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19 April 2017Patents

Federal Circuit remands part of Samsung’s $15.7m patent ruling

The US Court of Appeals for the Federal Circuit remanded part of a patent suit earlier this week, meaning that Samsung may not have to pay the full $15.7 million in damages to Rembrandt Wireless.

Handed down on Monday, April 17, the Federal Circuit’s ruling disagreed with the district court’s denial of Samsung’s motion based on the marking statute, so it remanded the issue.

Under the marking statute—35 USC, section 287—a patent owner who makes/sells a product covered by a patent must mark that product with all applicable patent numbers.

However, the Federal Circuit affirmed the other decisions made by the district court—namely, its claim construction and denial of Samsung’s motions for judgment as a matter of law on obviousness and damages.

Licensing company Rembrandt sued Samsung in March 2013 at the US District Court for the Eastern District of Texas, alleging infringement of two patents that share a specification: US number 8,023,580 and a continuation patent, US number 8,457,228.

The patents cover a method of communicating between two mobile phones at a short distance—a process commonly used by Bluetooth.

After a five-day trial, the jury found that Samsung had infringed Rembrandt’s patents and that the patents were valid over the prior art Samsung presented.

Rembrandt was awarded $15.7 million in damages.

Samsung then appealed against the decision to the Federal Circuit, arguing, among other things, that the district court “erred in refusing to bar Rembrandt’s recovery of pre-notice damages based on Rembrandt’s failure to mark products covered by a claim Rembrandt later disclaimed”.

Before trial, Samsung moved to limit Rembrandt’s potential damages award based on its failure to mark its products.

Rembrandt had licensed the ‘580 patent to Zhone Technologies, and Samsung claimed that Zhone had sold unmarked products embodying claim 40 of the ‘580 patent.

The licence agreement between Rembrandt and Zhone did not require Zhone to mark its products with the patent number.

Samsung tried to limit Rembrandt’s damages to those incurred after Samsung received notice of Rembrandt’s patents.

According to Samsung, this was when the licensing company filed its complaint.

Eight days later, Rembrandt withdrew claim 40 from its infringement allegations and disclaimed it at the US Patent and Trademark Office.

Samsung’s motion to bar Rembrandt’s recovery of pre-notice damages was denied by the district court, based on Rembrandt’s disclaimer of claim 40.

“In denying Samsung’s motion, the district court relied on the proposition that a disclaimed patent claim is treated as if it ‘had never existed in the patent’,” said the Federal Circuit, citing Guinn v Kopf.

The court added that while it has held that a disclaimer “relinquishes the rights of the patent owner, we have never held that the patent owner’s disclaimer relinquishes the rights of the public”.

Because the marking statute serves to protect the public, the court held, a disclaimer cannot serve to “retroactively dissolve the section 287(a) marking requirement for a patentee to collect pre-notice damages”.

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