Summit 6, LLC v. Samsung Elecs. Co.

• Decision Date: 21 September 2015
• Docket Number: 2013–1651.,Nos. 2013–1648,s. 2013–1648
• Citation: 116 U.S.P.Q.2d 1637,802 F.3d 1283
• Parties: SUMMIT 6, LLC, Plaintiff–Cross Appellant, v. SAMSUNG ELECTRONICS CO., LTD., Samsung Telecommunications America, LLC, Defendants–Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

802 F.3d 1283
116 U.S.P.Q.2d 1637

SUMMIT 6, LLC, Plaintiff–Cross Appellant
v.
SAMSUNG ELECTRONICS CO., LTD., Samsung Telecommunications America, LLC, Defendants–Appellants.

Nos. 2013–1648
2013–1651.

United States Court of Appeals, Federal Circuit.

Sept. 21, 2015.

802 F.3d 1286

Theodore Stevenson, III, McKool Smith, P.C., Dallas, TX, argued for plaintiff-cross appellant. Also represented by Douglas Aaron Cawley, Phillip Aurentz, Richard Alan Kamprath ; Joel Lance Thollander, John Bruce Campbell, Gretchen Curran, Kathy Hsinjung Li, Austin, TX; Bradley Wayne Caldwell, Caldwell, Cassady & Curry, Dallas, TX.

Carter Glasgow Phillips, Sidley Austin LLP, Washington, DC, argued for defendants-appellants. Also represented by Joseph Guerra, Rachel Heather Townsend.

Before PROST, Chief Judge, REYNA, and HUGHES, Circuit Judges.

Opinion

802 F.3d 1287

REYNA, Circuit Judge.

This appeal is from a final judgment entered on a jury verdict in a patent case. The jury found the asserted claims of U.S. Patent No. 7,765,482 (“the '482 patent”) not invalid and infringed. The jury awarded Appellee–Cross Appellant Summit 6, LLC (“Summit”) $15 million in damages. The parties raise various issues relating to the proper legal framework for evaluating reasonable royalty damages in the patent infringement context. Also before us are questions regarding claim construction, infringement, invalidity, and the admissibility of expert testimony. For the reasons explained below, we affirm.

I. Background

A. The '482 Patent

Summit is the owner by assignment of the '482 patent, entitled “Web-based Media Submission Tool.” The '482 patent relates to the processing of digital content, such as digital photos. '482 patent at col. 1 ll. 11–14. The invention “provides an improved web-based media submission tool” that includes “several unique and valuable functions.” Id. at col. 2 ll. 7–8. The embodiment described in the specification focuses on a tool used to submit photos to a website. Id. at col. 2 ll. 44–60, col. 3 ll. 55–64. This embodiment is described as software that allows a user to place the photo into a website form either by dragging and dropping the photo from the user's computer or by using a mouse click within the website. Id. at col. 3 ll. 20–48. Among other things, the '482 patent teaches a web-based media submission tool with “a variable amount of intelligent pre-processing on media objects prior to upload.” Id. at col. 2 ll. 16–17.

The “intelligent preprocessing” taught by the '482 patent includes the “ability to control the width and height of the media object identifier and the ability to preprocess the media objects in any number of ways prior to transporting to a second location.” Id. at col. 4 ll. 53–56. The patent describes this process in detail:

[T]he [invention] may resize the image, (i.e., increase or decrease its size as defined by either physical dimensions, pixel count, or kilobytes). Compression, for example, is a type of sizing. The [invention] may also change the image's file format, ... change the quality setting of the image, crop the image or change the aspect ratio, add text or annotations, encode or combine ... the media object, or enhance the media object by changing image values, for example, relating to contrast or saturation.

Id. at col. 4 ll. 57–67.

Summit asserted independent claim 38 and dependent claims 40, 44–46, and 49 at trial. Claim 38 recites:

38. A computer implemented method for pre-processing digital content in a client device for subsequent electronic distribution, comprising:

a. initiating, by said client device, a transfer of digital content from said client device to a server device, said digital content including one or more of image content, video content, and audio content;

b. pre-processing said digital content at said client device in accordance with one or more pre-processing parameters, said one or more preprocessing parameters being provided to said client device from a device separate from said client device, said one or more pre-processing parameters controlling said client device in a placement of said digital content into a specified form in preparation for

802 F.3d 1288

publication to one or more devices that are remote from a server device and said client device; and

c. transmitting a message from said client device to said server device for subsequent distribution to said one or more devices that are remote from said server device and said client device, said transmitted message including said pre-processed digital content.

Id. at col. 13 l. 56–col. 14 l. 14 (emphases added to relevant terms).

B. Procedural History

On February 23, 2011, Summit sued Samsung Electronics Co., Ltd., Samsung Telecommunications America LLC (collectively, “Samsung”), Research in Motion Limited, Research in Motion Corp. (collectively, “RIM”), Facebook, Inc. (“Facebook”), and other defendants asserting infringement of the '482 patent. Summit asserted that the process of sending photographs via the multimedia messaging service (“MMS”) as used by smartphones and tablets designed, manufactured, and sold by Samsung infringes the '482 patent.

In the district court, the parties disputed the proper meaning of fourteen claim terms. As relevant to this appeal, the parties disputed the proper meaning of “publication/publishing” and “receiving”/“provided to.”¹ Samsung contended that “publication” should be construed to mean “making the digital content publicly available (e.g. posting the digital content on a web page)” in order to differentiate the term from “transmitting” and “distribution.” Summit argued that publication requires no construction and, if it does, it should be “sharing.” Regarding the “receiving”/“provided to” terms, Samsung argued that claim 38 required the active receipt of the pre-processing parameters during the operation of the claimed method. Samsung contended that the receipt of the pre-processing parameters must occur during the operation of the method. Summit argued that the receipt of pre-processing parameters required ongoing activity, but could also encompass the receipt of the pre-processing parameters prior to the commencement of the claimed method.

On May 21, 2012, the district court issued an order construing the disputed claim terms. Regarding “publication,” the district court agreed with Samsung and construed the term to mean “making publicly available.” The district court declined to construe the “receiving”/“provided to” terms, finding that the terms required no construction. RIM settled thereafter.

On October 22, 2012, Samsung filed a motion for summary judgment of non-infringement. The district court denied Samsung's motion as to literal infringement, finding that a genuine issue of material fact existed as to whether Samsung's products perform the recited pre-processing step. The court granted other aspects of Samsung's motion, finding that prosecution history estoppel bars application of the doctrine of equivalents to the pre-processing step. Soon thereafter, Facebook settled.² Samsung was then the only remaining defendant.

802 F.3d 1289

Beginning on March 29, 2013, the district court held a six-day jury trial. During trial the parties presented competing evidence regarding the provision of pre-processing parameters to the client device. Summit contended that receipt of the pre-processing parameters during the operation of the method was not required. Summit's expert, Dr. Mark Jones, testified that even if active receipt during the operation of the method is required, Samsung phones receive parameters when phones are reflashed or when software updates are provided. Samsung's expert, Dr. Earl Sacerdoti, explained that active receipt of the parameters is required and the pre-processing parameters are not provided to any accused Samsung device during any pre-processing operations.

On the “publication” limitation, Summit contended that Samsung's accused devices prepare the images for “publication.” Summit's expert, Dr. Jones, explained that when an image is resized in Samsung phones, the digital content is placed in a form in preparation for both transmission and publication. Samsung's expert, Dr. Sacerdoti, explained that any alterations to the image during the MMS process are done to meet carrier transmission requirements for message size limits, not to prepare the message for publication.

Summit then presented evidence of damages through its expert Mr. Paul Benoit. Mr. Benoit explained that Samsung would have agreed in a hypothetical negotiation to pay Summit $0.28 per phone to provide the infringing features on their phones over the life of the patent. Mr. Benoit acknowledged that he relied on a methodology not previously used or published in peer-reviewed journals. Samsung's expert, Mr. Christopher Martinez, testified that because infringement takes place at the software level, no company would agree to pay a running royalty on a phone. He testified that a proper royalty would be a $1.5 million...