IP Law Daily Invalidity, non-infringement rulings vacated for three Wi-LAN patents
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Tuesday, January 17, 2017

Invalidity, non-infringement rulings vacated for three Wi-LAN patents

A federal district court erred in granting summary judgment of non-infringement for two Wi-LAN wireless patents and summary judgment of invalidity for one Wi-LAN wireless patent, the U.S. Court of Appeals for the Federal Circuit has ruled. Because genuine disputes of material fact remained, both rulings were vacated and the case was remanded for further proceedings. Circuit Judge Kathleen O’Malley dissented, in part (Wi-LAN USA, Inc. v. Ericsson, Inc., January 17, 2017, Wallach, E.).

Lawsuit. Wi-LAN USA Inc. and Wi-LAN Inc. (collectively, "Wi-LAN") sued Ericsson Inc. and Telefonaktiebolaget LM Ericsson (collectively, "Ericsson") for the infringement of U.S. Patent No. 8,229,437 ("Pre-Allocated Random Access Identifiers) and U.S. Patent Nos. 8,027,298 and 8,249,014 (both titled "Methods and Systems for Transmission of Multiple Modulated Signals Over Wireless Networks"). The court referred to the latter patents as the "Bandwidth Patents."

The district court found, on summary judgment, that: (1) claims 8 and 18 of the ’437 patent were invalid as anticipated and (2) Ericsson’s accused products did not directly infringe the Bandwidth Patents. The district court also found that a Most-Favored Licensee Provision ("MFL Provision") did not apply to any of the three patents in suit. Wi-LAN appealed the grant of summary judgment of invalidity and non-infringement, and Ericsson cross-appealed the finding that the MFL Provision did not apply to the patents in suit.

Patents in suit. The ’437 patent disclosed systems and methods of "pre-allocating identifiers to wireless devices for use in requesting resources over a random access channel." The patent provided a method for transitioning a cell phone from the coverage area of one base station to the coverage area of another base station. The Bandwidth Patents disclosed a method and apparatus for "requesting and allocating bandwidth in a broadband wireless communication system," whereby "a combination of bandwidth allocation techniques" were used to efficiently allocate physical resources.

Anticipation. Prior art "Mouly" ("The GSM System for Mobile Communications") disclosed the GSM standard for cellular communications. Mouly explained how a "timing advance" was applied to communications between a mobile device and cell towers. The timing advance addressed the overall time that it took for data bursts to travel from the mobile device to the cell tower; it included an offset that was not dependent on the user’s location and a offset that depended on the user’s location.

The timing-advance issue incorporated both synchronous and asynchronous handovers, and both types of handovers involved several processes of transmitting an 8-bit message from the new cell tower, the old cell tower, and the mobile station.

According to the Federal Circuit, the district court made two errors in its analysis, and both errors involved the use of improper evidence at the summary judgment stage. First, the district court weighed the evidence that was presented by Ericsson’s expert (Mark Lanning) and Wi-LAN’s expert (Paul Min) against the disclosures of Mouly, and drew inferences from those facts. However, when ruling on a motion for summary judgment in a jury trial, credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts were all functions of the jury, not functions of the judge.

Second, the district court cited unsupported statements by Ericsson’s counsel in support of its conclusion that the record did not show that the "RIL3-RR HANDOVER ACCESS message" used short-access bursts on a dedicated channel for asynchronous handovers. Because those statements constituted attorney argument, not record evidence, relying on them was improper.

The Federal Circuit also found that a genuine dispute remained about what Mouly disclosed. According to the court, Mouly was ambiguous in its explanation of whether access bursts in synchronous and asynchronous handovers occurred on a random access channel (RACH). Ultimately, Mouly’s statements were "at least highly ambiguous" with respect to the question of whether synchronous or asynchronous handover messages occurred on a dedicated channel or a RACH. In addition, the parties’ experts showed that a dispute was present with respect to the correct interpretation, and that type of ambiguity was best resolved by the factfinder.

Because the district court should not have found that a dispute of material fact was lacking, summary judgment of invalidity was improper. The summary judgment ruling was therefore vacated and the matter was remanded for further proceedings.

Non-infringement. After finding that the district court had properly construed "bandwidth" to mean "data transmission resources in a particular time period," the Federal Circuit addressed the district court’s erroneous finding that the defendants did not infringe the Bandwidth Patents.

The district court found that Wi-LAN did not identify a genuine issue of material fact regarding direct infringement, and thus concluded that Ericsson’s accused products did not infringe the Bandwidth Patents. The court erred, however, because it improperly ignored conflicting evidence and placed a greater weight on Ericsson’s evidence. The Federal Circuit thus vacated the grant of summary judgment of non-infringement and remanded the matter for further proceedings.

Ericsson’s cross-appeal. Ericsson challenged the district court’s finding that the MFL Provision of the parties’ Patent and Conflict Resolution Agreement (PCRA) did not apply to the patents in suit, but the Federal Circuit found that the Provision was inapplicable. Although the circuit court agreed with the district court’s conclusion that Ericsson was not entitled to a "most favored licensee" status with respect to the patents in suit, it reached that conclusion in a different way. In the Federal Circuit’s view, Ericsson was entitled to a most favored licensee status only for the patent or patents that had triggered the MFL provision (i.e., U.S. Patent No. 6,549,759, which Wi-LAN had asserted against unrelated third-party products).

Reading the relevant provision of the PCRA in its entirety, the Federal Circuit concluded that the scope of the license would cover the patent or patents that were asserted by Wi-LAN against Ericsson for infringement; therefore, its scope was limited to pre-PCRA patents such as the ’759 patent. Reading the scope of the provision to apply to any post-PCRA patent would result in an unreasonable interpretation of the MFL Provision as a whole, the court decided.

Ultimately, the Federal Circuit ruled that "once the MFL Provision [wa]s triggered, the scope of that license [wa]s limited to the patent that triggered the MFL Provision." Because the patents in suit were excluded by that analysis, the circuit court ruled that the district court had not erred in finding that the MFL Provision did not apply to the patents in suit.

Dissent. Circuit Judge Kathleen O’Malley wrote separately to dissent, in part. Judge O’Malley disagreed with two of the majority’s conclusions: (1) that the district court had erred in granting summary judgment of invalidity on the asserted claims of the ’437 patent and (2) that the MFL Provision of the PCRA, once triggered, was limited to the patent or patents that triggered that Provision.

The case is Nos. 2015-1766 and 2015-1794.

Attorneys: Matthew D. Powers (Tensegrity Law Group, LLP) for Wi-LAN USA Inc. and Wi-LAN Inc. Paul D. Clement (Kirkland & Ellis LLP) for Ericsson Inc. and Telefonaktiebolaget LM Ericsson.

Companies: Wi-LAN USA Inc.; Wi-LAN Inc.; Ericsson Inc. and Telefonaktiebolaget LM Ericsson

MainStory: TopStory Patent TechnologyInternet FedCirNews

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