CARNEGIE MELLON UNIVERSITY v. MARVELL TECHNOLOGY GROUP, LTD. et al
Filing
901
OPINION indicating that, for reasons stated within, the Court denies Marvell's Motion for Judgment as a Matter of Law, or in the Alternative, New Trial on Non-Damages Issues 805 , and Marvell's Motion for Judgment as a Matter of Law, New Trial And/Or Remittitur With Respect To Damages 807 . The Court grants CMU's Motion for a Finding of Willful Infringement and Enhanced Damages 790 , in part, on willfulness, and reserves its ruling on enhanced damages for a forthcoming opinio n. The Court also reserves its rulings on Marvell's Motion for Judgment on Laches 802 , CMU's Motion for Permanent Injunction, Post-Judgment Royalties, and Supplemental Damages 786 , and CMU's Motion for Prejudgment and Post-Judgment Interest 788 , for a memorandum opinion that will be filed in due course. Signed by Judge Nora Barry Fischer on 9/23/13. (jg)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CARNEGIE MELLON UNIVERSITY,
)
)
)
)
)
)
)
)
)
)
Plaintiff,
vs.
MARVELL TECHNOLOGY GROUP, LTD.
et al.,
Defendants.
Civil Action No. 09-290
Judge Nora Barry Fischer
OPINION
I.
INTRODUCTION
This is a patent infringement case brought by Plaintiff, Carnegie Mellon University
(“CMU”), against Defendants Marvell Technology Group, Ltd. and Marvell Semiconductor, Inc.
(collectively “Marvell”), alleging that Marvell has infringed two of its patents, U.S. Patent Nos.
6,201,839 (the “‘839 Patent”) and 6,438,180 (the “‘180 Patent”) (collectively, the “CMU
Patents”). CMU contends that Marvell’s infringement was willful. (Docket No. 461). Marvell
counters that the CMU Patents are invalid. (Docket No. 465). This matter was tried before a jury
for four weeks, with jury selection starting on November 26, 2012. (Docket No. 760). A number
of motions for Judgment as a Matter of Law (“JMOL”) were made before the verdict was
rendered. (Docket Nos. 699; 701; 703; 731; 738; 740; 742; 747). The Court denied these motions
on the record1 on December 21, 2012. (Docket No. 759). The case was then presented to the jury.
After deliberations, the jury entered a verdict on December 26, 2012 in favor of CMU on
infringement, validity, and willfulness, awarding damages in the amount of $1,169,140,271.00.
(Docket No. 762).
1
Rather than state its reasons on the record, the parties requested the Court articulate its denial in a written
opinion. (Docket No. 764 at 99).
1
Following the trial, the Court entertained post-trial motions, wherein the parties: (1)
renewed their earlier JMOL contentions; (2) moved for a new trial on several grounds; (3)
argued the equitable defense of laches; and (4) requested a permanent injunction, post-judgment
royalties, supplemental damages, interest, enhanced damages, as well as attorney fees.2 (Docket
Nos. 786-811). These matters have been completely briefed (Docket Nos. 823-829; 832-837;
849-855; 857-863), and the Court heard argument on same from May 1 through May 2, 2013.
(Docket No. 873).3 The Court writes now to explain its reasoning for denying the pre-verdict
motions for JMOL, and to rule on the renewed JMOLs, the Motions for New Trial, and Motion
for a Remittitur.
II.
FACTUAL BACKGROUND4
A. Technology in Suit
The patents-in-suit are generally directed to the method of sequence detection in high
density magnetic recording sequence detectors. See ‘839 Patent col.16 ll.20-23.
1. Hard Disk Drive Data Recordings
Hard disk drives (“HDD”) contain a platter or disk that holds data on concentric tracks.
(Docket No. 673 at 154). The device bears a visual resemblance to the classic record player.
(Id.). Just as a record player has a needle attached to the tip of the arm, an HDD has a “read
head” that reads and writes data onto these tracks. (Id.). Each track is made up of a track width,
and this track width is broken into millions of bit regions. (Id.). The track is made of magnetic
2
The Court has denied CMU’s request for Attorney Fees, without prejudice. (Docket No. 884).
3
The parties had also filed their hearing slides. (Docket Nos. 874; 875). The transcript of these proceedings
was then filed on May 15, 2013. (Docket Nos. 880; 881). In August, they provided a joint status report with an
update on pertinent technology and financial information as well as a notice of related case authority. (Docket Nos.
889; 891; 893; 896; 897).
4
The Court now sets forth the pertinent facts for a general understanding of the case. Later in this Opinion,
the Court will discuss additional evidence as it relates to a particular issue. The Court is mindful that in deciding a
motion for judgment as a matter of law, the Court must view the evidence in the light most favorable to the nonmoving party. Galena v. Leone, 638 F.3d 186, 196 (3d Cir. 2011).
2
material. (Id.). The bit regions are magnetized to store data in the form of “zeros” and “ones.”
(Id.). As the track moves underneath the read head, the read head picks up the fields emanated
from these magnetic regions on the track and turns the fields into read back signal samples. (Id.
at 155). However, the read back signal samples are not exactly equal to what is actually written
on the disk. (Id. at 156). For instance, the read back signal may read “0.3” when a “zero” was
written on the track. (Id.). These discrepancies occurring during the read back process are
referred to as “noise.” (Id.).
2. Viterbi-Like Detector and the Trellis Concept
A Viterbi-like read channel detector found in the HDD takes the read back signal samples
and determines the sequence of symbols written on the disk using a trellis. (Id. at 157-158). This
process is called “sequence detection.” (Id. at 158). A trellis section is used to represent a string
of bits sitting on a medium. (Id.). There are four potential sequences of two bits, called states: 01,
11, 00, 10; and they can be connected by branches. (Id. at 162-163).
A trellis is used to represent a string of these bits; for example, a three-bit string of 011,
would be represented by a “01” connected by a branch to “11.” (Id.). One trellis section includes
all possible bit sequences. (Id.). In this instance, a single trellis section of 011, 010, 111, 110,
001, 000, 101, 100 is represented as follows:
3
(Docket No. 771 at Ex. C at14). A trellis can then be created to represent a sequence of any
length. For example, a six bit sequence is represented as follows:
(Id. at 18). Through this trellis, one can trace a path that is equivalent to a specific sequence of
symbols. (Id.). For example 100101, is shown below:
(Id. at 17).
The detector determines the “best path” through the trellis, meaning the best or most
likely written sequence on the disk, using branch metric values. (Docket No. 673 at 169). The
read back signal samples are taken by the detector to compute the branch metric.5 (Id. at 170).
The path with the lowest branch metric values becomes the detected sequence. (Id.). Thus, the
detector calculates the path with the lowest cumulative branch metric value to determine the
detected sequence of zeros and ones written on the disk. (Id. at 172).
5
One form of computation uses Euclidean branch metrics, which would be = (r – (the bit value of either zero
or one at the point in the trellis))2. (Docket No. 673 at 171). A read back signal of .3 would result in (.3 - 0) 2 = .09 or
(.3 - 1) 2 = .49. (Id.). Whichever option gives a value closest to “zero” represents the best guess. In this example, the
read back signal most likely represents a “zero” on the drive. (Id.). If the “r” value was .9, the branch metric would
be (.9 - 0) 2 = .81 or (.9 - 1) 2 = .01, and the likely signal on the disk is a “one.” As indicated at trial, the magnetic
recording disk drive industry no longer uses Euclidean branch metrics. (Id.).
4
3. Noise
Bit regions are not homogenous. (Id. at 175). Rather, they are made up of small tiles or
magnetic grains that create regions of magnetization that do not fall within straight bit regions on
the track. (Id.). As the bit regions become narrower in high density recording and more bits are
packed onto a smaller area, there will be fewer grains per bit region. (Id. at 176). With fewer
grains, islands of grains may develop in which the detector cannot accurately read the data. (Id.
at 176-177). This is shown below in a diagram in which green represents “zeros,” and blue
represents “ones.”6
(Docket No. 771 at Ex. C at 24). So, as the density of the recording increases, the amount of
noise or uncertainty in the signal also increases. (Docket No. 673 at 179). As seen below, the
amount of noise is also affected by the specific sequence of bits written on the track.
6
The Court notes that these figures represent how the technology was presented to the jury in teaching this
difficult area of technology. Accordingly, they are simplified explanations. The technology tutorial materials contain
more in-depth explanations of the technology. See (Docket Nos. 108; 109).
5
(Docket No. 771 at Ex. C at 25). This is correlated signal-dependent noise, because the noise
signals from one boundary to the other move together, either attracting or moving away from
each other. (Docket No. 673 at 179).
Noise was previously assumed to be white, or flat, at all time instances and in all
branches.7 (Id. at 183-184). Using this noise assumption in determining disk signals worked in
the low density environment of the 1970s and 1980s. (Id. at 184). A Viterbi-like detector
computed Euclidean branch metric values based on the assumption that the noise was white.
(Id.). Next, the industry used another assumption, that of correlated noise, where the noise had
structure but the structure was the same regardless of the symbol sequence (i.e., written
symbols). (Id. at 186). The current assumption is that of correlated signal-dependent noise. (Id. at
193). This is media noise in the read back signal, whose noise structure is attributable to a
specific sequence of symbols. (Id.). Below is a comparison of the three forms:
7
This is referred to as a white Gaussian noise assumption. (Docket No. 673 at 184).
6
(Docket No. 771 at Ex. C).
4. The CMU Patents
With the last model of signal-dependent noise, the detected sequence is obtained by
maximizing the likelihood function. (Docket No. 673 at 206-207). The CMU Patents start by
showing that such a likelihood function is dependent on all the read back signals and all written
symbols from the entire disk. (Docket No. 673 at 206-207). This is expressed as:
‘839 Patent Eq. 1.
As there are billions of symbols on the disk, the likelihood function is broken up into
smaller per sample functions. (Docket No. 673 at 208). The CMU Patents derived a function
based on the observed signal samples; postulated a sequence of written symbols; then applied
certain mathematical manipulations to turn the function into a quotient of a likelihood function,
as seen below. (Id. at 214-215).
7
‘839 Patent Eq. 4-6. The resulting function can be used to create different embodiments, as
disclosed in the CMU Patents. (Docket No. 673 at 220). One embodiment is called the
correlation matrices embodiment, expressed in Equation 13 of the ‘839 Patent:
‘839 Patent Eq. 13; (Docket No. 673 at 221).
Another form of embodiment is the Finite Impulse Response (“FIR”) embodiment. The
FIR filter coefficients operate on a plurality of signal samples and are different for each specific
sequence of written symbols. (Docket No. 673 at 225-226). When applied to the FIR
embodiment, the coefficients account for the structure of signal dependent noise attributable to
that specific sequence. (Id. at 227). Once the FIR has been applied to all of the sequences to
account for the noise of a specific sequence, a Viterbi-like detector can work on the result. (Id. at
228).
As the recording density increases, such detectors become better compared to signal
insensitive detectors. (Id. at 234). There is little benefit to increasing the amount of data on a disk
if it cannot be accurately read. (Id. at 90). The patents’ solution constitutes the “optimal”
8
detector, such that when the media noise is the dominant factor there is no better solution. (Id. at
70-71; Docket No. 677 at 170).
Media noise became increasingly significant as the industry moved from longitudinal to
perpendicular recording around 2005. (Docket No. 678 at 53-53, 114, 226).8 Media noise has
become the main limiting factor in accurately reading bits from the disk, with 90% of the noise
in read channels coming from media noise. (Docket No. 673 at 54). Consequently, academic
institutions and private industry undertook research to address this media noise problem at both a
theoretical level and product implementation level. (Id. at 40-41, 141; Docket No. 707 at 233).
B. CMU/DSSC Background
Carnegie Mellon University is a leading research university located in Pittsburgh,
Pennsylvania, with highly ranked engineering, information technology, and computer science
programs. (Docket No. 671 at 187). (Id.). Dr. Jared Cohon had been the President of the
University since 1997.9 (Id.). In response to the storage industry’s decreasing presence in the
8
One of CMU’s experts, Dr. Bajorek “worked at Komag, between ‘96 and 2005, [ ] and led the team that
developed the perpendicular magnetic recording disk that became standard in the whole industry.” (Docket No. 678
at 553-54). Perpendicular recording is where “the information is stored vertically above the surface of the disk,
instead of horizontally. And by storing it vertically, you can pack more bits, you can store more data by having
denser data on that disk,” but the “the price [ ] paid in that transition was to also see a dramatic increase in media
noise.” (Id at 55-56.). Below is picture depicting longitudinal versus perpendicular recording:
See HITACHI GLOBAL STORAGE TECHNOLOGIES, HITACHI RESEARCH AND TECHNOLOGY, available at
http://www.hgst.com/tech/techlib.nsf/techdocs/F47BF010A4D29DFD8625716C005B7F34/$file/PMR_white_paper
_final.pdf.
9
Dr. Cohon stepped down from his position as President on July 1, 2013. His successor is Dr. Subra Suresh,
former director of the National Science Foundation. See CMU WELCOMES PRESIDENT ELECT, at
http://www.cmu.edu/homepage/society/2013/winter/cmu-welcomes-president-elect.shtml (last visited September 20,
2013).
9
United States, CMU created the Magnetics Technology Center (MTC) in 1983 with the support
of industrial funding. (Docket No. 682 at 27). In collaboration with the National Science
Foundation, the MTC became the Data Storage Systems Center (“DSSC”) in 1990. (Id.). The
DSSC is an interdisciplinary center at CMU, funding long-term research and development
through federal grants, university investments, and corporate sponsorship. (Docket No. 682).
Since 1983, business partners have become “associate members” of the DSSC, by paying a
yearly $250,000 fee, sponsoring faculty chair positions, hiring students and making other
investments in the University. (Docket No. 682 at 41-42). DSSC Members at one point or
another have included IBM, Seagate, 3M, Hitachi, and Western Digital. (Id. at 43-44).
Dr. Mark Kryder10 testified at trial regarding the history and nature of the DSSC. (Id.).
Dr. Kryder was the cofounder and director of the DSSC until 1998, when he left to join Seagate
where he eventually became the Chief Technology Officer (“CTO”). (Id. at 25). Upon retiring
from Seagate, he returned to CMU and the DSSC. (Id.). According to Dr. Kryder, associate
members of the DSSC received disclosures of inventions created in the DSSC and enjoyed a
royalty-free license to same. (Id. at 43-44). The patents-in-suit were invented within the DSSC.
(Id. at 43-44). As such, the parties agree that the DSSC members at the relevant time had a
royalty-free license to the patents.11 (Id.). However, Marvell was never a DSSC Member. (Id. at
42).
10
Dr. Kryder is a professor of electrical and computer engineering at CMU. He has a B.S. in electrical
engineering and Ph.D. in electrical engineering and physics from the California Institute of Technology (“Cal
Tech”). (Docket No. 682 at 25-26). He taught at the University of Regensburg and worked at the IBM TJ Watson
Research Center before joining CMU. (Id.). His expertise is in magnetic recording heads and media. (Id.at 83). He is
knowledgeable about signal processing on a high level, but is not an expert in the field. (Id.).
11
The parties debate the relevant time period of the inventions as well as the rights in effect at different points
in time. The parties further contest which DSSC companies use (or used) the patents pursuant to their DSSC
licenses. (Docket No. 673 at 203-204, 253-257, 268; Docket No. 682 at 161-162, 234-236; 244; Docket No. 726 at
235).
10
C. Development and Acquisition of CMU Patents
From 1995 to1998, Professor Jose Moura12 of the Department of Electrical and Computer
Engineering and doctoral student Aleksandar Kavcic13 worked to develop a method for
addressing problems in high density and media noise problems related to new generation
sequence detectors. (Docket No. 673 at 42). On March 10, 1997, they submitted an invention
disclosure form to CMU’s technology transfer office regarding same. (Pl. Ex. 156). The
provisional patent application was filed in May 1997, with the final patent application being filed
on April 3, 1998. (Pl. Ex. 1). This patent which was granted on March 13, 2001 is referred to as
the ‘839 Patent. (Id.). On March 1, 1999, they filed for a second patent as a continuation in part
of the first. (Pl. Ex. 2). It was granted on August 20, 2002, and it is referred to as the ‘180 Patent.
(Id.). In 1998 and 2000, the pair published papers: “Correlation-Sensitive Adaptive Sequence
Detection” in IEEE Transactions on Magnetics and “The Viterbi Algorithm and Markov Noise
Memory” in IEEE Transactions on Information Theory, describing their work. (Pl. Ex. 169,
183).
In 1998, Aleksandar Kavcic received his Ph.D. and left CMU to join the faculty at
Harvard University. (Docket No. 673 at 149). He is currently a professor of electrical
engineering at the University of Hawaii. (Docket No. 673 at 149). Dr. Moura remains a professor
of electrical engineering at CMU. (Id. at 37). Pursuant to CMU’s policy, half of any proceeds
that CMU realizes on these patents, including from this lawsuit, are split between the inventors,
Dr. Kavcic and Dr. Moura. (Docket No. 671 at 194-195).
12
Dr. Moura is originally from Mozambique. (Docket No. 673 at 36). He obtained his undergraduate degree
in electrical engineering from the Technical University of Lisbon, Portugal, and his Ph.D. from Massachusetts
Institute of Technology (“MIT”). (Id. at 36-37). He was a professor at the Technical University of Lisbon and MIT,
before becoming a professor at CMU in 1986. (Id.).
13
Dr. Kavcic is originally from Yugoslavia and obtained a B.S. in electrical engineering from a university in
Germany before receiving his Ph.D. in electrical and computer engineering from CMU. (Docket No. 673 at 149150).
11
D. CMU’s Marketing of the CMU Patents
CMU’s Center for Technology Transfer and Enterprise Creation, currently headed by
Robert Wooldridge,14 is tasked with managing the University’s intellectual property. (Docket
No. 682 at 96). In August 2003, Carl Mahler, Esq.,15 a subordinate of Robert Wooldridge, sent
fourteen letters to several companies, including Marvell, Toshiba, Western Digital, Fujitsu,
Samsung, Hitachi, and Maxtor, asking if they would be interested in licensing the ‘180 and ‘839
Patents. (Pl. Ex. 422, 431; Def. Exs. 225; 226; 227; 229; 230; 231; 232; 233; 234; 1573). Not all
of these companies make read channel or system-on-a-chip (“SOC”) products. (Docket No. 682
at 149-153). Two companies contacted CMU declining to license the technology; the rest never
responded. (Id.).
CMU entered into a subscription agreement with its long-time corporate partner Intel in
September 2004. (Def. Ex. 255). For a yearly administration fee of $75,000, Intel would have the
option to license patents from a rotating pool.16 (Docket No. 682 at 185). If the inventors
approved the licensing, Intel could license a patent for a one-time fee of $200,000. (Def. Ex. 255;
Docket No. 682 at 183). In early 2005, it was proposed that the ‘180 Patent join the pool and in
an email regarding same, the inventors also expressed interest in having said patent be part of the
14
Robert Wooldridge is the Director of the Center for Technology Transfer and Enterprise Creation at CMU
since 2001 and has been with the Center for approximately fifteen years. (Docket No. 682 at 96).
15
Mr. Mahler was not called as a witness for either party.
16
CMU’s relationship with Intel went beyond this subscription agreement. (Docket No. 682 at 97-100). CMU
calculated that its partnership with Intel included investment in research, sponsorships, grants, fellowships, and the
creation of the Intel Science and Technology Centers on campus. (Id.). All of these investments totaled
approximately $150 million of funding for the University. (Id.).
12
pool.17 (Def. Ex. 263). Regardless of the inventors’ recommendation, the Patent was not licensed
by Intel. (Docket No. 682 at 100).
E. Marvell and Pertinent Staff
A leading fabless semiconductor company, Marvell was founded in 1995 by Dr. Sehat
Sutardja,18 along with his wife, Weili Dai, and brother, Dr. Pantas Sutarjda. (Docket No. 707 at
35). Defendants, Marvell Semiconductor Inc., a California corporation, and Marvell Technology
Group, Ltd., a Bermuda corporation, both have their primary place of business in Santa Clara,
California. (Id. at 29-34). Marvell designs and develops a wide variety of integrated circuit
devices, including read channel and SOC devices, used in storage products such as hard disk
drives. (Id.). Marvell researches, designs, and develops its read channel and SOC products,
including the accused products in this case, in Santa Clara. (Id.). The company has grown from
seven employees to nearly 7,000 employees, and is now a publicly traded company. (Id. at 53).
Dr. Sehat Sutardja is the current President and CEO; Ms. Dai is the Vice President and
General Manager of Communications and Consumer Business; and Dr. Pantas Sutardja is the
Director, Vice President, CTO, and Chief R&D Officer. See (Docket No. 707); see also
MARVELL COMPANY – GLOBAL SEMICONDUCTOR LEADERSHIP, http://investor.marvell.com/
phoenix.zhtml?c=120802&p=irol-govmanage (last visited September 20, 2013). Together these
three individuals own 19% of Marvell. (Docket No. 707 at 146). Dr. Alan Armstrong is the Vice
President of Marketing, Storage Business Group and was the company’s Rule 30(b)(6)
17
The email from Dr. Moura to the Intel Program Manager states in relevant part “any reason you did not
include in this deal the other patent # 6,201,839 … the inventors are the same (Kavcic and Moura) and we both
would like this included.” (Def. Ex. 263).
18
Dr. Sutardja is originally from Indonesia. (Docket No. 707 at 36-37). He received his Bachelors in
electrical engineering and computer science from Iowa State University, and he obtained his Masters and Ph.D. in
electrical engineering and computer science from the University of California, Berkley. (Id.). Dr. Sutardja is a
member of IEEE, and before starting Marvell, he had worked at Micro Linear and Integrated Information
Technology, focusing on chips, digital circuits, and digital signal processors. (Id. at 41). He is named the inventor on
approximately 300 patents. (Id. at 54).
13
deposition witness regarding same. (Docket No. 707 at 31). Bill Brennan is the former Vice
President of Sales, Storage Business Group. (Docket No. 707 at 31). Mr. Michael O’Dell is the
worldwide director of field application engineering at Marvell and worked for Mr. Brennan in
the early 2000s. (Docket No. 726 at 233).
Relevant engineering employees include Dr. Zining Wu, Gregory Burd, and Toai Doan.
Dr. Wu joined Marvell in 1999 after receiving his Ph.D. in Electrical Engineering from Stanford
University. (Docket No. 707 at 217-219). Mr. Burd19 joined Marvell in the same year. (Docket
No. 726 at 129). Mr. Doan, was a manager and principal engineer of signal processing and later
Vice President of read channel development. (Docket No. 761 at Jt. Ex. D-1 at 1). Mr. Doan left
Marvell in October 2009. (Id.). Last, Dr. Nersi Nazari was Mr. Burd’s acting manager in the
early 2000s.20 (Pl. Exs. 280; 283; 285). Of note, he was also Dr. Kavcic’s contact within Marvell.
(Def. Ex. 1023). In fact, Dr. Kavcic emailed him in early March 1998, inquiring about Marvell’s
work on detectors, sending him a link to his recent publications, resume and work, and seeking
information on job openings at Marvell. (Def. Ex. 1023).21
19
Mr. Burd is originally from Moscow, Russia, and came to the U.S. at age 18. (Docket No. 726 at 125-130).
He obtained a B.S. in mathematics and statistics from the University of Wisconsin, a Masters in mathematics from
Oregon State University, and completed some Ph.D. work at the University of Washington before joining Marvell in
1999. (Id.).
20
Dr. Nazari was not deposed and he did not appear at trial. Interestingly, he now works at a health care
company called Vital Connect, with Mr. Doan and Mr. Brennan. See EXECUTIVE TEAM, VITAL CONNECT
http://www.vitalconnect.com/executive-team (last visited September 20, 2013).
21
The email reads:
Hi Nersi, Somebody told me last week at our annual DSSC review here at
Carnegie Mellon that Marvell has a detector that implements some of the
approaches I suggested in my talk here. It is also in GLOBECOM 98 paper I
sent you. Is there a write-up regarding this detector. Also I am going to graduate
soon (May) and am on the look for jobs. [sic] Is Marvell hiring by any chance.
Please let me know. My resume and downloadable publications are on my web
page. The URL is …. Thanks, Alex.
(Def. Ex. 1023). The URL is no longer active. (last visited September 20, 2013). This Globecom Paper addresses
some of the ideas expressed in the patents, but it is not the IEEE paper later referenced by Burd. (Docket No. 674 at
14
F. Marvell’s Development of Read Channel Products
Both Dr. Wu and Mr. Burd worked to develop new technologies for digital signal
processing and read channel technologies. (Docket No. 707 at 221). As discussed, a read channel
is situated between a drive’s controller and the analog recording head, providing an interface so
that digital data can be read from the disk. (Id. at 30). As data is packed more tightly onto the
disk, errors arise from adjacent data tracks. (Id. at 96). The extent to which the error can be
corrected limits how much data can be stored on the disk. (Docket No. 707 at 231). Hence, the
team at Marvell worked to increase the signal-to-noise ratio (“SNR”) in its read channel chips,
addressing media noise and other sources of noise, such as asymmetric noise, baseline wander,
and thermal noise. (Id. at 230-234). One of their earlier projects from around 1999 to 2001 was
implementing iterative coding, a different method of improving SNR on chips. (Docket No. 678
at 119). This form of coding was also the basis of Dr. Wu’s Ph.D. thesis at Stanford. (Docket No.
707 at 255). However, iterative coding was not initially successful for Marvell.22 (Docket No.
687 at 119-124). In fact, Mr. Doan called these chips a “lost cause” and Mr. Brennan said many
referred to them as “coffee warmer” chips because they used so much power. (Id.).
G. MNP/NLD Chip Development
Because iterative coding was not initially successful, the team at Marvell continued to
work on other potential solutions to the noise problem. (Docket No. 687 at 119-124). In 2001,
118). In this Court’s estimation, it could be inferred that Dr. Nazari gave Dr. Kavcic’s work to the Marvell team
working in this arena. Caver v. City of Trenton, 420 F.3d 243, 262 (3d Cir. 2005) (a Court must view all reasonable
inferences in light most favorable to non-moving party when determining the facts on JMOL). The response to this
email was not proffered at trial and as such the Court cannot consider the response in deciding the present motion.
See Goodman v. Pennsylvania Tpk. Comm’n, 293 F.3d 655, 665 (3d Cir. 2002) (on Rule 50 motions the court can
only consider properly admitted evidence). Yet, in the hearing on post-trial motions, Marvell presented Dr. Nazari’s
response, which stated in relevant part that “as far as I know our [sic] we do not have a product in line of your work,
yet. Yes, we are hiring and I’ll read your resume on the web…” (Def. Ex. 1611).
22
Marvell was not able to install iterative coding on chips until the 2007-2008 time period. (Docket No. 707
at 105-106).
15
Mr. Burd read the papers by Dr. Kavcic and Dr. Moura explaining their invented method and he
began working on developing a “solution” for Marvell based on same. (Docket No. 726 at 137).
CMU asserts that Marvell “copied” Dr. Kavcic’s method as described in said articles and
claimed in the ‘180 and ‘839 Patents. (Docket No. 677 at 54-55). In response, Marvell
maintained throughout trial that Mr. Burd had developed his own sub-optimal “solution,” using
Dr. Kavcic’s scheme only as a launching pad, as later expressed in Marvell’s U.S. Patent
Number 6,931,585, which listed the ‘180 Patent as prior art. (Docket No. 726 at 125-135). The
method Mr. Burd developed, originally named KavcicPP, was renamed “MNP” in January 2003
and later incorporated into Marvell’s EMNP and NLD technology, all of which are used on read
channel chips and SOC chips (collectively, the “Accused Chips”). (Pl. Exs. 368; 823). In
connection with same, simulators were developed by Marvell engineers to mimic chips, so that
Marvell engineers could run and test the chip systems before producing the chips in silicon.
(Docket No. 707 at 113-114). Marvell also ran all of its chips against what it considered the
optimal benchmark simulator, called KavcicViterbi. (Docket No. 677 at 171-172; Docket No.
761 at Jt. Ex. D at 137-138). The KavcicPP, MNP, EMNP, and NLD type simulators and the
KavcicViterbi simulator are collectively the “Accused Simulators” in this litigation. (Pl. Exs. 89;
99; 106; 108; 110). The Accused Chips and Accused Simulators are collectively referred to as
the “Accused Technology.”
H. Marvell’s Sales of Accused Chips
Read channel chips were dominant until around 2004, when the industry transitioned to
SOC-type chips. (Docket No. 707 at 309-311). SOC chips integrated several different blocks,23
23
Other blocks on SOC chips include the central processing unit, the hard drive controller, a servo block
controlling the mechanics in the HDD, and the chip level circuit, among others. (Docket No. 707 at 224).
16
including the read channel block, onto one chip to improve speed, power, and cost. (Id. at 226).
Today, Marvell has about 800 employees involved in the development of SOC chips. (Id.).
CMU alleged infringement by Marvell’s MNP, EMNP-type and NLD type chips,
encompassing both read channel and SOC chips. (Docket No. 671). All of the Accused Chips
were custom made to the exact specifications requested by the customer. (Docket No. 678 at 50142). As noted, the custom designs and sample engineering chips are developed and tested by
using them with the Accused Simulators. Sample engineering chips are produced in Asia and
sent back to the United States to be tested by both Marvell and its customers. (Docket No. 678 at
105-106; Docket No. 707 at 164). Once the customer places an order, the chips are put into
production at Taiwan Semiconductor Manufacturing Company’s (“TSMC”) foundry in
Taiwan.24 (Docket No. 707 at 164). Marvell field application engineers then assist the hard drive
company to install chips into their product and instruct them on how to use the chips. (Docket
No. 677 at 178-179).
As stipulated by the parties, Marvell sells its chips through a lengthy sales cycle, in which
Marvell must invest significantly in each customer without the assurance of sales. (Docket No.
707 at 32-35). There is first a 3-6 month period of rigorous evaluation and reliability testing by
the customer in a stage called “qualification.” (Id.). This is followed by a 12-18 month
development period and then a 3-6 month period before Marvell commences volume production
(i.e. until 1 million units are produced). (Id.). Throughout this entire cycle, there is a significant
risk the customer will change its mind before the design is selected and the time and expense
incurred by Marvell will generate no revenue. (Id.). Since a customer usually uses a selected
24
A “foundry” is a business that operates a semiconductor fabrication plant (commonly called a “fab”) for the
purpose of fabricating the designs of other companies. PCMAG ENCYCLOPEDIA, http://www.pcmag.com/
encyclopedia/term/43433/foundry (last visited September 20, 2013).
17
design for a full generation, the loss of a sales win cannot be remedied until the customer
develops a new product or new generation. (Id.).
During this sales cycle, Marvell engineers assist the customer in implementing the
Marvell solutions into its product. (Id.). Almost all of this activity, including sales,25 marketing,
evaluation, testing, and development occurs in Santa Clara, California. (Id.). The Accused
Simulators are used at various points throughout this sales cycle to formulate product concepts
and to design, refine and evaluate chip designs. (Id. at 45). As CMU’s expert witness Dr. Steven
McLaughlin testified, the simulators are used for research and development to verify the
hardware design for the chip. (Docket No. 677 at 158). Marvell provides the simulation code to
its customers so they can evaluate the functionality and performance of a chip design. (Id.).
Marvell’s major customers are Fujitsu, Hitachi/IBM, Maxtor,26 Samsung, Seagate, Toshiba, and
Western Digital.27 (Docket No. 710 at 243-244). All of these customers go through this process
with Marvell at its Santa Clara location. Once the customer is satisfied that the design and testing
have met its specifications, the chip designs and engineering samples are sent back to TSMC to
begin volume production. (Docket No. 678 at 92).
According to Marvell sales data, between March 6, 2003 and July 28, 2012, Marvell sold
2.34 billion Accused Chips. (Docket No. 686 at 61). The average revenue per accused chip is
$4.42, with an average operating profit of $2.16. (Id. at 53-54). As noted, the chips are
manufactured by TSMC foundry in Taiwan, and then sent to the customers’ manufacturing sites
in Asia to be put into their HDDs. (Docket No. 710 at 360-361). These HDDs are then sold
25
Until his departure from Marvell, Vice President of Sales Mr. Brennan signed off on all deals. (Docket No.
761 at Jt. Ex. C at 7).
26
Maxtor was bought by Seagate in 2006. (Docket No. 673 at 268).
27
Teik Ee Yeo and Iftiqar Baqai testified at trial on behalf of Western Digital. (Docket No. 671 at Jt. Ex. B;
Docket No. 711).
18
primarily to laptop manufacturers, which incorporate the HDDs into their products at their own
factories. (Id.). A portion of the laptops are then imported back into the United States. (Id. at
164-165). The locations of the chips’ end users are unknown, but CMU presented estimates
based on import data calculated by its damages expert that 329,297,799 or 556,812,092 of the
2.34 billion Accused Chips were imported in to the United States. (Id. at 165; Docket No. 770-11
at 7).
I. Correspondence Regarding CMU Patents
In January 2002, Mr. Burd sent two emails to Mr. Doan, who was then his boss at
Marvell, stating that the Kavcic method was patented and assigned to CMU.28 (Pl. Exs. 280;
283). The following year, Carl Mahler of the CMU Technology Transfer Office sent out fourteen
letters to various technology companies, including two addressed to Marvell personnel Dr.
Pantas Sutardja and then-General Counsel Matthew Gloss, encouraging these companies to
contact CMU if they were interested in licensing the ‘180 and the ‘839 Patents. (Pl. Exs. 422;
431). There was no known response by Marvell to these letters from Mr. Mahler. In 2004,
Fujitsu, a read channel customer, wrote a letter to Marvell, stating that it had become aware of
the ‘839 Patent and asked for Marvell’s position regarding the relationship between these patents
and its own technology. (Pl. Ex. 477). There is no known response to this letter. (Docket No. 761
at Ex. C at 531-535).
J. Parties’ Evidence as to Infringement
At trial, CMU maintained that Marvell makes, uses, offers to sell, or sells chips and uses
simulators that infringe Claim 4 of the ‘839 Patent and Claim 2 of the ‘180 Patent.
Claim 4 of the ‘839 Patent provides:
28
These facts are admitted by both parties and supported by the evidence presented at trial, but the
motivations and effect of these points were greatly debated.
19
[a] method of determining branch metric values for branches of a
trellis for a Viterbi-like detector, comprising:
selecting a branch metric function for each of the branches
at a certain time index from a set of signaldependent branch metric functions; and
applying each of said selected functions to a plurality of
signal samples to determine the metric value
corresponding to the branch for which the applied
branch metric was selected wherein each sample
corresponds to a different sampling time instant.
‘839 Patent col.14 ll.10-19.
Claim 2 of the ‘180 Patent, incorporates Claim 1. Claims 1 and 2 of the ‘180 Patent state:
1. A method of determining branch metric values in a detector,
comprising:
receiving a plurality of time variant signal samples, the
signal samples having one of signal-dependent
noise, correlated noise, and both signal dependent
and correlated noise associated therewith;
selecting a branch metric function at a certain time index;
and
applying the selected function to the signal samples to
determine the metric values.
2. The method claim 1, wherein the branch metric function is
selected from a set of signal-dependent branch metric functions.
‘180 Patent col.15 ll.39-51.
CMU argued that Marvell’s MNP and NLD Chips infringed these claims. CMU also
asserted that Marvell’s KavcicPP Simulator, MNP Simulator, EMNP Simulator (these three
collectively the MNP-Type Simulators), NLD Simulator, and KavcicViterbi Simulator infringed
Claim 4 of the ‘839 Patent and Claim 2 of the ‘180 Patent.
Counsel for the parties prepared a stipulation on the chip technology, affectionately
called the “Chip Stip.” (Pl. Ex. 823). The parties agreed that the circuits set forth therein are true
and accurate depiction of the circuits within Marvell’s products. (Id.) The stipulation identified
20
which Marvell read channel and SOC models correspond to each of the stipulated circuits.29 (Id.)
CMU submitted the stipulation as evidence of infringement to the jury. (Pl. Ex. 823). Marvell’s
code for the KavcicPP Simulator (Pl. Ex. 110), MNP Simulator (Pl. Ex. 99), EMNP Simulator
(Pl. Ex. 89) (these three collectively, the “MNP-Type Simulators”), NLD Simulator (Pl. Ex.
106), and KavcicViterbi Simulator (Pl. Ex. 108) was also admitted as evidence of infringement.
Further, the parties presented competing expert opinions on infringement. For CMU, Dr.
Steven McLaughlin30 opined that Marvell’s chips and simulators infringed CMU’s patents.
(Docket No. 677). Dr. McLaughlin testified over two days using a PowerPoint presentation with
over 130 slides to help demonstrate his infringement analysis.31 (Docket No. 677-678). In doing
so, Dr. McLaughlin analyzed the Chip Stip, Simulator Code, Marvell’s technical documents, and
relevant deposition testimony from Marvell’s engineers in reaching his conclusions. At trial, he
broke down both claims into elements and demonstrated to the jury how the circuitry of the MNP
Chips and NLD Chips, in addition to the code of the Accused Simulators, infringed each and
every step of the two patents. (Docket No. 771). He was clear that as these are method claims,
infringement only occurs when the method is actually run on the chips or simulators. (Id.).
29
There are approximately 206 accused Models of chips. See (Pl. Ex. 1912; P-Demo at 39; Docket No. 771 at
Ex. 19 at 6).
30
Dr. McLaughlin has a Ph.D. in electrical engineering and is currently the chair of the School of Electrical
and Computer Engineering at the Georgia Institute of Technology. (Docket No. 677 at 30-31). Dr. McLaughlin’s
ability to testify as an expert based on his knowledge, skill, experience, training, and education was not challenged
by Marvell. (Docket No. 677 at 36). Given the small community focused on this technology, Dr. McLaughlin
knows, professionally, Dr. Kavcic, Marvell’s Dr. Wu, and both of Marvell’s experts Dr. Blahut and Dr. Proakis. (Id.
at 34). He was previously retained as a Technical Expert by Judge Posner in Apple v. Motorola. Civ. No. 11-8540
(N.D. IL). (Docket No. 677 at 35). His experience in this field of art spans from basic research, writing papers, and
teaching, to implementation on chips in a commercial setting. (Docket No. 456 at 1). Dr. McLaughlin provided an
expert report on his infringement opinions in accord with Rule 26(a) and a deposition on same. See (Docket No.
456). The Court accepted him as an expert in signal processing. (Docket No. 677 at 36).
31
The Court acknowledges that the transcript may not always be clear on what parts of a diagram are being
described by witnesses, as much testimony included pointing out with a laser pointer certain spots on circuit
diagrams that corresponded with elements of the claim. To aid in this endeavor, the Court required the parties to file
all demonstratives used during the trial. Dr. McLaughlin’s presentation is P-Demo 7. (Docket No. 771 at Ex. H).
21
Marvell countered with Dr. Richard Blahut,32 who opined that there was no infringement
of the CMU Patents. (Docket No. 711). Dr. Blahut believes that in the Marvell products, the
Viterbi algorithm uses a simple branch metric function that uses the same branch metric function
on every branch of the trellis, so there is no selecting step as required in the patents. (Id. at 244).
He also opined that there was no selecting function in the Viterbi detector or post processor;
hence, there was no applying step as required by the CMU Patents. (Id. at 246).
K. Parties’ Evidence as to Invalidity
During trial, Marvell maintained that CMU’s Patents were invalid because they were
both anticipated33 and obvious.34 To this end, Marvell submitted U.S. Patent No. 6,282,251 (the
“Worstell Patent”) as prior art for purposes of its anticipation defense. (Def. Ex. 187). This
patent was filed on March 21, 1995, three years before the CMU Patents were filed. (Id.). As
further evidence of invalidity, Marvell also presented a 1992 IEEE article by Inkyu Lee and John
Cioffi titled “Performance Analysis of the Modified Maximum Likelihood Sequence Detector in
the Presence of Data-dependent Noise” and a 1992 IEEE Transactions on Magnetics article by
Weining Zeng and Jaekyun Moon titled “Modified Viterbi Algorithm for a Jitter-dominant 1-D2
Channel” (Def. Exs. 37; 38).
32
Dr. Blahut is a professor of electrical and computer engineering at the University of Illinois and has
received many awards throughout his career. (Docket No. 771 at 207). He has experience with signal processing and
read channels, both as an academic and during his time at IBM. (Id. at 207-216). Dr. Blahut’s opinions went through
a Daubert challenge prior to trial, after which the Court accepted him as an expert in signal processing and read
channel technology. (Docket No. 447).
33
A patent claim is “invalid for anticipation if a single prior art reference discloses each and every limitation”
of the claim. Schering Corp. v. Geneva Pharm., 339 F.3d 1373, 1377 (Fed. Cir. 2003) (emphasis added).
34
An obviousness analysis measures the difference between the claimed invention and the prior art to
determine whether “the subject matter as a whole would have been obvious at the time the invention was made” to a
person having ordinary skill in the art. Alza Corp. v. Mylan Labs., Inc., 464 F.3d 1286, 1289 (Fed. Cir. 2006)
(citations omitted).
22
Again, the parties had dueling expert witnesses appear. Dr. John Proakis35 testified for
Marvell, and opined that the CMU Patents were invalid based on the aforementioned prior art.
(Docket No. 726). CMU called Dr. McLaughlin in rebuttal to testify on the subject of invalidity.
(Docket No. 736). Dr. McLaughlin countered Dr. Proakis’ testimony and concluded that the
CMU Patents were not invalid based upon the two IEEE articles and/or the Worstell Patent. (Id.
at 73). CMU also submitted a critical 1997 email from Glen Worstell, stating in relevant part that
he:
had reviewed the ‘Correlation Sensitive Adaptive Sequence
Detector’ patent proposal (i.e. the proposal of the CMU Patents) ...
A couple of years ago I did some work on a Viterbi detector
modification to account for noise correlation. This invention is
related, but goes beyond my work and is probably more
interesting.
(Pl. Ex. 161).
L. Damages Evidence
CMU sought money damages from Marvell for infringement, in the form of a $0.50 per
chip royalty on all Accused Chips sold by Marvell from March 2003 to the present. CMU
proffered evidence that the Accused Technology was “must have” for Marvell and thus the
parties would have agreed to this running royalty at a hypothetical negotiation in March 2003.36
In support of its position, CMU first called Dr. Christopher Bajorek37 as an industry expert.
35
Dr. Proakis is an adjunct professor of U.C. San Diego, and former professor and Chairman of the
Department of Electrical and Computer Engineering at Northeastern University. (Docket No. 726 at 53). He has
written several textbooks on electrical engineering and signal processing, and consulted for Quantum Corporation
and Digital Equipment Corporation designing read channel systems. (Id.) The Court accepted him as an expert in
digital signal processing and read channel technologies. (Id. at 54). CMU did not make any Daubert challenges to
Dr. Proakis’s opinion.
36
The parties agreed that the hypothetical negotiation would have occurred on March 6, 2003. (Docket No.
686 at 60).
37
Dr. Bajorek obtained his Ph.D. in electrical engineering from Cal Tech. (Docket No. 678 at 51). He has
worked in the HDD industry for 40 years, including at IBM where he worked to commercialize the first Viterbi
channel and at Komag as CTO and Vice President. (Id. at 52-53). The Court accepted Dr. Bajorek as an expert
23
(Docket No. 678 at 72-73). Dr. Bajorek opined that Marvell and its customers used the MNP and
NLD technologies during the sales cycle; the sales cycle essentially took place in the US; that the
MNP and NLD technology had become industry standard;38 and that the same technology was
“must have” for Marvell. (Id.). Dr. Bajorek testified that Seagate, IBM, HDST, Samsung,
Western Digital, and Toshiba use or previously used the patented technology. (Id. at 163-165).
Marvell did not counter Dr. Bajorek with a competing expert in his area of expertise.
CMU next called Catherine Lawton39 as its damages expert. (Docket No. 686 at 29). She
stated that Marvell sales data showed sales of 2.34 billion Accused Chips between March 6,
2003 and July 28, 2012. (Docket No. 686 at 61). She then analyzed sales data provided by
Marvell to calculate an “excess profits” benchmark of $0.42 per chip and “operating profit
premium” benchmark of $0.06 to $0.72 per chip, which she used along with other pertinent facts
to arrive at a reasonable royalty of $0.50 per chip. (Docket No. 710 at 170-171). Her analysis is
examined in more detail later herein.40
CMU also submitted supporting evidence in the form of internal Marvell
communications and presentations, including Marvell presentations to customers, deposition
testimony from Marvell sales and marketing executives such as Mr. Brennan and Dr. Armstrong,
witness in the areas of the hard disk drive industry, industry standards, and the use of Marvell’s technology as
elucidated in his report. (Id. at 63). Marvell filed a Daubert challenge to Dr. Bajorek which the Court granted, in
part, and denied, in part. (Docket No. 445).
38
A technology becomes “industry standard” when it is adopted by the majority of drive makers for two or
more generations of drives. (Docket No. 678 at 108-109).
39
Ms. Lawton is a damages consultant with Berkeley Research Group. She has a degree in finance and has
been working in the field of damages calculation for 27 years, testifying and working on a variety of cases. Marvell
filed a Daubert challenge to Ms. Lawton which the Court granted, in part, and denied, in part. (Docket No. 451).
After a full day of examination on her credentials and experience both before the jury and in camera, she was
accepted by the Court as an expert in IP damages. (Docket No. 713).
40
See discussion infra at Section V.D.4.
24
as well as the joint stipulation regarding Marvell’s sales cycle. (Pl. Exs. 220; 240; 244; 297; 331;
333; 651; 938).
Marvell rebutted this damages calculation by presenting its own damages expert,
Creighton Hoffman.41 (Docket Nos. 709; 710). Mr. Hoffman based his opinion primarily on the
DSSC Agreements (Def. Exs. 17; 39; 40), the Intel offer to license (Def. Ex. 255), and his
perception of a lack of marketing and licensing of the patents by CMU or their Inventors.42
(Docket No. 709). His ultimate opinion was that a reasonable royalty in this case would be a onetime royalty payment of $250,000.00. (Id. at 242-245). Marvell did not submit any evidence on
other licensing agreements or alternative pricing opinions.
M. Evidence of Alleged Willfulness
CMU argued that Marvell’s infringement had been willful by submitting evidence of
Marvell’s internal communication about the patents, including the aforementioned emails from
Mr. Burd (Pl. Ex. 280, 283), the letters received from CMU (Pl. Exs. 422; 431), the letter from
Fujitsu (Pl. Ex. 477), and deposition testimony of Dr. Wu, Mr. Doan, Dr. Armstrong, and Mr.
Burd. See (Docket No. 677 at 53-55; Docket No. 761 at Jt. Ex. C, D). CMU also submitted Dr.
McLaughlin’s expert testimony to the extent that he opined that the MNP was “copied” from the
CMU Patents. (Docket No. 677 at 82).
Marvell presented evidence to show that it had not willfully infringed, relying on internal
Marvell correspondence and presentations on the Accused Technologies and proof of Marvell’s
own patents, some of which cite the CMU Patents. (Def. Ex. 266). Marvell also offered portions
41
Mr. Hoffman is a CPA previously employed at Price Waterhouse, now with Hoffman-Alvary, where he
primarily deals with intellectual property negotiations and damages consulting. (Docket No. 709 at 105-172). CMU
filed a Daubert challenge to Mr. Hoffman which the Court granted, in part, and denied, in part. (Docket No. 450).
The Court accepted him as a damages expert in the realm of intellectual property damages. (Id. at 172).
42
See discussion supra at Section II.D “CMU’s Marketing of the CMU Patents,” and the August 5, 2003
CMU letters to which Wooldridge testified that no company expressed any interest in taking a license. (Pl. Exs. 422;
431; Def. Exs. 225; 235; 1573).
25
of Dr. McLaughlin’s deposition testimony to disprove copying from Dr. Kavcic and Dr. Moura,
as well as testimony at trial, such as that of Mr. Burd, (Docket No. 726 at 125-126), and Dr. Wu,
(Docket No. 707 at 326), who stated they did not copy the CMU Patents. As Dr. Sehat Sutardja
testified, Marvell’s people “are not stealers.” (Docket No. 707 at 92, 326).
N. Jury Verdict
On December 21, 2012 the jury was charged to decide issues of infringement, validity,
damages, and willfulness given all of the evidence before it. The jury deliberated for nearly two
days to render its verdict, returning on December 26, 2012. (Docket No. 762).
With respect to infringement, the jury found that CMU had proven by a preponderance of
the evidence that Marvell’s MNP-Type chips, MNP-Type simulators, NLD-Type chips, NLDType simulators, and Kavcic-Viterbi simulator literally infringe Claim 4 of the ‘839 Patent and
Claim 2 of the ‘180 Patent. (Id. at Q. 1-10). The jury held that CMU had proven by a
preponderance of the evidence that Marvell had induced at least one of its customers or an end
user to infringe Claim 4 of the ‘839 and Claim 2 of the ‘180 Patent in the United States with both
the MNP-Type and NLD-Type Chips. (Id. at Q. 11, 13). It additionally found that CMU had
proven by a preponderance of the evidence that Marvell contributed to the infringement of Claim
4 of the ‘839 and Claim 2 of the ‘180 Patent in the United States by at least one of its customers
or an end user with both the MNP-Type and NLD-Type Chips. (Id. at Q. 12, 14).
On invalidity, the jury found that Marvell had not proven by clear and convincing
evidence that Claim 4 of the ‘839 and Claim 2 of the ‘180 were invalid on the grounds that they
were anticipated by prior art or because they would have been obvious at the time the invention
was made. (Id. at Q. 15, 16). After finding that the claims infringed and are not invalid, the jury
awarded $1,169,140,271.00 to CMU for the use of the patented methods. (Id. at Q. 17).
26
Regarding willfulness, the jury found that Marvell had actual knowledge of the ‘180 and
‘839 Patents prior to commencement of the lawsuit on March 6, 2009. (Id. at Q. 19, 22). It
determined that Marvell did not have an objectively reasonable defense to CMU’s claim of
infringement on either the ‘180 or ‘839 Patent. (Id. at Q. 20, 23). Finally, the jury found that once
Marvell learned of the ‘180 and ‘839 Patent, there was clear and convincing evidence that
Marvell actually knew or should have known that its actions would infringe both Claim 2 of the
‘180 Patent and Claim 4 of the ‘839 Patent. (Docket No. 21, 24).
III.
PROCEDURAL HISTORY
CMU filed its complaint in this case on March 6, 2009. (Docket No. 1). Since then this
case had gone through extensive discovery and motions practice, including a Motion to
Transfer43 (Docket No. 55), Claim Construction44 (Docket No. 143), and several rounds of
Summary Judgment proceedings.45
43
On July 7, 2009 Marvell filed a Motion to Transfer the case to the Northern District of California, which,
after briefing and oral argument, was denied on September 21, 2009. (Docket Nos. 25; 26; 31; 33; 36; 45; 50; 54;
55). Marvell then filed its Amended Answer on April 29, 2010, and CMU filed its Answer and Affirmative Defenses
to same on May 28, 2010. (Docket Nos. 116; 127).
44
The Court held a seven hour Technology Tutorial with the parties’ experts Dr. McLaughlin and Dr.
Proakis, in preparation for claims construction. (Docket Nos. 104; 143). The Court then held a two day Markman
hearing. (Docket Nos. 104-106). Upon consideration of the parties’ arguments, briefs, and materials submitted in
support, as well as with the aid of the Court’s Technical Advisor, Dr. Daniel Costello, the Court issued an order on
the meaning of the disputed claims. (Docket Nos. 175; 176); see also Markman v. Westview Instruments, Inc., 517
U.S. 370, 377-90 (1996). The Court entered its Pretrial Order on October 10, 2011, scheduling jury selection and
trial and setting other pretrial hearings and deadlines. (Docket No. 315); see also (Docket Nos. 78; 79; 80; 81; 82;
83; 84; 89; 90; 91; 93; 94; 95; 105; 106; 108; 109; 110; 118; 119; 120; 128; 129; 142; 146).
45
This Court denied Marvell’s First Motion for Partial Summary Judgment of Invalidity of U.S. Patent Nos.
6,201,839 and 6,438,180, its Second Motion for Partial Summary Judgment of Invalidity and subsequent Motion for
Reconsideration of said denial of the Second Motion for Partial Summary Judgment upon consideration of the
parties’ briefs, declarations and oral argument. (Docket Nos. 218; 306; 307; 318; 337; 339; 423). The parties filed
their Summary Judgment Motions and Daubert Motions, along with briefs, declarations, and statements of facts in
support and opposition in the spring of 2012. The Court heard argument on these motions from July 10 through July
11, 2012. (Docket Nos. 433; 438-440). The Court granted, in part, and denied, in part, Marvell’s Motions for Partial
Summary Judgment of No Infringement and No Damages with Respect to Extraterritorial Conduct and for Partial
Summary Judgment of No Infringement and No Damages with Respect to Licensed Use. (Docket Nos. 356; 360;
441; 442). The Court granted Marvell’s Motion for Partial Summary Judgment of non-infringement with respect to
Claims 11, 16, 19 and 23 of U.S. Patent No. 6,201,839 and Claim 6 of U.S. Patent No. 6,438,180. (Docket Nos. 352;
443; 444). Further, the Court granted, in part, and denied, in part, Marvell’s Motion to Exclude the Testimony of
27
Following the Court’s Summary Judgment and Daubert rulings, and upon consideration
of the parties’ pretrial proffers,46 the Court convened a two-day hearing on October 17 and
October 18, 2012 to address nineteen Motions in limine (five by CMU and fourteen by Marvell).
(Docket Nos. 578; 579; 590; 591). The Court issued rulings shortly thereafter.47 (Docket Nos.
595; 596; 601; 602; 604; 605; 607-614).
On November 9, 2012, the parties filed their responses to objections to exhibits,
responses to objections to deposition designations,48 joint stipulations, proposed jury
instructions, proposed limiting instructions, proposed voir dire, and proposed verdict slips.49 See
(Docket Nos. 615-626; 640-644). The Court held a lengthy two-day Pretrial Conference on
November 14 and 15, 2012, during which objections to exhibits were ruled upon and arguments
on trial issues were heard. (Docket Nos. 636; 638; 645; 648; 650; 653). The parties subsequently
Christopher Bajorek. (Docket Nos. 364; 445; 446). The Court denied CMU’s Motion to Exclude Opinion Testimony
Regarding Purported Acceptable, Non-Infringing Alternatives. (Docket Nos. 373; 447; 448). CMU’s Motion to
Exclude Certain Opinion Testimony of Creighton G. Hoffman was granted, in part, and denied, in part. (Docket
Nos. 370; 449; 450). Finally, Marvell’s Motion to Exclude the Opinions of Catherine M. Lawton was granted, in
part, and denied, in part. (Docket Nos. 367; 451; 452).
46
CMU filed its Pretrial Statement on September 12, 2012, and Marvell filed its modified Pretrial Statement
on September 24, 2012. (Docket Nos. 461; 481). Witness Lists and Offers of Proof were filed on October 8, 2012
and October 15, 2012, by CMU and Marvell, respectively. (Docket Nos. 538; 575).
47
In accordance with the Pretrial Order, on September 24, 2012, the parties filed their Motions in Limine with
briefs in support, and both filed responses to same on October 9, 2012. (Docket Nos. 483-525; 555-571).
48
Exhibits, Objections to Exhibits, Reponses to Objections to Exhibits, Deposition Designations, Objections
to Deposition Designations, and Responses to Objections to Deposition Designations had been previously submitted
but were stricken by the Court’s October 24, 2012 Order. (Docket No. 586). The parties had presented the Court
with more than 2,700 exhibits and hundreds of deposition designations and counter depositions which they claimed
they might use at trial. Through the series of filings, the parties objected to nearly every exhibit, deposition
designation, and counter designation of their opponent in some fashion. Accordingly, the Court struck these
submissions and ordered the parties to meet and confer to resolve disputes. (Docket No. 586). By November 9,
2012, the parties had narrowed their disputes to 335 exhibits and reserved deposition disputes until the deposition’s
confirmed use at trial. (Docket Nos. 615-620; 631; 632; 640; 644).
49
The Court struck the parties proposed final jury instructions and verdict slip for violating the Court’s
directive to submit joint proposals, as the parties offered only twelve, out of a total thirty-seven, agreed upon
proposed jury instructions, few relating to the substantive law in the case, and two completely separate verdict
forms. (Docket Nos. 623; 626; 627). The parties were ordered to meet and confer to resolve disputes. On December
19, 2012, the parties submitted joint instructions and verdict slips to the Court by email, and the Court ruled on
disputes on the record during the Charge Conference. (Docket No. 764).
28
submitted trial briefs on the issues of law that would need to be addressed by the Court during
trial. (Docket Nos. 647; 652).
Jury selection proceeded as scheduled on November 26, 2012, and trial began on
November 28, 2012. (Docket Nos. 666; 669; 671). The Court heard argument, accepted briefing,
and ruled on a number of motions made during trial regarding witnesses, exhibits, and points of
law.50 The parties agreed that the Plaintiff, CMU would not rest its case until the conclusion of
testimony by three defense witnesses.51 Once CMU rested its case, Marvell moved for judgment
as a matter of law on “Non-infringement,” “No Damages,” and “No Willful Infringement.”
(Docket Nos. 703; 701; 699). At the end of Marvell’s evidence, CMU moved for “Judgment As a
Matter of Law on Marvell’s Invalidity Defenses.” (Docket No. 731). Following CMU’s rebuttal,
Marvell filed a Motion for Judgment as a Matter of Law on Invalidity, and renewed its earlier
Motions for Judgment as a Matter of Law on Non-Infringement, No Damages, and No Willful
Infringement. (Docket Nos. 738; 740; 742; 747). The Court denied these motions on the record
50
The Court will not discuss in depth the substance of these motions. See (Docket Nos. 656; 672; 679-681;
683-685; 687-698; 705; 712-720; 722-724; 727; 728; 730; 733; 735; 737; 744-746; 751; 753; 755-757) (denying
Marvell’s request for the Court to submit the issue of laches to the jury on an advisory basis; denying Marvell’s
Emergency Motion to Strike CMU’s Attempt to Include Non-infringing Sales of Chips that Are Never Used in the
U.S. in the Damages Case It Intends to Present to the Jury; granting Marvell’s Motion for Extension of Time for
trial; denying CMU’s Motion For Leave to Recall Dr. Kryder; granting in part and denying in part Marvell’s Motion
to Exclude the Testimony of Catherine Lawton; granting Marvell’s Motion for Reconsideration re: Court’s Order
Sustaining CMU’s Objections to Disputed Defendants’ Exhibit DX-189; denying Marvell’s Oral Motion to “Strike
Slide 19 of Plaintiff’s Demonstrative and Associated Testimony”; granting in part and denying in part CMU’s
Rebuttal Witness List/Offers of Proof; denying CMU’s Motion to Strike Testimony of Marvell Expert Creighton
Hoffman; Plaintiff’s Motion to Strike Testimony of Marvell Expert Richard Blahut and Enter Judgment of
Infringement for Accused MNP Chips and Simulators; denying Marvell’s Motion to Strike Certain Testimony of
Catharine M. Lawton; granting in part and denying in part CMU’s “Motion in Limine to Strike Testimony and to
Preclude Argument Relating to Marvell’s Pre-Suit Communications with Counsel”; and denying without prejudice
Marvell’s Motion for Mistrial).
51
In accordance with the Court’s October 20, 2011 Pretrial Order (Docket No. 315), counsel were limited to
twenty hours per side to present their case to the jury. Despite having proposed said time limit, Marvell moved for
an extension of trial time. (Docket No. 687). The Court granted said motion, allowing twenty-five hours per side
including opening statements, direct examination, cross examinations, and closing arguments. (Docket No. 710).
Since the parties were “on the clock,” they had a “gentlemen’s agreement” that certain witnesses that would have
been called by both parties, in the interest of saving time, would only be called once, with cross examination
allowed to go beyond the scope of the direct examination. The Court was not privy to this agreement but was told
that this agreement applied to the testimony of Marvell engineers: Mr. Doan, Dr. Wu, and Mr. Burd.
29
(Docket No. 759 at 52-53), with the parties requesting the Court to explain its rulings in written
opinions. (Docket No. 764 at 99). The Court then charged the jury on December 21, 2102, and it
returned its verdict on December 26, 2012. (Docket No. 762). As noted, the jury found for CMU
on infringement, validity, and willfulness, and awarded damages to CMU in the amount of
$1,169,140,271.00. (Id.). The Court entered the parties’ joint proposed form of judgment on
January 14, 2013. (Docket No. 769).
Pursuant to the Court’s scheduling order, (Docket No. 763), on February 11, 2013,
Marvell filed a Motion for Judgment as a Matter of Law or in the Alternative, Motion for New
Trial on Non-Damages Issues, specifically for Non-Infringement, Invalidity, No-Willfulness, and
CMU Misconduct (Docket Nos. 805; 806), Motion for Judgment as a Matter of Law, Motion for
New Trial And/Or Motion for Remittitur with Respect to Damages, (Docket Nos. 807; 808), and
Motion for Judgment on Laches. (Docket Nos. 802-04).
CMU moved for “Permanent Injunction, Post Judgment Royalties, and Supplemental
Damages” (Docket Nos. 786; 787), “Prejudgment Interest” (Docket Nos. 788; 789), “A Finding
of Willful Infringement and Enhanced Damages” (Docket Nos. 790; 793), and “Attorneys’ Fees
Pursuant to 35 U.S.C. Section 285” (Docket Nos. 794; 810; 811).
These matters have been completely briefed (Docket Nos. 823-829; 832-837; 849-855;
857-863), and the Court heard oral argument on same from May 1 to May 2, 2013. (Docket Nos.
872-874). In earlier opinions, the Court had denied, without prejudice, CMU’s Request for
Attorneys’ Fees (Docket No. 884), and denied Marvell’s Motion for a New Trial on the Grounds
of CMU Misconduct. (Docket No. 900). The Court now turns to the parties’ Motions for JMOL,
Motions for a New Trial, and Motion for Remittitur. (Docket Nos. 805; 807).
30
IV.
LEGAL STANDARD52
A. Judgment as a Matter of Law
It is well-established that a motion for judgment as a matter of law “should be granted
only if, viewing the evidence in the light most favorable to the non-moving party, there is no
question of material fact for the jury and any verdict other than the one directed would be
erroneous under the governing law.” Galena v. Leone, 638 F.3d 186, 196 (3d Cir. 2011) (quoting
Beck v. City of Pittsburgh, 89 F.3d 966, 971 (3d Cir. 1996)).53 Accordingly, the Court must
determine “‘whether there are any genuine issues of material fact such that a reasonable jury
could return a verdict for [the non-moving party].’” McGreevy v. Stroup, 413 F.3d 359, 364 (3d
Cir. 2005) (quoting Debiec v. Cabot Corp., 352 F.3d 117, 128 n.3 (3d Cir. 2003)) (alteration in
original); see also Trueman v. City of Upper Chichester, 289 F. App’x. 529, 540 (3d Cir. 2008)
(affirming denial of Rule 50(a) motion because “the jury could not reasonably have found in [the
non-movant’s] favor on his claim against the [movant]”).
In ruling on a Rule 50(a) motion, the Court “must refrain from weighing the evidence,
determining the credibility of witnesses, or substituting our own version of the facts for that of
the jury.” Eschelman v. Agere Sys., 554 F.3d 426, 433 (3d Cir. 2009) (citing Marra, 497 F.3d at
300). “Although judgment as a matter of law should be granted sparingly,” it should be granted
where “the record is critically deficient of the minimum quantum of evidence” necessary to
support a verdict in favor of the non-moving party. Id. (quoting Gomez v. Allegheny Health
52
While this is a patent case, Third Circuit law governs the Court’s analysis of the parties’ motions for
judgment as a matter of law and motions for a new trial. See Leader Technologies, Inc. v. Facebook, Inc., 678 F.3d
1300, 1305 (Fed. Cir. 2012), cert. denied, 133 S. Ct. 889 (2013).
53
Courts apply the same standard to motions pursuant to Rule 50(a) and Rule 50(b) of the Federal Rules of
Civil Procedure. See Galena, 638 F.3d at 196 (reviewing Rule 50(b) motion by using standard articulated in Beck,
89 F.3d at 971, which articulated the Rule 50(a) standard); McDaniels v. Flick, 59 F.3d 446 (3d Cir. 1995) (applying
the same standard to the review of both Rule 50(a) and Rule 50(b) motions); Foradori v. Harris, 523 F.3d 477, 485
n.8 (5th Cir. 2008) (“We apply this same 50(a) standard when we review a renewed motion for judgment as a matter
of law under 50(b).”).
31
Servs., Inc., 71 F.3d 1079, 1083 (3d Cir. 1995)). To that end, “a scintilla of evidence is not
enough” to survive a Rule 50 motion at trial. Johnson v. Campbell, 332 F.3d 199, 204 (citing
Goodman v. Pa. Turnpike Comm’n., 293 F.3d 655, 664-65 (3d Cir. 2002)). The question is not
whether there is literally no evidence supporting the unsuccessful party, but whether there is
evidence upon which a reasonable jury could properly find a verdict in favor of the non-moving
party. Gomez, 71 F.3d at 1083. In other words, “a directed verdict is mandated where the facts
and the law will reasonably support only one conclusion.” McDermott Int’l, Inc. v. Wilander,
498 U.S. 337, 356 (1991) (citation omitted).
B. Motion for New Trial
A motion for a new trial pursuant to Federal Rule of Civil Procedure 59 can be granted
“to all or any of the parties and on all or part of the issues in an action in which there has been a
trial by jury.” FED. R. CIV. P. 59(a). The Court is also “empowered to order a new trial on its own
initiative ‘for any reason that would justify granting one on a party’s motion.’” Pryer v. C.O. 3
Slavic, 251 F.3d 448, 453 (3d Cir. 2001) (quoting FED. R. CIV. P. 59(d)). A new trial is most
commonly granted in select situations, including: (1) when the jury’s verdict is against the clear
weight of the evidence; (2) when new evidence surfaces that would have altered the outcome of
the trial; (3) when improper conduct on the part of an attorney or the court unfairly influenced
the verdict; or (4) where the jury’s verdict was facially inconsistent. Davis v. Mountaire Farms,
Inc., 598 F. Supp. 2d 582, 587 (D. Del. 2009).
The Court’s level of discretion varies, depending on the type of error alleged. Moussa v.
Commonwealth of Pennsylvania Dep’t of Pub. Welfare, 289 F. Supp. 2d 639, 648 (W.D. Pa.
2003) (citing Klein v. Hollings, 992 F.2d 1285, 1289-90 (3d Cir. 1993)). When the motion for a
new trial is based on the claim that the verdict is against the clear weight of the evidence, the
32
Court’s discretion is limited—the verdict must be “contrary to the great weight of the evidence;
that is, where a miscarriage of justice would result if the verdict were to stand.” Pryer, 251 F.3d
at 453. A verdict may not be set aside when there is a plausible or rational basis for the decision.
Moussa, 289 F. Supp. 2d at 648. The Court must not substitute its own judgment of the facts and
assessment of the witnesses’ credibility for the jury’s. Davis, 598 F. Supp. 2d at 587. When the
basis for the motion is an alleged error on the part of the court, such as an error in jury
instructions or evidentiary rulings, a district court must first determine whether an error was
made, i.e., “whether, taken as a whole, the instruction properly apprised the jury of the issues and
the applicable law.” Donlin v. Philips Lighting N. Am. Corp., 581 F.3d 73, 78 (3d Cir. 2009). If
there was an error, the court must then determine “whether that error was so prejudicial that
refusal to grant a new trial would be ‘inconsistent with substantial justice.’” Bhaya v.
Westinghouse Elec. Corp., 709 F. Supp. 600, 601 (E.D. Pa. 1989) (quoting FED. R. CIV. P. 61).
“Generally, a party is not entitled to receive a new trial for objections to evidence that he did not
make at or prior to the initial trial, even if they may have been successful.” Ashford v. Bartz, Civ.
No. 04-642, 2010 WL 272009, at *4 (M.D. Pa. 2010) (citations omitted); see also Kiewit Eastern
Co., Inc. v. L & R Constr. Co., Inc., 44 F.3d 1194, 1204 (3d Cir. 1995) (“Courts often take a dim
view of issues raised for the first time in post-judgment motions. Generally, this is a decision
within the sound discretion of the district court.”).
V.
DISCUSSION
With these standards in mind, the Court discerns substantial evidence upon which a
reasonable jury could have found in favor of the non-movants for each of the filed Motions
challenging the evidence.
33
A. Infringement
CMU had the burden of proving its claims of direct and indirect infringement pursuant to
35 U.S.C. §§ 271(a), (b) and (c). It alleged that Marvell’s chips and simulators infringe Claim 4
of the ‘839 Patent and Claim 2 of the ‘180 Patent. To that end, it produced the opinion testimony
of Dr. McLaughlin, who testified over the course of two days. (Docket Nos. 677; 678). Against
same, Marvell moved for JMOL on the grounds that CMU had not presented sufficient evidence
that a reasonable jury could find infringement by Marvell, or, in the alternative, for a new trial.
(Docket Nos. 703; 805).
1. Legal Standard
Direct infringement of a U.S. patent occurs when a party, “without authority makes, uses,
offers to sell, or sells any patented invention, within the United States.” 35 U.S.C. § 271(a).
Method claims are not infringed simply by the sale of an apparatus that is capable of infringing
use. Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311 (Fed. Cir. 2006); Standard Havens
Products, Inc. v. Gencor Industries, Inc., 953 F.2d 1360, 1374 (Fed. Cir. 1991). “Because a
process is nothing more than the sequence of actions of which it is comprised, the use of a
process necessarily involves doing or performing each of the steps recited.” NTP, Inc. v.
Research in Motion, Ltd., 418 F.3d 1282, 1318 (Fed. Cir. 2005). Thus, direct infringement of a
method claim only occurs if each step of the claimed method is actually performed. See
Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1328 (Fed. Cir. 2008).
In this case, the only form of direct infringement at issue is literal infringement. Marvell
literally infringes if Marvell’s chips and simulators use a method that includes each and every
method step in Claim 4 of the ‘839 Patent or Claim 2 of the ‘180 Patent. Akamai Techs., Inc. v.
Limelight Networks, Inc., 692 F.3d 1301, 1307 (Fed. Cir. 2012). If Marvell’s methods as
34
employed by its chips and simulators do not contain one or more method steps in that patent
claim, Marvell does not directly infringe that claim. Id. Accordingly, literal infringement must be
determined with respect to each patent claim, individually.
There are also two forms of indirect infringement: inducing infringement and
contributory infringement. These modes of infringement are governed, respectively, by 35
U.S.C. § 271(b) and (c).
To prove inducement of infringement and contributory infringement, CMU must first
prove there is direct infringement. Akamai Techs., 692 F.3d at 1308. Second, “inducement
requires that the alleged infringer knowingly induced infringement and possessed specific intent
to encourage another’s infringement.” DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed.
Cir. 2006) (en banc) (internal quotation marks omitted); see also Global–Tech Appliances, Inc. v.
SEB S.A., __ U.S. __, 131 S. Ct. 2060, 2068 (2011). It is enough that the inducer “cause[s],
urge[s], encourage[s], or aid[s]” the infringing conduct and that the induced conduct is carried
out. Akamai Techs., 692 F.3d at 1308 (internal citations omitted, emphasis added). A defendant
must “actively induce” infringement which “require[s] knowledge of the existence of the patent
that is infringed” or taking “deliberate actions to avoid confirming a high probability of
wrongdoing.” Global-Tech, 131 S. Ct. at 2068-2070. Thus, induced infringement occurs if
Marvell actively induces someone else, such as one of Marvell’s customers, to use a method that
is covered by Claim 4 of the ‘839 Patent or Claim 2 of the ‘180 Patent. Id.
To prevail on a claim for contributory infringement, it must be shown that an infringer
sold, offered to sell, or imported into the United States a component of an infringing product
“knowing [the component] to be especially made or especially adapted for use in an infringement
of such patent, and not a staple article or commodity of commerce suitable for substantial non
35
infringing use.” 35 U.S.C. § 271(c); see Lucent Techs. v. Gateway, Inc., 580 F.3d 1301, 1320
(Fed. Cir. 2009). Thus, in this instance, contributory infringement occurs if Marvell sold or
offered for sale a material component of the patented invention that was not a staple article of
commerce, and which Marvell knew was specifically made for use in practicing the claimed
methods of either Claim 4 of the ‘839 Patent or Claim 2 of the ‘180 Patent. As with induced
infringement, a claim for contributory infringement must contain allegations of the requisite
knowledge of the patent-in-suit at the time of infringement. Mallinckrodt, 670 F. Supp. 2d at
355; see also Global–Tech, 131 S. Ct. at 2068. In addition, the patentee bears the burden of
proving that the accused products have no substantial non-infringing uses. See Golden Blount,
Inc. v. Robert H. Peterson Co., 438 F.3d 1354, 1363 (Fed. Cir. 2006).
Before delving into its analysis, the Court notes that expert testimony is not necessary to
prove infringement. In a case involving complex technology, however, the Federal Circuit has
“repeatedly approved the use of expert testimony to establish infringement” and indeed “where
the accused infringer offers expert testimony negating infringement, the patentee cannot satisfy
its burden of proof by relying only on testimony from those who are admittedly not experts in the
field.” Centricut, LLC v. Esab Grp., Inc., 390 F.3d 1361, 1370 (Fed. Cir. 2004).
In reaching its decision, the Court has considered all of the parties’ arguments raised in
their briefs and at trial, arguments made at the motion hearing held on May 1 and May 2, 2013,
the transcript thereof, and the entire trial record along with the parties’ latest submissions.
(Docket Nos. 703; 704; 729; 742; 743; 805; 806; 827; 851; 857; 880; 881).
2. Direct Infringement
As the party alleging infringement of the method claims at issue, CMU must demonstrate
that Marvell practices every step of the claimed method. See Muniauction, 532 F.3d at 1328. At
36
trial, CMU called Dr. Steven McLaughlin to provide expert technical testimony about CMU’s
patents and whether they are infringed by Marvell’s MNP-type chips, NLD type chips, and
related simulators. Dr. McLaughlin analyzed the documents produced by Marvell concerning the
MNP, EMNP, NLD, and Simulator Technology and the Chip Stip. (Pl. Ex. 823).
a. MNP/EMNP Chips
To begin, Marvell asserts that no reasonable jury could find that the accused MNP/EMNP
Chips infringe because: (1) they do not select a branch metric function for each of the branches
of the trellis at a certain time index; (2) they do not apply each of said branch metric functions to
a plurality of signal samples; and (3) the MNP/EMNP module does not determine branch metric
values for branches of a trellis. (Docket No. 743). CMU counters that its expert Dr. McLaughlin
has demonstrated otherwise through his mapping of the claims onto the Accused Technology.
(Docket Nos. 704; 743).
CMU asserted that Marvell’s MNP Chips first infringed Claim 4 of the ‘839 Patent.
Claim 4 of the ‘839 Patent provides:
[a] method of determining branch metric values for branches of a
trellis for a Viterbi-like detector, comprising:
selecting a branch metric function for each of the branches
at a certain time index from a set of signaldependent branch metric functions; and
applying each of said selected functions to a plurality of
signal samples to determine the metric value
corresponding to the branch for which the applied
branch metric was selected wherein each sample
corresponds to a different sampling time instant.
.
‘839 Patent col.14 ll.10-19.
In order to show infringement of the ‘839 Patent, Dr. McLaughlin broke this claim into
three “elements.” First, he mapped “a method of determining branch metric values for branches
of a trellis for a Viterbi-like detector” onto the MNP technology via the circuits of the Chip Stip
37
by showing how the MNP: (1) is a detector; (2) computes branch metric values for branches of a
trellis; and (3) is a Viterbi-like detector. (Docket No. 677 at 86-120). On this point, CMU also
proffered supporting internal Marvell documents, such as the 88c7500M Specification from
August 2004, which stated the “MNP is an advanced post processing adaptive detector,” and Mr.
Burd’s “Media Noise Processor” write up, which stated the “MNP is used to properly take media
noise into account during the detection processor.” (Pl. Exs. 472; 408) In addition, the “DSP
Technical Presentation 5: Data Detection” by Dr. Hongxin Song from 2009 stated “Media noise
post-processor is a partial nonlinear detector in data dependent noise channel.” (Pl. Ex. 770).
This exhibit also contained circuit drawings of the MNP, trellis models, and detailed the “steps to
calculate nonlinear branch metric.” (Id.).
Second, Dr. McLaughlin pointed out where the MNP technology contained a method for
“selecting a branch metric function for each of the branches at a certain time index from a set of
signal-dependent branch metric functions” on the circuits from Exhibit A of the Chip Stip.
(Docket No. 677 at 108-117). Third, Dr. McLaughlin used Exhibit A of the Chip Stip to
demonstrate how the MNP used a method “applying each of said selected functions to a plurality
of signal samples to determine the metric value corresponding to the branch for which the
applied branch metric was selected wherein each sample corresponds to a different sampling
time instant.” (Id. at 118-119). He explained that the FIR filter implements the function and
applies it to the plurality of signal samples which then computes the metric value, wherein each
sample corresponds to a different time instant, referred to as “D.” (Id.). After finding that each of
the elements of Claim 4 of the ‘839 Patent was used by the MNP technology, Dr. McLaughlin
opined that the MNP infringed Claim 4 of the ‘839 Patent. (Id. at 120).
38
Likewise, CMU claimed Marvell’s MNP technology infringed Claim 2 of the ‘180
Patents, which incorporates Claim 1. Claims 1 and 2 of the ‘180 Patent claim:
1. A method of determining branch metric values in a detector,
comprising:
receiving a plurality of time variant signal samples, the
signal samples having one of signal-dependent
noise, correlated noise, and both signal dependent
and correlated noise associated therewith;
selecting a branch metric function at a certain time index;
and
applying the selected function to the signal samples to
determine the metric values.
2. The method claim 1, wherein the branch metric function is
selected from a set of signal-dependent branch metric functions.
‘180 Patent col.15 ll.39-51.
Given same, Dr. McLaughlin divided these claims into five “elements” and walked the
jury through how each was mapped on to the accused MNP circuits. He showed how some of the
language of the ‘180 Patent was the same as the ‘839 Patent and explained that there was no need
to go through the circuit schematics again since the methods were being applied to the same
circuit. (Docket No. 677 at 120-125). He “checked off” that he had already demonstrated that the
MNP technology involved: (1) “a method of determining branch metric values in a detector,
comprising”; (2) “selecting a branch metric function at a certain time index;” and (3) “applying
the selected function to the signal samples to determine the metric values;” and (4) “the method
claim 1, wherein the branch metric function is selected from a set of signal-dependent branch
metric functions.” (Id.).
On the remaining element, Dr. McLaughlin explained how the MNP technology used a
method of “receiving a plurality of time variant signal samples, the signal samples having one of
signal-dependent noise, correlated noise, and both signal dependent and correlated noise
associated therewith,” which was consistent with the second element of Claim 1 of the ‘180
39
Patent. (Docket No. 677 at 122). Based on his knowledge and expertise in the field, as well the
Marvell DSP Technical Presentation slides titled “Data Dependent Noise” and “Noise
Correlation,” he showed that the MNP technology used this last element. (Pl. Ex. 770). He also
noted that there was no requirement in the ‘180 Patent that the detector be a Viterbi-like detector.
(Docket No. 677 at 121). In light of his prior conclusion that each of the elements of Claim 2 of
the ‘180 Patent, through which the elements of Claim 1 are incorporated, was used in the MNP
technology, he concluded that the MNP infringed Claim 2 of the ‘180 Patent. (Id. at 123).
b. NLD Chips
Marvell next argues that no reasonable jury could find that Accused NLD Chips infringe
because, again: (1) the chips do not select a branch metric function for each of the branches of
the trellis at a certain time index; (2) the chips do not apply each of said branch metric functions
to a plurality of signal samples; and (3) the NLDs do not determine branch metric values for
branches of a trellis. (Docket No. 743).
As with the MNP and EMNP chips, Dr. McLaughlin started with the ‘839 Patent and
mapped the first element, “a method of determining branch metric values for branches of a trellis
for a Viterbi-like detector” onto the NLD circuits from Exhibit D of the Chip Stip. (Docket No.
677 at 140-142). Dr. McLaughlin broke this down further, and showed how the NLD: (1) is a
detector; (2) computes branch metric values for branches of a trellis; and (3) is a Viterbi-like
detector. (Id. at 140-143). Dr. McLaughlin based his conclusions on his analysis, using his
personal knowledge and expertise in this area, and he also explicitly relied on Marvell
documents, such as the presentation titled “Nonlinear Viterbi Detector Application Note –
C8830R1.0” by Dr. Hongxin Song. (Pl. Ex. 596).
40
In light of the Chip Stip, Dr. McLaughlin opined that the NLD technology contained a
method for “selecting a branch metric function for each of the branches at a certain time index
from a set of signal-dependent branch metric functions.” (Docket No. 677 at 142-144). He
demonstrated this on the circuit drawing and referenced supporting testimony from Marvell
engineer Mr. Burd.54 (Id. at 145-146).
Last, for the ‘839 Patent, Dr. McLaughlin relied on Exhibit D of the Chip Stip to
conclude that the NLD used a method “applying each of said selected functions to a plurality of
signal samples to determine the metric value corresponding to the branch for which the applied
branch metric was selected wherein each sample corresponds to a different sampling time
instant.” (Docket No. 677 at 146-149). He highlighted the location on the circuit diagrams of the
plurality of signal samples, the application of the branch metric function, and the branch metric
value. (Id.). CMU also offered deposition testimony from Mr. Burd, who stated that “[a]nd so in
fact noise whitening filter is a parameter of the branch metric function,” as well as Dr. Song’s
Application Note, to further support Dr. McLaughlin’s conclusion. (Id. at 149; Pl. Ex. 596).
Given that Dr. McLaughlin demonstrated how each of the elements of Claim 4 of the ‘839 Patent
was found to be used in the NLD technology, he opined that the NLD infringed Claim 4 of the
‘839 Patent. (Docket No. 677 at 149-150).
Moving on to Claim 2 of the ‘180 Patent, Dr. McLaughlin stated that his analysis showed
that the NLD technology involved: (1) a method of determining branch metric values in a
54
As Marvell’s Rule 30(b)(6) deposition witness on the technology-in-suit, Mr. Burd stated:
Q: And it is possible that for a different branch of the Viterbi trellis that the f0,
f1, f2, and f3 valued can be different.
A: Yes it is possible. So basically we’re using a branch metric function that is
parameterized in terms of --….Parameterized in terms of branch—branch
metric, branch—sorry—branch index, and so for different branches you would
choose different set of parameters.
(Docket No. 726).
41
detector; (2) a detector selecting branch metric functions; (3) application of the selected function;
(4) wherein the branch metric function is selected from the set of signal dependent branch
functions; and finally (5) that it received a plurality of time variant signal samples, those having
one of signal dependent noise and correlated noise. (Docket No. 677 at 154-156). He did not
walk through the circuits again as he had already demonstrated his analysis in those respects.
Because Dr. McLaughlin gave expert opinion testimony that each of the elements of Claim 2 of
the ‘180 Patent, through which the elements of Claim 1 are incorporated, used the NLD
technology, he concluded that the NLD infringed Claim 2 of the ‘180 Patent. (Id.).
c. Simulators
Marvell also contends that the Accused Simulators do not infringe as a matter of law.
(Docket No. 743 at 5-7). It alleges that the ‘839 Patent is directed to a method of determining
branch metric values for branches of a trellis for a Viterbi-like “detector.” (Id. at 5) (emphasis in
original). Similarly, it claims that the ‘180 Patent is directed to a “method of determining branch
metric values in a detector.” (Id. at 5-6) (emphasis in original). Because Marvell’s simulators are
not detectors and do not process actual signal samples, they are not implicated by either patent.
(Id. at 6-7).
In support, Marvell cites to Harris Corp. v. Ericsson Inc. for the proposition that “as a
matter of law, running a simulator program does not constitute actually performing the claimed
methods in a detector for processing signal samples.” 417 F.3d 1241, 1256 (Fed. Cir. 2005). The
Harris case involved a method of using a communication system which could “be directly
infringed only by one who uses the system, not by one who makes or sells the components of the
system.” Id. at 1256. In Harris, the Federal Circuit focused on the fact that the plaintiff had
submitted only a flow chart describing a “simulation program” and had not shown that the
42
“claimed method is actually carried out, rather than simulated, when Ericsson runs this
program.” Id. (emphasis added). Accordingly, the plaintiff had failed to present evidence of the
method being carried out by the program. Id. Nevertheless, the Federal Circuit did not create a
bright line rule about simulation programs. As described herein, CMU has presented enough
evidence to persuade the trier of fact that the claimed method in this case is actually carried out
on the challenged simulators.
Upon examination of the Accused Simulators, Dr. McLaughlin opined at trial “that
Marvell’s simulators infringed the asserted claims.” (Docket No. 677 at 83). In reaching this
conclusion, he studied the code of five simulators provided by Marvell in discovery: (1) the
KavcicPP Simulator; (2) the MNP Simulator; (3) the EMNP Simulator; (4) the NLD Simulator;
and (5) the KavcicViterbi Simulator. (Id. at 156-166). The first four simulators correspond to
particular chips and the last is used as a benchmark. (Id. at 169). Dr. McLaughlin described the
simulators’ use by Marvell: (1) to research and develop the chips; (2) to verify the chips’
hardware design; and (3) to provide simulation code to customers so that they may, in turn,
evaluate the performance and functionality of Marvell’s chips. (Id. at 158). This testimony was
supported by the deposition testimony of the Marvell corporate designee on this technology,
Greg Burd, in which he stated “C Code which is used in our simulation. So we provide a version
of the same C code to the designers to be used to serve as a golden source of test vectors to
verify the design against.” (Id. at 169-170).
Dr. McLaughlin analyzed the simulator code (Pl. Ex. 106), and he compared lines of code
to the circuits of the chip. (Docket No. 677 at 156-166). He demonstrated how the simulators
mimic the chips and how the different elements of the claims were covered by the code. (Id.).
Further, Dr. McLaughlin determined that there was a one-to-one match between what was in the
43
computer code and what was being calculated in the circuitry. (Id.). Dr. McLaughlin showed this
for each of the first four simulators. (Id.). Based on his conclusion that the chips infringed each
and every claim, he determined the simulators also infringed. (Id.).
For the KavcicViterbi Simulator, Dr. McLaughlin similarly analyzed the code in
question. (Id. at 166-173). In doing so, Dr. McLaughlin looked at testimony by Marvell on how
it uses this particular simulator. For example, Mr. Doan, then a Marvell engineer, stated that the
KavcicViterbi Simulator was used as the benchmark and that they “continuously run Kavcic
algorithm to benchmark any subsequent algorithm we develop at Marvell.” (Id. at 171-172;
Docket No. 761 at Jt. Ex. D at 137-138). Some of his analysis was also based on the testimony of
Marvell engineer Mr. Burd, who stated in relevant part:
The way I do my research which might be different from other
people, I first try to understand what’s available out there. So
maybe look at some ideas which people came up with before me.
… To make sure that I do, in fact, understand what Professor
Kavcic is trying to do and at the same time just to see kind of
what’s out there. Right? And then I can use this code for
benchmarking later. Right? For performance benchmarking later.
So this was a launching pad for our research.
(Docket No. 677 at 170-173).
This (Plaintiff Ex. 93) is KavcicViterbi.cpp class, written by
engineers in Marvell, and I do believe it contains the
implementation, as understood by our architecture team of the IP
which is taught in Professor Kavcic’s papers, and consequently in
his patent.
(Docket No. 677 at 170-171; Pl. Ex. 93).
Although Marvell insists that its simulators do not process actual signal samples, Dr.
McLaughlin maintained that the simulators do process both synthetic as well as real samples
from a hard drive or hard drive disk. (Docket No. 677 at 174-178). To this end, he referred to
two Marvell documents to support his conclusion, the first being an “Analysis and Design of
44
Viterbi Detector” which showed test results for a Toshiba wave form. The second document he
used was an email from Marvell’s Mike Madden55 to Hitachi, showing test results for wave form
captured from the spin stand that were resampled, scaled, and fed into Marvell’s simulators. (Pl.
Exs. 527; 341).
In sum, Dr. McLaughlin opined that: (1) the computer code directly mimics the chip; (2)
the chip infringes each and every element of the claims of the CMU patent; and (3) the computer
code and the simulator also infringe each and every element of the claims. While Marvell
vigorously disagreed with all these opinions, both parties had an opportunity to make their
opposing arguments on the nature of simulators to the jury. See, e.g., (Docket No. 759 at 64-65)
(“And [CMU] say yeah, simulated data; simulations, simulator. They know full well that when
you sit down at a computer and you put in code and you simulate a formula, that’s not the
detector. You’re not infringing anybody’s work when you do that. Everybody does it. They did
it.”). The determination was purely factual and one which the jury alone would have to decide by
weighing the offered evidence and the credibility of witnesses who testified to same. Walker v.
Gordon, 46 F. App’x 691, 695 (3d Cir. 2002).
d. Direct Infringement in Sum
CMU presented sufficient evidence, through Dr. McLaughlin as well as supporting
Marvell documents, that the MNP, EMNP, and NLD chip technology and the Accused Simulator
technology use a method that includes each and every method step of Claim 4 of the ‘839 Patent
and Claim 2 of the ‘180 Patent. Whether Dr. McLaughlin’s conclusions were persuasive or
otherwise worthy of credence goes to the core of his credibility as a witness, and such
55
The parties did not provide information to the jury about Michael Madden, but provided his deposition to
the Court in the fall as part of possible depositions designations at trial. See (Docket No. 535). Therein, he stated he
went with Marvell as a design engineer in 2000, and then rose up the ranks to be a senior design manager. See
November 3, 2010 depo. at 19-23. He reports to Mr. Burd. Id.
45
“[d]eterminations regarding the weight to be accorded, and the sufficiency of, the evidence relied
upon by the proffered expert are within the sole province of the jury.” Walker, 46 F. App’x at
695. Indeed, Marvell took advantage of the opportunity to rebut Dr. McLaughlin’s conclusions
by offering opinion evidence through its own non-infringement expert Dr. Blahut that its
products did not infringe CMU’s patents. (Docket No. 711 at 204-308). The jury was free to
accept either expert’s opinions or reject them, as the “credibility of the parties’ competing
experts is an issue for the jury to resolve, not the Court.” Miller ex rel. Miller v. Evenflo Co.,
Inc., Civ. No. 09-108, 2011 WL 7037127, at *3 n.3 (W.D. Pa. Dec. 15, 2011); see also Walker,
46 F. App’x at 695.
Considering the evidence in the light most favorable to the nonmoving party, and giving
it the advantage of every fair and reasonable inference in light of the undisputed facts, the Court
finds there was adequate evidence upon which a reasonable jury could properly find a verdict in
favor of CMU. Therefore, Marvell’s motion for JMOL and motion for a new trial on this issue is
denied. The question of whether there was direct infringement by the Accused Chips and
Accused Simulators was properly submitted to and decided by the jury.
3. Indirect Infringement
a. Inducement
Marvell asserts that it was entitled to a judgment as a matter of law or a new trial on
CMU’s claims of indirect infringement for actively inducing infringement. (Docket No. 743,
805). It argues that CMU has not proven: (1) direct infringement; (2) that Marvell had actual
knowledge of the patents-in-suit; and (3) that it specifically intended for others to perform acts
that directly infringe one or more of the asserted claims. (Id.).
46
First, the Chip Stip lists the models of chips that correspond to the agreed-upon circuits
that Dr. McLaughlin analyzed. (Pl. Ex. 823). These chips are sold to Marvell’s customers to be
used in hard disk drives, and they are also used by Marvell in research and development phases.
(Docket No. 677 at 103-104, 178). As part of his testimony, Dr. McLaughlin analyzed the
hardware and firmware settings of Marvell’s customers such as Western Digital, Samsung, and
Toshiba. (Pl. Exs. 1914; 1915; 1918; 1919). Once again, Dr. McLaughlin put forth expert
testimony to prove direct infringement of Marvell’s chips, thereby allowing CMU to advance a
theory of induced infringement.56
Second, in order to achieve success on induced infringement, CMU was required to show
that Marvell had “knowledge of the existence of the patent” or took “deliberate actions to avoid
confirming a high probability of wrongdoing.” Global-Tech, 131 S. Ct. at 2068-70. To that end,
CMU presented significant amounts of evidence to show Marvell’s knowledge of the patents.
Much of this evidence also supported CMU’s claim of willful infringement, which is addressed
later herein.57
CMU proffered the following evidence of Marvell’s knowledge of the patents-in-suit.
First, is the email from Dr. Kavcic sent to Dr. Nazari at Marvell in 1998, providing a link to his
publications, resume, and recent work. (Def. Ex. 1023). Second, is the January 3, 2002 email
from Greg Burd to Toai Doan and Nersi Nazari, attaching a write up on the KavcicPP and stating
“1. Kavcic’s detection scheme is patented (assignee: Carnegie Mellon Univ. 2001).” (Pl. Ex.
280). Third, there is the January 4, 2002 weekly status report email from Mr. Burd to Mr. Doan,
56
See discussion supra at Section V.A.2.
57
See discussion infra at Section V.C.
47
Dr. Nazari, and Ke Han,58 describing his work and stating “[a]nd of course as I mentioned
earlier, Kavcic detector is also patented.” (Pl. Ex. 283). Such evidence indicated that Marvell
knew of both the patents and the high likelihood that the Accused Technology infringed,
especially given that the very people who designed the Accused Technology, i.e., the engineers,
knew of the patents. (Id.).
In fact, Marvell hardly argued that it did not know of the CMU Patents; its theme
throughout trial was that Dr. Kavcic’s work was its launching point only, and its technology was
a “sub-optimal” version of Kavcic’s algorithm. (Docket No. 756). CMU replied that the
MNP/NLD used the Kavcic algorithm, and optimality had no bearing on whether the claims of
the Kavcic patented method were infringed. (Id.) In support, CMU proffered one of Dr. Wu’s
weekly emails from January 10, 2003 that stated “1. MNP enhancement: Greg and I discussed
the approach of using a different noise whitening filter for each branch. It turns out to be the
original structure that Kavcic proposed in his paper.” (Pl. Ex. 366).59 Thus, even if, as Marvell
insists, it did not know the accused technologies infringed the patents-in-suit, CMU put forth
sufficient evidence that a jury could find that Marvell was willfully blind in light of the high
probability of infringement. Global-Tech, 131 S. Ct. at 2072. Once presented with the patents,
Mr. Doan testified that he never looked at the patents, never directed others to look at them, and
never contacted Marvell’s legal department about them. (Docket No. 761 Jt. Ex. D at 125, 130).
58
Mr. Han was not deposed or called as a witness by either party. Based on his email address, he was a
Marvell employee at the time said email was transmitted. (Pl. Ex. 283).
59
As detailed later herein, Mr. Burd admits that at least the KavcicViterbi simulator used by Marvell during
testing, was designed to encapsulate Dr. Kavcic’s work:
This (Plaintiff Ex. 93) is KavcicViterbi.cpp class, written by engineers in
Marvell, and I do believe it contains the implementation, as understood by our
architecture team of the IP which is taught in Professor Kavcic’s papers, and
consequently in his patent.
(Docket No. 677 at 170-171; Pl. Ex. 93).
48
Despite same, he reported to Nersi Nazari on his January 14, 2002 status report that they would
“continue work on non-linear detector based upon Kavcic’s model.” (Pl. Ex. 285).
Additionally, as to Marvell’s knowledge of the patents, CMU’s Technology Transfer
representative Carl Mahler sent a letter in August 2003 to Marvell’s CTO Dr. Pantas Sutardja
and Matthew Gloss, who was Marvell’s then General Counsel, stating that CMU held patents in
the area of correlation-sensitive adaptive sequence detectors, “namely US Patent number
6,201,839 B1 and US Patent number 6,438,180 B1.” (Pl. Ex. 422, Pl. Ex. 431). Mr. Mahler
attached the patents to the letter and encouraged Marvell to contact him if they found the patents
to be of interest. (Id.). There was no response to these letters. (Docket No. 682 at 150). Similarly,
Junya Suwanai of Fujitsu, “a customer for Marvell’s read channel i.e. 5575M, 7500M,”
corresponded with Marvell in November 2004, stating that Fujitsu had received a license offer
for the CMU Patents-in-suit. (Pl. Ex. 477). He wrote that “since it seems that these patents might
be related to read channel, we would like to know, by the end of November, your opinion
regarding relationship between CMU’s Patents and the above Marvell lead [sic] channel and the
specific grounds/reasons for such opinion.” (Id.). No documents were found in relation to this
letter, and Marvell’s corporate designee testified that he did not know of any response to this
letter. (Docket No. 761 at Jt. Ex. C. at 534-535).
CMU had to prove that Marvell had the specific intent to encourage another’s
infringement, which can be demonstrated if Marvell caused, urged, encouraged, or aided the
infringing conduct. DSU, 471 F.3d at 1306; Akamai Techs., 692 F.3d at 1308. On this point,
CMU showed that Marvell aided its customers’ infringement by producing chips that used the
accused methods and instructed its customers to use the chips in infringing modes. (Docket No.
677 at 180-183; Docket No. 678 at 91; Pl. Exs. 1913; 1918; 1919). Specifically, CMU entered
49
into evidence emails, firmware, as well as programming instructions for hardware showing that
Marvell directed its customers, including Western Digital, Samsung, and Toshiba, to use the
chips in infringing modes. (Pl. Exs. 730; 932; 1914; 1915; 1918; 1919).
Likewise, Dr. McLaughlin testified about Marvell field application engineers who are
deployed to Marvell’s customers to assist them in putting Marvell’s chips into their products and
instruct them on how to use the chips. (Docket No. 677 at 178-179). To that end, Teik Ee Yeo,
Western Digital’s corporate designee, testified that the chips it buys from Marvell have the
technology enabled, i.e., set to “infringing modes,” and that Western Digital tended to follow the
suggestions of Marvell engineers regarding these settings on the chips. (Docket No. 761 at Jt. Ex.
B 146).60 This knowledge of customer use was buttressed by the testimony of CMU industry
expert, Dr. Bajorek, who opined that the Accused Technology became industry standard.
(Docket No. 678 at 108-112).
Accepting the evidence in the light most favorable to CMU, the nonmoving party, and
giving it the advantage of every fair and reasonable inference based on the facts of record, there
was sufficient evidence presented at trial to support CMU’s theory that Marvell created
technology that employed the accused methods with either actual knowledge or willful blindness
to the possibility that its devices infringed the patents-in-suit, and that Marvell sold same to its
customers. CMU produced sufficient evidence that Marvell actively induced at least one of
Marvell’s customers to use a method that is covered by Claim 4 of the ‘839 Patent or Claim 2 of
the ‘180 Patent. Thus, Defendants’ JMOL on this issue was denied, and the question of whether
60
As noted, two representatives from Western Digital testified at trial, corporate designee Teik Ee Yeo,
(Docket No. 761 at Jt. Ex. B), and Iftiqar Baqai. (Docket No. 711). From 1997 to 2005, Mr. Baqai worked at
Western Digital in selection and development of read channel chips and their subsequent integration. (Docket No.
711 at 145-147). His testimony did not touch on the enablement of the chips in certain modes. (Id.). After 2005, he
no longer worked in the read channel area at Western Digital. (Id. at 175).
50
there was induced infringement properly proceeded to the jury. Considering the record as a
whole, the jury’s verdict of induced infringement is not against the weight of evidence, and the
motion for a new trial on this issue is denied.
b. Contributory Infringement
Marvell argues that it was entitled to either a judgment as a matter of law or a new trial
on CMU’s claims of contributory infringement for actively contributing to infringement. (Docket
Nos. 743; 805). It argues that CMU has not proven: (1) direct infringement; (2) that Marvell
possessed the requisite intent for contributory infringement, i.e., that it knew the Accused Chips
were infringing on CMU’s patents; and (3) that Marvell’s components had no substantial noninfringing uses. (Docket No. 743 at 3-4).
As previously stated, however, the record shows that CMU put forth ample evidence to
prove direct infringement by Marvell’s customers, thereby allowing CMU to advance a theory of
induced infringement.61 The Court has also observed that CMU presented sufficient evidence to
show that Marvell possessed the requisite knowledge of the patents-in-suit at the time of
infringement. (Pl. Ex. 280; Pl. Ex. 283)
Moving forward, the Court finds that CMU has produced sufficient evidence that the
Accused Chips were made specifically to use the Accused Technology with no other noninfringing use. For example, Dr. Bajorek testified that all the chips are designed through the
described sales cycle and that the final chips are custom made for each customer, with the
Accused Technology specifications in mind. (Docket No. 678 at 70). Each customer then
received programming instructions to use the chips in infringing modes. (Pl. Ex. 730; Pl. Ex.
1913). Dr. McLaughlin also testified that the MNP and NLD chips do not have any use besides
61
See discussion supra at Section V.A.2.
51
detecting data in hard drive disks and that they do not have any substantial uses beyond the
enabled, infringing modes. (Docket No. 677 at 188).
Accepting the evidence in the light most favorable to Plaintiff, the nonmoving party, and
giving it the advantage of every fair and reasonable inference based on the undisputed facts, it is
clear that there was sufficient evidence upon which a reasonable jury could properly find that
Marvell contributorily infringed Claim 4 of the ‘839 Patent and/or Claim 2 of the ‘180 Patent.
Accordingly, Marvell’s JMOL as to this issue was denied, and the question of whether there was
contributory infringement was properly presented to the jury. The jury’s finding that Marvell had
engaged in contributory infringement was not against the weight of the evidence, and the Court
likewise denies Marvell’s motion for a new trial on these grounds.
B. Validity
The parties filed cross-motions for JMOL on the patents’ validity. The Court was initially
presented with CMU’s Motion for Judgment As a Matter of Law on Marvell’s Invalidity
Defenses” as well as its “Brief in Support of its Motion. (Docket Nos. 731; 732). Marvell
opposed this motion. (Docket No. 749). Marvell, in turn, submitted its own Motion for Judgment
as a Matter of Law on Invalidity with a supporting brief. (Docket Nos. 747; 748). CMU similarly
opposed this cross-motion. (Docket No. 750). The Court denied both of these Motions on the
record. (Docket No. 759). Following trial, Marvell renewed its JMOL on invalidity and requests,
in the alternative, a new trial. (Docket No. 805). CMU did not renew its JMOL on validity given
the jury’s favorable verdict. (Docket No. 762).
52
1. Legal Standard
a. Anticipation Legal Standard
An issued patent enjoys a presumption of validity. See 35 U.S.C. § 282; SRAM Corp. v.
AD-II Engineering, Inc., 465 F.3d 1351, 1357 (Fed. Cir. 2006). Due to this presumption,
invalidity must be proven by clear and convincing evidence. Microsoft Corp. v. i4i Ltd.
Partnership (hereinafter “i4i”), __ U.S. __, 131 S. Ct. 2238, 2242 (2011). “The burden of
establishing invalidity of a patent or any claim thereof shall rest on the party asserting such
invalidity.” 35 U.S.C. 282. Even in instances where the allegedly anticipatory reference was not
before the Patent and Trademark Office (“PTO”), the clear and convincing standard remains. See
i4i, 131 S. Ct. at 2244; see also Uniroyal, Inc. v. Rudkin-Wiley Corp., 837 F.2d 1044, 1050 (Fed.
Cir. 1988). Given that “[c]redibility determinations, the weighing of evidence, and the drawing
of legitimate inferences from the facts are jury functions, not those of a judge,” this Court should
not, at this late stage, consider the possible additional weight carried by a piece of prior art not
considered by the PTO. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)
(citations omitted).
A patent claim is “invalid for anticipation if a single prior art reference discloses each and
every limitation” of the claim. Schering Corp. v. Geneva Pharm., 339 F.3d 1373, 1377 (Fed. Cir.
2003) (emphasis added); see also Zenith Elecs. Corp. v. PDI Commc’ns Sys., Inc., 522 F.3d
1348, 1363 (Fed. Cir. 2008). Each element, and the “arrangement or combination” of those
elements, must be present in the prior art reference. See Net MoneyIN, Inc. v. VeriSign, Inc., 545
F.3d 1359, 1371 (Fed. Cir. 2008). The key is that, within “the four corners of a single, prior art
document … every element of the claimed invention [must be described], either expressly or
inherently, such that a person of ordinary skill in the art could practice the invention without
53
undue experimentation.” Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282
(Fed. Cir. 2000).
b. Obviousness Legal Standard
Obviousness under 35 U.S.C. § 103(a) is a legal question based on underlying factual
determinations. Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352, 1360 (Fed. Cir. 2011), cert.
denied, 132 S. Ct. 1755 (2012). An obviousness analysis measures the difference between the
claimed invention and the prior art to determine whether “the subject matter as a whole would
have been obvious at the time the invention was made” to a person having ordinary skill in the
art. Alza Corp. v. Mylan Labs., Inc., 464 F.3d 1286, 1289 (Fed. Cir. 2006) (citations omitted).
The factual underpinnings of the obviousness analysis, often referred to as the Graham
factors, include: 1) the scope and content of the prior art; 2) the level of ordinary skill in the art;
3) the differences between the claimed invention and the prior art; and 4) evidence of secondary
factors, also known as objective indicia of non-obviousness. Graham v. John Deere Co., 383
U.S. 1, 17-18 (1966). “Evidence rising out of the so-called ‘secondary considerations’ must
always, when present, be considered en route to a determination of obviousness.” Transocean
Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc., 699 F.3d 1340, 1349 (Fed. Cir.
2012).
Obviousness requires more than a mere showing that the prior art includes separate
references covering each limitation in a claim under examination. KSR Int’l Co. v. Teleflex Inc.,
550 U.S. 398, 418 (2007). Rather, obviousness requires the additional component that a person
of ordinary skill at the time of the invention would have selected and combined those prior art
elements in the normal course of research and development to yield the claimed invention. Id. at
421.
54
As the parties alleging invalidity of the patents at issue, Marvell was required to prove its
invalidity defenses by clear and convincing evidence. i4i, 131 S. Ct. at 2242. At trial, Marvell
called Dr. John Proakis to provide expert technical testimony. (Docket No. 726). In rebuttal,
CMU recalled Dr. Steven McLaughlin to provide expert technical testimony about CMU’s
patents and the prior art in this field. (Docket No. 736).
2. CMU’s Motion on Marvell’s Invalidity Defenses
While not raised post-trial, the Court will first address CMU’s earlier Motion for
Judgment as a Matter of Law on Marvell’s Invalidity Defenses (Docket No. 731), which was
denied on the record on December 21, 2012 without further exposition given the time constraints
of trial. (Docket No. 764 at 99).
a. Anticipation
CMU moved for judgment as a matter of law, asserting that Marvell had failed to put
forth sufficient evidence on its invalidity defense of anticipation because: (1) Dr. Proakis
admitted that the Worstell Patent does not disclose all elements of the CMU Patents; and (2) Dr.
Proakis relied upon an incorrect claim construction making his opinion both incorrect and
inadmissible, as a new opinion not disclosed in his expert report. (Docket No. 732).
Marvell had presented Dr. Proakis’s testimony to show that all of the elements of the
claims-in suit were found in prior art. At the outset, Dr. Proakis opined that the Weining Zeng
and Inkyu Lee articles, as well as Dr. McLaughlin’s statements on same, proved that Dr. Kavcic
and Dr. Moura were not the first to disclose a method selecting a branch metric function from a
set of functions for each of the branches at a certain time index. (Def. Exs. 37; 38). Dr. Proakis
continued explaining that one of the equations in the ‘839 Patent expressing the same equation as
55
Weining Zeng, was, in fact, a set of functions and referenced Dr. Moura’s testimony.62 (Docket
No. 726 at 57). Dr. Proakis also stated that Dr. Kavcic was not the first person to propose a
Viterbi detector that took correlated noise into account and recounted that Dr. McLaughlin had
said the same thing at his deposition. (Id. at 58).
Next, Marvell proffered U.S. Patent No. 6,282,251 (the “Worstell Patent”) as prior art for
purposes of its anticipation defense. (Def. Ex. 187). This patent was filed on March 21, 1995,
three years before the CMU Patents were filed. (Id.). Dr. Proakis stated that equation 20 of the
Worstell Patent took into account signal dependent noise by scaling the branch metrics that have
a signal dependent noise with a fraction that depends on the transition noise standard deviation.
(Docket No. 726 at 60). He stated that because transition noise is another term for signal
dependent noise, Worstell teaches that whenever there is a transition, the corresponding branch
metric function is scaled by one over sigma squared, as disclosed by Inkyu Lee and Weining
Zeng. (Id.). Dr. Proakis also said that the Worstell Patent disclosed a modified Viterbi detector
which accounts for correlated noise, claimed by the first element of Claim 4 of the ‘839 Patent.
(Docket No. 726 at 63). Dr. Proakis then opined that the selecting and applying limitations of the
‘839 Patent are found in the Worstell Patent by highlighting the parts of relevant equations
derived from the Worstell Patent and the corresponding elements of Claim 4. (Id. at 68). Marvell
62
Dr. Moura’s referenced deposition testimony is as follows:
Q: Okay. So, in your mind, branch metric equation 10 at the bottom of column 6
of the ‘180 Patent is a set of branch metric functions; is that correct?
A: I guess we could say so.
Q: Why?
A: I told you, because the variance depends on the AIs, signal dependent.
(D Demo 12-10).
56
supported its position with proffered deposition testimony from Dr. McLaughlin.63 Thus, Dr.
Proakis concluded that Claim 4 of the ‘839 Patent was anticipated by the Worstell Patent.
Dr. Proakis then moved to Claim 2 of the ‘180 Patent, and as four of the elements were
previously determined to be present in the Worstell Patent through his ‘839 analysis, he
discussed the receiving step of Claim 2. (Docket No. 726 at 68-71). Dr. Proakis highlighted the
relevant portions of the Worstell Patent and stated that the Worstell branch metric equation
covers both correlated noise and signal dependent noise. (Id.). With this, Dr. Proakis concluded
that Claim 2 of the ‘180 Patent was anticipated by the Worstell Patent. (Id.).
CMU countered that Dr. Proakis’ opinions rested on an incorrect claim construction of
the terms “function” and “signal dependent branch metric function” and that such contradictory
testimony is therefore insufficient for a finding of validity as a matter of law. (Docket No. 732).
Having considered his testimony, the Court held that the record was not entirely clear that Dr.
Proakis offered a contradictory construction at trial, thereby violating the expert disclosure
requirements of Rule 26. (Docket No. 726 at 110-111); see Pritchard v. Dow Agro Scis, 263
F.R.D. 277, 284-85 (W.D. Pa. 2009) (“[c]aselaw establishes that a declaration should be stricken
if it contains new opinions or information which is contradictory to that set forth in the expert
report, but it need not be stricken if it contains merely an elaboration of and is consistent with an
63
Dr. McLaughlin testified:
Q: The paragraph refers to a further modified metric at Line 49 and Column 10;
right?
A: Okay. Yes.
Q: And you agree that the paragraph describes modifying a metric to take
transition noise into account?
A: That is what -- that is what the sentence says.
Q: And you agree that the transition noise can depend on the type of the
transition; is that correct?
A: The noise -- the value of the noise is going to be different -- is going to be
different whether there is a transition or whether there is no transition.
(D Demo 12-16).
57
opinion/issue previously addressed in the expert report”). While the Court has clarified the legal
meaning of certain terms for this case, Dr. Proakis’ use of the challenged terms throughout his
long career has not been guided by this Court’s claim construction. Similarly, his prior use of the
word “function” came before the Court offered clarification as to the meaning of this term for
this case. (Docket No. 337).64 To find that he has changed his entire opinion based on these
statements alone is an unwarranted conclusion for the Court to make. Even if Dr. Proakis had
offered a “new opinion” for the first time at trial, the striking of such evidence for a discovery
violation is an “extreme sanction” normally reserved for a “showing of willful deception or
‘flagrant disregard’ of a court order by the proponent of evidence,” which is not the case here.
Konstantopoulos v. Westvaco Corp., 112 F.3d 710, 719 (3d Cir. 1997) (quoting Meyers v.
Pennypack Woods Home Ownership Ass’n, 559 F.2d 894, 905 (3d Cir. 1977)).
To the extent that CMU continues to claim that Dr. Proakis used the incorrect meaning of
the term “signal dependent branch metric function,” its argument seems to be one of semantics
and not an issue of law upon which the Court need rule. Throughout the trial of this case, the jury
had the Court’s claim constructions,65 and counsel as well as witnesses displayed portions in
parts of their slides. (Docket No. 770 at Ex. M; Docket No. 771 at Ex. H). Any alleged
discrepancies between his use of the term “signal dependent branch metric function” in his
expert report and trial testimony were addressed during cross-examination, and, as such, went
towards the ultimate weight of his opinion, as determined by the jury. See i4i Ltd. P’ship v.
64
The Court is also mindful in June 2012, after its decision on the construction of the term “function,” the
Court denied Marvell’s Motion for Leave to Supplement Expert Reports to Take Into Account the Court’s Summary
Judgment Ruling. (Docket No. 425). In so holding, the Court noted that expert discovery was to have been
completed by April 6, 2012, (Docket No. 315), and that as Marvell had been aware of CMU’s position “well before
its expert reports were due, [ ] it should have anticipated the possibility that the Court would adopt CMU’s position.”
(Docket No. 425).
65
Each of the jurors had a notebook throughout trial that contained a copy of the patents, claims construction,
and a glossary of useful terms.
58
Microsoft Corp., 598 F.3d 831, 856 (Fed. Cir. 2010) (“‘[v]igorous cross-examination,
presentation of contrary evidence, and careful instruction on the burden of proof are the
traditional and appropriate means of attacking shaky but admissible evidence.’”) (citing Daubert
v. Merrell Dow Pharm., Inc., 509 U.S. 579, 596 (1993)).
CMU claims that during cross-examination, Dr. Proakis admitted that the Worstell Patent
did not disclose all elements of the CMU Patents. (Docket No. 732). Dr. Proakis stated that the
Worstell Patent spoke of “zero” branches and “one” branches. (Docket No. 726 at 92-94).
During cross, he agreed that the Worstell Patent never put any multiplier on the “zero” branches
but stated it would be “totally obvious to a person skilled in the art.” (Docket No. 726 at 94). The
key to anticipation is that every element of the claimed invention must be described in the piece
of prior art. Advanced Display Sys., Inc., 212 F.3d at 1282. However, the prior art can describe
the elements inherently, such that a person of ordinary skill in the art could still practice the
invention without undue experimentation. Advanced Display Sys., Inc., 212 F.3d at 1282.
The Court is mindful that Dr. Proakis is a technical expert, not a legal expert, and his
statement, as CMU interprets it, is not dispositive on its own. Resolving all reasonable inferences
in favor of the non-movant, the Court determined that a jury could find that his statement that the
multiplier would be “totally obvious to a person skilled in the art” was made to show that the
prior art inherently described the claimed invention. (Docket No. 726 at 94). Whether his
position is credible is the province of the jury. Collins v. Signetics Corp., 605 F.2d 110, 115 (3d
Cir. 1979) (“Neither a trial nor an appellate court has the authority to substitute its judgment for
that of the jury and thus usurp the jury’s function as the principal finder of fact.”). Given the
stage of trial, the Court did not find Dr. Proakis’s statement to be an admission that the Worstell
Patent does not anticipate the patents-in-suit as a matter of law. The Court reiterates that the
59
making of credibility determinations, weighing of evidence, and the drawing of reasonable
inferences from the facts are jury functions—they are not to be usurped by the Court as a matter
of law. Eschelman, 554 F.3d at 433.
Having considered the evidence in the light most favorable to the nonmoving party,
Marvell, and giving it the advantage of every fair and reasonable inference in light of the
undisputed facts, this Court concluded that Marvell had presented enough evidence for a
reasonable jury to find that Claim 4 of the ‘839 Patent and Claim 2 of the ‘180 Patent were
anticipated. Therefore, CMU’s motion for judgment as a matter of law on this basis was denied,
and the question of whether there was invalidity by anticipation was presented to the jury.
b. Obviousness
CMU argued that it was entitled to judgment as a matter of law on invalidity because
Marvell had failed to provide sufficient evidence that the asserted claims were obvious because:
(1) Dr. Proakis again admitted that the Worstell Patent does not disclose all elements of the
CMU Patents; (2) Dr. Proakis once more relied upon an incorrect claim construction making his
opinion both incorrect and inadmissible, as a new opinion not disclosed in his expert report;66
and (3) Dr. Proakis’s opinion was simply conclusory. (Docket No. 732).
Dr. Proakis opined that even if the Worstell Patent did not anticipate the asserted claims,
the Worstell Patent proves that the claims would have been obvious to a person of ordinary skill
in the art. (Docket No. 726 at 94). He stated that he believed a person of ordinary skill in the art,
reading the Worstell Patent claims and Column 10, would know that sigma squared has to vary
from branch to branch. (Id.). This, he urged, would make Claim 2 of the ‘180 Patent and Claim 4
of the ‘839 Patent obvious to a person of ordinary skill in the art. (Docket No. 726 at 77). His
66
The Court has just addressed CMU’s arguments on the admissibility of Dr. Proakis’s “new” opinion and
need not address the issue again. See discussion supra at Section V.B.2.a.
60
analysis was based primarily on his examination of the Worstell Patent. However, Marvell had
provided enough evidence to show that Dr. Proakis’s testimony was not conclusory and that he
considered secondary indicia of non-obviousness, such as statements by Dr. McLaughlin, Dr.
Moura, and Dr. Kavcic regarding the novelty of aspects of their invention. (Docket No. 726 at
58-59).
He and Dr. McLaughlin disputed what a person of the ordinary skill in the art would find
to be obvious and the nature of secondary considerations. (Docket No. 726 at 75-77; Docket No.
736 at 80-81). To this end, Dr. Proakis stated the reasons for his view (Docket No. 726 at 75-77),
and the Court does not find that they were conclusory as a matter of law. Obviousness, in the
end, is a question that must be determined based on the weight of the evidence presented and on
credibility determinations. See Unigene, 655 F.3d at 1360.
After considering the evidence in the light most favorable to the nonmoving party,
Marvell, and giving it the advantage of every fair and reasonable inference in light of the
undisputed facts, the Court concluded at trial that Marvell had presented enough evidence for a
reasonable jury to find that Claim 4 of the ‘839 Patent and Claim 2 of the ‘180 Patent were
obvious. Therefore, CMU’s motion for judgment as a matter of law on this basis was denied, and
the question of invalidity by obviousness was properly given to the jury to decide.
c. Written Description, Indefiniteness, and Enablement
At trial, CMU contended that Marvell had adduced no evidence in support of its written
description, indefiniteness, and enablement defenses. Marvell acknowledges such in its Brief in
Opposition, stating “Marvell acknowledges that it has not pursued its Section 112 defenses
(written description, enablement, and indefiniteness) at trial.” (Docket No. 749). Accordingly,
these defenses are waived. Moreover, as there was no evidence presented on Marvell’s invalidity
61
defenses of written description, indefiniteness, and enablement, no reasonable jury could
properly find a verdict in favor of Marvell on these defenses. (Docket No. 726). Therefore,
CMU’s motion for judgment as a matter of law on these three defenses was denied as moot.
(Docket No. 764 at 99).
3. Marvell’s Motion for Invalidity
a. Anticipation
Marvell argues that it is entitled to judgment as a matter of law or, in the alternative, a
new trial on the issue of invalidity by anticipation because: (1) the PTO did not consider the
Worstell Patent (Def. Ex. 187); (2) the Worstell Patent discloses every limitation of Claim 4 of
the ‘839 Patent; and (3) that Worstell discloses every limitation of Claim 2 of the ‘180 Patent.
(Docket Nos. 748; 805).
On the first point, Marvell has given the Court no authority as to why the fact that the
Worstell Patent was not disclosed to the Patent Office is relevant to the JMOL anticipation
analysis. Marvell argues that such a circumstance may ease the burden of clear and convincing
evidence (Docket No. 748 at 2); yet, the Court is mindful that the jury is tasked with weighing
the evidence. Eschelman, 554 F.3d at 433. The fact that the allegedly anticipatory reference was
not before the PTO does not change the clear and convincing standard for invalidity defenses,
and it is therefore irrelevant to the Court’s decision on anticipation. i4i, 131 S. Ct. at 2244.
Despite same, the jury was free to consider this fact in its determination on invalidity.67
67
The jury as the fact finder is tasked also with determining expert credibility. Miller, 2011 WL 7037127, at
*3 n.3. The Court notes several factors that could have had an impact on the jury’s analysis of the facts, including
length of the testimony, demonstratives, the thoroughness of presentation, and ease of understanding the expert’s
testimony, all of which, in the Court’s estimation, weighed in CMU’s favor throughout the trial. For each of his
conclusions, Dr. McLaughlin methodically laid out his opinions, cited the underlying factual support, explained his
reasoning with drawings and demonstratives, and then reiterated his opinion again. (Docket No. 677). His approach
was extremely thorough, complete, and clear. Dr. Blahut and Dr. Proakis, on the other hand, were forced to testify in
a hurried, sometimes disjointed fashion due to the time spent on other witnesses by Marvell’s trial team.
62
At trial, CMU called Dr. McLaughlin, as a rebuttal validity expert, to show that the
Worstell Patent did not invalidate the asserted claims. Dr. McLaughlin first testified that CMU’s
patents were novel in that they claimed a method using a set of signal dependent branch metric
functions and applied those signal dependent branch metric functions to a plurality of signal
samples. (Docket No. 736 at 54). Dr. McLaughlin contrasted the CMU Patents from the Inkyu
Lee and Weining Zeng articles by explaining that those articles referred to a single signal
sample, directed just towards transition noise, while CMU’s invention is oriented towards
multiple signal samples and intended to address noise associated with a specified sequence of
symbols, not just one transition. (Id. at 54).
In regards to the Worstell Patent, Dr. McLaughlin stated that both Claim 4 of the ‘839
Patent and Claim 2 of the ‘180 Patent require a set of signal-dependent branch metric functions
while the Worstell Patent only contemplates one. (Id. at 55). Dr. McLaughlin explained that
Equation 20 of the Worstell Patent shows just this single FIR filter. (Id. at 65). Given Dr.
Kavcic’s prior testimony and related demonstratives, Dr. McLaughlin showed how Dr. Kavcic
had originally only contemplated one FIR filter, which was the same as the Worstell Patent
invention, but then moved on from this idea to develop the invention in suit. (Id. at 64). Next, Dr.
McLaughlin opined that Worstell’s patent takes transition noise into account by modifying the
branch metrics by a fraction, but that this modification only happens on the “one” branches, not
the “zero” branches, and thus not on all branches. (Id. at 67). He further explained that the
fraction is a constant for all the branches, meaning that the method taught in the Worstell Patent
is different from that discussed in the patents-in-suit, where that modification is variable. (Id. at
Unsurprisingly, they were not able to elucidate their opinions as clearly as Dr. McLaughlin, who was by far the best
of the technical witnesses. (Docket Nos. 711; 726).
63
67-68). Finally, Dr. McLaughlin concluded that the Worstell Patent did not apply the transition
noise adjustment to a plurality of signal samples. (Id. at 70).
Dr. McLaughlin disagreed with Dr. Proakis’s opinions on invalidity, considering them to
be incorrect. (Id.) Instead, he testified that Dr. Proakis had described the Worstell method in the
opposite order of how the patent described it and referred to a further modified branch metric
equation that did not appear in the Worstell Patent. (Id. at 67-68). Given all of this, Dr.
McLaughlin stated that the Worstell Patent did not contain each of the elements of Claim 4 of the
‘839 Patent or each of the elements of Claim 2 of the ‘180 Patent. (Id. at 73) In his opinion, the
asserted claims of the ‘839 Patent and the ‘180 Patent were not anticipated. (Id.).
The factual disputes regarding invalidity that underlie the experts’ opinions in this case
were for the jury to decide. See In re Montgomery, 677 F.3d 1375, 1379 (Fed. Cir. 2012), cert.
denied, 133 S. Ct. 788 (2012). Once again, Dr. McLaughlin’s conclusions were left to the jury to
accept or reject as it was for them to determine credibility and the weight given to such evidence.
Id. Considering the evidence in the light most favorable to the nonmoving party CMU, and
giving it the advantage of every fair and reasonable inference in light of the undisputed facts, the
Court concluded that CMU had presented enough evidence upon which a reasonable jury could
properly find that Claim 4 of the ‘839 Patent and Claim 2 of the ‘180 Patent were not anticipated.
Therefore, Defendants’ motion for JMOL on the basis of invalidity is denied. Similarly, the
jury’s finding that the patents were not invalidated due to anticipation is not against the weight of
the evidence, and Marvell’s motion for a new trial on these grounds is thus denied.
b. Obviousness
Marvell further contends that it is entitled to judgment as a matter of law or a new trial on
the issue of invalidity because the asserted claims are obvious. To prove otherwise, once again,
64
CMU proffered the testimony of its expert, Dr. McLaughlin. In his analysis, Dr. McLaughlin
considered all of the pieces of prior art that Dr. Proakis relied upon in his opinion of invalidity,
such as the Inkyu Lee and Weining Zeng articles, as well as the Worstell Patent, in addition to
other pieces of prior art that Dr. Proakis did not discuss. (Docket Nos. 726; 737). Dr.
McLaughlin then concluded that the asserted claims were not obvious. (Docket No. 737 at 73).
Dr. McLaughlin also considered the secondary indicia of non-obviousness presented
throughout the trial such as praise for the invention by the industry in general and by Marvell
employees and the fact that the invention solved a long-perceived problem. (Id. at 71-72).68
Additionally, CMU and Dr. McLaughlin proffered an email from Glen Worstell as secondary
indicia of non-obviousness. (Pl. Ex. 161). In his email, Dr. Worstell wrote that the Kavcic/Moura
invention “is related but goes beyond my work and is probably more interesting.” (Id.).
Based on his analysis, the factors of non-obviousness, and his knowledge of the field, Dr.
McLaughlin concluded that neither Claim 4 of the ‘839 Patent nor Claim 2 of the ‘180 Patent
were obvious to a person of ordinary skill in the art. (Docket No. 736 at 73). Given Dr.
McLaughlin’s opinion and the underlying factual predicates, the Court found that the question of
obviousness was rightly sent to the jury to resolve. See Walker, 46 F. App’x at 695; Miller, 2011
WL 7037127, at *3 n.3. Considering the evidence in the light most favorable to the nonmoving
party, CMU, and giving it the advantage of every fair and reasonable inference in light of the
undisputed facts, the Court found that CMU had sufficiently presented enough evidence upon
which a reasonable jury could properly find that Claim 4 of the ‘839 Patent and Claim 2 of the
‘180 Patent were not obvious. Therefore, Marvell’s motion for judgment as a matter of law on
this issue was denied. The question of invalidity by obviousness was properly decided by the
68
While, Dr. McLaughlin explicitly listed examples of indicia to show non-obviousness, (Docket No. 737 at
71-72), Dr. Proakis did not rebut Dr. McLaughlin’s considerations on this indicia or provide any contrary evidence.
(Docket No. 726).
65
jury, which found that the patents were not rendered invalid for being obvious. (Docket No.
762). Considering the evidence proffered by CMU, this verdict was not against the clear weight
of the evidence and a new trial is not warranted as to this defense.
C. Willfulness
The Court turns to CMU’s claims of willfulness. At trial, Marvell filed a Motion for
Judgment as a Matter of Law on Willful Infringement and a Renewed Motion for Judgment as a
Matter of Law on Willful Infringement (Docket No. 740), both of which were fully briefed.
(Docket No. 700, 721, 740, 741). The Court denied these motions on the record, following
arguments by counsel, letting the relevant issues of willfulness go to the jury. (Docket No. 759 at
52-53).
After trial, CMU filed a Motion for a Finding of Willful Infringement and Enhanced
Damages. (Docket No. 790). Marvell also filed a Motion for Judgment as Matter of Law, or in
the Alternative, New Trial on Non-Damages Issues, wherein it requests a JMOL or new trial on
the issue of willfulness. (Docket No. 805).
The Court will now address the specific matters raised by these motions, considering all
of the parties’ arguments and the entire trial record, to explain its earlier and current decision.
1. Legal Standard
It is undisputed that CMU must establish willful infringement by proving, with clear and
convincing evidence that (1) Marvell acted despite an objectively high likelihood that its actions
constituted infringement of a valid patent, and (2) that this objectively-defined risk of
infringement was either known or so obvious that it should have been known to the accused
infringer. Bard Peripheral Vascular Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1005
(Fed. Cir. 2012), cert. denied, 133 S. Ct. 932 (2013); In re Seagate Tech. LLC, 497 F.3d 1360,
66
1371 (Fed. Cir. 2007) (en banc). The Court’s determination should be “based on the record
ultimately made in the infringement proceedings.” Bard, 682 F.3d at 1008.
a. Objective Reasonableness
Marvell first argues that CMU has not proven objective unreasonableness. (Docket No.
700 at 6, Docket No. 741 at 7). To the contrary, the Court believes CMU has presented sufficient
evidence to conclude that Marvell’s actions were such that a reasonable person would have
considered there to be a high likelihood that infringement of CMU’s patents would result.
i. Marvell’s Knowledge of the Patents and Awareness of an
Objectively High Likelihood of Infringement
The evidence at trial clearly and convincingly shows that Marvell had knowledge of the
patents-in-suit at the time of infringement by 2002 and that the very people who designed the
Accused Technology knew of the patents. To the extent a question of fact remained, the jury
found as part of its December 26, 2012 verdict that Marvell had “actual knowledge of the ‘180
and ‘839 Patent prior to commencement of this lawsuit (in other words, prior to March 6, 2009).”
(Docket No. 762 at 6-7). This jury determination is supported by substantial evidence.
Marvell first should have been aware of Kavcic’s work through an email on March 8,
1998 from Aleksandar Kavcic to Nersi Nazari at Marvell, in which Dr. Kavcic inquired about
Marvell’s detectors and sought information about the possibility of getting a job at Marvell. (Def.
Ex. 1023). In that email, Kavcic states that he had sent Dr. Nazari his Globecom paper and
referred Dr. Nazari to his other publications online. (Id.) This Globecom Paper addresses some
of the ideas expressed in the patents, but it is not the IEEE paper later referenced by Burd.69
69
On these facts the Court believes the jury could have made a number of legitimate inferences, including the
possible conclusion Dr. Nazari may have shared Dr. Kavcic’s work with Marvell’s team. The jury was instructed
that :
67
(Docket No. 674 at 118). In sending this email, Dr. Kavcic did not grant Marvell any rights to
use the ideas in the paper.70 (Id.). The response to this email was not proffered at trial, and Dr.
Nazari did not testify at trial.71
Next, Marvell engineer Gregory Burd, the developer of the Accused Technology, stated
that he read Dr. Kavcic’s published papers and learned about his Viterbi detector. (Docket No.
726 at 137). He told his supervisor, Toai Doan, about his work on “Kavcic’s model” in 2001,
(Docket No. 677 at 53:14-54:17; Pl. Ex. 227), and stated he was able to develop a sub-optimal
media noise detector based on the Kavcic model from Kavcic’s IEEE Paper. (Pl. Ex. 279). Mr.
Burd then informed his superiors twice via email about the CMU Patents in January 2002. (Pl.
Ex. 280; Docket No. 677 at 73:13-74:11; Pl. Ex. 283) (“And of course as I mentioned earlier,
Kavcic detector is also patented.”). Mr. Burd testified that he used Dr. Kavcic’s model to create a
simulation program at Marvell. (Docket No. 726 at 137) (“Q. Did you or someone else at
Marvell create a simulation in the computer of what Professor Kavcic was describing? A. Yes, I
did.”). Mr. Burd named his model KavcicPP, and he named his optimal simulator KavcicViterbi.
While you may consider only the evidence in the case in arriving at your verdict,
you are permitted to draw such reasonable inferences from the testimony and the
exhibits you feel are justified in light of your own common experience, reason,
and common sense.
(Docket No. 764 at 55).
70
At trial Dr. Kavcic was asked,
Q: And you understood if you sent the paper to Marvell, they were free to use
the information that was in the paper in their business. Right?
Kavcic: No, sir. No. No, not. Because this was already filed for a patent, and
nobody is free to use something that is without a license if it’s filed and then
ultimately patented.
Q: And -Kavcic: But I was sending this to Dr. Nersi Nazari because I wanted him to
know what I was working on as a lead-in to providing me an interview, because
I was looking for a job.
(Docket No. 674 at 118-119).
71
See supra note 21.
68
In 2003, the KavcicPP was renamed to MNP. (Pl. Ex. 368). Both Dr. Wu and Mr. Doan, who
were engineers at Marvell at that time, testified that they became aware of the patents in early
2002 when applying for Marvell’s patent related to MNP technology, when they listed CMU’s
patents as prior art. (Docket No. 707 at 322; Docket No. 761 at Jt. Ex. D at 124:22-125:19; U.S.
Patent No. 6,931,585). Yet, all three claimed they had not read the patents at the time. (Id.).
In addition to internal notification on the patents, CMU also sent two letters to Marvell’s
CTO Dr. Pantas Sutardja and Matthew Gloss, then General Counsel, enclosing copies of the
patents and inquiring if there was an interest in the patents. (Pl. Ex. 422; Pl. Ex. 431). Marvell
did not respond to these letters because, as CEO Dr. Sehat Sutardja alleges, they were “not
interested in using the technology in our chip.” (Docket No. 707 at 91). In addition, Fujitsu, “a
customer of Marvell’s read channel i.e. 5575M, 7500M,” wrote to Marvell in November 2004,
that it had received a license offer for the CMU Patents-in suit. (Pl. Ex. 477). Fujitsu wrote that
“since it seems that these patents might be related to read channel, we would like to know, by the
end of November, your opinion regarding relationship between CMU’s Patents and the above
Marvell lead [sic] channel and the specific grounds/reasons for such opinion.” (Id.). No
documents were found in relation to this letter, and Marvell’s corporate designee testified that he
did not know of any response to this letter. (Docket No. 761 at Jt. Ex. C at 534-535).
Despite knowing about the patents-in-suit, the evidence presented at trial reveals that
Marvell made little effort to determine whether it was infringing these patents. Dr. Wu, Mr.
Burd, and Mr. Doan all state that they decided not to read the patent claims, even though email
correspondence indicates that both were aware that Dr. Kavcic had patented his algorithm. (Pl.
Ex. 280; Pl. Ex. 283). If believed, this behavior is a clear sign they disregarded a high likelihood
of infringement. Once presented with the patents, Mr. Doan did not conduct further
69
investigations on his own, tell others to investigate or send the patents to Marvell’s legal team.72
(Docket No. 761 at Jt. Ex. C at 125-130). Instead, he directed his employees to continue working
to capture the realized gain and reported that his employees would continue to work on the
“Kavcic model.” (Id. at Ex. D at 190-191; Pl. Ex. 285). This occurred around the time that he
was promoted from his position as principal engineer of the signal processing group to Vice
President of read channel development. (Docket No. 761 at Jt. Ex. C at 16-17). While Marvell
alleges that the MNP is a suboptimal version of Dr. Kavcic’s work, Dr. Wu’s 2003 email to
Doan stated that he and Burd were implementing an approach that “turns out to be the original
structure that Kavcic proposed in his paper.” (Pl. Ex. 366; Docket No. 677 at 134-135).
These failed opportunities to investigate engendered a great deal of risk that Marvell’s
engineers infringed CMU’s patents. Moreover, the lack of action by Marvell’s employees does
not conform to Marvell’s own purported IP policy, which according to the testimony of Dr.
Armstrong, Marvell’s Vice President of Marketing, requires that any such information about
patents be forwarded to the legal department for analysis. (Docket No. 761 at Jt. Ex. C at 294295). Despite this, Dr. Armstrong stated that he did not know whether the CMU Patents were
ever submitted to the legal department according to this policy. (Id. at 295, 299). He further
testified that he was not aware of any internal discussion about licensing the patents from CMU
given Fujitsu’s letter request. (Id.).
Marvell’s lack of inquiry about the possibility of infringement also meant that it took no
effort to avoid infringement of the subject patents. This fact was specifically corroborated by Mr.
Burd, who stated that he was not aware of any measures being taken to stop using the CMU
Patents. (Docket No. 678 at 101). Marvell is a sophisticated entity with nearly 3,000 patents.
72
Mr. Doan testified by way of deposition designations. (Docket No. 761 at Jt. Ex. C). Mr. Doan left Marvell
in October of 2009. (Id.). As a former employee, he may not have been perceived with any bias towards Marvell,
compared to other witnesses who were still current employees. (Id.).
70
(Docket No. 707 at 53). Yet, it took absolutely no steps to investigate these patents before
producing 2.3 billion chips, despite the fact that the technology was named after Dr. Kavcic, one
of the inventors of the CMU Patents.73 To this day, Marvell continues to use the Accused
Technology. In fact, at trial Mr. Burd testified that Marvell had no plans to discontinue using the
technology. (Docket No. 678 at 101). Only as of July 2013—seven months after the verdict—is
it beginning to design around the technology. (Docket Nos. 889; 898).
Succinctly put, Burd presented his superiors at Marvell with a product named
“KavcicPP” and noted that Dr. Kavcic held a patent on such a detection scheme, yet nothing was
apparently done to investigate infringement, reach out to Dr. Kavcic or CMU, or respond to
CMU and Fujitsu’s inquiries on same. Accordingly, CMU has shown that Marvell’s behavior
created an objectively high risk of infringement. See Spectralytics, Inc. v. Cordis Corp., 649 F.3d
1336, 1348 (Fed. Cir. 2011) (failure to investigate the patent situation is a consideration that
tends to establish willful infringement).
ii. “Reasonable” Defenses
In response to CMU’s claim of willfulness, Marvell urges that the “‘objective’ prong of
[willfulness] tends not to be met where an accused infringer relies on a reasonable defense to a
charge of infringement.” Bard., 682 F.3d at 1005. Given its stance, the Court will review
Marvell’s defenses, how they evolved and were used at trial, if at all.
73
As shown at trial, Mr. Burd stated at his deposition:
Q: And why use the Kavcic approach, as the yardstick?
A: …just because his name, kind of became a yardstick. I don’t know why. I
mean, people use it. It’s like when you say-you know there are certain people
which get associated with – some event…. Ronald Reagan is credited with
breaking down the wall. Well, I didn’t see him break any bricks. Right? But yet,
he is the one. So same thing.
(Docket No. 771 at Ex. H at 110).
71
Marvell had several overarching defenses to the willful infringement claim, the first
being that Marvell believed its own technology covered the MNP. To this end, Marvell was
allowed to present, at trial, patent U.S. Patent Number 6,931,585 (the “‘585 Patent”)74 filed in
July 2002, with Dr. Wu and Mr. Burd listed as inventors, and which related to MNP
technology.75 (Def. Ex. 266). These patents may be relevant to the state of mind of the infringer,
but infringement is determined by mapping the claims of the patents-in-suit onto the Accused
Technology. See Akamai Techs., 692 F.3d at 1307 (“Because patent infringement is a strict
liability offense, the nature of the offense is only relevant in determining whether enhanced
damages are warranted.”). Marvell argued that since the PTO had granted Marvell the ‘585
74
The ‘585 patent is owned by Marvell International Ltd, based in Hamilton, Bermuda. See ‘585 Patent.
Marvell International Ltd., is not a party to this case, and, as such, CMU argues these patents are irrelevant. (Docket
No. 726 at 4). CMU contends that the admission of these patents opened the door to inquiry of Marvell’s corporate
structure, such that this patent and hundreds of others offered as exhibits at trial
are owned by Marvell International, Limited as part of the tax structure -- tax
favorable structure I’ll call it. So, you know, if they would want to go there with
respect to those patents, we ought to be entitled to talk about, you know, why
that works and how it works and what’s going on there. The fact that Marvell
has to pay royalties to itself -- although, frankly, they did not give us discovery
on that issue and so they can’t talk about a number, but, you know, they’ve
introduced that patent and want to introduce evidence of about 200 more that are
owned by some other entity.
(Docket No. 710 at 4-5). In its order on Marvell’s motion in limine, the Court precluded CMU from introducing
evidence or argument at trial that Marvell’s tax strategy was illegal or inappropriate. (Docket No. 605). Thus,
evidence on this subject was not introduced by the parties during trial.
75
The Court reminded the jury throughout the trial that owning one or more patents in and of itself is not a
defense against the charge of infringement. The following instruction was taken from the parties’ proposed limiting
instructions (Docket No. 625 at Ex. 4), and was repeatedly used during trial:
You have heard testimony about Marvell and whether Marvell does or does not
own a patent. Marvell may claim that some of its patents cover some of the
accused chips or simulators in this case. It may also claim that it improved on
the CMU patents. While this evidence may be relevant to some issues you will
decide, owning one or more patents in and of itself is not a defense against the
charges of infringement of the CMU patents.
(Docket No. 707 at 90, 294).
72
Patent, Marvell believed it did not infringe.76 The reasonableness of this position, given its
factual nature, was left for the jury to decide. Bard, 682 F.3d at 1008. Indeed, Marvell’s
argument on this point is completely factual, as it has not argued any legal theory to support its
defense that its later patents in some way invalidate earlier ones, or that owning a patent on
Accused Technology is a per se sign of reasonableness and non-infringement. To the extent that
this defense is factual in nature, it was presented to the jury, as instructed by Bard,77 and the jury
found that Marvell had no “objectively reasonable defense.” (Docket No. 762). The Court
likewise agrees.
A novel and non-obvious after-issued patent may be valid over a prior-issued patent, but
that does not mean that, if practiced, the technology disclosed in the after-issued patent would
not infringe the prior-issued patent. Bio-Tech. Gen. Corp. v. Genentech, Inc., 80 F.3d 1553, 1559
(Fed. Cir. 1996) (“The existence of one’s own patent does not constitute a defense to
infringement of someone else’s patent.”) (internal citation omitted). Therefore, Marvell’s overreliance on its own patents is misplaced. Rather than focusing on its patents, which have
absolutely no bearing on the reasonableness of its defense, the inquiry should center on the
Accused Technology and CMU’s patents. Marvell’s assertions that its patents form a valid
defense are not at all reasonable, either legally or, according to the jury, factually, as the Court
will now explain.
76
Of course, a patent issued by the PTO may later be declared invalid. See 35 U.S.C. § 282. Indeed, Marvell
has sought to invalidate CMU’s patents in this case. (Docket Nos. 747; 748)
77
“[T]he judge may when the defense is a question of fact or a mixed question of law and fact allow the jury
to determine the underlying facts relevant to the defense.” Bard, 682 F.3d at 1008. Trial courts have adopted this
practice in similar patent cases. See, e.g., Grant St. Grp., Inc. v. Realauction.com, LLC, Civ. No. 09-1407, 2013 WL
2404074, at *4-5 (W.D. Pa. May 31, 2013) (“The Court concludes that there are likely mixed questions of law and
fact with regard to Realauction’s defenses, insofar as the jury should be presented the evidence to determine the
underlying facts relevant to the defenses before this Court rules on the objective prong of willful infringement”)
(internal citations omitted).
73
To the extent that Dr. Wu has suggested that he consulted with Marvell’s legal counsel
about the patent, the Court notes that this testimony is hotly contested, was not significantly
developed at trial, and was shrouded by the attorney-client privilege. Dr. Wu testified that the
“prior art,” i.e., the ‘180 Patent and the ‘839 Patent, was given to Marvell’s patent counsel and
that he later obtained his own patents (owned by a Marvell-entity).78 (Docket No. 707 at 323;
Docket No. 709 at 90). Marvell, however, has expressly stated throughout this litigation that it is
not raising advice of counsel as a defense to the willfulness claims. (Docket No. 174-1 at 77-78).
To that end, the Court on December 20, 2012 ruled that Marvell could not at trial – “without
putting the actual communications from counsel at issue – argue that its receipt of a patent
implies or suggests that Marvell’s counsel returned a favorable opinion that Marvell’s NLD-type
and MNP-type chips and simulators and the Kavcic-Viterbi simulator do not practice the
patented methods of the asserted claims.” (Docket No. 753). Despite this, Marvell’s counsel
attempted to imply at closing that its engineers had vetted this patent with counsel based on
snippets of Dr. Wu’s testimony. (Docket No. 759 at 79-80). The Court has doubts about the
credibility of certain testimony79 regarding this consultation and the reasonableness of this
defense, given its years of involvement with this matter.80
78
CMU contends that Dr. Wu was clear in his deposition that such communications with a lawyer regarding
the patents were made only for his prior art search for his own patent filed in 2002. (Docket No. 709 at 91-92).
79
As the Court recounted in its opinion on Marvell’s Motion for a Mistrial, (Docket No. 900), Dr. Wu during
his testimony clenched his jaw, drank an entire pitcher of water, generally appeared uncomfortable, and
continuously looked at Dr. Sutardja in the back of the courtroom throughout his appearance as a witness. In this
Court’s estimation, the jury could have easily found Dr. Wu was not credible given his demeanor on the stand. On
this and all other areas of inquiry, the jury was charged to weigh witness testimony and give it the appropriate
weight it deserved or discredit the testimony completely. See, e.g., Barber v. CSX Distribution Servs., 68 F.3d 694,
700 (3d Cir. 1995).
80
Upon consideration of CMU’s “Motion in Limine Strike Testimony and to Preclude Argument Relating to
Marvell’s Pre-suit Communications with Counsel about the Patents-in-Suit” (Docket No. 722), the Court ordered
Marvell to produce any and all documents that involve or reference Mr. Gregory Burd, Dr. Zining Wu, Eric
Janofsky, Esq., CMU, Kavcic, or Seagate between the years of 2001 to 2003, and any and all documents involving
Fujitsu between the years of 2003 to 2005 to the Court for an in camera review. (Docket No. 737). The Court
74
Next, Marvell argued that it did not infringe the patents-in-suit in its chips and chip
simulators because the patents-in-suit are too “complex.” (Docket No. 741 at 9, 10, 15, 18). This
defense does not address Marvell’s KavcicViterbi Simulator, which it acknowledges embodies
the “complex” solution of the patents.81 Marvell claims that even the inventors of the patents
admitted that their method was too complex to implement in an actual chip, suggesting that
Marvell could not have willfully infringed on a patent with its “simpler, sub-optimal” solutions.
(Docket No. 759). But, optimality is not relevant to whether Marvell used a method that includes
each and every method step of the asserted claims in the patents-in-suit. Akamai Techs., 692 F.3d
at 1307. As Dr. McLaughlin explained at trial, the difference between an optimal and suboptimal media detector relates to performance as measured by SNR gain rather than
infringement. (Pl. Ex. 279; Docket No. 677 at 64-65). In fact, he specifically stated that the suboptimal detector “would be using the same method” as the optimal noise detector, (Docket No.
677 at 65), and he has testified that the sub-optimal versions do infringe on CMU’s patents. (Id.).
Marvell’s infringement expert, Dr. Proakis, similarly agreed that sub-optimality is not part of the
infringement analysis.82 Furthermore, Marvell cites no legal authority to support its asserted
reviewed these documents on December 19, 2012. The Court took said documents under advisement in reaching its
decision on willfulness, but did not base its analysis herein on any document produced under this order. (Docket No.
759 at 186-187) (“It was only the Court which asked for the documents in camera so that [it] could address this issue
and the opinion that I looked at…. [T]he Court is also well aware that you can’t draw an inference one way or the
other.”).
81
Marvell’s 30(b)(6) designee on the technology stated,
This (Plaintiff Ex. 93) is KavcicViterbi.cpp class, written by engineers in
Marvell, and I do believe it contains the implementation, as understood by our
architecture team of the IP which is taught in Professor Kavcic’s papers, and
consequently in his patent.
(Docket No. 677 at 170-171; Pl. Ex. 93).
82
To this end, Dr. Proakis testified that:
A. I don’t believe suboptimality -- optimality or suboptimality is mentioned in
any claims of the patent.
75
position that complexity constitutes a defense to infringement, and this Court’s research efforts
have uncovered no such authority.
Once again, Marvell’s defense is fact-intensive. Whether it was reasonable to believe that
the MNP, merely by being “sub-optimal,” did not use the method of the CMU Patents goes to the
defendants’ state of mind regarding the alleged infringement. The jury was presented with the
convincing testimony of Dr. McLaughlin explaining how the MNP used the methods as well as
the 2003 email from Dr. Wu to Mr. Doan stating that he and Mr. Burd were implementing an
approach that “turns out to be the original structure that Kavcic proposed in his paper.” (Pl. Ex.
366; Docket No. 677 at 134-135). Ultimately, the jury had to decide what was reasonable based
on the credibility of witnesses and the weight to be given to the evidence. Eschelman v. Agere
Sys., 554 F.3d 426, 433 (3d Cir. 2009). They found that this was not a reasonable defense
(Docket No. 762), and the Court takes this jury verdict on a question of fact as advisory to its
overall holding on willfulness. See Bard, 682 F.3d at 1008.
Specifically addressing the KavcicViterbi Simulator, Marvell has presented little to rebut
CMU’s position that this simulator infringes the patents-in-suit. Mr. Burd outright states that this
simulator contained the implementation of the “IP which is taught in Professor Kavcic’s papers
and consequently in his patent.” (Docket No. 677 at 167). Marvell’s only argument supporting
non-infringement on the KavcicViterbi Simulator appears to be that the patents-in-suit do not
cover simulators. (Docket No. 671). To the extent that this is a “reasonable defense,” a jury had
to decide this question based on the weight of the evidence and the credibility of same. See
Q. So a suboptimal version of an invention that’s covered by a claim can still
infringe; right?
A. It may or it may not. It depends on the circumstance.
Q. Right. But sub-optimality doesn’t enter into the analysis at all; does it?
A. No.
(Docket No. 711 at 281-282).
76
Eschelman, 554 F.3d at 433. Marvell, however, presented no evidence showing that its
employees believed the patents-in-suit did not cover simulators at the time of infringement.83
Indeed, Marvell employees considered the Kavcic algorithm the “gold standard” against which
they continuously run tests. (Docket No. 677 at 55). And, no evidence was ever presented as to
why Marvell believes using the patented technology for comparison and testing purposes negated
the need for a license on said technology.
Marvell further argues that CMU’s delay in initiating this lawsuit suggests that the case
for infringement is not sufficiently obvious to support a finding of willful infringement. (Docket
No. 741 at 8). Given that the willful infringement inquiry depends on the alleged infringer’s
conduct rather than the litigation strategy of the patentee, In re Seagate, 497 F.3d at 1374, the
Court fails to see how CMU’s timing with respect to the litigation is relevant on this issue.
Moreover, Dr. Wu testified during trial that it was not possible for anyone outside of Marvell to
determine the technology used on the chips without Marvell’s engineers explaining how its chips
worked. (Docket No. 709 at 61-64) (“Just like Coca-Cola keeps its formula as a secret…For you
to understand how the circuits implemented, the implementation detail, yes, you do need to talk
to our people.”). He also stated that he would not have explained to CMU how its chip circuitry
was implemented and had never told Dr. Kavcic about the use of his algorithm at Marvell despite
meeting him several times.84 (Id. at. 63:19-63:24). These facts may well have delayed CMU from
83
Certain witness (such Dr. Wu, Mr. Burd, Dr. McLaughlin, and Dr. Blahut) testified to the nature of
simulators and whether in their opinion simulators process real or simulated data. (Docket No. 677 at 167-175;
Docket No. 707 at 309-311, 322; Docket No. 711 at 261-266; Docket No. 726 at 131-136). However, none spoke to
how their beliefs about the nature of simulators affected Marvell’s decision to use the patents-in-suit.
84
During trial, Dr. Wu discussed the significance of naming active projects after Dr. Kavcic:
Q. Did you tell Dr. Kavcic you had files named after him?
A No.
Q Why not?
77
making a determination as to whether it could bring a lawsuit in good faith.85 But again, it is the
infringer’s actions, not the patentee’s, that prove willful infringement. See In re Seagate, 497
F.3d at 1374.
Marvell asserts again that the Court’s comment that Marvell’s invalidity defense was a
“close call” in its opinion denying summary judgment forecloses a finding of willfulness as a
matter of law. (Docket No. 741 at 11). The Court has already indicated that its prior summary
judgment rulings do not amount to a finding that an objectively reasonable defense has been
presented.86 (Docket No. 601, at 4); Monsanto Co. v. E.I. Dupont de Nemours and Co., Civ. No.
09-686, 2012 WL 2979080, at *2 (E.D. Mo. July 20, 2012); Grant St. Grp., Inc. v.
Realauction.com, LLC, Civ. No. 09-1407, 2013 WL 2404074, at *3 (W.D. Pa. May 31, 2013).
A Why should I? It’s just -- it’s like Dr. Viterbi, right? I think I bump into Dr.
Viterbi at the conference, should I just approach him and say: Dr. Viterbi, we
implemented your algorithm named after you?
(Docket No. 709 at 64). In addition, Mr. Burd and Dr. Wu testified that their references to Dr. Kavcic’s name were
meant to reference the media noise problem that Dr. Kavcic identified in his paper. (Id. at 22).
85
The Court is cognizant of Rule 11 of the Federal Rules of Civil Procedure, which establishes the standards
that counsel must follow when making written representations to the court. Rule Rule11(b) of the Federal Rules of
Civil Procedure provides in pertinent part:
[b]y presenting to the court a pleading, written motion, or other paper—whether
by signing, filing, submitting, or later advocating it—an attorney or
unrepresented party certifies that to the best of the person’s knowledge,
information, and belief, formed after an inquiry reasonable under the
circumstances:
...
(3) the factual contentions have evidentiary support or, if specifically so
identified, will likely have evidentiary support after a reasonable opportunity for
further investigation or discovery[.]
FED. R. CIV. P. 11(b)(3). Generally, Rule 11 “‘imposes on counsel a duty to look before leaping and may be seen
as a litigation version of the familiar railroad crossing admonition to ‘stop, look, and listen.’” Oswell v. Morgan
Stanley Dean Witter & Co., 507 F. Supp. 2d 484, 488 (D.N.J. 2007) (quoting Lieb v. Topstone Indus., 788 F.2d 151,
157 (3d Cir. 1986)).
86
Under Rule 56, the Court may only grant summary judgment if the “movant shows that there is no genuine
dispute as to any material fact.” FED. R. CIV. P. 56. A defense may be unreasonable even if the Court had earlier
found there to be genuine dispute of material facts. See, e.g., Grant St. Grp, 2013 WL 2404074 at *3. Moreover, in
considering a motion for a judgment as a matter of law after trial or a motion for a new trial, under Rule 50, the
Court looks at the evidence, actually presented at trial, in the light most favorable to the non-movant. Galena, 638
F.3d at 196. These standards of review are not one and the same.
78
Having now examined the trial record as a whole, the Court declines to hold that
Marvell’s failed invalidity defense affords shelter against a finding of willful infringement. It is
clear to the Court that in order for Marvell to have a “reasonable defense” to infringement for the
time period of 2001-2009, there needs to be some proof that the basis for such invalidity defense
was known to the infringers or even the person having ordinary skill in the art.87 In this regard,
Marvell’s claims at trial rested on the Worstell Patent, U.S. Patent No. 6,282,251, alone. (Def.
Ex. 187). Despite same, Marvell proffered no evidence that anyone at Marvell knew of the
Worstell Patent from 2001 until this litigation began in 2009. Therefore, Marvell did not have
any basis to believe that it could reasonably invoke such a defense to infringement prior to this
infringement. Instead, Marvell pursued a course of conduct that was without regard to the
potential legal ramifications of infringement. Even if the Court concluded that Marvell has now
put forth a reasonable defense to infringement that has been developed during litigation, such a
determination would not be dispositive. Rather, the full weight of Marvell’s actions as
documented in the record and presented at trial precludes the Court from finding that a
reasonable person would believe its actions did not involve a high risk of infringement. Further,
invalidity of the patents-in-suit was a factual determination to be made in this case.88 As such,
the reasonableness of reliance on such invalidity defense was also the prerogative of the jury.
87
The idea that outside counsel discovering prior art that may invalidate the patent-in-suit, eight years after
the start of infringing activity, defeats willful infringement, seems contrary to the spirit of the law. Just because a
defendant is able to hire a lawyer to develop a defense to a patent suit, cannot mean that its prior actions no longer
ran an “objectively high likelihood of patent infringement.” In re Seagate, 497 F.3d at 1374 (“in ordinary
circumstances, willfulness will depend on an infringer’s prelitigation conduct.”).
88
It would clearly be in error for the Court to have determined that no reasonable defense to infringement
exists before the jury even decided the factual underpinnings of invalidity and infringement. To do so would mean
the Court’s finding of objective willfulness necessitates judgments as a matter of law on validity and infringement,
or the Court could be left stating that “no reasonable litigant could realistically expect those defenses to succeed”
with the jury possibly finding for the defendant on same. Similarly, it would mean that allowing any defense to go to
the jury necessitates a finding of no willful infringement. See i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 860
(Fed. Cir. 2010) (“The fact that Microsoft presented several defenses at trial, including non-infringement and
invalidity, does not mean the jury’s willfulness finding lacks a sufficient evidentiary basis.”).
79
Marvell has trotted out a number of different non-infringement or invalidity defenses
throughout its four years litigating before the Court. Nevertheless, the Court has consistently
found that the issues of infringement and invalidity are to be decided by the jury. To the extent
that Marvell again believes the Court should deny a finding of willfulness on the basis that the
earlier defenses that were not presented to the jury were reasonable, the Court disagrees. If
Marvell thought that any of those “other” defenses were reasonable, it should have presented
them to the ultimate finder of fact, the jury.
iii. Conclusion: Objective Willfulness
After taking into account the totality of this litigation, the Court finds the question of
whether Marvell acted despite an objectively high likelihood that its actions constituted
infringement of a valid patent to be, in part, a question of fact. The Federal Circuit sitting en
banc held “when the resolution of a particular issue or defense is a factual matter, however,
whether reliance on that issue or defense was reasonable under the objective prong is properly
considered by the jury.” Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1236-37 (Fed. Cir.
2011). This Court recognizes that the Federal Circuit’s decision in Bard holds that this objective
recklessness determination is, however, “decided as a matter of law by the judge.” 682 F.3d at
1008. Given the lack of further guidance by the Federal Circuit on how to reconcile these
principles in a practical manner for trial, and the Circuit’s own debate on the precedential value
of Bard,89 the Court sent the question of willfulness to the jury for factual findings on an
89
In the Federal Circuit’s en banc decision in Highmark, Inc. v. Allcare Health Management Systems.,
Inc., the five-member dissent opinion written by Judge Moore stated “Bard’s holding that the objective prong
‘should always be decided as a matter of law by the judge’ cannot be reconciled with Powell … For reasons similar
to those discussed below, this court should also revisit Bard en banc.” 701 F.3d 1351, 1357 n.1 (Fed. Cir. 2012)
(emphasis in original). Judge Reyna, in another minority dissent, agreed that Bard was “a puzzling conclusion ... that
we can transform a question of fact into a mixed question of law and fact in order to exclude a jury from deciding
what conduct is reasonable.” Id. at 1366. Similarly, in Judge Mayer’s original panel dissent in the Highmark case, he
concluded “that because Bard usurps the fact-finding role of the trial courts and is plainly inconsistent with our
precedent it is an outlier and of no precedential value.” Highmark, 687 F.3d 1300, 1320-21 (Fed. Cir. 2012).
80
advisory basis. This, the Court believes, is in accord with Bard, which affirms that underlying
fact questions should be sent to a jury.90
In makings its ultimate finding, the Court has considered the whole record, including all
of the evidence; the jury’s verdict on infringement and invalidity; Marvell’s knowledge of the
patents; and the reasonableness of their defenses; along with the jury’s advisory verdict on
objective reasonableness.91 In doing so, the Court, as the final arbiter, finds that CMU has shown
by clear and convincing evidence that Marvell acted in disregard of an objectively high
likelihood that its actions constituted infringement of a valid patent. Thus, CMU’s Motion for a
Finding of Objective Willfulness is granted (Docket No. 790), and Marvell’s JMOL and/or
Motion for New Trial as to Objective Willfulness, (Docket No. 805), is denied.
b. Subjective Prong
Under the subjective prong of willful infringement, “the patentee must also demonstrate
that this objectively-defined risk (determined by the record developed in the infringement
proceeding) was either known or so obvious that it should have been known to the accused
infringer.” Powell, 663 F.3d at 1236. The jury ultimately determines whether this subjective
prong is met. Id. Notwithstanding a finding of objective willfulness, Marvell further maintains
90
Initially, the Court had contemplated sending interrogatories to the jury on the factual issues underlying the
objective prong of willfulness, but it became apparent that this was not feasible given the number of claims, disputed
facts, and defenses presented. For example, in considering Marvell’s belief that its invention was “less complex,” a
jury needed to weigh the “complexity” of the patents-in-suit, the Accused Technology, the Marvell patents, the
relationship between same, and the credibility of the witnesses who claimed to believe they were not infringing due
to this factor, balanced against all of Marvell’s infringing activity. Further, this is not a case in which the defenses
were tried in prior proceedings. With the parties’ agreement, infringement, validity, damages, and willfulness were
all presented to the jury in one trial.
91
The jury verdict addressed objective reasonableness as follows: “Did Marvell have actual knowledge of the
[patents] prior to commencement of this lawsuit (in other words, prior to March 6, 2009)?”; and “If Marvell learned
of the [patents] and prior to commencement of this lawsuit, did Marvell have an objectively reasonable defense to
CMU’s claim of infringement?” (Docket No. 762 at 6-7). On subjective willfulness, the jury was asked “If Marvell
learned of the [patents], do you find clear and convincing evidence that Marvell actually knew or should have
known that its action would infringe the [claims of the patents].” (Id.).
81
that no reasonable jury could find that Marvell possessed the requisite subjective intent for
willful infringement. (Docket No. 741 at 13).
Again, the evidence presented at trial belies Marvell’s assertions. CMU has presented
sufficient evidence that would permit the jury to find that Marvell’s engineers worked on
multiple projects bearing Kavcic’s name, clearly indicating that those engineers were aware that
Dr. Kavcic had a hand in creating this technology. Moreover, Marvell’s failure to investigate the
patents despite the high likelihood of infringement militates against a finding that it had a
subjectively reasonable basis for believing that it was not infringing or that the patents were
invalid.
In addition, as the Court has already explained, the conduct of Marvell’s engineers in
copying Dr. Kavcic and Dr. Moura’s work as described in their papers is relevant to finding that
Marvell had a subjective intent to infringe. CMU presented evidence at trial showing that
Marvell’s engineers duplicated the technology described in Dr. Kavcic and Dr. Moura’s papers
in their chips and simulators, as testified to by Dr. McLaughlin. (Docket No. 677 at 54-55). The
evidence shows that shortly after beginning work on the Kavcic model, Mr. Burd prepared a
preliminary write-up of the KavcicPP detector which referenced the work of Dr. Kavcic and Dr.
Moura. (Pl. Ex. 280). Again, Dr. McLaughlin testified that this KavcicPP write-up became the
MNP circuit. (Docket No. 677 at 66-67). Although Mr. Burd stated that he was “generally
following the papers,” not the patents, and that he “left it at that,” (Id. at 77), Dr. McLaughlin
testified that the papers are virtually identical to what is described in the patents. (Id. at 66-67).
The evidence also showed that when Kavcic’s name was disassociated with the project,
there was no functional difference between the old and new computer codes. (Pl. Ex. 368;
Docket No. 677 at 81). Dr. Wu informed Mr. Doan that he and Mr. Burd were working on a
82
model that ended up being the original structure that Kavcic proposed in his paper. (Pl. Ex. 366;
Docket No. 677 at 134-135). Dr. McLaughlin confirmed that the NLD used the original structure
proposed in Dr. Kavcic’s paper, and subsequently in the CMU Patents. (Docket No. 677 at 136137). This evidence of copying contributes to the Court’s finding that Marvell acted in a
subjectively reckless manner with respect to the risk of infringing the subject patents.
In arguing that it lacked knowledge about the underlying infringement, Marvell points
out that CMU acknowledged its reputation as a technology innovator. The Court fails to see how
this pertains to whether Marvell knew or should have known that its actions ran an objectively
high risk of infringing the patents-in-suit. The Court also finds unavailing Marvell’s alternative
argument that CMU’s failure to follow-up on its 2003 licensing letters lulled it into a false sense
of security. Nothing disclosed at trial even indicated that any person at Marvell considered the
implications of these licensing letters. Nor was there testimony from Marvell employees stating
that they were aware CMU failed to follow up with other inquiries. Rather, when presented with
potential warnings about the risk of infringement, Marvell ignored them and proceeded ahead in
developing read channel technology based on Dr. Kavcic and Dr. Moura’s work.
For all of these reasons, after considering all of the evidence in this case in the light most
favorable to CMU, and drawing all reasonable inferences in its favor on subjective willfulness,
the Court denied Marvell’s original and renewed Motion for Judgment as a Matter of Law on
Willful Infringement, (Docket Nos. 699; 740), and denies Marvell’s JMOL now. (Docket No.
805). Likewise, the Court finds CMU presented sufficient evidence on which a jury could have
found that Marvell knew or should have known about the substantial risk of infringement. Thus,
the verdict on subjective willfulness is not against the great weight of evidence and Marvell’s
83
request for a new trial is not justified. As such, the Court grants CMU’s Motion for a Finding of
Willful Infringement. (Docket No. 790).
D. Damages
The Court also considers Marvell’s Motion for Judgment as a Matter of Law, New Trial
and/or Remittitur with Respect to Damages, along with related briefing. (Docket Nos. 807; 808;
829; 855; 857). In these motions, Marvell renews arguments from its at-trial JMOL. (Docket
Nos. 701; 702; 725; 738; 739). In sum, Marvell maintains that the jury award of $1.169 billion is
legally unsound and factually unsupported. (Docket No. 808). CMU counters that the award is in
accord with the governing statute and Federal Circuit precedent, and supported by the facts of
record. (Docket No. 829).
1. Legal Standard
As the Court has set forth in a number of prior decisions, in a patent infringement action,
a successful plaintiff is entitled to “damages adequate to compensate for the infringement, but in
no event less than a reasonable royalty for the use made of the invention by the infringer,
together with interest and costs as fixed by the court.” 35 U.S.C. § 284. Two forms of
compensation are authorized by § 284: lost profits and reasonable royalty damages. Lucent
Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). Because CMU does not
manufacture or sell products that practice the claimed methods, it is not entitled to lost profits.
CMU thus bears the burden of proof to establish its damages at trial through a reasonable
royalty. See Lucent, 580 F.3d at 1324 (citation omitted) (“The burden of proving damages falls
on the patentee.”).
“A reasonable royalty contemplates a hypothetical negotiation between the patentee and
the infringer at a time before the infringement began.” Red Hat, 705 F. Supp. 2d at 689 (citing
84
Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1078 (Fed. Cir. 1983)). The hypothetical
negotiation assumes two preconditions are met: (1) that both the patentee and the accused
infringer are willing parties to the negotiation, and (2) that the patent was valid, enforceable, and
infringed. Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y.
1970). The Georgia-Pacific case sets out a series of factors that may be relevant to the analysis
of a reasonable royalty. Id. “Although some approximation is permitted in calculating the
reasonable royalty, the Federal Circuit requires ‘sound economic and factual predicates’ for that
analysis.” Red Hat, Inc., 705 F. Supp. 2d at 689 (quoting Riles v. Shell Exploration & Production
Co., 298 F.3d 1302, 1311 (Fed. Cir. 2002) (citation omitted)); see also i4i, 598 F.3d at 857-58
(citing Lucent, 580 F.3d at 1325) (“any reasonable royalty analysis necessarily involves an
element of approximation, and uncertainty”).
In general, the determination of compensatory damages is within the province of the jury
and is entitled to great deference.” Dee v. Borough of Dunmore, 474 F. App’x 85, 87 (3d Cir.
2012). The United States Court of Appeals for the Third Circuit92 has held that a remittitur is
appropriate if the trial judge concludes that a jury verdict is “clearly unsupported and/or
excessive.” Cortez v. Trans Union, LLC, 617 F.3d 688, 715 (3d Cir. 2010). The reduction may
not be less than the maximum amount that does not “shock the judicial conscience.” Evans v.
Port Auth. of N.Y. & N.J., 273 F.3d 346, 355 (3d Cir. 2001). If remittitur is granted, the party
against whom it is entered can accept it or can proceed to a new trial on the issue of damages.
Martik Bros., Inc. v. Huntington Nat’l Bank, Civ. No. 08-83, 2010 WL 2041065, at *1 (W.D. Pa.
May 20, 2010).
92
While the substantive law of patent damages is reviewed under Federal Circuit precedent, the “decision to
grant or withhold a remittitur [is decided] under the law of the regional circuit.” Power Integrations, Inc. v.
Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348, 1356 (Fed. Cir. 2013).
85
2. Background
The issues surrounding CMU’s damages claim have been addressed numerous times in
this case, from the early days of discovery disputes (Docket No. 195), to summary judgment
(Docket No. 441), in motions in limine (Docket No. 493), and “emergency” motions (Docket No.
656), during trial (Docket No. 713), and now again post trial. At the earlier stages, the Court
ruled based upon the evidence submitted by the parties and what it expected to hear at trial. (Id.).
Unsurprisingly, a significant portion of the trial focused on determining damages.
CMU’s liability theories against Marvell are critical to understanding the jury’s damages
award. At trial, CMU argued that that Marvell directly infringed the CMU Patents by using the
method of the patents during its sales cycle as well as indirectly infringed by inducing and
contributing to the infringement by its customers in the United States. As already discussed, the
evidence presented through the testimony of Dr. Bajorek, CMU’s industry expert, Marvell’s SEC
filings (Pl. Ex. 198), and the joint stipulation by the parties (Pl. Ex. 938), established that Marvell
sells its chips through a lengthy, expensive sales cycle during which Marvell “invest[s]
significant resources with each potential customer without any assurance of sales to that
customer.” (Docket No. 707 at 32-35). At the end of a given sales cycle, Marvell achieves a
“design win” if “the customer decides to go into production” with Marvell and actually does so.
(Id.). Such a design win is generally a winner-take-all affair in the HDD industry, which
typically results in the winner becoming the exclusive supplier for the customer’s specific hard
drive or generation of hard drives. (Id.). Simulation programs are used throughout the sales cycle
to formulate the concepts and basic designs, research and develop new products, refine and
evaluate chip designs before incurring the cost of setting the chips in silicon, among other ways.
(Id.). Once the simulation programs have satisfactory results, an engineering sample chip is
86
created in Asia and sent back to domestic offices for continued refinement, testing, and
evaluation with Marvell engineers and its customers. (Docket No. 678 at 105-106; Docket No.
707 at 164). If the customer is satisfied and places an order, the chips are put into volume
production and manufactured in Asia. (Docket No. 707 at 164). Following Marvell’s “design
win,” it would become the exclusive supplier for a customer’s specific hard drive or generation
of hard drives. (Id. at 32-35). A portion of these chips comes back to the United States through
the chain of commerce in hard drives and/or laptops. (Docket No. 710 at 360-361). As Dr.
Bajorek testified, the “sales cycle sequence” takes “three or four years to complete” and “with
the exception of the chip making, which is made by a foundry in Taiwan, all the activities related
to designing, simulating, designing [sic], testing, evaluating, qualifying the chips by Marvell as
well as by its customers occurs in the United States.” (Docket No. 678 at 105).
Much of this sales cycle activity uses the methods claimed in the CMU Patents. Through
evidence regarding this sales cycle, CMU proved Marvell’s direct infringement by: (1) use of the
method in the KavcicViterbi simulator, which all chips are tested against to evaluate their
performance and used to develop greater SNR gain; (2) use of the method by the Chip
Simulators (KavcicPP, MNP, EMNP, and NLD Simulators) during the research, development,
design, qualification and testing phases for the corresponding chips; and (3) use of the method in
Accused Chips as engineering samples, sometimes called “golden chips,” that Marvell uses
during the sales cycle. (Docket No. 678 at 78-82; Docket No. 673 at 156-178). CMU
demonstrated that these three scenarios of direct infringement all arise in the United States
during Marvell’s sales cycle. CMU also successfully argued contributory infringement and
induced infringement through Marvell’s customers’ use of the patented method in the Accused
Chips in the United States. (Docket No. 759). CMU has never asserted infringement against
87
Marvell for any use of its patented methods which did not occur in the United States, nor does it
seek damages for instances of foreign infringement.
With these theories of infringement in mind, the Court turns to the problem of
quantifying the volume or the value of the “use” of the patented methods during the sales cycles.
This issue has been hotly contested by the parties throughout this litigation, and, as the case
progressed towards trial, it became clear that there were only a limited number of options to
value “use.” First, calculating a reasonable royalty on the simulators and/or engineering samples
was not promising as they are not products in the market place. Thus, such a hypothetical
negotiation led back to the initial question of how to quantify use of patented methods during
such a sales cycle. The second potential solution was to quantify a fee per use of the patented
method. See Sinclair Ref. Co. v. Jenkins Petroleum Process Co., 289 U.S. 689, 697 (1933)
(“[t]he use that has been made of the patented device is a legitimate aid to the appraisal of the
value of the patent at the time of the breach.”). However, quantifying a per use fee in this case is
nearly impossible, as the patented method is literally run hundreds of millions of times per
second. (Docket No. 677 at 38). By the Court’s rough calculation, assuming an eight hour work
day, and 100 million runs per second, there are a minimum of 2.88 trillion infringing uses, per
single chip or simulator, per day. Given same, if Marvell would rather negotiate a fee based on
such use, the Court is certain CMU would be more than willing, but such astronomical numbers
make this method extremely impractical. See, e.g., Lucent, 580 F.3d at 1334 (“A company
licensing a patented method often has strong reasons not to tie the royalty amount strictly to
usage. The administrative cost of monitoring usage can be prohibitively expensive.”).
The third option quantifies the use of the patented methods during this sales cycle based
on a reasonable royalty for the sales that arose from the sales cycle. CMU proffered this theory
88
and the Court ruled on several occasions that Marvell’s sales could be an appropriate metric for
assessing the value of the use of the patented methods in the U.S. by Marvell and its customers.
(Docket Nos. 441; 672). Accordingly, CMU was permitted to present this theory to the jury, and
Marvell was given a full opportunity to rebut this valuation method.
To support this theory, CMU called Catherine Lawton as its damages expert and she
opined that the value of the patented method would be a royalty of $0.50 on all chips sold by
Marvell as a result of the sales cycle. (Docket No. 686 at 29). Her calculations resulted in her
opinion that CMU’s damages are $1.169 billion. (Id.). Marvell rebutted this damages calculation
by presenting its own damages expert, Creighton Hoffman, who opined that a reasonable royalty
in this case would be a one-time royalty payment of $250,000.00. (Docket No. 709 at 242-245).
At the conclusion of trial, the Court instructed the jury:
Marvell cannot be found to have directly or indirectly infringed in
connection with chips that are never used in the United States. To
the extent, however, that Marvell achieved sales resulting from
Marvell’s alleged infringing use during the sales cycle, you may
consider them in determining the value of the infringing use…
The damages you award must be adequate to compensate CMU for
the infringement. Damages are not meant to punish an infringer.
Your damages award, if you reach this issue, should put CMU in
approximately the same financial position that it would have been
in had the infringement not occurred, but in no event may the
damages award be less than what CMU would have received had it
been paid by Marvell a reasonable royalty. CMU has the burden to
establish the amount of its damages by a preponderance of the
evidence. In other words, you should award only those damages
that CMU establishes that it more likely than not suffered. In this
case CMU seeks a reasonable royalty. A reasonable royalty is
defined as the monetary amount CMU and Marvell would have
agreed upon as a fee for use of the invention in the United States at
the time prior to when the infringement began.
89
(Docket No. 764 at 62-63, 80-81). Against this backdrop, the jury returned a verdict in favor of
CMU on all forms of direct and indirect infringement, validity, and willfulness, ultimately
assessing $1.169 billion in damages for CMU. (Docket No. 762).
Having considered the applicable legal standard against the facts of record, the Court
finds that CMU had presented sufficient evidence from which the jury could have found that
CMU is entitled to damages authorized by 35 U.S.C. § 284, as expressed by the expert opinion
of Ms. Lawton, i.e., CMU is entitled to a reasonable royalty of $0.50 per chip sold by Marvell.
Of course, the jury could have found that Ms. Lawton’s testimony was not credible, or it could
have favored the expert testimony of Mr. Hoffman and awarded any figure he believed was
appropriate. See Micro Chem., 317 F.3d at 1394. The jury also could have reached a different
verdict altogether from any amount that was suggested by either expert and awarded a greater or
lesser sum. It is not the Court’s role to weigh the factual disputes presented by the parties at trial.
Eschelman, 554 F.3d at 433. Likewise, it is not the Court’s duty to usurp the jury’s fact finding
role when it reached a verdict on damages that was within the calculations proffered by the
competing experts. Both parties came into trial knowing that $1.169 billion was within the range
of possible compensatory verdicts. This is not a punitive award. It is the exact award sought by
CMU. (Docket No. 671 at 132). As such, the jury’s verdict is not against the great weight of
evidence as to mandate a new trial on damages. Nor is the verdict clearly unsupported such that
remittitur is warranted. For completeness, the Court now briefly addresses the bevy of arguments
advanced by Marvell to limit damages in this case, which can be categorized as either challenges
to the royalty base or the royalty rate.
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3. Challenges to the Royalty Base
a. Argument Based on Power Integrations
Marvell has repeatedly challenged the Court’s decision to allow CMU to value Marvell’s
use of the CMU Patents by considering all the chips that were sold under the aforementioned
sales cycle. (Docket Nos. 356; 656; 808). The Court first ruled on the inclusion of extraterritorial
conduct at summary judgment. (Docket No. 441). Motions in limine were due September 24,
2012. (Docket No. 315). Marvell did not raise this issue in a motion in limine; instead, it waited
until the last minute to file an “Emergency Motion to Strike CMU’s Attempt to Include
Noninfringing Sales of Chips that Are Never Used in the US in its Damages Case It Intends to
Present to the Jury” on the Saturday after Thanksgiving, two days before the start of trial. 93
(Docket No. 656) (emphasis added). Consequently, the Court reiterated, in response to this
“emergency” motion:
CMU intends to prove that the alleged infringing method is used
during Marvell’s sales cycle, which is performed here in the
United States, where both its engineers and customers are located.
(Docket No. 665). CMU seeks damages for this sales cycle
infringement by claiming a reasonably royalty rate on all of the
chips that are produced during this sales cycle and purchased based
on the result of said cycle.
To be clear, CMU does not seek damages from alleged
infringement of the Accused Chips that are never used in the
United States, because the Court has held the extra-territorial sales
are not infringing (Docket No. 441), it seeks damages on the
infringement from the U.S. based sales cycle, and has chosen to
quantify these damages by applying a per chip royalty rate on all
Accused Chips produced under the sales cycle. (Id.). Marvell will
have a full opportunity at trial to argue that this quantification is
unreasonable.
(Docket No. 672 at 5-6).
93
The Court notes that in October and November of 2012, eight new attorneys entered their appearances to
take the lead at trial for Marvell. (Docket Nos. 550-554; 599; 600; 630). The Court is not sure why this strategy was
employed. In any event it resulted in a complete changeover of lead counsel for Marvell from all prior proceedings.
91
During this post-trial stage, Marvell’s now claims that the Federal Circuit’s holding in
Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir. 2013),
precludes consideration of all of Marvell’s chips in computing a reasonable royalty.94 (Docket
No. 855). Having fully considered the law, the arguments of the parties, and the evidence
presented at trial, the Court does not believe that Power Integrations overrules this Court’s
earlier decisions.95
In Power Integrations, the plaintiff argued for an award of damages on the lost profits
from foreign sales which it would have made but for the defendant’s domestic infringement.
Power Integrations, Inc., 711 F.3d at 1371. In holding that such foreign lost profits were not
cognizable damages, the Circuit held that the question presented in the end was whether the
plaintiff was “entitled to compensatory damages for injury caused by infringing activity that
occurred outside the territory of the United States.” Id. at 1371. The Circuit panel held that “the
entirely extraterritorial production, use, or sale of an invention patented in the United States is an
independent, intervening act that, under almost all circumstances, cuts off the chain of causation
initiated by an act of domestic infringement.” Id. at 1371-1372 (finding that the damages expert’s
“estimate of $30 million in damages was not rooted in [the defendant’s] activity in the United
States”).
The Power Integrations fact pattern is quite distinct from the facts at hand. First, this case
has nothing to do with lost profits. Second, unlike the situation in Power Integrations, CMU does
not seek “damages for injury caused by infringing activity that occurred outside the territory of
94
New counsel have only recently, post trial, joined the cause, (Docket Nos. 776; 777), and bring with them
new issues for the Court to address.
95
The Court notes that Power Integrations’ request for rehearing and rehearing en banc has been denied, but
it has indicated it intends to seek Supreme Court review on the damages issue. See Power Integrations v. Fairchild,
Civ. No. 04-1371 (D. Del.) at (Docket No. 812).
92
the United States.” Id. at 1371 (emphasis added). The Court reiterates that CMU has always
sought damages for domestic infringement resulting from Marvell’s use of the patented methods
during research, development, chip design, qualification, use of engineering samples, continuous
evaluation and indirect infringement by end users in the United States. (Docket No. 860 at 5;
Docket No. 678 at 70-162). There was ample evidence presented at trial to establish that these
infringing activities occur in the United States. Dr. McLaughlin testified at length to establish
that the MNP and NLD chips and KavcicPP, MNP, EMNP, NLD, and Kavcic Viterbi Simulators
infringed the methods. (Docket No. 673 at 156-178). Dr. Bajorek then, in turn, explained how
these chips and simulators are used during the sales cycle. (Docket No. 678 at 76-90). He next
testified that all steps of the sales cycle, other than physical production of the chips, occur in the
United States, adding that he had personally been to each of the customer’s design centers in the
United States. (Docket No. 678 at 105) (“Hitachi, San Jose. Samsung in San Jose. Toshiba in San
Jose. And Western Digital in San Jose, in Lake Forest, which is southern California. In
Longmont and Fremont, several design centers by Seagate.”). He provided the following
demonstrative for the jury, which tabulated some of the infringing sales cycle activities, the
participants, the place of the activity, and the pinpoint reference citation supporting his
conclusion:
93
94
(Docket No. 771 at Ex. I). Dr. Sutardja, likewise, testified that the sales cycle process occurs in
the United States for its largest customers such as Seagate, Western Digital, Samsung, Quantum,
Maxtor, Toshiba, and possibly Hitachi. (Docket No. 707 at 132-133; Docket No. 868 at Ex. 1).
Mr. Yeo, Western Digital’s corporate designee also testified that the MNP and NLD technology
was tested as part of drive development in the United States. (Docket No. 761 at Jt. Ex. B at 4143). Additionally, the parties entered into a stipulation which reads in part:
Eight, the headquarters and principal place of business of
Marvell Semiconductor, Inc., also known as MSI, is located at
5488 Marvell Lane, Santa Clara, California.
Nine, the management and strategic decision-making of
MSI as well as most of its business activities are conducted at MSI
Headquarters in Santa Clara, California.
....
Eleven, the accused read channel and SOC products in this
case were researched, designed, and developed in MSI’s
headquarters in Santa Clara, California.
Twelve, as of June of 2009, MSI’s system and design teams
for the read channel R&D organization consisted of approximately
133 employees, of whom approximately 131 were located at MSI’s
facility in Santa Clara, California.
95
Thirteen, Dr. Zining Wu, vice-president of data storage
technology, Toai Doan, former vice-president for signal processing
technology and read channel product development, and Greg Burd,
senior manager of engineering, are knowledgeable about the
design, operation, and features of the accused read channel
products, particularly as related to the technology area of the
patents asserted in this litigation. All three of them work or worked
in northern California, and the managerial functions that they
carried out on a daily basis are essential to MSI’s ongoing data
storage business operations.
Fourteen, almost all of the design and development
documents from MSI’s read channel R&D organization are located
in Santa Clara, California.
....
Eighteen, MSI’s manufacturing operations group generally
supports read channel research and development rather than
commercial production activities. MSI’s manufacturing operations
group supports MSI’s read channel R&D through, for example,
ATE test development, product characterization, qualification, and
oversight of product transfer during read channel product
development. These activities are conducted in Santa Clara,
California.
Nineteen, as of June, 2009, approximately fifty employees
from Marvell’s manufacturing operations group who support read
channel research and development work at Marvell’s facilities in
Santa Clara, California.
Twenty, Albert Wu, vice-president of manufacturing
operations, works in northern California, managed those fifty
employees in June of 2009; and the managerial functions that he
carries out on a daily basis are essential to MSI’s ongoing
operations support for research and development.
Twenty-one, MSI’s operations documents concerning the
accused read channel products are located in Santa Clara,
California.
(Docket No. 764 at 49-56; Pl. Ex. 938).
Upon review of the record, the Court can find no evidence regarding whether any step of
the sales cycle process occurred anywhere other than in the United States. Indeed, Marvell
proffered almost no evidence regarding its business operations to rebut CMU’s arguments on
96
infringement, sales, or damages.96 Accordingly, CMU has shown that the infringement for which
it seeks damages occurred within the United States, clearly distinct from the Power Integrations
foreign exploitation of a patented invention.97 711 F.3d at 1371.
Even after Power Integrations, the Court must still confront the question of how to
quantify damages for Marvell’s use of the method patents at issue. As the Court discussed, a fee
per use is unrealistic. Moreover, no established fee exists. At trial, Marvell argued that a onetime fee of $250,000 was the appropriate measure of damages, (Docket No. 809), while CMU
countered that a reasonable fee should be a $0.50 royalty per chip on all chips created through
this sales cycle. (Docket No. 829). The Court has never endorsed either side’s position, only
ruling that CMU’s theory could presented to the jury. Based on the evidence before it, the Court
found CMU’s theory just as reasonable as Marvell’s. Accordingly, the jury considered both
positions. Furthermore, the Court properly instructed the jury that Marvell could not infringe
“with chips that are never used in the United States” but “[t]o the extent, however, that Marvell
achieved sales resulting from Marvell’s alleged infringing use during the sales cycle, you may
consider them in determining the value of the infringing use.”
In requesting the Court to follow Power Integrations, Marvell asks the Court to limit
CMU’s royalty to an estimate of chips that came back into the United States in the stream of
commerce. This proposition, however is lacking in evidentiary support and common sense.
Marvell did not submit evidence at trial that it or any company has ever licensed patented
96
This is not to say that Marvell had the burden of proof on damages, see Lucent, 580 F.3d at 1324, but only
that CMU has presented unchallenged direct and circumstantial evidence to establish the sales cycle occurred in the
United States.
97
As part of her damages evaluation, Ms. Lawton considered whether Marvell, in order to avoid
infringement, could move its design and sales centers overseas. (Docket No. 686 at 223-224). She determined,
however, based on Dr. Bajorek’s testimony, that it was key to Marvell’s business success to be in California where
the majority of its customers were based and where there was the largest pool of talent. (Id.). As such, moving the
research, design, testing, sales and marketing centers overseas was not a potential option. (Id.).
97
technology on a per United States imported chip basis. The only Marvell license submitted into
evidence at trial (by CMU no less), was between Marvell Technology Group and DSPG signed
in April 2000. (Pl. Ex. 197). According to the licensing arrangement, Marvell was to pay a $2.1
million fee plus a running royalty between $0.10 to $0.40 per unit, after 35 million units are
produced.98 (Id. at 79). The royalties paid to DSPG are not linked to the units’ location in any
particular country.99 (Id.). Likewise, Dr. Sutardja, Dr. Armstrong, and Mr. Brennan did not
testify that Marvell would have, or had ever, entered into an agreement which limited royalties to
chips in the United States, only. Dr. Armstrong did testify, however, that Marvell had entered
into running royalty agreements on chips, referring for instance to the aforementioned DSPG
contract. (Docket No. 761 at Ex. C at 15-16). The major concern with limiting a royalty for sales
cycle infringement to chips in the United States is that no one, including Marvell, tracks how
many chips come back into the country. (Docket No. 356-1; Docket No. 710 at 361).100 For the
purposes of this trial, Ms. Lawton projected two estimates: the first, 556,812,092 chips, based on
adjusted industry analytics of HDDs imported into the United States; and the second,
329,297,799 chips, based on the import records of Marvell’s four largest customers, i.e.,
Samsung, Hitachi, Western Digital, and Toshiba. (Docket No. 356-1 at 488-489; Docket No. 710
at 165, 200, 207-210).
98
One of the Georgia Pacific factors, is the “rates paid by the licenses for the use of other patents comparable
to the patent in suit.” 318 F. Supp. at 1120. While the Court does not suggest that the DSPG technology is
necessarily comparable, it does offer a glimpse at standard contract terms of Marvell and the industry in general.
This exhibit was admitted in connection with Dr. Armstrong’s testimony, in part, to show that Marvell has entered
into running royalty arrangements in the past. (Docket No. 682 at 252).
99
CMU’s DSSC licenses, equally, show that CMU licensed its patents on a worldwide basis, without
reference to use in or outside the United States. (Def. Exs. 17; 39; 40).
100
Mr. Hoffman stated “Nobody really knows is the bottom line. Okay? Because you just can’t tell. You just -you lose it. It goes through too many hands in commerce before I get a laptop here on my -- here in Pittsburgh or
somebody else gets a laptop in Paris or Buenos Aires. It’s -- you just don’t know where those things are going.”
(Docket No. 710 at 361).
98
All relevant information on the estimate of chips used in the United States and the total
number of chips produced worldwide was presented to the jury. Marvell argued to the jurors that
they should consider only the number of chips that are ever used in the United States in valuing
Marvell’s use of the patented method, while CMU urged the jurors to consider all chips produced
during the sales cycle regardless of whether they come back into the country. (Docket No. 759 at
96, 113). The factual record was such that the jury had substantial evidence on which to find in
favor of CMU’s theory.
The Court also believes that in envisioning a hypothetical negotiation, the jury could have
properly considered as illogical an agreement to a per chip royalty predicated on an analytic
neither party knows or tracks, and, depending on estimates, could vary by millions. It seems
unrealistic that for one license agreement, Marvell and CMU would undergo extensive
accounting review each and every year of import and export data of Marvell’s customers (if even
available). Moreover, such calculation would not include the number of simulators being used by
Marvell. The Federal Circuit counsels that “where it is impossible to make a mathematical or
approximate apportionment between infringing and noninfringing items, the infringer must bear
the burden and the entire risk.” Nickson Indus., Inc. v. Rol Mfg. Co., Ltd., 847 F.2d 795, 799
(Fed. Cir. 1988); see also TWM Mfg. Co., Inc. v. Dura Corp., 789 F.2d 895, 900 (Fed. Cir. 1986)
(where infringer’s failure to keep accurate records causes difficulty in ascertaining damages,
infringer must bear adverse consequences).101
The Court also reminds counsel that CMU’s damages request incorporates the damages
for Marvell’s indirect infringement, which if segregated from sales cycle infringement would
have created an even larger award for CMU. The Court had to remind Marvell of this as one of
101
Under this precedent, any remittitur based on the location of end products would be based on Ms. Lawton’s
556,812,092 million chip estimate. (Docket No. 710 at 165).
99
the verdict forms it proposed included separate lines for damages on each set of chips and
simulators, which could have inadvertently led to an award far in excess of $1.169 billion.
(Docket No. 759 at 39).
b. Location of Sales
As previously discussed, CMU seeks damages based on the sales that are created because
of Marvell’s infringement during the sales cycle. Marvell argues for the first time in its reply
brief on its Rule 50(b) Motion that CMU has not entered enough evidence to show that sales
took place in the United States in light of the Power Integrations decision. (Docket No. 855 at 6).
First and foremost, Marvell seems to conflate several issues in maintaining that CMU
must prove that the sales were made in the United States. Marvell’s liability is not predicated on
“sales,” but rather on “use” under 35 U.S.C. § 271(a). Under CMU’s theory, as proffered, it
would seem that sales would not necessarily need to be made in the United States because as
long as the sales were a direct result of Marvell’s infringement in the United States during the
United States sales cycle, the foreign sales would remain an appropriate component to value
domestic infringement. Second, Marvell introduced no evidence at trial that any aspect of its
sales took place outside the United States. Third, Power Integrations’ damages theory was
predicated on lost profits, while this matter focuses on finding a reasonable royalty or negotiated
fee for the use of CMU’s methods.
Next, there is the issue of waiver. Marvell contends that there is no evidence that sales
took place in the United States, because there was no evidence of the location of delivery,
location of the buyer, the passage of legal title, location of contracting, or execution of a sales
contract. (Docket No. 855 at 6-8). It also argues that the jury was not instructed on the law
relevant to determining the location of sales. (Id.). CMU objects to this argument because it was
100
never raised in either of Marvell’s two Rule 50(a) Motions during trial or even the initial posttrial Rule 50(b) Motion. (Docket No. 860).
A “defendant’s failure to raise an issue in a Rule 50(a)(2) motion with sufficient
specificity to put the plaintiffs on notice waives the defendant’s right to raise the issue in [his]
Rule 50(b) motion.” State Farm Mut. Auto. Ins. Co. v. Lincow, 444 F. App’x 617, 620 (3d Cir.
2011); see also Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1173 (3d Cir. 1993) (stating
that Rule 50(b) motion “must be preceded by a Rule 50(a) motion sufficiently specific to afford
the party against whom the motion is directed with an opportunity to cure possible defects in
proof which otherwise might make [his] case legally insufficient”) (emphasis in original).
Marvell did not raise this argument until its most recent reply brief. Throughout the trial, there
was no argument on the sufficiency of showing, where legal title was passed or even argument
on the sufficiency of the evidence regarding sales in general. This highlights why the Court of
Appeals for the Third Circuit directs that such arguments must be raised in a sufficiently specific
Rule 50(a) motion—if properly noticed, CMU could have submitted more evidence to rebut
Marvell’s current assertions.102 Further, Marvell cannot argue that it only raised such argument
because of Power Integrations, because the Court made it clear that the site of sales was not
settled during discovery (Docket No. 195), at Summary Judgment (Docket No. 441), and in its
order on the emergency motion on the fourth day of trial. (Docket No. 672).
To the extent that Marvell argues the jury should have been instructed on the legal
definition of sales, including any of the aforementioned factors, that argument has been waived
as such point for charge was neither suggested in proposed jury instructions nor preserved as an
102
For example, the Court notes that at summary judgment, CMU submitted the executed supply agreement
between Western Digital and Marvell, signed in California, as an exhibit to rebut Marvell’s Motion for Summary
Judgment of No Damage on Extraterritorial Conduct. (Docket No. 403 at Exhibit 68). However, in deciding a JMOL
the Court relies only on the properly admitted evidence. See Goodman, 293 F.3d at 665 (3d Cir. 2002).
101
objection during the charge conference. (Docket Nos. 623; 761; 764). Indeed, the Court has
reviewed the parties’ proposed jury instructions, the numerous versions of draft final
instructions, objections submitted via email and the transcript of the charge conference that
spanned three days, and it can find no requests by Marvell for the Court to include such
instructions. (Id.). The Court’s instruction on contributory infringement required CMU to prove
that Marvell “sold or offered to sell” infringing chips in the United States. (Docket No. 764 at
75). There was no request for an instruction defining sales in connection with this claim as well.
If a party does not preserve its objection to the final instructions it cannot challenge them later.
Brooks v. City of Summit, 138 F. App’x 390, 393 (3d Cir. 2005). Verdicts based on faulty
instructions are only reversed where there is error that is “fundamental and highly prejudicial or
if the instructions are such that the jury is without adequate guidance on a fundamental question
and ... failure to consider the error would result in a miscarriage of justice.” Id.
Even if Marvell has not waived this argument, which the Court believes it has, there is
more than sufficient evidence for a jury to find that the sales occurred in the United States. First,
in an effort to prevent CMU from entering numerous of Marvell’s SEC filings into evidence, the
parties stipulated that:
Eight, the headquarters and principal place of business of
Marvell Semiconductor, Inc., also known as MSI, is located at
5488 Marvell Lane, Santa Clara, California.
Nine, the management and strategic decision-making of
MSI as well as most of its business activities are conducted at MSI
Headquarters in Santa Clara, California.
....
Fourteen, almost all of the design and development
documents from MSI’s read channel R&D organization are located
in Santa Carla, California.
Fifteen, almost all of MSI’s sales and marketing
management personnel for read channel products are located in
Santa Clara, California. MSI’s sales and marketing decision-
102
making for read channel products is conducted in Santa Clara,
California.
Sixteen, Alan Armstrong, vice-president of marketing,
storage business group, and Bill Brennan, former vice-president of
sales, storage business group, are knowledgeable about MSI’s sales
and marketing of the accused read channel products. Both of them
work or worked in northern California, and the managerial
functions that they carried out on a daily basis are essential to
MSI’s ongoing sales and marketing on data storage products.
Seventeen, almost all of MSI’s sales and marketing
documents concerning the accused read channel products are
located in Santa Clara, California.
(Docket No. 764 at 49-56). Secondly, Dr. Armstrong testified that Mr. Brennan, based in
California, signed off on the sales. (Docket No. 761 at Ex. C at 213). Then, Dr. Bajorek gave
uncontradicted testimony that Marvell’s sales “essentially take place in the United States” and
identified the domestic office of each of Marvell’s major customers.103 (Docket No. 678 at 72,
105-106). In deciding a discovery dispute as to the scope of relevant discovery, nearly three
years ago, this Court wrote that some factors in determining sales in the context of 35 U.S.C. §
271 could include:
(1) the location of the contemplated future sale, (2) the location of
delivery, (3) the location of performance, (4) the location of the
buyer; (5) the location of the passage of legal title; (6) the location of
contracting; (7) the location of the negotiation of the sales contract,
and (8) the location of the execution of the sales contract
(Docket No. 195 at 3-4). While these factors are not exhaustive or necessarily determinative,
with the above-described stipulation in evidence, along with one of Marvell’s SEC filings (Pl.
Ex. 198), testimony from Dr. Armstrong, and expert testimony from Dr. Bajorek, there is
103
Dr. Bajorek testified:
Hitachi, San Jose. Samsung in San Jose. Toshiba in San Jose. And Western
Digital in San Jose, in Lake Forest, which is Southern California. In Longmont
and Fremont, several design centers by Seagate.
Q Have you personally been in these design centers, sir?
A Yes, I have.
(Docket No. 678 at 106).
103
sufficient direct and circumstantial evidence to support the proposition that sales resulting from
Marvell’s sales cycles were made in the United States. See, e.g., Snyder v. Bazargani, 241 F.
App’x 20, 23 (3d Cir. 2007) (juries can rely on direct and circumstantial evidence).
Again, there is no contrary evidence in the record showing that any activity beyond the
manufacture of the chips occurred anywhere outside the United States. Marvell allowed CMU to
present all of the evidence about Marvell’s business structure, organization and sales cycle.
Marvell presented no evidence to suggest that sales occurred in any other country.104 Counsel did
not argue to the jury that sales occurred in any other location than the United States. (Docket No.
759 at 96) (at closings arguing only that some chips are not used in the United States). Based on
the testimony and exhibits of record presented at trial, a finding that the chips were sold outside
the United States would have been without any evidentiary support. By withholding all evidence
on its operations and sales, Marvell undermined its ability to counter CMU’s proposition that the
sales, in fact, occurred in the United States.105
Marvell asks the Court to follow Judge Gilstrap’s decision in Lake Cherokee v. Marvell
Semiconductor, Inc., wherein Marvell’s evidence of foreign sales of chips was excluded as a
basis for damages.106 (Docket No. 890). However, in that case, not only was the court analyzing
what constitutes a “sale” under 35 U.S.C. § 271(a),107 but it was presented with undisputed facts
regarding Marvell’s foreign activities. (Id.). Based on the record before him, Judge Gilstrap was
104
The only evidence in the record of any foreign activity came from CMU’s expert, Dr. Bajorek who testified
that Marvell chips are made in a Taiwanese foundry. (Docket No. 678 at 105).
105
The Court ruled that if Marvell introduced evidence at trial, such as tax invoices, to try and establish the
location of sales, CMU may be able to use certain evidence pertaining to Marvell’s tax strategy, tax payments,
effective tax rates, or corporate structure to rebut said argument. (Docket No. 605). Possibly as a preventive
measure, Marvell did not submit any evidence or elicit any testimony that the Court could find “opened this door.”
106
The Court notes that Defendant Marvell Technology Group Ltd, the parent company of Marvell
Semiconductor, and Marvell’s Asian subsidiary MAPL, were not party to the Texas lawsuit. (Docket No. 890).
107
CMU does not argue liability for Marvell’s sales or offers to sell under § 271(a). Rather, CMU’s theory of
liability is based on Marvell’s use of the patented method. (Docket No. 860).
104
able to conclude that there was “no dispute that companies abroad submit purchase orders to
MAPL in Singapore and that, pursuant to such purchase orders, certain accused products are
manufactured abroad, delivered abroad, and never cross United States borders physically or by
legal title” and that “no revenues enter the United States.” (Docket No. 890-1 at 4-5). This Court
is in no place to make any similar conclusions. Not a single purchase order, nor delivery receipt,
nor any revenue data was introduced by Marvell. No Marvell witness testified that activities such
as sales, orders, deliveries, or accounting occurred overseas. Marvell’s strategy was “all or
nothing” in this case. By choosing to allow CMU to present all of the evidence regarding
Marvell and its business, Marvell was not able to control the message given to the jury, nor was
it able to establish convincing contrasting arguments.
In finding Marvell liable for contributory damages, the jury necessarily had to find that
Marvell sold or offered to sell the Accused Chips in the United States. Considering all the
evidence of record, the Court finds that there was sufficient evidence to support this finding, and
accordingly no JMOL, new trial, nor remittitur is warranted.
c. “But For” Standard
Marvell next contends that CMU has failed to meet its burden on damages under the “but
for” standard because it cannot prove that the sales of the Accused Chips arose due only to
Marvell’s infringement. (Docket No. 739 at 16; Docket No. 809 at 16). Marvell asserts that: (a)
no reasonable jury could conclude that the claimed methods in the patents-in-suit were “must
have” for Marvell’s customers; (b) CMU has no evidence that the claimed methods were “must
have” for Western Digital; (c) that non-infringing components made Marvell successful in the
storage hard drive business; (d) that incremental SNR gains are achieved with multiple noninfringing components; (e) that no reasonable jury could conclude that Marvell would have gone
105
out of business but for the claimed methods used in the read channel; and (f) the location of
Marvell’s sales cycle is irrelevant. (Docket No. 739 at 16-26). CMU counters that it has
presented sufficient evidence at trial from which a reasonable jury could find that Marvell’s use
of the claimed methods in the patents-in-suit was the “but for” cause of Marvell’s sales of the
Accused Chips. (Docket No. 725 at 9).
The Court finds that based on the evidence of record, viewed in the light most favorable
to the non-movant CMU and drawing all inferences in its favor, a reasonable jury could
determine that the alleged infringement in this case was the “but for” cause of the sales. Marvell
has made a “mountain out of a molehill” in arguing the requirements of “but for” causation,
maintaining that CMU must prove a certain level of customer demand or sole causation. (Docket
No. 855 at 8). The Court ruled at the Summary Judgment stage that CMU’s theory was
reasonable given that Marvell’s sales are the “but for” result of Marvell’s infringement during
the sales cycle. (Docket No. 441). The “but for” language on which Marvell relies does not arise
from case law or statute in this instance, but from the parties’ agreed-upon findings of fact.
(Docket No. 402 at ¶ 8; Docket No. 415 at ¶ 8) (“Marvell would not make volume sales of the
Accused Chips but for the use of Accused Chips in infringing modes in the U.S. during the sales
cycle.”). Thus, in stating in its summary judgment opinion that Marvell’s sales were a “but for
result of Marvell’s infringement,” the Court recognized that sales could be an indicator of the
value of Marvell’s use of the patents as long as there was a causal link between the infringement
and the sales. (Docket Nos. 441; 672). The Court was not speaking to whether there could be
only one cause or many. Regardless, the Court believes that CMU has met or exceeded its
burden of proof as to same.
106
To this end, the parties’ stipulation that was read into the record at trial on December 11,
2012, and again as part of the final instructions, provides that Marvell’s lengthy (eighteen to
thirty-month) sales cycle is a very important component of its business operations and is
completed almost entirely within the United States by its engineers, marketing and sales
executives as well as other members of Marvell’s staff at its Santa Clara offices. (Docket No.
676; Pl. Ex. 938). Nearly all of Marvell’s research and development, as well as its testing of
chips and multiple interactions with customers, occur there. (Id.). If a customer selects Marvell to
produce chips, Marvell achieves a “design win” whereby the customer orders a particular
integrated circuit for a full generation of its product line. (Docket No. 707 at 29-34). As already
recounted in addressing the JMOL motion on infringement, Dr. McLaughlin offered his expert
opinions, which the jury was free to credit, that the simulators run by Marvell and the NLD and
MNP-type chips sold by Marvell infringe CMU’s patents as Marvell uses the methods claimed in
this case.108 This opinion was bolstered by evidence adduced at trial that showed Marvell’s
product simulators are operated during the sales cycle and that infringing engineering sample
chips are used throughout the sales cycle. (Docket No. 707 at 45; Docket No. 678 at 70-162). It
was also shown that all of Marvell’s products and sales are the result of this lengthy sales cycle
and that “deals” are ultimately made by the Marvell sales team based in California. (Docket No.
761 at Jt. Ex C at 251-252). In addition, Dr. Bajorek gave his expert opinion, which the jury was
able to accept, that all of Marvell’s sales of the NLD and MNP-type chips are the result of this
United States sales cycle, and the MNP and NLD technology was the critical driver of the sale of
these chips. (Docket No. 678 at 66-75).
The sales data upon which Ms. Lawton relied in her opinion showing the number of NLD
and MNP-type chips sold by Marvell was provided by Marvell to CMU and not disputed at trial.
108
See Docket No. 673 at 156-178; see also discussion supra at Section V.A.2.c.
107
(Docket Nos. 315; 686). She testified that between March 6, 2003 and July 28, 2012, Marvell
sold 2,338,280,543 chips, (Docket No. 686 at 61), as illustrated by the following chart:
(Docket No. 868-16 at 6). A reasonable jury could conclude from this, and the other evidence of
record, that Marvell’s use of the claimed methods in the United States was the “but for” cause of
Marvell’s sales of the NLD and MNP-type chips.
The other matters that Marvell has raised, including whether the technology was “must
have” for its customers like Western Digital, whether the other components in the NLD and
MNP-type chip drove sales, the success of its other product lines at achieving SNR gains, and
whether Marvell would have gone out of business without the use of the claimed methods,
challenges the credibility and weight to be given to CMU’s damages evidence and presents
factual issues the jury had to consider and decide. Marvell proclaims it is “undisputed” that
108
customers did not want the MNP. (Docket No. 885 at 9). The Court, however, does not agree.
Marvell heavily relies on Iftiqar Baqai of Western Digital and Marvell’s Michael O’Dell to argue
that customers did not want the MNP. Mr. Baqai testified that when he worked in the relevant
division, Western Digital wanted to pull the MNP. (Docket No. 711 at 164). However, Mr. Baqai
was only involved in read channel activities until 2005.109 (Id. at 175). Moreover, Western
Digital went on to buy one billion infringing chips with the technology enabled. (Docket No. 868
at Ex. 1; Pl. Ex. 1922). Mr. O’Dell, a late additional witness for Marvell, likewise stated that
when he was with Marvell, customers wanted to remove the MNP; however, he did not work at
Marvell in the critical time period between 2004 to 2010. (Docket No. 726 at 229).
On the other hand, CMU presented: (1) the expert testimony of Dr. Bajorek that the
technology was “must have”; (2) internal Marvell communications showing failed predecessors
to the MNP, requests to include the MNP as a “critical requirement,” as well as references that
the MNP was a key feature in Marvell’s products; (3) testimony of Western Digital’s original
corporate designee, Teik Ee Yeo, stating that Western Digital used the technology and saw gains
from it; and (4) relevant data on Marvell’s sales of infringing products. (Docket No. 829 at 913).
Even if the Court ignores all of the arguments by counsel, statements from witnesses, and
opinions from experts, the data shows that a majority of all chips sold by Marvell contained the
infringing technology. (Docket No. 686 at 117-126). Therefore, Marvell’s contentions of what is
purportedly “undisputed” evidence do not hold weight. At most, the parties’ evidence created
factual disputes for the jury, which were resolved in favor of CMU. See, e.g., Curley v. Klem,
499 F.3d 199, 208 (3d Cir. 2007) (factual disputes must be resolved by a jury). The Court finds
109
Marvell avers that Mr. Baqai was present due to a subpoena. (Docket No. 711 at 144). CMU argued that
Mr. Baqai, a California resident, was not technically compelled to appear by way of a subpoena from the Western
District of Pennsylvania. See FED. R. CIV. P. 45(b)(2)(b). It is true that Mr. Baqai could not have been actually
compelled by this subpoena, but he may have thought he was compelled to appear.
109
that there is sufficient evidence on which a jury could find that Marvell’s infringement through
the sales cycle was the cause of its sales.
d. Running Royalty
Marvell contends that CMU has adduced no evidence in support of a running royalty tied
to product sales, allegedly undermining its damages case. (Docket Nos. 738; 805). As CMU
points out in its response, there is sufficient evidence in the record from which the jury could
have found the parties to the hypothetical negotiation determined that a running royalty was
appropriate in this case. (Docket No. 725). As the Court held at the Daubert stage of these
proceedings in the opinions addressing both the motion to exclude the testimony of Ms. Lawton
and Mr. Hoffman, there is no established royalty for the patents-in-suit in this case. (Docket No.
449). To this end, as the Court recounted in one of the memorandum orders denying CMU’s
motions in limine to exclude the evidence of the Intel Subscription Agreement, (Def. Ex. 255),
and the “Highly Speculative Forecast,” (Def. Ex. 272), the parties to the hypothetical negotiation
in this case would have to negotiate both the financial aspect of any license for the patents-in-suit
as well as the framework or structure of the deal, including whether it was a running royalty or a
lump sum payment. (Docket No. 609 at 5-6 (citing Lucent Technologies, Inc. v. Gateway, Inc.,
580 F.3d 1301, 1326 (Fed. Cir. 2009)).
In this Court’s opinion, CMU presented sufficient evidence showing that both parties
have used the running royalty structure in past license agreements. (Pl. Ex. 197; Def. Ex. 272). In
the absence of an established royalty, a reasonable jury could conclude that the parties to the
hypothetical negotiation would have agreed to a running royalty in accordance with Ms.
Lawton’s expert opinion.
110
As CMU recounts (Docket No. 725 at 7-8), the trial record contains evidence that
Marvell has been a party to running royalty licenses in the past. Indeed, Dr. Armstrong has
represented that Marvell entered into both lump sum and running royalty agreements in the past.
(Docket No. 761 at Jt. Ex. C at 251-252). Ms. Lawton also relied on three license agreements for
a running royalty into which Marvell had entered: (1) Hitachi; (2) DSP group (Pl. Ex. 197); and
(3) ARM, during her testimony, to which there was no objection by Marvell. (Docket No. 710 at
112-113).
The trial record also contains evidence that CMU has been a party to both running royalty
and lump sum licenses in the past. First, Ms. Lawton testified that she relied on a Showa Denko
license agreement wherein CMU had agreed to a running royalty for a set number of cents per
disk and Marvell did not object to such testimony. (Docket No. 710 at 112-113). Second, the
“Highly Speculative Forecast” was entered in evidence over CMU’s objection. It contains a list
of license agreements to which CMU has been a party and reflects that CMU was a party to
running royalty agreements at that time.110 (Def. Ex. 272). Third, Dr. Wooldridge also testified
that CMU had been a party to running royalty agreements in general and as set forth in the
“Highly Speculative Forecast.” (Docket No. 682 at 102, 110).
For these reasons, the Court finds that CMU adduced sufficient evidence from which a
reasonable jury could conclude that the parties to the hypothetical negotiation may have agreed
to a running royalty in this case. Once again, the parties’ competing evidence on this issue was
left for the jury to decide.
110
These include running royalties for ATRP with PPG, Ciba, Kaneka, and Dolonex; for Smartcube with
Psychogenics; and for Microvelcro with Alza. (Def. Ex. 272).
111
e. Licensed Sales
Marvell’s final argument in its initial Rule 50(a) motion was that CMU improperly
included licensed sales to non-party Seagate Technologies in the royalty base, relying on this
Court’s Summary Judgment opinion dated August 24, 2012. (Docket No. 441). However,
Marvell misconstrues the Court’s earlier decision. At that point in the litigation, the Court also
found that Marvell’s use of the claimed methods during its sales cycle could support a verdict
against it because there was no evidence of record that Seagate had exercised its “have made”
rights under the license and solicited Marvell to build the patented technology for it. 111 (Docket
No. 441 at 10-11). Without such evidence, the Court further found that Marvell’s use of the
patented methods in this manner could support a claim for damages.112 (Docket No. 441 at 1214). As before, Marvell did not introduce any evidence at trial demonstrating that Seagate
exercised its “have made” rights under its DSSC license such that the Court’s prior decision no
longer stands. Nor have they convinced this Court that its prior decision was incorrect.
111
Seagate, as a member of the DSSC, has a right to the patents-in-suit under the Associates Agreement. To
this end, that agreement gives Seagate a right to have the Inventions made, i.e., “have made” rights. (Def. Exs. 39;
1003; 1008). However, it is not clear to the Court that the appropriate Seagate Associates Agreement covering these
patents was entered into evidence, as at trial, Marvell only proffered unsigned copies of Seagate DSSC Associates
Agreements. (Def. Exs. 39; 1003; 1008). These three versions of the agreement have conflicting terms for the period
of 1992-1997. Id. The agreement in place in 1995-1997 would be controlling regarding Seagate’s “have made”
rights for the patents-in-suit. Thus at trial, Marvell did not present uncontroverted evidence that Seagate had a
license to the patents. Regardless, Marvell likewise did not proffer any contract, communication, testimony or
document showing Seagate exercised any DSSC rights in conjunction with its dealings with Marvell.
112
The Court’s reasoning was that had Seagate exercised its “have made” rights before Marvell undertook the
sales cycle, it would not be liable for infringement. (Docket No. 411). If Marvell, however, did not secure such a
grant of rights it would have infringed the patents in order to make a non-infringing sale. (Id.). Hence, the sales to
Seagate could still demonstrate the value to Marvell of infringing CMU’s patents. (Id.).
112
4. Challenges to the Royalty Rate
a. Challenges to Ms. Lawton’s Methodology
Marvell contends that a royalty of $0.50 per chip is unsupported by the record because
Ms. Lawton’s opinion is speculative. (Docket No. 809 at 10-17). Marvell’s first line of attack is
on Ms. Lawton’s use of excess profits analysis and operating profit premium analysis.
Because of Marvell’s numerous challenges to Ms. Lawton, the Court held two Daubert
hearings regarding Ms. Lawton’s opinion at Marvell’s request. (Docket Nos. 438-440; 706). In
addressing these same arguments, the Court has now written over forty pages analyzing Ms.
Lawton’s qualifications and methods, ultimately holding that she was qualified to testify as an
expert in this case and that she applied a reliable methodology in reaching her damages opinion.
(Docket Nos. 451; 713). The Court incorporates both opinions herein and denies the Motion for
Judgment as a Matter of Law, the Motion for a New Trial, and Motion for Remittitur to the
extent that Marvell argues Ms. Lawton is not qualified to render her damages opinion, that her
opinions were unreliable, or that they did not fit this case.
Going through these Daubert challenges, the Court put Ms. Lawton to the test, requiring
her to first give her testimony in camera for all counsel and the Court before addressing the jury.
Additionally, ten minutes before her testimony, the Court excluded Ms. Lawton’s prepared
slides, given numerous and time consuming arguments over them and what the Court determined
to be a summary presentation that should not be permitted in a trial. (Docket No. 686 at 29).113
113
Despite these last minute changes and extra scrutiny, Ms. Lawton, in this Court’s estimation, was
remarkable as a witness. In the Court’s thirty years of private trial practice and over six years on the bench, there
have not been many witnesses (fact or expert) who have had such a grasp on all the facts and figures of a case,
possessed the ability to answer thoroughly, succinctly, and convincingly, as well as communicate in a direct yet
amicable manner.
113
With respect to her computations,114 Ms. Lawton initially arrived at a price-per-chip of
$4.42 and operating profit-per-chip of $2.16 based on Marvell’s internal sales data. (Docket No.
686 at 53-54). She then relied on comments from Marvell’s CEO, Dr. Sutardja, and deposition
testimony of Marvell’s marketing executive, Dr. Armstrong, both of which suggest that
Marvell’s target gross margin for all of its products was 50%. (Docket No. 710 at 232-233). She
next looked at Marvell’s gross margin, operating income and excess profits from 2000 to 2013 of
MNP and NLD chips and found that Marvell made approximately 59.6% profit on its gross
margins. (Id. at 82-86; Lawton Chart 27). Based on this analysis, Ms. Lawton concluded that
Marvell received $0.42 of “excess profits” from its sales of the read channel and SOC chips, i.e.,
profit in excess of the 50% target margin. (Id. at 85-86). She then conducted an operating profit
premium analysis in which she compared the sales of Marvell’s chips to certain customers
(Maxtor and Toshiba) for which she had information from the same time period (2003) where
products were sold with and without the addition of the allegedly infringing MNP detector.115
(Id. at 95-100). From this data, Ms. Lawton calculated that Marvell had an operating profit
delta116 between $0.06 and $0.72 on the chips containing the MNP/NLD compared to those that
did not have an MNP/NLD. (Id.). She refers to this $0.06 to $0.72 range as the “operating profit
premium” and suggests that this range would also have been the range of negotiations between
114
The full data and her calculations are detailed in her expert report which is over 500 pages with 3,000
footnotes. (Docket No. 356-1).
115
Marvell maintained that this comparison was not appropriate and cross-examined Ms. Lawton on same.
(Docket No. 710 at 242-245). Ms. Lawton stated she compared these customers’ chips because Dr. Armstrong
advised that to analyze prices with respect to the chips that Marvell was selling, one would need to establish
comparability of the chips. (Id. at 95-96). In order to establish comparability, she stated the chips would have to
have: the same data rate; the same packaging; been sold to the same customer; and been sold in the same quarter.
(Id.). Ms. Lawton also looked at the price deltas of Fujitsu, Hitachi, and Seagate, but stated they did not meet her
comparability standard given that for Fujitsu the sales were not in the same quarter and for Hitachi the comparison
chips had different data rates. (Id.). The prices for Seagate were listed in a price quote and Ms. Lawton stated she
was not able to see the prices actually paid. (Id.).
116
An operating profit delta is the price delta minus the cost associated with the MNP. (Docket No. 710 at 97).
114
the parties during the hypothetical negotiation. Id. at 172. Ultimately, relying in part on her
calculations of the excess profits benchmark of $0.42 per unit, and the operating profit premium
benchmark of $0.06 to $0.72 per unit, and considering all the other factors as laid out in
Georgia-Pacific,117 Ms. Lawton opined that a reasonable royalty in this case was $0.50. (Docket
No. 710 at 170-171). After applying this figure to the 2,338,280,543 Accused Chips sold over the
past ten years since March 6, 2003, she concluded that CMU’s damages were $1.169 billion.
(Docket No. 686 at 61).
This analysis and testimony was in stark contrast to Marvell’s damages expert, who did
not do any financial analysis of Marvell’s sales data. He only opined that CMU and Marvell
would have agreed to a one time lump sum payment of $250,000. (Docket No. 709 at 242-245).
His opinion was based on the DSSC licenses and CMU-Intel Subscription Agreement. (Docket
No. 709, 710). While he tried to discredit Ms. Lawton’s in-depth analysis, he did not offer any
analysis of his own of any sales data. Unlike Ms. Lawton, Mr. Hoffman appeared unfocused at
times and repeatedly lost track of his points during his brief “expert” testimony. His expert
opinion bordered on mere regurgitation of the facts related to the DSSC and Intel licenses, rather
than any analysis based on his knowledge, education or expertise. His ultimate opinion was
$250,000 one-time lump sum, despite the fact that the Intel agreement was for a lump sum of
$200,000 and the DSSC agreement required annual $250,000 payments. (Def. Exs. 17; 39; 40;
255). In the Court’s estimation, it is not hard to see why the jury chose to credit Ms. Lawton over
Mr. Hoffman. To that end, the jurors took their task in analyzing the expert opinions very
seriously. Indeed, they asked the Court during deliberations if they could be provided with the
117
The factors she considered include: the advantages of the patented invention; the market and industry
background; the date of the hypothetical negotiation; acceptable available non-infringing alternatives; consideration
of the parties to the negotiation; projection sales; norms in the relevant industry; the structure of the agreement;
royalties received by CMU; rates paid by Marvell; the commercial relationship between the two; the duration of the
patents; and the use of the patents by Marvell, among many others. (Docket No. 761 at P. Demo 12).
115
full expert reports and demonstratives for both Ms. Lawton and Mr. Hoffman. (Docket No. 761
at Ct . Ex. 3).118
As the Court held at the summary judgment stage, whether Ms. Lawton’s testimony
would be accepted or not is a “[d]eterminations regarding the weight to be accorded, and the
sufficiency of, the evidence relied upon by the proffered expert…within the sole province of the
jury.” (Docket No. 451 at 10) (citing Walker v. Gordon, 46 F. App’x 691, 695 (3d Cir. 2002)).
The Court does not find any of the data points utilized by Ms. Lawton improper. Thus, the JMOL
is denied to this extent, and a new trial and/or a remittitur is not warranted on this basis.
b. Damages Are “Out of Proportion”
Marvell next argues in its motion for JMOL that “CMU’s claim for $1.169 billion is
wildly out of proportion to its own pre-litigation assessments of value.” (Docket No. 739 at 12).
It maintains that judgment as a matter of law is warranted as a result of Ms. Lawton’s failure to
rely on the following evidence: (1) the DSSC membership licenses (Def. Exs. 17; 39; 40); (2) the
August 5, 2003 letters to which Wooldridge testified that no company expressed any interest in
taking a license (Pl. Exs. 422; 431; Def. Exs. 225; 235; 1573); (3) the 2004 Intel Subscription
Agreement through which an offer was made to Intel for the patents-in-suit for a lump sum of
$200,000 (Def. Ex. 255); (4) the evidence that CMU had not entered into a single license arising
out of engineering or computer science let alone a single, upfront licensing fee greater than
$100,000; and (5) the “highly speculative” projection spreadsheet and emails wherein Wooldridge
stated that an estimate for the patents-in-suit was $2,000,000.00 per year. (Def. Ex. 299).
As the Court noted in the Memorandum Order denying CMU’s Motion to Strike Mr.
Hoffman’s testimony filed on December 18, 2012, all of this evidence underpins Mr. Hoffman’s
118
After consulting with counsel and hearing argument on same, the Court instructed the jury that neither the
slide presentation nor any expert reports were admitted into evidence and could not be used in their deliberations.
(Docket No. 765 at 12-13).
116
opinion that the reasonable royalty in this case would be a one-time, lump-sum payment by
Marvell to CMU of $250,000.00. (Docket No. 733). As the Court has recounted, Mr. Hoffman
relied heavily upon this figure in both his expert report and opinion testimony.
Based on this Court’s review of the record, Ms. Lawton did not disregard any of this
evidence. She convincingly explained her consideration of the DSSC and Intel agreements and
how those agreements affected her opinion. (Docket No. 686 at 138-166).
119
Ms. Lawton
identified the special nature of the agreements as well as the other forms of compensation the
University received in connection with said agreements, such as research grants, funding,
scholarships, sponsored fellowships, etc. (Id.). She did the same with respect to CMU’s
marketing efforts, discussing how this evidence did or did not affect her calculation of the
reasonable royalty through her use of the hypothetical negotiation framework. 120 (Id.). The
119
On the DSSC agreements, Ms. Lawton testified:
Q: Did you consider these DSSC agreements and the fact that they provided for
a 250,000-dollar annual fee?
A: Yes, I did.
Q: And did you have a view as to whether that was an appropriate measure of
the -- of a royalty in this case?
A: Yes, I did.
Q: And what was your conclusion?
A: My conclusion is that that is not an appropriate measure in this case, because
those were special agreements.
(Docket No. 686 at 138). In regards to the Intel agreement she testified:
Q: Okay. Now, we saw testimony in this case yesterday, at some length, about a
subscription agreement between CMU and Intel. Do you recall the date of that
subscription agreement?
A: September of 2004.
Q: And how does that compare to the date of the hypothetical negotiation?
A: That’s about three-and-a-half years after the date of the hypothetical
negotiation.
Q: And did you consider the existence of this Intel agreement in connection with
your analysis?
A: I did, yes…
(Id. at 165-166).
120
In considering the “highly speculative” spreadsheet Ms. Lawton noted:
117
record clearly shows she was cross-examined extensively by Marvell’s counsel on these very
points. (Docket No. 710 at 179-191). Obviously, Marvell disagrees with Ms. Lawton’s opinions
regarding the importance of this evidence, but that does not mean such facts were not considered.
The jury was presented with all of the evidence that Marvell avers was not considered by
Ms. Lawton. Further, CMU’s witnesses including Dr. Kavcic, Dr. Kryder, and Mr. Wooldridge
were cross-examined on these facts. (Docket Nos. 673; 674; 682). Accordingly, the weight of
these facts that underlie the experts’ opinions was for the jury to decide. See Micro Chem., Inc. v.
Lextron, Inc., 317 F.3d 1387, 1394 (Fed. Cir. 2003). Whether Ms. Lawton’s testimony would be
accepted or not is a “[d]etermination[ ] regarding the weight to be accorded, and the sufficiency
of, the evidence relied upon by the proffered expert…within the sole province of the jury.”
Walker v. Gordon, 46 F. App’x 691, 695 (3d Cir. 2002). As such, Marvell’s motions for
judgment as a matter of law are denied to the extent that it argues that the damages which were
sought are “out of proportion” with reality.
c. Patented and Unpatented Features
Marvell claims that: (1) CMU has no evidence that the claimed algorithm drives
customer demand; (2) CMU did not apportion the value of the claimed algorithm to the accused
MNP chips; (3) the calculated price premium for one of Marvell’s smallest customers is
Q: And we spent some time talking about what we at least fondly call the highly
speculative memo at CMU that Mr. Wooldridge talked about yesterday. What -how does the date of that -- do you know what the date of that memo was?
A: January of 2006.
Q: And how does the date of that memo compare to the date of the hypothetical
negotiation?
A: Almost five years later -- four -- four years and ten months later.
Q: And how do all those dates compare to the dates of the events that you
studied at Marvell?
A: They’re well after the dates that surround the hypothetical negotiation on
March 13th of 2001.
(Docket No. 686 at 166).
118
inapplicable to all accused sales;121 and (4) CMU’s excess profits analysis is completely divorced
from any measure of value for the claimed algorithm. (Docket No. 739 at 27-36). The Court
finds that these arguments go to the weight rather than the admissibility of Ms. Lawton’s
testimony. See Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387, 1394 (Fed. Cir. 2003). She
addressed each and every one of these arguments and was cross-examined by Marvell on same.
(Docket No. 710 at 173-266). The Court has already reviewed her testimony at length here and in
its opinion on Marvell’s Motion to Exclude Catherine Lawton’s testimony.122
Similarly, the Court has already discussed the propriety of Ms. Lawton’s price premium
and excess profits analysis. Again, she based her reasonable royalty opinion on the opinion of
Dr. Bajorek that the technology became “industry standard” and was “must have” for Marvell’s
survival and his other opinions regarding the value of the Accused Technology to Marvell’s
customers in order to establish liability. (Docket No. 686 at 68); see, e.g., Member Services, Inc.
v. Sec. Mut. Life Ins. Co. of New York, Civ No. 06-1164, 2010 WL 3907489, at *27 (N.D.N.Y.
Sept. 30, 2010) (an “expert may rely upon another expert to form an opinion under Rule 703” as
long as the expert does not “merely recite another expert’s opinion as his own”). Ms. Lawton
also relied on Dr. McLaughlin’s opinions on the infringement of the claimed algorithm on the
MNP and NLD chips again in order to assume liability. See, e.g., Sys. Dev. Integration, LLC v.
Computer Scis. Corp., 886 F. Supp. 2d 873, 882 (N.D. Ill. 2012) (“It is entirely appropriate for a
damages expert to assume liability for the purposes of his or her opinion. To hold otherwise
would be illogical.”); Sancom v. Quest Commc’ns Corp., 683 F. Supp. 2d 1043, 1068 (D.S.D.
121
At trial and post-trial hearings, Marvell’s counsel claims it was able to show that the average margin of
non-infringing storage products is higher than its margin of infringing products. (Docket No. 880 at 65-66).
However, Ms. Lawton explained that those non-infringing products include a non-read channel chip for Seagate that
sells at a premium, and a chip that Marvell indicated had an MNP but CMU could not absolutely confirm this and
out of an abundance of caution, she did not include this chip in its list of Accused Products. (Docket No. 710 at 257258).
122
See supra at Section V.D.4.a.; see also (Docket No. 713).
119
2010) (“it is well-settled that a damages expert ... can testify as to damages while assuming the
underlying liability”). The specific challenges to the factual underpinnings of these expert
opinions go to the weight to be afforded to their respective testimonies. See Miller, 2011 WL
7037127, at *3 n.3.
The Court is guided by the Federal Circuit’s decision in Micro Chemical, Inc., which
aptly stated:
[t]his case is a classic example of competing experts. Each side had
the opportunity to present its damages theory. Each party’s expert
supported his reasonable royalty determination with an analysis of
relevant factors based on his client’s view of the disputed facts.
The outcome of the case depended to a large extent upon which
predicate facts the jury believed, and then on which expert’s
analysis they believed. Upon reviewing the record, we cannot say
that [plaintiff’s] damages theory and the jury’s ultimate damages
award were unsupported by substantial evidence. The defendants
may not like the jury verdict, but it was the result of a fair trial,
fairly fought.
317 F.3d at 1394. Likewise in this case, all of the evidence Marvell cites, along with their expert
testimony, as well as their arguments, were presented to the jury, who had ample opportunity to
consider same in their calculation of damages. Ms. Lawton’s opinion is not rendered unreliable
simply because she reached a conclusion adverse to Marvell’s arguments on the facts. The jury
was tasked with evaluating the credibility of all of the witnesses and the weight of the evidence
in order to reach its ultimate decision on damages. They did just that and found for CMU.
Accordingly, Marvell’s motion is denied on these grounds.
5.
Conclusion on Damages
Marvell is in its current predicament because it deliberately undertook a series of
strategic risks. It took the risk of incorporating technology into its products that it knew might
have been covered by CMU’s Patents. It took the risk of continuing its use of this technology
even after this litigation was initiated. It bore the risk of failing to keep or to demonstrate it kept
120
records pertaining to sales and use of its chips.123 Its trial team took the risk of taking this case to
trial, despite repeated efforts to mediate this case (Docket No. 236),124 and knowing full well the
size of the possible award. Indeed, Marvell has known CMU’s position on damages since
January 2012, when Catherine Lawton’s expert report was produced. (Docket No. 315). Now,
Marvell looks to the courts to relieve it from the damages award it faces from taking those risks.
This Court, however, remains unconvinced by Marvell’s arguments. Perhaps, in foreseeing such
a result, Marvell has vowed to march forward on the chance that the Federal Circuit may favor
its position, as Marvell has made it clear that it believes the Court’s rulings were in error and
against the great weight of Federal Circuit precedent. While Marvell may believe the Court’s
purportedly flawed legal analysis precipitated its defeat, it is the undersigned’s impression as a
Judge and former trial lawyer that Marvell’s bad facts and even worse litigation strategy were
fatal to its cause.
Marvell’s strategy was always “all or nothing.” At trial, Marvell argued that the parties
would have agreed to a one-time payment of $250,000. It took the risk that the jury would reject
this argument.125 In making this argument, Marvell intentionally declined to present evidence of
a lower running royalty amount, upon which a jury could have awarded CMU substantially
reduced damages. Marvell did not offer any evidence about its sales cycle, business strategy,
technology, pricing or products, in relation to determining damages. It took the risk of not
123
See discussion supra at Section V.D.3.b.
124
Magistrate Judge Infante attempted to mediate this case twice, (Docket Nos. 236; 315), the Court held a
settlement conference immediately before trial, (Docket No. 641), and the Court ordered the parties to Courtannexed mediation twice, once during trial, before the verdict and once before the hearing on post-trial motions.
(Docket Nos. 734; 872). Despite same, this case is obviously still ongoing.
125
It likely would have been difficult for the jury to believe the technology at issue was only worth a one-time
payment of $250,000 once they observed the number of lawyers in the Courtroom at any given time during this trial.
Just the sight of these armies of attorneys would suggest to any casual observer that this case was about valuable
technology and important for both sides.
121
presenting this evidence in order to keep its technology, products, and sales information secret.
This was Marvell’s choice. It should thus not come as a shock that the jury did not find in its
favor, as it proffered no solid evidence about its business and its products.
CMU’s damages expert Ms. Lawton was the only person in the trial to present evidence
concerning Marvell’s sales of the Accused Technology.126 (Docket Nos. 868; 710). She was thus
able to define Marvell’s sales, characterize its actions in her favor, and support CMU’s theory of
the case. Opposing her was Mr. Hoffman, whose testimony appeared disjointed and did not
demonstrate a comparably firm grasp of the facts and data as Ms. Lawton. Although he was
dismissive of Ms. Lawton’s opinion, he did not provide any other contrary calculations or wellconsidered alternatives. In effect, Marvell let CMU create a one-sided expert exposition, because
it did not argue for any per chip royalty. This left the jury in a tough spot, with no reasonable
options for a damages award other than $250,000 or $1.169 billion.127 While the Court cannot
even begin to calculate the hours it spent on arguments, objections at over 130 sidebars, and
motions regarding minutiae,128 Marvell’s proper focus should have been on persuading the jury,
if liability were found, that a lower royalty existed.129
126
Ironically, when Marvell wished to seal Ms. Lawton’s trial slides months later, CFO Brad Feller provided
an affidavit as to the importance of this information. (Docket No. 773).
127
During deliberations on December 21, 2012, the jury requested a calculator. (Docket No. 761 at Ct. Ex. 2).
Marvell objected to this request. (Docket No. 764 at 106-120, 131-132). As a result, the parties and the Court could
not come to a resolution until the jury resumed deliberations on December 26, 2012. (Docket No. 765). The Court
eventually advised the jury that a calculator could be made available upon request. (Id. at 13). The jury never again
requested to use a calculator, and none was provided. In this Court’s estimation, a calculator may have been in the
best interest of Marvell because it could have allowed the jury to consider per chip royalties below $0.50 per chip.
128
See (Docket No. 72) (Marvell’s Oral Motion to Strike Slide 19 of Plaintiff’s Demonstrative); (Docket No.
660) (“Motion for Reconsideration Regarding Order Sustaining CMU’s Objections to Disputed Defendants’ Exhibit
DX-189”).
129
Given the attitude of Marvell’s counsel and its actions, the Court felt at times that Marvell was treating this
trial as a dress rehearsal for the new trial that it hopes to gain from the Federal Circuit.
122
John Adams has observed that “[f]acts are stubborn things; and whatever may be our
wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and
evidence.”130 Such was the case for Marvell. CMU presented three extremely qualified and
competent experts, each of whom did an excellent job explaining their opinions and pointing the
jury to the factual proof underlying their opinions.131 On the other hand, Marvell focused on
attacking CMU’s witnesses instead of presenting a cohesive defense based on its witnesses.
While CMU had numerous fact witnesses, such as Dr. Cohon and Dr. Kryder, who apparently
garnered credibility with the jury, Marvell’s employee testimony may not have been as
convincing, especially when they had to struggle against facts tending to show infringement
(naming the Accused Technology after Dr. Kavcic),132 and patent validity (email from the
inventor of the Worstell patent). (Pl. Ex. 161).133 Moreover, given the nature of the invention,
everyone agreed that Dr. Kavcic’s method is the optimal solution. (Docket No. 677 at 170; 759
at 133). As Dr. Burd said in his displayed deposition testimony [Dr. Kavcic] “is kind of VIP
which everybody tries to cite and everybody is citing, even in the papers… so it’s a natural thing
130
John Adams, Argument in Defense of the Soldiers in the Boston Massacre Trials (December 1770),
available at http://www.bostonmassacre.net/trial/acct-adams3.htm.
131
In contrast, at one point in trial, the Court observed two of out of Marvell’s three experts sound asleep for a
period of time. In all likelihood, the jury made the same observation.
132
The Court particularly recalls the deposition testimony of Mr. Burd:
Q. And why use the Kavcic approach, as the yardstick?
A. …just because his name, kind of became a yardstick. I don’t know why. I
mean, people use it. It’s like when you say-you know there are certain people
which get associated with – some event….Ronald Reagan is credited with
breaking down the wall. Well, I didn’t see him break any bricks. Right? But yet,
he is the one. So same thing.
(Docket No. 771 at Ex. H at 110).
133
Three former Marvell employees Mr. Doan, Dr. Armstrong, and Mr. Brennan did not appear in person,
opting to testify by deposition designations, and offered testimony helpful to CMU’s cause. (Docket No. 761 at Jt.
Exs. A, C, D). For example, Mr. Doan testified that he never looked at the patents, never directed others to look at
them, and never contacted Marvell’s legal department about them. (Docket No. 761 Jt. Ex. D at 125, 130).
123
to compare yourself to, you know, people whose work considered to be, you know, on a leading
edge or on the cutting edge of a field.” (Docket No. 771 at Ex. H at 110). While these facts may
not be dispositive on the issues of infringement, invalidity, and willfulness, they were
nevertheless very difficult to overcome.
As to damages, there is likewise telling sales data that shows that a majority of all chips
sold by Marvell used the Accused Technology for a ten-year period. (Docket No. 686 at 117126; P-Demo 13). Marvell’s revenue on the Accused Technology was $10.34 billion, with a total
operating profit of $5.05 billion.134 (Docket No. 868 at P Demo 9-Lawton Chart 4). Over the past
decade, Marvell has grown to become the dominant market leader, holding 60% of the market.
(Docket No. 707 at 122). If a new trial is warranted, Marvell will have to proceed to trial with
these same facts and the same experts.135 The Court is not sure how different the outcome would
be.
While the Court acknowledges this award is large, the facts show that the infringement
was long and sustained. Marvell often ridiculed CMU’s request for a billion dollars; however,
just because a damages award is large136 does not mean the Court’s standard of review changes.
134
In an abundance of caution, the Court did not permit Ms. Lawton to discuss the total figures of revenue and
profit, but only offer average revenue and profit per chip. However, it was within the jurors’ prerogative to “do the
math,” as both the average values and the volume of chips (2.34 billion) were proffered.
135
Expert discovery closed in this matter on April 16, 2012, and it will not be reopened if a new trial is
ordered. (Docket No. 335). Thus, Marvell would be limited to Mr. Hoffman’s expert damages opinion of $250,000
in any future proceedings.
136
The size of the award is in part of Marvell’s own making. Since this matter was filed in March 2009,
Marvell has not made any efforts to remove the Accused Technology from its products and sold a number of
infringing products, thereby incurring a substantial amount of additional damages of around $535 million based on
information regarding sales dating to July 29, 2012. (Docket No. 569; Docket No. 889-2 at 2). According to the
latest joint submissions regarding sales data, Marvell has sold 363,752,585 infringing chips from July 29, 2012 to
August 3, 2013, (Docket No. 889 at 3; Docket No. 898 at 2), thereby yielding $181,876,292.50 in added damages.
This combined sum of more than $716 million in damages accrued (and likely attorney fees as well as costs
approaching $20 million) since the initiation of this litigation could have easily been avoided if the parties came to a
reasonable and mutually beneficial licensing agreement or settlement agreement—such as the Marvell Hall of
Engineering at CMU—back in 2009.
124
At this stage of the case, the Court is only an “umpire,”137 checking to make sure there is
sufficient evidence upon which a reasonable jury could have returned their verdict. Galena, 638
F.3d at 196. The nature and scope of the damages to be awarded was properly left to the jury.
For all of these reasons and after considering all of the evidence in this case, in the light
most favorable to CMU, and drawing all reasonable inferences in its favor, the Court denies
Marvell’s Motion for Judgment as a Matter of Law on Damages, its Motion for a New Trial, as
well as its Motion for Remittitur.
VI.
CONCLUSION
Given the above findings and analysis, the Court denied the parties’ motions for JMOL
before giving the case to the jury for deliberations. (Docket Nos. 699; 701; 703; 731; 738; 740;
742; 747). For these and other reasons discussed herein, the Court denies Marvell’s Motion for
Judgment as a Matter of Law, or in the Alternative, New Trial on Non-Damages Issues (Docket
No. 805), and Marvell’s Motion for Judgment as a Matter of Law, New Trial And/Or Remittitur
With Respect To Damages. (Docket No. 807). The Court grants CMU’s Motion for a Finding of
Willful Infringement and Enhanced Damages (Docket No. 790), in part, on willfulness, and
reserves its ruling on enhanced damages for a forthcoming opinion. The Court also reserves its
rulings on Marvell’s Motion for Judgment on Laches, (Docket No. 802), CMU’s Motion for
Permanent Injunction, Post-Judgment Royalties, and Supplemental Damages (Docket No. 786),
137
As Chief Justice Roberts said in his opening statements before the Senate Judiciary Committee in 2005,
Judges and justices are servants of the law, not the other way around. Judges are
like umpires. Umpires don’t make the rules; they apply them. The role of an
umpire and a judge is critical. They make sure everybody plays by the rules. But
it is a limited role. Nobody ever went to a ball game to see the umpire.
Confirmation Hearing on the Nomination of John G. Roberts, Jr. to be Chief Justice of the United States Before the
S. Comm. on the Judiciary, 109TH CONG. 55 (2005).
125
and CMU’s Motion for Prejudgment and Post-Judgment Interest (Docket No. 788), for a
memorandum opinion that will be filed in due course.
s/Nora Barry Fischer
Nora Barry Fischer
United States District Judge
Date: September 23, 2013
cc/ecf: All counsel of record.
126
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