Juries to play key role in SEP litigation for infringement and damages

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This is an insight article whose content has not been written by the IAM editorial team, but which has been proofed and edited to run in accordance with the IAM style guide.

Cases mentioned

Microsoft v Motorola

Ericsson v D-Link

TCL v Ericsson

IP Bridge v TCL
Name of law US Constitution Seventh Amendment

While the legal framework of SEP litigation continues to evolve through executive policies, juries’ roles in SEP litigations has been confirmed to include findings of infringement and compliance with standards, as well as damages awards. Since the Federal Circuit has embraced an increasingly large role of juries in this area, it is likely that juries will continue to have major impact on US SEP litigations.

Courts continue to rely upon juries – they are currently playing a crucial role in deciding infringement and damages in SEP litigations. While the first FRAND rate case in the United States, Microsoft v Motorola, involved a bench trial to determine the FRAND rate and range for Motorola’s patents, more recent SEP litigations have entailed jury damages determinations, including affirmances of jury awards by the Federal Circuit.

For example, in the often cited Ericsson v D-Link litigation, the Federal Circuit reversed and remanded the jury’s 2013 FRAND determination, finding that the court committed legal error in its jury instructions by failing to instruct the jury:

  • adequately about Ericsson’s actual RAND commitment;
  • that any royalty for the patented technology must be apportioned from the value of the standard as a whole; and
  • that the RAND royalty rate must be based on the value of the invention, not any value added by the standardisation of that invention – while insisting the jury consider irrelevant Georgia-Pacific factors.

While the Federal Circuit reversed the jury’s FRAND determination, the decision is monumental because it represented the jury’s role in the damages award in a FRAND suit. The Federal Circuit’s reversal reflects legal error committed by the district court, not the jury’s finding.

In the later TCL v Ericsson case, the Federal Circuit vacated and reversed the district court’s bench trial on the amount of a release payment for past infringement, finding that the district court deprived Ericsson of its constitutional right to a jury trial because: “the release payment is in substance compensatory relief for TCL’s past patent infringing activity” (TCL Commc’n Tech Holdings Ltd v Telefonaktiebolaget LM Ericsson, Federal Circuit 5 December 2019). Following this appeal, the Supreme Court denied TCL’s petition for certiorari, cementing the Federal Circuit’s Seventh Amendment finding. This case is significant because it made clear that a jury can – and should – have a key role in SEP litigation involving FRAND damages.

In IP Bridge v TCL in Delaware, a jury found that TCL infringed claims by its LTE standard-compliant devices and awarded $950,000 in damages (Godo Kaisha IP Bridge 1 v TCL Commc’n Tech Holdings Ltd, No CV 15-634-JFB, 2019 WL 1877189, 26 April 2019). On appeal, the Federal Circuit held that it is the jury’s role as fact finder to assess infringement of SEPs, not a legal question for the court. In its decision, the Federal Circuit affirmed the jury’s infringement verdict and let stand their damages verdict, which was not challenged on appeal (967 F3d 1380, 1384-85 Federal Circuit 2020).  The Supreme Court also denied TCL’s petition for certiorari.

Taken together, recent US SEP litigations have involved greater roles of juries, both for infringement and damages. It appears likely that future SEP trials will include juries as central figures.

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