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Alfred E. Mann Foundation for Scientific Research v. Cochlear Corp.

United States Court of Appeals, Federal Circuit

November 17, 2016

ALFRED E. MANN FOUNDATION FOR SCIENTIFIC RESEARCH, ADVANCED BIONICS, LLC, Plaintiffs-Cross-Appellants
v.
COCHLEAR CORPORATION, NKA COCHLEAR AMERICAS, COCHLEAR LTD., Defendants-Appellants

         Appeals from the United States District Court for the Central District of California in No. 2:07-cv-08108-FMO-SH, Judge Fernando M. Olguin.

          Thomas M. Peterson, Morgan, Lewis & Bockius LLP, San Francisco, CA, argued for plaintiff-cross-appellant Alfred E. Mann Foundation for Scientific Research. Also represented by Michael John Lyons, Ehsun Forghany, Jason Evan Gettleman, Corey Ray Houmand, Jacob Joseph Orion Minne, Lindsey M. Shinn, Palo Alto, CA; Esther K. Ro, Daniel Grunfeld, Los Angeles, CA.

          Donald Manwell Falk, Mayer Brown, LLP, Palo Alto, CA, for plaintiff-cross-appellant Advanced Bionics, LLC. Also represented by Paul Whitfield Hughes, Washington, DC.

          J. Michael Jakes, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, argued for defendants-appellants. Also represented by DAVID MROZ; Bruce G. Chapman, Sheppard, Mullin, Richter & Hampton LLP, Los Angeles, CA.

          Before Newman, Chen, and Hughes, Circuit Judges.

          OPINION

          HUGHES, CIRCUIT JUDGE.

         The Alfred E. Mann Foundation for Scientific Research sued Cochlear Corporation and Cochlear Ltd. for infringing claims 1 and 10 of U.S. Patent No. 5, 609, 616 and claims 6-7 of U.S. Patent No. 5, 938, 691, which cover implantable cochlear stimulators. After conducting a jury trial and a bench trial on separate issues, the district court entered judgment finding claim 10 of the '616 patent infringed and claim 1 of the '616 patent and claims 6-7 of the '691 patent invalid for indefiniteness. The court also granted Cochlear's JMOL of no willful infringement and its motion for a new trial on damages. Both parties appeal. Because we find that the district court did not err in its infringement determination or in finding claims 6-7 indefinite, but did err in finding claim 1 indefinite, we affirm-in-part and reverse-in-part. We vacate and remand the district court's determination regarding willfulness in light of the Supreme Court's decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S.___, 136 S.Ct. 1923 (2016). We also conclude that we do not have jurisdiction over the damages issue.

         I

         The Alfred E. Mann Foundation for Scientific Research (The Foundation) owns the '616 and '691 patents, and formed Advanced Bionics, LLC (Advanced Bionics) to manufacture implants. The Foundation sued Cochlear Corporation and Cochlear Ltd. (Cochlear) for infringing the '616 and '691 patents, and Advanced Bionics was later added as an involuntary plaintiff. Claims 1 and 10 of the '616 patent and claims 6-7 of the '691 patent are at issue in this appeal.

         The patents are directed to an ear implant with telemetry functionality for testing purposes, and generally describe a two-part system comprising an external wearable system with a wearable processor (WP) and headpiece, and an internal implantable cochlear stimulator (ICS). Sound is transmitted from the headpiece to the WP, which processes the transmissions before sending them to the ICS. The ICS processes the sound to stimulate the cochlea-the organ that converts sound to nerve impulses-via implanted electrodes, thereby allowing the user to hear. See '616 patent, col. 3 ll. 10-24.[1] In addition, the system allows testers, usually physicians, to measure and adjust various parameters of the implant to assess whether the device is functioning properly. Id. at col. 32 ll. 34-54. The tester may observe the implant's functionality through the "physician's tester." As depicted in Figure 6, the physician's tester is a modification of the previously described WP. Id. at col. 51-55.

         (IMAGE OMITTED)

         The tester may interact with the ICS by adjusting various knobs on the control panel 302, such that the physician's tester measures and displays different parameters on visual display 304. Id. at col. 32 1. 65-col. 33 1. 18. Table 7 of the patents describes "typical parameter settings" for the control knobs, which in turn dictate the parameters that are measured and displayed. Id. at col. 33 ll. 14-24. These parameter settings include impedance, voltage, and output current. Id. at col. 33 ll. 26-54.

         Cochlear's accused system includes an implant with a pair of electrodes, a speech processor worn behind the patient's ear, and diagnostic software used to test the implant. After a physician inserts the implant and electrodes, he can use the diagnostic software to send stimulation signals through the electrodes and determine the impedance, which is the resistance to electrical current. The accused system displays the results of the impedance testing by depicting the electrodes as either red or green, where an electrode displayed in red indicates that the electrode has a circuit condition. In addition to displaying a red or green electrode, Cochlear's system may also display the calculated impedance value. Cochlear's system does not display the measured voltage across the two electrodes.

         On January 23, 2014, the jury found that Cochlear willfully infringed claims 1 and 10 of the '616 patent and claims 6-7 of the '691 patent. The jury also found that all of the asserted claims were not invalid under §§ 102 or 103. The jury awarded approximately $131 million in damages. J.A. 59-70.

         On March 31, 2015, the court conducted a bench trial on equitable estoppel, laches, inequitable conduct, prosecution history, and indefiniteness, and determined that all of the asserted claims except for claim 10 of the '616 patent were invalid for indefiniteness. Id. at 47-56. On the same day, the court denied Cochlear's JMOL of noninfringement as to claim 10 of the '616 patent, granted Cochlear's JMOL of no willful infringement, and granted Cochlear's motion for a new trial on damages. Id. at 10-24.

         Cochlear appeals the court's denial of its JMOL of noninfringement as to claim 10 of the '616 patent. The Foundation and Advanced Bionics (collectively, Cross-Appellants) appeal the court's indefiniteness findings as to claim 1 of the '616 patent and claims 6-7 of the '691 patent, grant of Cochlear's JMOL of no willful infringement, and grant of Cochlear's motion for a new trial on damages. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

         II

         We first address the district court's denial of Cochlear's JMOL of noninfringement of claim 10 of the '616 patent. We review the denial of a motion for judgment as a matter of law under the law of the regional circuit. Verizon Servs. Corp. v. Cox Fibernet Va., Inc., 602 F.3d 1325, 1331 (Fed. Cir. 2010). The Ninth Circuit reviews the district court's denial de novo. Rivero v. City & Cty. of San Francisco, 316 F.3d 857, 863 (9th Cir. 2002). Judgment as a matter of law is appropriate where there is no legally sufficient evidentiary basis for a reasonable jury to find for the party on that issue. Fed.R.Civ.P. 50(a)(1). Cochlear raises two arguments on appeal: first, the district court erred in construing claim 10, and second, even under the district court's construction, Cochlear's accused system does not infringe. We address each of these arguments in turn.

         A

         Cochlear argues that claim 10 of the '616 patent requires that an infringing system must display the voltage between two electrodes. Cochlear Br. at 31-32. We review claim construction de novo, and underlying factual determinations concerning extrinsic evidence for clear error. Teva Pharm. USA, Inc. v. Sandoz, Inc., 574 U.S. ___, 135 S.Ct. 831, 841 (2015). We do not find Cochlear's arguments persuasive based on the claim language, specification, and prosecution history. See Phillips v. AWH Corp., 415 F.3d 1303, 1313-14 (Fed. Cir. 2005) (en banc).

         Claim 10 of the '616 patent reads, in relevant part:

A method of testing an implantable tissue stimulating system comprising: . . .
[f] selectively monitoring the at least one pair of the multiplicity of electrodes to measure a voltage associated therewith at the same time the stimulation signals are applied thereto;
[g] generating stimulator status-indicating signals representative of the measurements made within the implanted stimulator;
[h] transmitting the stimulator status-indicating signals to an external receiver coupled to the external transmitter;
[i] receiving and processing the status-indicating signals to produce processed status-indicating signals which convey information regarding the status of the implanted stimulator, including the measurements made within the implanted stimulator, and
[j] displaying the processed status-indicating signals, whereby the status of the implanted stimulator, including the results of the measurements made within the implanted stimulator, may be made known.

'616 patent, col. 35 1. 43-col. 36 1. 7 (emphases added).

         Cochlear first argues that voltage measurements must be included in the processed status-indicating signals because part (i) of the claim states that "processed status-indicating signals . . . convey information . . . including the measurements made within the implanted stimulator." See Cochlear Br. at 36 (emphasis added). Cochlear reasons that part (i) "does not permit processing that calculates impedance values from the voltage measurements without maintaining the voltage measurements for display." Id. We find Cochlear's argument unpersuasive in light of the claim language as a whole.

         While it is true that the "measurements made within the implanted stimulator" in part (i) are the voltage measurements according to the plain language of the claim and the court's construction, see J.A. 13, part (g) defines the pre-processed status-indicating signals as merely "representative" of these measurements, see '616 patent, col. 35 ll. 60-62. According to part (i), the signals described in part (g) are further processed such that they only "convey information regarding the status of the implanted stimulator." Id. at col. 35 1. 66-col. 36 1. 3. Parts (g) and (i) together make clear that the status-indicating signals, regardless of whether they are processed or not, only have to convey information about the voltage measurements, but do not require such information to be displayed. Furthermore, Cochlear's construction would require us to find that to "convey" the voltage measurements, the signals in part (i) must "display" this information. There is no intrinsic support for this definition, which would also render part (j) redundant under Cochlear's proposed construction. Merck & Co. v. Teva Pharm. USA, Inc., 395 F.3d 1364, 1372 (Fed. Cir. 2005) ("A claim construction that gives meaning to all the terms of the claim is preferred over one that does not do so.").

         Cochlear next argues that the "whereby" clause in part (j) is material to patentability such that voltage must be made available for display. Cochlear Br. at 38. The district court determined that the "whereby" clause merely provides a more illustrative expression of the "displaying the status-indicating signals" limitation, and provides no additional restrictions on the claim. J.A. 26436. We agree. There is no support for Cochlear's construction, particularly because parts (g) and (i) of claim 10 make clear that the processed status-indicating signals only have to convey information about the voltage measurements, but do not have to include the measurements for display. In addition, Cochlear's construction would require us to find that the term "may be made known" means "available for display." There is no support for this interpretation, particularly because the limitation states that only the processed status-indicating signals must be displayed.

         Cochlear's proposed construction also conflicts with the specification. As depicted in Figure 6, the control knob 308 (the right most knob) is one of three knobs that dictate "the parameters measured and displayed by the ICS and Physician's Tester combination." '616 patent, col. 33 ll. 14-18. Positions 1-3 correspond to the impedance, and are distinct from positions 4-7, which correspond to the voltage. Id. at ll. 36-40 (Table 7). Because the specification envisions that impedance, voltage, or the current may be displayed, the voltage measurement does not have to be displayed as Cochlear argues.

         The prosecution history also does not support Cochlear's proposed claim construction. In response to a § 112 rejection, the patentee amended "voltages/current" to "voltage" in part (f), and in response to a § 103 rejection, added parts (i) and (j). J.A. 15834-35. Cochlear argues that the applicant made this amendment to specify that the voltage must be displayed. Cochlear Br. at 38. But, it is clear that the patentee amended the claim to distinguish the invention from the prior art based on its realtime testing abilities. See J.A. 15843-44 (noting that the invention allowed a physician to perform real-time testing, where a sensed parameter (voltage) "is sent back to the physician's tester as part of a feedback signal were [sic] it is displayed or otherwise processed. Such action thereby provides, in effect, a 'snapshot', in real time, of the selected parameter . . . ."). Though the Examiner allowed the claim because "the prior art does not show or suggest the measuring of the electrode voltage for external display, " id. at 15850, an examiner's unilateral statement does not give rise to a clear disavowal of claim scope by the applicant, see Salazar v. Procter & Gamble Co., 414 F.3d 1342, 1347 (Fed. Cir. 2005). Here, the patentee did not argue that the voltage must be displayed, instead focusing its arguments on the real-time features of the invention.

         In light of the intrinsic evidence, we reject Cochlear's proposed claim construction.

         B

         Cochlear argues that even under the district court's construction, its accused system does not infringe. Infringement is a question of fact that we review for substantial evidence when tried to a jury. Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1309 (Fed. Cir. 2009). Cochlear asserts that even though its system may display the impedance value, the voltage value is not "made known" as required by part (j) of claim 10. Cochlear's Br. at 43-44. The relationship between voltage, impedance, and current is defined by Ohm's Law, where voltage = current x impedance. Because there is sufficient evidence that the accused system sets forth the current level associated with each measurement, J.A. 4700, and voltage may be measured by multiplying the current level by the accused system's displayed impedance value, there is substantial evidence that Cochlear's accused system infringes claim 10.

         III

         We next turn to Cross-Appellants' cross-appeal on the court's indefiniteness determinations. The ultimate determination of indefiniteness is a question of law that we review de novo, although any factual findings by the district court based on extrinsic evidence are reviewed for clear ...


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