Delay of Game

O2 Micro International, Ltd. v. Beyond Innovation Technology, Co., Ltd.

What's the amount of time necessary to separate a patent holder from an infringement verdict? In O2 Micro International, Ltd. v. Beyond Innovation Technology, Co., Ltd., 32 micro seconds was enough - that is, when combined with district court errors regarding claim construction and equivalency. The Federal Circuit's call?  The infringement verdict is vacated and the ball goes back to the district court.

In O2 Micro, the patent at issue involved circuitry for controlling the power made available to the backlights used in laptop computers.  The patent holder's technology employed feedback loop signals which served (in part) to prevent circuitry damage by reducing power during unexpected events. Because of difficulties during claim prosecution, the patent holder added limiting language to the claim. The additional language stated that the control provided by the circuits would be enabled "only if said feedback signal is above a predetermined threshold." Defendants used similar circuitry in their products; however, in two modes the circuitry also incorporated both a start-up delay and that 32 micro-second delay.  Control continued in both these modes even though the signal fell below the patented threshold.

During pre-trial claim construction, defendants argued that the phrase "only if" should mean "exclusively or solely in the event of" and otherwise allowed for no exception. Agreeing with the patentee, the district court found the "only if" language to be plain English needing no construction.  The district court also let the patent holder argue infringement under the doctrine of equivalents, despite the amendment. The verdict form used did not require the jury to specify the basis of the infringement finding it ultimately reached.

On appeal, defendants got a replay on the question of the district court's construction of the "only if" language.  Even though defendants did not object to the relevant jury instruction, the Federal Circuit found that they had sufficiently preserved the issue on appeal by raising it during the pre-trial construction hearing.  Chiding the district court, the Federal Circuit said that trial court has the responsibility to determine the scope of the language at question when ever a dispute arises regarding a claim term-even if the term has a "plain meaning." The allowance of a claim under the doctrine of equivalents was also erroneous because the district court failed to explain how the patent holder overcame the presumption of prosecution history estoppel. 

O2 Micro offers some interesting lessons for the patent litigator's playbook.  First, it appears to prevent litigants (and courts) from avoiding tough issues of claim construction, and offers some ammunition to challenge the growing court trend of limiting the number of claims to be construed.  While the Federal Circuit "recognized" that the district court can't construe every limitation, it offered no specific rules for this new implementation.  Litigants who don't want to see infringement issues collapse into the claim construction process will also want to carefully frame the question by asking "How is the infringing device best characterized as operating?" NOT "What is the scope of the claim?"

Important too, the court's determination that for appeal purposes, defendants need not object to jury instruction if the same issue has been "fully litigated" and decided at the Markman stage of litigation.  This more forgiving standard certainly gives greater flexibility to litigants in how they comport themselves during the jury charge phase of a trial.  In addition, where a court adopts some intermediate construction (i.e., one which borrows from, but does not completely accept, both sides' constructions) this decision places a premium on understanding one's opponent's reaction/position with regard to the construction.

Do-overs like the one in O2 Micro don't just mean more litigation; they can end up costing the whole game.  Whether playing for the offense or the D, patent litigators will want to heed the tactical lesson inherent in the decision or else risk seeing the clock run out on their pending claims.

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