Apple Inc. v. Samsung Elecs. Co.

• Citation: 839 F.3d 1034,120 U.S.P.Q.2d 1400
• Parties: Apple Inc., a California Corporation, Plaintiff–Cross–Appellant v. Samsung Electronics Co., Ltd., a Korean Corporation, Samsung Electronics America, Inc., a New York Corporation, Samsung Telecommunications America, LLC, a Delaware Limited Liability Company, Defendants–Appellants
• Decision Date: 07 October 2016
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

839 F.3d 1034

120 U.S.P.Q.2d 1400

Apple Inc., a California Corporation, Plaintiff–Cross–Appellant

v.Samsung Electronics Co., Ltd., a Korean Corporation, Samsung Electronics America, Inc., a New York Corporation, Samsung Telecommunications America, LLC, a Delaware Limited Liability Company, Defendants–Appellants

United States Court of Appeals, Federal Circuit.

Decided: October 7, 2016

William F. Lee , Wilmer Cutler Pickering Hale and Dorr LLP, Boston MA, argued for plaintiff-cross-appellant. Also represented by Dana Olcott Burwell, Andrew J. Danford, Mark Christopher Fleming, Lauren B. Fletcher, Sarah R. Frazier, Richard Wells O'Neill ; Mark D. Selwyn , Palo Alto, CA; Thomas Gregory Sprankling , Washington, DC; Rachel Krevans , Morrison & Foerster LLP, San Francisco, CA; Erik Jeffrey Olson , Palo Alto, CA.

Kathleen M. Sullivan , Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for defendant-appellants. Also represented by William Adams, David Michael Cooper; Brian Cosmo Cannon, Kevin P.B. Johnson, Victoria Fishman Maroulis , Redwood Shores, CA; John B. Quinn, Scott L. Watson, Michael Thomas Zeller , Los Angeles, CA.

Before Prost, Chief Judge, Newman, Lourie, Dyk, Moore, O'Malley, Reyna, Wallach, Chen, Hughes, and Stoll, Circuit Judges.^*

Concurring in the result without opinion Circuit Judge Hughes.

Dissenting Opinion filed by Chief Judge Prost.

Dissenting Opinion filed by Circuit Judge Dyk.

Dissenting Opinion filed by Circuit Judge Reyna.

Moore, Circuit Judge.

I. INTRODUCTION

The current appeal results from a patent infringement suit and countersuit between Apple Inc. (“Apple”) and Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively, “Samsung”). Relevant to this en banc decision, the district court granted summary judgment that Samsung's accused devices infringe the asserted claim of U.S. Patent No. 8,074,172 (“the '172 patent”). After a thirteen day trial, the jury found the asserted claim of U.S. Patent No. 5,946,647 (“the '647 patent”) infringed, and the district court denied Samsung's requested judgment as a matter of law (“JMOL”). The jury also found the asserted claim of U.S. Patent No. 8,046,721 (“the '721 patent”) infringed and not invalid and the asserted claim of the '172 patent not invalid. The district court later denied Samsung's requested JMOL and entered judgment accordingly.¹ Samsung appealed the district court's grant of summary judgment of infringement as to the '172 patent, denial of JMOL of non-infringement as to the '647 patent, and denial of JMOL of obviousness as to the '721 and '172 patents.

II. PROCEDURAL PROGRESS

A. The Decision to Grant En Banc Review

On February 26, 2016, a panel of this court reversed the denial of JMOL with regard to the jury verdict of infringement as to the '647 patent and non-obviousness as to the '721 and '172 patents. Apple filed a petition for rehearing en banc. Apple's petition argued that the panel reversed the jury's finding of infringement of the '647 patent by relying on extra-record evidence “none of which was of record and that the panel appears to have located only through independent research.” Apple Pet. 2. Apple argued that this extra-record extrinsic evidence was used to modify the agreed to and unappealed claim construction. See, e.g. , id . at 8 (“The panel looked to [this extra-record evidence] to create its own plain meaning of ‘server’ as requiring a ‘stand alone’ program.”). Apple also argued that this extra-record evidence was used in “considering the factual question whether Samsung's phones met the ‘analyzer server’ limitation.” See id . at 6, 8 (“The panel also relied on dictionary and encyclopedia entries to inform its understanding of how the shared library code in Samsung's phones work.” (emphasis in original)). Apple also argued that the case should be taken en banc because “in an unprecedented decision,” the panel reversed nearly every fact finding by the jury which favored Apple. Id . at 1.

We granted Apple's en banc petition to affirm our understanding of the appellate function as limited to deciding the issues raised on appeal by the parties, deciding these issues only on the basis of the record made below, and as requiring appropriate deference be applied to the review of fact findings. There was no need to solicit additional briefing or argument on the question of whether an appellate panel can look to extra-record extrinsic evidence to construe a patent claim term. “The Supreme Court made clear that the factual components [of claim construction] include ‘the background science or the meaning of a term in the relevant art during the relevant time period.’ ” Teva Pharms., Inc. v. Sandoz, Inc. , 789 F.3d 1335, 1342 (Fed. Cir. 2015) (quoting Teva Pharms., Inc. v. Sandoz, Inc. , ––– U.S. ––––, 135 S.Ct. 831, 841, ––– L.Ed.2d –––– (2015) ). After Teva , such fact findings are indisputably the province of the district court. We did not need to solicit additional briefing or argument to conclude that the appellate court cannot rely on extra-record extrinsic evidence in the first instance or make factual findings about what such extrinsic evidence suggests about the plain meaning of a claim term in the art at the relevant time or how such extra record evidence may inform our understanding of how the accused device operates. We likewise did not need additional briefing or argument to determine that the appellate court is not permitted to reverse fact findings that were not appealed or that the appellate court is required to review jury fact findings when they are appealed for substantial evidence. The panel reversed nearly a dozen jury fact findings including infringement, motivation to combine, the teachings of prior art references, commercial success, industry praise, copying, and long-felt need across three different patents. It did so despite the fact that some of these findings were not appealed and without ever mentioning the applicable substantial evidence standard of review. And with regard to objective indicia, it did so in ways that departed from existing law.

The dissents, and Judge Dyk's dissent in particular, raise big questions about how aspects of the obviousness doctrine ought to operate. But no party—at the panel or the petition for rehearing en banc stage—invited this court to consider changing the existing law of obviousness. We did not take this case en banc to decide important legal questions about the inner workings of the law of obviousness. We have applied existing obviousness law to the facts of this case. We took this case en banc to affirm our understanding of our appellate function, to apply the governing law, and to maintain our fidelity to the Supreme Court's Teva decision.

B. The En Banc Decision

We affirm and reinstate the district court's judgment as to the ' 647, '721, and '172 patents. We conclude that the jury verdict on each issue is supported by substantial evidence in the record and that the district court did not err when denying Samsung's respective JMOLs. Accordingly, we vacate the panel opinion and affirm the district court's judgment with respect to these patents. We reinstate the panel opinion regarding U.S. Patent Nos. 6,847,959, 7,761,414, 5,579,239, and 6,226,449. In all other respects, the panel decision is vacated. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

III. DISCUSSION

We review a district court's order granting or denying JMOL under the standard applied by the regional circuit. In the Ninth Circuit, JMOL “is proper when the evidence permits only one reasonable conclusion and the conclusion is contrary to that of the jury.” See Monroe v. City of Phoenix , 248 F.3d 851, 861 (9th Cir. 2001). The Ninth Circuit explains that “[t]he evidence must be viewed in the light most favorable to the nonmoving party, and all reasonable inferences must be drawn in favor of that party.” Id. The Ninth Circuit reviews a district court's decision to grant or deny JMOL de novo. Id.

A. The '647 Patent

Apple asserted infringement of claim 9 of the '647 patent. The jury found that Samsung infringed and awarded Apple $98,690,625. J.A. 40869–79. The district court denied JMOL of non-infringement. J.A. 40–48. Samsung argues the district court erred in not granting its motion for JMOL of non-infringement. Because there was substantial evidence to support the jury's verdict, we affirm. “Substantial evidence ... means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. of N.Y. v. N.L.R.B. , 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938).

Infringement is a question of fact. Lucent Techs., Inc. v. Gateway, Inc. , 580 F.3d 1301, 1309 (Fed. Cir. 2009). Our review on appeal is limited to whether there was substantial evidence in the record to support the jury's verdict. Id. We presume the jury resolved all underlying factual disputes in favor of the verdict. SSL Servs., LLC v. Citrix Sys., Inc. , 769 F.3d 1073, 1082 (Fed. Cir. 2014).

The '647 patent discloses a system and method for detecting structures such as phone numbers, addresses, and dates in documents, and then linking actions or commands to those structures. When the system detects a structure in a document, an “analyzer server” links actions to that detected structure. Actions include things such as placing a phone call or adding an address to an electronic address book. See '647 patent at 2:21–41. Apple asserted claim 9, which depends from claim 1:

1. A computer-based system for detecting structures in data and performing actions on detected structures, comprising:

an input device for receiving data;

an output device for presenting the data;

a memory storing information including program routines including

an analyzer server for detecting structures in the data, and for linking actions to the detected structures ;

a user interface enabling the selection of a detected structure and a linked action; and

an action

...