Vacating a $110 million judgment against Finnegan client TCL Communication

In a precedential opinion, the U.S. Court of Appeals for the Federal Circuit reversed the Eastern District of Texas’s ruling of patent eligibility, and as a result, vacated the entire judgement—worth at least $110 million—against Finnegan client TCL Communication. The Federal Circuit invalidated the asserted claims under 35 U.S.C. § 101 because they are directed to an abstract idea.

Ericsson sued TCL in the Eastern District of Texas for patent infringement, after which TCL moved for summary judgment of patent ineligibility. The district court denied the summary judgment motion, and the case went to trial. The jury found that TCL willfully infringed and awarded Ericsson $75 million in damages. The court enhanced the award by $25 million for willful infringement and awarded another $10 million in pre-judgment interest plus an undetermined amount in post-judgment interest.

Finnegan was brought on to handle the appeal. It argued that Ericsson inconsistently asserted the patent claims narrowly at summary judgment (for patent eligibility) and broadly at trial (for infringement). Pointing to this inconsistency, Finnegan successfully argued that the claims amounted to nothing more than the abstract idea of controlling access to resources. In its opinion, the Federal Circuit rejected Ericsson’s attempt to import limitations from the specification into the claims and held Ericsson responsible for its past characterization of the claims’ breadth, which cut against its patent-eligibility position on appeal.

Because it invalidated the asserted claims, the Federal Circuit vacated the entire judgment against TCL. TCL had also raised arguments on appeal regarding damages and willfulness, but the Federal Circuit did not reach those arguments because they were moot. The Federal Circuit further awarded costs to TCL. Based on that award, Finnegan further persuaded the Eastern District of Texas to tax $2.35 million in costs.