Law360 (December 16, 2020, 5:39 PM EST) -- Apple and Broadcom have asked the Federal Circuit to reverse the California Institute of Technology's $1.1 billion jury trial win over data transmission patents, saying the "case was filled with error at every turn."
In a brief filed Monday, Apple and Broadcom said the infringement judgment rests upon "multiple legal errors," including the district court's adoption of an erroneous claim construction at the last minute during trial. The pair said they were also wrongly barred from presenting any defenses they could have raised in failed bids to invalidate the patents at the Patent Trial and Appeal Board, which they said prohibited them from litigating obviousness or anticipation.
"These rulings unfairly prejudiced appellants and greatly hampered their ability to rebut Caltech's repeated emphasis at trial on the supposed importance of the patents-in-suit, which led to an enormous — and unwarranted — damages award," the appeal brief said.
The companies are also taking issue with the damages theory presented to the jury, contending that it relied on two separate hypothetical negotiations with Caltech in which they would have each acquiesced "to wildly different royalty rates" for licensing the exact same technology.
Apple and Broadcom had moved to exclude the damages theory, in which Apple would pay a royalty rate five times higher than Broadcom that they argued was derived "from non-comparable settlement agreements, without apportionment, and made unsupported upward adjustments."
Apple and Broadcom said the district court had "expressed doubt" about the damages model and called it "somewhat troubling" that Apple's rate was higher, but "did nothing to ensure that only a legally correct, factually supported, and reliable damages theory was presented to the jury."
Following a two-week trial in January, a California federal jury found that Apple and Broadcom infringed with the Wi-Fi chips used in hundreds of millions of iPhones and other devices, and awarded the university over $1.1 billion in damages.
The jury ordered Apple to pay over $837 million and Broadcom to pay over $270 million — the amounts Caltech sought during closing arguments. Caltech, however, is seeking more damages. In April, it asked the court to order ongoing royalties at two times the rates determined by the jury.
In its motion, the university slammed the companies for "truly egregious" misconduct throughout the case, including purportedly inhibiting its discovery efforts and dragging their feet on disclosing evidence. Because of that, Caltech urged U.S. District Judge George Wu to find the case exceptional and award attorney fees and supplemental damages, which would push the jury award past $2.2 billion.
In August, Judge Wu tacked on $66 million in combined prejudgment interest but said he would wait to handle Caltech's request on damages and attorney fees until after the appeal has been handled.
Counsel for Apple and Broadcom declined to comment while counsel for Caltech did not immediately return a request for comment Wednesday.
The patents-in-suit are U.S. Patent Numbers 7,116,710; 7,421,032; and 7,916,781.
Caltech is represented by Kathleen M. Sullivan, James R. Asperger, Brian P. Biddinger, Todd M. Briggs, Edward J. DeFranco, Kevin P.B. Johnson and Derek L. Shaffer of Quinn Emanuel Urquhart & Sullivan LLP.
Apple and Broadcom are represented by William F. Lee, Joseph J. Mueller, Lauren B. Fletcher, Madeleine C. Laupheimer, Mark D. Selwyn, Steven J. Horn and David P. Yin of WilmerHale.
The case is The California Institute of Technology v. Broadcom Ltd. et al., case number 20-2222, in the U.S. Court of Appeals for the Federal Circuit.
--Additional reporting by Craig Clough and Hailey Konnath. Editing by Bruce Goldman.
(Source: LAW 360)
