Summary: District court’s construction of the term “next item heuristic” reversed-in-part, vacated-in-part, and remanded. District court erred when it excluded both parties’ damages evidence. The Federal Circuit reversed the district court’s summary judgment of no damages, found that the district court construed one of Apple’s patents too narrowly, affirmed the finding that Motorola was not entitled to an injunction with respect to its standards essential patent and remanded to the district court to reconsider Apple’s request for injunctive relief.

Case: Apple Inc. v. Motorola Mobility Inc., No. 2012-1548,-1549 (Fed. Cir. Apr. 25, 2014) (precedential). On appeal from the Northern District of Illinois. Before Rader (dissenting in part), Prost (concurring in part and dissenting in part) and Reyna.

Procedural Posture: Apple accused Motorola of infringing its patents and Motorola, in turn, accused Apple of infringing its patents, including one that is a standard-essential patent. With Circuit Judge Posner sitting by designation, the district court completed claim construction, granted summary judgment of non-infringement with respect to certain claims, excluded the parties’ damages expert evidence for the remaining claims, and granted summary judgment that neither side was entitled to damages or an injunction. CAFC affirmed-in-part, reversed-in-part, vacated-in-part, and remanded.

  • Claim Construction: With respect to one of the patents-in-suit, the Federal Circuit reversed the district court’s construction of the term “next item heuristic” as a means-plus-function claim. The Federal Circuit held that the claim did not use the term “means” and that the claim recited sufficiently definite structure to a person of ordinary skill in the art. Accordingly, the Federal Circuit vacated the summary judgment of noninfringement based on this term. With respect to other disputed claim terms, the Federal Circuit found no error in the district court’s analysis, and thus affirmed the district court’s claim constructions.
  • Standard for Excluding Damages Testimony: The Federal Circuit found that the district court erred when it excluded nearly all of both parties’ damages evidence, noting that “[a] judge must be cautious not to overstep its gatekeeping role and weigh facts, evaluate the correctness of conclusions, impose its own preferred methodology, or judge credibility, including the credibility of one expert over another. These tasks are solely reserved for the fact finder.” Based primarily on these erroneous exclusions, the Federal Circuit reversed the district court’s grant of summary judgment of no damages for both parties.
  • Reasonable Royalty: The Federal Circuit reversed the district court’s summary judgment of no damages, holding that the fact finder must determine a reasonable royalty. Section 284 requires the court to award damages “in no event less than a reasonable royalty.” The fact finder may award no damages only when the record supports a zero royalty award, and can only do so on summary judgment when no material fact issue exists that zero is the only reasonable royalty, which was not the case here.
  • Injunctive Relief for Standards Essential Patents: The Federal Circuit found that the district court construed one of Apple’s patents too narrowly, and remanded to the district court to reconsider Apple’s request for injunctive relief. The Federal Circuit affirmed the finding that Motorola was not entitled to an injunction with respect to its standards essential patent because it had licensed the patent to others on a FRAND basis, such that damages were adequate compensation and Motorola was not irreparably harmed. However, in doing so, the Federal Circuit ruled that the district court had erred in applying a per se rule that injunctions are not available for standards essential patents. The mere existence of a FRAND commitment to license does not prevent an owner of a standards essential patent from seeking injunctive relief, and the question of whether an injunction is the appropriate remedy for a standards essential patent should instead be evaluated using the framework set forth by the Supreme Court in eBay.

Rader dissenting in part:

Judge Rader dissented on this point and would have remanded to the district court to evaluate Motorola’s request for an injunction, pointing to evidence that suggested that Apple was an unwilling licensee.

Prost dissenting in part:

Judge Prost also dissented on several issues. She would have affirmed the district court’s construction of the “heuristic” claim elements as means-plus function limitations. She also agreed with certain of the district court’s rulings to exclude expert damages evidence. She also agreed with the district court that Apple had not demonstrated irreparable harm caused by Motorola’s infringement. Finally, while she agreed with the district court’s denial of Motorola’s request for an injunction, she disagreed with aspects of the reasoning, noting that “an injunction might be appropriate where, although monetary damages could compensate for the patentee’s injuries, the patentee is unable to collect the damages to which it is entitled.”