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Finding Does Not Vitiate Claim Limitation

02-1571
December 09, 2003

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Last Month at the Federal Circuit - January 2004

Judges:  Lourie (author), Mayer, and Newman (concurring-in-part and dissenting-in-part)

In Ericsson, Inc. v. Harris Corp., No. 02- 1571 (Fed. Cir. Dec. 9, 2003), the Federal Circuit reversed a grant of JMOL of noninfringement and affirmed a denial of JMOL relating to damages.

Ericsson, Inc. (“Ericsson”) owns U.S. Patent No. 4,961,222 (“the ‘222 patent”), which is directed to an apparatus for supplying power to a telephone set in a telecommunications system. The claimed invention is designed to reduce the idling power that is dissipated by amplifiers that transmit speech signals across a subscriber line. Ericsson sued Harris Corporation (“Harris”) for infringement of claims 1 and 2 of the ‘222 patent based on Harris’s sales of three accused Subscriber Line Interface Circuits (“SLICs”). A jury found that Harris’s accused devices did not literally infringe, but did infringe under the DOE. The district court, however, granted Harris’s motion for JMOL of noninfringement.

Claim 1 requires that the speech-signal amplifiers “only supply power” to the telephone set in the off-hook position. The evidence showed that the speech-signal amplifiers in the accused devices supply some power to the telephone set in the on-hook position, and Ericsson argued equivalence. But, the district court concluded that a determination of equivalence would vitiate the “only supply power” limitation in the claims.

The Federal Circuit found error with the district court’s ruling. Concerning literal infringement, the Court ruled that the “only supply power” limitation refers to power supplied by the speech-signal amplifiers. Ericsson convinced the Federal Circuit that transistors in the accused devices are part of the control circuitry that merely switches the speech-signal amplifiers on and off, not the speech-signal amplification circuitry. Thus, the Federal Circuit found the evidence sufficient to support a reasonable jury’s finding that any power supplied by the transistors in the accused devices is not supplied by the speech-signal amplifiers and, therefore, does not vitiate the “only supplied power” limitation. Moreover, the evidence showed that power supply during on-hook times occurs less than 0.1% of the time in the accused product. The Court ruled that the jury reasonably could have concluded that this operation was insubstantially different from the claimed invention under the DOE.

The jury awarded Ericsson damages in the amount of $3.5 million for lost profits due to lost sales, $645,000 for lost profits due to price erosion, and $136,000 as a reasonable royalty. The Federal Circuit concluded that substantial evidence supported the jury’s verdict for all three damages awards, noting that although an inelastic market may be rare, Ericsson’s expert produced credible economic evidence showing that an inelastic market in this instance would nonetheless support lost profits.

Judge Newman concurred-in-part and dissented-in-part. In her opinion, the claim limitation at issue had been narrowed during the prosecution history, and, as a result, under the Festo precedent, the DOE was not available for that limitation.