Case: 17-1848 Document: 55-2 Page: 1 Filed: 05/08/2018
`
`NOTE: This disposition is nonprecedential.
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`CHRIMAR HOLDING COMPANY, LLC, CHRIMAR
`SYSTEMS, INC., DBA CMS TECHNOLOGIES, INC.,
`Plaintiffs-Cross-Appellants
`
`v.
`
`ALE USA INC., FKA ALCATEL-LUCENT
`ENTERPRISE USA, INC.,
`Defendant-Appellant
`______________________
`
`2017-1848, 2017-1911
`______________________
`
`Appeals from the United States District Court for the
`Eastern District of Texas in No. 6:15-cv-00163-JDL,
`Magistrate Judge John D. Love.
`______________________
`
`Decided: May 8, 2018
`______________________
`
`JUSTIN S. COHEN, Thompson & Knight LLP, Dallas,
`
`TX, argued for plaintiffs-cross-appellants. Also repre-
`sented by ADRIENNE E. DOMINGUEZ, J. MICHAEL HEINLEN,
`RICHARD L. WYNNE, JR.; RICHARD W. HOFFMANN, Reising
`Ethington PC, Troy, MI.
`
`CHRISTOPHER N. CRAVEY, Jackson Walker LLP, Hou-
`
`ston, TX, argued for defendant-appellant. Also represent-
`
`HPE 1012-0001
`
`HPE Co. v. ChriMar Sys., Inc.
`IPR Pet. - U.S. Patent No. 8,155,012
`
`

`

`Case: 17-1848 Document: 55-2 Page: 2 Filed: 05/08/2018
`
`ed by BRIAN K. BUSS, LEISA T. PESCHEL, DAVID K.
`WOOTEN.
`
`______________________
`
`Before PROST, Chief Judge, WALLACH and TARANTO,
`Circuit Judges.
`TARANTO, Circuit Judge.
`Chrimar Systems, Inc., filed a patent infringement
`suit against ALE USA Inc. (formerly known as Alcatel-
`Lucent Enterprise USA Inc.). In response, ALE asserted
`numerous defenses and counterclaims, including a claim
`of fraud under Texas law. As relevant here, a jury found
`infringement by ALE and awarded damages to Chrimar,
`and it rejected ALE’s fraud claim. The court entered
`judgment in favor of Chrimar on those issues. The court
`also denied Chrimar’s post-trial motion for attorney fees
`under 35 U.S.C. § 285. Both parties appeal. We reject
`one of the claim constructions adopted by the district
`court, but we affirm the damages award, the judgment on
`ALE’s fraud claim, and the denial of fees.
`I
`A
`Chrimar owns four related patents—U.S. Patent Nos.
`8,155,012; 8,942,107; 8,902,760; and 9,019,838—whose
`specifications are materially the same for present purpos-
`es. We treat the ’012 patent’s specification as representa-
`tive. The specification describes the use of devices that
`connect to a wired network, such as Ethernet, and that
`manage or track remote electronic equipment, such as a
`personal computer, on that network. ’012 patent, col. 1,
`lines 23–26, 37–39. In the arrangement described, such
`equipment, called an “asset,” has a tracking device, called
`a “remote module,” attached internally or externally to it.
`Id., col. 1, line 66 through col. 2, line 2. The asset can be
`managed, tracked, or identified by using the remote
`
`HPE 1012-0002
`
`

`

`Case: 17-1848 Document: 55-2 Page: 3 Filed: 05/08/2018
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`module to communicate a unique identification number,
`port identification, or wall jack location to the network
`monitoring equipment, or “central module.” Id., col. 3,
`lines 22–27; see id., col. 8, line 58 through col. 9, line 23;
`see also id., col. 6, lines 48–67 & Fig. 4. Asset identifica-
`tion may be done without using existing network band-
`width, because the remote module can convey information
`about the asset to the central module through the same
`wiring or cables that convey the high-frequency data on
`the network, without adversely affecting the high-
`frequency data. See id., col. 3, lines 10–12; id., col. 11,
`line 64 through col. 12, line 1 (“The system transmits a
`signal over preexisting network wiring or cables without
`disturbing network communications by coupling a signal
`that does not have substantial frequency components
`within the frequency band of network communications.”).
`And asset identification does not require that the asset be
`powered on. Id., col. 4, lines 65–67; id., col. 12, lines 48–
`50.
`
`According to Chrimar, all four patents are standard-
`essential patents in that they cover features required by
`the Institute of Electrical and Electronics Engineers
`(IEEE) Power over Ethernet (PoE) 802.3af standard
`(ratified in 2003) and 802.3at amendments to the IEEE
`PoE 802.3 standard (ratified in 2009). Those standards
`address detection, classification, power-on, operating
`power, and removal of power. Chrimar’s patents cover
`the first three features (detection, classification, and
`power-on).
`A Power over Ethernet controller chip controls the ac-
`tivities addressed in the standard relevant here. Products
`with such a controller chip interact with other products to
`enable the safe delivery of power from power-sourcing
`equipment (e.g., switches) to powered devices (e.g., wire-
`less access points and voice over internet protocol (VoIP)
`phones). ALE sells VoIP phones, wireless access points,
`
`HPE 1012-0003
`
`

`

`Case: 17-1848 Document: 55-2 Page: 4 Filed: 05/08/2018
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`and switches that implement the IEEE PoE 802.3af/at
`standard.
`
`B
`The IEEE ratified the PoE 802.3af standard in 2003.
`That ratification followed a series of meetings convened
`by the IEEE regarding adoption of the standard. John
`Austermann, Chrimar’s Chief Executive Officer and listed
`inventor on the patents, participated in several such
`meetings in 2000.
`Under the then-applicable bylaws of the IEEE Stand-
`ards Association Board (2000)—which have since been
`changed—if the IEEE knew of an essential patent, the
`IEEE could adopt a standard that includes the known use
`of that patent or patent application “if there is technical
`justification in the opinion of the standards-developing
`committee and provided the IEEE receives assurance
`from the patent holder that it will license under reasona-
`ble terms and conditions for the purpose of implementing
`the standard.” J.A. 10548. The bylaws also stated that
`the letter of assurance “shall be provided without coer-
`cion,” J.A. 10548; and the IEEE Standards Association
`operations manual required that the working group “shall
`request that known patent holders submit statements”
`but that the working group refrain from coercing the
`patent holders to do so, J.A. 6711. According to Chrimar’s
`expert Clyde Camp, who served as Chair of the IEEE
`Patent Committee, the IEEE’s patent policy at the time
`was one of “request and encourage,” J.A. 6706, consisting
`of sending letters to owners of patents that may be essen-
`tial and requesting (without requiring) that the patent
`owner return a “Letter of Assurance,” J.A. 6705–09; see
`also J.A. 6713–14 (IEEE 2002 statement submitted to
`FTC: “Disclosure of patents is based on the willingness of
`the individual participants to disclose any known patents
`whose use would be required in the practice of the stand-
`ard.”). Mr. Camp also testified that patent holders did not
`
`HPE 1012-0004
`
`

`

`Case: 17-1848 Document: 55-2 Page: 5 Filed: 05/08/2018
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`always provide a letter of assurance in response to such
`requests. J.A. 6712.1
`In October 2001, while the relevant IEEE component
`was considering the adoption of the PoE 802.3af standard,
`Chrimar expressed its belief to the IEEE that the Chri-
`mar-owned U.S. Patent No. 5,406,260—not asserted in
`this case—was an essential patent for that standard.
`Chrimar submitted a “letter of assurance” agreeing to
`license the ’260 patent upon request “to all applicants at
`royalty rates that [Chrimar] deems reasonable in light of
`the specific circumstances of this particular situation.”
`J.A. 10559. The IEEE never requested, and Chrimar did
`not submit, any similar letter regarding the four patents
`asserted in this case.
`
`C
`In 2015, Chrimar sued ALE in the Eastern District of
`Texas for direct and indirect infringement of the ’012,
`’107, ’838, and ’760 patents under 35 U.S.C. §§ 271(a), (b).
`ALE asserted defenses of, inter alia, noninfringement,
`invalidity (including anticipation, obviousness, lack of
`enablement, lack of sufficient written description, and
`lack of proper inventorship), unenforceability based on
`unclean hands and inequitable conduct, prosecution
`laches, equitable estoppel, waiver, and implied license.
`ALE also asserted counterclaims of, inter alia, breach of
`contract with the IEEE (with ALE as a third-party benefi-
`ciary), fraud, and violation of section 2 of the Sherman
`Act, as well as declaratory judgment counterclaims corre-
`sponding to several of ALE’s affirmative defenses.
`The court issued a claim construction order in late
`March 2016. Chrimar Sys., Inc. v. Alcatel-Lucent USA,
`Inc., No. 6:15-cv-163, 2016 WL 1228767 (E.D. Tex. Mar.
`
`In 2004, the IEEE changed its policy to require
`1
`the submission of letters of assurance.
`
`HPE 1012-0005
`
`

`

`Case: 17-1848 Document: 55-2 Page: 6 Filed: 05/08/2018
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`28, 2016) (Claim Construction Order I). Two weeks before
`trial, on September 20, 2016, ALE stipulated to infringe-
`ment of claims 1, 5, 72, and 103 of the ’107 patent and
`claims 1, 7, and 26 of the ’838 patent under the governing
`claim construction order; and ALE requested further
`construction of the claim terms “adapted” and “physically
`connect” in the asserted claims of the ’012 and ’760 pa-
`tents. A week later, the court issued a second claim
`construction order construing those terms. Chrimar Sys.,
`Inc. v. Alcatel-Lucent USA, Inc., No. 6:15-cv-163, 2016 WL
`5393853 (E.D. Tex. Sept. 27, 2016) (Claim Construction
`Order II). In light of that order, ALE, on September 30,
`2016, stipulated to infringement of claims 31, 35, 43, and
`60 of the ’012 patent and claims 1, 59, 69, 72, and 145 of
`the ’760 patent.2
`In late June 2016, ALE moved to strike the expert re-
`port and exclude the testimony of Chrimar’s damages
`expert, Robert Mills, arguing that, in his damages calcu-
`lation, he did not properly limit compensation to the value
`of the patented features of ALE’s products, i.e., he did not
`adequately separate the value of the patented features
`
`2 The claims of the ’107, ’838, ’012, and ’760 patents
`to which ALE stipulated infringement in this case were
`all determined to be unpatentable by the Patent Trial and
`Appeal Board in four final written decisions. Appeals
`from the final written decisions for the first three patents
`have been filed with this court. Notice of Appeal, Chri-
`mar Sys., Inc. v. Juniper Networks, Inc., No. 18-1499 (Fed.
`Cir. Feb. 1, 2018), ECF No. 1; Notice of Appeal, Chrimar
`Sys., Inc. v. Juniper Networks, Inc., No. 18-1500 (Fed. Cir.
`Feb. 1, 2018), ECF No. 1; Notice of Appeal, Chrimar Sys.,
`Inc. v. Juniper Networks, Inc., No. 18-1503 (Fed. Cir. Feb.
`1, 2018), ECF No. 1. ALE has not yet appealed the final
`written decision regarding the ’760 patent, entered by the
`Board on April 26, 2018.
`
`HPE 1012-0006
`
`

`

`Case: 17-1848 Document: 55-2 Page: 7 Filed: 05/08/2018
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`from the value of nonpatented features and the value
`associated with the IEEE standardization. In August
`2016, the court granted the motion only in part. The
`court concluded that, for admissibility, Mr. Mills had
`adequately separated patented from nonpatented fea-
`tures. But the court concluded that Mr. Mills improperly
`stated in his report that there was no need even to assess
`the value of standardization because, when the IEEE
`standard was adopted, there were no noninfringing alter-
`natives to the features at issue; the court struck that
`statement. Mr. Mills then submitted a supplemental
`report, as authorized, addressing the value of standardi-
`zation. When ALE again moved to strike and exclude, the
`court again granted ALE’s motion only in part, striking
`from the supplemental report one sentence about the lack
`of noninfringing alternatives at the time the standard was
`adopted.
`A jury trial was held in early October 2016. ALE
`dropped many of its defenses and counterclaims shortly
`before or during trial and, as mentioned previously,
`stipulated to infringement under the governing claim
`constructions shortly before trial. The issues submitted to
`the jury were infringement damages, invalidity based on
`improper inventorship, fraud, and breach of contract. On
`October 7, 2016, the jury returned a verdict in favor of
`Chrimar on all issues and awarded Chrimar a royalty of
`$324,558.34. The defenses of equitable estoppel, waiver,
`prosecution laches, and inequitable conduct were left to
`the court, which ruled for Chrimar on all issues.
`After the jury trial, Chrimar filed a motion for attor-
`ney fees under 35 U.S.C. § 285, and ALE moved for judg-
`ment as a matter of law or a new trial. The court denied
`both motions. Chrimar Sys., Inc. v. Alcatel-Lucent Enter.
`USA Inc., No. 6:15-cv-163, 2017 WL 568712 (E.D. Tex.
`Feb. 13, 2017) (JMOL Order); Mem. Op. & Order, Chri-
`mar Sys., Inc. v. Alcatel-Lucent Enter. USA Inc., No. 6:15-
`cv-163 (E.D. Tex. Jan. 23, 2017), ECF No. 412 (Fees
`
`HPE 1012-0007
`
`

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`Case: 17-1848 Document: 55-2 Page: 8 Filed: 05/08/2018
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`Order), J.A. 20001–05. On February 27, 2017, the court
`entered final judgment.
`ALE timely appealed. Chrimar timely cross-appealed.
`We have jurisdiction under 28 U.S.C. § 1295(a)(1).
`II
`ALE appeals three of the district court’s claim con-
`structions, the denial of its motion to exclude Mr. Mills’s
`damages testimony, and the jury instruction on ALE’s
`state-law fraud claim.
`
`A
`We review de novo a district court’s claim construc-
`tion, while reviewing for clear error any underlying factu-
`al findings. Teva Pharms. USA, Inc. v. Sandoz, Inc., 135
`S. Ct. 831, 840–42 (2015). ALE challenges the district
`court’s construction of (1) “adapted,” as used in the rele-
`vant claims of the ’012 patent; (2) a series of infinitive
`phrases in the relevant claims of the ’107, ’760, and ’838
`patents; and (3) “physically connect,” as used in the
`relevant claims of the ’760 patent. We agree on the first
`issue, not the others.
`
`1
`ALE objects to the court’s construction of “adapted” in
`claim 31 of the ’012 patent (on which claims 35, 43, and
`60 directly or indirectly depend). That claim reads:
`31. An adapted piece of Ethernet data termi-
`nal equipment comprising:
`an Ethernet connector comprising a plurality
`of contacts; and
`at least one path coupled across selected con-
`tacts, the selected contacts comprising at least one
`of the plurality of contacts of the Ethernet con-
`nector and at least another one of the plurality of
`contacts of the Ethernet connector,
`
`HPE 1012-0008
`
`

`

`Case: 17-1848 Document: 55-2 Page: 9 Filed: 05/08/2018
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`wherein distinguishing information about the
`piece of Ethernet data terminal equipment is as-
`sociated to impedance within the at least one
`path.
`’012 patent, col. 18, line 62 through col. 19, line 5 (empha-
`sis added).
`In this case, the district court, at the parties’ request,
`adopted the construction of “[a]n adapted piece of Ether-
`net data terminal equipment” from an earlier case in
`which the same court construed the preamble in claim 31
`of the ’012 patent. See Claim Construction Order II, 2016
`WL 5393853, at *1, *3 (referring to ChriMar Sys., Inc. v.
`Alcatel-Lucent, Inc., No. 6:13-cv-880, 2015 WL 233433,
`at *7–9 (E.D. Tex. Jan. 8, 2015) (6:13-cv-880 Claim Con-
`struction Order)). In the claim construction order entered
`in the earlier case, the court construed the preamble as
`“limiting” and stated that its “plain and ordinary mean-
`ing” should govern its scope, a construction with which
`both parties to that case agreed.3 6:13-cv-880 Claim
`Construction Order, 2015 WL 233433, at *9. While ac-
`knowledging that the parties continued to dispute the
`meaning of the term “adapt,” id., the court in that order
`reasoned:
`The “adapting” requirement in the claims of the
`’012 Patent is essential to address the problem
`confronted by the inventors taking existing net-
`works and adapting them to make equipment dis-
`
`3 That case, filed in 2013, involved Chrimar and Al-
`catel-Lucent. (The present case involves Chrimar and
`ALE USA Inc., which was spun off from Alcatel-Lucent in
`2014.) With the parties’ agreement, the 2013 case was
`dismissed without prejudice in June 2015. Chrimar Sys.,
`Inc. v. Alcatel-Lucent, Inc., No. 6:13-cv-880 (E.D. Tex. Jan.
`8, 2015), ECF No. 140.
`
`HPE 1012-0009
`
`

`

`Case: 17-1848 Document: 55-2 Page: 10 Filed: 05/08/2018
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`tinguishable. Thus, the word “adapting” must
`have some meaning.
`Id. The court did not say more about what that “mean-
`ing” is. See id.
`Two weeks before trial in the present case, ALE asked
`for further claim construction of the term “adapted.”
`Claim Construction Order II, 2016 WL 5393853, at *1.
`According to ALE, the term should be construed as a
`“modification of preexisting equipment.” See id. at *3.
`The court disagreed with that narrowing construction. Id.
`at *4. Instead, the court construed the term “consistently
`with its plain and ordinary meaning to mean ‘designed,
`configured, or made.’” Id. at *3–4.
`In light of the parties’ agreement in this case that the
`preamble is limiting, both before the district court and on
`appeal, see ALE Br. 12; Chrimar Br. 18 n.5, we disagree
`with the district court’s claim construction. Generally,
`every apparatus may be described as “designed, config-
`ured, or made,” and Chrimar has not explained how that
`construction in any way limits the scope of claim 31.
`Chrimar also contends that “piece of Ethernet data ter-
`minal equipment,” rather than “adapted,” is the limiting
`term in the preamble, but it does not explain how the
`former is limiting. Chrimar Br. 20–21. The district court
`did not adopt that position. See Claim Construction Order
`II, 2016 WL 5393853, at *3–4; see also 6:13-cv-880 Claim
`Construction Order, 2015 WL 233433, at *9 (assuming
`that “the word ‘adapting’ must have some meaning”).
`The specification is consistent with giving “adapted” a
`meaning tied to existing equipment to avoid stripping the
`concededly limiting claim language of meaning. The
`specification describes the invention generally as designed
`to operate on a preexisting network connected to pieces of
`networked terminal equipment. See ’012 patent, col. 3,
`lines 18–22 (“In accordance with the teachings of the
`present invention, a communication system is provided
`
`HPE 1012-0010
`
`

`

`Case: 17-1848 Document: 55-2 Page: 11 Filed: 05/08/2018
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`for generating and monitoring data over a pre-existing
`wiring or cables that connect pieces of networked comput-
`er equipment to a network.”); id., col. 1, line 67 through
`col. 2, line 2 (“[A] method for permanently identifying an
`asset by attaching an external or internal device to the
`asset and communicating with that device using existing
`network wiring or cabling is desirable.”). As the district
`court noted, moreover, the specification states that “[t]his
`invention is particularly adapted to be used with an
`existing Ethernet communications link or equivalents
`thereof,” ’012 patent, col. 3, lines 35–37, and that “[t]he
`communication system 15 and 16 described herein is
`particularly adapted to be easily implemented in conjunc-
`tion with an existing computer network 17 while realizing
`minimal interference to the computer network,” id., col. 4,
`lines 56–60. Claim Construction Order II, 2016 WL
`5393853, at *3; see also 6:13-cv-880 Claim Construction
`Order, 2015 WL 233433, at *9 (stating that “[t]he ‘adapt-
`ing’ requirement in the claims of the ’012 Patent is essen-
`tial to address the problem confronted by the inventors
`taking existing networks and adapting them to make
`equipment distinguishable” and therefore “must have
`some meaning”).
`Chrimar does not dispute that the specification de-
`scribes embodiments that require modification of a preex-
`isting piece of Ethernet data terminal equipment. Nor
`does it dispute that “adapted” appears only in the claims
`of the ’012 patent, not the other patents involving essen-
`tially the same specification, suggesting that the claim
`scope chosen for the asserted claims in this patent is only
`a subset of what the specification may support.4 It is
`
`4 The district court noted that the patent describes
`at least one embodiment in which the invention is imple-
`mented at the manufacturing stage, rather than through
`a modification of already-manufactured equipment.
`
`HPE 1012-0011
`
`

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`Case: 17-1848 Document: 55-2 Page: 12 Filed: 05/08/2018
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`hardly unknown for one set of claims to use language that
`picks out one among several embodiments, especially
`where other claims (perhaps in the same or related pa-
`tents) claim more broadly or focus on other embodiments.
`E.g., Advanced Cardiovascular Sys., Inc. v. Medronic,
`Inc., 265 F.3d 1294, 1305–06 (Fed. Cir. 2001) (refusing to
`apply limitations expressed in prosecution histories of
`related patents where relevant claim term was not in-
`cluded in claims of the asserted patent and “[t]he patent-
`ee’s whole point in filing the application that resulted in
`the [asserted patent] was to secure broader claims”); see
`also, e.g., Haemonetics Corp. v. Baxter Healthcare Corp.,
`607 F.3d 776, 782 (Fed. Cir. 2010) (construing term
`“centrifugal unit” differently in two separate claims in the
`same patent where language in each claim tracked differ-
`ent embodiments described in the specification). The
`claim language here, to be meaningful, requires such a
`construction of “adapted.” We therefore adopt ALE’s
`proposed construction of “adapted” to mean “modified.”
`2
`ALE also objects to the constructions of the infinitive
`phrases “to detect,” “to control,” “to provide,” and “to
`distinguish” in the relevant claims of the ’838 patent; “to
`draw,” “to result,” and “to convey” in the relevant claims
`of the ’107 patent; and “to draw,” “to detect,” “to control,”
`and “to distinguish” in the relevant claims of the ’760
`patent. E.g., ’838 patent, col. 17, lines 17, 19–20; ’107
`patent, col. 17, lines 18, 20, 23; ’760 patent, col. 17, lines
`28, 33–35. ALE argues that those terms should have been
`
`Claim Construction Order II, 2016 WL 5393853, at *4
`(citing ’012 patent, col. 11, lines 16–19 (“It is also envi-
`sioned that the electronics of the network identification
`circuitry can be placed on a motherboard within the
`computer or as part of the circuitry on the NIC [network
`interface controller] card.”)).
`
`HPE 1012-0012
`
`

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`Case: 17-1848 Document: 55-2 Page: 13 Filed: 05/08/2018
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`construed as means-plus-function elements subject to 35
`U.S.C. § 112, ¶ 6 because they do not recite sufficient
`structure to perform the required function.5 The district
`court rejected that argument. So do we.
`The district court properly recognized the presump-
`tion against application of § 112, ¶ 6 where, as here, the
`word “means” is not used in the claim and properly asked
`whether the terms preceding the infinitive phrases—
`“central piece of equipment,” “Ethernet terminal equip-
`ment” (or “BaseT Ethernet terminal equipment”), and
`“end device”—identify structures or instead are, like
`“means,” essentially place-holder nonce words. Claim
`Construction Order I, 2016 WL 1228767, at *5; see Wil-
`liamson v. Citrix Online, LLC, 792 F.3d 1339, 1349 (Fed.
`Cir. 2015) (en banc) (For functional terms lacking the
`word “means,” the challenger arguing for the application
`of § 112, ¶ 6 must satisfy “[t]he standard[, which] is
`whether the words of the claim are understood by persons
`of ordinary skill in the art to have a sufficiently definite
`meaning as the name for structure.”). ALE did not dis-
`pute before the district court, and has not disputed on
`appeal, that those terms refer to known structures in the
`art. Claim Construction Order I, 2016 WL 1228767, at
`*5–6; see also id. at *5 n.2 (noting that ALE’s “expert
`repeatedly discusses the ‘Ethernet terminal equipment’
`and ‘end device’ interchangeably and without any ques-
`tion as to the understanding of these terms in the art”).
`ALE therefore has not met its burden to overcome the
`presumption against applying § 112, ¶ 6 for those infini-
`
`5 Paragraph 6 of 35 U.S.C. § 112 was replaced with
`35 U.S.C. § 112(f) when the Leahy-Smith America Invents
`Act (AIA), Pub. L. No. 112-29, 125 Stat. 284 (2011), took
`effect on September 16, 2012. Because the applications
`resulting in the asserted patents were filed before that
`date, we refer to the pre-AIA version of § 112.
`
`HPE 1012-0013
`
`

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`Case: 17-1848 Document: 55-2 Page: 14 Filed: 05/08/2018
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`tives. A claim term that has an understood meaning in
`the art as reciting structure is not a nonce word triggering
`§ 112, ¶ 6. Williamson, 792 F.3d at 1349; see, e.g., Skky,
`Inc. v. MindGeek, s.a.r.l., 859 F.3d 1014, 1019–20 (Fed.
`Cir. 2017) (even including use of the word “means,” “wire-
`less device means” was not a means-plus-function term
`because “‘wireless device’ is used in common parlance . . .
`to designate structure”) (ellipsis in original).
`3
`ALE argues that the district court erred in construing
`“physically connect”—as used in claim 1 of the ’760 patent
`(on which claims 59, 69, and 72 depend) and claim 73 of
`the ’760 patent (on which claim 145 depends). Claim 1
`reads:
`
`1. A BaseT Ethernet system comprising:
`a piece of central BaseT Ethernet equipment;
`a piece of BaseT Ethernet terminal equip-
`ment; and
`data signaling pairs of conductors comprising
`first and second pairs used to carry BaseT Ether-
`net communication signals between the piece of
`central Ethernet BaseT Ethernet equipment and
`the piece of BaseT Ethernet terminal equipment,
`the first and second pairs physically connect be-
`tween the piece of BaseT Ethernet terminal
`equipment and the piece of central BaseT Ether-
`net equipment having at least one DC supply, the
`piece of BaseT Ethernet terminal equipment hav-
`ing at least one path to draw different magnitudes
`of current flow from the at least one DC supply
`through a loop formed over at least one of the con-
`ductors of the first pair and at least one of the
`conductors of the second pair, the piece of central
`BaseT Ethernet equipment to detect at least two
`different magnitudes of the current flow through
`
`HPE 1012-0014
`
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`Case: 17-1848 Document: 55-2 Page: 15 Filed: 05/08/2018
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`the loop and to control the application of at least
`one electrical condition to at least two of the con-
`ductors.
`’760 patent, col. 17, lines 15–36 (emphasis added).
`The district court considered dependent claim 71 (not
`asserted in this case), in which the only additional limita-
`tion is that “the first and second pairs are physically
`connected between the piece of BaseT Ethernet terminal
`equipment and the piece of central BaseT Ethernet
`equipment.” Id., col. 21, lines 28–30 (emphasis added). In
`light of that dependent claim and the presumption of
`claim differentiation, the court stated that the term
`“physically connect” in claim 1 requires only that the
`components be configured (have the ability) to physically
`connect, rather than actually be physically connected (as
`in claim 71). Claim Construction Order II, 2016 WL
`5393853, at *4–5.
`On appeal, ALE argues that the district court’s con-
`struction renders the term “physically connect” meaning-
`less and that, without an actual physical connection, the
`system would be inoperable. But requiring that a system
`be configured to physically connect is a meaningful limita-
`tion (it imports a meaningful capability), and such a
`system is operable (upon action by a user, the system
`makes the physical connection needed for actual opera-
`tion). Not surprisingly, it is hardly uncommon for an
`apparatus or system claim, as a claim to a product rather
`than a process (or a forbidden mix), to be directed to
`capability, instead of actual operation. Finjan, Inc. v.
`Secure Computing Corp., 626 F.3d 1197, 1204 (Fed. Cir.
`2010) (“[W]e have held that, to infringe a claim that
`recites capability and not actual operation, an accused
`device need only be capable of operating in the described
`mode.” (citation and quotation marks omitted)); see, e.g.,
`Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1217
`(Fed. Cir. 2014) (affirming infringement verdict based on
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`HPE 1012-0015
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`Case: 17-1848 Document: 55-2 Page: 16 Filed: 05/08/2018
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`claims directed to components “reasonably capable of
`‘arranging information for transmission . . . which identi-
`fies a type of payload information’” (quoting U.S. Patent
`No. 6,466,568, col. 13, lines 12–18)); Finjan, 626 F.3d at
`1204–05 (affirming infringement verdict for “non-method
`claims describ[ing] capabilities without requiring that any
`software components be ‘active’ or ‘enabled’” because
`“software for performing the claimed functions existed in
`the products when sold—in the same way that an auto-
`mobile engine for propulsion exists in a car even when the
`car is turned off”). Chrimar cites no authority barring a
`claim to a component “configured to” work and capable of
`operation by a user, where the user’s actual operation is
`unclaimed. See Versata Software, Inc. v. SAP Am., Inc.,
`717 F.3d 1255, 1262–63 (Fed. Cir. 2013) (affirming in-
`fringement verdict based on evidence that the system
`would operate in an infringing manner if a user followed
`the accused infringer’s instructions, and explaining that
`“[w]hile a device does not infringe simply because it is
`possible to alter it in a way that would satisfy all the
`limitations of a patent claim, . . . an accused product may
`be found to infringe if it is reasonably capable of satisfy-
`ing the claim limitation” (citation and quotation marks
`omitted)). Thus, ALE has not provided any reason that
`overcomes the presumption in favor of claim differentia-
`tion. See Phillips v. AWH Corp., 415 F.3d 1303, 1315
`(Fed. Cir. 2005) (en banc).
`
`4
`We affirm the judgment of infringement of the ’107,
`’838, and ’760 patents. Because we agree with ALE as to
`the term “adapted” in the ’012 patent, we vacate the
`district court’s claim construction order as to that term.
`We remand for further proceedings on infringement of the
`’012 patent under the proper construction of “adapted.”
`That result does not call for a new trial on damages.
`ALE did not ask for a new trial on damages based on our
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`HPE 1012-0016
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`Case: 17-1848 Document: 55-2 Page: 17 Filed: 05/08/2018
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`adoption of its construction of “adapted.” See ALE Br. 21
`(requesting only reversal of the infringement judgment);
`ALE Reply Br. 11 (requesting that the court either “re-
`verse or vacate the infringement judgment . . . so that the
`fact finder may assess whether the accused products
`infringe the asserted claims of the ’012 patent under a
`proper construction”). And a new trial on damages is not
`warranted on that basis. Chrimar’s technical expert Dr.
`Vijay Madisetti testified that all four patents “cover the
`PSE [power sourcing equipment] and the PD [power
`device] aspects of classification, detection, and controlling
`the power,” J.A. 5892—a proposition that ALE agrees
`with on appeal, ALE Br. 8. Dr. Madisetti also testified
`that the smallest saleable patent-practicing units are
`ALE’s power sourcing equipment, which infringe the ’760
`and ’838 patents, and ALE’s power devices, which infringe
`the ’012, ’107, and ’760 patents, J.A. 5921—a proposition
`ALE does not dispute on appeal. Given the (affirmed)
`judgment of infringement of the ’107 and ’760 patents, the
`absence of an infringement judgment on the ’012 patent is
`immaterial to damages because any damages that would
`result from the alleged infringement of the ’012 patent
`also results from the infringement of the ’107 and ’760
`patents. We therefore proceed to consider ALE’s inde-
`pendent arguments directed to damages.
`B
`ALE challenges the damages award by attacking the
`testimony of Mr. Mills, Chrimar’s damages expert. Ac-
`cording to ALE, Mr. Mills, in calculating a reasonable
`royalty, (1) relied on licenses not comparable to the hypo-
`thetical negotiation for the present case; (2) did not ade-
`quately separate the value of patented features from the
`value of standardization and the value of nonpatented
`features; and (3) prejudicially referred to ALE’s total net
`revenue and profit. The challenge is most naturally
`viewed as a challenge to the admission of Mr. Mills’s
`testimony, reviewable for abuse of discretion. See Gen.
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`HPE 1012-0017
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`Case: 17-1848 Document: 55-2 Page: 18 Filed: 05/08/2018
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`Elec. Co. v. Joiner, 522 U.S. 136, 138–39 (1997); Versata,
`717 F.3d at 1261 (applying Fifth Circuit law); Snap-
`Drape, Inc. v. Comm’r