November 18, 2022
In INVT SPE LLC v. ITC, the Federal Circuit affirmed an International Trade Commission (ITC) decision that held INVT’s patent claims were not essential to the LTE cellular communications standard. According to the court, INVT failed to show that an LTE-compliant device was “capable” of meeting the claimed functional language when the device was put into operation, and thus INVT could not prove infringement by showing the accused product’s use of the LTE standard. The court’s decision is notable because it required evaluating the essentiality of patent claims directed to functional capabilities.
INVT appealed a determination by the ITC that Apple, HTC, and ZTE did not violate 19 U.S.C. § 1337 by importing mobile devices. The court evaluated the essentiality of a patent directed to how a user device (i.e., mobile device) encodes and decodes data sent between the device and a base station. As claimed, the user device determines and sends encoding parameters to the base station; the base station encodes data using those parameters and sends the encoded data back to the user device; and the user device decodes the data using the same parameters that it previously determined. INVT asserted that these functions were essential to practicing the LTE standard and thus the standard could not be implemented without infringing the asserted patent claims.
According to the court, in the LTE standard, the user device chooses one of 16 possible combinations of encoding parameters to send to the base station. The base station, in turn, selects encoding parameters—but from a much greater number (close to 3,000) of possible combinations. The base station then encodes the data using the parameters it selected and sends the encoded data and its selected parameters back to the user device. The user device decodes the data using the parameters selected by the base station. INVT argued that although the claims required use of the encoding parameters determined by the user device, the claims were still standard essential because, under the LTE standard, all LTE-compliant devices must be capable of using any of the available encoding/decoding parameters in the LTE standard, including the parameters originally decided by the user device.
Because INVT asserted that the patent was standard essential, it sought to prove infringement by comparing the patent’s claims to the LTE standard rather than to the accused products themselves. If a patent claim is standard essential, infringement can be proven based on an accused product’s use of the standard. Claims are standard essential if the reach of the claims includes any device that practices the standard, i.e., all implementations of the standard infringe the claim and the patent covers all possible implementations of the standard. Once a claim is found to be standard essential, any device that is compliant with the standard necessarily infringes the claim. If a claim is not standard essential, then the patent owner must prove infringement by comparing the claim to each accused product.
The court first addressed INVT’s assertion that the patent’s claims were infringed if a device was capable of performing the claimed encoding/decoding functions, rather than requiring proof that an accused device actually performed the functions in operation. Recognizing that it has frequently construed functional language as not requiring proof of actual performance of operative steps, and that it has not required claims to adhere to a specific grammatical form to find them drawn to capabilities, the court agreed with INVT that the patent claims were drawn to capabilities rather than actual performance.
Having construed the patent claims as drawn to capability, the court then stated that, for infringement purposes, a computer-implemented claim drawn to a functional capability requires some showing that the accused device is configured, without modification, to perform the claimed function when in operation. The court stated that proof of reasonable capability of performing claimed functions requires, at least as a general matter, proof that an accused product—when put into operation—in fact executes all of the claimed functions at least some of the time or at least once in the claim-required environment.
INVT’s proof fell short in this regard. The patent claims required encoding/decoding based on parameters determined by the user device, but INVT failed to show that, under the LTE standard, a user device ever receives and handles data signals that way. For that reason, INVT failed to show that an LTE standard-compliant user device was capable of meeting the claimed functional language when that device is put into operation under the LTE standard, thus the claims were not essential to the standard.
Because the claims were not essential to the LTE standard, INVT was required to prove infringement in the ordinary manner by comparing the claims to each accused product. However, INVT had not reviewed the base station source code to determine whether the base station decided to use the same parameters determined by the user device, as required by the claims. The court affirmed the ITC’s finding of no infringement based on this evidentiary gap.
With the roll-out of 5G devices and emergence of new IoT standards, much attention has been placed on standard essential patents (SEPs). This case provides a useful overview of U.S. law on patent essentiality and illustrates the importance of providing sufficient evidence to show functional capability even in cases where patent infringement will be shown by comparing the claims to an LTE standard.