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The Federal Circuit affirmed the jury’s verdicts of infringement, no invalidity for anticipation and the rejection of the laches defense, awarding damages for chips imported into the U.S., and awarding the reasonable royalty amount of fifty cents per computer chip sold, but reversed the grant of enhanced damages for willful infringement and reversed the portion of the damage award that covered chips that were made and delivered abroad, but never imported into the United States.  As to those chips that were made and delivered abroad, but never imported into the United States, the court remanded to the district court to determine whether those chips were “sold” in the U.S.  As a result, the court reduced the damages award from over $1.54 billion to over $278 million, plus additional damages for U.S. sales that can be proven on remand. 

On the issue of whether Carnegie-Mellon could recover damages for those chips that were made and delivered abroad (and never imported into the U.S.), the court held that damages could be awarded for infringement of the U.S. Patent only if Carnegie-Mellon can show a “sale” in the U.S.  The court first held that direct infringement under Section 271(a) requires either making, using, or selling in the U.S., and, therefore, infringement can occur where only one of these acts occurs in the U.S. even if any of the other two acts occur outside of the U.S.  The court ordered a new trial as to the chips that were delivered and used outside of the U.S., and were never imported into the U.S., to determine whether those chips were sold in the U.S.  The court discussed how a sale takes place in the U.S. and stated that a sale can have more than one location.  While the court refused to give a legal definition to the location of a sale, it did refer to the “place of inking the legal commitment to buy and sell and a place of delivery” and to the place where other “substantial activities of the sales transaction” occurred.  Here, the court concluded that the evidence permitted the jury to find that the sales occurred in the U.S., but remanded to the district court to have that determination made.  With the exception of actually making the chips, all the activities relating to designing, simulating, testing, evaluating, qualifying the chips by Marvell and the customer occurred in the U.S. 

The court rejected laches as a defense, even though Marvell had satisfied the threshold requirements to invoke laches, because, under the entirety of the circumstances, Marvell’s “blatant and prolonged copying of CMU’s inventions met the standard of particularly egregious behavior.”  Under Aukerman, “conscious copying may be such a factor weighing against the defendant.” 

The court reversed the award of enhanced damages for willful infringement, because the invalidity defense Marvell presented in the litigation was objectively reasonable even though Marvell did not have that defense in mind before the litigation.

Carnegie-Mellon University  v. Marvell Technology Group, Ltd., Case No. 2014-1492 (August 4, 2015); Opinion by: Taranto, joined by Wallach and Chen; Appealed From: District Court for the Western District of Pennsylvania, Fischer, J.  Read the full opinion here.

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