Docket No. 2015-1766, -1794
MOORE, O’MALLEY, WALLACH
January 17, 2017
Brief Summary: DC grant of SJ for anticipation and non-infringement vacated; determination that Most Favored Licensee Provision of Agreement only applied to patents owned as of the date thereof.
Summary: This is the second appeal related to this dispute regarding the claims of several patents (“Patents-In-Suit”) and a Most Favored Licensee Provision (“MFL Provision”) in a Patent and Conflice Resolution Agreement (“PCRA”) between Wi-LAN and Ericsson. The DC originally found that the MFL Provision entitled Ericsson to a license to the disputed patents but an FC panel reversed (Wi-LAN, FC 2014). On remand, the DC concluded that two claims were invalid, Ericsson’s accused products did not directly infringe the “Bandwidth Patents”, and the MFL Provision did not apply to the Patents-In-Suit. In this opinion, the FC panel concluded the DC erred in granting SJ to Ericsson based on its anticipation determination because a genuine dispute regarding what a prior art reference disclosed was identified. The errors were “weighing” the testimony of Wi-LAN’s and Ericsson’s experts since “[c]redibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge” (Anderson, US 1986) and relied on “unsupported statements made by Ericsson’s counsel” (“attorney argument, not record evidence” (Laitram, FC 1990). Regarding infringement, the FC panel explained that infringement is determined by constru[ing] the asserted claim” (a question of law reviewed de novo (Teva, FC 2015) and then “determin[ing] whether the accused product…contains each limitation of the properly construed claim, either literally or by a substantial equivalent” (“a question of fact” (Absolute Software, FC 2011; Glaxo, FC 1997; Freedman Seating, FC 2005). And a DC may enter infringement SJ “when no reasonable jury could find that every limitation recited in the properly construed claim is or is not found in the accused device” (Bai, FC 1998). The FC panel concluded the DC did not err in construing “bandwidth” but did err in granting SJ of non-infringement because it improperly “weighed conflicting evidence and improperly credited Ericsson’s” (Anderson, US 1986).
Regarding the MFL Provision of the PCRA, the FC panel agreed with the DC that it did not apply to the Patents-In-Suit. It explained that the agreement is governed by New York law under which “courts ‘should…choose that construction which will carry out the plain purpose and object of the agreement” (Kass, NY 1998). The first clause of the MFL Provision was determined to apply only “to Wi-LAN’s patents owned or controlled as of the effective date of the PCRA” and the second clause to “discuss the rights extended to Ericsson in terms of patents, not products” (the “licensing of patents not already addressed under this Agreement,” “which are infringed or alleged to be infringed by UMTS/HSPA PRODUCTS”). Ericsson argued the PCRA/MFL Provision regarding certain of its products and the Patents-in-Suit was triggered by Wi-LAN’s assertion of a patent that is not one of the Patents-in-Suit but was “owned or controlled” by Wi-LAN before the PCRA effective date (the ‘759 patent) against a third party (BelAir Networks). The DC concluded that the MFL Provision did apply to the Patents-in-Suit as those were “acquired…after execution of the PCRA”. The FC panel agreed with the DC’s conclusion “but for different reasons”, finding “Ericsson is entitled to a most favored licensee status only for the” “pre-PCRA” ‘759 patent “that trigger[ed] the MFL provision” (“reading the scope of the section to apply to any post-PCRA patent would result in an unreasonable interpretation of the MFL Provision as a whole”).