NORA BARRY FISCHER, District Judge.
This is a patent infringement case brought by Plaintiff, Carnegie Mellon University ("CMU"), against Defendants Marvell Technology Group, Ltd. and Marvell
Following the trial, the Court entertained post-trial motions, wherein the parties: (1) renewed their earlier JMOL contentions; (2) moved for a new trial on several grounds; (3) argued the equitable defense of laches; and (4) requested a permanent injunction, post-judgment royalties, supplemental damages, interest, enhanced damages, as well as attorney fees.
The patents-in-suit are generally directed to the method of sequence detection in high density magnetic recording sequence detectors. See '839 Patent col. 16 ll. 20-23.
Hard disk drives ("HDD") contain a platter or disk that holds data on concentric tracks. (Docket No. 673 at 154). The device bears a visual resemblance to the classic record player. (Id.). Just as a record player has a needle attached to the tip of the arm, an HDD has a "read head" that reads and writes data onto these tracks. (Id.). Each track is made up of a track width, and this track width is broken into millions of bit regions. (Id.). The track is made of magnetic material. (Id.).
A Viterbi-like read channel detector found in the HDD takes the read back signal samples and determines the sequence of symbols written on the disk using a trellis. (Id. at 157-158). This process is called "sequence detection." (Id. at 158). A trellis section is used to represent a string of bits sitting on a medium. (Id.). There are four potential sequences of two bits, called states: 01, 11, 00, 10; and they can be connected by branches. (Id. at 162-163).
A trellis is used to represent a string of these bits; for example, a three-bit string of 011, would be represented by a "01" connected by a branch to "11." (Id.). One trellis section includes all possible bit sequences. (Id.). In this instance, a single trellis section of 011, 010, 111, 110, 001, 000, 101, 100 is represented as follows:
(Docket No. 771 at Ex. C at 14). A trellis can then be created to represent a sequence of any length. For example, a six bit sequence is represented as follows:
(Id. at 18). Through this trellis, one can trace a path that is equivalent to a specific sequence of symbols. (Id.). For example 100101, is shown below:
(Id. at 17).
The detector determines the "best path" through the trellis, meaning the best or most likely written sequence on the disk, using branch metric values. (Docket No. 673 at 169). The read back signal samples are taken by the detector to compute the branch metric.
Bit regions are not homogeneous. (Id. at 175). Rather, they are made up of small tiles or magnetic grains that create regions of magnetization that do not fall within straight bit regions on the track. (Id.). As the bit regions become narrower in high density recording and more bits are packed onto a smaller area, there will be fewer grains per bit region. (Id. at 176). With fewer grains, islands of grains may develop in which the detector cannot accurately read the data. (Id. at 176-177). This is shown below in a diagram in which green represents "zeros," and blue represents "ones."
(Docket No. 771 at Ex. C at 24). So, as the density of the recording increases, the amount of noise or uncertainty in the signal also increases. (Docket No. 673 at 179). As seen below, the amount of noise is also affected by the specific sequence of bits written on the track.
(Docket No. 771 at Ex. C at 25). This is correlated signal-dependent noise, because the noise signals from one boundary to the other move together, either attracting or moving away from each other. (Docket No. 673 at 179).
Noise was previously assumed to be white, or flat, at all time instances and in all branches.
(Docket No. 771 at Ex. C).
With the last model of signal-dependent noise, the detected sequence is obtained by maximizing the likelihood function. (Docket No. 673 at 206-207). The CMU Patents start by showing that such a likelihood function is dependent on all the read back signals and all written symbols from the entire disk. (Docket No. 673 at 206-207). This is expressed as:
'839 Patent Eq. 1.
As there are billions of symbols on the disk, the likelihood function is broken up into smaller per sample functions. (Docket No. 673 at 208). The CMU Patents derived a function based on the observed signal samples; postulated a sequence of written symbols; then applied certain mathematical manipulations to turn the function into a quotient of a likelihood function, as seen below. (Id. at 214-215).
'839 Patent Eq. 4-6. The resulting function can be used to create different embodiments, as disclosed in the CMU Patents. (Docket No. 673 at 220). One embodiment is called the correlation matrices embodiment, expressed in Equation 13 of the '839 Patent:
'839 Patent Eq. 13; (Docket No. 673 at 221).
Another form of embodiment is the Finite Impulse Response ("FIR") embodiment. The FIR filter coefficients operate on a plurality of signal samples and are different for each specific sequence of written symbols. (Docket No. 673 at 225-226). When applied to the FIR embodiment, the coefficients account for the structure of signal dependent noise attributable to that specific sequence. (Id. at 227). Once the FIR has been applied to all of the sequences to account for the noise of a specific sequence, a Viterbi-like detector can work on the result. (Id. at 228).
As the recording density increases, such detectors become better compared to signal insensitive detectors. (Id. at 234). There is little benefit to increasing the amount of data on a disk if it cannot be accurately read. (Id. at 90). The patents' solution constitutes the "optimal" detector, such that when the media noise is the dominant factor there is no better solution. (Id. at 70-71; Docket No. 677 at 170).
Media noise became increasingly significant as the industry moved from longitudinal to perpendicular recording around 2005. (Docket No. 678 at 53-53, 114, 226).
Carnegie Mellon University is a leading research university located in Pittsburgh, Pennsylvania, with highly ranked engineering, information technology, and computer science programs. (Docket No. 671 at 187). (Id.). Dr. Jared Cohon had been the President of the University since 1997.
Dr. Mark Kryder
From 1995 to 1998, Professor Jose Moura
In 1998, Aleksandar Kavcic received his Ph.D. and left CMU to join the faculty at Harvard University. (Docket No. 673 at 149). He is currently a professor of electrical engineering at the University of Hawaii. (Docket No. 673 at 149). Dr. Moura remains a professor of electrical engineering at CMU. (Id. at 37). Pursuant to CMU's policy, half of any proceeds that CMU realizes on these patents, including from this lawsuit, are split between the inventors, Dr. Kavcic and Dr. Moura. (Docket No. 671 at 194-195).
CMU's Center for Technology Transfer and Enterprise Creation, currently headed by Robert Wooldridge,
CMU entered into a subscription agreement with its long-time corporate partner Intel in September 2004. (Def. Ex. 255). For a yearly administration fee of $75,000, Intel would have the option to license patents from a rotating pool.
A leading fabless semiconductor company, Marvell was founded in 1995 by Dr. Sehat Sutardja,
Dr. Sehat Sutardja is the current President and CEO; Ms. Dai is the Vice President and General Manager of Communications and Consumer Business; and Dr. Pantas Sutardja is the Director, Vice President, CTO, and Chief R&D Officer. See (Docket No. 707); see also MARVELL COMPANY — GLOBAL SEMICONDUCTOR LEADERSHIP, http://investor.marvell.com/phoenix.zhtml?c=120802&p=irol-govmanage
Relevant engineering employees include Dr. Zining Wu, Gregory Burd, and Toai Doan. Dr. Wu joined Marvell in 1999 after receiving his Ph.D. in Electrical Engineering from Stanford University. (Docket No. 707 at 217-219). Mr. Burd
Both Dr. Wu and Mr. Burd worked to develop new technologies for digital signal processing and read channel technologies. (Docket No. 707 at 221). As discussed, a read channel is situated between a drive's
Because iterative coding was not initially successful, the team at Marvell continued to work on other potential solutions to the noise problem. (Docket No. 687 at 119-124). In 2001, Mr. Burd read the papers by Dr. Kavcic and Dr. Moura explaining their invented method and he began working on developing a "solution" for Marvell based on same. (Docket No. 726 at 137). CMU asserts that Marvell "copied" Dr. Kavcic's method as described in said articles and claimed in the '180 and '839 Patents. (Docket No. 677 at 54-55). In response, Marvell maintained throughout trial that Mr. Burd had developed his own sub-optimal "solution," using Dr. Kavcic's scheme only as a launching pad, as later expressed in Marvell's U.S. Patent Number 6,931,585, which listed the '180 Patent as prior art. (Docket No. 726 at 125-135). The method Mr. Burd developed, originally named KavcicPP, was renamed "MNP" in January 2003 and later incorporated into Marvell's EMNP and NLD technology, all of which are used on read channel chips and SOC chips (collectively, the "Accused Chips"). (Pl. Exs. 368; 823). In connection with same, simulators were developed by Marvell engineers to mimic chips, so that Marvell engineers could run and test the chip systems before producing the chips in silicon. (Docket No. 707 at 113-114). Marvell also ran all of its chips against what it considered the optimal benchmark simulator, called KavcicViterbi. (Docket No. 677 at 171-172; Docket No. 761 at Jt. Ex. D at 137-138). The KavcicPP, MNP, EMNP, and NLD type simulators and the KavcicViterbi simulator are collectively the "Accused Simulators" in this litigation. (Pl. Exs. 89; 99; 106; 108; 110). The Accused Chips and Accused Simulators are collectively referred to as the "Accused Technology."
Read channel chips were dominant until around 2004, when the industry transitioned to SOC-type chips. (Docket No. 707 at 309-311). SOC chips integrated several different blocks,
CMU alleged infringement by Marvell's MNP, EMNP-type and NLD type chips, encompassing both read channel and SOC chips. (Docket No. 671). All of the Accused Chips were custom made to the exact specifications requested by the customer. (Docket No. 678 at 50-142). As noted, the custom designs and sample engineering chips are developed and tested by using them with the Accused Simulators. Sample engineering chips are produced in Asia and sent back to the United States to be tested by both Marvell and its customers. (Docket No. 678 at 105-106; Docket No. 707 at 164). Once the customer places an order, the chips are put into production at Taiwan Semiconductor Manufacturing Company's ("TSMC") foundry in Taiwan.
As stipulated by the parties, Marvell sells its chips through a lengthy sales cycle, in which Marvell must invest significantly in each customer without the assurance of sales. (Docket No. 707 at 32-35). There is first a 3-6 month period of rigorous evaluation and reliability testing by the customer in a stage called "qualification." (Id.). This is followed by a 12-18 month development period and then a 3-6 month period before Marvell commences volume production (i.e. until 1 million units are produced). (Id.). Throughout this entire cycle, there is a significant risk the customer will change its mind before the design is selected and the time and expense incurred by Marvell will generate no revenue. (Id.). Since a customer usually uses a selected design for a full generation, the loss of a sales win cannot be remedied until the customer develops a new product or new generation. (Id.).
During this sales cycle, Marvell engineers assist the customer in implementing the Marvell solutions into its product. (Id.). Almost all of this activity, including sales,
According to Marvell sales data, between March 6, 2003 and July 28, 2012, Marvell sold 2.34 billion Accused Chips. (Docket No. 686 at 61). The average revenue per accused chip is $4.42, with an average operating profit of $2.16. (Id. at 53-54). As noted, the chips are manufactured by TSMC foundry in Taiwan, and then sent to the customers' manufacturing sites in Asia to be put into their HDDs. (Docket No. 710 at 360-361). These HDDs are then sold primarily to laptop manufacturers, which incorporate the HDDs into their products at their own factories. (Id.). A portion of the laptops are then imported back into the United States. (Id. at 164-165). The locations of the chips' end users are unknown, but CMU presented estimates based on import data calculated by its damages expert that 329,297,799 or 556,812,092 of the 2.34 billion Accused Chips were imported in to the United States. (Id. at 165; Docket No. 770-11 at 7).
In January 2002, Mr. Burd sent two emails to Mr. Doan, who was then his boss at Marvell, stating that the Kavcic method was patented and assigned to CMU.
At trial, CMU maintained that Marvell makes, uses, offers to sell, or sells chips and uses simulators that infringe Claim 4 of the '839 Patent and Claim 2 of the '180 Patent.
Claim 4 of the '839 Patent provides:
'839 Patent col. 14 ll. 10-19.
Claim 2 of the '180 Patent, incorporates Claim 1. Claims 1 and 2 of the '180 Patent state:
'180 Patent col. 15 ll. 39-51.
CMU argued that Marvell's MNP and NLD Chips infringed these claims. CMU also asserted that Marvell's KavcicPP Simulator, MNP Simulator, EMNP Simulator (these three collectively the MNP-Type Simulators), NLD Simulator, and KavcicViterbi Simulator infringed Claim 4 of the '839 Patent and Claim 2 of the '180 Patent.
Counsel for the parties prepared a stipulation on the chip technology, affectionately called the "Chip Stip." (Pl. Ex. 823). The parties agreed that the circuits set forth therein are true and accurate depiction of the circuits within Marvell's products. (Id.) The stipulation identified which Marvell read channel and SOC models correspond to each of the stipulated circuits.
Further, the parties presented competing expert opinions on infringement. For CMU, Dr. Steven McLaughlin
Marvell countered with Dr. Richard Blahut,
During trial, Marvell maintained that CMU's Patents were invalid because they were both anticipated
Again, the parties had dueling expert witnesses appear. Dr. John Proakis
(Pl. Ex. 161).
CMU sought money damages from Marvell for infringement, in the form of a $0.50 per chip royalty on all Accused Chips sold by Marvell from March 2003 to the present. CMU proffered evidence that the Accused Technology was "must have" for Marvell and thus the parties would have agreed to this running royalty at a hypothetical negotiation in March 2003.
CMU next called Catherine Lawton
CMU also submitted supporting evidence in the form of internal Marvell communications and presentations, including Marvell presentations to customers, deposition testimony from Marvell sales and marketing executives such as Mr. Brennan
Marvell rebutted this damages calculation by presenting its own damages expert, Creighton Hoffman.
CMU argued that Marvell's infringement had been willful by submitting evidence of Marvell's internal communication about the patents, including the aforementioned emails from Mr. Burd (Pl. Ex. 280, 283), the letters received from CMU (Pl. Exs. 422; 431), the letter from Fujitsu (Pl. Ex. 477), and deposition testimony of Dr. Wu, Mr. Doan, Dr. Armstrong, and Mr. Burd. See (Docket No. 677 at 53-55; Docket No. 761 at Jt. Ex. C, D). CMU also submitted Dr. McLaughlin's expert testimony to the extent that he opined that the MNP was "copied" from the CMU Patents. (Docket No. 677 at 82).
Marvell presented evidence to show that it had not willfully infringed, relying on internal Marvell correspondence and presentations on the Accused Technologies and proof of Marvell's own patents, some of which cite the CMU Patents. (Def. Ex. 266). Marvell also offered portions of Dr. McLaughlin's deposition testimony to disprove copying from Dr. Kavcic and Dr. Moura, as well as testimony at trial, such as that of Mr. Burd, (Docket No. 726 at 125-126), and Dr. Wu, (Docket No. 707 at 326), who stated they did not copy the CMU Patents. As Dr. Sehat Sutardja testified, Marvell's people "are not stealers." (Docket No. 707 at 92, 326).
On December 21, 2012 the jury was charged to decide issues of infringement, validity, damages, and willfulness given all of the evidence before it. The jury deliberated for nearly two days to render its verdict, returning on December 26, 2012. (Docket No. 762).
With respect to infringement, the jury found that CMU had proven by a preponderance of the evidence that Marvell's MNP-Type chips, MNP-Type simulators, NLD-Type chips, NLD-Type simulators, and Kavcic-Viterbi simulator literally infringe Claim 4 of the '839 Patent and Claim 2 of the '180 Patent. (Id. at Q. 1-10). The jury held that CMU had proven by a preponderance of the evidence that Marvell had induced at least one of its customers or an end user to infringe Claim 4 of the '839 and Claim 2 of the '180 Patent in the United States with both the MNP-Type and NLD-Type Chips. (Id. at Q. 11, 13). It additionally found that CMU
On invalidity, the jury found that Marvell had not proven by clear and convincing evidence that Claim 4 of the '839 and Claim 2 of the '180 were invalid on the grounds that they were anticipated by prior art or because they would have been obvious at the time the invention was made. (Id. at Q. 15, 16). After finding that the claims infringed and are not invalid, the jury awarded $1,169,140,271.00 to CMU for the use of the patented methods. (Id. at Q. 17).
Regarding willfulness, the jury found that Marvell had actual knowledge of the '180 and '839 Patents prior to commencement of the lawsuit on March 6, 2009. (Id. at Q. 19, 22). It determined that Marvell did not have an objectively reasonable defense to CMU's claim of infringement on either the '180 or '839 Patent. (Id. at Q. 20, 23). Finally, the jury found that once Marvell learned of the '180 and '839 Patent, there was clear and convincing evidence that Marvell actually knew or should have known that its actions would infringe both Claim 2 of the '180 Patent and Claim 4 of the '839 Patent. (Docket No. 21, 24).
CMU filed its complaint in this case on March 6, 2009. (Docket No. 1). Since then this case had gone through extensive discovery and motions practice, including a Motion to Transfer
On November 9, 2012, the parties filed their responses to objections to exhibits, responses to objections to deposition designations,
Jury selection proceeded as scheduled on November 26, 2012, and trial began on November 28, 2012. (Docket Nos. 666; 669; 671). The Court heard argument, accepted briefing, and ruled on a number of motions made during trial regarding
Pursuant to the Court's scheduling order, (Docket No. 763), on February 11, 2013, Marvell filed a Motion for Judgment as a Matter of Law or in the Alternative, Motion for New Trial on Non-Damages Issues, specifically for Non-Infringement, Invalidity, No-Willfulness, and CMU Misconduct (Docket Nos. 805; 806), Motion for Judgment as a Matter of Law, Motion for New Trial And/Or Motion for Remittitur with Respect to Damages, (Docket
CMU moved for "Permanent Injunction, Post Judgment Royalties, and Supplemental Damages" (Docket Nos. 786; 787), "Prejudgment Interest" (Docket Nos. 788; 789), "A Finding of Willful Infringement and Enhanced Damages" (Docket Nos. 790; 793), and "Attorneys' Fees Pursuant to 35 U.S.C. Section 285" (Docket Nos. 794; 810; 811).
These matters have been completely briefed (Docket Nos. 823-829; 832-837; 849-855; 857-863), and the Court heard oral argument on same from May 1 to May 2, 2013. (Docket Nos. 872-874). In earlier opinions, the Court had denied, without prejudice, CMU's Request for Attorneys' Fees (Docket No. 884), and denied Marvell's Motion for a New Trial on the Grounds of CMU Misconduct. (Docket No. 900). The Court now turns to the parties' Motions for JMOL, Motions for a New Trial, and Motion for Remittitur. (Docket Nos. 805; 807).
It is well-established that a motion for judgment as a matter of law "should be granted only if, viewing the evidence in the light most favorable to the non-moving party, there is no question of material fact for the jury and any verdict other than the one directed would be erroneous under the governing law." Galena v. Leone, 638 F.3d 186, 196 (3d Cir.2011) (quoting Beck v. City of Pittsburgh, 89 F.3d 966, 971 (3d Cir.1996)).
In ruling on a Rule 50(a) motion, the Court "must refrain from weighing the evidence, determining the credibility of witnesses, or substituting our own version of the facts for that of the jury." Eschelman v. Agere Sys., 554 F.3d 426, 433 (3d Cir.2009) (citing Marra v. Philadelphia Housing Autk, 497 F.3d 286, 300 (3d Cir. 2007)). "Although judgment as a matter of law should be granted sparingly," it should be granted where "the record is critically deficient of the minimum quantum of evidence" necessary to support a verdict in favor of the non-moving party. Id. (quoting Gomez v. Allegheny Health Servs., Inc., 71 F.3d 1079, 1083 (3d Cir. 1995)). To that end, "a scintilla of evidence is not enough" to survive a Rule 50
A motion for a new trial pursuant to Federal Rule of Civil Procedure 59 can be granted "to all or any of the parties and on all or part of the issues in an action in which there has been a trial by jury." Fed. R. Civ. P. 59(a). The Court is also "empowered to order a new trial on its own initiative `for any reason that would justify granting one on a party's motion.'" Pryer v. C.O. 3 Slavic, 251 F.3d 448, 453 (3d Cir.2001) (quoting Fed. R. Civ. P. 59(d)). A new trial is most commonly granted in select situations, including: (1) when the jury's verdict is against the clear weight of the evidence; (2) when new evidence surfaces that would have altered the outcome of the trial; (3) when improper conduct on the part of an attorney or the court unfairly influenced the verdict; or (4) where the jury's verdict was facially inconsistent. Davis v. Mountaire Farms, Inc., 598 F.Supp.2d 582, 587 (D.Del.2009).
The Court's level of discretion varies, depending on the type of error alleged. Moussa v. Commonwealth of Pennsylvania Dep't of Pub. Welfare, 289 F.Supp.2d 639, 648 (W.D.Pa.2003) (citing Klein v. Hollings, 992 F.2d 1285, 1289-90 (3d Cir. 1993)). When the motion for a new trial is based on the claim that the verdict is against the clear weight of the evidence, the Court's discretion is limited — the verdict must be "contrary to the great weight of the evidence; that is, where a miscarriage of justice would result if the verdict were to stand." Pryer, 251 F.3d at 453. A verdict may not be set aside when there is a plausible or rational basis for the decision. Moussa, 289 F.Supp.2d at 648. The Court must not substitute its own judgment of the facts and assessment of the witnesses' credibility for the jury's. Davis, 598 F.Supp.2d at 587. When the basis for the motion is an alleged error on the part of the court, such as an error in jury instructions or evidentiary rulings, a district court must first determine whether an error was made, i.e., "whether, taken as a whole, the instruction properly apprised the jury of the issues and the applicable law." Donlin v. Philips Lighting N. Am. Corp., 581 F.3d 73, 78 (3d Cir.2009). If there was an error, the court must then determine "whether that error was so prejudicial that refusal to grant a new trial would be `inconsistent with substantial justice.'" Bhaya v. Westinghouse Elec. Corp., 709 F.Supp. 600, 601 (E.D.Pa.1989) (quoting Fed. R. Civ. P. 61). "Generally, a party is not entitled to receive a new trial for objections to evidence that he did not make at or prior to the initial trial, even if they may have been successful." Ashford v. Bartz, Civ. No. 04-642, 2010 WL 272009, at *4 (M.D.Pa.2010) (citations omitted); see also Kiewit Eastern Co., Inc. v. L & R Constr. Co., Inc., 44 F.3d 1194, 1204 (3d Cir. 1995) ("Courts often take a dim view of issues raised for the first time in post-judgment motions. Generally, this is a decision within the sound discretion of the district court.").
With these standards in mind, the Court discerns substantial evidence upon which a
CMU had the burden of proving its claims of direct and indirect infringement pursuant to 35 U.S.C. §§ 271(a), (b) and (c). It alleged that Marvell's chips and simulators infringe Claim 4 of the '839 Patent and Claim 2 of the '180 Patent. To that end, it produced the opinion testimony of Dr. McLaughlin, who testified over the course of two days. (Docket Nos. 677; 678). Against same, Marvell moved for JMOL on the grounds that CMU had not presented sufficient evidence that a reasonable jury could find infringement by Marvell, or, in the alternative, for a new trial. (Docket Nos. 703; 805).
Direct infringement of a U.S. patent occurs when a party, "without authority makes, uses, offers to sell, or sells any patented invention, within the United States." 35 U.S.C. § 271(a). Method claims are not infringed simply by the sale of an apparatus that is capable of infringing use. Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311 (Fed.Cir.2006); Standard Havens Products, Inc. v. Gencor Industries, Inc., 953 F.2d 1360, 1374 (Fed. Cir.1991). "Because a process is nothing more than the sequence of actions of which it is comprised, the use of a process necessarily involves doing or performing each of the steps recited." NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1318 (Fed. Cir.2005). Thus, direct infringement of a method claim only occurs if each step of the claimed method is actually performed. See Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1328 (Fed.Cir.2008).
In this case, the only form of direct infringement at issue is literal infringement. Marvell literally infringes if Marvell's chips and simulators use a method that includes each and every method step in Claim 4 of the '839 Patent or Claim 2 of the '180 Patent. Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301, 1307 (Fed.Cir.2012). If Marvell's methods as employed by its chips and simulators do not contain one or more method steps in that patent claim, Marvell does not directly infringe that claim. Id. Accordingly, literal infringement must be determined with respect to each patent claim, individually.
There are also two forms of indirect infringement: inducing infringement and contributory infringement. These modes of infringement are governed, respectively, by 35 U.S.C. § 271(b) and (c).
To prove inducement of infringement and contributory infringement, CMU must first prove there is direct infringement. Akamai Techs., 692 F.3d at 1308. Second, "inducement requires that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement." DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed.Cir.2006) (en banc) (internal quotation marks omitted); see also Global — Tech Appliances, Inc. v. SEB S.A., ___ U.S. ___, 131 S.Ct. 2060, 2068, 179 L.Ed.2d 1167 (2011). It is enough that the inducer "cause[s], urge[s], encourage [s], or aid [s]" the infringing conduct and that the induced conduct is carried out. Akamai Techs., 692 F.3d at 1308 (internal citations omitted, emphasis added). A defendant must "actively induce" infringement which "require[s] knowledge of the existence of the patent that is infringed" or taking "deliberate actions to avoid confirming a high probability of wrongdoing." Global-Tech, 131 S.Ct. at 2068-2070. Thus, induced infringement occurs if Marvell actively induces someone else, such as
To prevail on a claim for contributory infringement, it must be shown that an infringer sold, offered to sell, or imported into the United States a component of an infringing product "knowing [the component] to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non infringing use." 35 U.S.C. § 271(c); see Lucent Techs. v. Gateway, Inc., 580 F.3d 1301, 1320 (Fed. Cir.2009). Thus, in this instance, contributory infringement occurs if Marvell sold or offered for sale a material component of the patented invention that was not a staple article of commerce, and which Marvell knew was specifically made for use in practicing the claimed methods of either Claim 4 of the '839 Patent or Claim 2 of the '180 Patent. As with induced infringement, a claim for contributory infringement must contain allegations of the requisite knowledge of the patent-in-suit at the time of infringement. Mallinckrodt v. E-Z-Em Inc., 670 F.Supp.2d 349, 355 (D.Del.2009); see also Global-Tech, 131 S.Ct. at 2068. In addition, the patentee bears the burden of proving that the accused products have no substantial non-infringing uses. See Golden Blount, Inc. v. Robert H. Peterson Co., 438 F.3d 1354, 1363 (Fed.Cir.2006).
Before delving into its analysis, the Court notes that expert testimony is not necessary to prove infringement. In a case involving complex technology, however, the Federal Circuit has "repeatedly approved the use of expert testimony to establish infringement" and indeed "where the accused infringer offers expert testimony negating infringement, the patentee cannot satisfy its burden of proof by relying only on testimony from those who are admittedly not experts in the field." Centricut, LLC v. Esab Grp., Inc., 390 F.3d 1361, 1370 (Fed.Cir.2004).
In reaching its decision, the Court has considered all of the parties' arguments raised in their briefs and at trial, arguments made at the motion hearing held on May 1 and May 2, 2013, the transcript thereof, and the entire trial record along with the parties' latest submissions. (Docket Nos. 703; 704; 729; 742; 743; 805; 806; 827; 851; 857; 880; 881).
As the party alleging infringement of the method claims at issue, CMU must demonstrate that Marvell practices every step of the claimed method. See Muniauction, 532 F.3d at 1328. At trial, CMU called Dr. Steven McLaughlin to provide expert technical testimony about CMU's patents and whether they are infringed by Marvell's MNP-type chips, NLD type chips, and related simulators. Dr. McLaughlin analyzed the documents produced by Marvell concerning the MNP, EMNP, NLD, and Simulator Technology and the Chip Stip. (Pl. Ex. 823).
To begin, Marvell asserts that no reasonable jury could find that the accused MNP/EMNP Chips infringe because: (1) they do not select a branch metric function for each of the branches of the trellis at a certain time index; (2) they do not apply each of said branch metric functions to a plurality of signal samples; and (3) the MNP/EMNP module does not determine branch metric values for branches of a trellis. (Docket No. 743). CMU counters that its expert Dr. McLaughlin has demonstrated otherwise through his mapping of the claims onto the Accused Technology. (Docket Nos. 704; 743).
'839 Patent col. 14 ll. 10-19.
In order to show infringement of the '839 Patent, Dr. McLaughlin broke this claim into three "elements." First, he mapped "a method of determining branch metric values for branches of a trellis for a Viterbi-like detector" onto the MNP technology via the circuits of the Chip Stip by showing how the MNP: (1) is a detector; (2) computes branch metric values for branches of a trellis; and (3) is a Viterbi-like detector. (Docket No. 677 at 86-120). On this point, CMU also proffered supporting internal Marvell documents, such as the 88c7500M Specification from August 2004, which stated the "MNP is an advanced post processing adaptive detector," and Mr. Burd's "Media Noise Processor" write up, which stated the "MNP is used to properly take media noise into account during the detection processor." (Pl. Exs. 472; 408) In addition, the "DSP Technical Presentation 5: Data Detection" by Dr. Hongxin Song from 2009 stated "Media noise post-processor is a partial nonlinear detector in data dependent noise channel." (Pl. Ex. 770). This exhibit also contained circuit drawings of the MNP, trellis models, and detailed the "steps to calculate nonlinear branch metric." (Id.).
Second, Dr. McLaughlin pointed out where the MNP technology contained a method for "selecting a branch metric function for each of the branches at a certain time index from a set of signal-dependent branch metric functions" on the circuits from Exhibit A of the Chip Stip. (Docket No. 677 at 108-117). Third, Dr. McLaughlin used Exhibit A of the Chip Stip to demonstrate how the MNP used a method "applying each of said selected functions to a plurality of signal samples to determine the metric value corresponding to the branch for which the applied branch metric was selected wherein each sample corresponds to a different sampling time instant." (Id. at 118-119). He explained that the FIR filter implements the function and applies it to the plurality of signal samples which then computes the metric value, wherein each sample corresponds to a different time instant, referred to as "D." (Id.). After finding that each of the elements of Claim 4 of the '839 Patent was used by the MNP technology, Dr. McLaughlin opined that the MNP infringed Claim 4 of the '839 Patent. (Id. at 120).
Likewise, CMU claimed Marvell's MNP technology infringed Claim 2 of the '180 Patents, which incorporates Claim 1. Claims 1 and 2 of the '180 Patent claim:
'180 Patent col. 15 ll. 39-51.
Given same, Dr. McLaughlin divided these claims into five "elements" and walked the jury through how each was mapped on to the accused MNP circuits. He showed how some of the language of the '180 Patent was the same as the '839 Patent and explained that there was no need to go through the circuit schematics again since the methods were being applied to the same circuit. (Docket No. 677 at 120-125). He "checked off that he had already demonstrated that the MNP technology involved: (1) "a method of determining branch metric values in a detector, comprising"; (2) "selecting a branch metric function at a certain time index;" and (3) "applying the selected function to the signal samples to determine the metric values;" and (4) "the method claim 1, wherein the branch metric function is selected from a set of signal-dependent branch metric functions." (Id.).
On the remaining element, Dr. McLaughlin explained how the MNP technology used a method of "receiving a plurality of time variant signal samples, the signal samples having one of signal-dependent noise, correlated noise, and both signal dependent and correlated noise associated therewith," which was consistent with the second element of Claim 1 of the '180 Patent. (Docket No. 677 at 122). Based on his knowledge and expertise in the field, as well the Marvell DSP Technical Presentation slides titled "Data Dependent Noise" and "Noise Correlation," he showed that the MNP technology used this last element. (Pl. Ex. 770). He also noted that there was no requirement in the '180 Patent that the detector be a Viterbi-like detector. (Docket No. 677 at 121). In light of his prior conclusion that each of the elements of Claim 2 of the '180 Patent, through which the elements of Claim 1 are incorporated, was used in the MNP technology, he concluded that the MNP infringed Claim 2 of the '180 Patent. (Id. at 123).
Marvell next argues that no reasonable jury could find that Accused NLD Chips infringe because, again: (1) the chips do not select a branch metric function for each of the branches of the trellis at a certain time index; (2) the chips do not apply each of said branch metric functions to a plurality of signal samples; and (3) the NLDs do not determine branch metric values for branches of a trellis. (Docket No. 743).
As with the MNP and EMNP chips, Dr. McLaughlin started with the '839 Patent and mapped the first element, "a method of determining branch metric values for branches of a trellis for a Viterbi-like detector" onto the NLD circuits from Exhibit D of the Chip Stip. (Docket No. 677 at 140-142). Dr. McLaughlin broke this down further, and showed how the NLD: (1) is a detector; (2) computes branch metric values for branches of a trellis; and (3) is a Viterbi-like detector. (Id. at 140-143). Dr. McLaughlin based his conclusions on his analysis, using his personal knowledge and expertise in this area, and he also explicitly relied on Marvell documents, such as the presentation titled "Nonlinear Viterbi Detector Application Note — C8830R1.0" by Dr. Hongxin Song. (Pl. Ex. 596).
In light of the Chip Stip, Dr. McLaughlin opined that the NLD technology contained a method for "selecting a branch
Last, for the '839 Patent, Dr. McLaughlin relied on Exhibit D of the Chip Stip to conclude that the NLD used a method "applying each of said selected functions to a plurality of signal samples to determine the metric value corresponding to the branch for which the applied branch metric was selected wherein each sample corresponds to a different sampling time instant." (Docket No. 677 at 146-149). He highlighted the location on the circuit diagrams of the plurality of signal samples, the application of the branch metric function, and the branch metric value. (Id.). CMU also offered deposition testimony from Mr. Burd, who stated that "[a]nd so in fact noise whitening filter is a parameter of the branch metric function," as well as Dr. Song's Application Note, to further support Dr. McLaughlin's conclusion. (Id. at 149; Pl. Ex. 596). Given that Dr. McLaughlin demonstrated how each of the elements of Claim 4 of the '839 Patent was found to be used in the NLD technology, he opined that the NLD infringed Claim 4 of the '839 Patent. (Docket No. 677 at 149-150).
Moving on to Claim 2 of the '180 Patent, Dr. McLaughlin stated that his analysis showed that the NLD technology involved: (1) a method of determining branch metric values in a detector; (2) a detector selecting branch metric functions; (3) application of the selected function; (4) wherein the branch metric function is selected from the set of signal dependent branch functions; and finally (5) that it received a plurality of time variant signal samples, those having one of signal dependent noise and correlated noise. (Docket No. 677 at 154-156). He did not walk through the circuits again as he had already demonstrated his analysis in those respects. Because Dr. McLaughlin gave expert opinion testimony that each of the elements of Claim 2 of the '180 Patent, through which the elements of Claim 1 are incorporated, used the NLD technology, he concluded that the NLD infringed Claim 2 of the '180 Patent. (Id.).
Marvell also contends that the Accused Simulators do not infringe as a matter of law. (Docket No. 743 at 5-7). It alleges that the '839 Patent is directed to a method of determining branch metric values for branches of a trellis for a Viterbi-like
In support, Marvell cites to Harris Corp. v. Ericsson Inc. for the proposition that "as a matter of law, running a simulator
Upon examination of the Accused Simulators, Dr. McLaughlin opined at trial "that Marvell's simulators infringed the asserted claims." (Docket No. 677 at 83). In reaching this conclusion, he studied the code of five simulators provided by Marvell in discovery: (1) the KavcicPP Simulator; (2) the MNP Simulator; (3) the EMNP Simulator; (4) the NLD Simulator; and (5) the KavcicViterbi Simulator. (Id. at 156-166). The first four simulators correspond to particular chips and the last is used as a benchmark. (Id. at 169). Dr. McLaughlin described the simulators' use by Marvell: (1) to research and develop the chips; (2) to verify the chips' hardware design; and (3) to provide simulation code to customers so that they may, in turn, evaluate the performance and functionality of Marvell's chips. (Id. at 158). This testimony was supported by the deposition testimony of the Marvell corporate designee on this technology, Greg Burd, in which he stated "C Code which is used in our simulation. So we provide a version of the same C code to the designers to be used to serve as a golden source of test vectors to verify the design against." (Id. at 169-170).
Dr. McLaughlin analyzed the simulator code (Pl. Ex. 106), and he compared lines of code to the circuits of the chip. (Docket No. 677 at 156-166). He demonstrated how the simulators mimic the chips and how the different elements of the claims were covered by the code. (Id.). Further, Dr. McLaughlin determined that there was a one-to-one match between what was in the computer code and what was being calculated in the circuitry. (Id.). Dr. McLaughlin showed this for each of the first four simulators. (Id.). Based on his conclusion that the chips infringed each and every claim, he determined the simulators also infringed. (Id.).
For the KavcicViterbi Simulator, Dr. McLaughlin similarly analyzed the code in question. (Id. at 166-173). In doing so, Dr. McLaughlin looked at testimony by Marvell on how it uses this particular simulator. For example, Mr. Doan, then a Marvell engineer, stated that the KavcicViterbi Simulator was used as the benchmark and that they "continuously run Kavcic algorithm to benchmark any subsequent algorithm we develop at Marvell." (Id. at 171-172; Docket No. 761 at Jt. Ex. D at 137-138). Some of his analysis was also based on the testimony of Marvell engineer Mr. Burd, who stated in relevant part:
(Docket No. 677 at 170-173).
(Docket No. 677 at 170-171; Pl. Ex. 93).
Although Marvell insists that its simulators do not process actual signal samples, Dr. McLaughlin maintained that the simulators do process both synthetic as well as real samples from a hard drive or hard drive disk. (Docket No. 677 at 174-178). To this end, he referred to two Marvell documents to support his conclusion, the first being an "Analysis and Design of Viterbi Detector" which showed test results for a Toshiba wave form. The second document he used was an email from Marvell's Mike Madden
In sum, Dr. McLaughlin opined that: (1) the computer code directly mimics the chip; (2) the chip infringes each and every element of the claims of the CMU patent; and (3) the computer code and the simulator also infringe each and every element of the claims. While Marvell vigorously disagreed with all these opinions, both parties had an opportunity to make their opposing arguments on the nature of simulators to the jury. See, e.g., (Docket No. 759 at 64-65) ("And [CMU] say yeah, simulated data; simulations, simulator. They know full well that when you sit down at a computer and you put in code and you simulate a formula, that's not the detector. You're not infringing anybody's work when you do that. Everybody does it. They did it."). The determination was purely factual and one which the jury alone would have to decide by weighing the offered evidence and the credibility of witnesses who testified to same. Walker v. Gordon, 46 Fed.Appx. 691, 695 (3d Cir. 2002).
CMU presented sufficient evidence, through Dr. McLaughlin as well as supporting Marvell documents, that the MNP, EMNP, and NLD chip technology and the Accused Simulator technology use a method that includes each and every method step of Claim 4 of the '839 Patent and Claim 2 of the '180 Patent. Whether Dr. McLaughlin's conclusions were persuasive or otherwise worthy of credence goes to the core of his credibility as a witness, and such "[d]eterminations regarding the weight to be accorded, and the sufficiency of, the evidence relied upon by the proffered expert are within the sole province of the jury." Walker, 46 Fed.Appx. at 695. Indeed, Marvell took advantage of the opportunity to rebut Dr. McLaughlin's conclusions by offering opinion evidence through its own non-infringement expert Dr. Blahut that its products did not infringe CMU's patents. (Docket No. 711 at
Considering the evidence in the light most favorable to the nonmoving party, and giving it the advantage of every fair and reasonable inference in light of the undisputed facts, the Court finds there was adequate evidence upon which a reasonable jury could properly find a verdict in favor of CMU. Therefore, Marvell's motion for JMOL and motion for a new trial on this issue is denied. The question of whether there was direct infringement by the Accused Chips and Accused Simulators was properly submitted to and decided by the jury.
Marvell asserts that it was entitled to a judgment as a matter of law or a new trial on CMU's claims of indirect infringement for actively inducing infringement. (Docket No. 743, 805). It argues that CMU has not proven: (1) direct infringement; (2) that Marvell had actual knowledge of the patents-in-suit; and (3) that it specifically intended for others to perform acts that directly infringe one or more of the asserted claims. (Id.).
First, the Chip Stip lists the models of chips that correspond to the agreed-upon circuits that Dr. McLaughlin analyzed. (Pl. Ex. 823). These chips are sold to Marvell's customers to be used in hard disk drives, and they are also used by Marvell in research and development phases. (Docket No. 677 at 103-104, 178). As part of his testimony, Dr. McLaughlin analyzed the hardware and firmware settings of Marvell's customers such as Western Digital, Samsung, and Toshiba. (Pl. Exs. 1914; 1915; 1918; 1919). Once again, Dr. McLaughlin put forth expert testimony to prove direct infringement of Marvell's chips, thereby allowing CMU to advance a theory of induced infringement.
Second, in order to achieve success on induced infringement, CMU was required to show that Marvell had "knowledge of the existence of the patent" or took "deliberate actions to avoid confirming a high probability of wrongdoing." Global-Tech, 131 S.Ct. at 2068-70. To that end, CMU presented significant amounts of evidence to show Marvell's knowledge of the patents. Much of this evidence also supported CMU's claim of willful infringement, which is addressed later herein.
CMU proffered the following evidence of Marvell's knowledge of the patents-in-suit. First, is the email from Dr. Kavcic sent to Dr. Nazari at Marvell in 1998, providing a link to his publications, resume, and recent work. (Def. Ex. 1023). Second, is the January 3, 2002 email from Greg Burd to Toai Doan and Nersi Nazari, attaching a write up on the KavcicPP and stating "1. Kavcic's detection scheme is patented (assignee: Carnegie Mellon Univ. 2001)." (Pl. Ex. 280). Third, there is the January 4, 2002 weekly status report email from Mr. Burd to Mr. Doan, Dr. Nazari, and Ke Han,
In fact, Marvell hardly argued that it did not know of the CMU Patents; its theme throughout trial was that Dr. Kavcic's work was its launching point only, and its technology was a "sub-optimal" version of Kavcic's algorithm. (Docket No. 756). CMU replied that the MNP/NLD used the Kavcic algorithm, and optimality had no bearing on whether the claims of the Kavcic patented method were infringed. (Id.) In support, CMU proffered one of Dr. Wu's weekly emails from January 10, 2003 that stated "1. MNP enhancement: Greg and I discussed the approach of using a different noise whitening filter for each branch. It turns out to be the original structure that Kavcic proposed in his paper." (Pl. Ex. 366).
Additionally, as to Marvell's knowledge of the patents, CMU's Technology Transfer representative Carl Mahler sent a letter in August 2003 to Marvell's CTO Dr. Pantas Sutardja and Matthew Gloss, who was Marvell's then General Counsel, stating that CMU held patents in the area of correlation-sensitive adaptive sequence detectors, "namely U.S. Patent number 6,201,839 B1 and U.S. Patent number 6,438,180 B1." (Pl. Ex. 422, Pl. Ex. 431). Mr. Mahler attached the patents to the letter and encouraged Marvell to contact him if they found the patents to be of interest. (Id.). There was no response to these letters. (Docket No. 682 at 150). Similarly, Junya Suwanai of Fujitsu, "a customer for Marvell's read channel i.e. 5575M, 7500M," corresponded with Marvell in November 2004, stating that Fujitsu had received a license offer for the CMU Patents-in-suit. (Pl. Ex. 477). He wrote that "since it seems that these patents might be related to read channel, we would like to know, by the end of November, your opinion regarding relationship between CMU's Patents and the above Marvell lead [sic] channel and the specific grounds/reasons for such opinion." (Id.). No documents were found in relation to this letter, and Marvell's corporate designee testified that he did not know of any response to this letter. (Docket No. 761 at Jt. Ex. C. at 534-535).
CMU had to prove that Marvell had the specific intent to encourage another's infringement, which can be demonstrated if Marvell caused, urged, encouraged, or aided
Likewise, Dr. McLaughlin testified about Marvell field application engineers who are deployed to Marvell's customers to assist them in putting Marvell's chips into their products and instruct them on how to use the chips. (Docket No. 677 at 178-179). To that end, Teik Ee Yeo, Western Digital's corporate designee, testified that the chips it buys from Marvell have the technology enabled, i.e., set to "infringing modes," and that Western Digital tended to follow the suggestions of Marvell engineers regarding these settings on the chips. (Docket No. 761 at Jt. Ex. B 146).
Accepting the evidence in the light most favorable to CMU, the nonmoving party, and giving it the advantage of every fair and reasonable inference based on the facts of record, there was sufficient evidence presented at trial to support CMU's theory that Marvell created technology that employed the accused methods with either actual knowledge or willful blindness to the possibility that its devices infringed the patents-in-suit, and that Marvell sold same to its customers. CMU produced sufficient evidence that Marvell actively induced at least one of Marvell's customers to use a method that is covered by Claim 4 of the '839 Patent or Claim 2 of the '180 Patent. Thus, Defendants' JMOL on this issue was denied, and the question of whether there was induced infringement properly proceeded to the jury. Considering the record as a whole, the jury's verdict of induced infringement is not against the weight of evidence, and the motion for a new trial on this issue is denied.
Marvell argues that it was entitled to either a judgment as a matter of law or a new trial on CMU's claims of contributory infringement for actively contributing to infringement. (Docket Nos. 743; 805). It argues that CMU has not proven: (1) direct infringement; (2) that Marvell possessed the requisite intent for contributory infringement, i.e., that it knew the Accused Chips were infringing on CMU's patents; and (3) that Marvell's components had no substantial non-infringing uses. (Docket No. 743 at 3-4).
As previously stated, however, the record shows that CMU put forth ample evidence to prove direct infringement by Marvell's customers, thereby allowing CMU to advance a theory of induced infringement.
Moving forward, the Court finds that CMU has produced sufficient evidence that the Accused Chips were made specifically to use the Accused Technology with no other non-infringing use. For example, Dr. Bajorek testified that all the chips are designed through the described sales cycle and that the final chips are custom made for each customer, with the Accused Technology specifications in mind. (Docket No. 678 at 70). Each customer then received programming instructions to use the chips in infringing modes. (Pl. Ex. 730; Pl. Ex. 1913). Dr. McLaughlin also testified that the MNP and NLD chips do not have any use besides detecting data in hard drive disks and that they do not have any substantial uses beyond the enabled, infringing modes. (Docket No. 677 at 188).
Accepting the evidence in the light most favorable to Plaintiff, the nonmoving party, and giving it the advantage of every fair and reasonable inference based on the undisputed facts, it is clear that there was sufficient evidence upon which a reasonable jury could properly find that Marvell contributorily infringed Claim 4 of the '839 Patent and/or Claim 2 of the '180 Patent. Accordingly, Marvell's JMOL as to this issue was denied, and the question of whether there was contributory infringement was properly presented to the jury. The jury's finding that Marvell had engaged in contributory infringement was not against the weight of the evidence, and the Court likewise denies Marvell's motion for a new trial on these grounds.
The parties filed cross-motions for JMOL on the patents' validity. The Court was initially presented with CMU's Motion for Judgment As a Matter of Law on Marvell's Invalidity Defenses" as well as its "Brief in Support of its Motion. (Docket Nos. 731; 732). Marvell opposed this motion. (Docket No. 749). Marvell, in turn, submitted its own Motion for Judgment as a Matter of Law on Invalidity with a supporting brief. (Docket Nos. 747; 748). CMU similarly opposed this cross-motion. (Docket No. 750). The Court denied both of these Motions on the record. (Docket No. 759). Following trial, Marvell renewed its JMOL on invalidity and requests, in the alternative, a new trial. (Docket No. 805). CMU did not renew its JMOL on validity given the jury's favorable verdict. (Docket No. 762).
An issued patent enjoys a presumption of validity. See 35 U.S.C. § 282; SRAM Corp. v. AD-II Engineering, Inc., 465 F.3d 1351, 1357 (Fed.Cir.2006). Due to this presumption, invalidity must be proven by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. Partnership (hereinafter "i4i"), ___ U.S. ___, 131 S.Ct. 2238, 2242, 180 L.Ed.2d 131 (2011). "The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity." 35 U.S.C. § 282. Even in instances where the allegedly anticipatory reference was not before the Patent and Trademark Office ("PTO"), the clear and convincing standard remains. See i4i, 131 S.Ct. at 2244; see also Uniroyal, Inc. v. Rudkin-Wiley Corp., 837 F.2d 1044, 1050 (Fed.Cir.1988). Given that "[credibility determinations, the weighing of evidence, and the drawing of legitimate
A patent claim is "invalid for anticipation if a single prior art reference discloses each and every limitation" of the claim. Schering Corp. v. Geneva Pharm., 339 F.3d 1373, 1377 (Fed.Cir.2003) (emphasis added); see also Zenith Elecs. Corp. v. PDI Commc'n Sys., Inc., 522 F.3d 1348, 1363 (Fed.Cir.2008). Each element, and the "arrangement or combination" of those elements, must be present in the prior art reference. See Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed.Cir. 2008). The key is that, within "the four corners of a single, prior art document ... every element of the claimed invention [must be described], either expressly or inherently, such that a person of ordinary skill in the art could practice the invention without undue experimentation." Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed.Cir.2000).
Obviousness under 35 U.S.C. § 103(a) is a legal question based on underlying factual determinations. Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352, 1360 (Fed.Cir.2011), cert. denied, ___ U.S. ___, 132 S.Ct. 1755, 182 L.Ed.2d 531 (2012). An obviousness analysis measures the difference between the claimed invention and the prior art to determine whether "the subject matter as a whole would have been obvious at the time the invention was made" to a person having ordinary skill in the art. Alza Corp. v. Mylan Labs., Inc., 464 F.3d 1286, 1289 (Fed.Cir. 2006) (citations omitted).
The factual underpinnings of the obviousness analysis, often referred to as the Graham factors, include: 1) the scope and content of the prior art; 2) the level of ordinary skill in the art; 3) the differences between the claimed invention and the prior art; and 4) evidence of secondary factors, also known as objective indicia of non-obviousness. Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). "Evidence rising out of the so-called `secondary considerations' must always, when present, be considered en route to a determination of obviousness." Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc., 699 F.3d 1340, 1349 (Fed.Cir. 2012).
Obviousness requires more than a mere showing that the prior art includes separate references covering each limitation in a claim under examination. KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007). Rather, obviousness requires the additional component that a person of ordinary skill at the time of the invention would have selected and combined those prior art elements in the normal course of research and development to yield the claimed invention. Id. at 421, 127 S.Ct. 1727.
As the parties alleging invalidity of the patents at issue, Marvell was required to prove its invalidity defenses by clear and convincing evidence. i4i, 131 S.Ct. at 2242. At trial, Marvell called Dr. John Proakis to provide expert technical testimony. (Docket No. 726). In rebuttal, CMU recalled Dr. Steven McLaughlin to provide expert technical testimony about CMU's patents and the prior art in this field. (Docket No. 736).
While not raised post-trial, the Court will first address CMU's earlier Motion for Judgment as a Matter of Law on Marvell's Invalidity Defenses (Docket No. 731), which was denied on the record on December 21, 2012 without further exposition given the time constraints of trial. (Docket No. 764 at 99).
CMU moved for judgment as a matter of law, asserting that Marvell had failed to put forth sufficient evidence on its invalidity defense of anticipation because: (1) Dr. Proakis admitted that the Worstell Patent does not disclose all elements of the CMU Patents; and (2) Dr. Proakis relied upon an incorrect claim construction making his opinion both incorrect and inadmissible, as a new opinion not disclosed in his expert report. (Docket No. 732).
Marvell had presented Dr. Proakis's testimony to show that all of the elements of the claims-in suit were found in prior art. At the outset, Dr. Proakis opined that the Weining Zeng and Inkyu Lee articles, as well as Dr. McLaughlin's statements on same, proved that Dr. Kavcic and Dr. Moura were not the first to disclose a method selecting a branch metric function from a set of functions for each of the branches at a certain time index. (Def. Exs. 37; 38). Dr. Proakis continued explaining that one of the equations in the '839 Patent expressing the same equation as Weining Zeng, was, in fact, a set of functions and referenced Dr. Moura's testimony.
Next, Marvell proffered U.S. Patent No. 6,282,251 (the "Worstell Patent") as prior art for purposes of its anticipation defense. (Def. Ex. 187). This patent was filed on March 21, 1995, three years before the CMU Patents were filed. (Id.). Dr. Proakis stated that equation 20 of the Worstell Patent took into account signal dependent noise by scaling the branch metrics that have a signal dependent noise with a fraction that depends on the transition noise standard deviation. (Docket No. 726 at 60). He stated that because transition noise is another term for signal dependent noise, Worstell teaches that whenever there is a transition, the corresponding branch metric function is scaled by one over sigma squared, as disclosed by Inkyu Lee and Weining Zeng. (Id.). Dr. Proakis also said that the Worstell Patent disclosed a modified Viterbi detector which accounts for correlated noise, claimed by the first element of Claim 4 of the '839 Patent. (Docket No. 726 at 63). Dr. Proakis then opined that the selecting and applying limitations of the '839 Patent are found in the Worstell Patent by highlighting the parts of relevant equations derived from the Worstell Patent and the corresponding elements of Claim 4. (Id. at 68). Marvell supported its position with proffered deposition testimony from Dr. McLaughlin.
Dr. Proakis then moved to Claim 2 of the '180 Patent, and as four of the elements were previously determined to be present in the Worstell Patent through his '839 analysis, he discussed the receiving step of Claim 2. (Docket No. 726 at 68-71). Dr. Proakis highlighted the relevant portions of the Worstell Patent and stated that the Worstell branch metric equation covers both correlated noise and signal dependent noise. (Id.). With this, Dr. Proakis concluded that Claim 2 of the '180 Patent was anticipated by the Worstell Patent. (Id.).
CMU countered that Dr. Proakis' opinions rested on an incorrect claim construction of the terms "function" and "signal dependent branch metric function" and that such contradictory testimony is therefore insufficient for a finding of validity as a matter of law. (Docket No. 732). Having considered his testimony, the Court held that the record was not entirely clear that Dr. Proakis offered a contradictory construction at trial, thereby violating the expert disclosure requirements of Rule 26. (Docket No. 726 at 110-111); see Pritchard v. Dow Agro Scis., 263 F.R.D. 277, 284-85 (W.D.Pa.2009) ("[c]aselaw establishes that a declaration should be stricken if it contains new opinions or information which is contradictory to that set forth in the expert report, but it need not be stricken if it contains merely an elaboration of and is consistent with an opinion/issue previously addressed in the expert report"). While the Court has clarified the legal meaning of certain terms for this case, Dr. Proakis' use of the challenged terms throughout his long career has not been guided by this Court's claim construction. Similarly, his prior use of the word "function" came before the Court offered clarification as to the meaning of this term for this case. (Docket No. 337).
To the extent that CMU continues to claim that Dr. Proakis used the incorrect meaning of the term "signal dependent branch metric function," its argument
CMU claims that during cross-examination, Dr. Proakis admitted that the Worstell Patent did not disclose all elements of the CMU Patents. (Docket No. 732). Dr. Proakis stated that the Worstell Patent spoke of "zero" branches and "one" branches. (Docket No. 726 at 92-94). During cross, he agreed that the Worstell Patent never put any multiplier on the "zero" branches but stated it would be "totally obvious to a person skilled in the art." (Docket No. 726 at 94). The key to anticipation is that every element of the claimed invention must be described in the piece of prior art. Advanced Display Sys., Inc., 212 F.3d at 1282. However, the prior art can describe the elements inherently, such that a person of ordinary skill in the art could still practice the invention without undue experimentation. Advanced Display Sys., Inc., 212 F.3d at 1282.
The Court is mindful that Dr. Proakis is a technical expert, not a legal expert, and his statement, as CMU interprets it, is not dispositive on its own. Resolving all reasonable inferences in favor of the non-movant, the Court determined that a jury could find that his statement that the multiplier would be "totally obvious to a person skilled in the art" was made to show that the prior art inherently described the claimed invention. (Docket No. 726 at 94). Whether his position is credible is the province of the jury. Collins v. Signetics Corp., 605 F.2d 110, 115 (3d Cir.1979) ("Neither a trial nor an appellate court has the authority to substitute its judgment for that of the jury and thus usurp the jury's function as the principal finder of fact."). Given the stage of trial, the Court did not find Dr. Proakis's statement to be an admission that the Worstell Patent does not anticipate the patents-in-suit as a matter of law. The Court reiterates that the making of credibility determinations, weighing of evidence, and the drawing of reasonable inferences from the facts are jury functions — they are not to be usurped by the Court as a matter of law. Eschelman, 554 F.3d at 433.
Having considered the evidence in the light most favorable to the nonmoving party, Marvell, and giving it the advantage of every fair and reasonable inference in light of the undisputed facts, this Court concluded that Marvell had presented enough evidence for a reasonable jury to find that Claim 4 of the '839 Patent and Claim 2 of the '180 Patent were anticipated. Therefore, CMU's motion for judgment as a matter of law on this basis was denied, and the question of whether there was invalidity
CMU argued that it was entitled to judgment as a matter of law on invalidity because Marvell had failed to provide sufficient evidence that the asserted claims were obvious because: (1) Dr. Proakis again admitted that the Worstell Patent does not disclose all elements of the CMU Patents; (2) Dr. Proakis once more relied upon an incorrect claim construction making his opinion both incorrect and inadmissible, as a new opinion not disclosed in his expert report;
Dr. Proakis opined that even if the Worstell Patent did not anticipate the asserted claims, the Worstell Patent proves that the claims would have been obvious to a person of ordinary skill in the art. (Docket No. 726 at 94). He stated that he believed a person of ordinary skill in the art, reading the Worstell Patent claims and Column 10, would know that sigma squared has to vary from branch to branch. (Id.). This, he urged, would make Claim 2 of the '180 Patent and Claim 4 of the '839 Patent obvious to a person of ordinary skill in the art. (Docket No. 726 at 77). His analysis was based primarily on his examination of the Worstell Patent. However, Marvell had provided enough evidence to show that Dr. Proakis's testimony was not conclusory and that he considered secondary indicia of non-obviousness, such as statements by Dr. McLaughlin, Dr. Moura, and Dr. Kavcic regarding the novelty of aspects of their invention. (Docket No. 726 at 58-59).
He and Dr. McLaughlin disputed what a person of the ordinary skill in the art would find to be obvious and the nature of secondary considerations. (Docket No. 726 at 75-77; Docket No. 736 at 80-81). To this end, Dr. Proakis stated the reasons for his view (Docket No. 726 at 75-77), and the Court does not find that they were conclusory as a matter of law. Obviousness, in the end, is a question that must be determined based on the weight of the evidence presented and on credibility determinations. See Unigene, 655 F.3d at 1360.
After considering the evidence in the light most favorable to the nonmoving party, Marvell, and giving it the advantage of every fair and reasonable inference in light of the undisputed facts, the Court concluded at trial that Marvell had presented enough evidence for a reasonable jury to find that Claim 4 of the '839 Patent and Claim 2 of the '180 Patent were obvious. Therefore, CMU's motion for judgment as a matter of law on this basis was denied, and the question of invalidity by obviousness was properly given to the jury to decide.
At trial, CMU contended that Marvell had adduced no evidence in support of its written description, indefiniteness, and enablement defenses. Marvell acknowledges such in its Brief in Opposition, stating "Marvell acknowledges that it has not pursued its Section 112 defenses (written description, enablement, and indefiniteness) at trial." (Docket No. 749). Accordingly, these defenses are waived. Moreover, as there was no evidence presented on Marvell's invalidity defenses of written description, indefiniteness, and enablement,
Marvell argues that it is entitled to judgment as a matter of law or, in the alternative, a new trial on the issue of invalidity by anticipation because: (1) the PTO did not consider the Worstell Patent (Def. Ex. 187); (2) the Worstell Patent discloses every limitation of Claim 4 of the '839 Patent; and (3) that Worstell discloses every limitation of Claim 2 of the '180 Patent. (Docket Nos. 748; 805).
On the first point, Marvell has given the Court no authority as to why the fact that the Worstell Patent was not disclosed to the Patent Office is relevant to the JMOL anticipation analysis. Marvell argues that such a circumstance may ease the burden of clear and convincing evidence (Docket No. 748 at 2); yet, the Court is mindful that the jury is tasked with weighing the evidence. Eschelman, 554 F.3d at 433. The fact that the allegedly anticipatory reference was not before the PTO does not change the clear and convincing standard for invalidity defenses, and it is therefore irrelevant to the Court's decision on anticipation. i4i, 131 S.Ct. at 2244. Despite same, the jury was free to consider this fact in its determination on invalidity.
At trial, CMU called Dr. McLaughlin, as a rebuttal validity expert, to show that the Worstell Patent did not invalidate the asserted claims. Dr. McLaughlin first testified that CMU's patents were novel in that they claimed a method using a set of signal dependent branch metric functions and applied those signal dependent branch metric functions to a plurality of signal samples. (Docket No. 736 at 54). Dr. McLaughlin contrasted the CMU Patents from the Inkyu Lee and Weining Zeng articles by explaining that those articles referred to a single signal sample, directed just towards transition noise, while CMU's invention is oriented towards multiple signal samples and intended to address noise associated with a specified sequence of symbols, not just one transition. (Id. at 54).
In regards to the Worstell Patent, Dr. McLaughlin stated that both Claim 4 of the '839 Patent and Claim 2 of the '180 Patent require a set of signal-dependent branch metric functions while the Worstell Patent only contemplates one. (Id. at 55). Dr. McLaughlin explained that Equation 20 of the Worstell Patent shows just this single FIR filter. (Id. at 65). Given Dr. Kavcic's prior testimony and related demonstratives, Dr. McLaughlin showed how Dr. Kavcic had originally only contemplated one FIR filter, which was the same as the Worstell Patent invention, but then
Dr. McLaughlin disagreed with Dr. Proakis's opinions on invalidity, considering them to be incorrect. (Id.) Instead, he testified that Dr. Proakis had described the Worstell method in the opposite order of how the patent described it and referred to a further modified branch metric equation that did not appear in the Worstell Patent. (Id. at 67-68). Given all of this, Dr. McLaughlin stated that the Worstell Patent did not contain each of the elements of Claim 4 of the '839 Patent or each of the elements of Claim 2 of the '180 Patent. (Id. at 73) In his opinion, the asserted claims of the '839 Patent and the '180 Patent were not anticipated. (Id.).
The factual disputes regarding invalidity that underlie the experts' opinions in this case were for the jury to decide. See In re Montgomery, 677 F.3d 1375, 1379 (Fed. Cir.2012), cert. denied, ___ U.S. ___, 133 S.Ct. 788, 184 L.Ed.2d 582 (2012). Once again, Dr. McLaughlin's conclusions were left to the jury to accept or reject as it was for them to determine credibility and the weight given to such evidence. Id. Considering the evidence in the light most favorable to the nonmoving party CMU, and giving it the advantage of every fair and reasonable inference in light of the undisputed facts, the Court concluded that CMU had presented enough evidence upon which a reasonable jury could properly find that Claim 4 of the '839 Patent and Claim 2 of the '180 Patent were not anticipated. Therefore, Defendants' motion for JMOL on the basis of invalidity is denied. Similarly, the jury's finding that the patents were not invalidated due to anticipation is not against the weight of the evidence, and Marvell's motion for a new trial on these grounds is thus denied.
Marvell further contends that it is entitled to judgment as a matter of law or a new trial on the issue of invalidity because the asserted claims are obvious. To prove otherwise, once again, CMU proffered the testimony of its expert, Dr. McLaughlin. In his analysis, Dr. McLaughlin considered all of the pieces of prior art that Dr. Proakis relied upon in his opinion of invalidity, such as the Inkyu Lee and Weining Zeng articles, as well as the Worstell Patent, in addition to other pieces of prior art that Dr. Proakis did not discuss. (Docket Nos. 726; 737). Dr. McLaughlin then concluded that the asserted claims were not obvious. (Docket No. 737 at 73).
Dr. McLaughlin also considered the secondary indicia of non-obviousness presented throughout the trial such as praise for the invention by the industry in general and by Marvell employees and the fact that the invention solved a long-perceived problem. (Id. at 71-72).
Based on his analysis, the factors of non-obviousness, and his knowledge of the field, Dr. McLaughlin concluded that neither Claim 4 of the '839 Patent nor Claim 2 of the '180 Patent were obvious to a person of ordinary skill in the art. (Docket No. 736 at 73). Given Dr. McLaughlin's opinion and the underlying factual predicates, the Court found that the question of obviousness was rightly sent to the jury to resolve. See Walker, 46 Fed.Appx. at 695; Miller, 2011 WL 7037127, at *3 n. 3. Considering the evidence in the light most favorable to the nonmoving party, CMU, and giving it the advantage of every fair and reasonable inference in light of the undisputed facts, the Court found that CMU had sufficiently presented enough evidence upon which a reasonable jury could properly find that Claim 4 of the '839 Patent and Claim 2 of the '180 Patent were not obvious. Therefore, Marvell's motion for judgment as a matter of law on this issue was denied. The question of invalidity by obviousness was properly decided by the jury, which found that the patents were not rendered invalid for being obvious. (Docket No. 762). Considering the evidence proffered by CMU, this verdict was not against the clear weight of the evidence and a new trial is not warranted as to this defense.
The Court turns to CMU's claims of willfulness. At trial, Marvell filed a Motion for Judgment as a Matter of Law on Willful Infringement and a Renewed Motion for Judgment as a Matter of Law on Willful Infringement (Docket No. 740), both of which were fully briefed. (Docket No. 700, 721, 740, 741). The Court denied these motions on the record, following arguments by counsel, letting the relevant issues of willfulness go to the jury. (Docket No. 759 at 52-53).
After trial, CMU filed a Motion for a Finding of Willful Infringement and Enhanced Damages. (Docket No. 790). Marvell also filed a Motion for Judgment as Matter of Law, or in the Alternative, New Trial on Non-Damages Issues, wherein it requests a JMOL or new trial on the issue of willfulness. (Docket No. 805).
The Court will now address the specific matters raised by these motions, considering all of the parties' arguments and the entire trial record, to explain its earlier and current decision.
It is undisputed that CMU must establish willful infringement by proving, with clear and convincing evidence that (1) Marvell acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, and (2) that this objectively-defined risk of infringement was either known or so obvious that it should have been known to the accused infringer. Bard Peripheral Vascular Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1005 (Fed.Cir.2012), cert. denied, ___ U.S. ___, 133 S.Ct. 932, 184 L.Ed.2d 752 (2013); In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed.Cir.2007) (en banc). The Court's determination should be "based on the record ultimately made in the infringement proceedings." Bard, 682 F.3d at 1008.
Marvell first argues that CMU has not proven objective unreasonableness. (Docket No. 700 at 6, Docket No. 741 at 7).
The evidence at trial clearly and convincingly shows that Marvell had knowledge of the patents-in-suit at the time of infringement by 2002 and that the very people who designed the Accused Technology knew of the patents. To the extent a question of fact remained, the jury found as part of its December 26, 2012 verdict that Marvell had "actual knowledge of the '180 and '839 Patent prior to commencement of this lawsuit (in other words, prior to March 6, 2009)." (Docket No. 762 at 6-7). This jury determination is supported by substantial evidence.
Marvell first should have been aware of Kavcic's work through an email on March 8, 1998 from Aleksandar Kavcic to Nersi Nazari at Marvell, in which Dr. Kavcic inquired about Marvell's detectors and sought information about the possibility of getting a job at Marvell. (Def. Ex. 1023). In that email, Kavcic states that he had sent Dr. Nazari his Globecom paper and referred Dr. Nazari to his other publications online. (Id.) This Globecom Paper addresses some of the ideas expressed in the patents, but it is not the IEEE paper later referenced by Burd.
Next, Marvell engineer Gregory Burd, the developer of the Accused Technology, stated that he read Dr. Kavcic's published papers and learned about his Viterbi detector. (Docket No. 726 at 137). He told his supervisor, Toai Doan, about his work on "Kavcic's model" in 2001, (Docket No. 677 at 53:14-54:17; Pl. Ex. 227), and stated he was able to develop a sub-optimal media noise detector based on the Kavcic model from Kavcic's IEEE Paper. (Pl. Ex. 279). Mr. Burd then informed his superiors twice via email about the CMU Patents in January 2002. (Pl. Ex. 280; Docket No. 677 at 73:13-74:11; Pl. Ex. 283) ("And of course as I mentioned earlier, Kavcic detector is also patented."). Mr. Burd testified that he used Dr. Kavcic's
In addition to internal notification on the patents, CMU also sent two letters to Marvell's CTO Dr. Pantas Sutardja and Matthew Gloss, then General Counsel, enclosing copies of the patents and inquiring if there was an interest in the patents. (Pl. Ex. 422; Pl. Ex. 431). Marvell did not respond to these letters because, as CEO Dr. Sehat Sutardja alleges, they were "not interested in using the technology in our chip." (Docket No. 707 at 91). In addition, Fujitsu, "a customer of Marvell's read channel i.e. 5575M, 7500M," wrote to Marvell in November 2004, that it had received a license offer for the CMU Patents-in suit. (Pl. Ex. 477). Fujitsu wrote that "since it seems that these patents might be related to read channel, we would like to know, by the end of November, your opinion regarding relationship between CMU's Patents and the above Marvell lead [sic] channel and the specific grounds/reasons for such opinion." (Id.). No documents were found in relation to this letter, and Marvell's corporate designee testified that he did not know of any response to this letter. (Docket No. 761 at Jt. Ex. C at 534-535).
Despite knowing about the patents-in-suit, the evidence presented at trial reveals that Marvell made little effort to determine whether it was infringing these patents. Dr. Wu, Mr. Burd, and Mr. Doan all state that they decided not to read the patent claims, even though email correspondence indicates that both were aware that Dr. Kavcic had patented his algorithm. (Pl. Ex. 280; Pl. Ex. 283). If believed, this behavior is a clear sign they disregarded a high likelihood of infringement. Once presented with the patents, Mr. Doan did not conduct further investigations on his own, tell others to investigate or send the patents to Marvell's legal team.
These failed opportunities to investigate engendered a great deal of risk that Marvell's
Marvell's lack of inquiry about the possibility of infringement also meant that it took no effort to avoid infringement of the subject patents. This fact was specifically corroborated by Mr. Burd, who stated that he was not aware of any measures being taken to stop using the CMU Patents. (Docket No. 678 at 101). Marvell is a sophisticated entity with nearly 3,000 patents. (Docket No. 707 at 53). Yet, it took absolutely no steps to investigate these patents before producing 2.3 billion chips, despite the fact that the technology was named after Dr. Kavcic, one of the inventors of the CMU Patents.
Succinctly put, Burd presented his superiors at Marvell with a product named "KavcicPP" and noted that Dr. Kavcic held a patent on such a detection scheme, yet nothing was apparently done to investigate infringement, reach out to Dr. Kavcic or CMU, or respond to CMU and Fujitsu's inquiries on same. Accordingly, CMU has shown that Marvell's behavior created an objectively high risk of infringement. See Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1348 (Fed.Cir.2011) (failure to investigate the patent situation is a consideration that tends to establish willful infringement).
In response to CMU's claim of willfulness, Marvell urges that the "`objective' prong of [willfulness] tends not to be met where an accused infringer relies on a reasonable defense to a charge of infringement." Bard, 682 F.3d at 1005. Given its stance, the Court will review Marvell's defenses, how they evolved and were used at trial, if at all.
Marvell had several overarching defenses to the willful infringement claim, the first being that Marvell believed its own technology covered the MNP. To this end, Marvell was allowed to present, at trial, patent U.S. Patent Number 6,931,585 (the "`585 Patent")
A novel and non-obvious after-issued patent may be valid over a priorissued patent, but that does not mean that, if practiced, the technology disclosed in the after-issued patent would not infringe the prior-issued patent. Bio-Tech. Gen. Corp.
To the extent that Dr. Wu has suggested that he consulted with Marvell's legal counsel about the patent, the Court notes that this testimony is hotly contested, was not significantly developed at trial, and was shrouded by the attorney-client privilege. Dr. Wu testified that the "prior art," i.e., the '180 Patent and the '839 Patent, was given to Marvell's patent counsel and that he later obtained his own patents (owned by a Marvell-entity).
Next, Marvell argued that it did not infringe the patents-in-suit in its chips and
Once again, Marvell's defense is fact-intensive. Whether it was reasonable to believe that the MNP, merely by being "sub-optimal," did not use the method of the CMU Patents goes to the defendants' state of mind regarding the alleged infringement. The jury was presented with the convincing testimony of Dr. McLaughlin explaining how the MNP used the methods as well as the 2003 email from Dr. Wu to Mr. Doan stating that he and Mr. Burd were implementing an approach that "turns out to be the original structure that Kavcic proposed in his paper." (Pl. Ex. 366; Docket No. 677 at 134-135). Ultimately, the jury had to decide what was reasonable based on the credibility of witnesses and the weight to be given to the evidence. Eschelman v. Agere Sys., 554 F.3d 426, 433 (3d Cir.2009). They found that this was not a reasonable defense (Docket No. 762), and the Court takes this jury verdict on a question of fact as advisory to its overall holding on willfulness. See Bard, 682 F.3d at 1008.
Specifically addressing the KavcicViterbi Simulator, Marvell has presented little to rebut CMU's position that this simulator infringes the patents-in-suit. Mr. Burd outright states that this simulator contained the implementation of the "IP which is taught in Professor Kavcic's papers and consequently in his patent." (Docket No. 677 at 167). Marvell's only argument supporting non-infringement on the KavcicViterbi Simulator appears to be that the
Marvell further argues that CMU's delay in initiating this lawsuit suggests that the case for infringement is not sufficiently obvious to support a finding of willful infringement. (Docket No. 741 at 8). Given that the willful infringement inquiry depends on the alleged infringer's conduct rather than the litigation strategy of the patentee, In re Seagate, 497 F.3d at 1374, the Court fails to see how CMU's timing with respect to the litigation is relevant on this issue. Moreover, Dr. Wu testified during trial that it was not possible for anyone outside of Marvell to determine the technology used on the chips without Marvell's engineers explaining how its chips worked. (Docket No. 709 at 61-64) ("Just like Coca-Cola keeps its formula as a secret... For you to understand how the circuits implemented, the implementation detail, yes, you do need to talk to our people."). He also stated that he would not have explained to CMU how its chip circuitry was implemented and had never told Dr. Kavcic about the use of his algorithm at Marvell despite meeting him several times.
Marvell asserts again that the Court's comment that Marvell's invalidity defense was a "close call" in its opinion denying summary judgment forecloses a finding of willfulness as a matter of law. (Docket No. 741 at 11). The Court has already indicated that its prior summary judgment rulings do not amount to a finding that an objectively reasonable defense has been presented.
Having now examined the trial record as a whole, the Court declines to hold that Marvell's failed invalidity defense affords shelter against a finding of willful infringement. It is clear to the Court that in order for Marvell to have a "reasonable defense" to infringement for the time period of 2001-2009, there needs to be some proof that the basis for such invalidity defense was known to the infringers or even the person having ordinary skill in the art.
Marvell has trotted out a number of different non-infringement or invalidity defenses throughout its four years litigating before the Court. Nevertheless, the Court has consistently found that the issues of infringement and invalidity are to be decided by the jury. To the extent that Marvell again believes the Court should deny a finding of willfulness on the basis that the earlier defenses that were not presented to the jury were reasonable, the Court disagrees. If Marvell thought that any of those "other" defenses were reasonable, it should have presented them to the ultimate finder of fact, the jury.
After taking into account the totality of this litigation, the Court finds the question of whether Marvell acted despite an objectively high likelihood that its actions constituted infringement of a valid patent to be, in part, a question of fact. The Federal Circuit sitting en banc held "when the resolution of a particular issue or defense is a factual matter, however, whether reliance on that issue or defense was reasonable under the objective prong is properly considered by the jury." Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1236-37 (Fed.Cir.2011). This Court recognizes that the Federal Circuit's decision in Bard holds that this objective recklessness determination is, however, "decided as a matter of law by the judge." 682 F.3d at 1008. Given the lack of further guidance by the Federal Circuit on how to reconcile these principles in a practical manner for trial, and the Circuit's own debate on the precedential value of Bard,
Under the subjective prong of willful infringement, "the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer." Powell, 663 F.3d at 1236. The jury ultimately determines whether this subjective prong is met. Id. Notwithstanding a finding of objective willfulness, Marvell further maintains that no reasonable jury could find that Marvell possessed the requisite subjective intent for willful infringement. (Docket No. 741 at 13).
Again, the evidence presented at trial belies Marvell's assertions. CMU has presented sufficient evidence that would permit the jury to find that Marvell's engineers worked on multiple projects bearing Kavcic's name, clearly indicating that those engineers were aware that Dr. Kavcic had a hand in creating this technology. Moreover, Marvell's failure to investigate the patents despite the high likelihood of infringement militates against a finding that it had a subjectively reasonable basis for believing that it was not infringing or that the patents were invalid.
In addition, as the Court has already explained, the conduct of Marvell's engineers in copying Dr. Kavcic and Dr. Moura's work as described in their papers is relevant to finding that Marvell had a subjective intent to infringe. CMU presented evidence at trial showing that Marvell's engineers duplicated the technology described in Dr. Kavcic and Dr. Moura's papers in their chips and simulators, as testified to by Dr. McLaughlin. (Docket No. 677 at 54-55). The evidence shows that shortly after beginning work on the Kavcic model, Mr. Burd prepared a preliminary write-up of the KavcicPP detector which referenced the work of Dr. Kavcic and Dr. Moura. (Pl. Ex. 280). Again, Dr. McLaughlin testified that this KavcicPP write-up became the MNP circuit. (Docket No. 677 at 66-67). Although Mr. Burd stated that he was "generally following the papers," not the patents, and that he "left it at that," (Id. at 77), Dr. McLaughlin testified that the papers are virtually identical to what is described in the patents. (Id. at 66-67).
The evidence also showed that when Kavcic's name was disassociated with the
In arguing that it lacked knowledge about the underlying infringement, Marvell points out that CMU acknowledged its reputation as a technology innovator. The Court fails to see how this pertains to whether Marvell knew or should have known that its actions ran an objectively high risk of infringing the patents-in-suit. The Court also finds unavailing Marvell's alternative argument that CMU's failure to follow-up on its 2003 licensing letters lulled it into a false sense of security. Nothing disclosed at trial even indicated that any person at Marvell considered the implications of these licensing letters. Nor was there testimony from Marvell employees stating that they were aware CMU failed to follow up with other inquiries. Rather, when presented with potential warnings about the risk of infringement, Marvell ignored them and proceeded ahead in developing read channel technology based on Dr. Kavcic and Dr. Moura's work.
For all of these reasons, after considering all of the evidence in this case in the light most favorable to CMU, and drawing all reasonable inferences in its favor on subjective willfulness, the Court denied Marvell's original and renewed Motion for Judgment as a Matter of Law on Willful Infringement, (Docket Nos. 699; 740), and denies Marvell's JMOL now. (Docket No. 805). Likewise, the Court finds CMU presented sufficient evidence on which a jury could have found that Marvell knew or should have known about the substantial risk of infringement. Thus, the verdict on subjective willfulness is not against the great weight of evidence and Marvell's request for a new trial is not justified. As such, the Court grants CMU's Motion for a Finding of Willful Infringement. (Docket No. 790).
The Court also considers Marvell's Motion for Judgment as a Matter of Law, New Trial and/or Remittitur with Respect to Damages, along with related briefing. (Docket Nos. 807; 808; 829; 855; 857). In these motions, Marvell renews arguments from its at-trial JMOL. (Docket Nos. 701; 702; 725; 738; 739). In sum, Marvell maintains that the jury award of $1.169 billion is legally unsound and factually unsupported. (Docket No. 808). CMU counters that the award is in accord with the governing statute and Federal Circuit precedent, and supported by the facts of record. (Docket No. 829).
As the Court has set forth in a number of prior decisions, in a patent infringement action, a successful plaintiff is entitled to "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court." 35 U.S.C. § 284. Two forms of compensation are authorized by § 284: lost profits and reasonable royalty damages. Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed.Cir.2009). Because CMU does not manufacture or
"A reasonable royalty contemplates a hypothetical negotiation between the patentee and the infringer at a time before the infringement began." IP Innovation L.L.C. v. Red Hat, Inc., 705 F.Supp.2d 687, 689 (E.D.Tex.2010) (citing Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1078 (Fed.Cir.1983)). The hypothetical negotiation assumes two preconditions are met: (1) that both the patentee and the accused infringer are willing parties to the negotiation, and (2) that the patent was valid, enforceable, and infringed. Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y.1970). The Georgia-Pacific case sets out a series of factors that may be relevant to the analysis of a reasonable royalty. Id. "Although some approximation is permitted in calculating the reasonable royalty, the Federal Circuit requires `sound economic and factual predicates' for that analysis." Red Hat, Inc., 705 F.Supp.2d at 689 (quoting Riles v. Shell Exploration & Production Co., 298 F.3d 1302, 1311 (Fed.Cir.2002) (citation omitted)); see also i4i, 598 F.3d at 857-58 (citing Lucent, 580 F.3d at 1325) ("any reasonable royalty analysis necessarily involves an element of approximation, and uncertainty").
"In general, the determination of compensatory damages is within the province of the jury and is entitled to great deference." Dee v. Borough of Dunmore, 474 Fed.Appx. 85, 87 (3d Cir.2012). The United States Court of Appeals for the Third Circuit
The issues surrounding CMU's damages claim have been addressed numerous times in this case, from the early days of discovery disputes (Docket No. 195), to summary judgment (Docket No. 441), in motions in limine (Docket No. 493), and "emergency" motions (Docket No. 656), during trial (Docket No. 713), and now again post trial. At the earlier stages, the Court ruled based upon the evidence submitted by the parties and what it expected to hear at trial. (Id.). Unsurprisingly, a significant portion of the trial focused on determining damages.
CMU's liability theories against Marvell are critical to understanding the jury's damages award. At trial, CMU argued that that Marvell directly infringed the CMU Patents by using the method of the patents during its sales cycle as well as indirectly infringed by inducing and contributing
Much of this sales cycle activity uses the methods claimed in the CMU Patents. Through evidence regarding this sales cycle, CMU proved Marvell's direct infringement by: (1) use of the method in the KavcicViterbi simulator, which all chips are tested against to evaluate their performance and used to develop greater SNR gain; (2) use of the method by the Chip Simulators (KavcicPP, MNP, EMNP, and NLD Simulators) during the research, development, design, qualification and testing phases for the corresponding chips; and (3) use of the method in Accused Chips as engineering samples, sometimes called "golden chips," that Marvell uses during the sales cycle. (Docket No. 678 at 78-82; Docket No. 673 at 156-178). CMU demonstrated that these three scenarios of direct infringement all arise in the United States during Marvell's sales cycle. CMU also successfully argued contributory infringement and induced infringement through Marvell's customers' use of the patented method in the Accused Chips in the United States. (Docket No. 759). CMU has never asserted infringement against Marvell for any use of its patented methods which did not occur in the United States, nor does it seek damages for instances of foreign infringement.
With these theories of infringement in mind, the Court turns to the problem of quantifying the volume or the value of the "use" of the patented methods during the sales cycles. This issue has been hotly contested by the parties throughout this litigation, and, as the case progressed towards
The third option quantifies the use of the patented methods during this sales cycle based on a reasonable royalty for the sales that arose from the sales cycle. CMU proffered this theory and the Court ruled on several occasions that Marvell's sales could be an appropriate metric for assessing the value of the use of the patented methods in the U.S. by Marvell and its customers. (Docket Nos. 441; 672). Accordingly, CMU was permitted to present this theory to the jury, and Marvell was given a full opportunity to rebut this valuation method.
To support this theory, CMU called Catherine Lawton as its damages expert and she opined that the value of the patented method would be a royalty of $0.50 on all chips sold by Marvell as a result of the sales cycle. (Docket No. 686 at 29). Her calculations resulted in her opinion that CMU's damages are $1.169 billion. (Id.). Marvell rebutted this damages calculation by presenting its own damages expert, Creighton Hoffman, who opined that a reasonable royalty in this case would be a one-time royalty payment of $250,000.00. (Docket No. 709 at 242-245). At the conclusion of trial, the Court instructed the jury:
(Docket No. 764 at 62-63, 80-81). Against this backdrop, the jury returned a verdict in favor of CMU on all forms of direct and indirect infringement, validity, and willfulness, ultimately assessing $1.169 billion in damages for CMU. (Docket No. 762).
Having considered the applicable legal standard against the facts of record, the Court finds that CMU had presented sufficient evidence from which the jury could have found that CMU is entitled to damages authorized by 35 U.S.C. § 284, as expressed by the expert opinion of Ms. Lawton, i.e., CMU is entitled to a reasonable royalty of $0.50 per chip sold by Marvell. Of course, the jury could have found that Ms. Lawton's testimony was not credible, or it could have favored the expert testimony of Mr. Hoffman and awarded any figure he believed was appropriate. See Micro Chem., 317 F.3d at 1394. The jury also could have reached a different verdict altogether from any amount that was suggested by either expert and awarded a greater or lesser sum. It is not the Court's role to weigh the factual disputes presented by the parties at trial. Eschelman, 554 F.3d at 433. Likewise, it is not the Court's duty to usurp the jury's fact finding role when it reached a verdict on damages that was within the calculations proffered by the competing experts. Both parties came into trial knowing that $1.169 billion was within the range of possible compensatory verdicts. This is not a punitive award. It is the exact award sought by CMU. (Docket No. 671 at 132). As such, the jury's verdict is not against the great weight of evidence as to mandate a new trial on damages. Nor is the verdict clearly unsupported such that remittitur is warranted. For completeness, the Court now briefly addresses the bevy of arguments advanced by Marvell to limit damages in this case, which can be categorized as either challenges to the royalty base or the royalty rate.
Marvell has repeatedly challenged the Court's decision to allow CMU to value Marvell's use of the CMU Patents by considering all the chips that were sold under the aforementioned sales cycle. (Docket Nos. 356; 656; 808). The Court first ruled on the inclusion of extraterritorial conduct at summary judgment. (Docket No. 441). Motions in limine were due September 24, 2012. (Docket No. 315). Marvell did not raise this issue in a motion in limine; instead, it waited until the last minute to file an "Emergency Motion to Strike CMU's Attempt to Include Noninfringing Sales of Chips that Are Never Used in the U.S. in its Damages Case It Intends to Present to the Jury" on the Saturday after Thanksgiving, two days before the start of trial.
(Docket No. 672 at 5-6).
During this post-trial stage, Marvell's now claims that the Federal Circuit's holding in Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 711 F.3d 1348 (Fed.Cir.2013), precludes consideration of all of Marvell's chips in computing a reasonable royalty.
In Power Integrations, the plaintiff argued for an award of damages on the lost profits from foreign sales which it would have made but for the defendant's domestic infringement. Power Integrations, Inc., 711 F.3d at 1371. In holding that such foreign lost profits were not cognizable damages, the Circuit held that the question presented in the end was whether the plaintiff was "entitled to compensatory damages for injury caused by infringing activity that occurred outside the territory of the United States." Id. at 1371. The Circuit panel held that "the entirely extraterritorial production, use, or sale of an invention patented in the United States is an independent, intervening act that, under almost all circumstances, cuts off the chain of causation initiated by an act of domestic infringement." Id. at 1371-1372 (finding that the damages expert's "estimate of $30 million in damages was not rooted in [the defendant's] activity in the United States").
The Power Integrations fact pattern is quite distinct from the facts at hand. First, this case has nothing to do with lost profits. Second, unlike the situation in Power Integrations, CMU does not seek "damages for injury caused by infringing activity that occurred outside the territory of the United States." Id. at 1371 (emphasis added). The Court reiterates that CMU has always sought damages for domestic infringement resulting from Marvell's use of the patented methods during research, development, chip design, qualification, use of engineering samples, continuous evaluation and indirect infringement by end users in the United States. (Docket No. 860 at 5; Docket No. 678 at 70-162). There was ample evidence presented at trial to establish that these infringing activities occur in the United States. Dr. McLaughlin testified at length to establish that the MNP and NLD chips and KavcicPP,
(Docket No. 764 at 49-56; Pl. Ex. 938).
Upon review of the record, the Court can find no evidence regarding whether any step of the sales cycle process occurred anywhere other than in the United States. Indeed, Marvell proffered almost no evidence regarding its business operations to rebut CMU's arguments on infringement, sales, or damages.
Even after Power Integrations, the Court must still confront the question of how to quantify damages for Marvell's use of the method patents at issue. As the Court discussed, a fee per use is unrealistic. Moreover, no established fee exists. At trial, Marvell argued that a one-time fee of $250,000 was the appropriate measure of damages, (Docket No. 809), while CMU countered that a reasonable fee should be a $0.50 royalty per chip on all chips created through this sales cycle. (Docket No. 829). The Court has never endorsed either side's position, only ruling that CMU's theory could presented to the jury. Based on the evidence before it, the Court found CMU's theory just as reasonable as Marvell's. Accordingly, the jury considered both positions. Furthermore, the Court properly instructed the jury that Marvell could not infringe "with chips that are never used in the United States" but "[t]o the extent, however, that Marvell achieved sales resulting from Marvell's alleged infringing use during the sales cycle, you may consider them in determining the value of the infringing use."
In requesting the Court to follow Power Integrations, Marvell asks the Court to limit CMU's royalty to an estimate of chips that came back into the United States in the stream of commerce. This proposition, however is lacking in evidentiary support and common sense. Marvell did not submit evidence at trial that it or any company has ever licensed patented technology on a per United States imported chip basis. The only Marvell license submitted into evidence at trial (by CMU no less), was between Marvell Technology Group and DSPG signed in April 2000. (Pl. Ex. 197). According to the licensing arrangement, Marvell was to pay a $2.1 million fee plus a running royalty between $0.10 to $0.40 per unit, after 35 million units are produced.
All relevant information on the estimate of chips used in the United States and the total number of chips produced worldwide was presented to the jury. Marvell argued to the jurors that they should consider only the number of chips that are ever used in the United States in valuing Marvell's use of the patented method, while CMU urged the jurors to consider all chips produced during the sales cycle regardless of whether they come back into the country. (Docket No. 759 at 96, 113). The factual record was such that the jury had substantial evidence on which to find in favor of CMU's theory.
The Court also believes that in envisioning a hypothetical negotiation, the jury could have properly considered as illogical an agreement to a per chip royalty predicated on an analytic neither party knows or tracks, and, depending on estimates, could vary by millions. It seems unrealistic that for one license agreement, Marvell and CMU would undergo extensive accounting review each and every year of import and export data of Marvell's customers (if even available). Moreover, such calculation would not include the number of simulators being used by Marvell. The Federal Circuit counsels that "where it is impossible to make a mathematical or approximate apportionment between infringing and noninfringing items, the infringer must bear the burden and the entire risk." Nickson Indus., Inc. v. Rol Mfg. Co., Ltd., 847 F.2d 795, 799 (Fed.Cir.1988); see also TWM Mfg. Co., Inc. v. Dura Corp., 789 F.2d 895, 900 (Fed.Cir.1986) (where infringer's failure to keep accurate records causes difficulty in ascertaining damages, infringer must bear adverse consequences).
The Court also reminds counsel that CMU's damages request incorporates the damages for Marvell's indirect infringement, which if segregated from sales cycle infringement would have created an even larger award for CMU. The Court had to remind Marvell of this as one of the verdict forms it proposed included separate lines for damages on each set of chips and simulators, which could have inadvertently led to an award far in excess of $1.169 billion. (Docket No. 759 at 39).
As previously discussed, CMU seeks damages based on the sales that are created because of Marvell's infringement during the sales cycle. Marvell argues for the first time in its reply brief on its Rule 50(b) Motion that CMU has not entered enough evidence to show that sales took place in the United States in light of the Power Integrations decision. (Docket No. 855 at 6).
Next, there is the issue of waiver. Marvell contends that there is no evidence that sales took place in the United States, because there was no evidence of the location of delivery, location of the buyer, the passage of legal title, location of contracting, or execution of a sales contract. (Docket No. 855 at 6-8). It also argues that the jury was not instructed on the law relevant to determining the location of sales. (Id.). CMU objects to this argument because it was never raised in either of Marvell's two Rule 50(a) Motions during trial or even the initial post-trial Rule 50(b) Motion. (Docket No. 860).
A "defendant's failure to raise an issue in a Rule 50(a)(2) motion with sufficient specificity to put the plaintiffs on notice waives the defendant's right to raise the issue in [his] Rule 50(b) motion." State Farm Mut. Auto. Ins. Co. v. Lincow, 444 Fed.Appx. 617, 620 (3d Cir.2011); see also Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1173 (3d Cir.1993) (stating that Rule 50(b) motion "must be preceded by a Rule 50(a) motion sufficiently specific to afford the party against whom the motion is directed with an opportunity to cure possible defects in proof which otherwise might make [his] case legally insufficient") (emphasis in original). Marvell did not raise this argument until its most recent reply brief. Throughout the trial, there was no argument on the sufficiency of showing, where legal title was passed or even argument on the sufficiency of the evidence regarding sales in general. This highlights why the Court of Appeals for the Third Circuit directs that such arguments must be raised in a sufficiently specific Rule 50(a) motion — if properly noticed, CMU could have submitted more evidence to rebut Marvell's current assertions.
To the extent that Marvell argues the jury should have been instructed on the legal definition of sales, including any of the aforementioned factors, that argument has been waived as such point for charge was neither suggested in proposed jury instructions nor preserved as an objection during the charge conference.
Even if Marvell has not waived this argument, which the Court believes it has, there is more than sufficient evidence for a jury to find that the sales occurred in the United States. First, in an effort to prevent CMU from entering numerous of Marvell's SEC filings into evidence, the parties stipulated that:
(Docket No. 764 at 49-56). Secondly, Dr. Armstrong testified that Mr. Brennan, based in California, signed off on the sales. (Docket No. 761 at Ex. C at 213). Then, Dr. Bajorek gave uncontradicted testimony that Marvell's sales "essentially take place in the United States" and identified the domestic office of each of Marvell's major customers.
(Docket No. 195 at 3-4). While these factors are not exhaustive or necessarily determinative, with the above-described stipulation in evidence, along with one of Marvell's SEC filings (Pl. Ex. 198), testimony from Dr. Armstrong, and expert testimony from Dr. Bajorek, there is sufficient direct and circumstantial evidence to support the proposition that sales resulting from Marvell's sales cycles were made in the United States. See, e.g., Snyder v. Bazargani, 241 Fed.Appx. 20, 23 (3d Cir. 2007) (juries can rely on direct and circumstantial evidence).
Again, there is no contrary evidence in the record showing that any activity beyond the manufacture of the chips occurred anywhere outside the United States. Marvell allowed CMU to present all of the evidence about Marvell's business structure, organization and sales cycle. Marvell presented no evidence to suggest that sales occurred in any other country.
Marvell asks the Court to follow Judge Gilstrap's decision in Lake Cherokee v. Marvell Semiconductor, Inc., wherein Marvell's evidence of foreign sales of chips was excluded as a basis for damages.
In finding Marvell liable for contributory damages, the jury necessarily had to find that Marvell sold or offered to sell the Accused Chips in the United States. Considering all the evidence of record, the Court finds that there was sufficient evidence to support this finding, and accordingly no JMOL, new trial, nor remittitur is warranted.
Marvell next contends that CMU has failed to meet its burden on damages under the "but for" standard because it cannot prove that the sales of the Accused Chips arose due only to Marvell's infringement. (Docket No. 739 at 16; Docket No. 809 at 16). Marvell asserts that: (a) no reasonable jury could conclude that the claimed methods in the patents-in-suit were "must have" for Marvell's customers; (b) CMU has no evidence that the claimed methods were "must have" for Western Digital; (c) that non-infringing components made Marvell successful in the storage hard drive business; (d) that incremental SNR gains are achieved with multiple noninfringing components; (e) that no reasonable jury could conclude that Marvell would have gone out of business but for the claimed methods used in the read channel; and (f) the location of Marvell's sales cycle is irrelevant. (Docket No. 739 at 16-26). CMU counters that it has presented sufficient evidence at trial from which a reasonable jury could find that Marvell's use of the claimed methods in the patents-in-suit was the "but for" cause of Marvell's sales of the Accused Chips. (Docket No. 725 at 9).
The Court finds that based on the evidence of record, viewed in the light most favorable to the non-movant CMU and drawing all inferences in its favor, a reasonable jury could determine that the alleged infringement in this case was the "but for" cause of the sales. Marvell has made a "mountain out of a molehill" in arguing the requirements of "but for" causation, maintaining that CMU must prove a certain level of customer demand or sole causation. (Docket No. 855 at 8). The Court ruled at the Summary Judgment stage that CMU's theory was reasonable given that Marvell's sales are the "but for" result of Marvell's infringement during the sales cycle. (Docket No. 441). The "but for" language on which Marvell relies does not arise from case law or statute in this instance, but from the parties' agreed-upon findings of fact. (Docket No. 402 at ¶ 8; Docket No. 415 at ¶ 8) ("Marvell would not make volume sales of the Accused Chips but for the use of Accused Chips in infringing modes in the U.S. during the sales cycle."). Thus, in stating in its summary judgment opinion that Marvell's sales were a "but for result of Marvell's infringement," the Court recognized that sales could be an indicator of the value of Marvell's use of the patents as long as there
To this end, the parties' stipulation that was read into the record at trial on December 11, 2012, and again as part of the final instructions, provides that Marvell's lengthy (eighteen to thirty-month) sales cycle is a very important component of its business operations and is completed almost entirely within the United States by its engineers, marketing and sales executives as well as other members of Marvell's staff at its Santa Clara offices. (Docket No. 676; Pl. Ex. 938). Nearly all of Marvell's research and development, as well as its testing of chips and multiple interactions with customers, occur there. (Id.). If a customer selects Marvell to produce chips, Marvell achieves a "design win" whereby the customer orders a particular integrated circuit for a full generation of its product line. (Docket No. 707 at 29-34). As already recounted in addressing the JMOL motion on infringement, Dr. McLaughlin offered his expert opinions, which the jury was free to credit, that the simulators run by Marvell and the NLD and MNP-type chips sold by Marvell infringe CMU's patents as Marvell uses the methods claimed in this case.
The sales data upon which Ms. Lawton relied in her opinion showing the number of NLD and MNP-type chips sold by Marvell was provided by Marvell to CMU and not disputed at trial. (Docket Nos. 315; 686). She testified that between March 6, 2003 and July 28, 2012, Marvell sold 2,338, 280,543 chips, (Docket No. 686 at 61), as illustrated by the following chart:
(Docket No. 868-16 at 6). A reasonable jury could conclude from this, and the other evidence of record, that Marvell's use of the claimed methods in the United States was the "but for" cause of Marvell's sales of the NLD and MNP-type chips.
The other matters that Marvell has raised, including whether the technology was "must have" for its customers like Western Digital, whether the other components in the NLD and MNP-type chip drove sales, the success of its other product lines at achieving SNR gains, and whether Marvell would have gone out of business without the use of the claimed methods, challenges the credibility and weight to be given to CMU's damages evidence and presents factual issues the jury had to consider and decide. Marvell proclaims it is "undisputed" that customers did not want the MNP. (Docket No. 885 at 9). The Court, however, does not agree. Marvell heavily relies on Iftiqar Baqai of Western Digital and Marvell's Michael O'Dell to argue that customers did not want the MNP. Mr. Baqai testified that when he worked in the relevant division, Western Digital wanted to pull the MNP. (Docket No. 711 at 164). However, Mr. Baqai was only involved in read channel activities until 2005.
On the other hand, CMU presented: (1) the expert testimony of Dr. Bajorek that the technology was "must have"; (2) internal Marvell communications showing failed predecessors to the MNP, requests to include the MNP as a "critical requirement," as well as references that the MNP was a key feature in Marvell's products; (3) testimony of Western Digital's original corporate designee, Teik Ee Yeo, stating that Western Digital used the technology and saw gains from it; and (4) relevant data on Marvell's sales of infringing products. (Docket No. 829 at 913). Even if the Court ignores all of the arguments by counsel, statements from witnesses, and opinions from experts, the data shows that a majority of all chips sold by Marvell contained the infringing technology. (Docket No. 686 at 117-126). Therefore, Marvell's contentions of what is purportedly "undisputed" evidence do not hold weight. At most, the parties' evidence created factual disputes for the jury, which were resolved in favor of CMU. See, e.g., Curley v. Klem, 499 F.3d 199, 208 (3d Cir.2007) (factual disputes must be resolved by a jury). The Court finds that there is sufficient evidence on which a jury could find that Marvell's infringement through the sales cycle was the cause of its sales.
Marvell contends that CMU has adduced no evidence in support of a running royalty tied to product sales, allegedly undermining its damages case. (Docket Nos. 738; 805). As CMU points out in its response, there is sufficient evidence in the record from which the jury could have found the parties to the hypothetical negotiation determined that a running royalty was appropriate in this case. (Docket No. 725). As the Court held at the Daubert stage of these proceedings in the opinions addressing both the motion to exclude the testimony of Ms. Lawton and Mr. Hoffman, there is no established royalty for the patents-in-suit in this case. (Docket No. 449). To this end, as the Court recounted in one of the memorandum orders denying CMU's motions in limine to exclude the evidence of the Intel Subscription Agreement, (Def. Ex. 255), and the "Highly Speculative Forecast," (Def. Ex. 272), the parties to the hypothetical negotiation in this case would have to negotiate both the financial aspect of any license for the patents-in-suit as well as the framework or structure of the deal, including whether it was a running royalty or a lump sum payment. (Docket No. 609 at 5-6 (citing Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1326 (Fed.Cir.2009))).
In this Court's opinion, CMU presented sufficient evidence showing that both parties have used the running royalty structure in past license agreements. (Pl. Ex. 197; Def. Ex. 272). In the absence of an established royalty, a reasonable jury could conclude that the parties to the hypothetical negotiation would have agreed to a running royalty in accordance with Ms. Lawton's expert opinion.
As CMU recounts (Docket No. 725 at 7-8), the trial record contains evidence that Marvell has been a party to running royalty licenses in the past. Indeed, Dr. Armstrong has represented that Marvell entered into both lump sum and running royalty agreements in the past. (Docket No. 761 at Jt. Ex. C at 251-252). Ms. Lawton also relied on three license agreements for a running royalty into which Marvell had entered: (1) Hitachi; (2) DSP group (Pl. Ex. 197); and (3) ARM, during her testimony, to which there was no objection
The trial record also contains evidence that CMU has been a party to both running royalty and lump sum licenses in the past. First, Ms. Lawton testified that she relied on a Showa Denko license agreement wherein CMU had agreed to a running royalty for a set number of cents per disk and Marvell did not object to such testimony. (Docket No. 710 at 112-113). Second, the "Highly Speculative Forecast" was entered in evidence over CMU's objection. It contains a list of license agreements to which CMU has been a party and reflects that CMU was a party to running royalty agreements at that time.
For these reasons, the Court finds that CMU adduced sufficient evidence from which a reasonable jury could conclude that the parties to the hypothetical negotiation may have agreed to a running royalty in this case. Once again, the parties' competing evidence on this issue was left for the jury to decide.
Marvell's final argument in its initial Rule 50(a) motion was that CMU improperly included licensed sales to nonparty Seagate Technologies in the royalty base, relying on this Court's Summary Judgment opinion dated August 24, 2012. (Docket No. 441). However, Marvell misconstrues the Court's earlier decision. At that point in the litigation, the Court also found that Marvell's use of the claimed methods during its sales cycle could support a verdict against it because there was no evidence of record that Seagate had exercised its "have made" rights under the license and solicited Marvell to build the patented technology for it.
Marvell contends that a royalty of $0.50 per chip is unsupported by the record because Ms. Lawton's opinion is speculative. (Docket No. 809 at 10-17). Marvell's first line of attack is on Ms. Lawton's use of excess profits analysis and operating profit premium analysis.
Because of Marvell's numerous challenges to Ms. Lawton, the Court held two Daubert hearings regarding Ms. Lawton's opinion at Marvell's request. (Docket Nos. 438-440; 706). In addressing these same arguments, the Court has now written over forty pages analyzing Ms. Lawton's qualifications and methods, ultimately holding that she was qualified to testify as an expert in this case and that she applied a reliable methodology in reaching her damages opinion. (Docket Nos. 451; 713). The Court incorporates both opinions herein and denies the Motion for Judgment as a Matter of Law, the Motion for a New Trial, and Motion for Remittitur to the extent that Marvell argues Ms. Lawton is not qualified to render her damages opinion, that her opinions were unreliable, or that they did not fit this case.
Going through these Daubert challenges, the Court put Ms. Lawton to the test, requiring her to first give her testimony in camera for all counsel and the Court before addressing the jury. Additionally, ten minutes before her testimony, the Court excluded Ms. Lawton's prepared slides, given numerous and time consuming arguments over them and what the Court determined to be a summary presentation that should not be permitted in a trial. (Docket No. 686 at 29).
With respect to her computations,
This analysis and testimony was in stark contrast to Marvell's damages expert, who did not do any financial analysis of Marvell's sales data. He only opined that CMU and Marvell would have agreed to a one time lump sum payment of $250,000. (Docket No. 709 at 242-245). His opinion was based on the DSSC licenses and CMU-Intel Subscription Agreement. (Docket No. 709, 710). While he tried to discredit Ms. Lawton's in-depth analysis, he did not offer any analysis of his own of any sales data. Unlike Ms. Lawton, Mr. Hoffman appeared unfocused at times and repeatedly lost track of his points during his brief "expert" testimony. His expert opinion bordered on mere regurgitation of the facts related to the DSSC and Intel licenses, rather than any analysis based on his knowledge, education or expertise. His ultimate opinion was $250,000 one-time lump sum, despite the fact that the Intel agreement was for a lump sum of $200,000 and the DSSC agreement required annual $250,000 payments. (Def. Exs. 17; 39; 40; 255). In the Court's estimation, it is not hard to see why the jury chose to credit Ms. Lawton over Mr. Hoffman. To that end, the jurors took their task in analyzing the expert opinions very seriously. Indeed, they asked the Court during deliberations if they could be provided with the full expert reports and demonstratives for both Ms. Lawton and Mr. Hoffman. (Docket No. 761 at Ct. Ex. 3).
Marvell next argues in its motion for JMOL that "CMU's claim for $1.169 billion is wildly out of proportion to its own pre-litigation assessments of value." (Docket No. 739 at 12). It maintains that judgment as a matter of law is warranted as a result of Ms. Lawton's failure to rely on the following evidence: (1) the DSSC membership licenses (Def. Exs. 17; 39; 40); (2) the August 5, 2003 letters to which Wooldridge testified that no company expressed any interest in taking a license (Pl. Exs. 422; 431; Def. Exs. 225; 235; 1573); (3) the 2004 Intel Subscription Agreement through which an offer was made to Intel for the patents-in-suit for a lump sum of $200,000 (Def. Ex. 255); (4) the evidence that CMU had not entered into a single license arising out of engineering or computer science let alone a single, upfront licensing fee greater than $100,000; and (5) the "highly speculative" projection spreadsheet and emails wherein Wooldridge stated that an estimate for the patents-in-suit was $2,000,000.00 per year. (Def. Ex. 299).
As the Court noted in the Memorandum Order denying CMU's Motion to Strike Mr. Hoffman's testimony filed on December 18, 2012, all of this evidence underpins Mr. Hoffman's opinion that the reasonable royalty in this case would be a one-time, lump-sum payment by Marvell to CMU of $250,000.00. (Docket No. 733). As the Court has recounted, Mr. Hoffman relied heavily upon this figure in both his expert report and opinion testimony.
Based on this Court's review of the record, Ms. Lawton did not disregard any of this evidence. She convincingly explained her consideration of the DSSC and Intel agreements and how those agreements affected her opinion. (Docket No. 686 at 138-166).
The jury was presented with all of the evidence that Marvell avers was not considered by Ms. Lawton. Further, CMU's witnesses including Dr. Kavcic, Dr. Kryder, and Mr. Wooldridge were cross-examined on these facts. (Docket Nos. 673; 674; 682). Accordingly, the weight of these facts that underlie the experts' opinions was for the jury to decide. See Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387, 1394 (Fed.Cir.2003). Whether Ms. Lawton's testimony would be accepted or not is a "[d]etermination[ ] regarding the weight to be accorded, and the sufficiency of, the evidence relied upon by the proffered expert ... within the sole province of the jury." Walker v. Gordon, 46 Fed. Appx. 691, 695 (3d Cir.2002). As such, Marvell's motions for judgment as a matter of law are denied to the extent that it argues that the damages which were sought are "out of proportion" with reality.
Marvell claims that: (1) CMU has no evidence that the claimed algorithm drives customer demand; (2) CMU did not apportion the value of the claimed algorithm to the accused MNP chips; (3) the calculated price premium for one of Marvell's smallest customers is inapplicable to all accused sales;
The Court is guided by the Federal Circuit's decision in Micro Chemical, Inc., which aptly stated:
317 F.3d at 1394. Likewise in this case, all of the evidence Marvell cites, along with their expert testimony, as well as their arguments, were presented to the jury, who had ample opportunity to consider same in their calculation of damages. Ms. Lawton's opinion is not rendered unreliable simply because she reached a conclusion adverse to Marvell's arguments on the facts. The jury was tasked with evaluating the credibility of all of the witnesses and the weight of the evidence in order to reach its ultimate decision on damages. They did just that and found for CMU. Accordingly, Marvell's motion is denied on these grounds.
Marvell is in its current predicament because it deliberately undertook a series of strategic risks. It took the risk of incorporating technology into its products that it knew might have been covered by CMU's Patents. It took the risk of continuing its use of this technology even after this litigation was initiated. It bore the risk of failing to keep or to demonstrate it kept records pertaining to sales and use of its chips.
Marvell's strategy was always "all or nothing." At trial, Marvell argued that the parties would have agreed to a one-time payment of $250,000. It took the risk that the jury would reject this argument.
CMU's damages expert Ms. Lawton was the only person in the trial to present evidence concerning Marvell's sales of the Accused Technology.
John Adams has observed that "[f]acts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence."
As to damages, there is likewise telling sales data that shows that a majority of all chips sold by Marvell used the Accused Technology for a ten-year period. (Docket No. 686 at 117-126; P-Demo 13). Marvell's revenue on the Accused Technology was $10.34 billion, with a total operating profit of $5.05 billion.
While the Court acknowledges this award is large, the facts show that the infringement was long and sustained. Marvell often ridiculed CMU's request for a billion dollars; however, just because a damages award is large
For all of these reasons and after considering all of the evidence in this case, in the light most favorable to CMU, and drawing all reasonable inferences in its favor, the Court denies Marvell's Motion for Judgment as a Matter of Law on Damages, its Motion for a New Trial, as well as its Motion for Remittitur.
Given the above findings and analysis, the Court denied the parties' motions for
(Def. Ex. 1023). The URL is no longer active. (last visited September 20, 2013). This Globecom Paper addresses some of the ideas expressed in the patents, but it is not the IEEE paper later referenced by Burd. (Docket No. 674 at 118). In this Court's estimation, it could be inferred that Dr. Nazari gave Dr. Kavcic's work to the Marvell team working in this arena. Caver v. City of Trenton, 420 F.3d 243, 262 (3d Cir.2005) (a Court must view all reasonable inferences in light most favorable to non-moving party when determining the facts on JMOL). The response to this email was not proffered at trial and as such the Court cannot consider the response in deciding the present motion. See Goodman v. Pennsylvania Tpk. Comm'n, 293 F.3d 655, 665 (3d Cir.2002) (on Rule 50 motions the court can only consider properly admitted evidence). Yet, in the hearing on post-trial motions, Marvell presented Dr. Nazari's response, which stated in relevant part that "as far as I know our [sic] we do not have a product in line of your work, yet. Yes, we are hiring and I'll read your resume on the web..." (Def. Ex. 1611).
(Docket No. 726).
(Docket No. 677 at 170-171; Pl. Ex. 93).
(D Demo 12-10).
(D Demo 12-16).
(Docket No. 425).
(Docket No. 764 at 55).
(Docket No. 674 at 118-119).
(Docket No. 771 at Ex. H at 110).
(Docket No. 710 at 4-5). In its order on Marvell's motion in limine, the Court precluded CMU from introducing evidence or argument at trial that Marvell's tax strategy was illegal or inappropriate. (Docket No. 605). Thus, evidence on this subject was not introduced by the parties during trial.
(Docket No. 707 at 90, 294).
(Docket No. 677 at 170-171; Pl. Ex. 93).
(Docket No. 711 at 281-282).
(Docket No. 709 at 64). In addition, Mr. Burd and Dr. Wu testified that their references to Dr. Kavcic's name were meant to reference the media noise problem that Dr. Kavcic identified in his paper. (Id. at 22).
FED. R. CIV. P. 11(b)(3). Generally, Rule 11 "`imposes on counsel a duty to look before leaping and may be seen as a litigation version of the familiar railroad crossing admonition to `stop, look, and listen.''" Oswell v. Morgan Stanley Dean Witter & Co., 507 F.Supp.2d 484, 488 (D.N.J.2007) (quoting Lieb v. Topstone Indus., 788 F.2d 151, 157 (3d Cir.1986)).
(Docket No. 678 at 106).
(Docket No. 686 at 138). In regards to the Intel agreement she testified:
(Id. at 165-166).
(Docket No. 686 at 166).
(Docket No. 771 at Ex. H at 110).
Confirmation Hearing on the Nomination of John G. Roberts, Jr. to be Chief Justice of the United States Before the S. Comm. on the Judiciary, 109TH CONG. 55 (2005).
