Ericsson Inc. v. TCL Commc'n Tech. Holdings, Ltd.
| Decision Date | 10 May 2018 |
| Docket Number | Case No. 2:15-cv-00011-RSP |
| Parties | ERICSSON INC., TELEFONAKTIEBOLAGET LM ERICSSON, Plaintiffs, v. TCL COMMUNICATION TECHNOLOGY HOLDINGS, LTD., TCT MOBILE LIMITED, TCT MOBILE (US) INC., Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
After a four-day trial, the jury unanimously found that TCL willfully infringed claims 1 and 5 of United States Patent No. 7,149,510 by selling phones and devices equipped with the Google Android operating system, and the jury awarded $75 million as a lump sum royalty.1 The court previously ordered a new trial on damages after finding Ericsson's damages theory unreliable, see ECF No. 456, but the court now reconsiders that order, reinstates the jury's verdict in full, and resolves all other remaining disputes.
TCL's motions for judgment as a matter of law and for a new trial raise procedural issues not unique to patent law and are therefore evaluated under regional circuit law. Promega Corp. v. Life Techs. Corp., 875 F.3d 651, 659 (Fed. Cir. 2017). The Fifth Circuit is "especially deferential" to a jury verdict. Olibas v. Barclay, 838 F.3d 442, 448 (5th Cir. 2016) (quoting Evans v. Ford Motor Co., 484 F.3d 329, 334 (5th Cir. 2007)) (internal quotation marks omitted). A party is onlyentitled to judgment as a matter of law on an issue where no reasonable jury would have had a legally sufficient evidentiary basis to find otherwise. Fed. R. Civ. P. 50(a); Bear Ranch, L.L.C. v. Heartbrand Beef, Inc., 885 F.3d 794, 801 (5th Cir. 2018). The evidence must be reviewed "in the light most favorable to the non-movant." Id. (quoting Omnitech Int'l, Inc. v. Clorox Co., 11 F.3d 1316, 1323 (5th Cir. 1994)). The Fifth Circuit will reverse the denial of a motion for judgment as a matter of law "only if the jury's factual findings are not supported by substantial evidence or if the legal conclusions implied from the jury's verdict cannot in law be supported by those findings." MM Steel, L.P. v. JSW Steel (USA) Inc., 806 F.3d 835, 843 (5th Cir. 2015) (citation omitted).
A decision to grant a new trial must also overcome significant deference to the jury's verdict. "A trial court should not grant a new trial on evidentiary grounds unless the verdict is against the great weight of the evidence." Seibert v. Jackson Cty., Mississippi, 851 F.3d 430, 439 (5th Cir. 2017) (quoting Whitehead v. Food Max of Miss., Inc., 163 F.3d 265, 269 (5th Cir. 1998)). This requires the movant to show "an absolute absence of evidence to support the jury's verdict." Id. (quoting Whitehead, 163 F.3d at 269).
TCL makes two arguments in support of judgment as a matter of law that TCL has not infringed. ECF No. 427 at 3-8. Both arguments relate to the phrase "interception module," which appears in claim 1 of the '510 patent:
'510 Patent col.11 ll.1-23 (emphasis added). TCL's first argument is that the Android operating system does not include an "interception module" because the segments of code responsible for interception are not in the same place. ECF No. 427 at 3-6. TCL's second argument, as best as the court can understand it, is that the claims require the "interception module" to be separate from the "software services component," yet there was no evidence for the jury to conclude that these two components are separate in the Android operating system. Id. at 6-8. Neither argument is persuasive.
TCL's first argument was raised in a pretrial motion—TCL asked the court to construe "interception module" as a self-contained segment of source code, as opposed to code that is dispersed throughout an operating system. See ECF No. 359 at 19-20. TCL did not timely raise this claim construction argument, however, and the court found the argument waived. Id. Nevertheless, because it was not clear that TCL's argument was a matter for claim construction, the court permitted TCL's expert, Dr. Malek, to explain his understanding of the plain and ordinary meaning of the term "module" at trial. Id. (); see also Nobelbiz, Inc. v. Glob. Connect, LLC, 876 F.3d 1326, 1330 (Fed. Cir. 2017) () ("The fact that parties' experts might proffer differing definitions of a term's plain and ordinary meaning to a jury should not be enough to justify removing that question from the jury's consideration.").
Ericsson's expert, Dr. Jones, offered a competing understanding, explaining that the Android operating system included an interception "module" because it had code that is "a logically separable part of the program that has an identifiable functionality." Trial Tr. vol. 2 (afternoon), 56:12-57:7, Dec. 6, 2017, ECF No. 404. In other words, Dr. Jones's opinion was that regardless of where in the operating system the source code resided, segments of source code could work together in the Android operating system to perform the interception function, and such segments would be considered a "module" because they are logically distinct (in terms of function) from other portions of source code. See id.
Dr. Jones discredited Dr. Malek's testimony by highlighting that Dr. Malek's understanding of the term has not been consistent. In a claim construction declaration, Dr. Malek explained that "interception module" would be understood as software responsible for receiving a request to access the software services component from the application domain software and passing the request to the decision entity. Id. 58:3-8. Dr. Jones explained that this definition is consistent with his understanding, i.e., a segment of code that performs the interception function. Id. 58:4-24. Dr. Malek repeated essentially the same definition during his deposition. Id. 59:4-7. Yet at trial, Dr. Malek defined the term as a "program unit that is discrete and identifiable with respect to compiling, combining with other units, and loading." Id. 60:6-8. Dr. Jones not only highlighted the inconsistency, but also explained how the Android operating system would satisfy each one of Dr. Malek's definitions. Id. 58:4-60:24.
The real difference between the experts, according to Dr. Jones, had to do with the fact that the portions of code alleged by Ericsson to satisfy the "interception module" limitation were scattered in different places and in different files. Id. 60:25-61:9. Dr. Jones explained that in terms of computer science, it did not matter where the source code was located as long as the code segments were linked together in a way that made them logically discrete. Id. 61:10-25. Thus, "from the phone's perspective, they're executed right in a row." Id. 61:21-22.
Not surprisingly, the jury discredited Dr. Malek's testimony, and substantial evidence supports this finding. First, the jury could have credited Dr. Jones's understanding that the Android system has an "interception module" because it includes logically distinct segments of code that interact together to perform the interception function. TCL's argument to the contrary, that "[t]he only clear definition of the term 'module' was presented by TCL," ECF No. 427 at 3, is meritless. Dr. Jones's understanding of the term was not only clear, but it made sense in terms of computer science. Second, the jury could have credited Dr. Malek's own prior definitions of the phrase, which were consistent with Dr. Jones's definition. Third, the jury could have concluded that the Android system satisfies the definition Dr. Malek offered at trial inasmuch as the Android code segments are logically discrete and identifiable with respect to compiling and loading.
TCL's second argument appears to be that Ericsson unwittingly limited the scope of the claims during trial by stating that the claims require a "layered" architecture. See ECF No. 427 at 6-7. According to TCL, this means that the "interception module" and "software services component" must be in separate places, yet there is no evidence to support that finding. Id. at 7. The testimony TCL cites as supporting a disclaimer of claim scope, however, has nothing to do with the claim requirements. The testimony related to the fact that the Android system contains the interception module and software services component in the same file. Trial Tr. vol. 1(morning), 37:25-38:9, Dec. 5, 2017, ECF No. 399. Even so, according to Dr. Jones, the interception module and software services component are logically "separate and distinct things," and indeed, in "[d]ifferent layers." Id. 38:4-9. Thus, even if the claims require the interception module to be in a different "layer" than the software services component, the jury heard substantial evidence to support the finding that this requirement is satisfied.
To be clear, TCL's infringement arguments are not about the jury...
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