Telcordia Technologies Inc v. Cisco Sys. Inc

• Decision Date: 06 October 2010
• Docket Number: 2009-1184.,No. 2009-1175,2009-1175
• Citation: 612 F.3d 1365
• Parties: TELCORDIA TECHNOLOGIES, INC., Plaintiff-Appellant,v.CISCO SYSTEMS, INC., Defendant-Cross Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

612 F.3d 1365

TELCORDIA TECHNOLOGIES, INC., Plaintiff-Appellant,v.CISCO SYSTEMS, INC., Defendant-Cross Appellant.

Nos. 2009-1175, 2009-1184.

United States Court of Appeals Federal Circuit.

July 6, 2010.

Rehearing En Banc Denied Oct. 6, 2010.

Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for plaintiff-appellant. With him on the brief were Don O. Burley, Darrel C. Karl, and John M. Williamson.

Edward R. Reines, Weil, Gotshal & Manges LLP, of Redwood Shores, CA, argued for defendant-cross appellant. With him on the brief was Sonal N. Mehta.

Before RADER ^*, Chief Judge, LOURIE and PROST, Circuit Judges.

Opinion for the court filed by Chief Judge RADER. Opinion dissenting in part filed by Circuit Judge PROST.

RADER, Chief Judge.

Telcordia Technologies, Inc. (“Telcordia”) initiated this suit against Cisco Systems, Inc. (“Cisco”) alleging infringement of U.S. Patent Nos. 4,893,306 (“'306 patent”); 4,835,763 (“'763 patent”); and RE 36,633 (“'633 patent”). The United States District Court for the District of Delaware granted summary judgment of non-infringement of the '306 patent. Telcordia Techs., Inc. v. Cisco Sys., Inc., 514 F.Supp.2d 598, 603-07 (D.Del.2007). At trial, the jury found that Cisco willfully infringed the '763 and '633 patents and upheld the validity of all three asserted patents. The jury awarded $6.5 million in damages. Following trial, the district court denied Cisco's motion for judgment as a matter of law (“JMOL”) that the '306 patent was anticipated and that the '763 patent was invalid as indefinite. Telcordia Techs., Inc. v. Cisco Sys., Inc., 592 F.Supp.2d 727, 738-40, 743-44 (D.Del.2009). The district court awarded prejudgment interest on the $6.5 million damages award. Id. at 748-50. Further, the district court awarded an accounting for interim sales from January 31, 2007 to the date of the judgment. Id. at 748-50. In addition, the district court ordered the parties to negotiate the terms of a royalty that would apply to the accounting and to post-judgment sales. Id.

On appeal, Telcordia challenges the district court's claim construction with respect to the '306 patent. Cisco cross-appeals the district court's holding that the asserted claims of the '306 and '763 patents are not invalid. Cisco also contests the district court's award of an accounting and pre-judgment interest, and its order requiring the parties to negotiate the royalty.

Because the district court erroneously construed the only term on which it based its denial of Cisco's JMOL motion on invalidity of the '306 patent, this court vacates that decision and remands for determination of the validity issue. This court also remands to provide the parties an opportunity to negotiate the terms of the royalty. In all other respects, this court affirms.

I.

Telcordia owns by assignment the '306 patent, the '763 patent, and the ' 633 patent. The patents relate to transmission of data in telecommunications networks. The '306 patent-“Method and Apparatus for Multiplexing Circuit and Packet Traffic”-issued on January 9, 1990, based on a November 10, 1987 application. The '763 patent-“Survivable Ring Network”-issued on May 30, 1989, based on a February 4, 1988 application. The '633 patent-“Synchronous Residual Time Stamp for Timing Recovery in a Broadband Network”-issued on March 28, 2000, as a reissue of U.S. Patent No. 5,260,978.

A.

The '306 patent describes a data transmission technique called Dynamic Time Division Multiplexing (“DTDM”). DTDM is compatible with both the circuit transmission format and the packet transmission format. In the late 1980's, the public telephone network began shifting from the circuit transmission format to the packet transmission format. The “commonly-held view as to how to introduce packet technology into the public network [was] to deploy a packet overlay network.” '306 patent col.3 ll.3-18. This migration strategy required building a packet transmission network on top of a circuit transmission network. The patented invention aimed to provide an alternate migration strategy between the two different transmission formats.

A system implementing DTDM allocates discrete segments, or “frames,” of a single transmission line to several sources (e.g., voice, video, and data). A frame is the basic unit of transmission:

Id. at fig.1. Each frame has two fixed-length fields: a transmission overhead (“T”) and a payload. The transmission overhead has, for example, frame timing information and the empty/full status of the frame. The payload field has a header field (“H”) for storing the sender's and recipient's addresses, and an information field for storing the actual data for transmission. Rather than pre-assign the frames to each information source, the DTDM system dynamically allocates the frames to each source based on the source's priority level and data availability.

Figure 2 illustrates how a multiplexer called a “DTDM Assembler” (3) merges traffic from three different information sources (5, 7, 9) into a single DTDM bit stream (12).

Id. at fig.2. The system generates a train of DTDM frames (10) with occupied transmission overhead fields and empty payload fields. Id. at col.4 l.65-col.5 l.2. This train has “a bit rate which defines a basic backbone transmission rate” for the system.

Id. at col.5 ll.2-4. The information sources transmit, for example, voice (5), video (7), and data (9), over their data lines or “tributaries.” The incoming data segments may be in the circuit transmission format or the packet transmission format. Packetizers (11, 13, 15) put the incoming data segment into a packet structure by adding a packet header (“H”) at the beginning of each data segment. The DTDM assembler inserts the packets into the empty payload fields of the DTDM frames. If the DTDM assembler simultaneously receives packets from multiple information sources, the DTDM assembler selects the packet with the highest priority level. The resulting DTDM bit stream (12) contains packets from multiple information sources.

Telcordia alleges that Cisco infringes claims 1, 3, and 4 of the '306 patent. Claims 1 and 3 are method claims. Claim 4 is an apparatus claim. Each is stated below (important phrases underlined):

1. A method for simultaneously transmitting data from sources having different bit rates in a telecommunication network comprising the steps of:

generating a bit stream comprising a sequence of frames, each of said frames including a transmission overhead field containing frame timing information and an empty payload field, and

filling the empty payload fields in said frames with data in packetized format from a plurality of sources which have access to the bit stream including circuit or packet sources such that data in packetized format from any of said sources is written into any available empty payload field of any of said frames for transmitting data from each of said sources at its own desired bit rate via said bit stream and for transmitting data from said plurality of sources simultaneously via said bit stream.

Id. at col. 17 ll.44-61 (emphases added).

3. A method for generating a bit stream capable of transporting data originating from both circuit transmission and packet sources comprising

generating a bit stream comprising a sequence of frames, each of said frames including a transmission overhead field containing frame timing information and an empty payload field,

packetizing data from a plurality of sources having different bit rates and which have access to said bit stream including circuit transmission sources or customer premises equipment to produce data packets, and

inserting said packets from said sources into the empty payload fields of said frames such that a packet from any of said sources is inserted into any available empty payload field of any of said frames for transmitting data from each of said sources at its own desired bit rate via said bit stream and for transmitting data from said plurality of sources simultaneously using said bit stream.

Id. at col. 18 ll.1-20 (emphases added).

4. An apparatus for assembling a dynamic time division multiplexing bit stream comprising,

generating means for generating a train of frames wherein each frame includes a transmission overhead field containing timing information and an empty payload field,

processing means for processing data from a plurality of sources into packet format, and

inserting means for receiving said train of frames and for inserting each of said packets comprised of data from one of said plurality of sources into any empty payload field of any of said frames available to said inserting means to form said bit stream so that data from each of said sources can be transmitted at its own desired bit rate via said bit stream and so that data from said plurality of sources can be transmitted simultaneously via said bit stream.

Id. at col. 18 ll.21-37 (emphases added).

B.

The '763 patent claims a survivable or self-healing ring network that can withstand a cut line or failed node. Figure 2 illustrates the invention:

'763 patent fig.2.

The invention consists of two rings carrying identical multiplexed node-to-node communications in opposite directions. A node (1), for example, has controllers (117, 118) and selectors (119-121). Each node can detect a break (122) in either ring by monitoring the arriving signals for defects. If an arriving signal is defective, the controller in the node inserts an error signal on the specific channels that were lost due to the break. When these error-containing channels reach their destination node, the selector in the node will detect the error signal and select the identical, error-free channels from the other ring.

Monitoring of errors in the arriving signals is essential to the invention. The asserted independent claims 1 and 7 both claim this functionality via the “monitoring means” requirement. Claim 1 is illustrative (important phrase underlined):

1. In a

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