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Commil USA, LLC v. Cisco Systems, Inc.

United States Court of Appeals, Federal Circuit

December 28, 2015

COMMIL USA, LLC, Plaintiff-Appellee
v.
CISCO SYSTEMS, INC., Defendant-Appellant

Appeal from the United States District Court for the Eastern District of Texas in No. 07-CV-0341, Magistrate Judge Charles Everingham.

RICHARD A. SAYLES, Sayles Werbner, P.C., Dallas, TX, for plaintiff-appellee. Also represented by MARK S. WERBNER, MARK STRACHAN, DARREN PATRICK NICHOLSON; LESLIE V. PAYNE, Conley Rose, P.C., Houston, TX; MIRANDA Y. JONES, Heim, Payne & Chorush, LLP, Houston, TX.

WILLIAM F. LEE, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, for defendant-appellant. Also represented by MARK CHRISTOPHER FLEMING, ERIC FLETCHER; JONATHAN W. ANDRON, FELICIA H. ELLSWORTH, New York, NY; WILLIAM G. MCELWAIN, FRANCESCO VALENTINI, SETH P. WAXMAN, Washington, DC; JEFFREY ERIC OSTROW, HARRISON J. FRAHN IV, PATRICK E. KING, JONATHAN SANDERS, Simpson Thacher & Bartlett LLP, Palo Alto, CA; HENRY B. GUTMAN, New York, NY.

Before PROST, Chief Judge, NEWMAN and O'MALLEY, Circuit Judges.

OPINION

[117 U.S.P.Q.2d 1657] Prost, Chief Judge.

This case returns to us on remand from the Supreme Court. See Commil USA, LLC v. Cisco Sys., Inc., 135 S.Ct. 1920, 191 L.Ed.2d 883 (2015). While our previous opinion had remanded this case to the district court for a new trial, Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361, 1372 (Fed. Cir. 2013), when we received the case back from the Supreme Court we granted Cisco's request to retain the case and address Cisco's remaining non-infringement arguments which we had declined to address in our previous opinion. ECF No. 101. We now conclude that substantial evidence does not support the jury's finding that Cisco's devices, when used, perform the " running" step of the asserted claims. The district court's judgment is therefore reversed.[1]

I

Because much of the relevant background is set forth in our previous opinion, we summarize only briefly here the facts and posture of this case.

[117 U.S.P.Q.2d 1658] Commil owns U.S. Patent No. 6,430,395 (" '395 patent" ), which relates to a method of providing faster and more reliable handoffs of mobile devices from one base station to another as a mobile device moves throughout a network area. In 2007, Commil brought this action against Cisco, which makes and sells wireless networking equipment. In a first jury trial, Commil alleged that Cisco directly infringed the '395 patent by making and using networking equipment, and also that Cisco induced its customers to infringe by selling them the infringing equipment. The jury concluded that Commil's patent was valid, that Cisco was liable for direct but not induced infringement, and awarded $3.7 million in damages. Commil then filed a motion for a new trial on induced infringement and damages, which the district court granted. The second jury concluded that Cisco was liable for induced infringement and awarded $63.7 million in damages.

Cisco thereafter appealed to us, raising a number of issues. A split panel affirmed in part, vacated in part, and remanded for a new trial. Commil, 720 F.3d at 1361. Because we were remanding for a new trial, we did not reach certain of Cisco's arguments on non-infringement and damages. Id. at 1372. Following that decision, Commil sought certiorari on the limited question of whether a defendant's belief that a patent is invalid is a defense to induced infringement. The Supreme Court granted certiorari, reversed the majority's decision on that issue, and vacated and remanded back to us.

Upon return to this court, Cisco requested that we address its non-infringement arguments that a majority of this panel previously had declined to decide. Specifically, Cisco contends that Commil cannot prevail on its infringement charges because neither Cisco nor its customers directly infringe by performing both method steps. We granted Cisco's request, and now address those arguments. We review the jury's determinations of infringement for substantial evidence. ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1311 (Fed. Cir. 2007).

II

Claim 1, the sole independent claim of the '395 patent, contains two steps: a " dividing" step and a " running" step. Specifically, Claim 1 reads:

In a wireless communication system comprising at least two Base Stations, at least one Switch in communication with the Base Stations, a method of communicating between ...

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