Trade Court Updates for Week of February 18, 2015

United States Court of Appeals for the Federal Circuit

Affirming ITC Decision Regarding Patents in CDMA Networks

In InterDigital Communications, Inc., InterDigital Tech-nology Corporation, and IPR Licensing, Inc. (collectively, “InterDigital”) v. United States International Trade Commission et al., 2014-1176 (February 18, 2015), InterDigital appealed from the final determination of the United States International Trade Commission (“Commission” or “ITC”) finding no violation of Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337. The subject patents are directed towards code division multiple access “CDMA” networks.  A CDMA network allows multiple cellphones, referred to in the patents as subscriber units, to use the same radio frequencies for multiple simultaneous communications. A CDMA system is able to do this by modulating the data with unique codes. One problem with CDMA systems is that signals within the same geographical area can interfere with one another, and that problem is exacerbated as transmission power levels are increased. This appeal involved U.S. Patent Nos. 7,706,830 (“’830 patent”), 8,009,636 (“’636 patent”), 7,502,406 (“’406 pa-tent”), 7,706,332 (“’332 patent”), and 7,616,970 (“’970 patent”), discussed in groups as follows: (1) the Power Ramp-Up Patents (the ‘830 and ’636 patents), (2) the Power Control Patents (the ’406 and ’332 patents), and (3) the Dual Mode Patent (the ’970 patent). 

The Power Ramp-Up Patents addressed the way a subscriber unit established a connection with a base station in order to initiate a communication such as a voice call. The subscriber unit starts transmitting at a low power level and then repeatedly sends transmissions—called “short codes”—at increasing power levels until the base station detects the transmissions and sends back an acknowledgement to the subscriber unit. The transmissions are called “short codes” because they are shorter than a regular length code. Once the acknowledgement is received, a substantive communication such as a voice call can be initiated.  The Power Control Patents relate to how the sub-scriber unit and the base station adjust their transmission power level after a connection is established. In particular, the patents describe sending messages back and forth indicating whether the power level should be increased or decreased. These messages are known as “adaptive,”, or “automatic power control” information.   The Dual Mode Patent relates generally to subscriber units that can switch between different types of networks, such as CDMA cellular networks and local wireless net-works, to transfer data. According to InterDigital, the patented innovation describes a way for the subscriber unit itself to make the CDMA communication channels available for use rather than waiting for the base station to allocate a channel.

As for the Power Ramp-Up Patents, the main issue was the construction of “successively sends [or sent] transmissions.” The ALJ construed the term to mean “transmits to the base station, one after the other, codes that are shorter than a regular length code,” and the Commission adopted that construction. Commission’s Decision at 19. The Commission also adopted the ALJ’s conclusion that the patents “disclose that the codes successively transmit-ted during the random access process (i.e., the short codes) are neither modulated with data, nor used to modulate data.” Because the accused products do not modulate data, the ITC held that they do not violate the Power Ramp-Up Patents. InterDigital raised several arguments, which the Federal Circuit did not find persuasive.  For example, InterDigital argued that the Commission improperly limited the claim term by relying on statements concerning only a preferred embodiment. However, the fact that the carries-no-data limitation was expressly tied to the purpose of the short codes, which InterDigital did not dispute was universal to the invention, did not overcome the ITC’s findings about short codes and the lack of modulating data regarding the accused product. Additionally, Interdigital argued that the principles of claim differentiation support not limiting short codes to codes that do not carry data. But none of these arguments overcame the ITC’s findings.

As for the Power Control Patents, the ALJ construed the term “power control bit” to mean “single-bit power control information transmitted at an APC data rate equivalent to the APC update rate.” The Commission modified the construction to be simply “single-bit power control information,” struck the later part of the ALJ’s construction, and  then affirmed the ALJ’s finding of no infringement based on the ALJ’s finding that the accused products use only multi-bit power control commands. InterDigital contended that the Commission erred in limiting the term to single-bit power control commands and presented several arguments in support of its position. But no intrinsic evidence was provided to support the view that “power control bit” was defined the same way in the Power Control Patents as in the industry standard. And, to the extent that InterDigital implied that the commission erred in its construction of “bit,” the argument was not persuasive because the adopted construction also used the term “bit,” without restriction as to what constitutes a bit.

Finally, as for the Dual Mode patents, the Commission adopted the ALJ’s holding that the claims of the Dual Mode Patent are invalid as obvious.  At issue on appeal was the construction of the term “a plurality of physical layer channels are available for assignment for communication with the cellular network.” The ALJ adopted InterDigital’s proposed construction of the term, construing it to mean “two or more physical layer channels allocable by the subscriber unit for data communication.” 

As part of the obviousness holding, the ALJ reasoned that (1) in the context of the ’970 patent, “allocation” means the same thing as “use,” (2) the prior art subscriber units use two or more channels to transmit data, and, thus, (3) the prior art discloses the contested limitation.  Interdigital however, argued that the ALJ improperly modified the construction when doing its obviousness analysis, specifically by equating “allocation” with “use.” InterDigital believed that had the ALJ not equated the terms it would not have held the claims obvious. But, according to InterDigital’s own expert, in the context of this patent “assign,” “allocate,” and “use” have the same meaning. It follows that the corresponding claim limitation is satisfied when a sub-scriber unit can use two or more physical layer channels for communication. Thus the Federal Circuit affirmed the ALJ’s conclusion that the claims were invalid as obvious.


Note: The information contained in this memorandum is for general information only, and is not intended as advice or counsel regarding any specific situation. If you have an issue relating to the subject matter discussed in this memorandum, you should consult with counsel or your customs advisers concerning the proper course of action to be followed in your case.

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