Monolithic Power Systems v. O2 Micro Intern. Ltd.

• Decision Date: 05 March 2009
• Docket Number: No. 2008-1136.,No. 2008-1128.,2008-1128.,2008-1136.
• Citation: 558 F.3d 1341
• Parties: MONOLITHIC POWER SYSTEMS, INC., Plaintiff/Counterclaim Defendant-Cross Appellant, and Asustek Computer, Inc., Counterclaim Defendant-Cross Appellant, and Advanced Semiconductor Manufacturing Corporation, Ltd., Counterclaim Defendant-Appellee, v. O2 MICRO INTERNATIONAL LIMITED, Defendant/Counterclaimant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

558 F.3d 1341

MONOLITHIC POWER SYSTEMS, INC., Plaintiff/Counterclaim Defendant-Cross Appellant, and Asustek Computer, Inc., Counterclaim Defendant-Cross Appellant, and Advanced Semiconductor Manufacturing Corporation, Ltd., Counterclaim Defendant-Appellee, v. O2 MICRO INTERNATIONAL LIMITED, Defendant/Counterclaimant-Appellant.

No. 2008-1128.

No. 2008-1136.

United States Court of Appeals, Federal Circuit.

March 5, 2009.

Dan L. Bagatell, Perkins Coie Brown & Bain P.A., Phoenix, AZ, argued for plaintiff/counterclaim defendant-cross appellant. With him on the brief were Mark A. Flagel and Dean G. Dunlavey, Latham & Watkins LLP, Los Angeles, CA.

Thomas J. Friel, Jr., Cooley Godward Kronish LLP, Palo Alto, CA, argued, for counterclaim defendant-cross appellant ASUSTeK Computer, Inc., and counterclaim defendant-appellee Advanced Semiconductor Manufacturing Corporation Limited.

Henry C. Bunsow, Howrey LLP, of San Francisco, CA, argued, for defendant-counterclaimant-appellant. With him on the brief were Korula T. Cherian and Duane H. Mathiowetz, and Henry C. Su and Richard C. Lin, East Palo Alto, CA; and Richard Stanley, of Houston, TX.

Before RADER, PLAGER, and GAJARSA, Circuit Judges.

RADER, Circuit Judge.

In a jury trial, the United States District Court for the Northern District of California appointed an expert witness under Fed.R.Evid. 706(a) to testify on contested issues. Based on that testimony and considerable other evidence, the jury found all asserted claims of O2 Micro International Limited's ("O2 Micro's") U.S. Patent No. 6,396,722 ("'722 patent") obvious under 35 U.S.C. § 103. Because the district court did not abuse its discretion in appointing an expert under the Federal Rules, and because this court finds no error in the district court's denial of O2 Micro's motion for judgment as a matter of law on obviousness, this court affirms the judgment of the district court.

I

O2 Micro's '722 patent, entitled "High-Efficiency Adaptive DC/AC converter," relates to power inverter circuitry for laptop computers. Laptops must be capable of operating on direct current ("DC") power sources such as batteries. However, the cold cathode fluorescent lamps ("CCFLs") for backlit laptop screens require high voltage, alternating current ("AC") power. The disclosed circuitry converts low voltage DC battery power into higher voltage AC power with the help of feedback circuitry that precisely controls the amount of power delivered from the battery to the CCFL. Figure 2 of the '722 patent illustrates the converter circuit in question.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Switches A-D define a "full-bridge" switch configuration. Diagonally opposing pairs of switches (A and D, B and C) define alternating conduction paths for current to reach the CCFL load (20) from the battery source V1(12). The full bridge `chops up' direct current into alternating current by requiring current to alternately flow through the A-D and B-C paths. By selectively turning on the pairs of switches, the circuitry controls the amount of power delivered to the load.

A feedback signal ("FB") indicates the current being supplied to the CCFL at any given time. In turn, a reference signal ("REF") indicates desired load conditions. A comparator (32) compares the feedback signal with the reference signal to produce a comparison signal ("CMP"). This CMP signal triggers adjustments to the load power by adjusting the amount of overlap between the switches. Thus, the circuit regulates outputted power much as a home thermostat maintains a steady-state temperature.

Additionally, the converter circuit includes over-voltage protection mechanisms that reduce the power supplied to the CCFL in short-circuit or open-circuit situations. As shown in Figure 2, a current sensing comparator (42) compares the presently supplied current (FB) with a reference value reflecting the minimum or maximum current permitted by the system. If FB is within a permissible range, the comparator allows the current to flow unhindered through the output switch (38). However, when FB is in an undesirable range, the comparator substitutes a minimum voltage ("Vmin") at the output switch (38), reducing the CCFL's power to a safe level.

II

In May 2004, Monolithic Power Systems, Inc. ("MPS") filed suit in the Northern District of California seeking a declaratory judgment finding O2 Micro's '722 patent invalid, not infringed, and unenforceable. O2 Micro counterclaimed for infringement and added Advanced Semiconductor Manufacturing Corp. ("ASMC"), MPS's foundry, as a counter-defendant. O2 Micro's counterclaim alleged that several models of MPS inverter controllers infringe claims 1, 2, 9, 12, 14 and 18 of the '722 patent.

Five months later, O2 Micro sued MPS in the Eastern District of Texas, accusing MPS of infringing U.S. Patent No. 6,804,129 ("the '129 patent"). O2 Micro later amended its complaint to also accuse ASMC of infringing the '129 patent and to accuse ASUSTeK Computer Inc. ("ASUS") of infringing U.S. Patent No. 6,259,615 ("the '615 patent"), as well as the '722 and '129 patents. In March 2006, the Texas court transferred O2 Micro's case to the Northern District of California, which in turn consolidated the two cases. The district court in California then dismissed O2 Micro's claims regarding the '129 patent with prejudice, and granted summary judgment of non-infringement of the '615 patent in favor of ASUS.

On Oct. 27, 2006, the district court convened a case management conference and set a trial date for Apr. 30, 2007. At the conference, the court expressed its frustration with the technical complexities of the '722 patent.

On the technical issues here ... I find this extremely difficult to understand. And the notion that a jury is going to understand it, to me, is foolishness. You can talk for months and the jury isn't really going to understand this in the sense of being able to make a reasoned, rational decision about it.

They will make a decision, we hope. Maybe they will hang because they'll say that we can't possibly understand this, but in my experience, they make a decision. But what is it based on? . . . It is kind of trial by ordeal or by sort of a champion, like a jousting contest rather than on the actual scientific merits of who is right and who is wrong.

Hr'g Tr. 35:3-8, Oct. 27, 2006. The court entertained the idea of appointing an independent expert under Fed.R.Evid. 706 to testify "on the electrical engineering aspects" of the case. Id. at 35:22. This expert, in the court's estimation, "would essentially, I can't say decide the case, but would testify and [the jury] would be told `This is the court's expert on these points.'" Id. at 36:2-4. O2 Micro objected, while MPS expressed its approval of the idea.

On Jan. 17, 2007, the district court ordered the parties to confer about candidates to serve as the Rule 706 expert. The parties ultimately agreed, after a series of disagreements, upon an expert, Dr. Enrico Santi. The district court outlined a protocol detailing what information to provide Dr. Santi and when to complete discovery regarding his opinions.

Trial commenced as scheduled in April 2007. MPS and the other appellees presented evidence that the asserted claims of the '722 patent were obvious under 35 U.S.C. § 103. Further, MPS presented evidence that the '722 patent was invalid under the on-sale bar of 35 U.S.C. § 102(b). The court-appointed expert, Dr Santi, offered testimony largely consistent with MPS's theory of the case, including MPS's position that it did not infringe O2 Micro's asserted claims. The district court instructed the jury that Dr. Santi was "an independent witness retained by the parties jointly at the court's direction to assist in explaining the technology at issue in this case." Trial Tr. 96:21-24, Apr. 30, 2007.

On May 15, 2007, the jury rendered a verdict favorable to MPS and the appellees. The jury found the asserted claims invalid under both MPS's obviousness and on-sale bar theories. Additionally, the jury found no literal infringement of the claims, but found infringement under the doctrine of equivalents as to claims 12 and 14. The district court denied O2 Micro's motions for a new trial and for judgment as a matter of law. Monolithic Power Sys., Inc. v. O2 Micro Int'l Ltd., No. C 04-2000 CW, 2007 WL 3231709, at *7 (N.D.Cal. Oct. 30, 2007). This court has jurisdiction over O2 Micro's timely appeal under 28 U.S.C. § 1295(a)(1).

III

The Federal Rules of Evidence allow a court to appoint an expert either "on its own motion or on the motion of any party." Fed.R.Evid. 706(a). Rule 706(a) provides:

The court may appoint any expert witnesses agreed upon by the parties, and may appoint expert witnesses of its own selection . . . A witness so appointed shall be informed of the witness' duties by the court in writing, a copy of which shall be filed with the clerk, or at a conference in which the parties shall have opportunity to participate. A witness so appointed shall advise the parties of the witness' findings, if any; the witness' deposition may be taken by any party; and the witness may be called to testify by the court or any party. The witness shall be subject to cross-examination by each party, including a party calling the witness.

Id.

The appointment of an independent expert is a procedural ruling reviewable under regional circuit law. See TechSearch L.L.C. v. Intel Corp., 286 F.3d 1360, 1376-77 (Fed.Cir.2002) (stating standard of review regarding the appointment of a non-Rule 706 technical advisor). The United States Court of Appeals for the Ninth Circuit reviews the decision to appoint a Rule 706 expert for an abuse of discretion. Walker v. Am. Home Shield Long Term Disability Plan, 180 F.3d 1065, 1071 (9th Cir.1999); see also Daubert v. Merrell Dow Pharms. Inc., 509 U.S. 579, 595, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) (stating in dicta that "Rule 706 allows the court at its...