Ericsson, Inc. v. D-Link Systems, Inc.

U.S. Court of Appeals12/4/2014
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Full Opinion

O’MALLEY, Circuit Judge.

Ericsson, Inc. & Telefonaktiebolaget LM Ericsson (collectively, “Ericsson”) brought suit against D-Link Systems, Inc.; Netgear, Inc.; Acer, Inc.; Acer America Corp.; Gateway, Inc.; Dell, Inc.; Toshiba America Information Systems, Inc.; and Toshiba Corp., with Intel Corp. intervening (collectively, “D-Link”), in the United States District Court for the Eastern District of Texas, alleging infringement of, inter alia, certain claims from U.S. Patent Nos. 6,424,625 (“the '625 patent”); 6,466,-568 (“the '568 patent”); and 6,772,215 (“the '215 patent”). All of the patents at issue generally relate to Wi-Fi technology employed by electronic.devices to wirelessly access the Internet. Ericsson alleged that all of the patents at issue were essential to the Wi-Fi standard, which would mean that all Wi-Fi-capable devices infringe Ericsson’s patents.

The case progressed to a jury trial, where the jury found that D-Link infringed the asserted claims of the three patents and assigned roughly $10 million in damages — approximately 15 cents per infring*1208ing device. After post-trial motions, the district court upheld the jury’s infringement and validity findings and refused to grant a new trial based on an alleged violation of the “entire market value rule” (“ÉMVR”) and allegedly deficient jury instructions regarding the standard-setting context and Ericsson’s “reasonable and non-discriminatory” licensing obligations derived from that context. For the reasons explained below, we affirm-in-part, reverse-in-part, vacate-in-part, and remand.

I. Background

A. Technology and Standards Background

Interoperability is an essential requirement for many electronic devices. For example, if a user brings her laptop to a local coffee shop, she expects that her laptop will charge when she plugs it in and that she will be able to access the Internet when she connects to the coffee shop’s wireless network. For the user to be able to charge her laptop, the plug must be in the correct shape and the laptop charger must be able to accept the voltage output of the outlet. For the user to be able to connect to the Internet, her laptop must know, inter alia, what frequency to search for the wireless signal, what messages to send to the network to set up a connection, and how to interpret the messages sent from the network. Though most users take for granted that their electronic devices will be able to charge and connect to the wireless Internet anywhere, interoperability does not happen automatically. Because of the multitude of devices, device designers, and manufacturers, there must be an established standard mode of operation to ensure compatibility among all of these different devices.

Standards development organizations (“SDOs”) publish standards, which are lists of technical requirements. Compliance with these technical requirements ensures interoperability among compliant de vices. Of course, at least a critical mass of device developers must adopt the standard in order to ensure mass interoperability.1 Relevant to this case, the Institute of Electrical and Electronics Engineers, Inc. (“IEEE”) publishes the 802.11 standards, more commonly known as “Wi-Fi.” Br. of Amici Curiae Institute of Electrical and Electronics Engineers, Inc. (“IEEE Br.”) at 1-2. The 802.11 standard is the prevailing wireless internet standard and has already reached widespread adoption. A device is considered 802.11-compliant if it adheres to the IEEE’s technological requirements stated in the 802.11 standard. Requiring all 802.11-compliant devices to operate in a certain way ensures that every compliant device can communicate with all other 802.11-compliant devices.2

For example, an 802.11-compliant laptop will be able" to establish a connection with an 802.11-compliant router. The 802.11 standards also govern how subsequent data is passed between the laptop and the router once that connection is established. This includes, inter alia, data formatting, *1209prioritization, error handling, and flow control.

Importantly for this case, data flies are not sent between a router and a laptop in a single transmission. For example, if a laptop user wants to download a video, the router does not send the entire file in a single huge transmission. Instead, each data file is broken into “packets,” where each packet is sent in a different transmission. Small files may only require a single packet, whereas large flies, e.g., video and sound, may require thousands of packets. The receiving device then reassembles the file out of the packets. The data from the file in the packet is called the “payload.” Because packets may be lost or arrive out of order, the 802.11 standard provides ways to handle these errors. For example, each packet has a “header” that is sent to the receiving device with the packet. The header contains, inter alia, a sequence number so the receiving device knows the order in which to reassemble the payload of the packets.

Creating some standards, like IEEE’s 802.11 standard, is a complicated process that involves the collaboration and can involve cooperation of a number of interested parties. IEEE Br. 4-12. Due to the collaborative nature of this process, the chosen standard may include technology developed by a number of different parties. Sometimes that technology is covered by patents. Because the standard requires that devices utilize specific technology, compliant devices necessarily infringe certain claims in patents that cover technology incorporated into the standard. These patents are called “standard essential patents” (“SEPs”). IEEE Br. 13-14.

SEPs pose two potential problems that could inhibit widespread adoption of the standard: patent hold-up and royalty stacking. Patent hold-up exists when the holder of a SEP demands excessive royalties after companies are locked into using a standard. Royalty stacking can arise when a standard implicates numerous patents, perhaps hundreds, if not thousands. If companies are forced to pay royalties to all SEP holders, the royalties will “stack” on top of each other and may become excessive in the aggregate. To help alleviate these potential concerns, SDOs often seek assurances from patent owners before publishing the standard. IEEE, for example, asks SEP owners to pledge that they will grant licenses to an unrestricted number of applicants on “reasonable, and nondiscriminatory” (“RAND”) terms. IEEE Br. at 16-18.

B. Ericsson’s SEPs

Ericsson has asserted that all of the patents at issue are SEPs for IEEE’s 802.11(n) standard. Ericsson promised to offer licenses for all of its 802.11(n) SEPs at a RAND rate via letters of assurance to the IEEE. In its letters, Ericsson pledged to “grant a license under reasonable rates to an unrestricted number of applicants on a worldwide basis with reasonable terms and conditions that are demonstrably free of unfair discrimination.” Joint Appendix (“J.A.”) 17253. The parties agree that this commitment is binding on Ericsson. See also IEEE Br. 19-20.

1. The '568 Patent

The '568 patent, titled “Multi-Rate Radiocommunication Systems and Terminals,” describes prioritizing packets based on the type of payload in the packet. The prioritization of packets is important because networks all have a bandwidth limitation. Bandwidth refers to the amount of data that can be sent across the network at one time. When a network receives multiple requests at the same time, it must be able to respond to all of the requests in a timely fashion. Due to the network’s *1210bandwidth limitation, however, the messages cannot be sent all at once. Though networks can deal with the bandwidth limitation problem in different ways, each method involves dividing the available bandwidth among the outstanding requests.

The '568 patent explains that networks transmit a variety of different types of payloads, including “voice, video, and data.” According to the '568 patent, networks in the prior art did not have the ability to prioritize certain types of data over others. Because certain types of transmissions are less preferable when delayed — e.g., voice calling — the '568 patent discloses transmitting the type of transmission as part of the header. This would allow the network to dedicate more bandwidth to the higher priority transmission types, thereby sending those packets more quickly.

Claims 1 and 5 are at issue in this appeal. Claim 1 is representative:

1. A communications station comprising:
a processor for arranging information for transmission including providing at least one first field in which payload information is disposed and providing at least one second field, separate from said first field, which includes a service type identifier which identifies a type of payload information provided in said at least one first field; and a transmitter for transmitting information received from said processor including said at least one first field and said at least one second field.

'568 patent col. 13 11. 11-21 (emphasis added).

2. The '215 Patent

As described above, files are broken into packets, which are. sent to the receiving device with sequence numbers so the receiving device can reassemble the payload in the correct order. Packets, however, are often lost or corrupted during transmission. To ensure that the receiver receives the payload in those lost or corrupted packets, the transmitter "will have to resend those packets. For the transmitter to know which packets need to be resent, the receiving device must tell the transmitting device which packets it did not receive or are corrupted. This may be done using an “Automatic Repeat Request” (“ARQ”) protocol. In an ARQ protocol, the receiving device will send a “feedback response” to the transmitting device. Though feedback response messages can be in different formats, the feedback response will generally indicate which packets, if any, are missing or corrupted. The transmitting device will then retransmit those missing packets.

Although ARQ protocols existed in the prior art, the '215 patent, titled “Method for Minimizing Feedback Responses in ARQ Protocols,” asserts that those prior art ARQ protocols wasted bandwidth because they were “static” and not adaptable. By making the feedback response type dynamic, the '215 patent discloses that the response could be formatted in' the most efficient response type. For example, if 1 packet out of 100 is missing, just the missing packet number could be sent. Conversely, if 50 out of 100 packets are missing, the response could be a bitmap with a bit set to one to indicate the missing packets, instead of a list of all 50 missing packet numbers. To solve this alleged deficiency in the prior art, the '215 patent discloses adding a “type identifier field” (“TIF”) to the feedback response that identifies the format of that feedback response. This would allow the receiver to choose dynamically between different types of feedback responses based on *1211which response would be most efficient, e.g., a list of packet numbers or a bitmap.

Claim 1 is the independent claim at issue:

1. A method for minimizing feedback responses in an ARQ protocol, comprising the steps of:
sending a plurality of first data units over a communication link; receiving said plurality of first data units; and
responsive to the receiving step, constructing a message field for a second data unit, said message field including a type identifier field and at least one of a sequence number field, a length field, and a content field.

'215 patent col. 10 11. 19-28 (emphasis added).

3. The '625 Patent

Due to technical limitations, prior art receiving devices used a limited “reception window” for keeping track of which packets it had received. Because this reception window was finite, if the receiving device received a packet outside of the window, it would not accept the packet. The window would not move forward until it received all of the packets in the current window. This process ensures that the receiver will receive all of the missing packets. For certain “delay sensitive applications,” however, a 0% packet loss rate is not required and significantly delayed packets provide no benefit — e.g., “telephony, video conferencing, and delay sensitive control systems.” '625 patent col. 3 II. 51-53.

According to the '625 patent, prior art transmitting devices had no "way to tell the receiving device to ignore unnecessary, missing packets and shift the receiving window forward. The '625 patent discloses adding a way for the transmitting device to force the receiving device to accept packets that may be out of its reception window. This will also shift the reception window forward and the receiving device will forget about the delayed or lost packets that would no longer provide any benefit.

Claim 1 is at issue in this appeal:

1. A method for discarding packets in a data network employing a packet transfer protocol including an automatic repeat request scheme, comprising the steps of:
a transmitter in the data network commanding a receiver in the data network to a) receive at least one packet having a sequence number that is not consecutive with a sequence number of a previously received packet and b) release any expectation of receiving outstanding packets having sequence numbers prior to the at least one packet; and the transmitter discarding all packets for which acknowledgment has not been received, and which have sequence numbers prior to the at least one packet.

'625 patent col. 10 II. 13-26 (emphases added).

C. The Accused Products

The accused infringers in this case produce a variety of electronic devices, including laptop computers and routers (“the end products”), which incorporate 802.11(n) wireless chips made by Intel. Because all of these end products incorporate 802.11(n)-compliant chips, they must be capable of the functionality mandated by the 802.11(n) standard.

For example, the standard requires that, in the header of an 802.11(n)-compliant packet, there must be a traffic identifier (“TID”) field that indicates the priority of the data. This TID field has a value from 0-7, which indicates its priority. Packages with higher priority typically will be sent more quickly or given more bandwidth than those with lower priority. And the standard explains that one use of this TID identifier is to associate particular values *1212with particular types of information inside packages — to correspond to a particular kind of payload — as indicated in the following table giving an example:

Table 9-1-UP-to-AC mappings

[[Image here]]

J.A. 15781. In this table, each priority is given an informative “Designation.” For example, priority levels 4 and 5 are given the designation “Video.”

For further examples of required functionality, the 802.11(n) standard also requires feedback response headers to include information about the type of feedback response in the BlockAck field:

Table 7-6k-BlockAck frame variant encoding

[[Image here]]

J.A. 16778. The 802.11(n) standard allows three different types of feedback responses: Basic BlockAck, Compressed BlockAck, and Multi-TID BlockAck. Sending this information as part of the header is mandatory for interoperability between devices.

All 802.11(n)-compliant devices, moreover, must be capable of accepting any packets they receive. In other words, 802.11(n)-compliant devices do not use a limited reception window. The receiver is just programmed to receive automatically all packets, regardless of the packet’s sequence number.

D. The Dell-Ericsson AB Agreement

Dell argues on appeal that it has a license to practice the patents at issue *1213based on its prior agreement with Ericsson AB. Ericsson AB is a Swedish manufacturing and development subsidiary of LM Ericsson. LM Ericsson is the Swedish parent corporation of Ericsson AB and owns the patents-in-suit. LM Ericsson and its North American subsidiary, Ericsson, Inc., are the two plaintiffs-appellees in the suit.

On February 13, 2008, Ericsson AB and Dell executed a Master Purchase Agreement (“MPA”), under which Ericsson AB would provide Dell with mobile broadband products for three years from the date of execution of the MPA. Ericsson AB is the only named “supplier” listed in the MPA, as well as the only signatory to the MPA aside from Dell. The MPA also separately defined Ericsson AB’s “Affiliates.” At issue in this appeal, Section 12.1 of the MPA, entitled “Dispute Resolution,” stated that “[sjupplier will not commence any lawsuit or seek any judicial order affecting Dell or add Dell as a party to any pending legal or administrative proceeding that is not directly related to Dell’s purchase of Products or that may prevent Dell from shipping any Dell or third-party products.” J.A. 6348 (emphasis added).

E. Procedural History

On September 14, 2010, Ericsson filed suit in the United States District Court for the Eastern District of Texas, accusing D-Link of infringing nine patents that, according to Ericsson, were essential to the 802.11(n) wireless standard. Intel, the wireless internet chip supplier for the accused products, intervened. On March 8, 2013, the magistrate judge issued a claim construction order, which the district court judge adopted. Ericsson Inc. v. D-Link Corp. (“Claim Construction Order”), No. 6:10-cv-473, 2013 WL 949378 (E.D.Tex. Mar. 8, 2013). Shortly before trial, the trial judge denied D-Link’s motion to exclude the. testimony of Ericsson’s damages expert, over D-Link’s argument that the testimony violated the EMVR. Prior to trial; the court also granted summary judgment against Dell, rejecting its argument that it had a license based on the MPA.

Although the parties were forced to narrow the case, for trial, Ericsson still accused D-Link of infringing 5 different patents at trial. On June 13, 2013, after a 7-day jury trial, the jury found that D-Link infringed the asserted claims in three of Ericsson’s patents — the '568, '215, and '625 patents. The jury also found that the '625 patent was valid over a prior art publication (“the Petras reference”). As past damages for that infringement, the jury awarded Ericsson approximately $10 million — roughly 15 cents per infringing device. After the jury trial, the trial court conducted a separate bench trial regarding several RAND issues.3

Following the bench trial, D-Link filed a motion for judgment as a matter of law (“JMOL”) and a new trial, arguing that the jury’s findings of infringement and no invalidity, as well as its damages award, were not supported by substantial evidence. D-Link further contended that Ericsson’s expert violated the EMVR by relying on licenses that were based on the value of the end products. D-Link asserted, moreover, that the jury was inade*1214quately instructed regarding Ericsson’s RAND obligation.

The trial court denied D-Link’s post-trial motions, finding that substantial evidence supported: (1) the jury’s findings of infringement; (2) the validity of the '625 patent; and' (3) the jury’s $10 million award. The judge also concluded that Ericsson’s damages testimony was not inconsistent with the EMVR and that the jury instruction regarding Ericsson’s RAND obligations was adequate. The judge further found that, based on the jury’s award, 15 cents per product was an appropriate ongoing RAND rate for thethree infringed patents. Ericsson Inc. v. D-Link Corp. ("JMOL Order"), No. 6:10-cv-473, 2013 WL 4046225 (E.D.Tex. Aug. 6, 2013). According to the trial court, moreover, Ericsson did not violate its RAND obligations by offering Intel a license at the rate of 50 cents per unit. In fact, the court concluded that it was Intel that violated its obligation to negotiate a royalty rate in good faith. Id. at *16.

D-Link timely appealed to this court. We have jurisdiction under 28 U.S.C. § 1295(a)(1) (2012).

II. Discussion

On appeal, D-Link raises a number of issues: (1) ¡whether the jury had substantial evidence to find that D-Link infringed claims 1 and 5 of the '568 patent; (2) whether the district court properly construed the term “responsive to the receiving step, constructing a message field for a second data unit, said message field including a type identifier field” in the '215 patent, and, if the district court correctly construed that term, whether the jury had substantial evidence to find that D-Link infringed claims 1 and 2 of the '215 patent; (3) whether the jury had substantial evidence to find that D-Link infringed claim 1 of the '625 patent and that the Petras reference did not anticipate the '625 patent; (4) whether Ericsson’s damages theory was presented in violation of the EMVR; (5) whether the jury was instructed properly regarding Ericsson’s RAND obligations; and (6) whether Dell had a license to practice the patents at issue based on its agreement with Ericsson AB. We address each issue in turn.

A. Infringement

We first address D-Link’s challenges to the infringement findings. We review the trial court’s decision on a motion for JMOL under the law of the regional circuit, in this case, the Fifth Circuit. Verizon Servs. Corp. v. Cox Fibernet Va., Inc., 602 F.3d 1325, 1331 (Fed.Cir.2010). The Fifth Circuit reviews the denial of a motion for JMOL de novo, but the “jury’s verdict can only be overturned if there is no legally sufficient evidentiary basis for a reasonable jury to find as the jury did.” Miller v. Raytheon Co., 716 F.3d 138, 144 (5th Cir.2013). We review issues of patent law applying this court’s case law. Claim construction is an issue of law reviewed de novo. Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272, 1276-77 (Fed.Cir.2014) (en banc). Infringement and anticipation are issues of fact reviewed for substantial evidence. 01 Communique Lab., Inc. v. Log-MeIn, Inc., 687 F.3d 1292, 1296 (Fed.Cir.2012); In re Montgomery, 677 F.3d 1375, 1379 (Fed.Cir.2012).

1. The '568 Patent

D-Link contends that the jury did not have substantial evidence to find infringement of the asserted claims of the '568 patent, specifically with respect to the “service type identifier which identifies a type of payload information” limitation. Neither party challenges the district court’s construction of that limitation as “an identifier that identifies the type of information conveyed in the payload. Examples of types of information include, but are not limited to, video, voice, data, and *1215multimedia.” Claim Construction Order, 2013 WL 949378, at *11.

To prove literal infringement, the patentee must show that the accused device contains each and every limitation of the asserted claims. Presidio Components, Inc. v. Am. Tech. Ceramics, Corp., 702 F.3d 1351, 1358 (Fed.Cir.2012).

Before the jury, Ericsson relied on the TID field value in the 802.11(n) standard to meet the service type identifier limitation. Ericsson’s expert testified that each TID field contains an integer that establishes a priority of service. According to Ericsson’s expert, each TID value may be assigned an “informative” designation: Background, Best Effort, Video, or Voice. Ericsson’s expert further stated that devices need to implement the TID field in order to be compliant with the 802.11(n) standard. Ericsson’s expert pointed to several programs that “take advantage” of the “informative” use of the TID capability to assign TID values to payloads of a particular type. J.A. 1395-96 (testifying that CSipSimple, Skype, Ekiga, and Windows Media take advantage of the TID capability). Ericsson also presented an Intel document, recommending that developers utilize the TID field based on the informative designation categories described by the 802.11(n) standard.

D-Link’s expert, on the other side, countered that the TID designations are used to prioritize packets, but do not identify the type of information contained in the payload’s packet, e.g., a text email can be sent using the Video designation. D-Link’s expert testified that the he ran tests on video and voice programs that did not assign different TID numbers for video and voice data. In other words, the program assigned a TID designation of zero, regardless of the type of data in the payload. On cross examination, however, D-Link’s expert admitted that he also observed some traffic in which the TID designation did correspond to the content of the payload. Indeed, when presented with his own expert report, D-Link’s expert admitted that at least one program — Ekiga, a video conferencing program — used the video TID designation for its packets with a video payload. In fact, D-Link’s own expert testified that Ekiga was “using the ['568] invention.” J.A. 1568 (“A. Ekiga is using the invention, you said? Q. Yes. That’s what you tested, right? A. Yes.”).

The jury, using the district court’s construction for service type identifier, found that D-Link infringed claims 1 and 5 of the '568 patent. The district court denied D-Link’s subsequent JMOL motion, explaining that D-Link’s evidence that the TID designation does not always correspond to the payload is, “[a]t best, ... evidence showing] [its] products can be configured in a non-infringing manner.” JMOL Order, 2013 WL 4046225, at *6.

On appeal, D-Link first argues that, under the district court’s proper construction, the service type identifier must “identify] the type of information conveyed in the payload.” Claim Construction Order, 2013 WL 949378, at *11 (emphasis added). D-Link insists that the TID field relates only to priority and does not identify the payload of the packet. D-Link asserts that Ericsson’s infringement contentions for the '568 patent are thus premised on the mere “capability of infringement.” According to D-Link, it was an error for the judge to instruct the jury that “[a]n accused system or product directly infringes a claim if it is reasonably capable of satisfying the claim elements even though it may also be capable of non-infringing modes of operation.” Appellants’ Br. 35. D-Link argues that mere capability does not constitute infringement unless the claim language is “drawn to capability.” Appellants’ Br. 36 (citing Finjan, Inc. v. *1216Secure Computing, Corp., 626 F.3d 1197, 1204 (Fed.Cir.2010); Ball Aerosol & Specialty Container, Inc. v. Limited Brands, Inc., 555 F.3d 984, 994 (Fed.Cir.2009)). D-Link asserts, moreover, that Ericsson failed to show any programs that actually assign TID values according to their informative designations, e.g., voice and video.

Ericsson responds that the jury’s finding of infringement of the asserted claims of the '568 patent was supported by substantial evidence, including testimony by Ericsson’s expert and the chart showing the informative designations presented to the jury. Ericsson further contends that D-link’s own technical expert’s tests revealed traffic that corresponded to the correct TID designations. Ericsson also points to Intel’s instruction manual that urges developers to use the correct TID designations for the various types of data. According to Ericsson, moreover, this court has repeatedly held that a product infringes if it is reasonably capable of. satisfying the claimed elements. For example, Ericsson argues that, in Finjan, this court “held that where an apparatus claim is styled as a component ‘for’ performing some function, the claim is drawn to capability and the reasonable capability test applies.” Appellees’ Br. 33 (citing Finjan, 626 F.3d at 1204-05).

We are unpersuaded by D-Link’s argument that the jury did not have substantial evidence to find infringement of claims, 1 and 5 of the '568 patent. We recognize that the evidence showed that the TID field does not always identify its payload type. Indeed, D-Link’s ex-pert’s testimony that many programs did not utilize the TID field according to the informative designations was unchallenged. D-Link’s expert, however, also admitted that at least one video calling program “us[ed] the invention.”. J.A. 1568. Furthermore, Ericsson’s expert testified as to several examples of programs running on the accused devices where the TID field indicated the type of payload.

We understand that the TID field may be inherently only a priority field. But that field necessarily has the capability to be used to identify the payload type, as shown by the informative example in the standard and by the proof that it was in fact so used by some device users. Crucially, this capability satisfies the patent claim language here, which means all accused devices could be found by the jury to infringe.

In Fantasy Sports Properties, Inc. v. Sportsline.com, Inc., 287 F.3d 1108 (Fed.Cir.2002), we held that software for playing fantasy football could infringe a claim covering a “computer for playing football.” 287 F.3d at 1118. Though a user must install and activate functions in the software to infringe the claims, the Fantasy Sports opinion explained that the user is only activating means that are already present in the underlying software. Id. In Ball Aerosol, on the other hand, the patent claimed an apparatus arranged in a certain manner. We reversed a grant of summary judgment of infringement because the claims were not drawn to capability and there was no evidence that the accused device “was ever placed in the infringing configuration.” 555 F.3d at 995.

In Finjan, we found that the system claims at issue described “capabilities,” without describing any software components that must be “active” or “enabled.” For example, the claim language in Finjan required “a logical engine for preventing execution” and “a communications engine for obtaining a Downloadable.” Finjan, 626 F.3d at 1204-05 (emphases added in opinion). In Finjan, we found that, in order for the accused system to infringe, the logical engine only needed to be reasonably capable of “preventing execution” *1217and the communications engine only needed to be reasonably capable of “obtaining a Downloadable.” Id. Our court explained further in Versata,, that, “[w]hile ‘a device does not infringe simply because it is possible to alter it in a way that would satisfy all the limitations of a patent claim,’ ... an accused product ‘may be found to infringe if it is reasonably capable of satisfying the claim limitation.’” Versata Software, Inc. v. SAP Am., Inc., 717 F.3d 1255, 1262 (Fed.Cir.2013) (quoting Finjan, 626 F.3d at 1204). In Versata, we found that the patentee presented evidence that, if a user followed the accused infringer’s own instructions, the system would operate in an infringing manner. Id. at 1263. In sum, when the asserted claims recite capability, our case law supports finding infringement by a “reasonably capable” accused device on a case-by-case basis particularly where, as here, there is evidence that the accused device is actually used in an infringing manner and can be so used without significant alterations. See J.A. 1568 (“A. Ekiga is using the invention, you said? Q. Yes. That’s what you tested, right? A. Yes.”); see also Ball Aerosol, 555 F.3d at 995.

The asserted claims of the '568 patent are most similar to the claim at issue in Finjan. Both use language reciting capa-' bility, as opposed to actual operation. Compare Finjan, 626 F.3d at 1204-05 (system claims reciting “a logical engine for preventing execution”- and “a communications engine for obtaining a Downloadable” (emphases added)), with '568 patent col. 13 ll. 12-18 (“a processor for arranging information for transmission ... which identifies a type of payload information ----” (emphasis added)). Accordingly, just as the accused system in Finjan only needed to have components that are reasonably capable of “preventing execution” and “obtaining a Downloadable” to infringe, Finjan, 626 F.3d at 1204-05, D-Link’s products only need to have a component that is reasonably capable of “arranging information for transmission ... which identifies a type of payload information----” '568 patent col. 13 ll. 12-18. Furthermore, similar to the evidence the patentee presented in Versata, Ericsson presented evidence that Intel — the 802.11-compliant chip producer — instructed developers to use the TID field in an infringing manner. See Versata, 717 F.3d at 1263. We therefore find that the jury could properly base its infringement finding on the reasonable capability of the unmodified accused devices.

For the foregoing reasons, we hold that substantial evidence supports the jury’s finding that D-Link infringed claims 1 and 5 of the '568 patent.

2. The '215 Patent

D-Link challenges the district court’s construction of the term “responsive to the receiving step, constructing a message field for a second data unit, said message field including a type identifier field” in the '215 patent. Even if we affirm the district court’s construction of that term, according to D-Link, the jury did not have substantial evidence to find infringement of claims 1 and 2 of the '215 patent. We first consider the proper scope of the claims before comparing the construed claims to the accused devices. See Absolute Software, Inc. v. Stealth Signal, Inc., 659 F.3d 1121, 1129 (Fed.Cir.2011).

a. Claim Construction

Generally, claim terms should be given their ordinary and customary meaning to a person having ordinary skill in the art at the time of the effective date of the patent application. Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed.Cir.2005) (en banc). To ascertain the scope *1218and meaning of the asserted claims, we look to the words of the claims themselves, the specification, the prosecution history, and any relevant extrinsic evidence. Id. at 1315-17. This inquiry typically begins and ends with the intrinsic evidence. In fact, the specification is the single best guide to the meaning of the claim terms; it is usually dispositive. Id. at 1318 (“[T]he specification ‘is always highly relevant to the claim construction analysis. Usually, it is dispositive....”’ (internal citations omitted)).

D-Link challenges the district court’s construction of “responsive to the receiving step, constructing a message field for a second data unit, said message field including a type identifier field” as “responsive to the receiving step, generating a message field including a field that identifies the message type of the feedback response message from a number of different message types.” Claim Construction Order, 2013 WL 949378, at *4-6. D-Link argues that the district court should have adopted its proposed construction: “responsive to the receiving step, generating a message field including a field identifying the type of feedback response that is selected from multiple available feedback responses in order to minimize the size or number of feedback responses.” Id. at *4 (emphasis added). In essence, D-Link contends that the “type identifier field” must be used to “seleet[] from multiple available feedback responses” and “minimize the size or number of feedback responses.” Id.

D-Link asserts that, because the entire specification of the '215 patent emphasizes that the point of the invention is to select the feedback response that minimizes the size or number of feedback responses, we must limit the scope of the claims to capture the scope of the actual invention. Ericsson responds that the district court properly excluded the two extraneous limitations — selecting and minimizing — in its constructiofi. Because none of the language cited by D-Link amounts to a clear disavowal of the claim scope, Ericsson contends that we should not read limitations from the specification into the claims.

We agree with Ericsson that D-Link’s proposed construction improperly reads limitations from the specification into the claims. Although the claims must be read in light of the specification, it is important that we “avoid importing limitations from the specification into the claims.” Phillips, 415 F.3d at 1323. We recognize that there is a fine distinction between these two concepts, but we must, as always, draw this distinction from the point of a view of a person of ordinary skill in the art. Id. Although the '215 patent envisions thát the type identifier field be used to select the most efficient format of feedback response, the specification never requires the selection of the feedback response type that minimizes the size or number of feedback responses. See id. at 1326-27 (“The fact that the written description of the [ ] patent sets forth multiple objectives to be served by the baffles recited in the claims confirms that the term ‘baffles’ should not be read restrictively to require that the baffles in each case serve all of the recited functions.”). The type identifier field actually serves another purpose — one distinct from the proposed selecting and minimizing functions — it must identify the type of feedback response. This purpose is encompassed by the district court’s construction. Although the type identifier field may be used to select and minimize, a person of ordinary skill would not read those limitations into the claims when the field has another purpose as well.

D-Link relies on Metabolite Laboratories, Inc. v. Laboratory Corp. of America Holdings, 370 F.3d 1354 (Fed.Cir.2004) to *1219argue that we should use the preamble of the asserted claim to limit our construction. In Metabolite, we stated that “[a] preamble may provide context for claim construction, particularly, where as here, that preamble’s statement of intended use forms the basis for distinguishing the prior art in the patent’s prosecution history.” 370 F.3d at 1362 (emphasis added). D-Link omits the italicized part of the Metabolite quote in its briefs, likely because the selection and minimization requirements were not used as the basis for distinguishing the prior art in the prosecution history of the. '215 patent. Indeed, the addition of the type identifier field, which identifies the type of feedback response, is a sufficient basis for distinguishing the prior art. This is reflected in the district court’s correct construction because the message field must “includ[e] a field that identifies the message type of the feedback response message from a number of different message types.” Claim Construction Order, 2013 WL 949378, at *4 (emphasis added).

We therefore hold that the district court correctly did not read the additional limitations D-Link identifies into the “type identifier field” term of the '215 patent; we adopt the district court’s construction.

b. Infringement

D-Link argues that, even under the district court’s construction, the jury did not have substantial evidence to find that the accused devices met the “responsive to the receiving step, constructing a message field for a second data unit, said message field including a type identifier field” step in the asserted claims of the '215 patent.

A method claim is directly infringed when someone practices every step of the patented method. Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1359 (Fed.Cir.2009). In order to prove induced infringement, the patentee must show that the alleged infringer performs, or induces another party to perform, every single step in the method. Limelight Networks, Inc. v. Akamai Techs., Inc.

Additional Information

Ericsson, Inc. v. D-Link Systems, Inc. | Law Study Group