On April 4, 2011, Judge Leonard Davis handed down a 44-page Memorandum Opinion and Order in Mirror Worlds, LLC v. Apple, Inc. (Case No. 6:08 CV 88). The opinion represents a significant win for Apple, with favorable rulings on infringement and damages. (Full Opinion)
The opinion cites numerous flaws in Mirror Worlds direct infringement case, its case under the doctrine of equivalents, and its damages case:
Mirror Worlds identified three Mac OS X features—Spotlight, Cover Flow, and Time Machine—as practicing the patented invention. [...]
Mirror Worlds’ reliance on Apple’s sales of computers that contain the accused Mac OS X 10.4-6 software does not prove direct infringement. The law is clear that the sale or offer for sale is insufficient to prove direct infringement of a method claim. See Joy Techs., 6 F.3d at 773
Not only is it legally insufficient to show direct infringement of the method claims through Apple’s sales, it is insufficient to merely assume that Apple conducted tests that performed the method while the accused features were under development.
Interestingly, Mirror Worlds use of video of Steve Jobs himself demonstrating Cover Flow and Spotlight appears to have backfired:
Throughout trial, Mirror Worlds continually referenced and played clips of Mr. Jobs demonstrating the Spotlight and Cover Flow features. Both during and after trial, Mirror Worlds asserted the video was evidence of infringement; however, this assertion is unsupported by the record. First, the video did not demonstrate Mr. Jobs performing all of the steps of the claimed method. At best, the video clips highlighted and promoted a few attributes of the accused Spotlight and Cover Flow features and practiced some of the claimed steps. Second, despite representing to the jury that the videos showed Mr. Jobs using the accused products, Mirror Worlds did not establish that the features demonstrated in the videos were actually the features accused of infringement in this case.
The opinion lists a number of deficiencies in the testimony of Mirror Worlds' expert testimony on equivalence:
Viewing the record in the light most favorable to Mirror Worlds, Mirror Worlds did not present sufficient evidence to allow a reasonable jury to conclude that the asserted claims of the ’427 patent were infringed under the doctrine of equivalents.
Dr. Levy offered no substantive explanation for how or why Mac OS X operates in a similar way to the asserted claims. Instead, Dr. Levy merely repeated the claim language when testifying about the accused Mac OS X Cover Flow features and summarily considered them equivalent.
Dr. Levy’s bald recitation of Cover Flow features and references to pictures and demonstratives without supportive reasoning of why the accused devices are substantially similar to the claim limitation is simply legally insufficient.
Separate and apart from the sufficiency of evidence regarding infringement, there is insufficient evidence to support the jury’s $208.5 million damages award.
Apple’s sales cannot be used to determine damages for Apple’s direct infringement of the method claims. As explained above, a sale or offer for sale is insufficient to prove direct infringement of a method claim—sale of the apparatus is not the sale of the method—and thereby irrelevant in calculating liability for direct infringement. See Joy Techs., 6 F.3d at 774-75;
Likewise, the record lacks sufficient evidentiary basis to support the jury’s damages award for Apple’s direct infringement of the ’427 patent.
Moreover, Mirror Worlds presented a fatally flawed reasonable royalty analysis.
As Mirror Worlds is not entitled to use the entire market value of the accused products, it was obligated to properly apportion the royalty base to address the accused features, which it did not do.
For these reasons, the record lacks substantial evidence to support the jury’s award of damages. The Court GRANTS Apple’s request for Judgment as a Matter of Law to vacate the jury’s damages award. [...]
To give a sense of how many issues were covered in this decision, consider the final paragraph of the Conclusion:
Upon consideration of the parties’ arguments and the evidence of record established at trial, the Court GRANTS Apple’s Renewed Motion for Judgment as a Matter of Law, Motion for New Trial and Motion for Remittitur Pursuant to Federal Rules of Civil Procedure 50 and 59 as to Apple’s direct infringement of the ’227, ’313, and ’427 patents, DENIES the motion as to invalidity, and DENIES AS MOOT the request for a new trial or remittitur; DENIES Apple’s Motion for a Finding of Inequitable Conduct and Good Cause to Re-Open the Record for a Bench Trial (Docket No. 433); DENIES Mirror Worlds’ Motion for (1) Entry of Judgment, (2) Prejudgment Interest, (3) Post Verdict and Prejudgment Damages, (4) Post Judgment Royalties, (5) Enhanced Damages, (6) Attorneys’ and Experts’ Fees, (7) Costs, and (8) Post Judgment Interest (Docket No. 435); GRANTS Apple’s Motion to Strike the October 29, 2010 Declaration of Walter Bratic and Documents Not in Evidence (Docket No. 446); and DENIES Apple’s Motion Regarding Mirror Worlds’ Waiver of Privilege for Documents Listed on the December 9, 2010 Privilege Log (Docket No. 465). All other pending motions not previously resolved are DENIED AS MOOT.
UNITED STATES DISTRICT JUDGE
Overall, a very favorable result for Apple.
UPDATE: Excellent analysis, as always, from Michael C. Smith at his EDTX Practice blog.