Lupercal LLC v. CitiBank, N.A.

Western District of Texas, txwd-6:2019-cv-00201


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1 Caution As of: November 13, 2019 3:46 PM Z C Summit 6, LLC v. Samsung Elecs. Co. United States Court of Appeals for the Federal Circuit September 21, 2015, Decided 2013-1648, 2013-1651 Reporter 802 F.3d 1283 *; 2015 U.S. App. LEXIS 16711 **; 116 U.S.P.Q.2D (BNA) 1637 *** Counsel: THEODORE STEVENSON, III, McKool SUMMIT 6, LLC, Plaintiff-Cross Appellant v. SAMSUNG Smith, P.C., Dallas, TX, argued for plaintiff-cross ELECTRONICS CO., LTD., SAMSUNG appellant. Also represented by DOUGLAS AARON TELECOMMUNICATIONS AMERICA, LLC, CAWLEY, PHILLIP AURENTZ, RICHARD ALAN Defendants-Appellants KAMPRATH; JOEL LANCE THOLLANDER, JOHN BRUCE CAMPBELL, GRETCHEN CURRAN, KATHY Prior History: [**1] Appeals from the United States HSINJUNG LI, Austin, TX; BRADLEY WAYNE District Court for the Northern District of Texas in No. CALDWELL, Caldwell, Cassady & Curry, Dallas, TX. 11-CV-0367, Judge Reed O'Connor. CARTER GLASGOW PHILLIPS, Sidley Austin LLP, Washington, DC, argued for defendants-appellants. Also represented by JOSEPH GUERRA, RACHEL Summit 6 LLC v. Research in Motion Corp., 2013 U.S. HEATHER TOWNSEND. Dist. LEXIS 95164 (N.D. Tex., June 26, 2013) Judges: Before PROST, Chief Judge, REYNA, and Disposition: AFFIRMED. HUGHES, Circuit Judges. Case Summary Opinion by: REYNA Overview Opinion HOLDINGS: [1]-District court did not err in declining to construe patent claim terms because the terms "being provided to" were commonly used terms and had no [***1639] [*1287] REYNA, Circuit Judge. special meaning in the art; thus, no new trial was warranted based on claim construction; [2]-District court This appeal is from a final judgment entered on a jury also did not err in denying defendant's motion for verdict in a patent case. The jury found the asserted judgment as a matter of law (JMOL) with respect to claims of U.S. Patent No. 7,765,482 ("the '482 patent") infringement because the jury's verdict finding not invalid and infringed. The jury awarded Appellee- infringement was supported by substantial evidence; [3]- Cross Appellant Summit 6, LLC ("Summit") $15 million District court did not err in denying defendant's JMOL in damages. The parties raise various issues relating to with respect to invalidity; [4]-District court did not abuse the proper legal framework for evaluating reasonable its discretion in deciding that plaintiff's expert testimony royalty damages in the patent infringement context. Also was admissible and that the expert's damages before us are questions regarding claim construction, methodology was based on reliable principles and was infringement, invalidity, and the admissibility of sufficiently tied to the facts of the case; [5]-District court expert [**2] testimony. For the reasons explained did not abuse its discretion in denying plaintiff's request below, we affirm. for an ongoing royalty. I. BACKGROUND Outcome A. The '482 Patent Judgment affirmed. Summit is the owner by assignment of the '482 patent, 1 802 F.3d 1283, *1287; 2015 U.S. App. LEXIS 16711, **2; 116 U.S.P.Q.2D (BNA) 1637, ***1639 entitled "Web-based Media Submission Tool." The '482 device, said one or more pre-processing patent relates to the processing of digital content, such parameters controlling said client device in a as digital photos. '482 patent at col. 1 ll. 11-14. The placement of said digital content into a specified invention "provides an improved web-based media form in preparation for [*1288] publication to one or submission tool" that includes "several unique and more devices that are remote from a server device valuable functions." Id. at col. 2 ll. 7-8. The embodiment and said client device; and described in the specification focuses on a tool used to c. transmitting a message from said client device to submit photos to a website. Id. at col. 2 ll. 44-60, col. 3 said server device for subsequent distribution to ll. 55-64. This embodiment is described as software that said one or more devices that are remote from said allows a user to place the photo into a website form server device and said client device, said either by dragging and dropping the photo from the transmitted message including said pre-processed user's computer or by using a mouse click within the digital content. website. Id. at col. 3 ll. 20-48. Among other things, the '482 patent teaches a web-based media submission tool Id. at col. 13 l. 56-col. 14 l. 14 (emphases added to with "a variable amount of intelligent pre-processing on relevant terms). media objects prior to upload." Id. at col. 2 ll. 16-17. B. Procedural History The "intelligent preprocessing" taught by the '482 patent On February 23, 2011, Summit sued Samsung includes the "ability to control the width and height of the Electronics Co., Ltd., Samsung Telecommunications media object identifier and the ability to preprocess the America LLC (collectively, "Samsung"), Research in media objects in any number of ways prior to Motion Limited, Research in Motion Corp. (collectively, transporting to a second [**3] location." Id. at col. 4 ll. "RIM"), Facebook, Inc. ("Facebook"), and other 53-56. The patent describes this process in detail: defendants asserting infringement of the '482 patent. [T]he [invention] may resize the image, (i.e., Summit asserted that the process of sending increase or decrease its size as defined by either photographs via the multimedia messaging service physical dimensions, pixel count, or kilobytes). ("MMS") as used by smartphones and tablets designed, Compression, for example, is a type of sizing. The manufactured, and sold by Samsung infringes the '482 [invention] may also change the image's file format, patent. . . . change the quality setting of the image, crop the image or change the aspect ratio, add text or In the district [**5] court, the parties disputed the proper annotations, encode or combine. . . the media meaning of fourteen claim terms. As relevant to this object, or enhance the media object by changing appeal, the parties disputed the proper meaning of image values, for example, relating to contrast or "publication/publishing" and "receiving"/"provided to."1 saturation. Samsung contended that "publication" should be construed to mean "making the digital content publicly Id. at col. 4 ll. 57-67. available (e.g. posting the digital content on a web page)" in order to differentiate the term from Summit asserted independent claim 38 and dependent "transmitting" and "distribution." Summit argued that claims 40, 44-46, and 49 at trial. Claim 38 recites: publication requires no construction and, if it does, it 38. A computer implemented method for pre- should be "sharing." Regarding the "receiving"/"provided processing digital content in a client device for to" terms, Samsung argued that claim 38 required the subsequent electronic distribution, comprising: active receipt of the pre-processing parameters during a. initiating, by said client device, a transfer of the operation of the claimed method. Samsung digital content from said client device to [***1640] contended that the receipt of the pre-processing a server device, said digital content including one or parameters must occur during the operation of the more of image content, video content, and audio method. Summit argued that the receipt of pre- content; processing parameters required ongoing activity, but b. pre-processing said digital content at said client device in accordance with one or more pre- 1 The "receiving"/"provided to" terms include "receiving. . . processing parameters, said one or more pre- from a remote device," "received from a device separate from processing [**4] parameters being provided to said a client device," and "provided to said client [**6] device by a client device from a device separate from said client device separate from said client device." Page 2 of 11 1 802 F.3d 1283, *1288; 2015 U.S. App. LEXIS 16711, **6; 116 U.S.P.Q.2D (BNA) 1637, ***1640 could also encompass the receipt of the pre-processing to prepare the message for publication. parameters prior to the commencement of the claimed method. Summit then presented evidence of damages through its expert Mr. Paul Benoit. Mr. Benoit explained that On May 21, 2012, the district court issued an order Samsung [**8] would have agreed in a hypothetical construing the disputed claim terms. Regarding negotiation to pay Summit $0.28 per phone to provide "publication," the district court agreed with Samsung the infringing features on their phones over the life of and construed the term to mean "making publicly the patent. Mr. Benoit acknowledged that he relied on a available." The district court declined to construe the methodology not previously used or published in peer- "receiving"/" provided to" terms, finding that the terms reviewed journals. Samsung's expert, Mr. Christopher required no construction. RIM settled thereafter. Martinez, testified that because infringement takes place at the software level, no company would agree to pay a On October 22, 2012, Samsung filed a motion for running royalty on a phone. He testified that a proper summary judgment of non-infringement. The district royalty would be a $1.5 million lump sum. He based this court denied Samsung's motion as to literal conclusion on two license agreements. infringement, finding that a genuine issue of material fact existed as to whether Samsung's products perform After the close of Summit's case-in-chief, Samsung the recited pre-processing step. The court granted other presented evidence that it asserted showed that the aspects of Samsung's motion, finding that prosecution '482 patent is invalid over U.S. Patent No. 6,038,295 history estoppel bars application of the doctrine of ("Mattes"). At trial, the parties agreed that the basic equivalents to the pre-processing step. Soon thereafter, operation of the system disclosed in Mattes included Facebook settled.2 taking a picture, pre-processing the picture, and transmitting the picture to a server over a wireless Samsung was then the only remaining defendant. network. Summit's expert, Dr. Jones, testified that [*1289] Beginning on March 29, 2013, the district court Mattes fails to disclose the pre-processing step of claim held a six-day jury trial. During trial the parties 38 because the imaging device does not "know" that a presented competing evidence regarding the provision photo has met the server's specification when the photo of pre-processing parameters [**7] to the client device. is transmitted. Dr. Jones further testified that the Summit contended that receipt of the pre-processing limitations of claims 40 and [**9] 46 were similarly not parameters during the operation of the method was not disclosed by Mattes. required. Summit's expert, Dr. Mark Jones, testified that even if active receipt during the operation of the method The jury returned a verdict on April 5, 2013, finding the is required, Samsung phones receive parameters when five asserted claims of the '482 patent not invalid and phones are reflashed or when software updates are infringed. The jury awarded Summit $15 million in provided. Samsung's expert, Dr. Earl Sacerdoti, damages. The jury indicated on the verdict form that this explained that active receipt of the parameters is was a lump sum award. required and the pre-processing parameters [***1641] are not provided to any accused Samsung device during The parties filed post-trial motions. The district court any pre-processing operations. granted Samsung's pre-verdict motion for judgment as a matter of law ("JMOL") of no direct infringement and On the "publication" limitation, Summit contended that denied all other pre-verdict motions. The district court Samsung's accused devices prepare the images for denied all of Samsung's post-verdict motions except its "publication." Summit's expert, Dr. Jones, explained that motion to reduce prejudgment interest. when an image is resized in Samsung phones, the digital content is placed in a form in preparation for both The parties timely appealed. We have jurisdiction under transmission and publication. Samsung's expert, Dr. 28 U.S.C. § 1295(a)(1). Sacerdoti, explained that any alterations to the image II. DISCUSSION during the MMS process are done to meet carrier transmission requirements for message size limits, not A. Claim Construction On appeal, the parties dispute whether the asserted 2 Facebook was also accused of infringing U.S. Patent No. claims of the '482 patent require [*1290] that pre- 6,895,557 ("the '557 patent"). The '482 patent is a continuation processing parameters be provided to the client device of the '557 patent. during the computer-implemented method for pre- Page 3 of 11 1 802 F.3d 1283, *1290; 2015 U.S. App. LEXIS 16711, **9; 116 U.S.P.Q.2D (BNA) 1637, ***1641 processing digital content or whether it can occur prior F.3d 1318, 1324 (Fed. Cir. 2012). Although courts are to operation of the method. Samsung argues that the permitted to consider extrinsic evidence, like expert district court erred in declining to construe the term testimony, dictionaries, and treatises, such evidence is "being provided to" as used in claim 38 because this generally of less significance than the intrinsic record. term requires the provision of the pre-processing Phillips, 415 F.3d at 1317 (citing C.R. Bard, Inc. v. U.S. parameters during the operation of the method. Surgical Corp., 388 F.3d 858, 862 (Fed. Cir. 2004)). Samsung contends that [**10] this ongoing activity is Extrinsic evidence may not be used "to contradict claim compelled not only by the language of the claim, but meaning that is unambiguous in light of the intrinsic also by the language of other claims and the evidence." Id. at 1324. prosecution history. While the parties focus on the words "being provided Summit asks that we conclude Samsung waived the to," the surrounding language of the claim is instructive. argument that "being provided to" requires that the pre- The relevant limitation of claim 38 requires: processing parameters be provided to the device during the operation of the method. In the alternative, Summit b. pre-processing said digital content at said client argues that there is no evidence to support Samsung's device in accordance with one or more pre- proposed limitation on the claim language. Summit processing parameters, said one or more pre- contends that "being provided to" is not a verb requiring processing parameters [*1291] being provided to ongoing activity, but instead a phrase functioning as an said client device from a device separate from said adjective that describes a characteristic of "said. . . client device, [**12] . . .; parameters." '482 patent at col. 14 ll. 1-5 (emphasis added). We find We first address the issue of waiver. To avoid waiver, a that "being provided to" is not used as a verb in claim party's argument at trial and the appellate level should 38, but instead is a part of a phrase that conveys be consistent. Finnigan Corp. v. Int'l Trade Comm'n, 180 information about the "pre-processing parameters." In F.3d 1354, 1363 (Fed. Cir. 1999). We find that Samsung this claim, the pre-processing parameters are "being has argued throughout this action that the claimed provided to" the client device from a second device. Id. provision of pre-processing parameters must be This is not a step in the claimed method. It is, instead, a performed as an active step of the claimed method. phrase that characterizes the claimed pre-processing Samsung's argument on this issue has been sufficiently parameters. The use of the term "said" indicates that consistent to negate a finding of waiver. For these this portion of the claim limitation is a reference back to reasons, we conclude that Samsung has not waived its the previously claimed "pre-processing parameters." argument. We now turn to the merits of the claim See Baldwin Graphic Sys., Inc. v. Siebert, Inc., 512 F.3d construction dispute. 1338, 1343 (Fed. Cir. 2008) (noting that claims using the term "said" are "anaphoric phrases, referring to the [***1642] Claim construction is generally [**11] a initial antecedent phrase"). That the pre-processing matter of law that we review de novo, but it may have parameters come from a second device is merely a underlying factual determinations that are reviewed for characteristic of the parameters. It is not a step of the clear error. Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 method, nor does it require current or ongoing activity. S. Ct. 831, 837, 190 L. Ed. 2d 719 (2015). The process of construing a claim term begins with the words of the Further, the district court did not err in declining to claims. Phillips v. AWH Corp., 415 F.3d 1303, 1312-14 construe the term. While the court must resolve actual (Fed. Cir. 2005) (en banc); Vitronics Corp. v. disputes regarding the proper scope of a claim term, O2 Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996). Micro Int'l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1360 (Fed. Cir. 2008), restating a settled However, the claims "must be read in view of the argument does not create an actual dispute within the specification, of which they are a part." Phillips, 415 meaning of O2 Micro, Finjan, Inc. v. Secure Computing F.3d at 1315 (quoting Markman v. Westview Corp., 626 F.3d 1197, 1207 (Fed. Cir. 2010). At the Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en claim construction stage, the [**13] district court banc), aff'd, 517 U.S. 370, 116 S. Ct. 1384, 134 L. Ed. rejected Samsung's argument that ongoing activity is 2d 577 (1996)). Additionally, the doctrine of claim required—the heart of the parties' disagreement—and differentiation disfavors reading a limitation from a declined to further construe the term because it was a dependent claim into an independent claim. See "straightforward term" that required no construction. J.A. InterDigital Commc'ns, LLC v. Int'l Trade Comm'n, 690 Page 4 of 11 1 802 F.3d 1283, *1291; 2015 U.S. App. LEXIS 16711, **13; 116 U.S.P.Q.2D (BNA) 1637, ***1642 45. "Being provided to" is comprised of commonly used 26 recite "previously received pre-processing terms; each is used in common parlance and has no parameter." [sic] Since the claims are not shown special meaning in the art. Because the plain and [sic] any previously received parameter prior to the ordinary meaning of the disputed claim language is "pre-processing" step, such language is indefinite. clear, the district court did not err by declining to J.A. 25179. In response, the applicant amended the first construe the claim term. limitation of these claims to recite "receiving pre- processing parameters. . .," thus showing the receipt of Samsung contends that the district court read a the parameters referenced in the third limitation and limitation out of claim 38 by refusing to construe this creating the proper basis for receipt of the "previously term. Samsung argues that by failing to limit the claim to received parameters." This does not preclude prior active receipt of the pre-processing parameters, the receipt as to either these claims, or to claim 38, which district court effectively read the "being provided to" was subsequently added. language out of the claim. We disagree. That the pre- processing parameters are on the client device and that Finally, Samsung argues that the preamble is limiting they have come from a second device must be proved, because it "provides context essential to understanding just like any other limitation. The claim term "being the corresponding steps in the body of the claim" provided to," however, does not limit the claim to the because it is the only part of [**16] the claim that refers provision of pre-processing parameters only during the to the advance over the prior art. Appellants' Opening operation of the method. Br. at 41. Samsung concludes that because the preamble is limiting, provision of the parameters must Samsung argues that other claims use language that happen during the pre-processing step. We disagree clearly indicates [**14] temporal activity and concludes that the preamble here is limiting. Generally, a preamble that the "being provided to" term must indicate present is not limiting. Symantec Corp. v. Computer Assocs. and ongoing activity. Samsung suggests that claims 36, Int'l, Inc., 522 F.3d 1279, 1288 (Fed. Cir. 2008). For 37, and [***1643] 51, use language that indicates a example, "[p]reamble language that merely states the past activity. '482 patent at col. 13 ll. 21-22 ("pre- purpose or intended use of an invention is generally not processing parameters that were provided to said client treated as limiting the scope of the claim." Pacing device. . ."), col. 13 ll. 45-46 ("pre-processing Techs., LLC v. Garmin Int'l, Inc., 778 F.3d 1021, 1023- parameters that were provided to said client device. . . 24 (Fed. Cir. 2015) (quoting Bicon, Inc. v. Straumann"), col. 14 ll. 49-50 ("pre-processing parameters that Co., 441 F.3d 945, 952 (Fed. Cir. 2006)). Samsung have been provided to. . ."). Yet, other claims use does not contend that the preamble to claim 38 is language indicating that the provision must occur during necessary to provide antecedent basis or that the the operation of the claimed method. Id. at claim 26, col. applicant placed clear reliance on the preamble during 9 ll. 23-24 ("receiving pre-processing parameters from a prosecution. See Pacing, 778 F.3d at 1024 ("Because remote device. . ."), claim 12, col. 10 ll. 43-44 the preamble terms. . . provide antecedent basis for ("receiving pre-processing parameters from a remote and are necessary to understand positive limitations in device. . . ."). [*1292] Neither of these sets of claims, the body of claims. . ., we hold that the preamble to however, provides an indication of what the applicants claim 25 is limiting."). Moreover, the preamble to claim intended when they chose the phrase "being provided 38 is duplicative of the limitations in the body of the to," and the plain meaning of this term does not clearly claim and merely provides context for the limitations. delineate the temporal limitation Samsung suggests. See Symantec, 522 F.3d at 1288-89. Samsung points to the prosecution history to support its In sum, the district court properly rejected Samsung's position, arguing that amendments to other claims show argument that the "being provided to" language of claim that claim 38 requires ongoing activity during [**15] 38 requires that the pre-processing parameters are operation of the method. This argument misinterprets provided to the client device during operation [**17] of the prosecution history. During prosecution, the the claimed method. We affirm the district court's denial applicant presented claims reciting "previously received of the motion for new trial based on claim construction. pre-processing parameters" in the third limitation of each claim. J.A. 25153-56 (claims 16, 23, and 26). The B. Infringement examiner rejected these claims as indefinite under 35 After the jury returned its verdict finding the five U.S.C. § 112 para. 2. The examiner stated: asserted claims of the '482 patent not invalid and The step of "pre-processing" in claims 16, 23, and Page 5 of 11 1 802 F.3d 1283, *1292; 2015 U.S. App. LEXIS 16711, **17; 116 U.S.P.Q.2D (BNA) 1637, ***1643 infringed, the district [*1293] court denied Samsung's Both parties were fully heard on this issue, and there pre-verdict JMOL of no indirect infringement. exists legally sufficient evidentiary basis for a reasonable jury to find for Summit on this issue. This Samsung argues that the jury's verdict on indirect evidence supports the jury's verdict finding that infringement is not supported by substantial evidence Samsung's accused devices perform the methods of the because Samsung's accused phones do not pre- asserted claims. process "in preparation for publication." Samsung argues that under the district court's constructions, Thus, the district court did not err in denying Samsung's Summit was required to show that Samsung's accused JMOL with respect to infringement. phones modify a digital image in preparation for making C. Invalidity the image publicly available. Samsung argues that Summit failed to make such a showing. We disagree. At trial, Samsung argued that the '482 patent was invalid as anticipated by the prior art reference Mattes. After [***1644] A denial of a motion for JMOL is not unique the jury returned its verdict finding the five asserted to patent law, and thus, we apply the law of the regional claims of the '482 patent not invalid and infringed, the circuit, here the Fifth Circuit. Transocean Offshore district court denied Samsung's pre-verdict JMOL of Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc., invalidity. 699 F.3d 1340, 1346-47 (Fed. Cir. 2012). Under Fifth Circuit law, a district court's decision on a motion for Samsung argues that the evidence does not support the JMOL is reviewed de novo, reapplying the JMOL jury's verdict that the '482 patent is not invalid. Samsung standard. Ford v. Cimarron Ins. Co., Inc., 230 F.3d 828, argues that it presented clear and convincing evidence 830 (5th Cir. 2000) (citing Omnitech Int'l, Inc. v. Clorox of invalidity. We disagree. Co., 11 F.3d 1316, 1322-23 (5th Cir. 1994)). JMOL is appropriate when a party has been fully heard on an [*1294] A party challenging the validity of a patent issue and there is no legally sufficient evidentiary basis must establish invalidity by clear and convincing for a reasonable jury to find for [**18] that party on that evidence. See Microsoft Corp. v. i4i Ltd. 564 U.S. 91, issue. Fed. R. Civ. P. 50(a)(1). 131 S. Ct. 2238, 2242, 180 L. Ed. 2d 131 (2011). Anticipation is a factual question that we review for The jury heard evidence from Summit's expert, Dr. substantial evidence when appealed from a jury verdict. Jones, that Samsung's accused devices perform the SynQor, Inc. v. Artesyn Techs., Inc., 709 F.3d 1365, methods of the asserted claims. Dr. Jones explained 1373 (Fed. Cir. 2013). A claim is anticipated only if each that the carriers dictate image height and width and every element is found within a single prior art resolution parameters to maintain image quality in reference, arranged as claimed. [**20] See Net preparation for publication. J.A. 6128-29, 7282-83. Dr. MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1369 Jones also explained that the pre-processing performed (Fed. Cir. 2008). by Samsung's phones is in preparation for publication. J.A. 7283. Dr. Jones outlined the difference between The jury heard evidence from Summit's expert, Dr. preparing for transmission and preparing for publication. Jones, that at least one element of each asserted claim J.A. 6149-50. Dr. Jones noted that if the pre-processing was missing from that reference. At trial, Dr. Jones were only for transmission, Samsung could use an focused his testimony regarding the prior art Mattes "extremely low JPEG quality parameter" that "would patent on the pre-processing requirements of the '482 likely look terrible at the end but it would be quite small.'' patent. Specifically, Dr. Jones testified that Mattes fails J.A. 7283. to disclose limitation (b) of claim 38: "one or more pre- processing parameters controlling said client device in a Samsung's expert, Dr. Sacerdoti, admitted that the placement of said digital content into a specified form." source code contained in each of the phones has a Dr. Jones testified that in Mattes it is the server—not the configurable maximum file size as dictated by the client device—that contains the software for pre- carriers. J.A. 7001. Dr. Sacerdoti agreed with Dr. Jones processing the image and that Mattes does not disclose that the carrier requirements for image resolution were performing the image analysis on the client device. J.A. related to how an image is viewed on the screen. J.A. 7271, 7273. 7000. He also agreed that the carrier requirements for image resolution were not transmission The jury heard expert testimony from both sides. The requirements. [**19] Id. jury verdict is supported by substantial evidence, and Page 6 of 11 1 802 F.3d 1283, *1294; 2015 U.S. App. LEXIS 16711, **20; 116 U.S.P.Q.2D (BNA) 1637, ***1644 we have no cause to disturb it. Thus, the district court Court stated that the trial judge plays a "gatekeeping did not err in denying Samsung's JMOL with respect to role," id. at 597, which "entails a preliminary assessment invalidity. of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to [***1645] D. Expert Testimony the facts in issue." Id. at 592-93. The Court emphasized that the focus "must be solely on principles and Samsung appeals the district court's denial of methodology, not on the conclusions that they Samsung's JMOL motion to exclude Mr. Benoit's generate." Id. at 595. This admissibility assessment, testimony. Samsung contends that Mr. Benoit's analysis while a flexible one, may consider the following factors: fails the standards set forth by Daubert v. Merrell Dow (1) whether the methodology is scientific knowledge that Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, will assist the trier of fact; (2) whether the methodology 125 L. Ed. 2d 469 (1993). First, Samsung argues that has been tested; (3) whether the methodology has been Mr. Benoit's methodology [**21] was unpublished, published in peer-reviewed journals; (4) whether there is created specifically for this litigation, and never before a known, potential rate of error; and (5) whether the employed by Mr. Benoit or by another expert. Second, methodology is generally accepted. Id. at 591-95. Samsung argues that Mr. Benoit's "premise. . . that a feature's use is proportional to its value" was incorrect The admissibility of expert evidence is also and contradicted by other expert testimony. Defendant- governed [**23] by Rules 702 and 703 of the Federal Appellant's Opening Br. at 6. Third, Samsung questions Rules of Evidence. "Rule 702 was amended in response the reliability of Mr. Benoit's use of surveys because Mr. to Daubert and cases applying it, including Kumho Tire." Benoit is not a survey expert and failed to take the basic Micro Chem., 317 F.3d at 1391 (citing Kumho Tire Co. steps required of a secondary expert who purports to v. Carmichael, 526 U.S. 137, 150, 119 S. Ct. 1167, 143 give an opinion based on a third party's survey. L. Ed. 2d 238 (1999)). Rule 702 states: A witness who is qualified as an expert by Summit responds that Mr. Benoit's analysis was not knowledge, skill, experience, training, or education "novel and untested" because it was within the may testify in the form of an opinion or otherwise if: framework of Georgia—Pacific Corp. v. U.S. Plywood (a) the expert's scientific, technical, or other Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970). Summit specialized knowledge will help the trier of fact to contends that Mr. Benoit was not a secondary expert, understand the evidence or to determine a fact in but a primary expert, because he "simply used issue; Samsung's surveys in his Georgia-Pacific analysis." (b) the testimony is based on sufficient facts or Plaintiff-Cross-Appellant's Br. at 51. data; (c) the testimony is the product of reliable principles Whether proffered evidence is admissible at trial is a and methods; and procedural issue not unique to patent law, and we (d) the expert has reliably applied the principles and therefore review the district court's decision to admit methods to the facts of the case. expert testimony under the law of the regional circuit, here the Fifth Circuit. Micro Chem., Inc. v. Lextron, Inc., Fed. R. Evid. 702. Rule 703 states: 317 F.3d 1387, 1390-91 (Fed. Cir. 2003) (citing Bose Corp. v. JBL, Inc., 274 F.3d 1354, 1360 (Fed. Cir. An expert may base an opinion on facts or data in 2001)). The Fifth Circuit reviews the admissibility of the case that the expert has been made aware of or expert testimony [**22] for abuse of discretion. personally observed. If experts in the particular field Primrose Operating Co. v. Nat'l Am. Ins. Co., 382 F.3d would reasonably rely on those kinds of facts or 546, 561 (5th Cir. 2004) (citing Vogler v. [*1295] data in forming an opinion on the subject, they need Blackmore, 352 F.3d 150, 154 (5th Cir. 2003)). The not be admissible for the opinion to be admitted. question here, therefore, is whether the district court But if the facts or data would otherwise be abused its discretion in deciding that Summit's expert inadmissible, the proponent of the opinion may testimony was admissible. We conclude that it did not. disclose them to the jury only if their probative value in helping the [***1646] jury evaluate the opinion In Daubert, the Supreme Court set out the requirements substantially outweighs their prejudicial effect. for admissibility of expert testimony. 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993). The Supreme Fed. R. Evid. 703. Page 7 of 11 1 802 F.3d 1283, *1295; 2015 U.S. App. LEXIS 16711, **23; 116 U.S.P.Q.2D (BNA) 1637, ***1646 Under [**24] these rules, a district court may exclude inquiry is whether the data utilized in the methodology is evidence that is based upon unreliable principles or sufficiently tied to the facts of the case. Kumho Tire, 526 methods, legally insufficient facts and data, or where the U.S. at 150. Hence, a reasonable or scientifically valid reasoning or methodology is not sufficiently tied to the methodology [**26] is nonetheless unreliable where the facts of the case. See, e.g., Kumho Tire, 526 U.S. at data used is not sufficiently tied to the facts of the case. 150 (the gatekeeping inquiry must be tied to the See, e.g., LaserDynamics, Inc. v. Quanta Computer, particular facts of the case); i4i Ltd. v. Microsoft Corp., Inc., 694 F.3d 51, 78-81 (Fed. Cir. 2012) (granting a 598 F.3d 831, 854 (Fed. Cir. 2010) (stating that new trial because damages testimony relied upon "Daubert and Rule 702 are safe-guards against licenses that were not comparable and therefore not unreliable or irrelevant opinions, not guarantees of relevant). Likewise, ideal input data cannot save a correctness"). [*1296] But the question of whether the methodology that is plagued by logical deficiencies or is expert is credible or the opinion is correct is generally a otherwise unreasonable. See Daubert, 509 U.S. at 592- question for the fact finder, not the court. Apple Inc. v. 93 (the court must make "a preliminary assessment of Motorola, Inc., 757 F.3d 1286, 1314 (Fed. Cir. 2014), whether the reasoning or methodology underlying the overruled en banc in part not relevant here, Williamson testimony is scientifically valid and of whether that v. Citrix Online, LLC, 792 F.3d 1339, 1349 (Fed. Cir. reasoning or methodology properly can be applied to 2015). Indeed, "[v]igorous cross-examination, the facts in issue) (emphasis added). But where the presentation of contrary evidence, and careful methodology is reasonable and its data or evidence are instruction on the burden of proof are the traditional and sufficiently tied to the facts of the case, the gatekeeping appropriate means of attacking shaky but admissible role of the court is satisfied, and the inquiry on the evidence." Daubert, 509 U.S. at 596. correctness of the methodology and of the results produced thereunder belongs to the factfinder. This court has recognized that estimating a reasonable royalty is not an exact science. The record may support To estimate a reasonable royalty rate in this case, Mr. a range of reasonable royalties, rather than a single Benoit started by estimating that the carriers pay value. Likewise, there may be more than one reliable Samsung $14.15 to include a camera component in method for estimating a reasonable royalty. Apple, 757 Samsung's phones. J.A. 6372. To arrive at this F.3d at 1315. A party may use the royalty rate from estimate, [*1297] Mr. Benoit used Samsung's annual sufficiently comparable licenses, value the infringed reports, internal cost and revenue spreadsheets, and features based upon [**25] comparable features in the interrogatory responses [**27] to determine that the marketplace, or value the infringed features by camera component accounted for 6.2% of the phone's comparing the accused product to non-infringing overall production cost. J.A. 6374. Accordingly, he alternatives. Id. A party may also use what this court attributed 6.2% of Samsung's revenue from selling each has referred to as "the analytical method," focusing on phone—i.e., $14.15—to the camera's functionality. J.A. the infringer's projections of profit for the infringing 6374. product. Lucent Techs., 580 F.3d at 1324. To apportion the camera-related revenue further, Mr. All approaches have certain strengths and weaknesses, Benoit estimated the percentage of camera users who and, depending upon the facts, one or all may produce used the camera to perform the infringing methods admissible testimony in a particular case. Because each rather than for other purposes. To do this, he relied on case presents unique circumstances and facts, it is surveys commissioned by Samsung in the ordinary common for parties to choose different, reliable [***1647] course of its business and on another survey approaches in a single case and, when they do, the he found on his own. J.A. 6374-75. The surveys were relative strengths and weaknesses of each approach conducted by J.D. Power and Associates, Pugh may be exposed at trial or attacked during cross- Research, Forrester, and ComScore. J.A. 6375. Using examination. That one approach may better account for the surveys, Mr. Benoit estimated that at least 65.3% of one aspect of a royalty estimation does not make other camera users used the camera regularly to capture only approaches inadmissible. photos rather than video. J.A. 6377-79. He calculated that at least 77.3% of those users who captured only In sum, while all approximations involve some degree of photos shared the photos, and that at least 41.2% of uncertainty, the admissibility inquiry centers on whether those users who shared the photos did so by MMS the methodology employed is reliable. Daubert, 509 rather than by email or web storage. J.A. 6379-84. U.S. at 589-595. A distinct but integral part of that Lastly, Mr. Benoit observed that 100% of those photos Page 8 of 11 1 802 F.3d 1283, *1297; 2015 U.S. App. LEXIS 16711, **27; 116 U.S.P.Q.2D (BNA) 1637, ***1647 shared by MMS were resized. J.A. 6384. Multiplying The Supreme Court has called the inquiry envisioned by these percentages together, Mr. [**28] Benoit thus Rule 702 a "flexible one" and indicated that these estimated that at least 20.8% of camera users utilized factors may be considered, [**30] but are not the camera for the infringing features rather than for exhaustive. Daubert, 509 U.S. at 594. The Fifth Circuit other camera-related features. has held expert testimony admissible even though multiple Daubert factors were not satisfied. See, e.g., Based on these usage statistics, Mr. Benoit concluded United States v. Norris, 217 F.3d 262, 269-71 (5th Cir. that 20.8% of Samsung's $14.15 revenue for including 2000). Still, the Supreme Court has warned that we the camera component in each phone—i.e., $2.93—was must not "deny the importance of Daubert's gatekeeping due to the infringing features. J.A. 6386. Using requirement. The objective of that requirement is to Samsung's annual reports to estimate its profit margins ensure the reliability and relevancy of expert testimony." and capital asset contributions, Mr. Benoit concluded Kumho Tire, 526 U.S. at 152. that $0.56 of the $2.93 revenue was profit attributable to the infringement. J.A. 6386-89. In this case, Mr. Benoit's damages methodology was based on reliable principles and was sufficiently tied to Mr. Benoit testified that to determine a reasonable the facts of the case. Mr. Benoit first estimated royalty at a hypothetical negotiation, the parties would Samsung's economic benefit from infringement by focus on allocating the $0.56 benefit Samsung gained specifically focusing on the infringing features and by by utilizing the patented features. Mr. Benoit testified valuing those infringing features based on Samsung's that the negotiation would concern the entire $0.56 own data regarding use and on its own financial reports benefit because Samsung had no non-infringing outlining production costs and profits. Mr. Benoit then alternatives, and the entire benefit was therefore envisioned a hypothetical negotiation in which the incremental profit from using the patent. J.A. 6390. Mr. parties would have bargained for respective shares of Benoit testified that because neither party had a the economic benefit, given their respective bargaining stronger negotiating position, the parties would have positions and alternatives to a negotiated agreement. split the $0.56 evenly to derive a reasonable royalty of Mr. Benoit's methodology was structurally sound and $0.28 per device. J.A. 6389-91, 6395. Mr. Benoit tied to the facts of the case. cited [**29] three academic articles and the Nash Bargaining Solution to support his theory of an even That Mr. Benoit's methodology was not peer-reviewed split.3 Based on the per-device royalty and on the or published does not necessitate its exclusion. We number of infringing devices sold by Samsung, Mr. recognize [**31] that the fact-based nature of Mr. Benoit estimated that a hypothetical negotiation would Benoit's damages testimony made it impractical, if not have resulted in a reasonable royalty of $29 million. J.A. impossible, to subject the methods to peer review and 6398. [***1648] publication. But "[p]ublication. . . is not a sine qua non of admissibility," and "in some instances well- In Daubert, The Supreme Court has delineated certain grounded but innovative theories will not have been factors to assist courts in evaluating the foundation of a published." Daubert, 509 U.S. at 593. Consequently, given expert's testimony, while carefully emphasizing "[w]here an expert otherwise reliably utilizes scientific the non-exhaustive nature of these factors. Suggested methods to reach a conclusion, lack of textual support considerations include whether the theory or technique may go to the weight, not the admissibility of the the expert employs is generally accepted, whether the expert's testimony." Knight v. Kirby Inland Marine Inc., theory has been subjected to peer review and 482 F.3d 347, 354 (5th Cir. 2007) (internal quotation publication, whether the theory can and has been marks omitted). tested, whether the known or potential rate of error is acceptable, and whether there are standards controlling Samsung argues that Mr. Benoit's "premise. . . that a the technique's operation. As the [*1298] Fifth Circuit feature's use is proportional to its value" was incorrect has noted, "[t]here is no formula, and the court must and contradicted by expert testimony. Defendant- judge admissibility based on the particular facts of the Appellant's Opening Br. at 6. But as we noted in Lucent, case." Wells v. SmithKline Beecham Corp., 601 F.3d "an invention used more frequently is generally more 375, 378-79 (5th Cir. 2010). valuable than a comparable invention used infrequently" and "frequency of expected use and predicted value are 3 On related." 580 F.3d at 1333. There is no dispute that use appeal, Samsung does not challenge Mr. Benoit's use of of the claimed invention is relevant under Georgia- Nash Bargaining. Page 9 of 11 1 802 F.3d 1283, *1298; 2015 U.S. App. LEXIS 16711, **31; 116 U.S.P.Q.2D (BNA) 1637, ***1648 Pacific: Georgia-Pacific factor 11 looks at use of the damages adequate to compensate for the infringement, invention and at evidence probative of the value of that but in no event less than a reasonable royalty for the use. Here, the district court did not abuse its discretion use made of the invention by the infringer." This court in determining that Mr. [**32] Benoit's methodology, has held that a reasonable method for determining a involving the correlation of use with value, was not reasonable royalty [**34] is the hypothetical negotiation unreliable. approach, which "attempts to ascertain the royalty upon which the parties would have agreed had they Samsung's argument that Mr. Benoit was unqualified to successfully negotiated an agreement just before rely on survey data compiled by third parties is also not infringement began." Lucent Techs., Inc. v. Gateway, persuasive. As the district court held, Mr. Benoit need Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). not be a survey expert to testify about the information compiled by third-party surveys, so long as the Samsung is correct that Summit failed to present information is of a type reasonably relied upon by evidence that the Facebook license was comparable or experts in the field to form opinions upon the subject. relevant to calculating a reasonable royalty in this case. Because neither Summit's brief nor our independent [*1299] To the extent Mr. Benoit's credibility, data, or review of Mr. Benoit's testimony shows otherwise, we do factual assumptions have flaws, these flaws go to the not address the Facebook license further. weight of the evidence, not to its admissibility. Once an expert has been qualified, the trial court's gatekeeping The damages evidence presented by Summit at trial inquiry focuses on the expert's methodology and on included Mr. Benoit's testimony regarding the whether the methodology is sufficiently tied to the facts apportionment methodology and the RIM license of the case. Where the methodology is sound and the agreement. In its brief, Samsung conflates the issue of evidence relied upon is sufficiently related to the case, whether the RIM license should have been excluded disputes over the expert's credibility or over the with whether the license supported the jury's damages accuracy of the underlying facts are for the jury. See i4i, [***1649] verdict. See Appellants' Op. Br. at 65-67. 598 F.3d at 852. Here, Samsung cross-examined Mr. Samsung does not challenge the admission of the RIM Benoit and, ultimately, the jury evaluated Mr. Benoit's license, and we therefore consider only the issue of opinions. whether substantial evidence supports the jury's verdict, in view of the RIM license and Mr. Benoit's testimony. In sum, Samsung has not shown that the district court abused its discretion in allowing [**33] Mr. Benoit to Mr. Benoit's testimony and the RIM license supported testify regarding his apportionment methodology. the jury's damages verdict. Mr. Benoit testified that the RIM license conveys [**35] rights to the '482 patent and E. Damages that both RIM and Samsung are similarly situated In its JMOL motion, Samsung argued that the jury's because both sell camera phones containing the damages award of $15 million is not supported by accused MMS functionality. J.A. 6394, 6482-83. The substantial evidence. Samsung now argues that Mr. jury [*1300] also heard evidence regarding the royalty Benoit's analysis was flawed and that it should not have amount in the RIM license and about Samsung's sales been admitted, and therefore cannot support the volume in comparison to RIM's. J.A. 6394-95. The RIM damages verdict. Samsung also argues that the license was therefore sufficiently relevant to a Facebook and RIM settlement agreements cannot hypothetical negotiation, and in conjunction with Mr. support the damages award because they are not Benoit's testimony, it provided substantial evidence sufficiently comparable. Samsung argues there was no supporting the jury's damages verdict. testimony at trial indicating that the Facebook license We agree with the district court that the jury verdict was was comparable or relevant in any way to what a supported by sufficient evidence and tied to the facts of reasonable royalty would have been in this case. this case. We therefore affirm the district court's denial Further, Samsung argues that the RIM license, alone, is of Samsung's motion for judgment as a matter of law of insufficient to support the jury's damages award. Thus, no damages. Samsung concludes that substantial evidence does not support the jury's damages award. We disagree. F. Lump Sum 35 U.S.C. § 284 provides that upon a finding of Summit cross-appeals, challenging the district court's infringement, "the court shall award the claimant determination that the jury verdict represents an amount Page 10 of 11 1 802 F.3d 1283, *1300; 2015 U.S. App. LEXIS 16711, **35; 116 U.S.P.Q.2D (BNA) 1637, ***1649 of a lump-sum license through the life of the patent and In this case, the district court properly denied Summit's compensates Summit for both past and future request for an [*1301] ongoing royalty because the jury infringement. Summit argues that the jury's award award compensated Summit for both past and future cannot be a lump sum through the life of the patent infringement through the life of the patent. Samsung's because the relevant evidence, arguments, and expert, Mr. Martinez, testified that a lump-sum award instructions, and the verdict form were all limited to was appropriate. J.A. 7089-90. He also testified damages for past infringement. [**36] Summit also regarding the weight the jury should give the license argues that its equitable claim for future damages is not agreements introduced into evidence, all of which were an issue for the jury. Thus, Summit concludes that it is lump-sum licenses. [**38] Moreover, Summit's expert, entitled to recover damages for future infringement. We Mr. Benoit, admitted that a lump-sum award would disagree. compensate Summit through the life of the patent. J.A. 6452, 6479-80. When the jury returned its verdict, it This court has not directly addressed whether a jury can indicated on the verdict form that the award was a lump award lump-sum damages through the life of the patent. sum by writing "lump sum" on the verdict form. We see We have, however, permitted such relief. In Telcordia no basis to disturb the district court's determination and Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1378 hold that the district court did not [***1650] abuse its (Fed. Cir. 2010), the district court rejected the discretion in denying Summit's request for an ongoing defendant's argument that the jury's damages award royalty. was necessarily a lump-sum award intended to III. CONCLUSION compensate the patentee for past and future infringement, reasoning that the evidence at trial For each of the reasons stated above, we affirm the provided no way of knowing what the jury actually did. district court's claim construction of "being provided to," Telcordia, 592 F. Supp. 2d 727, 747 n.8 (D. Del. 2009), affirm the infringement and invalidity verdicts, affirm the aff'd in part, vacated in part, 612 F.3d 1365 (Fed. Cir. district court's determination regarding the admissibility 2010). When the defendant appealed the district court's of Summit's damages expert's testimony, affirm the order granting the patentee equitable relief in the form of district court's determination regarding the damages an ongoing royalty, this court affirmed, reasoning that award, and affirm the determination of the district court the court did not abuse its "broad discretion" in that Summit is not entitled to a running royalty. interpreting the verdict form because the verdict form was ambiguous, neither party had proposed the jury's AFFIRMED exact $6.5 million award, and it was "unclear whether the jury based its award on a lump-sum, paid-up license, running royalty, some variation or combination End of Document of the two, or some other theory." Telcordia, 612 F.3d at 1378. Similarly, in Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 35-38 (Fed. Cir. 2012), this [**37] court vacated and remanded the district court's denial of supplemental damages for infringement after the verdict but before final judgment was entered because the court had failed to explain its reasons for denying such damages. This court rejected the defendant's argument that the patentee's supplemental damages request was properly denied because the jury had necessarily awarded a lumpsum license for all past and future infringement. Id. at 38. This court noted that "nothing in the record would support" that conclusion because "the parties limited their damages arguments to past infringement rather than projected future infringement" and the "jury's verdict did not indicate that the award was meant to cover future use of [plaintiff's] patents[.]" Id. at 35. Page 11 of 11