Recently the Federal Circuit issued its opinion in Constellation Designs, LLC v. LG Electronics Inc., a patent case we have been following because it attracted an amicus brief. In this case, LG Electronics appealed a judgment of the Eastern District of Texas, which granted summary judgment of eligibility and denied judgment as a matter of law of noninfringement. In an opinion authored by Judge Stoll and joined by Judges Lourie and Oetken, a district judge from New York sitting by designation, the panel vacated-in-part, affirmed-in-part, and remanded the district court’s judgment. This is our summary of the opinion.
Judge Stoll began by outlining the factual background:
This patent infringement case raises issues of eligibility, infringement, and damages and relates to communication systems that use non-uniform constellations that have increased capacity compared to conventional, uniform constellations operating within a similar signal-to-noise ratio band. Constellation Designs, LLC sued LG Electronics Inc. . . . for patent infringement in the United States District Court for the Eastern District of Texas, which proceeded to a jury trial. The district court entered a final judgment against LG for willfully infringing claims . . . . LG challenges on appeal the district court’s (1) summary judgment of patent eligibility under 35 U.S.C. § 101, (2) denial of LG’s motion for judgment as a matter of law of non-infringement, and (3) denial of LG’s motion for judgment as a matter of law of no damages or denial of LG’s motion to exclude the testimony of Constellation’s damages expert.
After the case’s factual background, Judge Stoll explained the technological background. She noted that one “of the named inventors, Dr. Chris Jones, conceded that the inventors did not invent (1) any of the communication system hardware, (2) using unequally spaced (i.e., non-uniform) constellations, or even (3) optimizing nonuniform constellations for a particular constellation characteristic.”
Reaching the dispute, Judge Stoll used Constellation’s framing of the claims, “discern[ing] two groups of claims on appeal: (1) the asserted ’761 and ’700 patent claims, which recite a geometrically spaced symbol constellation optimized for capacity using [Parallel Decode] capacity (collectively, ‘the optimization claims’); and (2) the asserted ’509 and ’922 patent claims, which recite specific non-uniform constellations (collectively, ‘the constellation claims’).”
Judge Stoll then turned to the merits of the district court’s grant of summary judgment of patent eligibility for the optimization claims. She explained that Constellation’s representative claim “recites a [Quadrature Amplitude Modulation] symbol constellation that is ‘optimized’ for PD capacity to achieve a particular result: capacity at a reduced signal-to-noise ratio compared to conventional QAM signal constellations.” Judge Stoll, however, found that the “claim itself does not recite how to achieve a constellation ‘optimized’ for PD capacity.” Rather, she said, “this important and distinguishing element of the claim is described in a result-oriented way.” In turn, she indicated that this claim “is ineligible because it is an abstract, result-oriented claim directed to all ways of achieving a recited result.”
Judge Stoll then addressed Constellation’s argument “that the optimization claims are eligible because they are not directed to simply optimizing constellations; rather, they recite a ‘concrete technique’—using PD capacity—to optimize constellations.” She rejected this argument. Instead, she “view[ed] the optimization claims here as analogous to the result-oriented claim in” a controlling case because Constellation’s claim “lacks sufficient details about the alleged ‘concrete technique.'” The claim, she said, “does not include any of the details that describe the inventors’ ‘process for selecting the points, and potentially the labeling, of a geometrically shaped constellation’ . . . as described in the specification.”
Next, Judge Stoll addressed the merits of the district court’s grant of summary judgment of patent eligibility for the constellation claims. She contrasted the constellation claims with the optimization claims. She explained that, “[i]nstead of claiming the abstract idea of ‘optimizing’ a constellation for capacity without limiting the optimization to any meaningful process or any constraints, the constellation claims are directed to ‘specific constellations’ that the inventors developed using the techniques described in the specifications.” Judge Stoll said “this distinction between the result-oriented optimization claims and constellation claims makes all the difference.”
Judge Stoll then turned to the merits of the district court’s denial of LG’s motion for judgment as a matter of law of non-infringement. She first rejected LG’s assertion “that a patent owner may only rely on a standard to prove infringement when the standard meets every limitation of the claim as opposed to just one or several limitations.” In fact, she said, “a patent owner may prove infringement based on standards-related evidence for some elements while using evidence about the accused products to show satisfaction of other elements of the same claim.”
Finally, Judge Stoll turned to the merits of LG’s request “to reverse the district court’s denial of JMOL of no damages or, alternatively, to reverse the denial of LG’s motion to exclude the testimony of Dr. Sullivan, Constellation’s damages expert.” She rejected LG’s challenge. She explained it was “not properly directed to JMOL and the sufficiency of the evidence presented to the jury on damages.” Rather, she said, “LG challenges the admissibility of Constellation’s expert testimony, which—under the law of the regional circuit, here the Fifth Circuit—we would ordinarily review for abuse of discretion.” Ultimately, she concluded, “LG has not shown that the district court erred in denying either its motion to exclude or its motion for judgment as a matter of law of no damages.”
As a result of Judge Stoll’s analysis, as mentioned the panel vacated-in-part, affirmed-in-part, and remanded for further proceedings.