Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Godo Kaisha IP Bridge 1 v. TCL Communication Technology Holdings Limited, No. 19-2215 (August 4, 2020).
IP Bridge sued TCL for infringement of two IP Bridge patents. At trial, “IP Bridge’s theory of infringement hinged on what it told the jury were two ‘bedrock facts’: that the patents-in-suit are essential” to the Long-Term Evolution (LTE) standard for wireless broadband communication for mobile devices and data terminals and “that TCL’s accused devices are LTE-compatible.” The jury found TCL liable for infringement based on its sales of LTE standard-compliant devices, such as mobile phones and tablets. TCL moved for judgment as a matter of law asserting IP bridge’s theory of infringement was flawed. Specifically, IP Bridge relied on Fujitsu v. Netgear to support proving infringement by reference to industry standards. TCL asserted that Fujitsu represents a “‘narrow exception’ to proving infringement in the standard way,” and only applies where the patent owner asks the district court to assess essentiality in the context of claim construction. The district court denied TCL’s motion. IP Bridge filed post-trial motions seeking supplemental damages and an accounting to address all adjudicated infringing product sales through the date of the verdict and ongoing royalties for all of TCL’s LTE standard-compliant products, “both adjudicated and non-adjudicated.” The district court granted IP Bridge’s requested relief. TCL appealed on the issues of infringement and royalties.
On appeal, the Federal Circuit affirmed on all issues. The Court’s written opinion, however, focused only on “TCL’s contention that whether a patent is essential to any standard established by a standard setting organization is a question of law to be resolved in the context of claim construction.” The Court explained that it has already endorsed standard compliance as a way of proving infringement in cases involving standard essential patents, but that its prior decisions had not addressed who determines the standard-essentiality of the patent claims at issue. The Court rejected TCL’s assertion that the determination is reserved for the district court during claim construction. The Court instead held that, where “there are material disputes of fact regarding whether asserted claims are in fact essential to all implementations of an industry standard, the question of essentiality must be resolved by the trier of fact in the context of an infringement trial.”