No Abuse of Discretion in Awarding Prejudgment Interest Based in Part on Patents Not Yet Issued at the Time of Hypothetical Negotiation

Author:Yoonhee KimEditor:Esther H. Lim

In Comcast IP Holdings I LLC v. Sprint Communications Co., L.P., No. 2015-1992 (Fed. Cir. Mar. 7, 2017), the Federal Circuit affirmed a jury verdict that Sprint infringed patents owned by Comcast and a $7.5 million damages award with prejudgment interest.

One patent-in-suit claims the use of domain name system signaling to initiate and route a call through a “switched telecommunication system” to a “call destination.” Sprint’s accused call flows operated on an Internet-based network, and the specification explains that a switched telecommunication system is “logically distinct” from datagram-based systems such as the Internet. The Court, however, rejected that an infringing call must travel “exclusively” over a switched telecommunication system, reasoning that the patent only required a call to be “initiated” or “set up” on that system. The Court also rejected Sprint’s argument over “call destination,” because Sprint did not propose any interpretation of that term, letting the jury apply its plain and ordinary meaning.

The Court also concluded that the prosecution histories of the two other patents did not demonstrate “clear and unmistakable” disavowal of claim scope as to the term “parsing.” In any event, the Court ruled any disclaimer argument waived, as Sprint did not explain in its opening brief how its narrower construction of “parsing” would affect the infringement judgment.

Finally, the Court upheld the district court’s assessment of prejudgment interest based on the entire royalty award predicated on a hypothetical negotiation in 2006. While only one patent had issued by 2006, both parties’ experts agreed that any damages should be a lump sum royalty running from the earliest hypothetical negotiation and would have included the issuance of any later patent, effectively treating the three patents as a “unitary licensing property.”

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