Case 3:14-cv-02235-DMS-BLM Document 930 Filed 04/12/22 PageID.41896 Page 1 of 28
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`APPLE INC.,
`Plaintiff-Appellant
`
`v.
`
`
`
`
`
`WI-LAN INC.,
`Defendant-Cross-Appellant
`______________________
`2020-2011, 2020-2094
`______________________
`Appeals from the United States District Court for the
`Southern District of California in Nos. 3:14-cv-02235-DMS-
`BLM, 3:14-cv-1507-DMS-BLM, Judge Dana M. Sabraw.
`______________________
`
`MANDATE
`______________________
`In accordance with the judgment of this Court, entered
`February 4, 2022, and pursuant to Rule 41 of the Federal
`Rules of Appellate Procedure, the formal mandate is
`hereby issued.
`
`
`
`
`
`
`March 14, 2022
`
`Date
`
`
`
`
`
`FOR THE COURT
`
`
`/s/ Peter R. Marksteiner
`Peter R. Marksteiner
`Clerk of Court
`
`Apr 12 2022
`
`s/ AKR
`
`

`

`Case 3:14-cv-02235-DMS-BLM Document 930 Filed 04/12/22 PageID.41897 Page 2 of 28
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`APPLE INC.,
`Plaintiff-Appellant
`
`
`
`v.
`
`
`
`WI-LAN INC.,
`Defendant-Cross-Appellant
`______________________
`2020-2011, 2020-2094
`______________________
`Appeals from the United States District Court for the
`Southern District of California in Nos. 3:14-cv-02235-DMS-
`BLM, 3:14-cv-1507-DMS-BLM, Judge Dana M. Sabraw.
`______________________
`
`JUDGMENT
`______________________
`
`THIS CAUSE having been considered, it is
`
`ORDERED AND ADJUDGED:
`
`AFFIRMED-IN-PART, REVERSED-IN-PART,
`VACATED-IN-PART, AND REMANDED
`
`
`
`
`
`February 4, 2022
`
`Date
`
`
`
`
`
`FOR THE COURT
`
`
`/s/ Peter R. Marksteiner
`Peter R. Marksteiner
`Clerk of Court
`
`

`

`Case 3:14-cv-02235-DMS-BLM Document 930 Filed 04/12/22 PageID.41898 Page 3 of 28
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`APPLE INC.,
`Plaintiff-Appellant
`
`v.
`
`WI-LAN INC.,
`Defendant-Cross-Appellant
`______________________
`
`2020-2011, 2020-2094
`______________________
`
`Appeals from the United States District Court for the
`Southern District of California in Nos. 3:14-cv-02235-DMS-
`BLM, 3:14-cv-1507-DMS-BLM, Judge Dana M. Sabraw.
`______________________
`
`Decided: February 4, 2022
`______________________
`
`MARK S. DAVIES, Orrick, Herrington & Sutcliffe LLP,
`Washington, DC, argued for plaintiff-appellant. Also rep-
`resented by BENJAMIN PAUL CHAGNON, JAMES ANGLIN
`FLYNN, KATHERINE M. KOPP; MAX CARTER-OBERSTONE, San
`Francisco, CA; THOMAS KING-SUN FU, Los Angeles, CA;
`SEAN C. CUNNINGHAM, ERIN GIBSON, STANLEY JOSEPH
`PANIKOWSKI, III, DLA Piper LLP (US), San Diego, CA.
`
`JEFFREY A. LAMKEN, MoloLamken LLP, Washington,
`DC, argued for defendant-cross-appellant. Also repre-
`sented by RAYINER HASHEM, LUCAS M. WALKER; LEONID
`
`

`

`Case 3:14-cv-02235-DMS-BLM Document 930 Filed 04/12/22 PageID.41899 Page 4 of 28
`
`2
`
`APPLE INC. v. WI-LAN INC.
`
`GRINBERG, New York, NY; WARREN LIPSCHITZ, MIKE
`MCKOOL, McKool Smith, PC, Dallas, TX.
` ______________________
`
`Before MOORE, Chief Judge, BRYSON and PROST, Circuit
`Judges.
`
`MOORE, Chief Judge.
`The U.S. District Court for the Southern District of
`California entered a final judgment (1) that Apple in-
`fringed claims 9, 26, and 27 of U.S. Patent No. 8,457,145
`and claim 1 of U.S. Patent No. 8,537,757; (2) that those
`claims had not been proven invalid; and (3) that awarded
`Wi-LAN $85.23 million in damages. Apple appeals, and
`Wi-LAN cross-appeals. For the following reasons, we af-
`firm-in-part, reverse-in-part, vacate-in-part, and remand.
`BACKGROUND
`I
`The ’145 patent is directed to allocating bandwidth in
`a wireless communication system. ’145 patent at Abstract,
`1:28–30. Wireless communication systems facilitate two-
`way communication between user devices (e.g., mobile
`phones) and an associated fixed network infrastructure
`(e.g., wire-line system). Id. at 1:36–47. The wireless net-
`work described in the ’145 patent does so using subscriber
`units associated with the user devices. Id. The subscriber
`units communicate with a base station connected to the
`fixed network infrastructure. Id. Because each base sta-
`tion has limited bandwidth for transmissions to and from
`the subscriber units it supports, those subscriber units
`must share bandwidth. Id. at 9:8–11. To that end, the sub-
`scriber units send bandwidth requests to the base station,
`which then allocates bandwidth. Id. at 3:19–28. This pro-
`cess itself also requires bandwidth. The ’145 patent pur-
`ports to provide a bandwidth allocation method that
`requires less bandwidth. Id. at 5:41–43, 51–56; 6:65–67.
`
`

`

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`APPLE INC. v. WI-LAN INC.
`
`3
`
`In one aspect, each subscriber unit, rather than the base
`station, maintains and allocates bandwidth across data
`queues for the physical channels it serves (e.g., data or
`voice), relieving the base station from performing these
`tasks. Id. at 7:39–53; 8:8–14; 22:25–38. In another aspect,
`each subscriber unit aggregates bandwidth requests across
`different queues and sends them out periodically, rather
`than separately passing each bandwidth request to the
`base station. Id. at 27:4–11. Asserted independent claims
`9 and 26 recite:
`9. A subscriber unit for a wireless communication
`system, wherein the wireless communication sys-
`tem includes a plurality of subscriber units in com-
`munication with an associated base unit,
`comprising:
`a plurality of queues, each queue for group-
`ing data based on the QoS; and
`a media access (MAC) module configured to
`set an initial value for a timer asso-
`ciated with a queue, and
`periodically, on expiration of the
`value of the timer, transmit a band-
`width
`request
`indicating
`an
`amount of bandwidth required for
`transmitting the data from the
`queue.
`26. A subscriber unit for a wireless communication
`system, comprising:
`a plurality of queues for buffering user traf-
`fic according to a traffic parameter, each
`queue having an associated logical state;
`a media access control (MAC) element ca-
`pable of
`
`

`

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`
`4
`
`APPLE INC. v. WI-LAN INC.
`
`transmitting an uplink (UL) band-
`width request based on the logical
`state of the queues during a band-
`width request opportunity, and
`allocating between the queues a
`bandwidth allocation received in
`response to the UL bandwidth re-
`quest, based on the current state of
`the queues.
`The ’757 patent, while unrelated to the ’145 patent, is
`directed to similar subject matter. See ’757 patent at Ab-
`stract, 1:27–29. The patent purports to improve signal
`quality and offer greater error protection in data transmis-
`sion using a modulation scheme. Id. at 4:53–5:46. Claim
`1 recites:
`A subscriber station for a wireless communication
`system comprising:
`a modem section configured to receive
`downlink data from a base station on a
`downlink link and to transmit uplink data
`to the base station on an uplink link shared
`with other subscribers stations;
`a receive signal quality module configured
`to monitor a downlink (DL) quality param-
`eter for the downlink data providing a pa-
`rameter value; and
`a control section configured to:
`determine a preferred downlink
`physical (PHY) mode for the down-
`link data among a plurality of PHY
`modes of different degrees of ro-
`bustness, the preferred downlink
`PHY mode being defined between a
`
`

`

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`APPLE INC. v. WI-LAN INC.
`
`5
`
`first and a second threshold for the
`parameter value;
`instruct the modem section to
`transmit to the base station an in-
`dication of the preferred downlink
`PHY mode;
`identify in a DL sub-frame map re-
`ceived from the base station, a cur-
`rent downlink PHY mode selected
`for the subscriber station based on
`the preferred downlink PHY mode
`and the bandwidth available to the
`subscriber station on the downlink
`link; and
`instruct the modem section to re-
`ceive the downlink data based on
`the current downlink PHY mode,
`wherein the downlink PHY mode specifies
`a modulation format and a forward error
`correction technique used for transmission
`of downlink data.
`
`II
`In May 2014, Apple sued Wi-LAN in the Southern Dis-
`trict of California, seeking a declaratory judgment of non-
`infringement and invalidity for all claims of the ’145 and
`’757 patents. Wi-LAN counterclaimed, alleging that cer-
`tain Apple devices—including the iPhone 6, iPhone 6 Plus,
`iPhone 5, iPhone 5S, and iPhone 5C—infringed at least one
`claim of those patents based on their use of the Long-Term
`Evolution (LTE) wireless communication standard.1 Wi-
`
`1 Apple also sought declaratory judgment, and Wi-
`LAN counterclaimed, on claims of other patents not at is-
`sue in this appeal.
`
`

`

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`
`6
`
`APPLE INC. v. WI-LAN INC.
`
`LAN contended that its patented technology enabled Voice
`over Long-Term Evolution (VoLTE), which provides voice
`call service over a 4G LTE network.
`During claim construction, the parties disputed the
`construction of “subscriber unit” and “subscriber station,”
`which they agreed should be construed the same.2 Apple
`proposed the terms mean a “fixed or portable customer
`premises equipment [CPE] that wirelessly receives [up-
`link] bandwidth from a base station, and allocates the
`bandwidth across connected user devices.” J.A. 5. The dis-
`trict court rejected that construction in favor of Wi-LAN’s
`construction: “module that receives [uplink] bandwidth
`from a base station, and allocates the bandwidth across its
`user connections.” J.A. 5–7.
`Apple moved for partial summary judgment of nonin-
`fringement for all accused phones equipped with Intel
`chips based on a 2011 license agreement between Wi-LAN
`and Intel. The parties agreed that the license shielded In-
`tel and its customer Apple from liability pertaining to sales
`of iPhones containing Intel chipsets sold during the license
`term. They disagreed, however, on whether section 3.2 of
`that agreement extended the license in perpetuity. The
`district court granted Apple’s motion, reasoning that this
`section “specifically states that ‘the licenses granted . . .
`shall survive the expiration of the Term License Period.’”
`J.A. 25 (alterations in original); Wi-LAN’s Opening & Re-
`sponse Br. 70.
`Infringement and damages were tried to a jury. At
`trial, Wi-LAN’s damages expert, David Kennedy, applied a
`hypothetical-negotiation framework to compute a royalty
`of $0.85 per phone, or $145.1 million total. J.A. 10617–70.
`He relied largely on the testimony of Dr. Vijay Madisetti
`
`2 The parties also agreed that the terms should be
`construed consistently across both patents at issue. J.A. 5.
`
`

`

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`APPLE INC. v. WI-LAN INC.
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`7
`
`regarding the incremental benefits of the ’145 patent. To
`measure those benefits, Dr. Madisetti tested systems that
`use VoLTE against the best purported noninfringing alter-
`native, Skype. J.A. 10260–61. In particular, Dr. Madisetti
`compared the voice quality of each system and attributed
`the difference to the ’145 patent. J.A. 10261–72. Mr. Ken-
`nedy’s damages theory relied on his testimony.
`The jury found Apple infringed claims 9, 26, and 27 of
`the ’145 patent and claim 1 of the ’757 patent and awarded
`Wi-LAN $145.1 million in damages. J.A. 629–30. Apple
`moved for judgment as a matter of law, renewing its claim
`construction arguments and arguing that Wi-LAN had
`failed to prove infringement even under the district court’s
`construction of subscriber unit. It also moved for a new
`trial on damages or, alternatively, a remittitur.
`The district court denied Apple’s motion for judgment
`as a matter of law and granted its motion for a new trial on
`damages or, alternatively, a remittitur. It determined that
`Dr. Madisetti’s testimony conflated the patented technol-
`ogy with VoLTE generally. J.A. 35–37. Because the inven-
`tors admittedly did not invent VoLTE technology, the
`district court concluded Dr. Madisetti’s testimony lacked a
`factual basis and should not have been presented to the
`jury. J.A. 37. Because Dr. Madisetti’s testimony was es-
`sential to Wi-LAN’s damages theory, the district court of-
`fered Wi-LAN a choice between remittitur to $10 million or
`a new trial on damages. J.A. 38. Wi-LAN chose a new trial.
`In the second damages retrial, Mr. Kennedy pivoted to
`a royalty rate of $0.45 per phone based on three compara-
`ble licenses that covered the asserted patents. J.A. 15216.
`The jury awarded Wi-LAN a royalty rate of $0.45 per phone
`resulting in total damages of $85.23 million. J.A. 756. Ap-
`ple moved for judgment as a matter of law of no damages,
`arguing Mr. Kennedy failed to properly apportion the com-
`parable licenses to reflect the value of the asserted patents.
`J.A. 764–72. The district court denied Apple’s motion. J.A.
`
`

`

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`8
`
`APPLE INC. v. WI-LAN INC.
`
`62. Apple appeals, and Wi-LAN cross-appeals. We have
`jurisdiction under 28 U.S.C. § 1295(a)(1).
`DISCUSSION
`Apple argues the district court erred in construing the
`“subscriber unit” and “subscriber station” terms3 to include
`components of a user device. Apple also argues that there
`is no record evidence that the accused iPhones as sold con-
`tain a subscriber unit because they do not have the re-
`quired user connections. Lastly, Apple argues that
`Mr. Kennedy failed to apportion for the value of the pa-
`tented technology and, thus, the jury should not have been
`allowed to consider his testimony.
`In its cross-appeal, Wi-LAN argues that the district
`court erred in interpreting the 2011 license agreement be-
`tween Wi-LAN and Intel to grant a perpetual license for
`Intel to sell certain chipsets to Apple. It also argues that
`the district court erred in ordering a new trial on damages
`and asks that we reinstate the original damages verdict.
`I
`We start with Apple’s challenge to the district court’s
`construction of subscriber unit as a “module that receives
`[uplink] bandwidth from a base station, and allocates the
`bandwidth across its user connections.” We review a dis-
`trict court’s claim construction and its interpretations of in-
`trinsic evidence de novo.
` Forest Lab’ys, LLC v.
`Sigmapharm Lab’ys, LLC, 918 F.3d 928, 932–33 (Fed. Cir.
`2019). We review any subsidiary fact findings based on ex-
`trinsic evidence for clear error. Id.
`A claim term is generally given its plain and ordinary
`meaning as understood by a skilled artisan. See Phillips v.
`AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc).
`
`3 For simplicity, we use the term subscriber unit to
`refer to both subscriber unit and subscriber station.
`
`

`

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`APPLE INC. v. WI-LAN INC.
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`9
`
`“We depart from the plain and ordinary meaning of claim
`terms based on the specification in only two instances: lex-
`icography and disavowal.” Hill-Rom Servs., Inc. v. Stryker
`Corp., 755 F.3d 1367, 1371 (Fed. Cir. 2014) (citing Thorner
`v. Sony Computer Ent. Am. LLC, 669 F.3d 1362, 1365 (Fed.
`Cir. 2012)). “To act as its own lexicographer, a patentee
`must clearly set forth a definition of the disputed claim
`term other than its plain and ordinary meaning and must
`clearly express an intent to redefine the term.” Id. (inter-
`nal quotation marks omitted). Embodiments in the speci-
`fication—even if there is only one embodiment—cannot
`limit the scope of the claims absent the patentee’s “words
`or expressions of manifest exclusion or restriction.” Id. at
`1372 (quoting Liebel-Flarsheim Co. v. Medrad, Inc., 358
`F.3d 898, 906 (Fed. Cir. 2004)).
`Rather than rely on the plain-and-ordinary meaning of
`“subscriber unit,” Apple claims the written description re-
`defines that term. It argues the patentee defined “sub-
`scriber unit” as CPE. Apple points to four aspects of the
`intrinsic record that allegedly show this redefinition: first,
`the patents’ interchangeable use of CPE and subscriber
`unit; second, the patents’ use of CPE as the sole embodi-
`ment of the “subscriber unit”; third, the patentee’s prelim-
`inary amendment that replaced claims reciting CPE with
`claims reciting “subscriber unit”; and fourth, the patentee’s
`interchangeable use of subscriber unit with other similar
`terms in related patents. We are not persuaded that the
`record in this case shows that the patentee clearly set forth
`this definition of subscriber unit.4
`First, the written description does not equate CPE and
`subscriber unit through interchangeable use. It does not
`
`4 Accordingly, we need not address the second por-
`tion of Apple’s claim construction argument: that CPE ex-
`cludes subcomponents of a user’s device (e.g., part of a
`user’s phone).
`
`

`

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`10
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`APPLE INC. v. WI-LAN INC.
`
`use the terms interchangeably at all. The terms are never
`used to describe the same facet of a device or embodiment,
`nor are they used to refer to the same element of a figure.
`Cf. Edwards Lifesciences LLC v. Cook Inc., 582 F.3d 1322,
`1329 (Fed. Cir. 2009) (consistent use of intraluminal graft
`and graft to refer to same object and figure element was
`“akin to a definition equating the two”). Between the two
`patents, they appear in the same sentence only once:
`The broadband wireless communication system fa-
`cilitates two-way communication between a plural-
`ity of base stations and a plurality of fixed
`subscriber stations or Customer Premises Equip-
`ment (CPE).
`’145 patent at 2:1–4 (emphasis added). And that sentence
`does little to explain the relationship between a subscriber
`station and a CPE because it relates to fixed subscriber sta-
`tions. Even then, it is unclear whether the sentence de-
`scribes fixed subscriber stations and CPEs as alternatives
`or equates the two.
`Nor does the patents’ use of the term CPE in specific
`communication system embodiments and the term sub-
`scriber unit in general communication system descriptions
`show interchangeability. The patents use subscriber unit
`to refer to a generic component of wireless communication
`systems in the related art. For example, they introduce a
`wireless communication system as simply “facilitat[ing]
`two-way communication between a plurality of subscriber
`units (fixed and portable) and a fixed network infrastruc-
`ture.” See ’145 patent at 1:36–40. Moreover, the patents
`explain that prior art systems typically use well-known du-
`plexing schemes such as “time division duplexing (TDD) or
`frequency division duplexing (FDD)” to facilitate the ex-
`change of information “between the base station and the
`subscriber units.” See id. at 1:58–64 (emphasis added).
`Categories of general network transmissions are likewise
`described in terms of subscriber units and base stations.
`
`

`

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`APPLE INC. v. WI-LAN INC.
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`11
`
`Id. at 1:55–58 (describing downlink and uplink transmis-
`sions).
`Then in each communication system embodiment, the
`patents describe CPEs with specific qualities and features
`communicating with their respective base station. See,
`e.g., ’145 patent at 2:11–15 (describing communication be-
`tween a base station and CPEs “positioned at fixed cus-
`tomer sites 112 throughout the coverage area”); 6:11–16
`(describing CPEs that transmit incremental and aggregate
`bandwidth requests to associated and respective base sta-
`tions). These CPEs match the description of subscriber
`units in the background, but, unlike subscriber units, they
`are never used to describe components common to commu-
`nication systems broadly.
`Thus, the written description merely reveals that a
`CPE is a type of subscriber unit, which Wi-LAN freely ad-
`mits. Wi-LAN’s Opening & Response Br. 34. The fact that
`a CPE is an example of a subscriber unit, however, does not
`show those terms are interchangeable. And there is no ev-
`idence that the patents accord CPE the same scope as sub-
`scriber unit. As such, Apple fails to show the terms are
`interchangeable.
`That brings us to Apple’s second argument: the pa-
`tents’ use of CPE as the sole embodiment of the subscriber
`unit is a redefinition. That argument fails because there
`are no “words or expressions of manifest exclusion or re-
`striction” in the written description. See Hill-Rom, 755
`F.3d at 1372. The patents do not describe the invention as
`limited to a CPE. There is no disclosure that, for example,
`the present invention is, includes, or refers to a CPE. See,
`e.g., Edwards Lifesciences, 582 F.3d 1322 at 1330 (“the
`specification frequently describes an ‘intraluminal graft’ as
`‘the present invention’ or ‘this invention,’ indicating an in-
`tent to limit the invention to intraluminal devices”). Nor
`are there any statements expressing the advantages, im-
`portance, or essentiality of using a CPE as opposed to a
`
`

`

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`12
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`APPLE INC. v. WI-LAN INC.
`
`subscriber unit. See, e.g., Techtronic Indus. Co. v. Int’l
`Trade Comm’n, 944 F.3d 901, 907–10 (Fed. Cir. 2019) (the
`patent’s focus on placement of a detector in the wall console
`as the objective of the invention and improvement over
`prior art garage door operators effected a disavowal of al-
`ternative locations). Nothing in the written description
`makes clear that the invention is limited to a CPE. In fact,
`there is some language suggesting the embodiments are
`not limiting. ’145 patent at 8:65–67, 31:60–63; ’757 patent
`at 2:66–3:2, 17:35–43. Absent such language, we do not
`import limitations from the written description into the
`claims. Hill-Rom, 755 F.3d at 1372–73.
`Apple’s two remaining arguments for equating sub-
`scriber unit and CPE are likewise unpersuasive. Merely
`replacing one claim term with another during prosecution
`does not alone mean the terms are equivalent or inter-
`changeable. Similarly, Wi-LAN does not dispute it used
`different terms for subscriber unit (such as wireless sub-
`scriber unit, subscriber radio unit, and subscriber radio
`station) across its many patents. If anything, that only
`shows subscriber unit is interchangeable with subscriber
`radio station and other, similar terms. It is not evidence
`that CPE and subscriber unit (or any of its variations) are
`interchangeable.
`In sum, our review of the intrinsic record does not sup-
`port Apple’s claim that subscriber unit should be construed
`as CPE. Apple’s claim construction argument, which
`would confine the term to standalone devices, rises and
`falls with that redefinition. We reject Apple’s argument
`and uphold the district court’s construction of subscriber
`unit.
`
`II
`Apple next argues that the district court erred in deny-
`ing its motion for judgment as a matter of law that the ac-
`cused products do not infringe. Apple contends that
`substantial evidence does not support
`the
`jury’s
`
`

`

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`APPLE INC. v. WI-LAN INC.
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`13
`
`infringement finding because the iPhones as sold do not
`have a subscriber unit under the district court’s construc-
`tion of that term. Apple’s Opening Br. 42–48. We do not
`agree.
`We review a denial of judgment as a matter of law un-
`der the law of the regional circuit. Godo Kaisha IP Bridge
`1 v. TCL Commc’n Tech. Holdings Ltd., 967 F.3d 1380,
`1382 (Fed. Cir. 2020). The Ninth Circuit reviews such a
`denial de novo. Est. of Diaz v. City of Anaheim, 840 F.3d
`592, 604 (9th Cir. 2016). We review a jury’s infringement
`finding for substantial evidence. Godo Kaisha, 967 F.3d at
`1383. “A factual finding is supported by substantial evi-
`dence if a reasonable jury could have found in favor of the
`prevailing party in light of the evidence presented at trial.”
`Id.
`
`Substantial evidence supports the jury’s finding that
`the accused iPhones as sold have a subscriber unit. The
`district court construed that limitation to require a “mod-
`ule that . . . allocates the bandwidth across its user connec-
`tions.” J.A. 5–7. At trial, Wi-LAN contended that the
`accused iPhones meet this limitation because each has a
`module that allocates bandwidth across two connections:
`data and VoLTE. Utilizing the graphic below, Dr. Madi-
`setti testified that the baseband processor in the accused
`iPhones has two LTE connections with the application pro-
`cessor: a VoLTE connection (green) and a data connection
`(blue).
`
`

`

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`J.A. 7561, 10251–52. He further testified that the base-
`band processor’s media access controller (MAC) allocates
`bandwidth across these two connections. J.A. 10253–54.
`More specifically, he testified that the VoLTE connection
`carries voice packets from the application processor’s
`phone application into the baseband processor using an I2S
`bus, where they are stored in a priority queue, and that
`packets from other applications are sent over the data con-
`nection using a PCIE bus and stored in a different queue.
`J.A. 10287–88; Wi-LAN’s Opening & Response Br. 48–49.
`The MAC then reads packets from the queues, in order of
`priority, and transmits them to the base station. J.A.
`10253–54. Finally, Dr. Madisetti testified that the physical
`connections between the baseband processor and applica-
`tion processor (i.e., the I2S bus and PCIE bus) exist “inside
`the iPhone as sold.” J.A. 10253. This testimony provides
`substantial evidence for the jury’s finding that the accused
`iPhones contain a subscriber unit, i.e., a module that allo-
`cates bandwidth across its user connections.
`Apple argues that the data and voice connections do not
`exist in iPhones as sold because those connections are not
`established until the user turns on the phone and connects
`to a network with VoLTE service. Apple’s Opening Br. 44–
`48. And because the phrase “user connections” in the dis-
`trict court’s construction of subscriber unit is structural,
`the iPhones’ capabilities of forming these connections are
`irrelevant. However, substantial evidence supports the
`jury’s contrary finding. As Dr. Madisetti testified, the
`physical I2S bus provides the VoLTE connection between
`the baseband chip and user application, and, likewise, the
`physical PCIE bus provides the data connection between
`the same. J.A. 10253, 10257. And both components exist
`in the iPhone as sold. J.A. 10253.
`Apple attempts to undermine Dr. Madisetti’s testi-
`mony by arguing those physical connections (i.e., I2S bus
`and PCIE bus) do not satisfy the user connections require-
`ment. Citing its expert’s testimony, Apple claims the I2S
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`APPLE INC. v. WI-LAN INC.
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`and PCIE buses stop at the edge of the applications proces-
`sor, meaning the connection would be incomplete. Apple’s
`Response & Reply Br. 21–22 (citing J.A. 11025). The jury,
`however, was free to weigh the testimony of Apple’s expert
`against that of Dr. Madisetti. And we cannot say, in view
`of Dr. Madisetti’s testimony, that the jury’s determination
`was unreasonable.
`Apple further argues the phones must be connected to
`a network to receive parameters to build “the ‘software
`structures’ necessary to establish a connection.” Apple’s
`Opening Br. 46. To the extent that is a separate nonin-
`fringement argument, substantial evidence supports a con-
`trary finding. Dr. Madisetti testified that no modification
`of hardware or software is required to perform the claimed
`allocation. J.A. 10258. And Apple admits that the relevant
`users are the iPhone applications, which run on the appli-
`cations processor. Apple’s Response & Reply Br. 21.
`Accordingly, substantial evidence supports the jury’s
`finding that the accused iPhones contain a subscriber unit
`as sold. Therefore, the district court did not err in denying
`Apple’s motion for judgment as a matter of law on infringe-
`ment.
`
`III
`Apple next challenges Mr. Kennedy’s damages method-
`ology in the second trial. We agree that his methodology
`was flawed, and thus, the district court abused its discre-
`tion by denying Apple’s motion for a new trial.
`In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509
`U.S. 579, 589–95 (1993), the Supreme Court set forth the
`standards governing admissibility of expert testimony un-
`der Federal Rules of Evidence 702 and 703. The Court ex-
`plained that the trial judge plays a “gatekeeping role,” id.
`at 597, which “entails a preliminary assessment of whether
`the reasoning or methodology underlying the testimony is
`scientifically valid and of whether that reasoning or
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`methodology properly can be applied to the facts in issue,”
`id. at 592–93. The Court emphasized that the focus “must
`be solely on principles and methodology, not on the conclu-
`sions that they generate.” Id. at 595. “[A] reasonable or
`scientifically valid methodology is nonetheless unreliable
`where the data used is not sufficiently tied to the facts of
`the case.” Summit 6, LLC v. Samsung Elecs. Co., Ltd., 802
`F.3d 1283, 1296 (Fed. Cir. 2015). Likewise, “ideal input
`data cannot save a methodology that is plagued by logical
`deficiencies or is otherwise unreasonable.” Id. But where
`the methodology is reasonable and its data or evidence are
`sufficiently tied to the facts of the case, the gatekeeping
`role of the court is satisfied. Id.
`At trial, Wi-LAN used the hypothetical negotiation ap-
`proach for calculating reasonable royalty damages under
`35 U.S.C. § 284. This approach attempts to calculate the
`royalty rate the parties would have agreed upon had they
`negotiated an agreement prior to the start of the infringe-
`ment. In determining a reasonable royalty, “parties fre-
`quently rely on comparable license agreements.” Bio-Rad
`Labs, Inc. v. 10X Genomics Inc., 967 F.3d 1353, 1372 (Fed.
`Cir. 2020). When relying on comparable licenses to prove
`a reasonable royalty, we require a party to “account for dif-
`ferences in the technologies and economic circumstances of
`the contracting parties.” VirnetX, Inc. v. Cisco Sys., Inc.,
`767 F.3d 1308, 1330 (Fed. Cir. 2014) (citation omitted). We
`review a district court’s decision concerning the methodol-
`ogy for calculating damages for an abuse of discretion. Lu-
`cent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed.
`Cir. 2009). We review a denial of judgment as a matter of
`law and the denial of a motion for a new trial under the law
`of the regional circuit. Id. at 1309. In the Ninth Circuit,
`denial of a motion for a new trial is reviewed for abuse of
`discretion. Smith v. City & Cnty. of Honolulu, 887 F.3d
`944, 949 (9th Cir. 2018).
`To estimate a reasonable royalty in this case, Mr. Ken-
`nedy
`first culled more than 150 Wi-LAN
`license
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`APPLE INC. v. WI-LAN INC.
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`agreements down to three comparable agreements5: the
`Vertu, Doro, and Unnecto license agreements. He chose
`those three licenses because they (1) involved phones as
`the licensed products; (2) became effective in 2013 or later;
`(3) licensed patents covering LTE or related technology;
`and (4) were executed after the asserted patents issued.
`J.A. 15220–23. In addition to licensing patents covering
`LTE, each agreement also licensed other patents in Wi-
`LAN’s portfolio.
`Mr. Kennedy then set out to adjust for the differences
`between those licenses and the license that would have re-
`sulted from the hypothetical negotiation. He acknowl-
`edged that—unlike the Vertu, Doro, and Unnecto portfolio
`licenses—the hypothetical negotiation would have resulted
`in a license to only the ’145 and ’757 patents. J.A. 15231–
`32.
`
`To account for this difference, Mr. Kennedy first sought
`to establish that, in practice, only a handful of valuable pa-
`tents drive the royalty rate for a license, and the rest of the
`portfolio is included for a marginal upcharge. J.A.