1a
`APPENDIX A
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`PERSONALIZED MEDIA
`COMMUNICATIONS, LLC,
`Plaintiff-Appellant
`v.
`APPLE INC.,
`Defendant-Appellee
`
`
`2021-2275
`
`
`
`Appeal from the United States District Court for the
`Eastern District of Texas in No. 2:15-cv-01366-JRG-
`RSP, Chief Judge J. Rodney Gilstrap.
`
`
`
`Decided: January 20, 2023
`
`
`
`KEVIN PAUL MARTIN, Goodwin Procter LLP, Boston,
`MA, argued for plaintiff-appellant. Also represented
`by GERARD JUSTIN CEDRONE, DOUGLAS J. KLINE, LANA
`S. SHIFERMAN; WILLIAM M. JAY, Washington, DC; SID-
`NEY CALVIN CAPSHAW, III, Capshaw DeRieux LLP,
`Gladewater, TX.
`JOHN C. O’QUINN, Kirkland & Ellis LLP, Washing-
`ton, DC, argued for defendant-appellee. Also repre-
`sented by NATHAN S. MAMMEN; GREG AROVAS, New
`York, NY; LUKE DAUCHOT, ELLISEN SHELTON TURNER,
`Los Angeles, CA; MARCUS EDWARD SERNEL, Chicago,
`IL.
`
`
`APPENDIX A
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`PERSONALIZED MEDIA
`COMMUNICATIONS, LLC,
`Plaintiff-Appellant
`v.
`APPLE INC.,
`Defendant-Appellee
`
`
`2021-2275
`
`
`
`Appeal from the United States District Court for the
`Eastern District of Texas in No. 2:15-cv-01366-JRG-
`RSP, Chief Judge J. Rodney Gilstrap.
`
`
`
`Decided: January 20, 2023
`
`
`
`KEVIN PAUL MARTIN, Goodwin Procter LLP, Boston,
`MA, argued for plaintiff-appellant. Also represented
`by GERARD JUSTIN CEDRONE, DOUGLAS J. KLINE, LANA
`S. SHIFERMAN; WILLIAM M. JAY, Washington, DC; SID-
`NEY CALVIN CAPSHAW, III, Capshaw DeRieux LLP,
`Gladewater, TX.
`JOHN C. O’QUINN, Kirkland & Ellis LLP, Washing-
`ton, DC, argued for defendant-appellee. Also repre-
`sented by NATHAN S. MAMMEN; GREG AROVAS, New
`York, NY; LUKE DAUCHOT, ELLISEN SHELTON TURNER,
`Los Angeles, CA; MARCUS EDWARD SERNEL, Chicago,
`IL.
`
`
`
`2a
`JEFFREY A. LAMKEN, MoloLamken LLP, Washing-
`ton, DC, for amicus curiae Fair Inventing Fund. Also
`represented by RAYINER HASHEM.
`
`
`
`Before REYNA, CHEN, and STARK, Circuit Judges.
`Opinion for the court filed by Circuit Judge REYNA.
`Dissenting opinion filed by Circuit Judge STARK.
`REYNA, Circuit Judge.
`Personalized Media Communications, LLC appeals
`the final judgment of the District Court for the East-
`ern District of Texas that U.S. Patent No. 8,191,091 is
`unenforceable based on prosecution laches. The dis-
`trict court determined that Personalized Media Com-
`munications successfully employed an inequitable
`scheme to extend its patent rights. Because the dis-
`trict court did not abuse its discretion in finding the
`patent unenforceable, we affirm.
`BACKGROUND
`In 2015, Personalized Media Communications
`(“PMC”) sued Apple in the U.S. District Court for the
`Eastern District of Texas, alleging that Apple Fair-
`Play1 infringed claim 13 (and related dependent
`claims) of U.S. Patent No. 8,191,091 (the “’091 pa-
`tent”). J.A. 2–3 (FF 1, 5). The case went to trial, where
`
`1 FairPlay is a digital rights management technology that Ap-
`ple uses on its computers, mobile phones, and other devices. J.A.
`2 (FF 1). FairPlay is software that prevents Apple users from un-
`authorized uses of content—such as illegally copying songs on
`iTunes. J.A. 25 (FF 68); Resp. Br. 22. To protect content, FairPlay
`encrypts data and uses “decryption keys” to control decryption.
`J.A. 25–26 (FF 69–70). Recognizing that “the weakest link” in a
`system’s security is the decryption key, Apple encrypted the de-
`cryption key as an additional layer of protection. Id.
`
`
`
`3a
`a jury returned a unanimous verdict, finding that Ap-
`ple infringed at least one of claims 13–16. J.A. 3 (FF
`5). The jury awarded PMC over $308 million in rea-
`sonable-royalty damages. Id.
`Thereafter, the district court held a bench trial on
`remaining issues and found the ’091 patent unenforce-
`able based on prosecution laches. J.A. 1–3. Relying on
`our recent decision in Hyatt, the court determined
`that laches required a challenger to prove that the ap-
`plicant’s delay was unreasonable and inexcusable un-
`der the totality of the circumstances and that there
`was prejudice attributable to the delay. J.A. 28 (CL 4–
`7) (discussing Hyatt v. Hirshfeld, 998 F.3d 1347,
`1359–62 (Fed. Cir. 2021)). Under this framework, the
`court found that PMC engaged in an unreasonable
`and unexplained delay amounting to an egregious
`abuse of the statutory patent system.
`The court described our recent Hyatt decision as a
`“white horse” case, with “remarkably similar” facts.
`J.A. 32, 41 (CL 15). The court explained that the pa-
`tentee in Hyatt had filed 381 GATT-Bubble applica-
`tions, and PMC had filed 328 GATT-Bubble applica-
`tions.2 J.A. 32 (CL 16). In addition, the court noted
`that as in Hyatt, where each application was a
`
`2 During negotiations of the Agreement on Trade-Related As-
`pects of Intellectual Property (“TRIPS Agreement”) at the Uru-
`guay Round of the General Agreement on Tariff and Trade
`(“GATT”), the U.S. agreed to change the term of U.S. patents
`from 17 years following the date of issuance to 20 years following
`the patent’s priority date. Hyatt, 998 F.3d at 1352. In the months
`leading up to the law change, the U.S. Patent and Trademark
`Office (“PTO”) saw an enormous influx of so-called “GATT Bub-
`ble” applications as applicants sought to take advantage of the
`existing law providing a patent term keyed from issuance. Id. at
`1352–53.
`
`
`
`4a
`photocopy of one of 11 earlier patent applications,
`PMC’s applications derive from two earlier applica-
`tions. J.A. 32 (CL 17). Similar to Hyatt, “PMC’s appli-
`cations . . . were ‘atypically long and complex,’” con-
`taining over 500 pages of text and over 22 pages of fig-
`ures. J.A. 33 (CL 20). And PMC filed each of its ap-
`plications with a single claim, then subsequently
`amended the claims, sometimes to recite identical lan-
`guage across different applications. J.A. 33 (CL 19).
`The court further explained that, like in Hyatt, “[o]ver
`time, PMC [] greatly increase[d] the total number of
`claims” in the range of 6,000 to 20,000 claims. J.A. 10,
`33–34 (FF 31, CL 21).
`The court also found the length of the delay similar
`to Hyatt because “PMC waited eight to fourteen years
`to file its patent applications and at least sixteen
`years to present the asserted claims for examination.”
`J.A. 32–33 (CL 18) (explaining that the applicant in
`Hyatt argued that he “delayed only seven to 11 years
`to file the four applications at issue and between 10
`and 19 years before presenting the claims now in dis-
`pute” (citing Hyatt, 998 F.3d at 1368)). Moreover, “as
`in Hyatt, even though the PTO suspended prosecution
`of PMC’s applications, such is directly attributable to
`the manner in which PMC prosecuted its applications
`in the first place.” J.A. 35 (CL 25). The court reasoned
`that “PMC’s prosecution conduct made it virtually im-
`possible for the PTO to conduct double patenting, pri-
`ority, or written description analyses.” J.A. 37 (CL 31).
`In addition to the scope and nature of PMC’s applica-
`tions, the court pointed to PMC’s vast prior art disclo-
`sure, which included references having little-to-no rel-
`evance, and examiners’ statements in office actions
`describing PMC’s prosecution strategy and conduct as
`improper. J.A. 37–38 (CL 31, 34); J.A. 47–78 (listing
`
`
`
`5a
`references filling more than 30 pages). Regardless,
`prosecution had been pending for “nearly ten years”
`before the PTO suspended it. J.A. 35 (CL 25).
`“The only notable distinction” the court found be-
`tween Hyatt and this case was that “Mr. Hyatt
`acknowledged he lacked a ‘master plan’ for demarcat-
`ing his applications” whereas PMC developed the
`“Consolidation Agreement” with the PTO. J.A. 34 (CL
`23). Under the Consolidation Agreement, PMC agreed
`to group its applications into 56 subject-matter cate-
`gories, with subcategories for each of the two priority
`dates. J.A. 14 (FF 39); J.A. 8081–82. Within the cate-
`gories, PMC was to designate “A” applications and “B”
`applications, with the PTO prioritizing “A” applica-
`tions. Id. Rejected claims would transfer to the corre-
`sponding “B” application and prosecution of “B” appli-
`cations was stayed until the corresponding “A” appli-
`cation issued. Id. PMC would abandon any remaining
`applications that were not designated “A” or “B.” Id.
`This “A” application-to-“B” application examination
`scheme, in effect, gave PMC an additional bite at the
`apple to extend out prosecution of its many claims
`without the cost of having to file a continuation appli-
`cation.3
`The court determined that the Consolidation Agree-
`ment alone does not operate to shift blame on the
`PTO. J.A. 34–35 (CL 24). The court explained that the
`Consolidation Agreement had to be understood in the
`context of PMC’s business-driven, unreasonable pros-
`ecution strategy. J.A. 36 (CL 28–30).
`
`
`3 The record does not explain how PMC and the PTO decided
`on the elements of the Consolidation Agreement.
`
`
`
`6a
`Specifically, the court explained that prior to the
`GATT, PMC had an express prosecution policy of pur-
`suing one application at a time and filing a continua-
`tion as the prior application reached issuance—with
`the sole purpose to delay issuance of PMC’s patents in
`order to extend PMC’s patents’ terms.4 In addition,
`the court discussed other documents from the same
`time period describing PMC’s strategy at the time of
`hiding its technologies, “quietly monitor[ing]” in-
`fringement, and “roll[ing] out” patents over time be-
`cause “[o]nce infringement becomes widespread in an
`industry, the patented technology becomes so deeply
`embedded in commercial products that design around
`is not an option to infringers.”5
`The court analyzed prosecution conduct concerning
`the asserted ’091 patent and found that PMC used the
`Consolidation Agreement “to realize [PMC’s] initial
`strategy of serialized prosecution, notwithstanding
`the GATT amendments.” J.A. 36 (CL 28). In
`
`4 See J.A. 6 (FF 15) (discussing a 1990 document stating
`“[PMC’s] strategy is to prosecute coverage on its technologies de-
`liberately over time in such a way that broad coverage is in effect
`at any given time while the duration of coverage is prolonged as
`long as possible.” (quoting J.A. 37730–31)); J.A. 6 (FF 16) (dis-
`cussing an April 1992 document explaining that PMC “believes
`that its intellectual property position will enable it to exercise
`far-reaching market control for as long as 30 to 50 years.” (quot-
`ing J.A. 39220)).
`5 See J.A. 7 (FF 17–18) (discussing J.A. 37817); see also J.A. 7–
`8 (FF 19–20) (discussing a document dated September 12, 1991,
`that states, “[i]n some cases markets had not yet matured to ben-
`efit from applications of [PMC’s] technologies . . . [so PMC] had
`deliberately chosen not to publicize widely its technologies or
`plans” and targets Apple as one of several “companies that are
`natural candidates for participating in the commercialization of
`[PMC’s] technologies.” (quoting J.A. 37865, 37870)).
`
`
`
`7a
`particular, the court explained that on July 18, 2002,
`the PTO accepted PMC’s request to designate Appli-
`cation No. 08/485,507 (the “’507 application”) as the
`“B” application corresponding to Application No.
`08/474,145 (the “’145 application”) and suspend pros-
`ecution of the ’507 application. J.A. 19 (FF 57). On
`February 4, 2003, PMC amended claim 22 of the ’145
`application. J.A. 22 (FF 61). The amendment changed
`the claim from “[a] method of enabling a programming
`presentation at a receiver station” to “[a] method of
`decrypting programming at a receiver station” and in-
`troduced various encryption and decryption steps:
`’145 application claim 22
`’145 application claim 22
`(March 15, 2002 amendment)
`(February 4, 2003 amend-
`ment)
`A method of enabling a de-
`crypting programming
`presentation at a receiver
`station, said method compris-
`ing the steps of:
`receiving an information
`transmission from at least
`one of a local source and a re-
`mote source, said information
`transmission including disa-
`bled encrypted information;
`detecting the presence of
`an instruct-to-enable signal,
`said instruct-to-enable signal
`designating enabling infor-
`mation;
`passing said instruct-to-
`enable signal to a processor;
`modifying determining a
`fashion in which said re-
`ceiver station locates said en-
`abling information in
`
`A method of enabling a pro-
`gramming presentation at a
`receiver station, said method
`comprising the steps of:
`receiving an information
`transmission from at least
`one of a local source and a re-
`mote source, said information
`transmission including disa-
`bled information;
`detecting the presence of
`an instruct-to-enable signal,
`said instruct-to-enable signal
`designating enabling infor-
`mation;
`passing said instruct-to-
`enable signal to a processor;
`modifying a fashion in
`which said receiver station
`locates said enabling infor-
`mation in response to said in-
`struct-to-enable signal;
`
`
`
`locating said enabling in-
`formation based on said step
`of modifying a fashion;
`enabling said disabled in-
`formation based on said step
`of locating said enabling in-
`formation; and
`outputting said program-
`ming presentation based on
`said step of enabling said dis-
`abled information.
`(DTX-1568 at 978)
`
`8a
`response to a first decryp-
`tion key by processing
`said instruct-to-enable sig-
`nal;
`locating said enabling in-
`formation first decryption
`key based on said step of
`modifying a fashion deter-
`mining;
`enabling decrypting said
`disabled encrypted infor-
`mation based on said step of
`locating said enabling infor-
`mation using said first de-
`cryption key; and
`outputting said program-
`ming presentation based on
`said step of enabling said dis-
`abled information decrypt-
`ing.
`(DTX-1568 at 1132, 1177)
`
`
`
`Id. The court found that the February 4, 2003 amend-
`ment was the first time that encryption, decryption,
`and decryption keys were a part of this claim. Id.
`That same year, the PTO stayed the prosecution of
`PMC’s applications pending resolution of eleven reex-
`amination proceedings on related, issued patents. J.A.
`16 (FF 46). The stay lasted several years, as reexami-
`nation continued, and was lifted in 2009. J.A. 16 (FF
`46–47).
`Once prosecution reopened, the PTO rejected
`amended claim 22 of the ’145 application claiming the
`“decrypting programming” method. J.A. 23 (FF 63).
`PMC subsequently amended claim 22 significantly,
`and the ’145 application ultimately issued. Id.
`
`
`
`9a
`But on April 11, 2011, PMC reintroduced the re-
`jected “decrypting programming” method claim to the
`’507 application (the corresponding “B” application),
`as a part of several other claim amendments. J.A. 23
`(FF 64). PMC told the PTO that the amendments
`“place the claims in condition for allowance,” despite
`the “decrypting programming” claim having previ-
`ously been rejected. Id. This time, however, the claim
`was allowed in large part. J.A. 24 (FF 65). The ’507
`application issued as the asserted ’091 patent, with
`the reintroduced claim as claim 13. Id. The ’091 patent
`is set to expire in 2027—forty years after its 1987 pri-
`ority date.6 J.A. 36 (CL 30).
`The court concluded that “the only rational explana-
`tion for PMC’s approach to prosecution is a deliberate
`strategy of delay” and that “PMC’s actions were a con-
`scious and egregious misuse of the statutory patent
`system.” J.A. 38 (CL 35). Thus, the court found that
`Apple met its burden to prove the first element of
`laches.
`The court then turned to prejudice. J.A. 38–41 (CL
`36–47). The court explained that Apple had already
`begun developing the accused FairPlay system by
`2003, the year that PMC first added the asserted tech-
`nology to the ’091 patent’s predecessor. J.A. 39–40 (CL
`38–43). Further, the ’091 patent issued in 2012—
`seven years after FairPlay had already matured into
`the version accused of infringement. J.A. 39 (CL 38).
`The court reasoned that the prosecution delays had to
`
`
`6 The parties appear to dispute whether the ’091 patent also
`claims priority to PMC’s 1981 application. Compare Appellant’s
`Br. 8, with Resp. Br. 3. We do not resolve this dispute as it is
`unnecessary for the purposes of this appeal.
`
`
`
`10a
`be understood in the context of PMC’s expressed de-
`sire to extend its patent rights as long as possible and
`conceal its inventions until infringement was deeply
`embedded into the industry. J.A. 40 (CL 45). This
`scheme contributed to the prejudice, which was un-
`der-scored by the fact that a jury found that Apple’s
`FairPlay technology infringed the ’091 patent. J.A. 39
`(CL 39). Thus, Apple established prejudice, and laches
`rendered the ’091 patent unenforceable.
`PMC timely appeals the laches determination. We
`have jurisdiction under 28 U.S.C. § 1295(a)(1).
`STANDARD OF REVIEW
`We review a district court’s determination of prose-
`cution laches for abuse of discretion. Cancer Research
`Tech. Ltd. v. Barr Labs Inc., 625 F.3d 724, 728–29
`(Fed. Cir. 2010). “‘We may find an abuse of discretion
`on a showing that the court . . . exercised its discretion
`based upon an error of law or clearly erroneous factual
`findings.’” SiOnyx LLC v. Hamamatsu Photonics K.K.,
`981 F.3d 1339, 1349 (Fed. Cir. 2020) (quoting Innoge-
`netics, N.V. v. Abbott Labs, 512 F.3d 1363, 1379 (Fed.
`Cir. 2008)).
`
`DISCUSSION
`Prosecution laches is an equitable affirmative de-
`fense dating back to the early 1900s. Hyatt, 998 F.3d
`at 1360. Prosecution laches may render a patent un-
`enforceable where a patentee’s conduct “constitutes
`an egregious misuse of the statutory patent system.”
`Id. at 1360–61 (citation omitted). Prosecution laches
`requires proving two elements: (1) the patentee’s de-
`lay in prosecution must be unreasonable and inexcus-
`able under the totality of circumstances and (2) the
`accused infringer must have suffered prejudice
`
`
`
`11a
`attributable to the delay. Id. at 1362. We conclude
`that the district court did not abuse its discretion by
`legally erring or making clearly erroneous factual
`findings in determining that Apple established both
`laches elements.
`Unreasonable and Inexcusable Delay
`PMC argues that the district court erred in finding
`an unreasonable and inexcusable delay, such that the
`district court failed to consider the totality of the cir-
`cumstances. We disagree.
`First, PMC argues legal error because its “conduct
`looks nothing like Hyatt or the handful of other cases
`that have found prosecution laches.” Appellant’s Br.
`39. This is not a legal error and is factually incorrect.
`Laches is an equitable and flexible doctrine that re-
`quires considering the totality of the circumstances.
`Hyatt, 998 F.3d at 1359–66. In Hyatt, we found that
`the district court improperly failed to consider the to-
`tality of the circumstances by repeatedly discounting
`or ignoring relevant evidence. Id. Thus, PMC’s argu-
`ment rests on a faulty premise: that PMC’s conduct
`has to look like “Hyatt or the handful of other [laches]
`cases.” Appellant’s Br. 39. Setting this aside, this case
`is very similar to Hyatt and prior cases, and, in some
`ways, involves even more egregious facts because, as
`the district court found, the record shows that PMC
`institutionalized its abuse of the patent system by ex-
`pressly adopting and implementing dilatory prosecu-
`tion strategies, specifically to ambush companies like
`Apple many years after PMC filed its applications.
`Second, PMC asserts that its “compliance” with the
`Consolidation Agreement and the PTO’s rules
`
`
`
`12a
`precludes a finding of laches as a matter of law. Ap-
`pellant’s Br. III(B); id. at 38, 46–47, 50–51. We disa-
`gree.
`In Hyatt, the PTO used “atypical procedures”—as it
`did here—to facilitate prosecution because the appli-
`cant, like PMC, had filed hundreds of burdensome
`GATT-Bubble applications. Hyatt, 998 F.3d at 1354–
`55, 1370. Still, we found that the PTO met its burden
`to prove an unreasonable and unjustifiable delay. Id.
`at 1369. We also explained that “[a]n applicant must
`. . . not only comply with the statutory requirements
`and PTO regulations but must also prosecute its ap-
`plications in an equitable way.” Id. at 1366. Moreover,
`PMC’s compliance with the Consolidation Agreement
`supports, rather than refutes, a finding of unreasona-
`ble and inexcusable delay. PMC’s agreement to struc-
`ture a serial examination of a claim through first an
`A application and then a B application gave PMC the
`very kind of prosecution delays that supported PMC’s
`campaign for drawn-out prosecution. J.A. 36 (CL 28).
`Third, PMC asserts that the “district court improp-
`erly disregarded the reasons for the prosecution’s
`length.” Appellant’s Br. III(C). PMC points to delays
`in prosecution that occurred due to the PTO grappling
`with PMC’s GATT-Bubble applications and attempt-
`ing to resolve overlapping issues across many of
`PMC’s applications. Id. at 42–43.
`In Hyatt, we rejected a similar argument and ex-
`plained that “a delay by the PTO cannot excuse the
`appellant’s own delay.” Hyatt, 998 F.3d at 1364–65 (ci-
`tation omitted) (finding that the district court errone-
`ously found the PTO solely responsible for a 9-year
`stay on prosecution, when the period was “directly at-
`tributable to” the applicant’s conduct and the stay’s
`
`
`
`13a
`outcome could have “rendered meaningless” PTO time
`spent examining the applications). Unlike in Hyatt,
`the district court here determined that the various
`prosecution delays occurred because of issues PMC in-
`tentionally created, correctly focusing on PMC’s ineq-
`uitable prosecution. Compare id. at 1365, with J.A.
`12–13 (FF 35–36) (discussing the In re Schneller stay),
`and J.A. 16 (FF 46–47) (discussing the reexamination
`stay), and J.A. 35 (CL 25) (“[E]ven though the PTO
`suspended prosecution of PMC’s applications, such is
`directly attributable to the manner in which PMC
`prosecuted its applications in the first place.”).
`Fourth, PMC argues that the “district court commit-
`ted legal error by relying on the simple number of
`PMC’s applications.” Appellant’s Br. III(D). This argu-
`ment also fails.
`While we discussed in Hyatt the fact that the appli-
`cant had filed 381 GATT-Bubble applications, we also
`considered other facts evidencing an unreasonable
`and unexplained delay. See Hyatt, 998 F.3d at 1353,
`1367 (considering the applications’ length and com-
`plexity). Thus, the district court here did not legally
`err by considering that PMC filed 328 GATT-Bubble
`applications as a part of the court’s analysis, which
`also properly considered other relevant facts.
`Fifth, PMC argues that it was a legal error for the
`district court to find delay due to PMC adding “nar-
`rowing” limitations directed to encryption and decryp-
`tion in 2003, years after the priority date of the ’091
`patent. Appellant’s Br. 47–48; Reply Br. 28–29. PMC,
`however, merely asserts that the 2003 amendments
`are “narrowing” without any attempt to explain why
`this is so, especially in view of the significant overhaul
`to the claims. See id. PMC does not cite case law
`
`
`
`14a
`holding legal error in a similar situation. In light of
`the significant amendments made in 2003, we are not
`persuaded that the district court erred in concluding
`that PMC unreasonably delayed in presenting the en-
`cryption and decryption subject matter.
`PMC misconstrues the district court’s rationale for
`finding delay due to the 2003 amendments. The dis-
`trict court faulted PMC for waiting until 2003—six-
`teen years after the priority date of the ’091 patent
`and nearly eight years after PMC filed its 328 GATT-
`bubble applications—to include the subject encryption
`and decryption limitations to the claims. J.A. 39–40
`(CL 38, 42). In Hyatt, we found that a similar delay in
`presenting claims was sufficient to trigger prosecution
`laches. Hyatt, 998 F.3d at 1367–68. In particular, we
`found that a delay of between 7–11 years to file appli-
`cations and 10–19 years before presenting claims con-
`tributed to the unreasonableness of the delay. Id. at
`1368. We also found that the district court erroneously
`“ignored evidence of Hyatt’s pattern of rewriting or
`shifting claims midway through prosecution” and that
`it was not enough for the district court to merely note
`that “it is ‘not unusual to see a few claims rewritten’”
`and that “the PTO accepted the amendments and con-
`tinued examination.” Id. at 1363. The district court
`properly considered the facts surrounding the amend-
`ment to find delay. J.A. 22–25, 36–38 (FF 61–67; CL
`28–35).
`In sum, the district court did not legally err. The dis-
`trict court correctly considered the totality of the cir-
`cumstances and did not disregard or ignore relevant
`facts.
`PMC also asserts that several of the district court’s
`factual findings concerning the first laches element
`
`
`
`15a
`amount to an abuse of discretion. Appellant’s Br. IV.
`First, PMC asserts that Apple needed an expert on
`PTO proceedings to support its case. Id. at 2, 52–53.
`Hyatt does not require PTO testimony for a laches de-
`termination to be supported, and PMC cites no case
`law suggesting otherwise. Nor is there any other basis
`in the record to suggest that the district court needed
`an expert’s specialized knowledge to help understand
`the administrative records and the PTO regulations
`in this case.
`Second, PMC argues that the district court clearly
`erred because it found PMC contributed to the delay
`by making it “virtually impossible for the PTO to con-
`duct double patenting, priority, or written description
`analyses,” but the PTO has issued over 100 patents to
`PMC. Id. at 52 (quoting J.A. 37 (CL 31)). That the PTO
`issued PMC many patents does not suggest clear er-
`ror—especially given how many other facts weigh
`against PMC here. See Symbol Techs., Inc. v. Lemel-
`son Med., Educ. & Rsch. Found., 422 F.3d 1378, 1380–
`85 (Fed. Cir. 2005) (affirming the court’s finding of
`laches, despite the patentee having many issued pa-
`tents).
`Third, PMC argues that the district court should not
`have considered the office actions where examiners
`harshly criticized PMC’s prosecution strategy. Appel-
`lant’s Br. 53–55. The district court was within its pur-
`view to consider these statements as evidence. J.A.
`14–16, 17– 19, 38 (FF 40–45, 52–55; CL 34). Further,
`the court properly considered the context of the
`
`
`
`16a
`criticisms and reasonably weighed them in view of
`other evidence.7 Id.
`Fourth, PMC argues that the district court clearly
`erred because it misinterpreted PMC’s internal docu-
`ments. Id. at 57–58. PMC argues that its document
`stating that PMC’s “intellectual property position will
`enable [PMC] to exercise far-reaching market control
`for as long as 30 to 50 years,” referred to copyrights,
`not patents. Id.
`The district court did not clearly err; the document
`itself describes “issued and pending patents.” See J.A.
`8573. And the court corroborated this document with
`similar evidence. See J.A. 6–7 (FF 16–17); see also J.A.
`9425–26 (testimony that PMC’s patent strategy was
`to extend its intellectual property rights and coverage
`out 30 to 50 years).
`Along those same lines, PMC argues that the dis-
`trict court clearly erred by considering PMC’s docu-
`ment describing a strategy of keeping “patents hidden
`while industry infringement is quietly monitored” be-
`cause that strategy would support “post-issuance
`laches, which since SCA Hygiene is not even a de-
`fense” as opposed to prosecution laches. Appellant’s
`Br. 58 (quoting SCA Hygiene, 580 U.S. 328). Put
`
`7 PMC also rehashes several other instances where the district
`court rejected PMC’s interpretation of the prosecution history.
`Appellant’s Br. 55–56 (arguing clear error by rejecting PMC tes-
`timony concerning discussions with the PTO); id. at 56 (disput-
`ing the district court’s finding that PMC filed duplicate claims);
`id. at 56–57 (disputing the district court’s finding that the prior
`art PMC submitted was irrelevant because “there was a reason-
`able explanation” for PMC submitting the references). These ar-
`guments amount to mere disagreement, not clearly erroneous
`factual findings.
`
`
`
`17a
`simply, PMC’s enforcement strategy is part of the “to-
`tality of the circumstances” here. See Hyatt, 998 F.3d
`at 1362; see also Symbol Techs., 422 F.3d at 1385 (ex-
`plaining that actions taken “for the business purpose
`of delaying [] issuance can be considered an abuse of
`the patent system”).
`In sum, the district court’s factual findings were not
`clearly erroneous. Thus, the district court did not
`abuse its discretion in finding that PMC’s delay in
`prosecution was unreasonable and inexcusable under
`the totality of circumstances.
`Prejudice
`Laches requires that the accused infringer suffered
`prejudice attributable to the delay. Hyatt, 998 F.3d at
`1362. An accused infringer can establish prejudice by
`proving that it “invested in, worked on, or used the
`claimed technology during the period of delay.” Id. (ci-
`tation omitted). We affirm the district court’s finding
`that PMC’s delay prejudiced Apple.
`PMC argues that the district court abused its dis-
`cretion in finding that PMC’s delay prejudiced Apple.
`Appellant’s Br. V; Reply Br. II. We disagree.
`PMC argues that the district court erred because
`“Apple needed to prove that PMC still was engaged in
`egregious conduct causing delays after 2003, which is
`when the district court found Apple began developing
`FairPlay.” Appellant’s Br. 59. This argument miscon-
`strues the record and the law.
`PMC incorrectly assumes that the district court did
`not find that PMC was still engaging in “conduct caus-
`ing delays after 2003.” Id. The district court found that
`the deliberate strategy of delay began at least in 1995
`and continued through PMC filing this suit in 2015.
`
`
`
`18a
`See, e.g., J.A. 38, 40 (CL 35, 44). The court found that
`in 2011, while PMC was in pre-suit negotiations with
`Apple, PMC reintroduced a previously-rejected claim
`in the ’507 application (the “B” application). See, e.g.,
`J.A. 23–25, 39–40 (FF 64–67; CL 41–45). PMC did not
`mention the application or claim to Apple during ne-
`gotiations. J.A. 40 (CL 44). PMC was able to get the
`claim quickly granted, assert that claim against Ap-
`ple, and obtain a damages award. J.A. 3, 40 (FF 5; CL
`43). This shows that the district court did not err by
`determining that well after 2003 PMC was still imple-
`menting its express strategy of delay to “reserve [its]
`patent till the trade independently develops, and then
`[] pounce upon it for a full term.”8 Victor Talking
`Mach. Co. v. Thomas A. Edison, Inc., 229 F. 999,
`1000–01 (2d Cir. 1916); see also J.A. 40 (CL 45) (“All
`of these events must be viewed in the context of PMC’s
`original plans: to prosecute its patents serially over
`time and keep them hidden until infringement was
`engrained and widespread.”).
`We find no clear error in the district court’s deter-
`mination that PMC engaged in conduct causing de-
`lays at least through 2011. PMC ignores the effect of
`its Consolidation Agreement with the PTO, which per-
`mitted PMC in 2011 to re-file the same decryption
`claim in the ’507 “B” application that was not allowed
`
`8 We disagree with the dissent’s suggestion that the period of
`delay ended before 2000. See Dissent pp. 14–16. The district
`court did not clearly err in finding that the period of delay lasted
`until at least 2003, when PMC introduced the encryption and de-
`cryption subject matter into the ’145 “A” application, and further
`until 2011, when PMC reintroduced the previously-rejected
`claim from the ’145 “A” application into the ’507 “B” application,
`for the reasons discussed in this section and above, see Discus-
`sion supra pp. 10–15.
`
`
`
`19a
`in the corresponding ’145 “A” application. By taking a
`second bite at the examination apple through the “B”
`application, PMC further lengthened the examination
`process beyond normal prosecution procedure, creat-
`ing improper delay during prosecution. That the PTO
`suspended prosecution for a period of time does not
`negate the fact that Apple had begun developing Fair-
`Play well before PMC was engaging in these amend-
`ments.
`Even if the district court’s analysis had found that
`the period of PMC’s delay ended by 2003, the district
`court properly concluded that PMC’s delayed presen-
`tation of the decryption claim in 2003 prejudiced Ap-
`ple because, as the court found, “[i]n so delaying, PMC
`prejudiced Apple, which had already begun investing
`in FairPlay’s development and continued to do so.”
`J.A. 39 (CL 38).9 The record indicates that Apple be-
`gan developing FairPlay before 2003. Apple began de-
`veloping FairPlay “in the early 2000s” and “launched”
`FairPlay with the Apple Music store in 2003. J.A. 26
`(FF 71); J.A. 4713 at 684:1–4 (“Q: When did Apple
`begin developing FairPlay? A: In . . . the early 2000s”),
`684:21–23 (“Q: Now, when did Apple first launch Fair-
`Play? A: We launched FairPlay together with the Ap-
`ple Music store, which I believe was in 2003”); J.A.
`8085 (¶¶ 73, 76) (parties stipulating that Apple began
`
`9 Although the district court stated in a later part of its opinion
`that “Apple began developing FairPlay in 2003,” J.A. 39 (CL 40
`(citing FF 71)), we take this statement to be a typo because it
`refers to but is inconsistent with the district court’s previous
`findings that “Apple began developing FairPlay in the early
`2000s” and launched FairPlay “together with the Apple Music
`store in 2003,” J.A. 26 (FF 71); see also J.A. 39 (CL 38) (stating
`that by the time PMC introduced the decryption claim in 2003,
`Apple “had already begun investing in FairPlay’s development”).
`
`
`
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