IP Law Daily ASUS wins judgment of non-infringement and invalidity as to four of five Avago patents
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Thursday, November 10, 2016

ASUS wins judgment of non-infringement and invalidity as to four of five Avago patents

By Robert Margolis, J.D.

Asustek Computer, Inc. (ASUS) has won partial summary judgment dismissing certain infringement claims on four of the five patents owned by Avago Technologies General IP (Singapore) PTE, Ltd. The federal district court in San Francisco found that (1) ASUS did not infringe claims with respect to three of the patents, (2) a claim of the fourth patent is invalid, and (3) there is a genuine issue of material fact as to whether ASUS infringed claims of the fifth patent (Avago Technologies General IP (Singapore) PTE, Ltd. v. Asustek Computer, Inc., November 9, 2016, Chen, E.).

‘148 Patent. The ‘148 patent relates to an orthogonal frequency division modulation ("OFDM") communication system and to synchronization techniques for improving the system’s operation. Avago alleged both literal infringement and infringement under the doctrine of equivalents as to two of the claims of the ‘148 patent. The court found no literal infringement because, as ASUS argued, the accused products add synchronization to data signals after modulation, while the ‘148 patent requires that such synchronization occur before modulation. As to doctrine of equivalents infringement, the court agreed with ASUS’s argument that prosecution history estoppel precludes Avago’s from recovering. In its patent prosecution, Avago had distinguished the ‘148 patent from a prior art reference based on the difference in timing of adding the synchronization signal, before modulation as opposed to after. Therefore, Avago is estopped from arguing in this case that the difference in timing between the requirements of the ‘148 patent and ASUS’s accused products makes no substantive difference, the court held. Thus, ASUS was granted partial summary judgment on noninfringement of two of the claims within the ‘148 patent, on both literal and doctrine of equivalents theories.

Likewise, the court held that two additional claims within the ‘148 patent, based on demodulating, were not infringed for the same reasons as the claims based on modulating, the difference in timing. Finally, the court granted ASUS partial summary judgment precluding Avago from pursuing pre-suit damages for any infringement of the ‘148 patent, because Avago provided no evidence that it or its licensees marked their products, as required by 35 U.S.C. §287(a).

‘087 Patent. The ‘087 relates to digital video decoding/decompression. The court first precluded testimony from one of Avago’s experts based on what the court termed "Avago’s leisurely pace" in making required disclosures. The court found that Avago’s lack of diligence was "not in keeping with the spirit and function of the infringement disclosure rules of this court" and was prejudicial to ASUS. Having excluded the expert’s proposed testimony, the court granted partial summary judgment on the ‘087 patent. ASUS argued that a "system controller" for purposes of the ‘087 patent must be hardware, which is inconsistent with Avago’s infringement position that a "system controller" could be software. After analyzing the language of the claims of the ‘087 patent, as well as the patent specification, the court agreed with ASUS.

‘830 Patent. The ‘830 patent generally relates to the art of audio/visual data compression and transmission. Avago alleged that ASUS products infringe several claims of the ‘830 patent. The court first precluded Avago’s expert’s testimony as to the ‘830 patent for the same lack of diligence as with respect to the ‘087 patent. Having done so, it granted ASUS partial summary judgment for non-infringement of the ‘830 patent as well. But even if it had permitted the testimony, summary judgment would still be granted to ASUS, the court held, since Avago’s infringement claim depended on the same construction of "controller" as being either hardware or software that the court had previously rejected with respect to the ‘087 patent.

‘387 and ‘663 Patents. The ‘663 patent is a continuation of the ‘387 patent and relates to an improved method for the binarization of data in an MPEG data stream. Because there was no dispute between the parties that two of the claims of the ‘663 patent required a certain ordering, and ASUS products do not follow the prescribed order, the court granted partial summary judgment as to those claims. However, because there was disputed expert testimony as to the ordering requirement in other claims, partial summary judgment was denied as to those claims, both as to literal infringement and doctrine of equivalents infringement.

ASUS also contended that one of the claims of the ‘387 patent is invalid as a matter of law as an unpatentable abstract idea pursuant to 35 U.S.C. §101. In conducting the two-step Alice analysis for invalidity, the court found on step one that the claim is directed to an abstract idea, binarization. The fact that the claim combines two binarization algorithms "does not change its fundamental nature as a rule of mathematics," which is an unpatentable abstract idea, the court held. Turning to Alice step two, the court found that there was no "inventive concept" sufficient to make the claim patent eligible. It rejected Avago’s argument that the combination of two binarization methods was sufficiently inventive, since all it really amounted to was the creation of a new mathematical formula. "Even a new mathematical formula, however novel, is not itself patentable," the court held. Thus, the court granted partial summary judgment to ASUS on this claim of the ‘387 patent.

Damages. ASUS also moved to exclude the testimony of Avago’s damages expert on what a reasonable royalty would be for all of the patents at issue except the ‘148 patent. The court agreed with ASUS’s argument that the expert’s testimony was not sufficiently reliable, based on his failure to apportion the royalty rate found in a licensing agreement among the patents at issue and other patents covered by the agreement. Further, his division of the royalty rate among the non-‘148 patents was arbitrary, the court held.

The case is No. 3:15-cv-04525-EMC.

Attorneys: Daniel Shaw Young (Swanson & Bratschun LLC) and David E. Sipiora (Kilpatrick Townsend & Stockton LLP) for Avago Technologies General IP [Singapore] PTE Ltd. Michael J. Newton (Alston & Bird LLP) for ASUSTeK Computer Inc. and ASUS Computer International.

Companies: Avago Technologies General IP [Singapore] PTE Ltd.; ASUSTeK Computer Inc.; ASUS Computer International

MainStory: TopStory Patent CaliforniaNews

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