Federal Circuit Says Patent Expert Witnesses Wrongly Barred, Resurrects Smartphone Action in Apple v. Motorola

Case:

(Apple Inc. et al v. Motorola Inc., et al., Nos. 2012–1548, 2012–1549, U.S. Court of Appeals for the Federal Circuit; April 25, 2014

Background:

Smartphone manufacturers Apple Inc. and Motorola Inc. asserted patent infringement claims against each other. They sought declaratory judgments of non-infringement and invalidity of patents related to smartphone technology.

Following claim construction, Judge Richard A. Posner of the U.S. District Court for the Northern District of Illinois granted summary judgment of non-infringement with respect to certain claims and excluded the vast majority of both parties’ damages expert evidence for the remaining claims. The court granted summary judgment that neither side was entitled to any damages or an injunction. The parties cross-appealed.

Patent Expert Witnesses:

On appeal, Apple argued that the proposed testimony of its damages expert regarding the ′949 and ′263 patents is admissible. Motorola argued that the proposed testimony of its damages expert for the ′898 patent is admissible.

Admissibility of Patent Expert Witnesses:

The U.S. Court of Appeals for the Federal Circuit found that, regarding the ′949 patent, the District Court improperly excluded Brian W. Napper because the court based its damages analysis on an incorrect claim construction. The appeals court said this overly narrow view of the claims led the trial court to conclude, incorrectly, that much of Napper’s analysis was too far removed from the asserted claims.

While the panel said this error alone would require reversal and remand because the erroneous claim construction here tainted the district court’s damages analysis. The District Court also “erred by not considering the full scope of the asserted claims, questioning the conclusions of Apple’s expert, and substituting its own opinion, rather than focusing on the reliability of the principles and methods used or the sufficiency of the facts and data relied upon.”

“At no point did the court ask or consider whether Napper had used reliable principles and methods, or sufficient data, to value the entire scope of the asserted claims,” the panel said.

Considering the entire scope of the asserted claims and the correct claim construction, Napper employed reliable principles and methods, reliably applied them, and relied upon legally sufficient facts or data, the panel said.

Regarding Apple’s ‘263 patent, the panel again found the trial court erred in excluding Napper’s expert testimony. The panel said Apple’s expert relied on information provided by a technical expert hired by Apple, and this was the sole reason for excluding his opinions.

“The district court’s exclusion of Napper’s proposed testimony was erroneous,” the panel said. “The district court’s decision states a rule that neither exists nor is correct. Experts routinely rely upon other experts hired by the party they represent for expertise outside of their field.”

The District Court also excluded all of Motorola’s proposed testimony related to damages for infringement of the ′898 patent. The appeals panel affirmed the exclusion of the testimony that relied on Motorola’s licensing expert, Charles Donohoe. However, the District Court erred in excluding the remainder of Motorola’s proposed expert testimony. Motorola’s analysis of comparable licenses used “reliable principles and methods,”. Motorola reliably applied them to sufficient facts and data to estimate the overall value of the ′898 patent.

“As noted above, on the basis of our reversal of the district court’s admissibility decisions, we vacate the court’s grant of summary judgment regarding damages for Apple’s ′949 and ′263 patents and for Motorola’s ′ 898 patent,” the panel held.

Further, the panel reversed the District Court’s grant of summary judgment that Apple was not entitled to any damages for infringement of the ′ 647 patent and that neither party was entitled to an injunction.