The Court of Appeals for the Federal Circuit vacated and remanded the lower court decision for a new trial on indirect infringement, compensatory damages, willful infringement, enhanced damages, and attorney’s fees, and affirmed no invalidity, and reversed in part direct infringement. Since the jury questionnaire on willfulness did not list each patent separately, a new trial is needed on willful infringement, enhanced damages, and attorney’s fees. Since the evidence on direct infringement amounts to about 5% of defendant’s total sales, a new trial is needed on damages. Since the lower court excluded testimony of defendant’s intent, which is relevant to inducement of infringement by a third party, a new trial is needed on indirect infringement. Omega Patents, LLC v. Calamp Corp., Case No. 2018-1309 (Fed. Cir. April 8, 2019) (Full Opinion Available Here).
CalAmp Corp. appealed from a judgment that several patents were infringed and are not invalid. The patents generally relate to multi-vehicle compatible systems that can remotely control various vehicle functions (for example, remote vehicle starting). The systems can also be used to notify the driver, or the driver’s employer, if certain conditions occur (for example, speeding). 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.
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.”
CalAmp contends that certain claim 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.” “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).
Omega alleged the 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. 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.
Per the Court: “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.”
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 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.”
First, CalAmp argues that “Omega failed to identify even one instance of direct infringement” by CalAmp’s customers that could support liability for inducement. There was evidence from which the jury could infer that customers controlled and used the system and received the required benefits.
Second, CalAmp argues that Claim 12 of the ’876 patent and all asserted claims of the ’885 patent require a “device code.”
During the Markman proceeding, CalAmp argued that the term “vehicle device” should be construed consistent with its use in the specification as an “electrical or electronic component in a vehicle that can be controlled and/or the status thereof read.” Omega argued that the term need not be construed because such a construction would not be helpful to the jury. Markman hearing Omega conceded. The district court noted that “[i]t may be inherent for people with knowledge, but I don’t know that people on a jury would understand that it can be controlled or the status of it read based on what claim 1 says.” Nonetheless, the district court refused to construe the term “vehicle device” “[s]ince CalAmp’s proposed construction of ‘vehicle device’ is taken from the patents-in-suit.”
The Court stated: “As we have held repeatedly, ‘[w]hen the parties raise an actual dispute regarding the proper scope of these claims, the court, not the jury, must resolve that dispute.’ O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1360 (Fed. Cir. 2008). The court is not absolved of this duty to construe the actually disputed terms just because the specification of the patent defines the term. Even if the parties had agreed to the construction, the district court was still obligated to give that construction to the jury in its instructions.”
Omega’s primary theory at trial was that the LMU was a “vehicle device” and the signals it sent to the ECU were infringing “device codes.” This theory was inconsistent with the proper claim construction to which Omega agreed, however. In the absence of guidance in the form of proper claim construction, the jury lacked a yardstick by which to measure the arguments and evidence on this issue and assess whether Omega’s infringement theory was a valid one.
“We affirm the jury’s verdict as to predicate acts of direct infringement by CalAmp’s customers.”
“We next consider CalAmp’s argument that it was entitled to JMOL of no inducement of all of the asserted claims. … Jury was not provided with written questions on the issue of inducement. But one cannot ‘use the answers to special questions as weapons for destroying the general verdict.’ Julien J. Studley, Inc. v. Gulf Oil Corp., 407 F.2d 521, 526–27 (2d Cir. 1969).”
“[T]he patentee must show . . . that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement.” Enplas, 909 F.3d at 407. “Liability for inducement ‘can only attach if the defendant knew of the patent and knew as well that the induced acts constitute patent infringement.’” Id. (quoting Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1926 (2015) (internal quotation marks omitted)); see Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 768 (2011).
For willful infringement, the jury was asked whether it had found CalAmp willfully “infringed a valid patent,” without specifying which patent or patents or which claim or claims were willfully infringed. The Court stated: “We cannot determine which patent(s) or claim(s) the jury found to be willfully infringed, and such a finding may be based on an infringement finding that has been set aside. Under these circumstances, neither party contests that the jury’s verdict as to willfulness must be vacated and a new trial conducted. See Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348, 1381 (Fed. Cir. 2013). Because the jury’s willfulness finding must be vacated, so too must the resulting enhanced damages and attorney’s fees award by the district court, both of which were explicitly based on the willful infringement finding.”
CalAmp argues that the district court erred by excluding Chen’s testimony as to CalAmp’s state of mind regarding infringement and validity. The Court stated: “First, we conclude that the district court’s exclusion of Chen’s testimony relating to CalAmp’s state of mind prior to the alleged acts of infringement was an abuse of discretion. Chen’s testimony on this issue was clearly relevant, as the evidence shows he was the ‘main person’ tasked with investigating the patent landscape ‘before CalAmp decided to release” the accused products and he was central to CalAmp’s decision to launch the accused products.”
The District court excluded Chen’s proffered testimony as not appropriately disclosed expert testimony under Federal Rule of Civil Procedure 26. “But Chen was not provided to offer expert testimony on non-infringement or invalidity. Rather, he was provided to offer testimony as to the bases for CalAmp’s state of mind, one of which was his investigation of the patent landscape. Therefore, he should have been allowed to present a limited summary of his conclusion from this investigation and the basis for it.”
“Second, the district court erred by preventing CalAmp’s outside counsel, Bailey, from testifying as to the analysis he allegedly provided to CalAmp (Chen and his superior, Sarkissian) prior to the launch of the products at issue in the litigation. For example, we held in Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 699 (Fed. Cir. 2008), that ‘opinion-of-counsel evidence’ is relevant to the intent analysis for induced infringement because such evidence ‘may reflect whether the accused infringer ‘knew or should have known’ that its actions would cause another to directly infringe.’” See also Bettcher Industries, Inc. v. Bunzl USA, Inc., 661 F.3d 629, 649 (Fed. Cir. 2011).