Appeal
from the United States District Court for the Middle District
of Florida in No. 6:13-cv-01950-PGB-DCI, Judge Paul G. Byron.
Brian
R. Gilchrist, Allen, Dyer, Doppelt & Gilchrist, PA,
Orlando, FL, argued for plaintiff-appellee. Also represented
by Ryan Santurri.
Constantine L. Trela, Jr., Sidley Austin LLP, Chicago, IL,
argued for defendant-appellant. Also represented by Stephanie
P. Koh, Bryan C. Mulder, Thomas D. Rein.
Before
Prost, Chief Judge, Dyk and Wallach, Circuit Judges.
Dyk,
Circuit Judge.
CalAmp
Corp. appeals from a judgment that U.S. Patent Nos. 6, 346,
876 ('876 patent), 6, 756, 885 ('885 patent), 7, 671,
727 ('727 patent), and 8, 032, 278 ('278 patent) were
infringed and are not invalid. We affirm the judgment of no
invalidity, affirm-in-part, reverse-in-part, vacate-in-part,
and remand the judgment as to direct infringement. We vacate
and remand for a new trial on indirect infringement,
compensatory damages, willful infringement, enhanced damages,
and attorney's fees.
Background
This
case involves a patent infringement suit brought by Omega
Patents, LLC ("Omega") against CalAmp for
infringement of claims 1, 3, 4, 5, 12, 14, and 16 of the
'876 patent, claims 1, 2, 3, 12, and 14 of the '885
patent, claims 1, 10, and 11 of the '727 patent, and
claims 1, 2, 3, 4, 5, 6, 8, 11, 12, 13, 14, 16, 18, 19, and
21 of the '278 patent. Representative claims are set
forth in the addendum.
The
patents generally relate to multi-vehicle compatible systems
that can remotely control various vehicle functions (for
example, remote vehicle starting), see, e.g.,
'876 patent, col. 3, ll. 34-36; '885 patent, col. 3,
ll. 33-35, and read the status of various vehicle devices
(for example, battery health), see, e.g., '278
patent, col. 18, ll. 56-57. The systems can also be used to
notify the driver, or the driver's employer, if certain
conditions occur (for example, speeding). See, e.g.,
'727 patent, col. 2, ll. 41-45; '278 patent, col. 9,
ll. 26-33. In order to be compatible with different vehicles,
the controller must determine the appropriate protocol to use
in communicating with a particular vehicle data bus (an
internal communications network), which is connected to
various devices in the vehicle. This process involves the
controller's first sending out a series of signals using
different protocols to the vehicle's data bus, which
relays them to the vehicle's devices. If the vehicle
device recognizes one of the signals, it can then respond
with its own signal, which travels to the data bus and then
back to the controller. The controller relies on this
response to determine the appropriate protocol to use for
further communication with the vehicle devices. See,
e.g., '885 patent, col. 4, ll. 9-23; col. 9, ll.
21-55.
CalAmp
operates in the telematics industry, assisting businesses and
government entities monitor and collect data for their assets
(for example, a fleet of vehicles). CalAmp sells its Location
Messaging Unit ("LMU") products, which are
multi-vehicle compatible devices that include a GPS receiver
for vehicle tracking. The LMU connects to a vehicle's
data communication bus via the onboard diagnostics port and
can retrieve information (for example, battery health or
vehicle speed) from the vehicle's engine control unit
("ECU") via the vehicle's data bus. Further,
the LMU can relay information to CalAmp's servers (for
example, in the form of a speeding notification), which
enables businesses to remotely monitor various aspects of
their vehicles.
Omega
filed suit against CalAmp in the Middle District of Florida
on December 20, 2013, for patent infringement based on
CalAmp's LMU systems and related products.[1] After a trial, a
jury found all asserted claims to be not invalid and
infringed, and the jury also found that CalAmp willfully
"infringed a valid patent." J.A. 170. The jury
awarded Omega approximately $2.98 million in compensatory
damages. The district court trebled damages for willful
infringement, awarded attorney's fees to Omega, awarded
damages for sales made subsequent to the jury verdict, and
added pre-judgment interest. The award totaled approximately
$15 million with an on-going royalty rate of $12.76 per unit.
The district court declined to award a permanent injunction,
a determination that is not at issue in this appeal.
CalAmp
appealed the final judgment and we have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(1).
Discussion
I.
Invalidity
CalAmp
argues that the district court's claim construction of
the terms "transmitter," "receiver," and
"data communication bus / vehicle data communications
bus / vehicle data bus" were erroneous. Some or all of
the terminology appears in each of the various claims of the
asserted patents. There is no argument that these
constructions had any effect on the jury's findings of
infringement. Rather, CalAmp contends that these
constructions affected the jury's verdict of invalidity,
though there is no claim that these constructions affected
invalidity with respect to prior art introduced at trial. The
contention is that had the district court adopted
CalAmp's proposed constructions, "CalAmp's
invalidity defenses would have included additional prior art
references." CalAmp, Open. Br. at 17.
"Federal
Rule [of Civil Procedure] 46 requires that a party, at the
time the ruling or order of the trial judge is . . . sought,
make known to the court the action that he desires the court
to take . . . and the grounds therefor," otherwise a
claim of error is typically forfeited. 9B Charles A. Wright
& Arthur R. Miller, Federal Practice and
Procedure § 2472 (3d ed. 2018) ("Wright &
Miller"). "This requirement is not a mere technical
formality and is essential to the orderly administration of
civil justice." Id. At the same time, courts
have recognized that the requirement of securing a ruling is
"not to be applied in a ritualistic fashion."
Wright & Miller § 2472. Context may well reveal an
implicit ruling that will suffice to preserve the issue.
CalAmp informed the district court during Markman
that construction of the terms "transmitter,"
"receiver," and "data bus" were actually
in dispute because additional prior art for CalAmp's
invalidity defense may or may not be relevant depending on
the court's construction.
Here
CalAmp did nothing in the district court Mark-man
proceeding to specifically identify the prior art that would
be impacted by the claim construction ruling. At the
Markman hearing, there was no identification of any
specific prior art references that would be excluded by the
district court's claim construction ruling.[2] Instead, the
court was presented with only vague claims that there was
prior art before August 22, 1995, one year before the
earliest priority date of the asserted patents, that would be
relevant under CalAmp's proposed construction. To be
sure, CalAmp was not required to identify the prior art at
the Markman proceeding in order to preserve the
argument, but here CalAmp fails to argue the prior art was
identified at any time thereafter.
In its
opening brief on appeal, CalAmp argued its "invalidity
defenses would have included additional prior art references
showing such wired connections." But in its opening
brief CalAmp failed to present a developed argument as to why
any actions by the district court after the Markman
hearing had the effect of excluding or limiting prior art
that CalAmp offered to present or even what relevant prior
art was excluded by the claim construction ruling. Under
these circumstances, CalAmp has failed to properly preserve
the issue. See Becton Dickinson & Co. v. C.R. Bard,
Inc., 922 F.2d 792, 800 (Fed. Cir. 1990) ("[A]n
issue not raised by an appellant in its opening brief . . .
is waived.").
We
decline CalAmp's invitation to speculate as to how
additional prior art may have been rendered irrelevant under
the court's claim construction. Thus, although
CalAmp's challenge to the district court's claim
construction was preserved under Federal Rule of Civil
Procedure 51 for purposes of challenging the jury
instructions, Lighting Ballast Control LLC v. Phillips
Elecs. N. Am. Corp., 790 F.3d 1329, 1338 (Fed. Cir.
2015), we conclude that CalAmp failed to satisfy the
requirements of Federal Rule of Civil Procedure 46 by not
seeking admission into evidence of, or at least specifically
identifying, the additional prior art. Such a request and
specific ruling by the district court is particularly
necessary where the prior art concerns a defense of
obviousness because a prior art reference need not satisfy
every claim element to still be relevant to obviousness.
For
these reasons, we affirm the judgment as to the validity of
the asserted patent claims.
II.
Infringement
We next
consider the district court's order denying CalAmp's
motion for judgment as a matter of law ("JMOL") or
a new trial based on various infringement issues. We review
the denial of JMOL de novo, viewing the evidence in the light
most favorable to the non-moving party.
"Where
the district court's claim construction relies only on
intrinsic evidence, as is the case here, the construction is
a legal determination reviewed de novo." In re:
Co-paxone Consol. Cases, 906 F.3d 1013, 1022 (Fed. Cir.
2018). When the district court errs in its jury instructions
as to the construction of a term central to the infringement
dispute, "[t]he error requires at least vacatur of the
verdict and a remand for a new trial unless we can conclude
that the error was not prejudicial, i.e., was
harmless." Avid Tech., Inc. v. Harmonic, Inc.,
812 F.3d 1040, 1047 (Fed. Cir. 2016). "[T]he error in
the instruction governing this central dispute at trial would
be harmless only if a reasonable juror would have been
required by the evidence to find []in-fringement even without
the error." Id. The jury's determination of
infringement is reviewed for substantial evidence.
A.
Infringement of '727 Patent Claim 11
CalAmp
argues that there was insufficient evidence for the jury to
find direct infringement by CalAmp of original claim 11, now
amended claim 1, of the '727 patent.[3] Omega alleged
this device claim was directly infringed by CalAmp's sale
and programming of its products as well as indirectly
infringed by CalAmp's sale, programming, and advertising
that induced customers to infringe.
CalAmp's
sole argument as to why it does not infringe is based on the
claim limitation that the device "read[ ] the data
related to vehicle speed from the vehicle data communications
bus" and use that information to determine when "to
send a remote vehicle speed exceeded
notification."[4] J.A. 350, col. 7, ll. 13-18. Neither party
sought construction of these terms, and the district court
instructed the jury to give the terms their plain and
ordinary meaning. The claim language above refers to the
patented device's ability to send a speed exceedance
notification based on vehicle speed information retrieved
from the vehicle's data bus. This functionality can be
useful for remotely monitoring driver behavior in real-time.
CalAmp
contends that its products do not use vehicle speed from the
data bus to send a speed exceedance notification but instead
use the GPS receiver on the LMU to make such determinations,
and therefore it does not infringe. But the testimony by
CalAmp's witnesses could reasonably be interpreted by the
jury as indicating that some small percentage, less than 5%,
of its devices infringed by being programmed to use vehicle
speed data from the data bus to send a speed exceedance
notification. See J.A. 14330; J.A. 14335
(CalAmp's witness testifying that "[w]e ran a count,
and . . . based on the count that more than 95 percent of the
speed thresholds are done by GPS, and this list here [of
customer scripts using vehicle bus speed] was less than 5
percent."); 14371 (CalAmp's witness testifying
"it would be a subset" of cases that did
not infringe (emphasis added)). CalAmp further argues that if
there was infringement, it was by CalAmp's customers and
not by CalAmp. This argument is belied by CalAmp's
response to Omega's interrogatory, where it stated it
"has identified the customers for whom it [i.e., CalAmp]
has loaded scripts [into devices it sold to customers]
related to . . . speed alerts." J.A. 8780; see
also J.A. 14271 ("Q. Does CalAmp develop scripts
for customers? A. Yes.").
This is
admittedly a close issue, but we conclude that there was
sufficient evidence for a reasonable jury to find that
CalAmp, at least under some circumstances, directly infringed
original claim 11 of the '727 patent and therefore affirm
the judgment of infringement. Our conclusion affirming the
jury's judgment that CalAmp directly infringed claim 11
of the '727 by selling its products and programming a
subset with infringing functionality moots the issue of
whether the same acts constituted indirect infringement by
CalAmp.
B.
Infringement of '876 Patent Claims and '885 Patent
Claims
CalAmp
argues it was entitled to JMOL on (1) no direct infringement
as to all of the asserted claims of the '876 patent and
'885 patent, and (2) no indirect infringement as to these
same claims. If it is not entitled to JMOL for indirect
infringement, CalAmp argues that a new trial is required.
These systems claims were alleged to be directly infringed by
CalAmp's making and selling of the patented systems and
indirectly infringed by CalAmp's inducement of its
customers to directly infringe the systems claims.
1.
Direct Infringement by CalAmp
Omega's
theory of direct infringement as to the systems claims is
based on CalAmp's making and selling its systems to its
customers. We assume that a systems claim is infringed by the
sale of the system. The question then is whether "all of
the elements of the claim . . . [are] present in the accused
system[s]" allegedly sold by CalAmp. Net-word, LLC
v. Centraal Corp., 242 F.3d 1347, 1353 (Fed. Cir. 2001);
see Centillion Data Sys., LLC v. Qwest Commc'ns
Int'l, 631 F.3d 1279, 1288 (Fed. Cir. 2011)
("In order to 'make' the system under §
271(a), [defendant] would need to combine all of the claim
elements . . . .").
We
agree with CalAmp that there was insufficient evidence for
the jury to have found the claim limitation "a
transmitter and a receiver for receiving signals from
said transmitter" in the claims of the '876
patent and the '885 patent was satisfied by CalAmp's
selling its systems. '876 patent, col. 11, ll. 36-37
(emphasis added); '885 patent, col. 11, ll. 16-17. The
evidence at trial only showed that the LMU
"transmitter" transmits signals to a
"receiver" on a cell tower, which can then relay
that information to CalAmp's servers, and the LMU
"receiver" receives signals from a
"transmitter" on the cell tower. But CalAmp is not
alleged to provide the cell tower. See, e.g., J.A.
8589; J.A. 16019-20. CalAmp therefore does not provide all
the required claim elements, and Omega does not argue that
CalAmp directly infringes by "us[ing]" the system.
See Omega Response Br. at 29. Thus, CalAmp was
entitled to JMOL of no direct infringement by CalAmp for all
of the asserted claims of the '876 patent and '885
patent.
2.
Induced Infringement
We next
consider Omega's claims that CalAmp induced direct
infringement by CalAmp's customers.
a.
Direct Infringement by CalAmp's Customers
"[L]iability
for inducement must be predicated on direct
infringement." Limelight Networks, Inc. v. Akamai
Techs., Inc., 572 U.S. 915, 921 (2014); see Enplas
Display Device Corp. v. Seoul Semiconductor Co., 909
F.3d 398, 407 (Fed. Cir. 2018). Omega's theory here is
that CalAmp's customers directly infringed the systems
claims. CalAmp argues three separate theories as to why there
were no predicate acts of direct infringement by CalAmp's
customers.
First,
CalAmp argues that "Omega failed to identify even one
instance of direct infringement" by CalAmp's
customers that could support liability for inducement.
CalAmp, Open. Br. at 39. Omega's theory of infringement
was that the customers directly infringed when they used
CalAmp's products. "[T]o use a system for purposes
of infringement, a party must put the invention into service,
i.e., control the system as a whole and obtain benefit from
it." Centillion, 631 F.3d at 1284. "[A]
person must control (even if indirectly) and benefit from
each claimed component." Intellectual Ventures I v.
Motorola Mobility, 870 F.3d 1320, 1329 (Fed. Cir. 2017).
Here, there was evidence from which the jury could infer that
customers controlled and used the system and received the
required benefits. See, e.g., J.A. 8780-87
(identifying customers using CalAmp products); J.A. 15943-45
(Omega's technical expert testifying the asserted claims
would be infringed by customer use of CalAmp's products).
Based on the record, we conclude that this theory does not
warrant setting aside the jury verdict.
Second,
CalAmp argues that Claim 12 of the '876 patent and all
asserted claims of the '885 patent require a "device
code." Omega has recognized "[t]he claims . . .
require 'communication' using a vehicle device
code." Omega Response Br. at 18. The district court
defined "device code" to mean a "signal from a
vehicle device," but the court improperly declined to
define the term "vehicle device." J.A. 148-50.
CalAmp seeks reversal or, in the alternative, a new trial for
the judgment of infringement as to these claims because the
district court's failure to construe the term
"vehicle device" in this context allowed Omega to
argue infringement under ...