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LaserDynamics, Inc. v. Quanta Computer, Inc.

United States Court of Appeals for the Federal Circuit

August 30, 2012, Decided

2011-1440, 2011-1470

Opinion

 [***1576]  [*56]   Reyna, Circuit Judge.

These appeals come before us after two trials in the district court—a first trial resolving the claims of patent infringement and damages, and a second trial ordered by the district court to retry the damages issues. The parties raise various issues relating to the proper legal frame-work for evaluating reasonable royalty damages in the patent infringement context. Also before us are questions regarding implied license, patent exhaustion, infringement, jury instructions, and the admissibility  [**2] of a settlement agreement. For reasons explained in detail below, we affirm-in-part, reverse-in-part, and remand.

I. Background

A. The Patented Technology and the Optical Disc Drive Industry

LaserDynamics, Inc. ("LaserDynamics") is the owner of U.S. Patent No. 5,587,981 ("the '981 Patent"), which was issued in 1996. The patent is directed to a method of optical disc discrimination that essentially enables an optical disc drive ("ODD") to automatically identify the type of optical disc—e.g., a compact disc ("CD") versus a digital video disc ("DVD")—that is inserted into the ODD. Claim 3, which was asserted at trial, is representative:

3. An optical disk reading method comprising the steps of:

processing an optical signal reflected from encoded pits on an optical disk until total number of data layers and pit configuration standard of the optical disk is identified;

collating the processed optical signal with an optical disk standard data which is stored in a memory; and

 [*57]  settling modulation of servomechanism means dependent upon the optical disk standard data which corresponds with the processed optical signal;

(c) [sic] the servomechanism means including:

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694 F.3d 51 *; 2012 U.S. App. LEXIS 18441 **; 104 U.S.P.Q.2D (BNA) 1573 ***; 89 Fed. R. Evid. Serv. (Callaghan) 348; 2012 WL 3758093

LASERDYNAMICS, INC., Plaintiff-Appellant, v. QUANTA COMPUTER, INC., Defendant-Cross Appellant, and QUANTA COMPUTER USA, INC., QUANTA STORAGE, INC., AND QUANTA STORAGE AMERICA, INC., Defendants.

Prior History:  [**1] Appeals from the United States District Court for the Eastern District of Texas in case no. 06-CV-0348, Judge T. John Ward.

LaserDynamics, Inc. v. Quanta Storage America, Inc., 2009 U.S. Dist. LEXIS 115848 (E.D. Tex., June 29, 2009)LaserDynamics, Inc. v. Quanta Computer, Inc., 2010 U.S. Dist. LEXIS 56634 (E.D. Tex., June 9, 2010)

Disposition: AFFIRMED-IN-PART, REVERSED-IN-PART, and REMANDED.

CORE TERMS

licenses, patented, royalty, district court, infringement, damages, laptop computer, optical, hypothetical, negotiation, technology, drives, market value, royalty rate, new trial, manufacture, first trial, disk, lump sum, settlement agreement, inducement, customers, second trial, patentee, implied license, calculated, assembled, license agreement, signal, buy

Patent Law, Damages, Patentholder Losses, Reasonable Royalties, Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Relief From Judgments, Additur & Remittitur, Remittiturs, Judgments, Motions for New Trials, Evidence, Admissibility, Procedural Matters, Rulings on Evidence, De Novo Review, Summary Judgment Review, Standards of Review, Trials, Judgment as Matter of Law, General Overview, Remedies, Measure of Damages, Appellate Briefs, Reviewability of Lower Court Decisions, Preservation for Review, Business & Corporate Compliance, Ownership, Conveyances, Licenses, Jurisdiction & Review, Summary Judgment, Opposing Materials, Jury Trials, Jury Instructions, Plain Error, Reversible Errors, Infringement Actions, Defenses, Statute of Limitations, Infringing Acts, Indirect Infringement, Torts, Multiple Defendants, Relevance, Exclusion of Relevant Evidence, Confusion, Prejudice & Waste of Time, Statements as Evidence, Compromise & Settlement Negotiations, Substantial Evidence, Sufficiency of Evidence, Testimony, Expert Witnesses