Ericsson, Inc. v. Harris Corp.

• Decision Date: 09 December 2003
• Docket Number: No. 02-1603.,No. 02-1571.,02-1571.,02-1603.
• Citation: 352 F.3d 1369
• Parties: ERICSSON, INC. and Telefonaktiebolaget LM Ericsson, Plaintiffs/Counterclaim Defendants-Appellants, and Ericsson Components AB, Counterclaim Defendant, v. HARRIS CORPORATION Defendant/Counterclaimant-Cross Appellant, and Intersil Corporation, Defendant/Counterclaimant-Cross Appellant, and Harris Canada, Inc., Counterclaimant.
• Court: U.S. Court of Appeals — Federal Circuit

352 F.3d 1369

ERICSSON, INC. and Telefonaktiebolaget LM Ericsson, Plaintiffs/Counterclaim Defendants-Appellants, and Ericsson Components AB, Counterclaim Defendant, v. HARRIS CORPORATION Defendant/Counterclaimant-Cross Appellant, and Intersil Corporation, Defendant/Counterclaimant-Cross Appellant, and Harris Canada, Inc., Counterclaimant.

No. 02-1571.

No. 02-1603.

United States Court of Appeals, Federal Circuit.

Decided December 9, 2003.

Rehearing and Rehearing En Banc Denied January 20, 2004.

COPYRIGHT MATERIAL OMITTED

Douglas A. Cawley, McKool Smith, P.C., of Dallas Texas, argued for plaintiffs/counterclaim defendants-appellants. With him on the brief were Theodore Stevenson, III and Rosemary T. Snider. Of counsel on the brief were Donald L. Jackson and John R. Lastova, Nixon & Vanderhye P.C., of Arlington, Virginia.

Henry C. Bunsow, Howrey Simon Arnold & White, LLP, of San Francisco, California, argued for defendants/counterclaimants-cross appellants. With him on the brief were Robert C. Laurenson; and Matthew E. Hocker, Ethan B. Andelman, and Justin A. White, Howrey Simon Arnold & White, LLP of Menlo Park, California. Of counsel were Lloyd A. Farnham and Stuart L. Gasner, Keker & Van Nest, L.L.P, of San Francisco, California; and Celine T. Callahan, Howrey Simon Arnold & White, LLP, of Washington, DC.

Steven R. Schooley, Holland and Knight LLP, of Orlando, Florida, for defendant/counterclaimant-cross appellant Intersil Corporation.

Before MAYER, Chief Judge, NEWMAN and LOURIE, Circuit Judges.

Opinion for the court filed by Circuit Judge LOURIE. Opinion concurring in part and dissenting in part filed by Circuit Judge NEWMAN.

LOURIE, Circuit Judge.

Ericsson, Inc. and Telefonaktiebolaget LM Ericsson (collectively, "Ericsson") appeal from the decision of the United States District Court for the Eastern District of Texas granting judgment as a matter of law ("JMOL") that Harris Corporation and Intersil Corporation (collectively, "Harris") do not infringe Ericsson's U.S. Patent 4,961,222. Ericsson, Inc. v. Harris Corp., No. 4:98cv325, 2002 WL 32114135 (E.D.Tex. July 11, 2002) ("JMOL Order"). Harris conditionally cross-appeals from the district court's denial of its motion for JMOL relating to damages. Ericsson, Inc. v. Harris Corp., No. 4:98cv325 (E.D.Tex. July 30, 2002) ("Final Judgment"). For the reasons stated below, we reverse the grant of JMOL of noninfringement and affirm the denial of JMOL relating to damages.

BACKGROUND

Ericsson owns the '222 patent, which is directed to an apparatus for supplying power to a telephone set in a telecommunications system. The patent discloses a subscriber line interface circuit ("SLIC"), which acts as an interface between a telephone exchange and individual subscriber telephone sets. The claimed invention is designed to reduce the idling power that is dissipated by the amplifiers that transmit speech signals across the subscriber line. The device thus conserves power by switching between an active mode, during which the relatively large speech signal amplifiers supply power to the telephone set when it is in use, and a low-power standby mode, during which the smaller auxiliary amplifiers supply power to the telephone set when it is not in use. According to claim 1, a loop sensing circuit detects whether the telephone receiver is in its lifted ("off-hook") position or its cradled ("on-hook") position. The loop sensing circuit then sends a corresponding signal to a control circuit, which in turn sends a control signal to both the speech signal amplifiers and the auxiliary amplifiers. When the loop sensing circuit determines that the telephone receiver is in its off-hook position, the control signal "enables the speech signal amplifiers and disables the auxiliary amplifiers." '222 patent, col. 4, ll. 27-28. Conversely, when the loop sensing circuit determines that the telephone receiver is in its on-hook position, the control signal "disables the speech signals [sic] amplifiers and enables the auxiliary amplifiers so that the speech signal amplifiers, which require power, only supply power to the telephone set when the receiver is off its cradle and a call can be made." Id. at col. 4, ll. 33-37 (emphasis added). Claim 2 depends from claim 1.

Harris manufactures and sells three accused devices: the 5513 SLIC, the 5514 SLIC, and the 5518 SLIC. Each of the accused devices has a low-power standby mode.

In November 1998, Ericsson filed suit against Harris for infringement of claims 1 and 2 of the '222 patent. During the claim construction phase of litigation, both parties agreed that the claim language requiring that the speech signal amplifiers "only supply power to the telephone set when the receiver is off its cradle and a call can be made," id. at col. 4, ll. 35-37 (the "`only supply power' limitation"), should be given its ordinary meaning. JMOL Order, slip op. at 6, 2002 WL 32114135. After a thirteen-day trial, a jury found that Harris's three accused devices did not literally infringe the '222 patent but did infringe claims 1 and 2 under the doctrine of equivalents. Id. at 2, 2002 WL 32114135. The jury awarded Ericsson damages in the amount of $3.5 million for lost profits due to lost sales; $645,000 for lost profits due to price erosion; and $136,000 as a reasonable royalty.

The district court, however, granted Harris's motion for JMOL of noninfringement. After reviewing the testimony of several witnesses, the court found that the "uncontroverted evidence" showed that the speech signal amplifiers in the accused devices supply "some power" to the telephone set in the on-hook position. Id. at 21-22, 2002 WL 32114135. In particular, the court cited the testimony of several of Harris's witnesses, who testified that the speech signal amplifiers in the accused devices have three transistors (the "QRA 23-25 transistors") that always supply a small amount of power to the subscriber line in order to prevent corrosion and also supply power to enable on-hook functions such as caller-ID. Id. at 15, 2002 WL 32114135. In addition, the court found that Ericsson's expert witness, Dr. Thomas Rhyne, acknowledged that the accused devices supply power to the telephone set in the on-hook position, testifying only that the power supplied to prevent corrosion is an insubstantial amount and that any power supplied for on-hook transmission would be present for only a few seconds at a time. Id. at 16, 2002 WL 32114135. However, because claim 1 requires that the speech signal amplifiers only supply power to the telephone set in the off-hook position, the court concluded that a determination that the scope of equivalence included the accused devices would vitiate the "only supply power" limitation. Id. at 22, 2002 WL 32114135. The court accordingly found no infringement as a matter of law and granted Harris's motion for JMOL of noninfringement. Id. The court then dismissed the case with prejudice and summarily denied Harris's motion for JMOL relating to the amount of the damages award. Final Judgment, slip op. at 1.

Ericsson timely appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

We review a district court's grant or denial of a motion for JMOL in a patent case de novo, reapplying the JMOL standard used by the district court. Sextant Avionique, S.A. v. Analog Devices, Inc., 172 F.3d 817, 824 (Fed.Cir.1999). JMOL is appropriate when "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Fed.R.Civ.P. 50(a)(1). When reviewing a district court's denial of JMOL, we must "determine whether `viewing the evidence in the light most favorable to the non-moving party,' and giving the non-movant `the benefit of all reasonable inferences,' there is sufficient evidence of record to support a jury verdict in favor of the non-movant." Southwest Software, Inc. v. Harlequin Inc., 226 F.3d 1280, 1289 (Fed.Cir.2000) (citation omitted).

A determination of infringement requires a two-step analysis. "First, the court determines the scope and meaning of the patent claims asserted ... [and second,] the properly construed claims are compared to the allegedly infringing device." Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed.Cir.1998) (en banc) (citations omitted). Step one, claim construction, is an issue of law, Markman v. Westview Instruments, Inc., 52 F.3d 967, 970-71 (Fed.Cir.1995) (en banc), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996), that we review de novo, Cybor, 138 F.3d at 1456. Step two, comparison of the claim to the accused device, requires a determination that every claim limitation or its equivalent be found in the accused device. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29, 117 S.Ct. 1040, 137 L.Ed.2d 146 (1997). Those determinations are questions of fact. Bai v. L & L Wings Inc., 160 F.3d 1350, 1353 (Fed.Cir.1998).

The determination of the amount of actual damages is also a question of fact. Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1578 (Fed.Cir. 1992). When reviewing a district court's denial of JMOL, we apply the substantial evidence standard to the jury's damages award. Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387, 1394 (Fed.Cir.2003).

A. Infringement

On appeal, Ericsson argues that the district court erred in granting Harris's motion for JMOL of noninfringement. Ericsson first contends that the jury reasonably could have found that the "only supply power" limitation was met literally (and that some other limitation was met equivalently) in light of the substantial evidence that it presented to show that the speech signal amplifiers in the accused devices do not supply power to the telephone set when the receiver is in the on-hook position. Ericsson also asserts that the court erred in holding that the "only supply power" limitation is entitled to no scope of...