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April 2015: Standards-Essential Patent Victory for Marvell

April 2015

On March 3, 2015, the firm achieved a complete defense victory for Marvell Semiconductor over France Telecom. Judge Orrick in the Northern District of California granted Marvell’s motion for judgment as a matter of law (JMOL) of no infringement. France Telecom had asserted that certain Marvell communications processors infringed U.S. Patent No. 5,446,747, which allegedly covered a type of error correction code widely used in telecommunications known as “turbo” codes. France Telecom had declared the patent essential to the 3G wireless standard and argued that any device compatible with that standard necessarily infringed. Likely because of the widespread use of turbo codes and France Telecom’s standards-essential declaration, dozens of companies had declined to challenge the ‘747 patent and instead acquiesced to a license with exorbitant fees under France Telecom’s licensing program.

The firm won many victories during the two year journey to trial. First, in late 2012, Judge Rakoff granted Marvell’s motion to transfer the case out of the Southern District of New York to the Northern District of California (Marvell is headquartered in Santa Clara, California). Judge Rakoff was persuaded by the firm’s arguments and agreed that “every relevant factor except the plaintiff’s choice of forum supports transfer.” Second, in March 2014, the firm won a favorable claim construction for a key claim term. Third, in April 2014, the firm won partial summary judgment on damages that excluded from the damages base all foreign sales, including all sales by a non-party Marvell affiliate based in Singapore. Judge Orrick agreed with the firm’s arguments that the Marvell affiliate was a separate legal entity and that there could be no liability under United States patent law for allegedly infringing acts occurring abroad. Finally, in August 2014, Marvell won motions in limine excluding key evidence from trial. Although he issued a preliminary order denying Marvell’s motion, after oral argument Judge Orrick agreed with the firm’s position, granting the motion to preclude arguments of infringement under the doctrine of equivalents and that the asserted claim covered the 3G standard. Judge Orrick also rejected attempts by France Telecom to argue that the mere act of importing a system embodying a claimed method into the United States can infringe a method claim. Judge Orrick agreed with the firm’s argument that, under controlling precedent, one can only directly infringe a method claim by use—that is, by performing each and every step of the claimed method in the United States.

During the two-week trial that ensued, the jury heard from the named inventor of the patent, Professor Claude Berrou, who had received the Marconi Prize in telecommunications—a technology award some equate to winning a Nobel prize—for his work on turbo codes. The jury also heard how prominently turbo codes were used in many telecommunications standards, including the 3G wireless standard. France Telecom even introduced scientific textbooks that included entire chapters devoted to turbo codes and their benefits on noisy communications channels. France Telecom claimed damages of $10 million plus enhancements due to alleged willful infringement. The firm mounted a spirited defense that included attacks on infringement and validity of the ‘747 patent, as well as on numerous facets of France Telecom’s damages case. In fact, the firm’s cross examination of France Telecom’s damages expert proved so devastatingly effective that it was reported by Law 360 under the headline “Marvell Shreds France Telecom’s Expert In $10M Chip IP Trial.” Although the jury found direct infringement, it rejected France Telecom’s claims of indirect and willful infringement and awarded damages of only $1.7M. This award was equal to Marvell’s expert’s lowest damages figure.

Following a hearing on post-trial briefs, Judge Orrick issued an order granting Marvell’s JMOL of no infringement—which amounts to a complete defense victory for the firm’s client. Marvell is now seeking its costs and attorneys fees.