IP Law Daily New trial granted to Comcast on obviousness of patent, but not for damages award
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Friday, August 18, 2017

New trial granted to Comcast on obviousness of patent, but not for damages award

By John W. Scanlan, J.D.

A Comcast patent involving the transfer of messages over cellular networks was not invalid for obviousness because there was no substantial evidence of a motivation to combine prior art or the likelihood of success in doing so, the U.S. District Court for the Eastern District of Pennsylvania has ruled. The court granted Comcast’s post-trial motions for judgment as a matter of law and a new trial on obviousness. In addition, it rejected Sprint’s challenge to patent eligibility. Finally, although the court denied Comcast’s request for a new trial on damages, it allowed Comcast to receive pre- and post-judgment interest (Comcast Cable Communications, LLC v. Sprint Communications Co., LP, August 16, 2017, DuBois, J.).

Comcast and Sprint brought claims of patent infringement against each other. After several claims were withdrawn, the court granted summary judgment to Comcast on Sprint’s counterclaims for infringements of two of Sprint’s patents, leaving only Comcast’s claim for infringement on its U.S. Patent No. 6,885,870 (the ’870 patent). This patent, "Transferring of Message," stated a method for "for inquiring about information relating to a [wireless] terminal of a cellular network from the cellular network, from a messaging server external to the cellular network." Comcast asserted three claims of the ’870 patent against Sprint, including Claim 113, which included four restrictions. A jury found that Sprint had infringed on all three asserted claims; it also found that the first two claims were valid and that Claim 113 was not anticipated but was invalid for being obvious. It awarded Comcast $1.5 million in damages as a lump-sum royalty for the life of the ’870 patent for infringement of the first two claims. Comcast filed a renewed motion for judgment as a matter of law, asserting that Claim 113 was not obvious, and in the alternative for a new trial on this issue. It also moved for a new trial on damages and to amend the final judgment to include pre- and post-judgment interest. Sprint filed a renewed motion for judgment of matter of law, asserting that the ’870 patent was invalid.

Obviousness. The court granted both Comcast’s motion for judgment as a matter of law and its alternative motion for a new trial on obviousness after concluding that Claim 113 of the ’870 of the patent was not obvious. It first found that there was substantial evidence that four limitations of the claim had been disclosed in the prior art. Based on the testimony of Comcast expert Dr. Robert Akl, the court found that there was evidence that Claim 113’s "said first limitation" had been disclosed in a Patent Cooperation Treaty (PCT) publication ("Sonera") that used an "Invoke ID" in a manner similar to that of the said first limitation. The "same element" limitation—that an "inquiry is sent to, and the determining is performed by, the same element of the cellular network"—also had been disclosed by Sonera’s "service node." Even though the "external messaging server" limitation was not disclosed by Sonera or the knowledge of a skilled artisan, it had been disclosed in a second PCT publication ("Vuoristo"). Based on the testimony of Sprint expert Dr. Nathaniel Polish, the court found substantial evidence that the limitation on the "mapping" of the said first identifier to an internal modifier not performed by a Home Location Register was disclosed by Sonera although not by Vuoristo.

However, Spring had not shown by clear and convincing evidence by its expert that a skilled artisan would have been motivated to combine the Sonera and Vuoristo prior art to create the invention described in Claim 113 or that any combination would have been likely to succeed. The expert did not identify any specific motivation to combine the two, and his testimony that any need or problem known in the field can provide this motivation was merely conclusory. Simply demonstrating that each of a patent’s elements was independently known in prior art does not by itself prove a patent obvious. Sprint had the burden of proving a reasonable likelihood that a skilled artisan would have had a chance of success in combining the prior art, but did not present such evidence; the mere possibility that they could be combined was not substantial evidence of the possibility of success.

Eligibility for patent. The court disagreed with Sprint’s argument that the ’870 patent was ineligible under Sec. 101 of the Patent Act, finding that its claims implemented a specific improvement in cellular networking rather than being directed toward an abstract idea. Although Sprint argued that the patent merely described how a process that can be performed by a human can be performed by a computer—citing the testimony of Comcast’s expert comparing the process to the actions of a switchboard operator—this testimony was merely an analogy to assist the jury, and the patent actually described a method of sending an inquiry between two elements on a network that could only be performed on a computer. Finding that three recent decisions published by the Federal Circuit after its prior decision was issued did not impact its conclusion, the court denied Sprint’s renewed motion for judgment as a matter of law.

Damages. The court denied Comcast’s motion for a new trial on damages because there was sufficient evidence to support the jury’s verdict, but granted its motion to amend the judgment to add pre- and post-judgment interest. The jury verdict matched the opinion of Sprint’s damages expert, who had opined that damages should be $1.5 million, based in part upon Comcast’s 2010 purchase of the ’870 patent and other patents from Nokia for $600,000. The parties had agreed that damages should reflect a reasonable royalty based on a hypothetical successful negotiation between the parties just before the infringement started, which would have been in April 2005, when Nokia owned the patent. The court found that the expert’s opinion had adequately accounted for the economic demand in the growing text messaging market at the time, and while the experts for Comcast and Sprint disagreed as to the strength of Nokia’s bargaining positions in 2005 and in 2010, there was sufficient evidence that they were comparable. The fact that Comcast may have had more bargaining power than Sprint because Sprint needed to license the patent to stay in business but Comcast did not was not so significant as to render the patent sale agreement and the other evidence insufficient to support the verdict. Comcast had the opportunity at trial to dispute the weight to be given to this evidence, but the jury agreed with Sprint. Sprint’s expert’s use of forward citation analysis to strengthen his confidence in his damages opinion did not make his opinion unreliable, and his statements regarding other Sprint patents were made in passing and did not make the evidence supporting the verdict insufficient.

Finally, the court awarded pre-judgment interest at 4.7 percent, which was the weekly average one-year constant maturity Treasury yield rate beginning in February 2006, rather than the six percent Pennsylvania statutory rate sought by Comcast. Courts have frequently used the T-bill rate for this purpose, and the T-bill rate was sufficient to compensate Comcast for its lost use of royalties because there was no evidence that it would have either invested the royalties or borrowed money at a higher rate. The court observed that the T-bill rate is required for post-judgment interest, and awarded post-judgment interest of 0.82 percent, the T-bill rate for the week preceding the issuance of the original judgment in February 2017.

The case is No. 12-859.

Attorneys: Anthony I. Fenwick (Davis Polk & Wardwell LLP) for Comcast Cable Communications, LLC, Comcast Cable Holdings, LLC and TVWorks, LLC. Brian C. Riopelle (McGuire Woods LLP), Dawn Michele Sigyarto (Harkins Cunningham LLP) and Erin P. Loucks (Shook, Hardy & Bacon LLP) for Sprint Spectrum L.P.

Companies: Sprint Spectrum L.P.; Comcast Cable Communications, LLC; Comcast Cable Holdings, LLC; TVWorks, LLC

MainStory: TopStory Patent TechnologyInternet PennsylvaniaNews

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