In APPLE INC. v. MOTOROLA, INC., Appeal No. 12-1548, the Federal Circuit reversed a means-plus-function claim construction; reversed exclusion of expert testimony regarding damages; reversed summary judgment that Apple was not entitled to damages; and affirmed summary judgment that Motorola was not entitled to an injunction.
Apple and Motorola sued one another on a number of patents. The district court, based on its claim constructions, granted summary judgment of non-infringement on a number of claims and excluded most of the testimony of the parties’ expert witnesses on damages. The district court also granted summary judgment that neither party was entitled to damages or an injunction.
The Federal Circuit reviewed the claim constructions of the district court. For one of Apple’s patents, the Federal Circuit reversed the district court’s construction of limitations containing the term “heuristic for” as means-plus-function limitations. Claim construction, including the determination that a limitation is written in means-plus-function format, is reviewed de novo. The Federal Circuit held that Motorola did not rebut the strong presumption that the heuristic-for limitations were not means-plus-function limitations because, taken as a whole, the limitations have sufficiently definite structure in light of the specification. Specifically, Apple’s patent describes the limitations’ operation in the specification with corresponding inputs and outputs, thereby providing sufficient structure.
The Federal Circuit also reviewed the exclusion of expert evidence related to damages. Applying Seventh Circuit law, the Federal Circuit reviewed the legal framework the district court applied de novo and the decision to exclude expert testimony for abuse of discretion. With respect to the exclusion of the expert testimony proffered by Apple, the Federal Circuit reversed, stating that the district court improperly judged the weight of the evidence rather than its admissibility because the district court disagreed with the experts’ conclusions or believed the experts could have used alternative, superior methods. Apple’s damages expert started with an existing product with features similar to the claimed invention and attempted to isolate the value of these features. The damages expert also relied on Apple’s own technical experts to assess the value of the features in the existing product. The damages expert also estimated consumer demand for the claimed features by evaluating what consumers have paid for comparable features. Although there may be alternative methods for obtaining damage calculations, their existence does not render reliable expert testimony inadmissible. With respect to the exclusion of Motorola’s expert testimony on damages, the Federal Circuit affirmed-in-part and reversed-in-part. The Federal Circuit affirmed the exclusion of the portion of the expert’s testimony which relied on a theory presented by a licensing expert because the theory was not tied to the claimed invention. The Federal Circuit reversed the exclusion of the remainder of the expert’s testimony on damages because the testimony was based on sufficiently comparable licenses in the field, which is a reliable method for determining a reasonably royalty.
The Federal Circuit also reviewed de novo the grant of summary judgment of no damages to Apple for Motorola’s assumed infringement. The statute requires that a court award damages of no less than a reasonable royalty. The Federal Circuit reversed the summary judgment of no damages because Apple presented evidence that the reasonably royalty was greater than zero, establishing a genuine issue of material fact that damages should be awarded.
The Federal Circuit also reviewed de novo the grant of summary judgment that Motorola was not entitled to an injunction for Apple’s infringement of a Motorola patent. The grant or denial of an injunction is reviewed for abuse of discretion. Motorola had agreed to license the patent at issue on fair, reasonable, and non-discriminatory (“FRAND”) licensing terms. Analyzing the terms set forth by the Supreme Court in eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), the Federal Circuit affirmed the district court and concluded that Motorola had failed to establish irreparable harm because, as is often the case with a patentee subject to FRAND commitments, Motorola’s many license agreements under these commitments indicated that money damages would be adequate to compensate for infringement.
Judge Rader filed an opinion dissenting in part, stating that he would have denied summary judgment to Apple with respect to the denial of an injunction because of Motorola’s evidence that Apple is an unwilling licensee. Judge Prost also filed an opinion dissenting in part, stating that the majority decision erred in its means-plus-function analysis by looking for structure outside of the claim language.