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Enplas Display Device Corp. v. Seoul Semiconductor Company, Ltd.

United States Court of Appeals, Federal Circuit

November 19, 2018

ENPLAS DISPLAY DEVICE CORPORATION, Plaintiff-Appellant
v.
SEOUL SEMICONDUCTOR COMPANY, LTD., Defendant-Appellee ENPLAS TECH SOLUTIONS, INC., ENPLAS (U.S.A.), INC., Plaintiffs

          Appeal from the United States District Court for the Northern District of California in No. 3:13-cv-05038-NC, Magistrate Judge Nathanael M. Cousins.

          John C. Rozendaal, Sterne Kessler Goldstein & Fox, PLLC, Washington, DC, argued for plaintiff-appellant. Also represented by Michael E. Joffre.

          Lawrence J. Gotts, Latham & Watkins LLP, Washington, DC, argued for defendant-appellee. Also represented by Gabriel Bell; Charles Sanders, Boston, MA; Ryan Owens, Costa Mesa, CA.

          Before Newman, Hughes, and Stoll, Circuit Judges.

          OPINION

          Stoll Circuit Judge.

         Enplas Display Device Corporation appeals the district court's summary judgment that claim 20 of Seoul Semiconductor Company, Ltd.'s ("SSC") U.S. Patent No. 6, 007, 209 is not anticipated. Following a jury trial on the remaining infringement and invalidity issues, Enplas also appeals the district court's denial of judgment as a matter of law ("JMOL") that SSC's U.S. Patent No. 6, 473, 554 is anticipated; denial of JMOL of no induced infringement; and denial of JMOL that the jury's damages award is excessive and not supported by the trial evidence.

         For the reasons below, we affirm the district court's judgment that claim 20 of the '209 patent and the asserted '554 patent claims are not anticipated. Although a close question, we also affirm the district court's denial of JMOL of no inducement. We hold, however, that the district court erred when it denied JMOL that the damages award was not supported by substantial evidence. We therefore vacate the jury's damages award, and remand for further proceedings.

         Background

         The asserted '209 and '554 patents are directed to methods of backlighting display panels, particularly LED displays used in televisions, laptop computers, and other electronics. In such displays, the '209 patent teaches, "uniform illumination is difficult to achieve, and prior art devices frequently fail[ed] to provide a sufficiently uni- form source of illumination for LCD displays." '209 patent col. 1 ll. 36-38. The invention claimed in the '209 patent purports to solve this problem by providing a light source that uniformly backlights the rear surface of the display panel. Id. at col. 1 ll. 45-48. The light source includes "a housing having a cavity formed by diffusely reflective bottom and side interior surfaces." Id. at col. 1 ll. 46-48. "Illumination is provided by [LEDs] that are shielded by shielding elements." Id. at col. 1 ll. 50-51. The LEDs and shielding elements are "positioned such that the emitted light is substantially uniformly distributed throughout the cavity, thereby eliminating bright spots (i.e., 'hot spots') in the display panel." Id. at col. 1 ll. 52-55.

         Claim 20 of the '209 patent recites:

         20. A method of backlighting a display panel, comprising:

producing illumination from a substantially lambertian light source comprising a cavity with internal side walls, an internal bottom wall, and an aperture, said step of producing illumination comprising the step of directing light rays emitted by plural light sources mounted on said internal bottom wall and around the perimeter of the aperture into the cavity such that the light exiting the aperture is substantially uniform in intensity and color;
using a diffuser to diffuse light from said substantially lambertian light source;
using a brightness enhancing film to concentrate the diffused light into a predetermined angular range without significantly reducing the uniformity of the diffused light; and
directing the concentrated, diffused light onto said display panel.

Id. at col. 9 l. 18-col. 10 l. 8 (emphasis added).

         The '554 patent, however, purports to solve the illumination uniformity problem in a different way. The patent discloses a lighting apparatus using a "waveguide coupled to a light source for injecting light into the waveguide." '554 patent, Abstract. Embedded within the waveguide is "an illumination coupler." Id. at col. 3 ll. 18-20. The illumination coupler "comprises a refractive index interface configured to capture light rays propagating along a line that forms less than the critical angle of total internal reflection with respect to at least one of the top and bottom surfaces, such that the captured light rays are injected therebetween for propagation outside of the interior region." Id. at col. 3 ll. 23-29. The illumination coupling element has two curved surfaces in its top surface that form the total internal reflection ("TIR") region above the LED and a bottom surface above the LED. Id. at col. 16 ll. 14-24. The bottom surface works with the TIR region to distribute light within the waveguide. Id. at col. 16 ll. 27-48.

         Through TIR, the '554 patent solves the bright spot problem by preventing light from shining directly from the light source through the display. The curved portions of the TIR region, however, also create a "dark spot" by completely redirecting light above the LED. Id. at col. 14 ll. 58-61. To counter this problem, the '554 patent discloses a rounded bottom TIR surface that is configured to allow a small amount of light to "leak" through its top surface to ensure uniformity in the display. Id. at col. 14 l. 61-col. 15 l. 3. This is known as "leaky TIR." Id. at col. 15 ll. 1-3.

         Claims 1, 6, 30, and 33-35 of the '554 patent are reproduced below:

         1. An illumination device, comprising:

a waveguide having an illumination coupler embedded in an interior region of said waveguide, said illumination coupler adapted to receive light from a point source within said interior region, and to direct light between generally parallel top and bottom surfaces outside said interior region, said illumination coupler comprising a refractive index interface which is inclined relative to at least one of said top and bottom surfaces said interface being configured to reflect light rays emitted by the point source which propagate along a line that forms less than the critical angle of total internal reflection with respect to a line lying in one of said top and bottom surfaces, such that light rays which would otherwise pass out of said waveguide are captured for propagation between said top and bottom surfaces.
. . . .
6. The illumination device of claim 1, wherein the waveguide and illumination coupler are integrally formed from a single piece of material.
. . . .
30. An optical apparatus, comprising:
a light emitting diode (LED);
an optical element having top and bottom opposing sides and an edge extending between the top and bottom opposing sides, said LED mounted at a predetermined location beneath a central portion of said optical element such that light from the LED enters the optical element, said optical element including a TIR surface spaced from said bottom side and extending from a point above the LED outwardly towards said edges, said TIR surface positioned to receive light emitted by the LED, said TIR surface curving towards the LED so as to form a cusp above the LED, the curving TIR surface totally internally reflecting light rays such that reflected light rays propagate from the TIR surface towards the edge of the optical element.
. . . .
33. The optical apparatus of claim 30, wherein said TIR surface is leaky such that some light emitted by the LED is transmitted therethrough.
34. The optical apparatus of claim 33, wherein said cusp is contoured to permit leakage of light through said TIR surface.
35. The optical apparatus of claim 34, wherein said cusp is rounded to permit leakage of light through said TIR surface.

Id. at col. 19 ll. 2-17, col. 19 ll. 31-33, col. 21 ll. 8-23, col. 21 ll. 28-36 (emphases added).

         Enplas is a Japanese manufacturer of plastic lenses used in "light bars," which are used for backlighting displays in flat-screen televisions. SSC is a Korean company that manufactures and sells LEDs, which are also used in light bars for backlighting flat-screen televisions, as well as automotive, smartphone, and lighting applications. From November 2010 to June 2011, SSC and Enplas collaborated to manufacture lenses for SSC's light bars, which are covered by SSC's '209 and '554 patents. SSC presented testimony that, during this joint development period, SSC employees informed Enplas that the end product, including SSC's LEDs and Enplas's lenses, would be covered by SSC's patents. SSC also presented testimony that it had understood that it would have an exclusive relationship with Enplas for sales of the lenses.

         In 2012, however, SSC suspected that Enplas had provided the lenses to SSC's competitors who sold light bar products in the United States. SSC believed that those products infringed the '209 and '554 patents. To confirm its suspicion, SSC purchased several televisions from various retailers in the United States and took them apart for analysis. In particular, SSC purchased a Samsung Display LCD television, which used a lens supplied to Lumens Co., Ltd., and an LG Electronics LED television, which used lenses supplied to LG Innotek. SSC analyzed the televisions and determined that they contained infringing light bars with Enplas's lenses. As a result, SSC sent Enplas a letter alleging that Enplas was inducing and contributing to the infringement of the '209 and '554 patents in the United States.

         In response, Enplas filed the present declaratory judgment action against SSC, seeking a declaration that the '209 and '554 patents were invalid and not infringed. SSC counterclaimed, asserting infringement and seeking damages. SSC alleged that Enplas induced its direct and indirect customers to import, use, sell or offer for sale products infringing SSC's patents.

         Before trial, Enplas moved for summary judgment that claim 20 of the '209 patent is anticipated by U.S. Patent No. 5, 684, 354 to Gleckman ("Gleckman"). The district court denied Enplas's motion but converted SSC's opposition into a cross-motion for summary judgment. The district court granted SSC's cross-motion, concluding that no reasonable juror could find that Gleckman anticipates claim 20 of the '209 patent.

         The case proceeded to a jury trial on anticipation of the asserted claims of the '554 patent, induced infringement of the '209 and '554 patents, willfulness, and damages. The jury found that Enplas induced infringement of the '209 and '554 patents and that none of the asserted claims of the '554 patent were anticipated by U.S. Patent No. 3, 774, 021 to Johnson ("Johnson") or Japanese Patent Application Publication No. S63-127161 ("JP-161"). Based on SSC's damages expert testimony, the jury awarded $4 million in damages for a one-time freedom-to-operate payment for the '554 patent and $70, 000 for the '209 patent. The jury verdict form specifically indicated that the one-time freedom to operate payment was for "all [Enplas] products," including lenses that had not been accused of infringement. J.A. 119, 121. The district court denied Enplas's pre-trial motions to exclude SSC's damages expert evidence on the basis that it improperly considered products not alleged or shown to infringe the '554 and '209 patents. The district court also denied Enplas's post-trial motions for JMOL of anticipation of the '554 patent, no inducement, and excessive damages.

         Enplas appeals the district court's summary judgment and denial of its post-trial motions. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

         Discussion

         I.

         Anticipation

         Enplas appeals the district court's summary judgment that claim 20 of the '209 patent is not anticipated by Gleckman and the district court's denial of JMOL that the '554 patent is anticipated by Johnson and JP-161. We affirm both judgments.

         A.

         First, Enplas asserts that the district court erred by granting summary judgment that claim 20 of the '209 patent is not anticipated by Gleckman. We review the district court's grant of summary judgment under regional circuit law. MAG Aerospace Indus., Inc. v. B/E Aerospace, Inc., 816 F.3d 1374, 1376 (Fed. Cir. 2016). The Ninth Circuit reviews a grant of summary judgment de novo. Id. (citing Greater Yellowstone Coal. v. Lewis, 628 F.3d 1143, 1148 (9th Cir. 2010)). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a).

         Gleckman discloses a method of backlighting a display panel comprising LEDs disposed around the periphery of a cavity having reflective walls and an aperture. The question before us is whether Gleckman discloses the "emitted by plural light sources mounted on said internal bottom wall" limitation of claim 20. Although Gleckman does not disclose mounting light sources on the bottom wall as required by the claim, Enplas nonetheless argues that a genuine issue of material fact exists regarding whether Gleckman teaches light sources mounted on the bottom wall. This is so, according to Enplas, because the inventor of the '209 patent, Dr. Pelka, testified that Gleckman "doesn't exclude the mounting on the perimeter being on the bottom wall as long as it's on the perimeter." J.A. 3413 at 59:12-14. We disagree.

         At most, Dr. Pelka's testimony suggests that Gleckman could have been modified to include light sources on the bottom wall. This is not enough, however, for anticipation. Anticipation requires that a single reference disclose each and every element of the claimed invention. In re Smith Int'l, Inc., 871 F.3d 1375, 1381 (Fed. Cir. 2017) ("A patent claim is anticipated 'only if each and every element is found within a single prior art reference, arranged as claimed.'" (quoting Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1294 (Fed. Cir. 2015))). Prior art that must be modified to meet the disputed claim limitation does not anticipate the claim. See, e.g., In re Chudik, 851 F.3d 1365, 1374 (Fed. Cir. 2017) ("Prior art that 'must be distorted from its obvious design' does not anticipate a new invention." (quoting In re Wells, 53 F.2d 537, 539 (CCPA 1931))). We therefore affirm the district court's summary judgment of no anticipation of claim 20 of the '209 patent.

         B.

         Second, Enplas asserts that the district court erred by denying JMOL that Johnson anticipates the asserted claims of the '554 patent. We review the district court's denial of JMOL de novo under the law of the Ninth Circuit. ActiveVideo Networks, Inc. v. Verizon Commc'ns, Inc., 694 F.3d 1312, 1319 (Fed. Cir. 2012); Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1005 (9th Cir. 2004). A motion for JMOL is properly granted "if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury's verdict." Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236, 1242 (9th Cir. 2014) (quoting Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002)). Whether a claim is anticipated is a question of fact. MPHJ Tech. Invs., LLC v. Ricoh Ams. Corp., 847 F.3d 1363, 1378 (Fed. Cir. 2017). As a factual question, the "jury's verdict must be upheld if it is supported by substantial evidence that is adequate to support the jury's findings, even if contrary findings are also possible." Escriba, 743 F.3d at 1242 (citation omitted).

         Johnson generally discloses an LED module that couples light into a planar light guide, e.g., a telephone faceplate, such that discrete remote regions of the faceplate can be illuminated. The issues at trial included whether Johnson discloses (1) the "illumination coupler" required by claims 1 and 6; (2) an "LED mounted at a predetermined location beneath a central portion of said optical element" required by claims 30 and 33-35; and (3) a "TIR surface" ...


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