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Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., Ltd.

United States Court of Appeals, Federal Circuit

April 17, 2017

REMBRANDT WIRELESS TECHNOLOGIES, LP, Plaintiff-Appellee
v.
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, Defendants-Appellants SAMSUNG AUSTIN SEMICONDUCTOR, L.L.C., RESEARCH IN MOTION CORPORATION, RESEARCH IN MOTION LTD., Defendants

         Appeal from the United States District Court for the Eastern District of Texas in No. 2:13-cv-00213-JRG, Judge J. Rodney Gilstrap.

          Michael F. Heim, Heim, Payne & Chorush, LLP, Houston, TX, argued for plaintiff-appellee. Also represented by Eric J. Enger, Miranda Y. Jones; Demetrios Anaipakos, Amir H. Alavi, Jamie Alan Aycock, Alisa A. Lipski, Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing PC, Houston, TX.

          Jesse J. Jenner, Ropes & Gray LLP, New York, NY, argued for defendants-appellants. Also represented by Douglas Hallward-Driemeier, Washington, DC; Gabrielle E. Higgins, East Palo Alto, CA; Brian P. Biddinger, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY.

          Before Taranto, Chen, and Stoll, Circuit Judges.

          Stoll, Circuit Judge.

         A jury found that Samsung infringed Rembrandt's asserted patents, which the jury also found not invalid over prior art cited by Samsung. The jury awarded Rembrandt $15.7 million in damages. After trial, Samsung moved for judgment as a matter of law on obviousness and damages, which the district court denied. Samsung appeals the district court's denial of JMOL, as well as the district court's claim construction order and an order denying Samsung's motion to limit Rembrandt's damages for alleged failure to mark patented articles.

         Because we agree with the district court's challenged claim construction and its denial of Samsung's JMOL motions, we affirm those decisions. We disagree, however, with the district court's denial of Samsung's motion based on the marking statute, and we vacate that decision and remand for proceedings consistent with this opinion.

         Background

         Rembrandt Wireless Technologies, LP, sued Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC in the United States District Court for Eastern District of Texas on March 15, 2013 for infringement of two patents that share a specification: U.S. Patent No. 8, 023, 580 and a continuation patent, U.S. Patent No. 8, 457, 228. These patents claim priority to a provisional application filed on December 5, 1997, and relate to "a system and method of communication in which multiple modulation methods are used to facilitate communication among a plurality of modems in a network, which have heretofore been incompatible." '580 patent col. 2 ll. 17-20. The patents explain that in the prior art "a transmitter and receiver modem pair can successfully communicate only when the modems are compatible at the physical layer." Id. at col. 1 ll. 27- 29. As a result, "communication between modems is generally unsuccessful unless a common modulation method is used." Id. at col. 1 ll. 45-47. Particularly with modems communicating via master/slave protocol, the patents explain that "[i]f one or more of the trib modems [slaves] are not compatible with the modulation method used by the master, those tribs will be unable to receive communications from the master." Id. at col. 1 ll. 58-61. To overcome the challenges described in the prior art, the patents propose using the first section of a transmitted message (the message "header") to indicate the modulation method being used for the substance of the message (the message "payload").

         Claim 2 of the '580 patent, which is dependent upon claim 1, is representative:

1. A communication device capable of communicating according to a master/slave relationship in which a slave communication from a slave to a master occurs in response to a master communication from the master to the slave, the device comprising:
a transceiver, in the role of the master according to the master/slave relationship, for sending at least transmissions modulated using at least two types of modulation methods, wherein the at least two types of modulation methods comprise a first modulation method and a second modulation method, wherein the second modulation method is of a different type than the first modulation method, wherein each transmission comprises a group of transmission sequences, wherein each group of transmission sequences is structured with at least a first portion and a payload portion wherein first information in the first portion indicates at least which of the first modulation method and the second modulation method is used for modulating second information in the pay-load portion, wherein at least one group of transmission sequences is addressed for an intended destination of the payload portion, and wherein for the at least one group of transmission sequences:
the first information for said at least one group of transmission sequences comprises a first sequence, in the first portion and modulated according to the first modulation method, wherein the first sequence indicates an impending change from the first modulation method to the second modulation method, and
the second information for said at least one group of transmission sequences comprises a second sequence that is modulated according to the second modulation method, wherein the second sequence is transmitted after the first sequence.
2. The device of claim 1, wherein the transceiver is configured to transmit a third sequence after the second sequence, wherein the third sequence is transmitted in the first modulation method and indicates that communication from the master to the slave has reverted to the first modulation method.

Id. at col. 7 l. 53 - col. 8 l. 24 (emphasis added to show dispute). Relevant here, the district court construed "modulation method [] of a different type" as "different families of modulation techniques, such as the FSK family of modulation methods and the QAM family of modulation methods." Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., No. 2:13-CV-213-JRG-RSP, 2014 WL 3385125, at *15 (E.D. Tex. July 10, 2014) (Claim Construction Order).

         Rembrandt alleged at trial that Samsung devices incorporating the Bluetooth enhanced data rate ("EDR") standard infringed its patents. After a five-day trial, the jury found that Samsung infringed Rembrandt's patents, and that the patents were valid over the prior art Samsung presented. The jury awarded Rembrandt $15.7 million in damages. The district court denied Samsung's post-trial motions for judgment as a matter of law-on both liability and on damages-and entered final judgment.

         Samsung appeals, and we have jurisdiction under 28 U.S.C. § 1295(a)(1).

         Discussion

         Samsung appeals several issues: (1) the district court's construction of the "different types" limitation; (2) the district court's denial of JMOL of obviousness; (3) the district court's denial of Samsung's Daubert motion, motions for a new trial, and motion for JMOL on damages; and (4) the district court's denial of Samsung's motion to limit damages based on Rembrandt's purported failure to mark products embodying the '580 patent. Samsung does not appeal the jury's finding of infringement. We address each issue in turn.

         I. Claim Construction

         Samsung disputes the district court's construction of "modulation method [] of a different type." The district court construed this limitation as "different families of modulation techniques, such as the FSK [frequency-shift keying] family of modulation methods and the QAM [quadrature amplitude modulation] family of modulation methods." Claim Construction Order, 2014 WL 3385125, at *15. We review claim constructions based solely on the intrinsic record, as here, de novo. Shire Dev., LLC v. Watson Pharm., Inc., 787 F.3d 1359, 1364 (Fed. Cir. 2015) (quoting Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S.Ct. 831, 840-42 (2015)).

         The district court arrived at its construction relying on the applicant's characterization of the "different types" term in the prosecution history. During prosecution of the '580 parent patent, the applicant inserted the "different types" limitation into its claims after the examiner had already issued a notice of allowance. In the applicant's contemporaneous remarks to the examiner, he indicated that he inserted the limitation into the independent claims to "more precisely claim the subject-matter." J.A. 2234. The applicant explained:

Applicant has further amended [its] claims . . . with additional recitations to more precisely claim the subject matter. For example, the language of independent claim 1 has been clarified to refer to two types of modulation methods, i.e., different families of modulation techniques, such as the ...

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