Broadcom Corp. v. Qualcomm Inc.

• Citation: 543 F.3d 683
• Decision Date: 24 September 2008
• Docket Number: No. 2008-1271.,No. 2008-1272.,No. 2008-1199.,2008-1199.,2008-1271.,2008-1272.
• Parties: BROADCOM CORPORATION, Plaintiff-Appellee, v. QUALCOMM INCORPORATED, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

543 F.3d 683

BROADCOM CORPORATION, Plaintiff-Appellee, v. QUALCOMM INCORPORATED, Defendant-Appellant.

No. 2008-1199.

No. 2008-1271.

No. 2008-1272.

United States Court of Appeals, Federal Circuit.

September 24, 2008.

William F. Lee, Wilmer Cutler Pickering Hale and Dorr LLP, of Boston, MA, argued for plaintiff-appellee. With him on the brief were Richard W. O'Neill, Joseph J. Mueller, and Lauren B. Fletcher; and James L. Quarles, III, of Washington, DC. Of counsel was Heath A. Brooks, of Washington, DC.

Evan R. Chesler, Cravath, Swaine & Moore LLP, of New York, NY, argued for defendant-appellant. With him on the brief were Richard J. Stark and Andrei Harasymiak. Of counsel on the brief were Carter G. Phillips and Stephen B. Kinnaird, Sidley Austin LLP, of Washington,

DC, and Richard T. Mulloy and Stanley J. Panikowski, DLA Piper U.S. LLP, of San Diego, California.

Richard McMillan, Jr., Crowell & Moring, LLP, of Washington, DC, for amicus curiae, Sprint Nextel Corporation. With him on the brief were Kathryn L. Clune, Brian M. Koide, and Nathaniel Grow.

Before LINN, FRIEDMAN, and PROST, Circuit Judges.

LINN, Circuit Judge.

Qualcomm Incorporated ("Qualcomm") appeals from a jury's determination that Qualcomm infringed U.S. Patents No. 6,847,686 ("the '686 patent"), No. 5,657,317 ("the '317 patent"), and No. 6,389,010 ("the '010 patent"), owned by Broadcom Corporation ("Broadcom"). Qualcomm also appeals from the district court's issuance of a permanent injunction against Qualcomm. Because the district court erred in its construction of claim 3 of the '686 patent, we reverse the jury's determination of infringement of that patent and conclude that claim 3, as properly construed, is invalid. Because the district court did not err in construing the claims of the '317 patent, and because substantial evidence supports the jury's determinations of infringement and validity of the '317 and '010 patents, we affirm the judgment of infringement of the '317 and '010 patents, and the injunction as it pertains to those patents.

I. BACKGROUND

Broadcom and Qualcomm compete in the market for chipsets used in mobile radio devices such as cell phone handsets. The technology at issue in this appeal relates to wireless voice and data communications on cellular telephone networks. The relevant technology is currently found in so-called third-generation ("3G") baseband processor chips. Baseband processor chips enable a cell phone's basic communication functions, along with other features such as graphics, multimedia, data transfer, and custom applications. The 3G chips sold by Broadcom, Qualcomm, and others replace older and less capable second-generation ("2G") chips, which include code division multiple access ("CDMA") chips and global system for mobile communications ("GSM") chips. The 3G CDMA replacement is known as CDMA2000, while the 3G GSM replacement is known as wideband CDMA ("WCDMA"). These 3G technologies are generally incompatible with each other, and thus both cell phone handsets and cell phone service provider networks are designed to work with only one of these two competing standards. Both standards, however, provide enhanced functionality over their 2G predecessors, particularly in the area of multimedia and multiple network products.

The products accused of infringing Broadcom's patents include baseband chips designed to work in cell phones in conjunction with 3G networks, including both CDMA2000 and WCDMA, although this appeal primarily relates to CDMA2000 chips. Also at issue is Qualcomm's software, which Qualcomm has licensed exclusively to Sprint. QChat allows the use of push-to-talk ("PTT") technology much like a walkie-talkie on CDMA2000 networks. Although Broadcom markets 3G chips, it does not currently sell any CDMA2000 chips, it has not sold any WCDMA chips for use in United States cell phones, and it does not offer a chip implementing a PTT feature.

Broadcom's '686 patent relates to video compression technology on cell phone devices. Claim 3, the only claim at issue, depends from claim 1, and is directed to a "digital signal processor" ("DSP"). Broadcom accused Qualcomm's WCDMA and CDMA2000 baseband processor chips of infringing this claim. The '317 patent relates to technology allowing cell phones to simultaneously participate on multiple wireless networks using a single transceiver. The relevant claims on appeal are directed to "radio units" having "transceivers" capable of "simultaneous" participation on multiple RF networks. Broadcom asserted that Qualcomm's CDMA2000 chips infringed these claims by interfacing with both the 1x network (for traditional voice communications) and the EV-DO network (for data and related applications including PTT functionality in QChat). Finally, the '010 patent claims a "telephone" having circuitry allowing it to "selectively couple" to two networks having different bandwidth characteristics. Broadcom asserted the several claims of the '010 patent against Qualcomm's CDMA2000 chips implementing the QChat PTT feature. Broadcom argued that that traditional voice calls couple to the telephone network, while calls initiated with the QChat feature are routed through the Internet, a distinct network.

The district court issued a claim construction order prior to trial in which it construed the contested terms of Broadcom's patents pursuant to Markman v. Westview Instruments, Inc., 517 U.S. 370, 372, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). Broadcom Corp. v. Qualcomm Inc., No. 05-CV-467 (C.D.Cal. Sept. 11, 2006) ("Claim Construction Order"). Following a trial, the jury found that Qualcomm directly infringed and induced infringement of claim 3 of the '686 patent and claims 1, 6, 9, and 12 of the '317 patent, either literally or under the doctrine of equivalents; that Qualcomm directly infringed, induced infringement of, and contributed to the infringement of claims 1, 2, 3, and 7 of the '010 patent, either literally or under the doctrine of equivalents; and that all of these claims were not invalid. The jury further found that Qualcomm had willfully infringed all three patents in suit. It awarded damages of approximately $20 million. Qualcomm filed post-trial motions for judgment as a matter of law under Rule 50(b) of the Federal Rules of Civil Procedure or a new trial under Rule 59(a). The district court denied relief, denying Qualcomm's motions in their entirety. Broadcom Corp. v. Qualcomm Inc., No. 05-CV-467, 2007 WL 2326838 (C.D.Cal. Aug. 10, 2007) ("JMOL Opinion").

Ten days after the district court's denial of Qualcomm's post-trial motions, this Court released its decision in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir.2007) (en banc). Given the potential impact of Seagate on the willfulness determination previously made by the jury, the district court sua sponte invited a motion for reconsideration of its denial of Qualcomm's request for a new trial on willfulness and of its award of enhanced damages. Upon considering the arguments presented, the district court vacated the willfulness verdict and directed Broadcom to file an election "indicating whether it wishe[d] to accept the liability and damages verdicts or proceed to a new trial on all issues, including willfulness." Broadcom Corp. v. Qualcomm Inc., No. 05-CV-467, slip op. at 9 (C.D.Cal. Nov. 21, 2007). Broadcom elected to accept the liability and damage verdicts rather than proceed to a new trial on all issues.

The district court then held a bench trial on the topic of injunctive relief and subsequently entered a permanent injunction against Qualcomm on all three patents, although it provided "sunset" provisions allowing continued sales pursuant to a mandatory royalty through January 31, 2009. Broadcom Corp. v. Qualcomm Inc., No. 05-CV-467 (C.D.Cal. Dec. 31, 2007) ("Injunction Opinion"). On February 5 2008, the district court issued an amended injunction, Broadcom Corp. v. Qualcomm Inc., No. 05-CV-467 (C.D.Cal. Feb. 5, 2008) ("First Amended Injunction"), and on March 13, 2008, it again amended and re-issued the injunction, Broadcom Corp. v. Qualcomm Inc., No. 05-CV-467 (C.D.Cal. Mar. 13, 2008) ("Second Amended Injunction"). Finally, on March 24, 2008, the district court entered judgment pursuant to Federal Rule of Civil Procedure 54(b). Broadcom Corp. v. Qualcomm Inc., No. 05-CV-467 (C.D.Cal. Mar. 24, 2008).

Qualcomm appealed from the First Amended Injunction, the Second Amended Injunction, and the Rule 54(b) judgment entering the jury's infringement verdicts. We granted unopposed motions to consolidate these three appeals on April 1, 2008, and April 11, 2008. We have jurisdiction over the appeal from the Rule 54(b) judgment pursuant to 28 U.S.C. § 1295(a)(1), and we have jurisdiction over the appeals from the interlocutory injunctions pursuant to 28 U.S.C. § 1292(c)(1).

II. DISCUSSION

Qualcomm presents numerous arguments regarding claim construction, infringement, and validity, as well as various contentions regarding the necessity of a new trial and the propriety of the district court's permanent injunction. We address each in turn.

A. The '686 Patent

Claim 3, the only asserted claim of the '686 patent, depends from claim 1, the patent's only independent claim, which recites:

A digital signal processor for processing a multiple frame video digital signal, comprising:

a DSP controller,

a plurality of processing units connected to said DSP controller for processing said multiple frame video digital signal; and at least one storage unit, wherein each of said processing units is connected to at least one of said at least one storage units, said DSP controller controlling said plurality of processing units, wherein said DSP controller, said plurality of processing units, and said at least one storage unit are on a single chip.

Dependent claim 3 additionally recites "[t]he digital signal processor according to claim 1 wherein each of said processing units operates according to a different...