Inducement not shown when accused product can work in an infringing way but doesn’t have toOctober 7, 2008

In a recent decision, the Federal Circuit affirmed the International Trade Commission's finding of noninfringement with respect to one patent but reversed and remanded on another. At issue was whether the defendant had imported chipsets that infringed five of the plaintiff's patents in violation of 19 U.S.C. § 1337. The action was dismissed with regard to two of the patents, as any action related to those two patents must occur in Federal Court in California due to a forum selection clause. Another patent is the subject of a separate appeal after an exclusion order was entered. The Commission adopted an administrative law judge's determination of noninfringement with respect to the remaining two asserted patents. The Federal Circuit affirmed the determination of noninfringement for one patent, holding the patentee had presented insufficient evidence to show the accused devices necessarily infringed, and the patentee did not provide evidence of specific instances of direct infringement. The court disagreed with the ALJ's claim construction with respect to the second patent. The administrative law judge misinterpreted expert testimony on whether a control signal was required to be changeable and accordingly the court vacated the noninfringement finding with regard to one of the eight accused chips, but affirmed the finding of noninfringement with regard to the other seven even under the revised construction.More on Broadcom Corp. v. Int'l Trade Comm'n after the jump.

The plaintiff, Broadcom, specializes in semiconductors for wired and wireless communications. Broadcom filed a petition with the International Trade Commission alleging that the defendant, Qualcomm, had imported chipsets that infringed five of Broadcom's patents in violation of 19 U.S.C. § 1337. The five asserted patents were U.S. Patent Nos. 5,682,379, 6,359,972, 6,347,311, 6,583,675, and 6,714,983.An administrative law judge dismissed claims relating to the '379 and '872 patents because of a forum selection clause requiring those patents to be litigated in California. The ALJ also held Qualcomm had induced infringement of the '983 patent. Ultimately, the ITC issued an exclusion order barring the importation of devices infringing the '983 patent. Qualcomm, in addition to other handset device manufacturers, appealed this decision and it is now pending in a separate action before the Federal Circuit.For the two remaining patents, the ALJ found no violation of § 1337. The Commission adopted the ALJ's determination and Broadcom subsequently appealed. The '311 patent covers a communication network capable of operating in a power-saving state. Broadcom asserted infringement of claims 1 and 16 of the '311 patent. Claim 1of the '311 patent recites, in relevant part (emphasis added):

A communication network supporting wireless communication of messages, said communication network comprising: … a second terminal node having a wireless receiver operable in a power-saving state; an access point that attempts to immediately deliver messages destined for the first terminal node;

Claim 16 of the '311 patent similarly recites, in relevant part (emphasis added):

A communication network supporting wireless communication of messages, said communication network comprising: … a second terminal node operating in a second state in which attempts are made to minimize power consumption by the wireless receiver[;]

The '675 patent relates to circuits for transmitting and receiving radiofrequency ("RF") signals. RF transmitters commonly use a circuit called a phase lock loop, pictured below, to generate the oscillator signal.The invention of the '675 patent is a gain compensation circuit. Claim 33 of the '675 patent claims:

A gain compensator circuit that determines a reference pump current for a charge pump in a phase lock loop (PLL), comprising:a plurality of unit current sources that are arranged into at least one group, said group responsive to a capacitor control signal and generating a portion of the reference pump current when said group is activated, wherein said capacitor control signal also controls a corresponding fixed capacitor of a voltage controlled oscillator (VCO) in the PLL; and a current mirror including one or more weighted current sources that generate a reference scale current responsive to a PLL control signal, the PLL control signal representative of one or more characteristics of the PLL, each of said unit current sources generating a unit current proportional to said reference scale current, said unit currents summed together to form the reference pump current.

As initial matter of the appeal, the court first dealt with a contention by Qualcomm that the petition for review was prematurely filed by Broadcom. Broadcom filed its petition for review after the Commission adopted the ALJ's finding of noninfringement in December 2006. Qualcomm contended the petition for review could only be filed after the President declined to review the Commission's order. The court disagreed, and held when the Commission adopted the ALJ's finding it was final and appealable, as there is no provision for Presedential review of determinations that do not lead to an exclusion order.Turning to the merits, the court considered the ALJ's finding of noninfringement of the '311 patent. Broadcom's theory of infringement centered on Qualcomm's manufacture of chipsets for use in third generation wireless networks governed by Qualcomm's EV-DO standard. Broadcom asserted that the EV-DO standard utilized an Idle State Protocol which requires networks to utilize power-saving features. Therefore, Qualcomm would directly infringe the '311 patent based on Qualcomm's use of its chipsets on its own test network. Broadcom also asserted that Qualcomm induced infringement of the asserted claims due to Qualcomm's promotion of the EV-DO standard.The court affirmed the ALJ's ruling that Qualcomm neither directly infringed nor induced infringement of the '311 patent. The court found Broadcom's evidence of infringement insufficient to prove that Qualcomm's EV-DO standard required handsets to operate in a power-saving state. Specifically, the court noted that the EV-DO specification states that a terminal in Sleep State "may shut down part of its subsystems to conserve power" (emphasis added). Because the power conservation was a capability of the network but not a requirement of the network, the accused network did not necessarily infringe. The court further held Broadcom waived its argument that Qualcomm's promotion of the network's optional features (including the power conservation Sleep State) because they were not presented to the ALJ.The court then moved to the ALJ's finding of noninfringement of the '675 patent. Broadcom contended that eight of Qualcomm's chips infringed claim 33 and dependent claim 35. Five of the chips are transmitter chips that upconvert baseband signals to RF signals. The other three chips are transceiver chips that downconvert RF signals to baseband signals and function as transmitter chips. Qualcomm did not dispute that the lower plane of its gain compensation circuit found within these eight chips met the first limitation of claim 33. However, Qualcomm contended, and the ALJ agreed, that seven of its chips used current produced by the lower plane in a manner inconsistent with the limitations of claim 33. With the respect to the remaining chip, the RF Qualcomm asserted that it also did not meet the "PLL control signal" limitation because its respective REF signal