No. 19-211
`
`IN THE
`Supreme Court of the United States
`————
`TIME WARNER CABLE, INC.; TIME WARNER
`CABLE, LLC; TIME WARNER ENTERTAINMENT
`COMPANY, L.P.; TIME WARNER ENTERTAINMENT-
`ADVANCE/NEWHOUSE PARTNERSHIP;
`TWC COMMUNICATIONS, LLC; AND TIME WARNER
`CABLE INFORMATION SERVICES (KANSAS), LLC,
`Petitioners,
`
`v.
`SPRINT COMMUNICATIONS COMPANY, L.P.,
`Respondent.
`
`————
`On Petition for Writ of Certiorari to the
`United States Court of Appeals
`for the Federal Circuit
`————
`BRIEF IN OPPOSITION
`————
`J. MICHAEL JAKES
`Counsel of Record
`KATHLEEN A. DALEY
`JASON L. ROMRELL
`FINNEGAN, HENDERSON,
`FARABOW, GARRETT &
`DUNNER, LLP
`901 New York Avenue, NW
`Washington, DC 20001
`(202) 408-4000
`mike.jakes@finnegan.com
`Counsel for Respondent
`WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002
`
`
`
`IN THE
`Supreme Court of the United States
`————
`TIME WARNER CABLE, INC.; TIME WARNER
`CABLE, LLC; TIME WARNER ENTERTAINMENT
`COMPANY, L.P.; TIME WARNER ENTERTAINMENT-
`ADVANCE/NEWHOUSE PARTNERSHIP;
`TWC COMMUNICATIONS, LLC; AND TIME WARNER
`CABLE INFORMATION SERVICES (KANSAS), LLC,
`Petitioners,
`
`v.
`SPRINT COMMUNICATIONS COMPANY, L.P.,
`Respondent.
`
`————
`On Petition for Writ of Certiorari to the
`United States Court of Appeals
`for the Federal Circuit
`————
`BRIEF IN OPPOSITION
`————
`J. MICHAEL JAKES
`Counsel of Record
`KATHLEEN A. DALEY
`JASON L. ROMRELL
`FINNEGAN, HENDERSON,
`FARABOW, GARRETT &
`DUNNER, LLP
`901 New York Avenue, NW
`Washington, DC 20001
`(202) 408-4000
`mike.jakes@finnegan.com
`Counsel for Respondent
`WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002
`
`
`
`i
`QUESTIONS PRESENTED
`
`Neither of the questions presented in the Petition is
`raised in the Federal Circuit’s decision. The court did
`not sanction unapportioned damages awards or create
`a new rule for the written description requirement.
`The court simply applied established law to particular
`facts and concluded that the jury verdict was sup-
`ported by substantial evidence. If this Court were to
`grant the Petition based on the Petitioners’ questions,
`it would find that it must first reweigh questions of
`fact decided by the jury on such things as the meaning
`of “broadband” technology and the credibility of expert
`witnesses.
`The questions presented in this case, properly stat-
`ed, are:
`1. Whether the Federal Circuit correctly affirmed
`the jury’s reasonable royalty award as supported by
`substantial evidence where Sprint presented the jury
`with expert testimony and other evidence of multiple
`methodologies apportioning the incremental value of
`Petitioners’ services attributable to Sprint’s inven-
`tions.
`2. Whether the Federal Circuit correctly affirmed
`the jury’s finding that Sprint’s patents are not invalid,
`where substantial evidence, including expert testi-
`mony, showed that the written descriptions are not
`limited to a single networking technology, but encom-
`pass a variety of broadband technologies.
`
`
`
`
`
`ii
`CORPORATE DISCLOSURE STATEMENT
`
`Respondent Sprint Communications Company, L.P.,
`is wholly owned by Sprint Communications, Inc.,
`either directly or indirectly.
`Sprint Communications, Inc., is a wholly owned
`subsidiary of Sprint Corporation, which is a public
`company listed on the New York Stock exchange.
`SoftBank Corp., a public company listed on the Tokyo
`Stock Exchange First Section, owns 10% or more of the
`stock of Sprint Corporation.
`
`
`
`
`
`iii
`TABLE OF CONTENTS
`
`Page
`
`QUESTIONS PRESENTED ........................................ i
`CORPORATE DISCLOSURE STATEMENT ............. ii
`TABLE OF AUTHORITIES ........................................ v
`INTRODUCTION ........................................................ 1
`STATEMENT OF THE CASE .................................... 3
`A. Sprint’s Inventions ........................................... 3
`B. Time Warner Abandoned Its Sprint Part-
`nership
`to
`“Go-It-Alone” and Save
`Billions .............................................................. 5
`C. Litigation ........................................................... 5
`1. Damages ...................................................... 6
`2. Written Description ..................................... 9
`3. Judgment and Appeal ............................... 10
`REASONS FOR DENYING THE PETITION .......... 12
`I. The Federal Circuit’s Nonprecedential
`Decision Applying Longstanding Princi-
`ples of Apportionment to Particular Facts
`Is Not Cert-Worthy ......................................... 14
`A. The Federal Circuit Correctly
`Affirmed—Consistent with Garretson—
`that the Jury’s Reasonable Royalty
`Award Was Apportioned to the Value
`of Sprint’s Inventions ................................ 14
`B. This Case Presents No Internal Split
`on Apportioning Reasonable Royalty
`Damages .................................................... 19
`
`
`
`
`
`iv
`TABLE OF CONTENTS—Continued
`
`Page
`
`C. This Case Is a Poor Vehicle to Review
`Apportionment ........................................... 23
`II. The Federal Circuit’s Fact-Bound
`Application of Settled Written Descrip-
`tion Law Does Not Warrant This Court’s
`Review ............................................................. 28
`A. The Federal Circuit Did Not Create
`the New Written Description Rule
`that Petitioners Say It Did ........................ 28
`B. There Is No Intra-Circuit Split on
`Written Description ................................... 31
`C. The Fact-Bound Nature of This Case
`Makes It a Poor Vehicle to Consider
`the Written Description Standard ............ 33
`CONCLUSION .......................................................... 35
`
`
`
`v
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`Abbvie Deutschland GmbH & Co. v.
`Janssen Biotech, Inc.,
`759 F.3d 1285 (Fed. Cir. 2014) ....................... 32
`Amgen Inc. v. Sanofi,
`872 F.3d 1367 (Fed. Cir. 2017),
`cert. denied, 139 S. Ct. 787 (2019) .................. 32
`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) ................................... 25, 34
`Apple Inc. v. Motorola, Inc.,
`757 F.3d 1286 (Fed. Cir. 2014) ......................... 9
`Ariad Pharm., Inc. v. Eli Lilly & Co.,
`598 F.3d 1336 (Fed. Cir. 2010) (en banc) ... passim
`Asetek Danmark A/S v. CMI USA Inc.,
`852 F.3d 1352 (Fed. Cir. 2017) ....................... 15
`AstraZeneca AB v. Apotex Corp.,
`782 F.3d 1324 (Fed. Cir. 2015) ....................... 22
`Bilski v. Kappos,
`561 U.S. 593 (2010) ......................................... 28
`Carnegie Mellon Univ. v.
`Marvell Tech. Grp., Ltd.,
`807 F.3d 1283 (Fed. Cir. 2015) ....................... 15
`Cisco Sys., Inc. v. Cirrex Sys., LLC,
`856 F.3d 997 (Fed. Cir. 2017) ......................... 32
`Commonwealth Sci. & Indus. Research
`Organisation v. Cisco Sys., Inc.,
`809 F.3d 1295 (Fed. Cir. 2015) ....................... 18
`
`
`
`
`
`
`vi
`TABLE OF AUTHORITIES—Continued
`
`
`
`Page(s)
`
`D Three Enters., LLC v. SunModo Corp.,
`890 F.3d 1042 (Fed. Cir. 2018) ....................... 32
`Dimick v. Schiedt,
`293 U.S. 474 (1935) ......................................... 19
`Dowagiac Mfg. Co. v. Minn. Moline Plow Co.,
`235 U.S. 641 (1915) ................................... 18, 19
`eBay Inc. v. MercExchange, L.L.C.,
`547 U.S. 388 (2006) ......................................... 28
`Ericsson, Inc. v. D-Link Sys., Inc.,
`773 F.3d 1201 (Fed. Cir. 2014) ................passim
`EVE-USA, Inc. v. Mentor Graphics Corp.,
`No. 17-804, Pet. (U.S. Nov. 30, 2017) ............. 24
`Exmark Manufacturing Co. v. Briggs &
`Stratton Power Products Group, LLC,
`879 F.3d 1332 (Fed. Cir. 2018) ................. 21, 22
`Feltner v. Columbia Pictures
`Television, Inc.,
`523 U.S. 340 (1998) ................................... 18, 25
`Garretson v. Clark,
`111 U.S. 120 (1884) ..................................passim
`Gen. Motors Corp. v. Devex Corp.,
`461 U.S. 648 (1983) ......................................... 26
`Georgia-Pacific Corp. v. U.S. Plywood Corp.,
`318 F. Supp. 1116 (S.D.N.Y. 1970) ................. 25
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`136 S. Ct. 1923 (2016) ................................ 27-28
`Knowles Elecs. LLC v. Cirrus Logic, Inc.,
`883 F.3d 1358 (Fed. Cir. 2018) ....................... 32
`
`
`
`vii
`TABLE OF AUTHORITIES—Continued
`
`
`
`Page(s)
`
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ......................................... 28
`LaserDynamics, Inc. v.
`Quanta Computer, Inc.,
`694 F.3d 51 (Fed. Cir. 2012) ..................... 20, 21
`Lucent Techs., Inc. v. Gateway, Inc.,
`580 F.3d 1301 (Fed. Cir. 2009) ................. 18, 21
`Mentor Graphics Corp. v. EVE-USA, Inc.,
`870 F.3d 1298 (Fed. Cir. 2017) ............. 1, 23, 24
`Microsoft Corp. v. i4i Ltd. P’ship,
`564 U.S. 91 (2011) ............................................. 9
`Nautilus, Inc. v. Biosig Instruments, Inc.,
`572 U.S. 898 (2014) ......................................... 28
`Neology, Inc. v. ITC,
`767 F. App’x 937 (Fed. Cir. 2019) ................... 32
`Novozymes A/S v. DuPont Nutrition
`Biosciences APS,
`723 F.3d 1336 (Fed. Cir. 2013) .................. 32-33
`Octane Fitness, LLC v. ICON Health &
`Fitness, Inc.,
`572 U.S. 545 (2014) ......................................... 28
`Panduit Corp. v. Stahlin Bros.
`Fibre Works, Inc.,
`575 F.2d 1152 (6th Cir. 1978) ................... 24, 27
`Quake v. Lo,
`928 F.3d 1365 (Fed. Cir. 2019) ....................... 32
`Reeves v. Sanderson Plumbing Prods., Inc.,
`530 U.S. 133 (2000) ......................................... 34
`
`
`
`viii
`TABLE OF AUTHORITIES—Continued
`
`
`
`Page(s)
`
`Rivera v. ITC,
`857 F.3d 1315 (Fed. Cir. 2017) ....................... 32
`Sessions v. Romadka,
`145 U.S. 29 (1892) ..................................... 15, 20
`Summit 6, LLC v. Samsung Elecs. Co.,
`802 F.3d 1283 (Fed. Cir. 2015) ......................... 8
`VirnetX, Inc. v. Cisco Systems, Inc.,
`767 F.3d 1308 (Fed. Cir. 2014) ....................... 20
`Westinghouse Elec. & Mfg. Co. v.
`Wagner Elec. & Mfg. Co.,
`225 U.S. 604 (1912) ......................................... 17
`Yale Lock Mfg. Co. v. Sargent,
`117 U.S. 536 (1886) ......................................... 17
`
`CONSTITUTION
`
`U.S. Const. amend. VII ............................ 2, 33, 34
`
`STATUTES
`
`35 U.S.C. § 101 ................................................... 28
`35 U.S.C. § 103 ................................................... 28
`35 U.S.C. § 112 ............................................... 5, 29
`35 U.S.C. § 112(a) ........................................... 5, 29
`35 U.S.C. § 112(b) ............................................... 28
`35 U.S.C. § 284 ............................................. 26, 27
`35 U.S.C. § 285 ................................................... 28
`
`
`
`
`ix
`TABLE OF AUTHORITIES—Continued
`
`RULES
`
`Page(s)
`
`Sup. Ct. R. 10 ...................................................... 25
`
`OTHER AUTHORITIES
`
`H.R. Rep. No. 1587, 79th Cong., 2d Sess.
`(1946) ............................................................... 26
`Jennifer L. Blouin & Melissa F. Wasser-
`man, Tax Solutions to Patent Damages,
`26 Tex. Intell. Prop. L.J. 1 (2018) ................... 17
`William M. Landes & Richard A. Posner,
`The Economic Structure of Intellectual
`Property Law (Harvard Univ. Press
`2003) ................................................................ 26
`
`
`
`INTRODUCTION
`Petitioners ask this Court to engage in fact-bound
`error correction. They first ask the Court to reexamine
`the Federal Circuit’s conclusion that the jury’s reason-
`able royalty award was based on the value of what was
`taken from Sprint, not the value of unpatented features.
`Petitioners then attempt to cast this case as one in a
`series in which the Federal Circuit has supposedly
`ignored principles of apportionment. But Petitioners
`cannot support either argument. Not only does this
`case not involve any departure from Garretson v.
`Clark, 111 U.S. 120 (1884), but Petitioners also fail to
`identify any series of reasonable royalty cases that do.
`Undeterred, Petitioners attempt to bootstrap their
`request for review to an unrelated petition for certio-
`rari filed two years ago. Pet.3. But the question
`presented in Mentor Graphics Corp. v. EVE-USA, Inc.,
`870 F.3d 1298 (Fed. Cir. 2017), hinged on an appor-
`tionment dispute unique to a patentee’s ability to recover
`lost profits. This case has nothing to do with lost profits.
`Instead, Sprint sought and obtained what Congress
`has set as the floor for recovery in every patent case—
`a reasonable royalty. Whatever conflict allegedly exists
`at the Federal Circuit when apportioning lost profits,
`this case is not the vehicle to address it.
`The Federal Circuit’s nonprecedential decision is
`also correct. The jury’s $140 million reasonable royalty
`award is not the product of “overreaching,” Pet.1,
`but of Petitioners’ willful infringement of five Sprint
`patents to save itself billions. Sprint offered the jury
`multiple methodologies for determining a reasonable
`royalty, each one apportioned to account for the value
`of Sprint’s patented technology. In particular, Sprint
`submitted two real-world license agreements and a
`prior jury verdict, each one covering the same patented
`
`
`
`2
`technology at issue here and calling for the same
`royalty rate. And Sprint further presented a detailed
`breakdown of the cost to Sprint and the benefit to
`Petitioners from their deliberate decision to infringe
`Sprint’s patents.
`The Federal Circuit did not, as Petitioners allege,
`affirm the jury’s reasonable royalty based on expert
`assurances of “general reasonableness.” Pet.3-4. Applying
`established principles of apportionment, the court metic-
`ulously reviewed the record to determine whether the
`jury’s reasonable royalty award was supported by
`reliable evidence. Its conclusion? “[T]he jury’s verdict
`was supported by sufficient evidence and did not con-
`travene the principles of apportionment.” App.13-14.
`And after confirming that Sprint’s evidence accounted
`for the incremental value of its patented technology,
`not the value of unpatented features, the court cor-
`rectly left the final damages calculation to the jury, as
`required by the Seventh Amendment.
`Petitioners tack onto their failed apportionment
`arguments a request to review the Federal Circuit’s
`affirmance of the jury’s written description verdict.
`Petitioners do not allege a split, however, nor do they
`challenge the settled law that compliance with the
`written description requirement is a question of fact
`for the jury. Instead, they accuse the panel majority of
`allowing Sprint to claim broad inventions simply
`because its patents did “not expressly exclude” them.
`Pet.4. But the majority neither adopted nor applied
`that standard. App.14-19. Rather, after a thorough
`review of the record, the majority confirmed that the
`evidence supported the jury’s finding that the written
`descriptions of Sprint’s patents are not limited to a
`single networking technology, but encompass a variety
`of broadband technologies.
`
`
`
`3
`No matter how they frame the questions, Petitioners
`are asking this Court to usurp the constitutionally
`mandated role of juries to find the facts and calculate
`damages. The Court should deny review.
`
`STATEMENT OF THE CASE
`A. Sprint’s Inventions
`For over a century, the Public Switched Telephone
`Network (“PSTN”) has been the cornerstone of our
`voice communication infrastructure. Hardwired into
`homes and businesses across the country and around
`the world, the PSTN uses circuit switching to set up
`an end-to-end path for each call. App.2-3. First, the
`user’s telephone connects to a switch, and based on the
`dialed number, the switch selects the next switch in
`the call path. Switch-by-switch, a user’s telephone
`is eventually connected to the dialed party along a
`fixed-circuit path. The connection occupies the entire
`bandwidth of that circuit for the duration of the call.
`This traditional “landline” network continues to connect
`millions of us to emergency services, businesses, friends,
`and family.
`But modern data communications connect differently.
`Because data typically comes in bursts rather than a
`continuous stream, occupying an entire circuit path
`during periods where no data is being transmitted
`wastes bandwidth. App.3. Packet-based broadband
`technologies—such as asynchronous transfer mode
`(“ATM”) and internet protocol (“IP”)—increase the effi-
`ciency of data transmission, allowing multiple users to
`share circuits at the same time. App.3. These broad-
`band technologies can be used to transmit all kinds of
`data, including voice communications.
`Despite the efficiency of broadband technologies, a
`fundamental problem remained: how could voice calls
`
`
`
`4
`connect between the ubiquitous PSTN and these new
`packet networks? Enter Joe Christie, a Sprint engineer
`who in 1993 invented a pioneering telecommunications
`system that changed the industry. Mr. Christie and
`his team developed and patented methods of using
`network components and network architectures to
`allow the narrowband PSTN to “talk” to broadband
`packet networks, and vice versa. Simply put, “[t]he
`inventions allowed telephone calls and data to be
`transmitted between those two different networks
`seamlessly.” App.2.
`Underscoring the fact-bound nature of the parties’
`dispute, Petitioners contend that Sprint’s patents are
`limited to connecting calls along fixed paths using
`ATM technology. Pet.8. They are not. Sprint’s patents
`actually disclose inventions for routing communica-
`tions between narrowband and broadband networks
`generally, including routing without a fixed end-to-end
`path. App.15-19. The specifications refer to “[b]roadband
`systems, such as Asynchronous Transfer Mode (ATM),”
`App.15 (alteration in original) (emphasis added), a
`statement that makes no sense if the inventions were
`limited to ATM only. The specifications repeatedly
`employ open-ended language to describe using “broad-
`band” networks, not only ATM. CA-Appx189(10:51-
`55).1 The specifications further explain that the
`networks on which the inventions operate “could be
`any type of telecommunications network that operates
`using network elements, signaling, and connections.”
`App.15 (quoting CA-Appx188(8:38-43)). Consistent
`with the specifications, Sprint’s patent claims are
`not limited to any particular broadband network, and
`cover the core technology used by Petitioners and
`
`1 “CA-Appx” refers to the Joint Appendix filed in the court of
`appeals, Fed. Cir. No. 17-2247 (filed Apr. 30, 2018), Dkt#71.
`
`
`
`5
`other Voice over Internet Protocol (“VoIP”) service
`providers to connect their broadband customers to the
`PSTN, a necessary feature of any commercial telephony
`service. App.17-19.
`
`B. Time Warner Abandoned Its Sprint Part-
`nership to “Go-It-Alone” and Save Billions
`Petitioners first partnered with Sprint in 2003 to
`launch their digital voice service, with Sprint provid-
`ing PSTN connectivity for Petitioners’ voice subscribers
`using Sprint’s patented broadband-to-PSTN technology.
`In 2009, however, Petitioners told Sprint that they
`intended to abandon the partnership. That is, Peti-
`tioners would start connecting to the PSTN by building
`their own nationwide “Go-It-Alone” broadband-to-PSTN
`network. Petitioners based their decision to Go-It-
`Alone, at least in part, on an estimated “2.6 Billion in
`savings” over their Sprint agreement. CA-Appx7534-
`7549; CA-Appx6223-6224; CA-Appx7295-7308.
`By March 2010, Sprint executives had initiated
`talks with Petitioners about patent issues arising from
`Petitioners’ planned Go-It-Alone launch, including
`Petitioners’ need to obtain a patent license. CA-
`Appx7550-7553. These discussions ended without
`Petitioners taking a license, and Petitioners launched
`their Go-It-Alone network. CA-Appx1491-1492.
`
`C. Litigation
`Sprint sued Petitioners for patent infringement in
`the District of Kansas. Before trial, the court denied
`Petitioners’ motion for summary judgment that Sprint’s
`patents are invalid for not complying with the written
`description requirement of 35 U.S.C. § 112, ¶ 1 (now
`35 U.S.C. § 112(a)). Petitioners also sought to exclude
`
`
`
`6
`testimony from Sprint’s damages expert, which the
`court denied.
`
`1. Damages
`Sprint presented a range of potential reasonable
`royalties to the jury, each one supported by reliable
`methodology and apportioned to the incremental
`value attributable to Sprint’s patented technology.
`As one approach, Sprint’s damages expert considered
`comparable royalty agreements, including Sprint’s agree-
`ments with two other telecommunication companies—
`VoiceGlo and Paetec. App.10-14; CA-Appx3982-3984;
`CA-Appx3987-3988. These two real-world agreements
`involved the same patented technology at issue here
`and called for royalties of approximately five percent
`of the companies’ total VoIP revenue.2 App.10-11 & n.3.
`Sprint’s damages expert also considered a previous
`litigation where a jury similarly awarded a five percent
`royalty on Vonage’s VoIP revenue for its infringement
`of Sprint’s inventions, including three of the same
`patents in this case. App.4-14. The 2007 Vonage verdict
`was plastered on the front page of the Wall Street
`Journal, was circulated within cable companies, and
`was well known to Petitioners by the time they began
`infringing Sprint’s patents with their Go-It-Alone
`architecture in 2010. App.6; CA-Appx3984-3985; CA-
`Appx6415-6416; CA-Appx7337-7340. Even Petitioners’
`damages expert admitted that the Vonage verdict
`
`
`2 Attempting to discredit the VoiceGlo and Paetec agreements,
`Pet.10 n.2, Petitioners omit that the district court allowed
`Sprint’s damages expert to use both agreements to support the
`five percent rate underlying his comparative methodology. CA-
`Appx58-59. Petitioners did not challenge the admissibility of
`either agreement before the court of appeals, nor do they ask this
`Court to review admissibility now. App.10-11 & n.3.
`
`
`
`7
`“would have been in the mix” during a 2010 hypothet-
`ical license negotiation between Sprint and Petitioners.
`CA-Appx5604-5605.
`For the VoiceGlo and Paetec agreements, Sprint’s
`damages expert calculated a per-subscriber per-month
`rate—a metric that Sprint and Petitioners used in past
`agreements where Sprint connected Petitioners’ VoIP
`subscribers to the PSTN. App.10-12; CA-Appx4029;
`CA-Appx4083-4084. Using available Vonage financial
`information, he calculated a $1.37 per-subscriber per-
`month royalty attributable to the value of Sprint’s
`inventions. CA-Appx4000-4002; CA-Appx4027-4030.
`Applying this rate over the period of Petitioners’ infringe-
`ment, he calculated a total reasonable royalty of $139.8
`million. CA-Appx4025.
`But that was not all. Sprint also provided the
`jury with several analytical methods to apportion
`away unpatented features and zero in on the value of
`Petitioners’ VoIP services specifically attributable to
`Sprint’s patents. In particular, Sprint’s accounting
`expert analyzed Petitioners’ financial information and
`provided a breakdown of Petitioners’ revenue and free
`cash flows on a per-subscriber per-month basis. CA-
`Appx4002-4003; CA-Appx3907-3939. The breakdown
`allowed Sprint’s damages expert to compare Petitioners’
`anticipated incremental profits with the previous agree-
`ments and negotiations between Sprint and Petitioners
`for PSTN connectivity, as well as other reasonable
`royalty measures.
`Using this breakdown together with detailed public
`reports, Sprint’s damages expert isolated and removed
`the profits that would have been attributable to provid-
`ing traditional telephone services. CA-Appx4003-4007.
`He further isolated and removed VoIP digital services
`and features that were not part of traditional
`
`
`
`8
`telephone services. CA-Appx4007-4008. And he also
`considered what additional profits could be attributed
`to calls that do not interconnect with the PSTN, and
`therefore do not infringe Sprint’s patents—there were
`none. CA-Appx4008-4009. He ultimately determined
`that $12.82 of Petitioners’ expected profits per-sub-
`scriber per-month was specifically attributable to
`Sprint’s patents. CA-Appx4009-4012.
`Sprint’s damages expert also considered Sprint’s
`“last offer” to Petitioners in May 2009 to discount its
`wholesale services an additional forty percent, just
`before Petitioners abandoned their partnership with
`Sprint and implemented their infringing Go-It-Alone
`architecture. App.13; CA-Appx4014-4017; CA-Appx3929-
`3939; CA-Appx7608-7620. Based on Sprint’s last
`offer, he determined that Sprint stood to lose $1.84
`per-subscriber per-month if it licensed its patents to
`Petitioners as opposed to providing Petitioners whole-
`sale PSTN connectivity. Petitioners, however, expected
`a cost savings of $3.39 per-subscriber per-month in
`implementing Go-It-Alone instead of accepting Sprint’s
`last offer. And in fact, Petitioners’ actual cost savings
`in choosing to Go-It-Alone over Sprint’s last offer was
`$5.32 per-subscriber per-month.
`What’s more, Sprint presented unrebutted evidence
`that, when Petitioners launched their Go-It-Alone
`architecture in 2010, they had no available alternative
`to Sprint’s patented technology. App.13; App.61. In
`other words, Petitioners’ plans to Go-It-Alone and save
`billions hinged on infringing Sprint’s patents.
`In short, Sprint provided evidence “support[ing] a
`range of reasonable royalties, rather than a single
`value.” Summit 6, LLC v. Samsung Elecs. Co., 802
`F.3d 1283, 1295-96 (Fed. Cir. 2015). Apportionment is
`not a one-size-fits-all formula, so Sprint presented the
`
`
`
`9
`jury with several “reliable and tangible” ways to sepa-
`rate the value of Sprint’s technology from nonpatented
`features. Garretson, 111 U.S. at 121; CA-Appx4019-
`4021. That Sprint’s damages expert conservatively
`favored his lowest estimate does not make the other
`methodologies window dressing. Pet.10-11. See Apple
`Inc. v. Motorola, Inc., 757 F.3d 1286, 1315 (Fed. Cir.
`2014) (“It is common for parties to choose different,
`reliable approaches in a single case . . . . That one
`approach may better account for one aspect of a royalty
`estimation does not make other approaches inadmis-
`sible.”). Each one provided substantial evidence for
`the jury to attribute at least $1.37 per-subscriber per-
`month to the incremental value of Sprint’s patents.
`
`2. Written Description
`Petitioners tried several ways to invalidate Sprint’s
`patents, but none rose to the level of “clear and
`convincing evidence,” see Microsoft Corp. v. i4i Ltd.
`P’ship, 564 U.S. 91, 102 (2011), including Petitioners’
`written description defense. App.70-77; App.14-19.
`Sprint showed the jury how its specifications describe
`using “broadband” networks generally, not only ATM.
`App.15-19. And Sprint’s technical expert explained to
`the jury why a person of ordinary skill in this tech-
`nology would have understood the patents’ use of the
`term “broadband” to include IP. App.16-19. Additionally,
`Sprint offered contemporaneous industry documents
`showing that, at the time of invention, the term “broad-
`band” connoted both ATM and IP. CA-Appx5638-5661.
`Even Petitioners’ expert admitted that “IP networks
`[were] a form of broadband networks” when Sprint’s
`patents were filed. CA-Appx5246-5248.
`
`
`
`
`
`
`
`10
`3. Judgment and Appeal
`After three weeks of trial, the jury found that
`Petitioners had willfully infringed each of Sprint’s
`valid patents and awarded a reasonable royalty of
`$139.8 million. App.2. The district court denied all of
`Petitioners’ requests to redo the jury’s factual findings.
`App.57 & n.2; App.84. In particular, the court rejected
`Petitioners’ contention—limited to a footnote “devoid
`of argument”—that Sprint’s damages theories were not
`apportioned to the incremental value of the infringed
`patents. App.62. And in holding that there was
`sufficient evidence for the jury to reject Petitioners’
`written description defense, the court noted that
`Petitioners did not challenge the instruction given to
`the jury that “[t]he specification need not describe in
`detail all possible examples to satisfy the written
`description requirement.” App.71-72; App.14.
`In a record-intensive review on appeal, a majority
`panel of the Federal Circuit affirmed the jury’s verdict
`in a nonprecedential opinion. App.2. Addressing appor-
`tionment at length, the majority found that “[t]he
`Vonage verdict did not stand alone,” but was supported
`by “two licenses from Sprint to other communications
`companies for the patented technology, both of which
`were for approximately five percent of the companies’
`VoIP revenue.” App.10. And Sprint’s evidence showed
`that these two license agreements, as well as the Vonage
`verdict, “were based on the value of the patented
`technology and not the value of other aspects of
`the companies’ VoIP technology that were not covered
`
`
`
`
`
`11
`by Sprint’s patents.”3 App.10-11. Indeed, “damages
`testimony regarding real-world relevant licenses ‘takes
`into account the very types of apportionment principles
`contemplated in Garretson.’” App.12 (quoting Ericsson,
`Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1227-28 (Fed.
`Cir. 2014)). The majority also held that the jury’s
`apportionment was supported by evidence showing
`the cost to Sprint and the benefit to Petitioners from
`its decision to Go-It-Alone and infringe Sprint’s patents.
`App.13.
`The majority did not—as Petitioners and their lone
`amicus allege—hold it “sufficient” for the jury to hear
`an apportionment instruction and an expert’s appor-
`tionment incantation. Pet.12; Intel.12-13. Nor did the
`majority uphold the jury’s reasonable royalty award
`simply because the Georgia-Pacific talisman was invoked.
`Pet.13; Intel.12-13. Instead, the majority painstakingly
`considered the entire record, noting that “apportion-
`ment can be achieved in different ways,” including by
`considering rates from comparable licenses to the
`same patented technology. App.11-12; App.8-14. And
`the majority verified that Sprint had indeed complied
`with apportionment principles. App.9-14.
`The majority also restated the longstanding princi-
`ple that “[c]ompliance with the written description
`requirement presents a question of fact.” App.14
`(citing Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d
`1336, 1355 (Fed. Cir. 2010) (en banc)). Considering the
`record, the majority held that the jury’s implicit
`
`3 Petitioners do not challenge the majority’s holding that the
`VoiceGlo and Paetec agreements “were for the ‘same technology’
`for the ‘same patents-in-suit,’” and any additional patents cov-
`ered in those agreements and in Vonage did not include
`“technology materially different from the technology covered by
`the patents-in-suit.” App.11 n.3.
`
`
`
`12
`finding that Sprint’s specifications are not limited to
`ATM, but describe using “broadband” networks gener-
`ally, was supported by substantial evidence. App.14-
`19. So too here, Petitioners mischaracterize the
`majority’s holding. The majority did not find the
`written description requirement satisfied simply
`because “IP technology is not expressly excluded from
`the call control specification.” Pet.13 (quoting App.15).
`Nor did the majority rely on expert testimony “to fill
`the gaps in the written specifications.” Pet.13. The
`majority faithfully adhered to the settled rule—which
`Petitioners do not challenge—that the written descrip-
`tion issue requires “an objective inquiry into the four
`corners of the specification from the perspective of a
`person of ordinary skill in the art” to determine
`whether the specification “show[s] that the inventor
`actually invented the invention claimed.” Ariad, 598
`F.3d at 1351, 1355 (emphasis added).
`Judge Mayer would have reached a different finding
`than the jury on written description. App.22-26. His
`disagreement with the majority, however, was ulti-
`mately factual—he did not accuse the majority of
`upending written description law with a new rule as
`Petitioners allege. Pet.13.
`Petitioners sought rehearing en banc. The panel
`reissued the nonprecedential decision with some minor
`modifications to the majority’s damages opinion.
`App.54-55. The court of appeals denied rehearing en
`banc without dissent. App.52-53.
`
`REASONS FOR DENYING THE PETITION
`The court of appeals’ decision raises neither of the
`questions Petitioners ask this Court to review. The
`court did not sanction unapportioned damages awards.
`And its apportionment ruling broke no new ground.
`
`
`
`13
`Applying established principles of apportionment to
`particular facts, the court exhaustively reviewed the
`entire record—including real-world license agreements
`and negotiations with Petitioners centered on the very
`same Sprint inventions at issue here—and verified
`that the jury’s reasonable royalty award “was based
`on the value of what was taken from Sprint, not the
`value of unpatented features of Time Warner’s VoIP
`system.” App.12. Garretson requires no more than
`that. Dissatisfied that they must now pay Sprint a
`reasonable royalty for their willful infringement,
`Petitioners allege that the Federal Circuit is “inter-
`nally divided.” Pet.14. But none of the cases cited
`shows a division when it comes to apportioning a
`reasonable royalty. And this case is an impossible
`vehicle to address whatever division allegedly exists at
`the Federal Circuit when it comes to apportioning lost
`profits.
`Petitioners do not even bother to identify a written
`description split at
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