Rembrandt Wireless v. Samsung Electronics , 853 F.3d 1370 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
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
______________________
2016-1729
______________________
Appeal from the United States District Court for the
Eastern District of Texas in No. 2:13-cv-00213-JRG,
Judge J. Rodney Gilstrap.
______________________
Decided: April 17, 2017
______________________
MICHAEL F. HEIM, Heim, Payne & Chorush, LLP,
Houston, TX, argued for plaintiff-appellee. Also repre-
sented by ERIC J. ENGER, MIRANDA Y. JONES; DEMETRIOS
ANAIPAKOS, AMIR H. ALAVI, JAMIE ALAN AYCOCK, ALISA A.
2 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
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 as-
serted 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, howev-
er, 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
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 3
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 incom-
patible.” ’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 modula-
tion 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 communi-
cating according to a master/slave relationship in
which a slave communication from a slave to a
master occurs in response to a master communi-
cation from the master to the slave, the device
comprising:
a transceiver, in the role of the master ac-
cording to the master/slave relationship,
for sending at least transmissions modu-
lated using at least two types of modula-
4 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
tion 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 struc-
tured 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 compris-
es a first sequence, in the first portion and
modulated according to the first modula-
tion 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 com-
prises a second sequence that is modulat-
ed 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
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 5
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 in-
corporating 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 Sam-
sung 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 judg-
ment.
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 damag-
es; 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
6 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
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 “differ-
ent types” limitation into its claims after the examiner
had already issued a notice of allowance. In the appli-
cant’s contemporaneous remarks to the examiner, he
indicated that he inserted the limitation into the inde-
pendent 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
FSK family of modulation methods and the QAM
family of modulation methods.
Id.
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 7
Samsung disputes the court’s construction, arguing
that it improperly affords dispositive weight to a single
self-serving statement in the prosecution history made
after the examiner had allowed certain claims. Samsung
contends that the plain claim language requires only that
the different types of modulation methods be “incompati-
ble” with one another. According to Samsung, the claims
cover devices that modulate signals using the same family
of modulation methods (for example, FSK modulation),
but operating with different amplitudes between modems.
Samsung asserts that, because modulating using different
amplitudes makes the devices incompatible, this ar-
rangement embodies “different types” of modulation.
We disagree with Samsung and adopt the construc-
tion entered by the district court. While the specification
is the principal source of the meaning of a disputed term,
the prosecution history may also be relevant. Vitronics
Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582
(Fed. Cir. 1996). Here, the clearest statement in the
intrinsic record regarding the meaning of the “different
types” limitation is the descriptive statement the appli-
cant made to the examiner when he inserted the limita-
tion into the claims. Samsung’s arguments to the
contrary do not diminish this unambiguous statement in
the prosecution history.
For example, Samsung avers that we should not give
the prosecution history statement definitional weight
because it uses the phrase “i.e.,” which Samsung argues
introduces an exemplary item in a set. A patentee’s use of
“i.e.,” in the intrinsic record, however, is often definition-
al. Edwards Lifesciences LLC v. Cook Inc., 582 F.3d 1322,
1334 (Fed. Cir. 2009) (“[U]se of ‘i.e.’ signals an intent to
define the word to which it refers.”); see also Abbott Labs.
v. Novopharm Ltd., 323 F.3d 1324, 1330 (Fed. Cir. 2003)
(holding that a patentee “explicitly defined” a term by
using “i.e.” followed by an explanatory phrase). Indeed,
the term “i.e.” is Latin for id est, which means “that is.”
8 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
On a related note in the context of disavowal, we have
explained that “[w]hether a statement to the PTO that
includes ‘i.e.’ constitutes a clear and unmistakable disa-
vowal of claim scope depends on the context.” Braintree
Labs., Inc. v. Novel Labs., Inc., 749 F.3d 1349, 1355
(Fed. Cir. 2014). The context here strongly supports the
conclusion that Rembrandt used “i.e.” to define the “dif-
ferent types” limitation because Rembrandt used it to
describe to the examiner a new limitation it had inserted
to further limit its claims.
Samsung directs us to cases where we have held that
“i.e.” was not used to define, particularly in instances
where interpreting “i.e.” as definitional would be internal-
ly inconsistent, see Pfizer, Inc. v. Teva Pharm., USA, Inc.,
429 F.3d 1364, 1373 (Fed. Cir. 2005), or where it would
read out preferred embodiments, see Dealertrack, Inc. v.
Huber, 674 F.3d 1315, 1326 (Fed. Cir. 2012). Samsung
argues that interpreting the “i.e.” statement as defini-
tional here would create an internal inconsistency with
claim 43, which recites that “at least one of said modula-
tion methods implements phase modulation.” Samsung
asserts that because claim 43 refers to “at least one” of
the methods using phase modulation, more than one of
them could use phase modulation, even though under the
district court’s construction that would mean they are not
in different families.
We are not convinced that there would necessarily be
a conflict with claim 43 under the adopted construction.
As Rembrandt points out, claim 26—from which claim 43
depends—also uses the “at least” language to describe “at
least two different types of modulation methods,” which
cuts against Samsung’s inference. In any event, we do
not find that this parsing of the claims overcomes the
definitional statement the applicant provided in the
prosecution history. See ERBE Elektromedizin GmbH v.
Canady Tech. LLC, 629 F.3d 1278, 1286–87
(Fed. Cir. 2010) (rejecting patent owner’s claim differenti-
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 9
ation argument based on disclaimer in the prosecution
history). Nor do we find that the specification is at odds
with the prosecution history definition. The specification
repeatedly refers to different types of modulation meth-
ods, but it does not provide examples of what would
constitute different methods or otherwise define this
limitation.
Samsung also mentions that in related IPR proceed-
ings, the Patent Trial and Appeal Board adopted the
broader construction Samsung argues for here. As Sam-
sung admits, however, this construction does not bind our
court. And the Board in IPR proceedings operates under
a broader claim construction standard than the federal
courts. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131,
2142, 2146 (2016). We also note that even after adopting
Samsung’s construction, the Board refused to deem Rem-
brandt’s patents unpatentable over the prior art, which is
ultimately what Samsung seeks under its proposed con-
struction.
We therefore agree with the construction entered by
the district court that the term “modulation method [] of a
different type” means “different families of modulation
techniques, such as the FSK family of modulation meth-
ods and the QAM family of modulation methods.” Claim
Construction Order, 2014 WL 3385125, at *15.
II. Obviousness
Samsung argues that even under the district court’s
construction of “different types,” it proved by clear and
convincing evidence that Rembrandt’s patents are invalid
for obviousness under 35 U.S.C. § 103 and that the jury
verdict of nonobviousness must be overturned as a matter
of law. 1
1 Given the effective filing dates of the ’580 and ’228
patents’ claims, the version of 35 U.S.C. § 103 that applies
10 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
We review the district court’s post-trial denial of
judgment as a matter of law under the law of the regional
circuit, here the Fifth Circuit. Finisar Corp. v. DirecTV
Grp., Inc., 523 F.3d 1323, 1328 (Fed. Cir. 2008). Fifth
Circuit law has us review the denial of JMOL de novo,
asking, as the district court did, whether a “reasonable
jury would not have a legally sufficient evidentiary basis
to find for the party on that issue.” Cambridge Toxicology
Grp. v. Exnicios, 495 F.3d 169, 179 (5th Cir. 2007) (quot-
ing Fed. R. Civ. P. 50(a)(1)). When a jury returns a gen-
eral verdict regarding obviousness, a legal question with
factual underpinnings, “[w]e first presume that the jury
resolved the underlying factual disputes in favor of the
verdict winner and leave those presumed findings undis-
turbed if they are supported by substantial evidence.
Then we examine the legal conclusion de novo to see
whether it is correct in light of the presumed jury fact
findings.” Circuit Check Inc. v. QXQ Inc., 795 F.3d 1331,
1334 (Fed. Cir. 2015) (quoting Jurgens v. McKasy,
927 F.2d 1552, 1557 (Fed. Cir. 1991)).
To allege obviousness, Samsung presented at trial a
prior art combination consisting of U.S. Patent No.
5,706,428 (“Boer”) as the primary reference and an article
by Bhargav P. Upender and Philip J. Koopman, Jr. (“Up-
ender”) as a secondary reference. According to Samsung,
the DBPSK and PPM/DQPSK modulation methods dis-
cussed in Boer are in “different families,” and are there-
fore different types of modulation methods under the
district court’s construction. Samsung’s expert, Dr.
Goodman, testified that, much like the QAM and PSK
modulation methods that the district court specifically
noted were in different families, Boer’s cited modulation
here is the one in force preceding the changes made by the
America Invents Act. See Leahy–Smith America Invents
Act, Pub. L. No. 112-29, § 3(n), 125 Stat. 284, 293 (2011).
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 11
methods alter different sets of characteristics:
PPM/DQPSK alters phase and position, but DBPSK alters
only phase.
On the other hand, Rembrandt’s infringement ex-
pert, 2 Dr. Morrow, testified that, in his experience, modu-
lation methods are in different families if they have “no
overlapping characteristics.” J.A. 1083, 18:13–24. Rem-
brandt therefore argued that PPM/DQPSK and DBPSK
were not in different families because they both altered
phase.
The jury was, of course, free to credit Dr. Morrow’s
testimony and reject Dr. Goodman’s. MobileMedia Ideas
LLC v. Apple Inc., 780 F.3d 1159, 1168 (Fed. Cir.)
(“[W]hen there is conflicting testimony at trial, and the
evidence overall does not make only one finding on the
point reasonable, the jury is permitted to make credibility
determinations and believe the witness it considers more
trustworthy.”), cert. denied, 136 S. Ct. 270 (2015). Sam-
sung argues, however, that Dr. Morrow’s testimony, and
Rembrandt’s argument based on it, constitute an improp-
er reinterpretation of the court’s “different types” con-
struction. Samsung urges that modulation methods can
have some overlapping characteristics and still be in
different families, as required by the court’s construction.
Samsung couches this argument as a claim construction
2 Rembrandt did not present a validity expert, and
Samsung suggests it was improper for Rembrandt to rely
on its infringement expert’s testimony for issues of validi-
ty. We disagree. Dr. Morrow’s testimony regarding
whether two modulation techniques are in the same or
different families is equally applicable to the infringement
and validity issues. Samsung does not argue that the
testimony was improperly admitted into evidence or that
the testimony was admitted only for limited purposes not
including use for validity.
12 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
issue. We disagree. As the district court correctly noted,
any dispute regarding whether particular modulation
techniques are in different families is a factual one. “[A]
sound claim construction need not always purge every
shred of ambiguity,” including potential ambiguity arising
from “the words a court uses to construe a claim term.”
Eon Corp. IP Holdings v. Silver Spring Networks,
815 F.3d 1314, 1318 (Fed. Cir. 2016) (citation omitted),
cert. denied, 137 S. Ct. 640 (2017). “Such an endeavor
could proceed ad infinitum.” Id.
Contrary to the way Samsung has cast the issue,
whether Boer meets the “different types” limitation under
the court’s construction is a factual question. Particularly
with regard to obviousness, it is a factual question going
to the scope and content of the prior art. See Graham v.
John Deere Co. of Kan. City, 383 U.S. 1, 17 (1966). We
review such factual questions underlying obviousness for
substantial evidence. Circuit Check, 795 F.3d at 1334.
Taken with Dr. Morrow’s testimony, the fact that Boer’s
DBPSK and PPM/DQPSK modulation methods both alter
phase is substantial evidence to support the jury’s pre-
sumed fact finding that Boer did not teach the “different
types” limitation.
Substantial evidence likewise supports the jury’s pre-
sumed finding that there was no motivation to combine
Boer with Upender, as Rembrandt had argued. The ’580
and ’228 patents claim a master/slave communication
protocol, whereas Boer discloses devices communicating
under the CSMA/CA protocol. 3 Samsung had argued that
combining Boer with Upender—which discusses and
compares several communication protocols, including
3 Upender defines CSMA/CA as Carrier Sense Mul-
tiple Access with Collision Avoidance.
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 13
master/slave 4—would render Rembrandt’s patents obvi-
ous. Rembrandt countered that one of skill in the art
would not have been motivated to combine the references
because Upender teaches away from substituting Boer’s
CSMA/CA approach with master/slave. Specifically,
Upender analyzes the tradeoffs between different com-
munication protocols based on various attributes, such as
efficiency, robustness, and cost. Upender concludes that
CSMA/CA is at least as good—and most often, better—
than master/slave in every respect. We conclude that this
disclosure provides substantial evidence to support the
jury’s presumed finding that one of ordinary skill in the
art would not have been motivated to replace the
CSMA/CA protocol already in place in Boer with a mas-
ter/slave arrangement as taught by Upender.
Samsung misses the mark by arguing that we must
find a motivation to combine if we agree with it that there
is not substantial evidence to support a finding that
Upender teaches away from substituting CSMA/CA with
master/slave. Whether a reference teaches away is doc-
trinally distinct from whether there is no motivation to
combine prior art references. See Apple Inc. v. Samsung
Elecs. Co., 839 F.3d 1034, 1051 n.15 (Fed. Cir. 2016) (en
banc) (identifying motivation to combine and teaching
away as “two discrete bases” supporting district court’s
denial of JMOL); see also Star Sci., Inc. v. R.J. Reynolds
Tobacco Co., 655 F.3d 1364, 1374–75 (Fed. Cir. 2011).
Surely a showing that a prior art reference teaches away
from a given combination is evidence that one of skill in
the art would not have been motivated to make that
combination to arrive at the claimed invention. But the
absence of a formal teaching away in one reference does
4 Upender refers to master/slave as the “polling”
protocol, but both parties agree that the two are synony-
mous for the purposes of this case.
14 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
not automatically establish a motivation to combine it
with another reference in the same field.
As such, the jury did not need to find that Upender
taught away from using master/slave in order to find that
there would be no motivation to replace CSMA/CA in Boer
with master/slave. Even if Upender “does not teach away,
its statements regarding users[’] prefer[ences] . . . are
relevant to a finding regarding whether a skilled artisan
would be motivated to combine” Upender with Boer.
Apple, 839 F.3d at 1051 n.15. Therefore, because Up-
ender strongly suggests that master/slave is inferior to
CSMA/CA, substantial evidence supports the jury’s pre-
sumed factual finding that one of skill in the art would
not have been motivated to combine Boer with Upender’s
teaching of master/slave.
The jury’s presumed findings that Boer does not teach
the “different types” limitation and that one of skill in the
art would not have been motivated to combine Boer with
Upender undermine Samsung’s obviousness challenge
against all of the infringed independent claims. Because
substantial evidence supports both of these findings, we
need not address Samsung’s additional obviousness
arguments for the infringed dependent claims. See In re
Fine, 837 F.2d 1071, 1076 (Fed. Cir. 1988) (“Dependent
claims are nonobvious under section 103 if the independ-
ent claims from which they depend are nonobvious.”). We
therefore affirm the district court’s denial of JMOL that
the infringed claims are invalid as obvious.
III. Damages
On appeal, Samsung also challenges the jury’s royalty
award of $15.7 million. Samsung first asserts that the
district court erred in resolving certain damages-related
evidentiary disputes. Applying Fifth Circuit law, we
review these rulings for an abuse of discretion. i4i Ltd.
P’ship v. Microsoft Corp., 598 F.3d 831, 852
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 15
(Fed. Cir. 2010) (applying Fifth Circuit law), aff’d, 564
U.S. 91 (2011).
First, Samsung argues that the district court should
have excluded the testimony of Rembrandt’s damages
expert, Mr. Weinstein, based on the allegedly flawed
methodology he used to calculate his proposed reasonable
royalty rate. In an effort to determine the incremental
value associated with implementing the infringing EDR
functionality, Mr. Weinstein compared the prices of two
Bluetooth chips Samsung purchased from Texas Instru-
ments—one with EDR functionality and the other with-
out. After calculating the price premium Samsung had
paid to procure the EDR chips as compared to the non-
EDR chips, Mr. Weinstein concluded that the reasonable
royalty rate would be between 5 and 11 cents per infring-
ing unit, resulting in a total damages range of $14.5–
$31.9 million.
We see no reversible error in the district court’s deni-
al of Samsung’s motion to exclude Mr. Weinstein’s testi-
mony. Samsung complains that the time periods that
Mr. Weinstein chose to compare the two sets of chips were
ones where Samsung purchased many more non-EDR
chips than EDR chips, making the relative cost of EDR
chips artificially high due to mismatched economies of
scale. Rembrandt responds that Mr. Weinstein testified
in his deposition that the seller of the chips, Texas In-
struments, suggested to him that the data from these
time periods were most suitable for his purposes. Rem-
brandt also explains that Mr. Weinstein aptly focused on
the earliest periods where significant sales of infringing
chips were made because the added value of technology
fades with time. We find these explanations plausible, as
they show that Mr. Weinstein’s royalty calculations were
properly “based on the incremental value that the patent-
ed invention adds to the end product.” Ericsson, Inc. v. D-
Link Sys., Inc., 773 F.3d 1201, 1226 (Fed. Cir. 2014). We
also note that while Mr. Weinstein compared the chips for
16 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
a time period when the non-EDR and EDR chip price
differential was on the high end of the spectrum, Sam-
sung was free to cross-examine Mr. Weinstein on this
issue and the jury’s award of $15.7 million fell within the
low end of Mr. Weinstein’s $14.5–$31.9 million suggested
damages range.
Samsung also takes issue with Mr. Weinstein’s at-
tribution of the chips’ cost differential solely to the addi-
tion of the EDR functionality, which it asserts was not the
only technological difference between the two sets of
chips. Rembrandt responds that all of the technical
expert testimony in the case shows that the major differ-
ence between the chips was the incorporation of EDR and
that Samsung could have cross-examined Rembrandt’s
damages expert on this point, but did not. Regardless,
Samsung’s criticism of Mr. Weinstein’s selected bench-
mark “goes to evidentiary weight, not [its] admissibility.”
Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1319 (Fed. Cir.
2014), overruled on other grounds by Williamson v. Citrix
Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015) (en banc).
Ultimately, we do not find that the district court abused
its discretion in permitting Mr. Weinstein to use the
methodology he adopted.
Mr. Weinstein used a settlement agreement Rem-
brandt entered into with BlackBerry, which was a de-
fendant in this suit before settling, and a licensing
agreement Rembrandt entered into with Zhone Technolo-
gies, Inc., to confirm his proposed royalty rate. On ap-
peal, Samsung argues that it was improper for Mr.
Weinstein to consider the BlackBerry agreement at all
because it is not representative of an arms-length agree-
ment between the parties and, therefore, is inappropriate
for use in determining the reasonable royalty rate. We
hold that the district court did not abuse its discretion in
allowing Mr. Weinstein to discuss the BlackBerry agree-
ment, as our cases allow relevant settlement agreements
to be considered in determining a reasonable royalty rate.
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 17
Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283,
1299–1300 (Fed. Cir. 2015). The BlackBerry settlement
agreement was relevant here because it contained a
license of the very patents Samsung was found to in-
fringe. We are also not convinced by Samsung’s argument
that Mr. Weinstein should not have cited the agreement
at all because BlackBerry would not agree to a particular
per-sale allocation clause Rembrandt wanted to include in
the agreement. Even though BlackBerry did not agree to
that express term, Mr. Weinstein explained his under-
standing of the agreement to be that BlackBerry effective-
ly paid Rembrandt a per-sale amount consistent with his
proposed royalty rate, he was cross-examined on that
point, and the jury was free to consider that testimony.
Samsung also avers that the district court improperly
redacted pertinent information from the BlackBerry
settlement agreement and the Zhone licensing agreement
that would have been necessary for the jury to understand
the context of those agreements. Particularly, Samsung
asserts that by redacting the agreements, the jury was
unable to see how Mr. Weinstein allocated payments
made by BlackBerry and Zhone to arrive at his proposed
royalty rate. We disagree. It was within the district
court’s discretion to redact information from these agree-
ments to prevent exposing confidential business infor-
mation and to avoid jury confusion, and we will not
disrupt that decision as an abuse of discretion.
Finally, Samsung argues that substantial evidence
does not support the jury’s damages award of $15.7 mil-
lion. Because we have rejected Samsung’s challenges to
Mr. Weinstein’s expert presentation on damages, and
because the jury’s award fell within the $14.5–$31.9
million range he suggested, we hold that substantial
evidence supports the jury’s damages award as it relates
to all of Samsung’s infringing sales. As will be discussed
in the next section, however, we remand this case for the
district court to consider in the first instance whether
18 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
Samsung is liable for pre-notice damages due to Rem-
brandt’s purported failure to mark certain licensed prod-
ucts. If the district court determines that Samsung is not
liable for pre-notice damages, the jury’s damages award
should be adjusted to strip out the royalties from pre-
notice sales. The parties agreed at oral argument that
this adjustment involves a pure accounting function that
the district court could perform based on the sales data
already in the record and without holding a new damages
trial. See Oral Arg. at 21:11–22:41 (Samsung), 45:56–
46:46 (Rembrandt), http://oralarguments.cafc.uscourts.gov
/default.aspx?fl=2016-1729.mp3.
IV. Marking
Samsung argues that the district court erred in refus-
ing to bar Rembrandt’s recovery of pre-notice damages
based on Rembrandt’s failure to mark products covered by
a claim Rembrandt later disclaimed. 5 We agree with
Samsung that Rembrandt cannot use disclaimer to avoid
the marking requirement in 35 U.S.C. § 287, and vacate
the judgment of the district court as it relates to marking.
A.
Before trial, Samsung moved to limit Rembrandt’s po-
tential damages award based on its failure to mark prod-
ucts covered by previously-asserted claim 40 of the ’580
5 Rembrandt argues as a threshold matter that
Samsung did not properly preserve this issue by raising it
at trial and, thus, waived it on appeal. We disagree. The
district court ruled on this issue as a matter of law before
trial, and Samsung continually objected to that legal
ruling before the district court. Therefore, the issue has
not been waived and is ripe for appeal. See Lighting
Ballast Control LLC v. Philips Elecs. N. Am. Corp., 790
F.3d 1329, 1338 (Fed. Cir. 2015), cert. denied, 136 S. Ct.
1226 (2016).
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 19
patent. Specifically, Rembrandt had licensed the ’580
patent to Zhone Technologies, Inc., and Samsung alleged
that Zhone sold unmarked products embodying asserted
claim 40 of the ’580 patent. The license agreement be-
tween Rembrandt and Zhone did not require Zhone to
mark its products with the patent number. Pursuant to
the patent marking statute, 35 U.S.C. § 287, Samsung
sought to limit Rembrandt’s damages to those incurred
after Samsung received notice of Rembrandt’s patents,
which, according to Samsung, occurred when Rembrandt
filed its complaint. Eight days later, Rembrandt with-
drew claim 40 from its infringement allegations and filed
a statutory disclaimer pursuant to 35 U.S.C. § 253(a) and
37 C.F.R. § 1.321(a), disclaiming claim 40 in the U.S.
Patent and Trademark Office.
The district court denied Samsung’s motion to bar
Rembrandt’s recovery of pre-notice damages based on
Rembrandt’s disclaimer of claim 40. The court accepted
Rembrandt’s argument that any prior obligation to mark
products embodying claim 40 vanished once it disclaimed
claim 40. Adopting the Magistrate Judge’s recommenda-
tion, the District Judge relied on the proposition that
“[u]nder Federal Circuit precedent, a disclaimed patent
claim is treated as if it never existed.” J.A. 337, 342
(citing Genetics Inst., LLC v. Novartis Vaccines & Diag-
nostics, Inc., 655 F.3d 1291 (Fed. Cir. 2011)).
B.
The patent marking statute provides that
“[p]atentees, and persons making, offering for sale, or
selling within the United States any patented article for
or under them, or importing any patented article into the
United States, may give notice to the public that the same
is patented” by marking the article in a method provided
by the statute. 35 U.S.C § 287(a). Marking under the
statute is permissive, not mandatory. While permissive,
there is a consequence if the patent owner chooses not to
20 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
mark: “In the event of failure so to mark, no damages
shall be recovered by the patentee in any action for in-
fringement, except on proof that the infringer was notified
of the infringement and continued to infringe thereafter,
in which event damages may be recovered only for in-
fringement occurring after such notice.” Id. “A licensee
who makes or sells a patented article does so ‘for or under’
the patentee, thereby limiting the patentee’s damage
recovery when the patented article is not marked.” Am-
sted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d
178, 185 (Fed. Cir. 1994) (citing Devices for Med., Inc. v.
Boehl, 822 F.2d 1062, 1066 (Fed. Cir. 1987)).
Consistent with Supreme Court precedent, we have
repeatedly emphasized that the marking statute serves to
protect the public. The marking statute protects the
public’s ability to exploit an unmarked product’s features
without liability for damages until a patentee provides
either constructive notice through marking or actual
notice. Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,
489 U.S. 141, 162 (1989) (“The notice requirement is
designed ‘for the information of the public,’ [and] . . . [t]he
public may rely upon the lack of notice in exploiting
shapes and designs accessible to all.” (quoting Wine Ry.
Appliance Co. v. Enter. Ry. Equip. Co., 297 U.S. 387, 397
(1936))). The essence of “the marking statute is to en-
courage the patentee to give notice to the public of the
patent.” Crown Packaging Tech., Inc. v. Rexam Beverage
Can Co., 559 F.3d 1308, 1316 (Fed. Cir. 2009) (quoting
Am. Med. Sys., Inc. v. Med. Eng’g Corp., 6 F.3d 1523, 1538
(Fed. Cir. 1993)). More specifically, “[t]he marking stat-
ute serves three related purposes: 1) helping to avoid
innocent infringement; 2) encouraging patentees to give
notice to the public that the article is patented; and
3) aiding the public to identify whether an article is
patented.” Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d
1437, 1443 (Fed. Cir. 1998) (internal citations omitted).
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 21
Rembrandt’s position, adopted by the district court,
effectively provides an end-run around the marking
statute and is irreconcilable with the statute’s purpose.
Allowing Rembrandt to use disclaimer to avoid the conse-
quence of its failure to mark undermines the marking
statute’s public notice function.
In denying Samsung’s motion, the district court relied
on the proposition that a disclaimed patent claim is
treated as if it “had never existed in the patent,” Guinn v.
Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996) (citing Altoona
Publix Theatres, Inc. v. Am. Tri–Ergon Corp., 294 U.S.
477, 492 (1935)), and allowed Rembrandt’s disclaimer to
retroactively excuse its failure to mark. But while we
have held that a disclaimer relinquishes the rights of the
patent owner, we have never held that the patent owner’s
disclaimer relinquishes the rights of the public. Indeed,
our precedent and that of other courts have not readily
extended the effects of disclaimer to situations where
others besides the patentee have an interest that relates
to the relinquished claims. See Kearney & Trecker Corp.
v. Cincinnati Milacron Inc., 562 F.2d 365, 372
(6th Cir. 1977) (recognizing accused infringer’s inequita-
ble conduct defense against original patent claims after
reissue claims secured through inequitable conduct were
disclaimed); Nat’l Semiconductor Corp. v. Linear Tech.
Corp., 703 F. Supp. 845, 850 (N.D. Cal. 1988) (allowing
antitrust and patent misuse counterclaims premised on
disclaimed claims to proceed). Cf. Guinn, 96 F.3d at 1422
(holding disclaimer of an allegedly interfering claim did
not divest the Board of jurisdiction over interference
proceeding). As our marking cases make clear, the mark-
ing statute’s focus is not only the rights of the patentee,
but the rights of the public. See, e.g., Crown Packaging,
559 F.3d at 1316; Nike, 138 F.3d at 1443; Bonito Boats,
489 U.S. at 162. Considering these rights held by the
public, we hold that disclaimer cannot serve to retroac-
22 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
tively dissolve the § 287(a) marking requirement for a
patentee to collect pre-notice damages.
C.
Separate from its disclaimer argument, Rembrandt
also argued to the district court that the marking statute
should attach on a claim-by-claim, rather than on a
patent-by-patent, basis. Applying Rembrandt’s claim-by-
claim approach in this case, for example, would permit
Rembrandt to recover pre-notice damages for Samsung’s
infringement of claims other than claim 40, which is the
only claim that Samsung alleges the unmarked Zhone
product embodied. Samsung disagreed with Rembrandt’s
position at the district court, arguing that the marking
statute attaches on a patent-by-patent basis. Put another
way, Samsung argued that because Rembrandt’s licensee
Zhone sold a product embodying one claim of the ’580
patent (claim 40), Rembrandt may not recover pre-notice
damages for any infringed claim of the patent.
The Magistrate Judge, after deciding Samsung’s mo-
tion to limit damages on the disclaimer ground, expressly
declined to rule on this theory, as did the District Judge.
Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., No.
2:13-CV-213-JRG-RSP, 2015 WL 627971, at *1, *3 & n.4
(E.D. Tex. Feb. 9, 2015). On appeal, Rembrandt did not
present this argument as an alternative basis for affirm-
ing the district court’s marking decision. Oral Arg. at
45:04–45:55, http://oralarguments.cafc.uscourts.gov/
default.aspx?fl=2016-1729.mp3. Rembrandt did concede,
however, that the Zhone product practices claim 40, and
thus that question is no longer a “live dispute” in this
case. Id. at 43:38–45:43.
The patent-by-patent versus claim-by-claim marking
dispute between the parties raises a novel legal issue not
squarely addressed by our past decisions. Although
Rembrandt did not raise this issue on appeal, it has not
waived this argument. See WesternGeco L.L.C. v. ION
REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS 23
Geophysical Corp., 837 F.3d 1358, 1364 n.3
(Fed. Cir. 2016) (holding arguments are not waived if they
involve issues both not decided by district court and
“properly considered moot” until reversal of another
district court ruling). But as we have remarked in earlier
cases regarding legal issues not addressed by the parties:
It is tempting to explore these unanswered ques-
tions, both because they are interesting and be-
cause the parties and the trial court might benefit
from early answers. But, that is a temptation to
be resisted. None are questions directly raised in
this appeal, and the parties have not briefed or
argued them. We thus leave to the trial court in
the first instance the responsibility to address
such questions . . . .
Cardiosom, L.L.C. v. United States, 656 F.3d 1322, 1329
(Fed. Cir. 2011); see also In re Katz Interactive Call Pro-
cessing Patent Litig., 639 F.3d 1303, 1321 (Fed. Cir. 2011)
(remanding legal issue not briefed on appeal for district
court to address on remand). We therefore remand to the
district court to address in the first instance whether the
patent marking statute should attach on a patent-by-
patent or claim-by-claim basis.
CONCLUSION
We have considered Samsung’s remaining arguments
and find them unpersuasive. Accordingly, we affirm the
challenged portion of the district court’s claim construc-
tion order and the district court’s denial of Samsung’s
JMOL motions. We vacate the district court’s denial of
Samsung’s motion to limit damages, and remand that
issue for proceedings consistent with this opinion.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED
24 REMBRANDT WIRELESS v. SAMSUNG ELECTRONICS
COSTS
Each party shall bear its own costs.