Friday, 7 October 2016

En Banc Federal Circuit Upholds Apple's Jury Verdict of $120 Million

On October 7, the en banc U.S. Court of Appeals for the Federal Circuit reversed a panel of the Federal Circuit and upheld a jury verdict for patent infringement (slide to unlock, auto-correction patents) of almost $120 million in favor of Apple against Samsung.  Apple's counsel argued that the three-judge panel of the Federal Circuit improperly rejected almost every finding of the jury and relied on "extra-record" evidence obtained through "independent research."  The en banc Federal Circuit in an opinion by Judge Moore reaffirmed the role of the appellate court does not include reweighing facts or even finding new ones.  The en banc court stated: 
We granted Apple’s en banc petition to affirm our understanding of the appellate function as limited to deciding the issues raised on appeal by the parties, deciding these issues only on the basis of the record made below, and as requiring appropriate deference be applied to the review of fact findings. There was no need to solicit additional briefing or argument on the question of whether an appellate panel can look to extra-record extrinsic evidence to construe a patent claim term. “The Supreme Court made clear that the factual components [of claim construction] include ‘the background science or the meaning of a term in the relevant art during the relevant time period.’” Teva Pharms., Inc. v. Sandoz, Inc., 789 F.3d 1335, 1342 (Fed. Cir. 2015) (quoting Teva Pharms., Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015)). After Teva, such fact findings are indisputably the province of the district court. We did not need to solicit additional briefing or argument to conclude that the appellate court cannot rely on extra-record extrinsic evidence in the first instance or make factual findings about what such extrinsic evidence suggests about the plain meaning of a claim term in the art at the relevant time or how such extra record evidence may inform our understanding of how the accused device operates. We likewise did not need additional briefing or argument to determine that the appellate court is not permitted to reverse fact findings that were not appealed or that the appellate court is required to review jury fact findings when they are appealed for substantial evidence. The panel reversed nearly a dozen jury fact findings including infringement, motivation to combine, the teachings of prior art references, commercial success, industry praise, copying, and long-felt need across three different patents. It did so despite the fact that some of these findings were not appealed and without ever mentioning the applicable substantial evidence standard of review. And with regard to objective indicia, it did so in ways that departed from existing law.
The en banc court noted that Judge Dyk raised thought-provoking points about obviousness law (the role of secondary considerations, and the motivation to combine) in his dissent, but the issues were not raised on appeal.  Judge Dyk nicely tees up the case for the U.S. Supreme Court on the proper application of obviousness.  (LOL, Get ready for another U.S. Supreme Court case on obviousness!) Importantly, the en banc court remands for the district court to consider willfulness post-Halo.  

Is this opinion really about judicial correction of (in hindsight) strategic decisions made to protect intellectual property (a game-changing piece of technology)? Or, this is just the best that could have been done.   

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