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MobileMedia Ideas LLC v. Apple Inc.

United States Court of Appeals, Federal Circuit

March 17, 2015

MOBILEMEDIA IDEAS LLC, Plaintiff-Cross-Appellant
v.
APPLE INC., Defendant-Appellant

Page 1160

[Copyrighted Material Omitted]

Page 1161

Appeals from the United States District Court for the District of Delaware in No. 1:10-cv-00258-SLR-MPT, Judge Sue L. Robinson.

STEVEN M. BAUER, Proskauer Rose LLP, Boston, MA, argued for plaintiff-cross-appellant. Also represented by JUSTIN J. DANIELS, SAFRAZ ISHMAEL, JOHN M. KITCHURA, JR., JOHN E. ROBERTS.

GEORGE ALFRED RILEY, O'Melveny & Myers LLP, San Francisco. CA, argued for defendant-appellant. Also represented by LUANN LORAINE SIMMONS, MELODY DRUMMOND HANSEN, TIM D. BYRON; XIN-YI ZHOU, Los Angeles, CA.

Before TARANTO, BRYSON, and CHEN, Circuit Judges.

OPINION

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Chen, Circuit Judge.

This is a patent infringement case relating to four patents owned by plaintiff and cross-appellant MobileMedia Ideas LLC (MobileMedia). Defendant and appellant Apple Inc. (Apple) appeals from a final judgment of the United States District

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Court for the District of Delaware finding claim 73 of U.S. Patent No. 6,427,078 (the '078 patent) and claim 23 of U.S. Patent No. 6,070,068 (the '068 patent) to be infringed and not invalid. MobileMedia cross-appeals from the district court's final judgment finding claims 5, 6, and 10 of U.S. Patent No. 6,253,075 (the '075 patent) and claims 2--4 and 12 of U.S. Patent No. RE 39,231 (the '231 patent) not to be infringed, and claims 5, 6, and 10 of the '075 patent to also be invalid.

As to Apple's appeal, we (i) affirm the district court's judgment that claim 73 of the '078 patent is not invalid, (ii) reverse the district court's judgment that claim 73 of the '078 patent is infringed, and (iii) reverse the district court's judgment that claim 23 of the '068 patent is not invalid. As to MobileMedia's cross-appeal, we (i) affirm the district court's judgment that claims 5, 6, and 10 of the '075 patent are invalid, (ii) vacate the district court's judgment that claims 2--4 and 12 of the '231 patent are not infringed because the judgment is based on an erroneous claim construction, and (iii) remand to the district court for further proceedings.

I. Background

MobileMedia is a company formed by MPEG LA, LLC, Nokia Corporation (Nokia), and Sony Corporation of America. MobileMedia filed suit against Apple, asserting infringement of sixteen patents by various Apple products. Apple responded with several affirmative defenses, alleging, among other things, invalidity of all sixteen patents, and also counterclaimed for declaratory judgments of noninfringement. The district court bifurcated the issues of willfulness and damages for purposes of discovery and trial. During the course of the ensuing litigation, the parties stipulated to a dismissal of the claims and counterclaims related to two patents, and MobileMedia deferred the resolution of four other patents to a later phase of the litigation. The district court then granted Apple's summary judgment motions of noninfringement or invalidity for five of the remaining patents, including Apple's summary judgment motion of noninfringement of claims 2--4 and 12 of the '231 patent. MobileMedia Ideas LLC v. Apple Inc., 907 F.Supp.2d 570, 627--28 (D. Del. 2012) ( MobileMedia SJ ). MobileMedia then selected claims 5, 6, and 10 of the '075 patent, claims 23 and 24 of the '068 patent, and claim 73 of the '078 patent to assert at trial against Apple and its accused iPhone 3G, iPhone 3GS, and iPhone 4 products. MobileMedia Ideas LLC v. Apple Inc., 966 F.Supp.2d 439, 447 (D. Del. 2013) ( MobileMedia JMOL ). At trial, Apple argued that its accused iPhones did not infringe any of the asserted claims and that certain combinations of prior art references rendered each of the asserted claims invalid as obvious under 35 U.S.C. § 103. The jury returned a verdict finding that (i) Apple's accused products directly infringed the asserted claims, (ii) Apple did not induce infringement of the asserted claims, and (iii) none of the asserted claims were invalid as obvious. Id.

After the district court entered a judgment consistent with the jury's verdict, Apple renewed a previously-filed motion for judgment as a matter of law (JMOL) under Rule 50(b) of the Federal Rules of Civil Procedure (FRCP), and in the alternative, moved for a new trial under FRCP 59(a). Id. The district court granted Apple's JMOL motion of (i) noninfringement and invalidity of all asserted claims of the '075 patent, id. at 457--59, and (ii) invalidity of claim 24 of the '068 patent, id. at 464--68. The district court denied Apple's motion with respect to (i) invalidity of claim 23 and noninfringement of claims 23 and 24 of the '068 patent, id. at 464--68, and (ii) invalidity and noninfringement of

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claim 73 of the '078 patent, id. at 472--74. The district court also denied Apple's motion for a new trial, id. at 474--77, and entered a judgment consistent with its partial grant of Apple's JMOL motion. Joint Appendix (J.A.) 1--5. Both parties agree that the district court's judgment is final except for an accounting, which includes the determination of damages and willful infringement. See Robert Bosch LLC v. Pylon Mfg. Corp., 719 F.3d 1305, 1320 (Fed. Cir. 2013) (en banc).

Apple now appeals the district court's denial of its JMOL motion of noninfringement and invalidity of claim 73 of the '078 patent and claim 23 of the '068 patent. In particular, Apple challenges (i) the district court's claim construction of two means-plus-function limitations in claim 73 of the '078 patent and one limitation in claim 23 of the '068 patent, (ii) the district court's determination that substantial evidence supports the jury's finding that a person having ordinary skill in the art would not have been motivated to combine two references to render claim 73 of the '078 patent obvious, and (iii) the district court's conclusion that claim 23 of the '068 patent would not have been obvious in view of a prior art reference, together with the common knowledge of one skilled in the art.

For its part, MobileMedia cross-appeals (i) the district court's grant of Apple's JMOL motion of noninfringement and invalidity of claims 5, 6, and 10 of the '075 patent, and (ii) the district court's grant of summary judgment of noninfringement of the '231 patent. In particular, MobileMedia challenges (i) the district court's finding that MobileMedia failed to present evidence that Apple's accused iPhones met a required limitation of the asserted claims of the '075 patent, (ii) the district court's conclusion that no reasonable juror could find the asserted claims of the '075 patent to be nonobvious over the prior art, and (iii) the district court's claim construction of a means-plus-function limitation in the asserted claims of the '231 patent.

Because a party may appeal a judgment that is final except for an " accounting," we have jurisdiction over both Apple's appeal and MobileMedia's cross-appeal under 28 U.S.C. § 1292(c)(2).

II. Discussion

We review decisions on motions for summary judgment and JMOL under the law of the regional circuit. Energy Transp. Grp. Inc. v. William Demant Holding A/S, 697 F.3d 1342, 1350 (Fed. Cir. 2012). The Third Circuit reviews grants and denials of motions for summary judgment de novo, applying the same standard of review as the district court. Gonzalez v. Sec'y of Dep't of Homeland Sec., 678 F.3d 254, 257 (3d Cir. 2012). Similarly, the Third Circuit reviews district court JMOL decisions de novo. Pitts v. Delaware, 646 F.3d 151, 155 (3d Cir. 2011). We must view the record in the light most favorable to the verdict winner, drawing all reasonable inferences in its favor. Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1095 (3d Cir. 1995). Only if the record is " critically deficient of the minimum quantum of evidence" on which a jury could reasonably base its verdict does the Third Circuit affirm a grant of JMOL. Pitts, 646 F.3d at 155 (internal citation omitted). JMOL, however, may be appropriate when there is a purely legal basis required for reversal that does not depend on rejecting the jury's findings on the evidence at trial. Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199, 211 (3d Cir. 2009).

III. Apple's Appeal

A. The '078 patent (camera phone)

The '078 patent is directed to a " small-sized, portable and hand-held work station," such as a notebook computer, that

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includes a camera unit, a data processing unit, a display, a user interface, and at least one memory unit. '078 patent, Abstract. The specification describes how this " notebook computer" uses the attached camera unit to take a picture of items such as business cards, handwritten text, and figures. Id. at 5:15--21 (business cards), 5:43--45 (circles or lines), and 5:37--38 (handwritten text). Software applications, such as graphics and optical character recognition (OCR) software, convert the captured images into text or rudimentary graphical data for subsequent use by the notebook computer. Id. at 5:21--58. According to the specification, adding a camera unit to the notebook computer allows a user to " scan different written and/or drawn information into the memory of the notebook computer quickly and easily." Id. at 6:17--20. A " digitizer pad" may also be part of the notebook computer, which uses " known technique[s]" to recognize input from a pen and convert figures drawn on the digitizer pad into bitmap images. Id. at 7:6--10.

The notebook computer can include a cellular mobile phone unit, which uses " conventional" analog modem or digital GSM technology. Id. at 3:37--49. Coupled with a miniature speaker and microphone, the GSM interface allows the notebook computer to " be used in the same way as a conventional hand-held telephone." Id. at 3:49--53. The notebook computer can also transmit SMS (Short Message Service) and e-mail messages through its GSM interface. Id. at 8:7--17.

Although the invention is described throughout the specification as a " notebook computer," the specification also contemplates that the device " may also be a radiotelephone." Id. at 8:18--20. Claim 73 of the '078 patent recites such an embodiment of the claimed invention:

73. A portable cellular mobile phone comprising:
a built in camera unit for obtaining image information; a user interface for enabling a user to input signals to operate the camera unit;
a display for presenting image information obtained by the camera unit;
a microprocessor adapted to control the operations of the camera unit in response to input signals from the user interface, and to process image information received by the camera unit; and
means, coupled to said microprocessor, for transmitting image information processed by said microprocessor to another location using a radio frequency channel; and
wherein the camera unit comprises:
optics for obtaining image information;
an image sensor for obtaining image information; and
means for processing and for storing at least a portion of the image information obtained by the camera unit for later recall and processing.

Id. at 16:1--19 (emphasis added).

1. Invalidity

Apple contends that the district court erred by denying its JMOL motion that the '078 patent is invalid as obvious over two references: Japanese patent application publication no. H6-133081 (Kyocera) and U.S. Patent No. 5,550,646 (Lucent). Kyocera discloses a mobile phone with a built-in camera unit, a user interface, and a viewfinder display. Kyocera, Abstract; J.A. 57596. The camera unit includes an image sensor that captures image data through a lens. Kyocera, ¶ 10; J.A. 57601. Lucent discloses a portable phone with an integrated camera unit, a keypad interface, and an LCD display.

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Lucent, 3:21-33, 4:1-31. The Lucent device includes a microprocessor that controls camera operations, id. at 3:24-29, and processes pictures in order to " enhance presentability," id. at 3:47-48. The device stores these pictures in RAM memory. Id. at 4:32-33, 4:40-42, and 6:46-62. The device can then transmit the pictures using a " built-in cellular telephone" and fax modem. Id. at 2:4-5, 2:61-66, and 5:26-47.

During trial, Apple contended that the Kyocera mobile phone, together with the microprocessor controlling the Lucent device, disclose all limitations of claim 73.[1] Apple's expert further testified that the two references discuss similar technologies, and a person having ordinary skill in the art--someone with a Bachelor of Science degree in electrical engineering, computer engineering, or the equivalent, and between two and four years of experience in the field[2]--would have understood the benefits and cost advantages of combining the references. MobileMedia JMOL, 966 F.Supp.2d at 471. MobileMedia responded with testimony from its expert that such a skilled artisan would not have been able to combine the Lucent microprocessor with the Kyocera mobile phone during the relevant time frame due to the " complexity and sophistication of software and hardware integration and development." Id. MobileMedia did not present evidence of objective indicia of nonobviousness. J.A. 19477-78.

The district court determined that there was no material dispute between the parties at trial that Kyocera and Lucent together disclose all the limitations of claim 73. MobileMedia JMOL, 966 F.Supp.2d at 471. The district court also found that the " jury implicitly chose to believe" the testimony of MobileMedia's expert instead of the testimony of Apple's expert regarding the alleged motivation to combine the two references. Id. at 472. Therefore, the district court found that substantial evidence supported the jury's verdict that the '078 patent was not invalid, and denied Apple's JMOL motion.

On appeal, Apple argues that the combination of the Kyocera and Lucent references is merely the predictable use of prior art elements according to their established functions, and therefore would have been obvious. First, Apple contends that Lucent discloses a microprocessor that performs signal processing to " enhance presentability" of captured pictures, and that its expert testified that a skilled artisan would have recognized that modifying Kyocera with Lucent provides the benefit of improved picture quality. Second, Apple asserts that the Lucent microprocessor can be programmed to provide functionality similar to that of the Kyocera mobile phone, and that its expert testified that skilled artisans would have understood the cost advantages of using a programmable microprocessor for the relevant operations of the Kyocera mobile phone. Apple also notes that Lucent discloses a ...


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