Judges: Rader (author), Lourie, Prost (dissenting-in-part)
[Appealed from D. Del., Chief Judge Sleet]
In Telcordia Technologies, Inc. v. Cisco Systems, Inc., Nos. 09-1175, -1184 (Fed. Cir. July 6, 2010), the Federal Circuit affirmed the district court’s grant of SJ of noninfringement of U.S. Patent No. 4,893,306 (“the ’306 patent”), vacated the denial of Cisco Systems, Inc.’s (“Cisco”) motion for JMOL that the ’306 patent was invalid as anticipated and remanded the issue to the district court, affirmed the district court’s denial of Cisco’s motion for JMOL that U.S. Patent No. 4,835,763 (“the ’763 patent”) was invalid as indefinite, affirmed the district court’s determinations that the jury verdict form provided damages for only past infringement and did not include prejudgment interest, affirmed the district court’s grant of an accounting and prejudgment interest, and remanded to allow the parties to negotiate a reasonable royalty to the ’763 patent and U.S. Patent No. RE 36,633 (“the ’633 patent”).
Telcordia Technologies, Inc. (“Telcordia”) owns by assignment the ’306, ’763, and ’633 patents, which relate to the transmission of data in telecommunications networks. The ’306 patent describes a data transmission technique called Dynamic Time Division Multiplexing (“DTDM”), which is compatible with both the circuit transmission and the packet transmission formats. A system according to the ’306 patent allocates discrete segments, or “frames,” of a single transmission line to several sources (e.g., voice, video, and data). A train of DTDM frames is generated with occupied transmission overhead fields and empty payload fields, where the train has a bit rate that defines a basic backbone transmission rate for the system. A DTDM assembler inserts data packets to be transmitted into the empty payload fields of the DTDM frames so that the resulting DTDM bit stream contains packets from multiple information sources.
The ’763 patent is directed to a survivable or self-healing ring network that can withstand a cut line or failed node. Two rings are provided, which carry identical multiplexed node-to-node communications in opposite directions. The nodes comprise controllers and selectors, and are capable of detecting a break in either ring by monitoring the arriving signals for defects. If a node detects an error, it inserts an error signal on the specific channels that were lost due to the break, which is detected by a selector in a node that then selects the identical, error-free channels from the other ring to use.
Telcordia sued Cisco on grounds that certain Cisco routers and switches infringe the ’306, ’633, and ’763 patents. The district court denied a Rule 54(b) motion by Cisco for entry of judgment of noninfringement of the ’306 patent, despite Telcordia’s concession that Cisco’s accused products did not meet two claim limitations. But the district court then granted Cisco’s motion for SJ of noninfringement of the ’306 patent, finding that its accused products did not meet four claim limitations, in addition to the two limitations conceded by Telcordia. During the jury trial on infringement of the ’633 and ’763 patents, and the validity of all three asserted patents, the jury found that Cisco willfully infringed all asserted claims of the ’633 and ’763 patents, and that all three patents were valid. The jury awarded Telcordia $6.5 million in damages. The district court granted Telcordia’s motion for an award of prejudgment interest and an accounting of Cisco’s prejudgment sales, and ordered the parties to negotiate the terms of a royalty for postjudgment sales. The district court also denied Cisco’s motion for JMOL that the asserted claims of the ’306 patent were invalid as anticipated, and denied Cisco’s motion for JMOL that the asserted claims of the ’763 patent are invalid as indefinite.
Telcordia appealed the district court’s construction of six claim terms and SJ of noninfringement of the ’306 patent. Cisco cross-appealed the district court’s denial of its JMOL motions on validity of the ’306 and ’763 patents, and appealed the district court’s damages awards.
The Federal Circuit first addressed claim construction. The district court construed the term “empty payload field” from the ’306 patent to mean “a payload field that is empty of source data, but including bit signals of some kind, i.e. garbage bits.” The Federal Circuit found that the district court’s construction improperly relied on “an ad lib comment” from a judge during oral argument in Bell Communications Research, Inc. v. FORE Systems, Inc., Nos. 02-1083, -1084 (Fed. Cir. Mar. 27, 2003), in which Telcordia’s predecessor asserted the ’306 patent against a different company. Rejecting the district court’s construction, the Federal Circuit concluded that “empty payload field” means “a payload field that is empty of source data, but includes bit signals of some kind.”
The Federal Circuit next considered the construction of the term “such that data in packetized format from any of said sources is written into any available empty payload field of any of said frames,” as recited in the ’306 patent. Agreeing with the district court’s construction, the Federal Circuit affirmed the grant of SJ of noninfringement of the ’306 patent. According to the Federal Circuit, “By repeatedly describing the inventive DTDM mechanism as one that only allows one packet per frame, ‘the patentee has demonstrated a clear intention to limit the claim scope using words or expressions of manifest execution or restriction.’” Slip op. at 17 (citation omitted). Although during prosecution, the applicant implied that a payload field may contain multiple packets, the specification failed to support such a construction, and “[t]hese prosecution history comments cannot trump the plain language of the claims and the direct teaching of the specification.” Id. Because Telcordia conceded that it could not prove infringement under this construction, the Federal Circuit affirmed the district court’s grant of SJ of noninfringement.
The Federal Circuit next affirmed the district court’s denial of Cisco’s motion for JMOL that the ’306 patent was invalid as anticipated. Because the district court denied Cisco’s JMOL motion solely on the basis of the construction of the claim term “empty payload field” that the Federal Circuit rejected, the Federal Circuit remanded for reconsideration of Cisco’s invalidity contentions under the revised claim construction.
Regarding Cisco’s claim that the ’763 patent was invalid because the “monitoring means” recitation was an indefinite means-plus-function limitation, the Court found that the patent’s specification adequately disclosed structure (a “controller”) corresponding to the “monitoring means.” Accordingly, the Court affirmed the district court’s denial of Cisco’s motion for JMOL that the asserted claims of the ’763 patent were indefinite.
Finally, the Federal Circuit affirmed the district court’s damages determinations. The Court observed that the verdict form was unclear as to whether the jury compensated Telcordia only for Cisco’s past infringement, or for both past and ongoing infringement. Noting that district courts have broad discretion in interpreting ambiguous verdict forms, the Court concluded that the district court did not clearly err in concluding that the jury’s damages award did not compensate Telcordia for ongoing infringement or prejudgment interest. Thus, the Court affirmed the district court’s ordering the parties to negotiate an ongoing royalty, and affirmed the district court’s award of an accounting and prejudgment interest.
Judge Prost dissented-in-part with respect to the majority’s finding that the ’763 patent was not indefinite. According to Judge Prost, the claim term “monitoring means” was indefinite because the specification failed to reveal that the structure within the node that performs the monitoring task is the circuitry of the controller. The specification, therefore, did not “clearly link a particular structure with a claimed function.” Prost Dissent at 2.