate Card”); VirnetX, 767 F.3d at 1330.

The district court suggested the rate sheets were “outrageous offers” like those in Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 30 (Fed. Cir. 2012). Appx42. Whitserve, however, acknowledged that “proposed licenses”— like rate sheets—“may have some value for determining a reasonable royalty.” 694 F.3d at 29-30. It rejected a proposed 31.8% royalty rate—offered to justify a

 76

 

Case: 20-2011 Document: 23 Page: 94 Filed: 02/12/2021

CONFIDENTIAL MATERIAL FILED UNDER SEAL REDACTED

19% royalty award—not merely because the rate was “unaccepted,” but because it was “based on fiction and contradict[ed] [other expert] testimony.” Id. at 29-30. But here, Apple’s expert testified that Wi-LAN licensees had actually paid up to $1.25/unit, Appx11161—well over the rate sheets’ $0.65-$1.10 range. Rate sheets proposing less than Wi-LAN previously negotiated could not “artificially inflate the royalty rate” or “‘ske[w] the damages horizon.’” Appx42. They were plainly admissible and caused no conceivable prejudice. It was an abuse of discretion to rule otherwise.

B. The Samsung license was properly admitted. It bore on a salient difference between Wi-LAN’s prior negotiations and its hypothetical negotiation with Apple. The licenses Wi-LAN negotiated with Doro, Unnecto, and Vertu would not affect existing license rates. But Apple’s would: Samsung’s “adjust- ment right” would reduce payments from Samsung if Wi-LAN granted Apple— Samsung’s closest competitor—a cheaper license. Appx10665. Given that, Kennedy explained, it would not “make economic sense” to grant Apple a license below a certain amount, because Wi-LAN would lose more from Samsung than it would gain from Apple. Appx10657. That evidence about Wi-LAN’s “economic circumstances” was plainly relevant. Finjan, 626 F.3d at 1211. Nor would the license inflate damages. While substantial, $ Royalty was less than Kennedy’s

 77

 

Case: 20-2011 Document: 23 Page: 95 Filed: 02/12/2021

$145 million proposed royalty for Apple (at $0.85/unit), which fell squarely within Wi-LAN’s rate sheets.

The district court deemed the Samsung license “‘not relevant’” because Kennedy supposedly had not testified it was “comparable” to Apple’s hypothetical license. Appx42. But Kennedy testified that Samsung was “certainly the most comparable.” Appx10640. He accounted for pertinent differences, such as the Samsung license’s greater scope and Apple’s greater sales—differences going to “weight,” not “admissibility.” Ericsson, 773 F.3d at 1227. Regardless, Samsung’s license was relevant because its adjustment right was an “economic circumstance” bearing on the hypothetical negotiation. Declaring it “ ‘not relevant,’ ” Appx42, was legal error.

C. Wi-LAN’s direct-valuation evidence was also properly admitted. Damages experts may consider the value to the infringer “of use of the patented technology . . . compared to using non-infringing alternatives.” Aqua Shield v. Inter Pool Cover Team, 774 F.3d 766, 770-71 (Fed. Cir. 2014). Here, the ’145 patent’s bandwidth-allocation invention—which VoLTE implements—prevents “degraded voice quality” by creating an “express lane” for voice packets. Appx10094; see Appx324. To isolate that technology’s benefits, Madisetti relied on tests comparing VoLTE to the best non-infringing alternative, Skype—which also sends voice packets over LTE, but without their own “express lane.” See pp.

78

 

Case: 20-2011 Document: 23 Page: 96 Filed: 02/12/2021

72-73, supra. Specifically, Madisetti compared call quality with “a lot of background applications” running and on a “loaded network.” Appx10265. The VoLTE call-quality advantage he described thus reflects the invention’s incre- mental benefit in conditions where its “express lane” matters most. Prince and Kennedy then estimated the value of that specific benefit. See p. 73, supra.

The district court held that evidence inadmissible based on a clearly erron- eous “premise”: that Madisetti’s opinions were “not confined” to “that aspect of VoLTE Asociated with improved voice quality ‘during loading.’” Appx41. The record refutes that characterization. Madisetti specifically compared VoLTE and Skype call quality during loading, with “a lot of background applications that are running on the phone” and on “a loaded network.” Appx10065. The “2.3 unit increase to the MOS score” on which Madisetti based his opinion, Appx36, explicitly compared the scores for VoLTE (3.7) and Skype (1.4) under those conditions, Appx10265-10266. Indeed, Skype scored better (3.1) under other conditions. Appx10265. It could not be clearer that Madisetti was not measuring the benefit of VoLTE “generally,” Appx41, but the specific benefits of Wi-LAN’s technology during multitasking.

The district court’s record citations are not to the contrary. While Madisetti testified (correctly) that VoLTE is “‘enabled’” by the ’145 patent, Appx35-36; Appx41, he did not measure VoLTE’s benefits as a whole. He compared VoLTE

79

 

Case: 20-2011 Document: 23 Page: 97 Filed: 02/12/2021

and Skype based on call quality during multitasking, the task the patented technology improves. Nor was the link between VoLTE’s better call quality and the ’145 patent “without factual basis.” Appx37. Madisetti explained how VoLTE uses the patented technology to “allocate bandwidth across two connections” and avoid the quality-destroying delay that Skype’s “single data connection” experi- ences during multitasking. Appx10261. Apple did not identify any other VoLTE feature that would improve voice quality under such conditions.

The district court’s comment that “there would have been no need” for

Kennedy to “further apportion” the described benefits if Madisetti’s testimony

were directed to the patents, Appx37, reveals a misconception. As Kennedy

explained, licensees do not pay patentees the entire value added by a patented

invention. They retain a portion, based on their respective “negotiating leverage.”

Appx10638. Kennedy’s opinion that Apple would pay Wi-LAN just 1% of the

invention’s marginal benefit, Appx10628, reflected that reality. There being no

proper basis for excluding Madisetti’s testimony, it was error to exclude Prince’s

and Kennedy’s reliance on him. Appx37. The verdict should be reinstated.

II. THE DISTRICT COURT MISCONSTRUED THE INTEL LICENSE

In holding Intel-based iPhones non-infringing, Appx23-25, the district court misread the relevant license. That license was limited to a specified term that

80

 

Case: 20-2011 Document: 23 Page: 98 Filed: 02/12/2021

expired years ago. Chipsets Intel sold Apple after expiration were not licensed. In the event a new trial is required, it should include Intel-based iPhones.

Standard of Review. Under governing Delaware law, Appx5433, contract interpretation is a question of law reviewed de novo, but ambiguities are resolved by the jury. Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232-33 (Del. 1997); Int’l Brotherhood of Teamsters v. NASA Servs., Inc., 957 F.3d 1038, 1041 (9th Cir. 2020).

A. Intel Chipsets Sold After January 2017 Were Not Licensed

The license agreement granted a “Term License” for the patents Aserted here. Appx5432. Section 3.2 provides that, “[f]or the Term License Period,” Wi-LAN granted Intel “a worldwide . . . license . . . to directly or indirectly engage

13

 in Licensed Activities.” Appx5432 (emphasis added).

to sell chipsets practicing the Aserted patents, but only “[f]or the Term License Period,” which expired January 21, 2017. See Appx23-24; Appx5429, Appx5431. Chipsets Intel sold after January 21, 2017 were not licensed—and offered Apple no shield from infringement.

The district court invoked Section 3.2’s “survival clause” to eviscerate that durational limit. That provision states, “[f]or clarity,” that licenses under Section

13

Intel thus was authorized

 “Licensed Activities” include “making, using, selling, offering for sale, importing, exporting, and/or otherwise transferring or disposing of any and all Licensed Products.” Appx5430. The parties agree “Licensed Products” include the disputed chipsets, provided they otherwise satisfy the license’s terms.

81

 

Case: 20-2011 Document: 23 Page: 99 Filed: 02/12/2021

3.2 will “survive the expiration of the Term License Period” only “with respect to Licensed Activities that were actually engaged in during the Term License Period.” Appx5432 (emphasis added). That backward-looking provision does not authorize future infringing sales after the Term License Period. It merely provides that past sales—sales that “were actually engaged in during the Term License Period”—will remain licensed despite the term’s expiration.

In other words, pre-expiration sales remain “authorized sale” that “exhaus[t]” Wi-LAN’s patent rights in the relevant chipsets. Automotive Body Parts As’n v. Ford Global Techs., LLC, 930 F.3d 1314, 1322 (Fed. Cir. 2019). Downstream entities like Apple thus are not liable for reselling those chipsets, even if they do so outside the Term License Period. See id. The provision does not, however, convert a term license into a perpetual one. It does not authorize Intel to sell additional chipsets after January 21, 2017—or Apple to sell products that incorporate such infringing chipsets.

B. Contrary Arguments Lack Merit

1. The district court declared that “the clause at issue specifically states that ‘the licenses granted . . . shall survive the expiration of the Term License Period[.]’” Appx25 (ellipsis and emphasis by district court). But it did not address—and omitted with an ellipsis—the critical language: the licenses survive only “with respect to Licensed Activities that were actually engaged in during the

82

 

Case: 20-2011 Document: 23 Page: 100 Filed: 02/12/2021

Term License Period.” Appx5432 (emphasis added). The court did not explain how activities “actually engaged in during the Term License Period” include sales actually engaged in after the Term License Period.

Nor could it. The term “actually” refers to something that is “really” done “n act or in fact.” Webster’s New International Dictionary 28 (2d ed. 1954). The clause thus extends only to licensed acts that were “really” or “in fact” engaged in during the Term License Period, such as sales of specific articles. Sales outside the license term, however, were not “really” or “in fact” engaged in during the license term; they were “really” and “in fact” engaged in after the license term.

2. Without addressing the “actually engaged in” requirement, the district court wondered “why the parties would confirm a doctrine [patent exhaustion] that already exists in the case law.” Appx25. There was ample reason. The agreement granted a “worldwide” license, Appx5432, and patent-exhaustion rules differ between countries, see Vincent Chiappetta, The Desirability of Agreeing to Disagree, 21 Mich. J. Int’l L. 333, 347-48 (2000). Plus, when the agreement was signed (in 2011), U.S. law allowed patent exhaustion to be limited by contract. Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992). That rule was not displaced until 2017. Impression Prods., Inc. v. Lexmark Int’l, Inc., 137 S. Ct. 1523 (2017). It made perfect sense for the parties to address exhaustion, even if only “for clarity” and to “confirm” its application.

83

 

Case: 20-2011 Document: 23 Page: 101 Filed: 02/12/2021

Regardless, even a supposedly superfluous construction is preferable to one “‘repugnant’ to” the agreement’s purpose. Bank of N.Y. Mellon v. Commerzbank Cap. Funding Tr. II, 65 A.3d 539, 549 n.30 (Del. 2013). The district court’s construction defies the agreement: While Section 3.2 granted only a “Term License,” the court held it effectively “gives Intel a perpetual license to the patents in suit.” Appx24 (emphasis added). That conflicts with not only Section 3.2, but also Section 3.1, which did grant “Perpetual Licenses”—but only for other patents. Appx5432. “‘[C]onstruing the agreement as a whole and giving effect to all its provisions’” confirms Wi-LAN’s construction. In re Viking Pump, Inc., 148 A.3d 633, 648 (Del. 2016).

3. Apple argued that, once Intel sold chipsets during the license term, it could continue selling “the same type of chipsets” after the term. Appx5422 (emphasis added). The clause does not say that. It extends only to activities “actually engaged in” during the license term—not activities that resemble activities actually engaged in during the license term. Apple ignores that “[e]ach sale constitutes an infringement.” Catalina Lighting v. Lamps Plus, Inc., 295 F.3d 1277, 1291 (Fed. Cir. 2002) (emphasis added). That sales before January 21, 2017 were licensed does not mean sales of similar items after January 21, 2017 are licensed. “Each sale” must be judged on its own merits. Id.

84

 

Case: 20-2011 Document: 23 Page: 102 Filed: 02/12/2021

Nor can an offer to sell chipsets during the license term authorize selling them after expiration—a theory the district court did not endorse. “An offer to sell is a distinct act of infringement separate from an actual sale.” Transocean Off- shore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F.3d 1296, 1308 (Fed. Cir. 2010). Actually engaging in one “Licensed Activity” (offering to sell) during the license term did not allow Intel to engage in a different “Licensed Activity” (selling) after the term expired. Apple’s contrary approach promises absurd results—effectively letting a licensee claim a perpetual license by posting an offer to sell products practicing the patents on the last day of the term. Apple offered no reason why any patent owner would agree to that. Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1160 (Del. 2010). At minimum, the agreement is “‘fairly susceptible of’” Wi-LAN’s construction. GMG Cap. Invs., LLC v. Atheni- an Venture Partners I, L.P., 36 A.3d 776, 780 (Del. 2012). If the Court does not adopt Wi-LAN’s construction as a matter of law, a jury must resolve the ambiguity. Id.

CONCLUSION

The original damages verdict should be reinstated. Any new trial should include Intel-based iPhones.

 85

 

Case: 20-2011

Document: 23 Page: 103 Filed: 02/12/2021

February 12, 2021

Mike McKool

MCKOOL SMITH, PC

300 Crescent Court, Suite 1500 Dallas, TX 75201

[phone] (telephone) [phone] (facsimile) [e-mail]

Brett E. Cooper

MCKOOL SMITH, PC

One Manhattan West

395 9th Avenue, 50th Floor New York, NY 10001 [phone] (telephone) [phone] (facsimile) [e-mail]

Respectfully submitted,

/s/ Jeffrey A. Lamken

Jeffrey A. Lamken

Counsel of Record

Lucas M. Walker

Rayiner I. Hashem

MOLOLAMKEN LLP

The Watergate, Suite 500

600 New Hampshire Avenue, N.W. Washington, D.C. 20037

[phone] (telephone) [phone] (facsimile) [e-mail] [e-mail] [e-mail]

Leonid Grinberg MOLOLAMKEN LLP

430 Park Avenue

New York, NY 10022

[phone] (telephone) [phone] (facsimile) [e-mail]

 Counsel for Defendant-Cross-Appellant Wi-LAN Inc.

 

Case: 20-2011 Document: 23 Page: 104 Filed: 02/12/2021

Addendum

 

Case: 20-2011 Document: 23 Page: 105 Filed: 02/12/2021

ADDENDUM

 Order (1) Denying Apple’s Motion to Strike Wi-LAN’s

New Infringement Theories; (2) Granting in Part

Wi-LAN’s Motion for Partial Summary Judgment;

(3) Granting in Part and Denying in Part Apple’s

Motion for Summary Judgment; (4) Granting in Part

and Denying in Part Apple’s Motion To Exclude

Certain Opinions of Vijay Madisetti, David Kennedy

and Jeffrey Prince; and (5) Denying in Part Wi-LAN’s

Omnibus Motion to Exclude Testimony of Apple Experts,

Dkt. No. 401, filed June 29, 2018..............................................................Appx15

Order (1) Denying Apple Inc.’s Renewed Motion for Judgment as a Matter of Law, (2) Granting Apple Inc.’s Motion for a New Trial and/or Remittitur and (3) Denying Wi-LAN’s Motion for Supplemental Damages, Ongoing Royalty, and Prejudgment and Post Judgment Interest,

Dkt. No. 554, filed January 3, 2019...........................................................Appx29

Order Denying Wi-LAN’s Motion for Reconsideration,

Dkt. No. 619, filed March 26, 2019...........................................................Appx39

Page

 

 Case: 20-2011 Document: 23 Page: 106 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 1 of 14

PageID.20852

   1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

APPLE INC.,

vs.

WI-LAN, INC.,

Plaintiff,

CASE NO. 14cv2235 DMS (BLM)

ORDER:

(1) DENYING APPLE’S MOTION TO STRIKE WI-LAN’S NEW INFRINGEMENT THEORIES;

(2) GRANTING IN PART WI- LAN’S MOTION FOR PARTIAL SUMMARY JUDGMENT;

(3) GRANTING IN PART AND DENYING IN PART APPLE’S MOTION FOR SUMMARY JUDGMENT;

(4) GRANTING IN PART AND DENYING IN PART APPLE’S MOTION TO EXCLUDE CERTAIN OPINIONS OF VIJAY MADISETTI, DAVID KENNEDY AND JEFFREY PRINCE; AND

(5) DENYING IN PART WI-LAN’S OMNIBUS MOTION TO EXCLUDE TESTIMONY OF APPLE EXPERTS

CONFIDENTIAL MATERIAL OMITTED

   Defendant. _______________________________

AND ALL RELATED COUNTERCLAIMS.

   Appx15

- 1 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 107 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 2 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20853

   CONFIDENTIAL MATERIAL OMITTED

 Appx16

- 2 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 108 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 3 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20854

   CONFIDENTIAL MATERIAL OMITTED

 Appx17

- 3 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 109 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 4 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20855

   CONFIDENTIAL MATERIAL OMITTED

 Appx18

- 4 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 110 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 5 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20856

   CONFIDENTIAL MATERIAL OMITTED

 Appx19

- 5 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 111 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 6 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20857

   CONFIDENTIAL MATERIAL OMITTED

 Appx20

- 6 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 112 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 7 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20858

   CONFIDENTIAL MATERIAL OMITTED

 Appx21

- 7 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 113 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 8 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20859

   CONFIDENTIAL MATERIAL OMITTED

 Appx22

- 8 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 114 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 9 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20860

   CONFIDENTIAL MATERIAL OMITTED

 Appx23

- 9 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 115 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 10 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20861

   CONFIDENTIAL MATERIAL OMITTED

 Appx24

- 10 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 116 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 11 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20862

   CONFIDENTIAL MATERIAL OMITTED

 Appx25

- 11 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 117 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 12 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20863

   CONFIDENTIAL MATERIAL OMITTED

 Appx26

- 12 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 118 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 13 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20864

   CONFIDENTIAL MATERIAL OMITTED

 Appx27

- 13 -

14cv2235

 

 Case: 20-2011 Document: 23 Page: 119 Filed: 02/12/2021

Case 3:14-cv-02235-DMS-BLM Document 401 Filed 06/29/18 Page 14 of 14

1 2 3 4 5 6 7 8 9

  10

  11

  12

  13

  14

  15

  16

  17

  18

  19

  20

  21

  22

  23

  24

  25

  26

  27

  28

PageID.20865

   CONFIDENTIAL MATERIAL OMITTED

 IT IS SO ORDERED. DATED: June 29, 2018

 Appx28

HON. DANA M. SABRAW United States District Judge

- 14 -

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM

Documentt: 52438 FPialegde:012/03/19FilePda:g0e2ID/1.2/62708281 Page 1 of 10

   1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

APPLE INC., vs.

WI-LAN, INC.,

Plaintiff,

CASE NO. 14cv2235 DMS (BLM)

ORDER (1) DENYING APPLE INC.’S RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW, (2) GRANTING APPLE INC.’S MOTION FOR A NEW TRIAL AND/OR REMITTITUR AND (3) DENYING WI-LAN’S MOTION FOR SUPPLEMENTAL DAMAGES, ONGOING ROYALTY, AND PREJUDGMENT AND POST JUDGMENT INTEREST

   Defendant. _______________________________

AND ALL RELATED COUNTERCLAIMS.

 This case comes before the Court on Apple Inc.’s renewed motion for judgment as a matter of law and/or motion for a new trial and Wi-LAN’s motion for supplemental damages, ongoing royalty, and prejudgment and post judgment interest. On November 30, 2018, the Court heard argument on the damages portion of Apple’s motion. Ashley Moore appeared and argued for Wi-LAN, and Sean Cunningham appeared and argued for Apple. After reviewing the parties’ briefs, the record, the relevant legal authority, and after hearing argument from counsel, the Court issues the following rulings:

/ / /

I.

- 1 -

Appx29

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/013/19FilePda:g0e2ID/1.2/62708291 Page 2 of 10

   1 RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW

2 Apple moves for judgment as a matter of law on the issue of infringement. “A

3 Rule 50(b) motion for judgment as a matter of law is not a freestanding motion. Rather,

4 it is a renewed Rule 50(a) motion.” E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951,

5 961 (9th Cir. 2009). Federal Rule of Civil Procedure 50(a)(1) provides:

6 If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary

7 basis to find for the party on that issue, the court may:

8 (A) resolve the issue against the party; and

9 (B) grant a motion for judgment as a matter of law against the party on a claim or defense that, under the controlling law, can be maintained or

10 defeated only with a favorable finding on that issue.

11 Fed. R. Civ. P. 50(a)(1). In the Ninth Circuit, “‘[j]udgment as a matter of law is

12 appropriate when the evidence presented at trial permits only one reasonable

13 conclusion.’” Torres v. City of Los Angeles, 548 F.3d 1197, 1205 (9th Cir. 2008)

14 (quoting Santos v. Gates, 287 F.3d 846, 851 (9th Cir. 2002)). “In other words, ‘[a]

15 motion for a judgment as a matter of law is properly granted only if no reasonable juror

16 could find in the non-moving party’s favor.’” Id. (quoting El-Hakem v. BJY Inc., 415

17 F.3d 1068, 1072 (9th Cir. 2005)). When considering a motion for judgment as a matter

18 of law, the court must view the evidence “‘in the light most favorable to the nonmoving

19 party, and all reasonable inferences must be drawn in favor of that party.’” Id. at 1205-

20 06 (quoting LaLonde v. County of Riverside, 204 F.3d 947, 959 (9th Cir. 2000)).

21 Here, Apple raises a number of arguments in support of its motion for judgment

22 as a matter of law on the issue of infringement. Several of these legal arguments were

23 raised and rejected prior to trial, e.g., the claim construction arguments. Apple has

24 failed to show that the Court’s previous rulings were in error, and thus those arguments

25 do not warrant judgment as a matter of law in Apple’s favor. On the evidentiary

26 arguments, Apple has failed to show that no reasonable juror could have found for Wi-

27 LAN, and thus those arguments also do not warrant judgment as a matter of law in

28

Appx30

- 2 -

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/023/19FilePda:g0e2ID/1.2/62709201 Page 3 of 10

   1 Apple’s favor. Thus, the Court denies Apple’s motion for judgment as a matter of law

2 on the issue of infringement.1

3 II.

4 MOTION FOR NEW TRIAL OR REMITTITUR

5 Apple’s motion for a new trial on damages is based on Federal Rule of Civil

6 Procedure 59, which provides: “The court may, on motion, grant a new trial on all or

7 some of the issues-and to any party-as follows: (A) after a jury trial, for any reason for

8 which a new trial has heretofore been granted in an action at law in federal court[.]”

9 Fed. R. Civ. P. 59(a)(1)(A). “A trial court should grant a motion for a new trial if (1)

10 the jury instructions were erroneous or inadequate, (2) the court made incorrect and

11 prejudicial admissibility rulings, or (3) the verdict is contrary to the great weight of the

12 evidence.” Chiron Corp. v. Genentech, Inc., 363 F.3d 1247, 1258 (Fed. Cir. 2004)

13 (citations omitted).

14 As an alternative to a new trial on damages, Apple requests that the Court enter

15 a conditional order of remittitur to a $10 million damages award. “‘The Court has

16 discretion to grant a remittitur, reducing the damages to the maximum authorized under

17 the evidence, and then offer Plaintiffs the choice of accepting a remittitur (a reduction)

18 of the award in lieu of a new trial on the issue of the damages only.’” Coach, Inc. v.

19 Celco Customs Services Co., No. CV 11-10787 MMM (FMOx), 2014 WL 12573411,

20 at *23 n.128 (C.D. Cal. June 5, 2014) (quoting Dixon v. City of Coeur d’Alene, No.

21 2:10-cv-00078-LMB, 2012 WL 2923149, at *8 (D. Idaho July 18, 2012)).

22 / / /

23

1 Applealsomovesforjudgmentasamatteroflawofnodamagesontheground Wi-LAN “failed to meet its burden of proving damages.” (Mem. of P. & A. in Supp. of Apple’s Mot. at 11.) At oral argument, Apple presented the Court with another option, namely entering judgment as a matter of law in the amount of $24 million in damages. That was the first mention of this option, and thus the Court declines to consider it here. Even if the Court considered it, however, Apple has failed to show there is sufficient evidence in the record for the Court to enter judgment as a matter of law in that amount. Furthermore, Apple’s arguments on damages are directed more toward Wi-LAN’s methodology, not a lack of evidence to support a damages award. Therefore, the Court addresses the issue of damages below under Apple’s alternative motion for a new trial or remittitur.

- 3 -

 24 25 26 27 28

Appx31

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/033/19FilePda:g0e2ID/1.2/6270921 Page 4 of 10 CONFIDENTIAL MATERIAL OMITTED

1 In this case, the primary point of contention on the damages issue is

2 apportionment.2 Both sides agree that apportionment was required, but they disagree

3 on the method for doing so. Apple apportioned by using the smallest salable patent

4 practicing unit (“SSPPU”), which Apple argued was the baseband processor, while Wi-

5 LAN used a “direct valuation” approach. Apple contends Wi-LAN’s approach was

6 riddled with legal and factual errors, and thus Apple is entitled to a new trial on

7 damages or a remittitur to $10 million.

8 The general rule of apportionment is that “[a] patentee is only entitled to a

9 reasonable royalty attributable to the infringing features.” Power Integrations, Inc. v.

10 Fairchild Semiconductor Int’l, Inc., 904 F.3d 965, 977 (Fed. Cir. 2018). As stated

11 above, there is no dispute that apportionment was required in this case. Thus, Wi-LAN

12 was required, as part of its reasonable royalty analysis, to “apportion[ ] between the

13 infringing and non-infringing features of the product.” Id. (citations omitted).

14 Here, the accused product was the iPhone, and thus Wi-LAN had the burden to

15 apportion the infringing features of the iPhone from the noninfringing features.

16 Generally, this kind of apportionment is accomplished by ensuring the royalty base is

17 not “larger than the smallest salable unit embodying the patented invention.” Id.3 If the

18 SSPPU “itself contains several non-infringing features[,]” the patentee must apportion

19 further by “estimat[ing] what portion of that smallest salable unit is attributed

20 / / /

21 / / /

22 / / /

23 / / /

24

2 To be sure, Apple raises other arguments, namely, that evidence of skewed the damages horizon, and that Wi-LAN improperly included millions of non-infringing iPhones in the royalty base. However, in light of the discussion below, the Court declines to address these other arguments.

3 The Court notes the parties dispute what constitutes the SSPPU in this case. Apple argues it is the baseband processor while Wi-LAN Aserts it is the iPhone. The Court need not resolve this issue here, however.

- 4 -

    25

26

27

28

Appx32

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/043/19FilePda:g0e2ID/1.2/62709221 Page 5 of 10

   1 to the patented technology.” Id. (citing VirnetX, Inc. v. Cisco Systems, Inc., 767 F.3d

2 1308, 1327 (Fed. Cir. 2014).4

3 Wi-LAN argues, however, that apportionment may be accomplished by other

4 means, and that courts should allow “flexibility in arriving at apportionment.” (Wi-

5 LAN’s Opp’n to Mot. at 15) (citations omitted). There is authority to support both of

6 these arguments, see Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1315 (Fed. Cir. 2014),

7 overruled on other grounds by Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed.

8 Cir. 2015), (stating party may “estimate the value of the benefit provided by the

9 infringed features by comparing the accused product to non-infringing alternatives.”);

10 Commonwealth Scientific and Indus. Research Org. v. Cisco Systems, Inc. (“CSIRO”),

11 809 F.3d 1295 (Fed. Cir. 2015) (stating “adaptability” may be necessary in the

12 apportionment analysis), but neither of these cases resolves the issues raised here.

13 CSIRO, for instance, was a unique case wherein the parties engaged in actual license

14 negotiations to the patent in suit. 809 F.3d at 1303. In determining a reasonable

15 royalty, the district court used those negotiations “as a lower bound on a reasonable

16 royalty,” and the Federal Circuit affirmed that approach. Id. at 1304. This case does

17 not present facts similar to those found in CSIRO, or facts that would necessarily call

18 for flexibility or “adaptability” in apportionment. Nevertheless, the Court cannot say,

19 as a matter of law, that Wi-LAN’s failure to use the SSPPU in its reasonable royalty

20 analysis requires either a new trial or remittitur on damages. Rather, whether Apple is

21 entitled to that relief depends on whether the damages theory Wi-LAN did present to

22 the jury was the product of a reliable methodology, and if so, whether that methodology

23 was reliably applied to the facts of this case.

24 / / /

25

26

27

28

 4 In exceptional cases, the entire market value of the product may be used, but “‘only where the patented feature creates the basis for customer demand or substantially creates the value of the component parts.’” Versata Software, Inc. v. SAP America, Inc., 717 F.3d 1255, 1268 (Fed. Cir. 2013) (quoting SynQor, Inc. v. Artesyn Tech., Inc., 709 F.3d 1365, 1383 (Fed. Cir. 2013)). There is no dispute that requirement is not met in this case, and that the entire market value rule, therefore, does not apply.

- 5 -

Appx33

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/053/19FilePda:g0e2ID/1.2/62709231 Page 6 of 10

   1 Wi-LAN described its methodology in this case as apportionment through “direct

2 valuation.” Notably, Wi-LAN fails to cite any other case in which this methodology

3 has been used to apportion the value of a patented invention as part of a reasonable

4 royalty analysis. Nevertheless, Wi-LAN engaged three experts who each analyzed

5 different factors as part of this methodology.

6 First, Wi-LAN had Dr. Madisetti study “the incremental benefits of the patented

7 technologies and quantif[y] those technical benefits for each patent group, by

8 comparing the Accused Products with the next-best noninfringing alternatives[.]”

9 (Mem. of P. & A. in Opp’n to Apple’s Mot. to Exclude Certain Opinions of Vijay

10 Madisetti, David Kennedy, and Jeffrey Prince, ECF No. 352 at 9.) After doing so, Dr.

11 Madisetti opined that voice over LTE (“VOLTE”) capability increased a phone’s Mean

12 Opinion Score (“MOS”) by 2.3 points.5 In reaching that opinion, Dr. Madisetti relied

13 on a report by Signals Ahead, which tested Samsung phones, that compared VOLTE

14 technology with non-VOLTE technology Skype. Dr. Madisetti also conducted his own

15 tests of VOLTE and non-VOLTE technology using iPhones. Dr. Madisetti also opined

16 that claim 9 of the ‘145 Patent provided benefits in the form of 16% faster uploads, and

17 that claim 1 of the ‘757 Patent provided benefits in the form of 6% faster downloads.

18 Professor Prince then took Dr. Madisetti’s “benefits” opinions and Asigned each

19 of those purported benefits a monetary value through the use of his “willingness to pay”

20 survey. Through that survey, Professor Prince determined the value of VOLTE

21 technology was in the range of $69-$121, the value of increased upload speed was

22 between $1.90 and $3.65, and the value of increased download speed was between

23 $2.44 and $4.02.

24 Mr. Kennedy then took Dr. Madisetti’s “benefits” opinions and Professor’s

25 Prince’s valuations of those benefits to arrive at a reasonable royalty figure of $145

26 27

 28

5 Duringopeningstatement,Wi-LAN’scounseldescribedVOLTEastheprocess of “sending voice calls over the current 4G or LTE networks which transmits the call, not through the telephone company but over the internet.” (Trial Tr. at 14, July 23, 2018, ECF No. 452.)

Appx34

- 6 -

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/063/19FilePda:g0e2ID/1.2/62709241 Page 7 of 10 CONFIDENTIAL MATERIAL OMITTED

1 million. That figure was based on a royalty rate of 85 cents per unit (iPhone),

2 multiplied by the number of iPhones sold during the period of infringement (170.7

3 million). Mr. Kennedy explained his royalty rate by reference to Professor Prince’s

4 valuation numbers. He specifically relied on the low end valuation for the upload and

5 download speeds ($1.90 and $2.44, respectively), but apportioned only 1% of the upper

6 end valuation of VOLTE ($121) to Wi-LAN for a total valuation of that technology of

7 $1.22. Mr. Kennedy used these valuations to argue the reasonableness of his 85 cents

8 per unit royalty rate. Mr. Kennedy also used the

9 to show the reasonableness of his 85 cent

10 royalty rate. He also relied on Wi-LAN’s license agreement with Samsung, which

11 provided for a lump sum payment of to Wi-LAN, as further support for

12 the reasonableness of his ultimate damages figure. When asked why he did not use the

13 SSPPU as his royalty base, particularly the baseband processor, Mr. Kennedy stated that

14 was not required because Dr. Madisetti and Professor Prince valued the patented

15 technology. In essence, he testified that he apportioned the patented features of the

16 iPhone through Dr. Madisetti’s and Professor Prince’s “direct valuation” of those

17 features.

18 The problem with this approach, however, specifically as it relates to claim 26

19 of the ‘145 Patent, was that Dr. Madisetti’s starting point was VOLTE, not the patented

20 technology. This, despite the testimony of Mr. Stanwood, one of the inventors of the

21 ‘145 Patent, who stated he did not invent VOLTE. (Trial Tr. at 187:14-16, July 24,

22 2018, ECF No. 514.)

23 Apple argues Wi-LAN’s use of VOLTE as a starting point overstated the

24 footprint of the invention, and that the expert testimony incorporating that argument

25 was therefore inadmissible. See ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869

26 (Fed. Cir. 2010) (stating “trial court must carefully tie proof of damages to the claimed

27 invention’s footprint in the market place.”) Wi-LAN disputes that it drew a connection

28 between the patented technology and VOLTE and therefore overstated the footprint of

- 7 -

   Appx35

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/073/19FilePda:g0e2ID/1.2/62709251 Page 8 of 10

   1 the invention. (Wi-LAN’s Opp’n to Apple’s Mot. at 18.) However, its arguments and

2 the evidence presented at trial refute that contention.

3 First, Wi-LAN used VOLTE to prove infringement of claim 26 of the ‘145

4 Patent. (Trial Tr. at 614, July 26, 2018, ECF No. 506 (“Q: ... A VOLTE to VOLTE

5 call, that is the technology that’s enabled by the ‘145 Patent? A: Yes.”).) Although that

6 may have been appropriate, taking that theory and simply importing it into the damages

7 case was not.

8 Second, Wi-LAN does not dispute that to determine the benefits of the invention

9 claimed in the ‘145 Patent, Dr. Madisetti relied primarily on a Signals Ahead test of

10 voice call quality using VOLTE compared to voice call quality using Skype. It is

11 undisputed this test did not mention the ‘145 Patent or equate its benefits with the voice

12 call quality of VOLTE, but Dr. Madisetti drew that connection anyway. Relying on that

13 unproven connection, Dr. Madisetti then extrapolated from the Signals Ahead test that

14 the benefit of the invention claimed in the ‘145 Patent was a 2.3 unit increase to the

15 MOS score. (See Trial Tr. at 266-67, July 24, 2018, ECF No. 514 (“Q: So using the

16 patented invention, the mean opinion score, the MOS, is almost twice as good as with

17 Skype, the alternative? A: It’s actually 2.3 MOS units, so the quality is quite

18 significant. It could be even more than twice.”); id. at 267 (Professor Madisetti stating

19 he did his own study of “the benefits of VOLTE over Skype” using iPhones).

20 Third, Wi-LAN’s counsel also drew this connection in questions to their

21 witnesses. (See id. at 271-72 (“Q: Apple’s use of these three inventions in the patent

22 claims in the accused iPhones, do they improve the iPhone as a whole for voice and

23 cellular data? A: Yes. Q: Better voice and higher speeds? A: Yes.”); Trial Tr. at 381,

24 July 25, 2018, ECF No. 493 (“Q: At a high level, what are [the technical benefits of

25 using the inventions in the accused product]? A: You get great quality from the

26 VOLTE, that is 2.3 MOS better.”); Trial Tr. at 614, July 26, 2018, ECF No. 506 (“Q:

27 ... A VOLTE to VOLTE call, that is the technology that’s enabled by the ‘145 Patent?

28 / / /

- 8 -

Appx36

14cv2235

 

Case 3:14-cv-0C2a2s3e5: -2D0M-2S0-1B1LM Documentt: 52438 FPialegde:012/083/19FilePda:g0e2ID/1.2/62709261 Page 9 of 10

   1 A: Yes.”). See also Rep. Tr. at 6, Nov. 30, 2018, ECF No. 547 (Wi-LAN’s counsel

2 stating “the 2.3 MOS score is still specific to the patented technology.”)

3 These opinions and evidence were without factual basis. Indeed, they

4 contradicted the testimony of Mr. Stanwood that he did not invent VOLTE, and the

5 testimony of Mr. Kennedy that the ‘145 patented technology was “related to” VOLTE,

6 not equivalent to it. (Trial Tr. at 686:10-12, July 26, 2018, ECF No. 506.) (See also id.

7 at 686:13-24 (acknowledging “there are other pieces of value, lots of little pieces of

8 value that go into VOLTE”); Trial Tr. at 14, July 23, 2018, ECF No. 452 (“VOLTE has

9 a lot of components to it. It uses LTE networks, it uses the internet. It has a lot of

10 different components that a lot of different people and companies invented. When you

11 see how complex it is you will see that all had to come together.”) Wi-LAN’s Asertion

12 that Dr. Madisetti’s “benefits” opinion was limited to the patented technology is also

13 contradicted by Mr. Kennedy’s subsequent apportionment of only 1% of VOLTE call

14 quality to Wi-LAN. Mr. Kennedy stated he allocated 1% of this value to Wi-LAN and

15 99% of the value to Apple using a profit sharing analysis, “even though that’s – all 121

16 of that is created by the Wi-LAN technology[.]” (Trial Tr. at 623:10-25, July 26, 2018,

17 ECF No. 506.) Had Dr. Madisetti’s opinion been limited to the “benefits” of the

18 patented invention, there would have been no need for Mr. Kennedy to further

19 apportion any value of VOLTE to Wi-LAN. That “benefit” should have been

20 accounted for by Dr. Madisetti.6

21 Absent a sufficient factual basis, Dr. Madisetti’s opinion about the “benefits” of

22 claim 26 of the ‘145 Patent should not have been presented to the jury. See

23 LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 81 (Fed. Cir. 2012)

24 (stating “new trial is required because the jury’s verdict was based on expert opinion

25 that finds no support in the facts in the record.”) And since Dr. Madisetti’s opinions

26 were the basis for Professor Prince’s opinions and Mr. Kennedy’s opinions, those

27

6 Mr.Kennedydidnotapplyasimilar“profitsharing”deductiontotheothertwo valuations, which further raises concerns about the reliability, perhaps, arbitrariness, of his opinions.

- 9 -

 28

Appx37

14cv2235

 

Case 3:14-cv-0C2a2s3e5:-D20M-S20-B1L1M Document:52438 FPilaegde0:1/2093/19FilPeadg: e0I2D/1.26/2709271 Page 10 of 10

   1 opinions also should have been excluded. See Gbarabe v. Chevron Corp., No. 14-CV-

2 00173-SI, 2017 WL 956628, at *17 (N.D. Cal. Mar. 13, 2017) (stating it would be

3 “inappropriate” for expert to rely on another expert’s “flawed and speculative report.”)7

4 Accordingly, the Court grants Apple’s request for a conditional remittitur of $10

5 million. In the event Wi-LAN does not accept this remittitur, the Court grants Apple’s

6 motion for a new trial on damages.8

7 III.

8 CONCLUSION AND ORDER

9 For the reasons set forth above, the Court denies Apple’s motion for judgment

10 as a matter of law on the issue of infringement or damages, and denies Wi-LAN’s

11 motion for supplemental damages, ongoing royalty and prejudgment and post judgment

12 interest. The Court grants Apple’s motion for a conditional remittitur to $10 million,

13 and orders the parties to appear for a settlement conference before Judge Major on

14 January 14, 2019, at 10:30 a.m. In the event Wi-LAN accepts the remittitur, a Notice

15 of Acceptance of Remittitur must be filed by January 18, 2019. In the event Wi-LAN

16 does not accept the remittitur, the Court grants Apple’s motion for a new trial on

17 damages, and will set a telephonic status conference with counsel to discuss dates.

18 IT IS SO ORDERED.

 19 DATED: January 3, 2019 20

21

22

23

24

25

26

27

28

HON. DANA M. SABRAW United States District Judge

 The Federal Rules of Evidence permit an expert to rely upon the opinions developed by another expert for the purpose of litigation if the expert independently verifies the underlying expert’s work. Fosmire v. Progressive Max Ins. Co., 277 F.R.D. 625, 630 (W.D. Wash. 2011). However, there is no evidence Professor Prince or Mr. Kennedy independently verified Dr. Madisetti’s “benefits” opinions in this case.

7

8 In light of this ruling, the Court denies Wi-LAN’s motion for supplemental damages, ongoing royalty and prejudgment and post judgment interest.

- 10 -

Appx38

14cv2235

 

Case 3:14-cv-C0a2s2e3:52-D0-M2S01-B1LM DDoocucummeennt:t26314

PFailgeed:013/026/1F9ilePda: g0e2I/D12.3/20022115

Page 1 of 5

   1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

APPLE INC.,

vs. WI-LAN, INC.,

Plaintiff,

CASE NO. 14cv2235 DMS (BLM)

ORDER DENYING WI-LAN’S MOTION FOR RECONSIDERATION

 Defendant. _______________________________

AND ALL RELATED COUNTERCLAIMS.

 On January 4, 2019, this Court issued an Order granting Apple’s motion for a new trial on damages. (ECF No. 554.) Wi-LAN now moves for reconsideration of that decision. Apple filed an opposition to the motion, and Wi-LAN filed a reply.

“Reconsideration is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law.” School Dist. No. 1J, Multnomah County, Oregon v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). Here, Wi-LAN relies on the second prong, and argues the Court’s decision to grant a new trial on damages was clearly erroneous and manifestly unjust. Specifically, Wi-LAN Aserts there was substantial evidence to support the jury’s damages verdict, and thus the Court’s decision to grant a new trial on damages was both clearly erroneous and

- 1 -

Appx39

14cv2235

 

Case 3:14-cv-C0a2s2e3:52-D0-M2S01-B1LM DDoocucummeennt:t26314 PFailgeed:013/126/1F9ilePda: g0e2I/D12.3/20022116 Page 2 of 5

   1 manifestly unjust. Wi-LAN also argues Dr. Madisetti properly measured the technical

2 benefit of the invention recited in claim 26 of the ‘145 Patent, and the Court’s decision

3 to the contrary was clearly erroneous.

4 The burden to show a decision is clearly erroneous is a high one, “which by

5 design is difficult to meet.” United States v. Perkins, 850 F.3d 1109, 1125 (9th Cir.

6 2017). “‘To be clearly erroneous, a finding must be more than possibly or even

7 probably wrong; the error must be pellucid to any objective observer.’” United States

8 v. Christie, 825 F.3d 1048, 1058 (9th Cir. 2016) (quoting United States v. Quaintance,

9 608 F.3d 717, 721 (10th Cir. 2010)) (internal quotation marks omitted). Stated

10 otherwise, “‘to be clearly erroneous, a decision must ... strike us as wrong with the

11 force of a five-week old, unrefrigerated dead fish.’” Ocean Garden, Inc. v. Marktrade

12 Co., Inc., 953 F.2d 500, 502 (9th Cir. 1991) (quoting Parts and Elec. Motors, Inc. v.

13 Sterling Elec., Inc., 866 F.2d 228, 233 (7th Cir. 1988)). “This stringent standard ‘rests

14 on good sense and the desire to protect both court and parties against the burdens of

15 repeated reargument by indefatigable diehards.’” Alaimalo v. United States, 645 F.3d

16 1042, 1060 (9th Cir. 2011) (quoting 18B Charles A. Wright et al., Federal Practice and

17 Procedure § 4478 (2d ed. 2002)).

18 Here, Wi-LAN argues the Court committed clear error in finding that Dr.

19 Madisetti’s opinion about the benefits of claim 26 of the ‘145 Patent lacked a sufficient

20 factual basis. However, this argument is essentially a rehash of arguments Wi-LAN

21 has raised in previous motions, namely, that Dr. Madisetti did not equate the value of

22 claim 26 of the ‘145 Patent with VOLTE. Wi-LAN attempts to put a finer point on that

23 argument here by drawing a distinction between VOLTE, in general terms, and one

24 aspect of VOLTE, namely “improved voice quality during loading[,]” (Mot. at 10), but

25 at its core this argument is simply a different shade of the same argument Wi-LAN has

26 been making consistently in this case. As such, it does not warrant reconsideration of

27 the Court’s prior finding. See Brown v. Kinross Gold, U.S.A., 378 F.Supp.2d 1280,

28 1288 (D. Nev. 2005) (“A motion for reconsideration is not an avenue to re-litigate the

- 2 -

Appx40

14cv2235

 

Case 3:14-cv-C0a2s2e3:52-D0-M2S01-B1LM DDoocucummeennt:t26314 PFailgeed:013/26/1F9ilePda: g0e2I/D12.3/20022117 Page 3 of 5

   1 same issues and arguments upon which the court already has ruled.”) (citing Brogdon

2 v. Nat’l Healthcare Corp., 103 F.Supp.2d 1322, 1338 (N.D. Ga. 2000)).

3 Furthermore, the Court does not agree with the premise of Wi-LAN’s argument,

4 namely, that Dr. Madisetti confined his opinions to that aspect of VOLTE Asociated

5 with improved voice quality “during loading.” As Apple points out, Dr. Madisetti

6 testified repeatedly that the benefit of claim 26 of the ‘145 Patent, generally, was

7 “much higher quality calls.” (Trial Tr. at 259:20-23, July 24, 2018, ECF No. 504; see

8 also id. at 261:22-24 (“And then you compare the quality of voice with VOLTE and

9 with Skype then that gives you an idea of how much benefits Apple would have using

10 these iPhone.”)) Those opinions were not confined to improved voice quality “during

11 loading.” Thus, this argument does not show the Court’s prior finding about Dr.

12 Madisetti’s opinion is clearly erroneous.

13 Wi-LAN’s only other argument is that there was substantial evidence to support

14 the jury’s damages verdict, and thus the Court’s decision to grant a new trial on

15 damages was clearly erroneous and manifestly unjust. As an initial matter, the Court

16 notes that Wi-LAN did not raise this “substantial evidence” argument in its opposition

17 to Apple’s motion for a new trial on damages. Indeed, the lead case in Wi-LAN’s

18 motion for reconsideration, Landes Construction Co. v. Royal Bank of Canada, 833

19 F.2d 1365 (9th Cir. 1987), is nowhere cited in Wi-LAN’s opposition to Apple’s motion

20 for a new trial on damages. Wi-LAN’s failure to make this specific argument in its

21 prior brief is reason enough to deny the motion for reconsideration. See Garber v.

22 Embry-Riddle Aeronautical Univ., 259 F.Supp.2d 979, 982 (D. Ariz. 2003) (“[N]ew

23 arguments and new legal theories that could have been made at the time of the original

24 motion may not be offered in a motion for reconsideration.”)

25 Even considering the merits of the argument, it does not warrant reconsideration

26 of the Court’s previous order. Contrary to Wi-LAN’s argument, the jury in this case

27 was not presented with two alternative theories of damages. Rather, the jury was

28 presented with one theory: A reasonable royalty. The evidence Wi-LAN relies on to

- 3 -

Appx41

14cv2235

 

Case 3:14-cv-C0a2s2e3:52-D0-M2S01-B1LM DDoocucummeennt:t26314 PFailgeed:013/326/1F9ilePda: g0e2I/D12.3/20022118 Page 4 of 5 CONFIDENTIAL MATERIAL OMITTED

1 support its Asertion that there was another theory of damages, i.e.,,

2 the rate sheets and the infrastructure analysis, were all part of that theory. Indeed, all

3 of that evidence was used primarily as a “check” against Mr. Kennedy’s opinion that

4 was a reasonable royalty in this case. It did not form the basis for an

5 alternative theory of damages.1

6 Furthermore, the Court is persuaded that admission of this evidence, combined

7 with Dr. Madisetti’s improper opinion on the benefits of claim 26 of the ‘145 Patent,

8 “skew[ed] the damages horizon for the jury.” Uniloc USA, Inc. v. Microsoft Corp., 632

9 F.3d 1292, 1320 (Fed. Cir. 2011). This is especially so with respect to

10 and the rate sheets. For instance, although Mr. Kennedy testified that

11 was “probative” to the hypothetical negotiation analysis, he did not

12 say was comparable to the hypothetical license the parties would have

13 agreed to in this case, (Trial Tr. at 693-94, July 26, 2018), which was a prerequisite to

14 its admissibility. See LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 78-

15 81 (Fed. Cir. 2012) (granting new trial because damages testimony relied on licenses

16 that were not comparable and therefore not relevant). Indeed, Mr. Kennedy testified

17 it was not the similarities between that made relevant,

18 but that was “most helpful.” (Id. at 693-

19 94.) Admission of the rate sheets was similarly prejudicial. See Whitserve, LLC v.

20 Computer Packages, Inc., 694 F.3d 10, 29-30 (Fed. Cir. 2012) (acknowledging that

21 although “proposed licenses may have some value for determining a reasonable royalty

22 in certain situations[,]” the evidentiary value of proposed licenses is limited by “the fact

23 that patentees could artificially inflate the royalty rate by making outrageous offers.”)

24

25 26 27 28

    1 The absence of an alternative theory of damages takes this case outside the holding of Landes. In that case, unlike here, the plaintiff actually presented two “alternative calculations of damages” to the jury, one based on lost profits and another based on “the difference between the purchase price and fair market value[.]” 833 F.2d at 1372-73. In light of those two theories, the court concluded “that proper respect for the role of the jury and the discretion of the trial judge favors construing a general verdict in behalf of the prevailing party.” Id. at 1373. That presumption does not apply here, where the jury was presented with only one theory of damages.

- 4 -

Appx42

14cv2235

 

Case 3:14-cv-C0a2s2e3:52-D0-M2S01-B1LM DDoocucummeennt:t26314 PFailgeed:013/426/1F9ilePda: g0e2I/D12.3/20022119 Page 5 of 5

   1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Under these circumstances, the Court cannot say its decision to grant Apple’s motion for a new trial on damages was either clearly erroneous or manifestly unjust. See United States v. 99.66 Acres of Land, 970 F.2d 651, 658 (9th Cir. 1992) (stating new trial is warranted “on the basis of an incorrect evidentiary ruling if the ruling substantially prejudiced a party.”) Accordingly, Wi-LAN’s motion for reconsideration is denied.

IT IS SO ORDERED. DATED: March 26, 2019

 Appx43

HON. DANA M. SABRAW United States District Judge

- 5 -

14cv2235

 

Case: 20-2011 Document: 23 Page: 135 Filed: 02/12/2021

FORM 31. Certificate of Confidential Material

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

CERTIFICATE OF CONFIDENTIAL MATERIAL CaseNumber: 2020-2011(lead);2020-2094

Short Case Caption: Apple Inc. v. Wi-LAN Inc.

Form 31 July 2020

          Instructions: When computing a confidential word count, Fed. Cir. R. 25.1(d)(1)(C) applies the following exclusions:

Only count each unique word or number once (repeated uses of the same word do not count more than once).

For a responsive filing, do not count words marked confidential for the first time in the preceding filing.

The limitations of Fed. Cir. R. 25.1(d)(1) do not apply to appendices; attachments; exhibits; and addenda. See Fed. Cir. R. 25.1(d)(1)(D).

 5

The foregoing document contains ____________ number of unique words (including

numbers) marked confidential.

This number does not exceed the maximum of 15 words permitted by Fed. Cir. R. 25.1(d)(1)(A).

This number does not exceed the maximum of 50 words permitted by Fed. Cir. R. 25.1(d)(1)(B) for cases under 19 U.S.C. § 1516a or 28 U.S.C. § 1491(b).

This number exceeds the maximum permitted by Federal Circuit Rule 25.1(d)(1), and the filing is accompanied by a motion to waive the confidentiality requirements.

Jeffrey A. Lamken

02/12/2021 /s/ Jeffrey A. Lamken

Date: _________________ Signature: Name:

  

Case: 20-2011 Document: 23 Page: 136 Filed: 02/12/2021

CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a) and Fed. R. Cir. R. 32(b) because this brief contains 16,484 words as measured by the word count function of Microsoft Word, excluding the parts of the brief exempted by Fed. R. App. P. 32(f).

2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type-style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Word in Times New Roman 14-point font.

February 12, 2021 /s/ Jeffrey A. Lamken Jeffrey A. Lamken

Counsel for Wi-LAN Inc.

  

[100mill]

V_guerriero, thanks for taking the time to copy/paste Wilan's reply. Much appreciated.