Ippv Enterprises v. Echostar Communications
| Decision Date | 27 March 2002 |
| Docket Number | No. CIV.A.99-577-RRM.,CIV.A.99-577-RRM. |
| Citation | 191 F.Supp.2d 530 |
| Parties | IPPV ENTERPRISES, LLC, and MAAST, Inc., Plaintiffs, v. ECHOSTAR COMMUNICATIONS CORP.; Nagravision, S.A.; and Nagrastar, L.L.C., Defendants |
| Court | U.S. District Court — District of Delaware |
James D. Heisman, Esquire, Connolly, Bove, Lodge & Hutz LLP, Wilmington, DE, Frederick G. Michaud, Jr., Esquire, Samuel C. Miller, III, Esquire, David M. Schlitz, Esquire, Lloyd S. Smith, Esquire, and Mark R. Kresloff, Esquire, Burns, Doane, Swecker & Mathis, L.L.P., Alexandria, VA, for plaintiffs.
Donald F. Parsons, Jr., Esquire and Rodger D. Smith, Esquire, Morris, Nichols, Arsht & Tunnell, Wilmington, DE, Philip L. Cohan, Esquire, John C. Dougherty, Esquire, Hugh J. Marbury, Esquire, James M. Heintz, Esquire, Piper Marbury Rudnick & Wolfe LLP, Washington, DC, for defendants.
This is a patent case. Plaintiff IPPV Enterprises, LLC is a Nevada limited liability corporation with its principal place of business in Reno, Nevada. IPPV is the owner of U.S. Patent Nos. 4,163,254 (the '254 patent); 4,225,884 (the '884 patent); 4,528,589 (the '589 patent); and 4,484,217 (the '217 patent), all of which relate to features for pay television service, including methods to keep track of the programs viewed by pay television subscribers, to bill and collect from subscribers for watching these programs, and to permit the subscriber to control what types of programs can be seen on their television. Plaintiff MAAST, Inc. is a Delaware corporation with its principal place of business in Sparks, Nevada. MAAST is one of the companies that owns IPPV. MAAST assigned the '254, '884, '589, and '217 patents to IPPV and itself owns U.S. Patent No. 4,600,942 (the '942 patent), which relates to the encryption and decryption of pay-per-view television broadcasts.
Defendant Echostar Communications Corp. is a Nevada corporation with its principal place of business in Littleton, Colorado. Echostar Communications operates a direct broadcast satellite subscriber television service known as the DISH Network. The DISH network transmits signals in digital format. To ensure secure transmission and delivery of signals, the broadcast signals are encrypted prior to satellite transmission and are subsequently decrypted at the subscriber location.
Defendant NagraVision, S.A. is a Swiss corporation with its principal place of business in Cheseaux, Switzerland. Defendant NagraStar L.L.C. is a Colorado limited liability corporation with its principal place of business in Englewood, Colorado. NagraVision and NagraStar supply Echostar Communications with certain enabling technology that is used in the DISH Network satellite receivers.
On August 26, 1999, IPPV and MAAST (collectively, "IPPV") filed a complaint in this case, alleging that Echostar Communications' operation of the DISH Network infringes, or induces infringement of, certain claims of the '254, '884, '589, '217, and '942 patents. IPPV subsequently abandoned its allegations with respect to the '589 patent.
On December 28, 1999, Echostar Communications answered the complaint, denying infringement and asserting certain affirmative defenses.
On July 20, 2000, IPPV amended its complaint to add NagraVision and NagraStar as defendants, alleging that NagraVision and NagraStar contributorily infringed or induced the infringement of certain claims of the '217 and '942 patents. Echostar Communications, NagraVision and NagraStar (collectively, "Echostar") answered the amended complaint and asserted certain counterclaims on August 24, 2000.
On two occasions before trial, the court conducted oral arguments and made rulings on the construction of the disputed terms and phrases of the asserted claims in accordance with Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). First, in an opinion dated July 28, 2000, the court construed the claim term "television program signal," as used in claim 21 of the '942 patent, in order to resolve a discovery dispute that turned on the construction of that term. See IPPV Enters., LLC v. Echostar Communications Corp., 106 F.Supp.2d 595 (D.Del.2000) ("IPPV I"). Then, on July 3, 2001, the court issued its claim construction opinion on the remaining disputed terms of the four patents at issue. See IPPV Enters., LLC v. Echostar Communications Corp., 146 F.Supp.2d 498 (D.Del.2001) ("IPPV II").
On September 19, 2000, Echostar moved for summary judgment that it does not infringe the '942 patent based on the court's construction of "television program signal." MAAST opposed Echostar's motion and sought reconsideration of the court's IPPV I claim construction opinion on October 18, 2000. On December 12, 2000, the court entered an order denying Echostar's motion for summary judgment of non-infringement, but invited the parties to file motions on potential liability for infringement under the doctrine of equivalents following the Federal Circuit's decision in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 234 F.3d 558 (Fed.Cir.2000) (en banc). The court also denied MAAST's motion for reconsideration of its IPPV I opinion. In a pre-trial conference on July 5, 2001, however, plaintiff MAAST conceded that, unless the court reconsidered its claim construction findings with respect to the '942 patent, the defendants were entitled to summary judgment of non-infringement of the '942 patent. Accordingly, MAAST did not participate in the trial and the infringement allegations relating to the '942 patent were not at issue in the trial.
Beginning on July 9, 2001, the court held a jury trial on IPPV's claims of infringement of the infringement was willful; and (v) that the plaintiffs were entitled to "bundled" damages award of $15 million for the infringement of the '254, '884, and '217 patents. Judgment has not yet been entered on the verdict. On a certain affirmative defenses which Echostar had asserted that it would raise prior to trial, but then failed to raise at trial, the court granted judgment for the plaintiff as a matter of law. These included: (i) that the accused Echostar Communications product literally infringed claims 1, 2, 3, 6, 7, 8, 13, 14, and 15 of the '217 patent; (ii) that NagraVision and NagraStar induced infringement of and contributorily infringed those claims; and (iii) that various invalidity positions that were no longer being pursued were out of the case.
At the close of IPPV's case, and again at the close of all of the evidence, Echostar moved for judgment as a matter of law under Rule 50(b). IPPV also moved for judgment as a matter of law. Soon after the conclusion of the jury trial, the parties filed a number of post-trial motions. On August 27, 2001, the defendants renewed their motion for judgment as a matter of law on the '254, '884, and '217 patents under Rule 50(b), and alternatively moved for a new trial under Rule 59.
The issues raised by Echostar include (i) whether sufficient evidence supports the jury's finding that Echostar literally infringed the asserted claims of the '254 and '884 patents; (ii) whether sufficient evidence supports the jury's finding that Echostar infringed step 3 of claim 4 of the '884 patent under the doctrine of equivalence; (iii) whether the jury was unreasonable in concluding that the asserted claims of the '217 patent were not invalid in light of U.S. Patent No. 3,885,089 ("the Callais patent"), the prior art reference that the defendants assert anticipates it; (iv) whether the jury's finding of willfulness with respect to Echostar Communications, NagraVision, and NagraStar is supported by sufficient evidence; and (v) whether the defendants were unfairly prejudiced by the following, either individually or collectively: the verdict form, the bundling of damages by the jury, the admission into evidence of a settlement agreement between IPPV and Echostar's competitor, DirectTV, the plaintiff's presentation of a new damages theory at trial, or the exclusion from evidence of the defendants' expert's '217 patent invalidity chart.
This is the court's decision on Echostar's motion for judgment as a matter of law or for a new trial.
The court draws the following facts from the evidence presented to the jury during the trial. The general background on the patents is drawn from the patents themselves and the court's claim construction opinions in the case.
The following section will briefly describe each of the patents that were at issue at the trial. For a more detailed discussion of the patented technology at issue in this case and the procedural history of the three patents at issue, see IPPV II, 146 F.Supp.2d at 501-513.
The '254 patent, which is entitled "Method and system for subscription television billing and access," relates to the use of program identification codes in pay television for use in customer billing. It discloses a method of placing identification codes in a television program signal and storing those codes at the subscriber's location for later retrieval and use in billing the subscriber for programs viewed.
IPPV alleged that Echostar Communications infringed method claims 8 and 9 of the '254 patent. Claim 8...
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