Amicus Curiae Brief — Cochlear Corporation, et al., Petitioners v. Alfred E. Mann Foundation for Scientific Research, et al.

No. 20-362

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In The

Supreme Court of the United States

---------------------------------♦--------------------------------COCHLEAR CORPORATION, et al.,

Petitioners,

v.

ALFRED E. MANN FOUNDATION

FOR SCIENTIFIC RESEARCH, et al.,

Respondents.

---------------------------------♦--------------------------------On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

---------------------------------♦--------------------------------BRIEF AMICI CURIAE OF

INTELLECTUAL PROPERTY PROFESSORS

IN SUPPORT OF PETITIONERS

---------------------------------♦--------------------------------MARK A. LEMLEY

Counsel of Record

STANFORD LAW SCHOOL

559 Nathan Abbott Way

Stanford, CA 94305

(650) 723-4605

mlemley@law.stanford.edu

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COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM

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TABLE OF CONTENTS

Page

TABLE CONTENTS ............................................

i

TABLE OF AUTHORITIES .................................

ii

INTEREST OF AMICI .........................................

1

SUMMARY OF ARGUMENT ..............................

1

ARGUMENT ........................................................

2

CONCLUSION.....................................................

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APPENDIX

Appendix A: List of Amici.................................... App. 1

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TABLE OF AUTHORITIES

Page

CASES

Accentra, Inc. v. Staples, Inc., 500 Fed. Appx. 922

(Fed. Cir. 2013) ..........................................................2

Apple Inc. v. Motorola, Inc., 757 F.3d 1286 (Fed.

Cir. 2014) ...................................................................3

Avid Tech., Inc. v. Harmonic, Inc., 812 F.3d 1040

(Fed. Cir. 2016) ..........................................................2

Carey v. Piphus, 435 U.S. 247 (1978) ............................5

Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008)..........3

Greenbelt Co-op. Publ’g Ass’n v. Bresler, 398 U.S.

6 (1970) ......................................................................3

i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831

(Fed. Cir. 2010), aff’d, 564 U.S. 91 (2011) .................2

Maryland v. Baldwin, 112 U.S. 490 (1884) ..................3

Memphis Cmty. Sch. Dist. v. Stachura, 477 U.S.

299 (1986) ..................................................................3

NTP, Inc. v. Research In Motion, Ltd., 418 F.3d

1282 (Fed. Cir. 2005) .................................................2

Omega Patents, LLC v. CalAmp Corp., 920 F.3d

1337 (Fed. Cir. 2019) .................................................2

Verizon Servs. Corp. v. Vonage Holdings Corp.,

503 F.3d 1295 (Fed. Cir. 2007) ..................................2

WesternGeco LLC v. Ion Geophysical Corp., 913

F.3d 1067 (Fed. Cir. 2019) .........................................2

Whitserve LLC v. Computer Packages, Inc., 694

F.3d 10 (Fed. Cir. 2012) .............................................2

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TABLE OF AUTHORITIES—Continued

Page

OTHER AUTHORITIES

7 Donald S. Chisum, Chisum on Patents

§ 20.07[3][a] (2011) ...................................................4

Vanessa L. Otero, How Much is Really at Stake?

Damages Statutes Collide in Multiple IP Litigation, 96 J. Pat. & Trademark Ofc. Soc’y 346

(2014) .........................................................................6

1

INTEREST OF AMICI

Amici curiae are intellectual property law professors throughout the United States. Appendix A includes a list of the amici. We have considerable

experience with both patent practice and patent doctrine. Amici have no personal interest in the outcome

of this litigation, but we share a professional interest

in seeing that the patent laws are applied in such a

way as to provide adequate incentives for innovation.1

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SUMMARY OF ARGUMENT

This Court should grant certiorari on question 2 to

resolve the circuit split on how to treat general jury

damages verdicts when the underlying verdict is overturned in part. It should reject the Federal Circuit’s

inconsistent position that every patent must have

monetary value when patentees assert them, but that

the same patents are presumed to have no value when

the jury verdict based on those patents is overturned.

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1

Amici certify that no party or party’s counsel authored this

brief in whole or in part, no party or party’s counsel contributed

money that was intended to fund the preparation or submission

of this brief, and no person or entity—other than amici or their

counsel—authored the brief or made a monetary contribution to

its preparation or submission. All parties have been given ten

days’ notice and have consented to the filing of this brief.

2

ARGUMENT

This Court should grant certiorari on question 2.

As the petition notes, there is a split among the circuits

on how to treat general jury verdicts when part of the

basis for that verdict is overturned on appeal. In addition to the split identified in the petition, the Federal

Circuit has issued contradictory opinions on the question of whether a damages award can be sustained

when some but not all the findings of patent infringement are reversed on appeal. Compare Verizon Servs.

Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1310

(Fed. Cir. 2007) (“where the jury rendered a single verdict on damages, without breaking down the damages

attributable to each patent, the normal rule would require a new trial as to damages.”); Accentra, Inc. v. Staples, Inc., 500 Fed. Appx. 922, 931 (Fed. Cir. 2013)

(same); i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831,

849–50 (Fed. Cir. 2010), aff ’d, 564 U.S. 91 (2011)

(same); NTP, Inc. v. Research In Motion, Ltd., 418 F.3d

1282, 1326 (Fed. Cir. 2005) (same); Omega Patents, LLC

v. CalAmp Corp., 920 F.3d 1337 (Fed. Cir. 2019) (same)

with WesternGeco LLC v. Ion Geophysical Corp., 913

F.3d 1067, 1074 (Fed. Cir. 2019) (holding that even if

only one of several claims once shown to a jury as a

basis for damages remains valid, so long as that claim

was shown to the jury to be essential to those damages,

then any error in instruction is harmless, and the entire award of lost profits can be sustained); Avid Tech.,

Inc. v. Harmonic, Inc., 812 F.3d 1040, 1047 (Fed. Cir.

2016) (same); cf. Whitserve LLC v. Computer Packages,

Inc., 694 F.3d 10 (Fed. Cir. 2012) (affirming a general

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jury verdict after reversing the jury’s finding of liability with respect to certain claims of a patent but not an

entire patent).

In resolving that conflict, this Court should reaffirm its traditional approach to general jury verdicts,

which requires a retrial when an essential part of the

underlying verdict is reversed and the court cannot

know how much of the verdict is attributable to that

error. Maryland v. Baldwin, 112 U.S. 490, 493 (1884);

Memphis Cmty. Sch. Dist. v. Stachura, 477 U.S. 299,

312–13 (1986) (where “the verdict does not reveal the

means by which the jury calculated damages,” an error

in one theory supporting the verdict “ ‘is difficult, if not

impossible, to correct without retrial, in light of the

jury’s general verdict’ ”); Exxon Shipping Co. v. Baker,

554 U.S. 471, 482 n.3 (2008) (quoting Greenbelt Co-op.

Publ’g Ass’n v. Bresler, 398 U.S. 6, 11 (1970) (“when it

is impossible to know, in view of the general verdict returned whether the jury imposed liability on a permissible or an impermissible ground, the judgment must

be reversed and the case remanded.”)).

That approach is particularly appropriate in patent cases like this one. It will almost never be possible

to tell how much of a general verdict is attributable to

an invalidated patent in cases where more than one

patent is at issue. The Federal Circuit has repeatedly

held that every patent has value in the form of a reasonable royalty. See Apple Inc. v. Motorola, Inc., 757

F.3d 1286, 1327–28 (Fed. Cir. 2014). In Apple, the Court

overturned the district court’s conclusion that a patentee could not show infringement because its expert

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evidence was excluded. The Court started from the presumption that “a holder of a valid and infringed patent

has inherently suffered legal damage at least to the extent of a lost license royalty opportunity.” Id. at 1330

(quoting 7 Donald S. Chisum, Chisum on Patents

§ 20.07[3][a] (2011)). It went on to require affirmative

evidence in the record that a patent was valueless before treating the value as zero:

[T]here is nothing in the record suggesting

that Apple would have been willing to accept

no payment for Motorola’s infringement. Nor

is there any evidence that, at the time of infringement, Motorola concluded that the ’647

patent had no value.

Id. at 1327–28.

Put another way, under Federal Circuit law the

proper damage award for any patent is never zero. The

logical corollary of that conclusion is that eliminating

a patent from the case must necessarily reduce the

jury’s general damages award to some extent. But because we cannot know how much it should be reduced,

that fact will ordinarily require a new trial. The error

will never be harmless, and there is no way to know

how much harm it causes. But under settled Federal

Circuit law we know it cannot be zero.

The fact that witnesses for both parties testified to

a single damages number for the case as a whole does

not change that result. It is not surprising or problematic that a party will present a single damages number

to a jury in a multi-patent case. When the jury

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evaluates the patents, it can presumably factor its own

determinations of validity and infringement into its

damages calculation. But when the jury errs in determining validity or infringement a recalculation of

damages based on the correct legal ruling is required.

The ’691 patent, if it alone had been valid and infringed, would surely have generated some royalty. The

jury’s finding that it was infringed means that under

the law the jury was required to attribute some royalty

payment to it. But the jury’s damages award was a general verdict, which means that we cannot know how

much of its damages award the jury attributed to the

’691 patent. Now that that patent has been invalidated, a new trial is warranted on the issue of damages.

More generally, even if an error in a general jury

verdict outside patent law can sometimes be harmless,

patent cases are different, for the very reason that the

law says there must be damages attributable to each

finding of infringement, even if multiple patents cover

the same product.

Alternatively, perhaps the flaw lies in the Federal

Circuit’s rule that patents must always have value.

This Court has found the violation of other rights to be

compensable only with nominal damages of $1 when

injury is not proven. Carey v. Piphus, 435 U.S. 247

(1978). But even if this Court were to reverse course

and adopt some form of harmless error analysis, it

should make clear that it was doing so because the

Federal Circuit’s “all patents have value” rule is wrong.

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In neither event should it let the current “heads I win,

tails you lose” policy stand.

The lower courts have understandably striven to

avoid retrials when possible. The best practice to reduce the inefficiency of having to hold a new trial is for

courts to require or encourage special verdict forms

breaking down damage awards in cases that include

multiple claims. See Vanessa L. Otero, How Much is

Really at Stake? Damages Statutes Collide in Multiple

IP Litigation, 96 J. Pat. & Trademark Ofc. Soc’y 346,

368–70 (2014). But it does not follow, as the Federal

Circuit held here, that a party who does not insist on a

special verdict form has somehow waived its rights to

the proper application of the law of general verdicts. To

the contrary, any party that accepts a general verdict

also accepts the risk of a new trial on damages if the

verdict is reversed in part. It is Mann, not Cochlear,

that must bear that burden here. This Court should accordingly resolve a second split in the circuits by holding that a party does not waive its rights to correct an

erroneous jury verdict merely because it accepted a

general verdict form. Accepting a general verdict form

means accepting the consequences of declining to ask

the jury for detailed findings. One of those consequences is that if the underlying verdict is reversed in

part, a retrial on damages is required.

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CONCLUSION

This Court should grant the petition for certiorari

on question 2.2

Respectfully submitted,

MARK A. LEMLEY

Counsel of Record

STANFORD LAW SCHOOL

559 Nathan Abbott Way

Stanford, CA 94305

(650) 723-4605

mlemley@law.stanford.edu

2

Amici take no position on the other questions presented.