Wi-Lan Inc. v. Sharp Electronics Corporation
Unpublished (slip opinion) (2021)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
To prove direct patent infringement, a patentee must present admissible, authenticated evidence of the accused product's operation, and unauthenticated source code printouts and related declarations created for litigation are inadmissible under Federal Rules of Evidence 803(6), 901(b)(4), and 703, as experts cannot reasonably rely on such untrustworthy data.
Facts:
- Wi-LAN Inc. owns U.S. Patent No. 6,359,654 (the ’654 patent), which concerns methods for displaying interlaced video on a noninterlaced monitor, a process known as deinterlacing.
- Wi-LAN Inc. also owns U.S. Patent No. 6,490,250 (the ’250 patent), which relates to an integrated multimedia stream multiplexer designed to combine and dynamically adjust bit rates of audio and video data streams.
- The need for deinterlacing arose in the 1980s and 1990s as noninterlaced monitors became prevalent, requiring conversion of older interlaced video formats.
- Vizio sells "smart" television sets, and Sharp Electronics Corporation sold "smart" television sets through 2015.
- The deinterlacing functions (relevant to the ’654 patent) and bit rate optimization components (relevant to the ’250 patent) reside on each television set’s "system-on-chip."
- The source code printouts Wi-LAN sought to use as evidence were obtained with declarations from third-party chip manufacturers only after Wi-LAN filed lawsuits against them.
Procedural Posture:
- On May 11, 2015, Wi-LAN Inc. sued Sharp Electronics Corporation in the U.S. District Court for the District of Delaware for patent infringement, alleging direct and induced infringement of various claims of the ’654 and ’250 patents.
- On September 8, 2015, Wi-LAN Inc. filed a similar complaint against Vizio, Inc. in the U.S. District Court for the District of Delaware, asserting the same claims of the ’654 and ’250 patents; these cases were managed in parallel.
- Wi-LAN accused Sharp and Vizio of infringing claims 1, 4, and 9 of the ’654 patent and claims 1, 4, and 6 of the ’250 patent.
- On February 27, 2018, the district court issued an order construing certain terms of the ’654 and ’250 patents.
- Following the claim construction, Wi-LAN conceded it could not prove infringement of the asserted claims of the ’250 patent under the district court’s constructions.
- The district court entered a stipulated judgment of noninfringement of the ’250 patent.
- Regarding the ’654 patent, the parties filed cross-motions for summary judgment on the issue of infringement.
- The district court granted Sharp and Vizio’s motion for summary judgment of noninfringement, ruling that Wi-LAN lacked sufficient admissible evidence (specifically, source code printouts) to prove direct infringement.
- Wi-LAN Inc. appealed the district court's judgments to the United States Court of Appeals for the Federal Circuit, which consolidated the two appeals.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a district court abuse its discretion by refusing to admit unauthenticated source code printouts and related declarations as evidence of direct patent infringement under Federal Rules of Evidence 803(6), 901(b)(4), or 703, or by denying additional time to obtain admissible evidence, especially when the proponent's expert cannot reasonably rely on such unauthenticated evidence?
Opinions:
Majority - Dyk, Circuit Judge
No, the district court did not abuse its discretion in refusing to admit unauthenticated source code printouts and related declarations, nor in denying additional time. The Federal Circuit affirmed the summary judgments of noninfringement for Sharp and Vizio. Regarding the ’654 patent, the court found Wi-LAN failed to provide admissible evidence of the source code needed to prove infringement. The declarations from chip manufacturers' employees, purporting to authenticate the source code printouts, were inadmissible because Wi-LAN could not assure the declarants' availability to testify at trial. Furthermore, the declarations were not admissible as business records under Federal Rule of Evidence 803(6) because they were created and prepared specifically for litigation, rather than in the regular course of business. Even under a more flexible Third Circuit approach to Rule 803(6), the documents lacked trustworthiness due to inconsistent dates, added commentary, and the suspicious circumstances of their production (obtained only after Wi-LAN sued the manufacturers). The source code printouts were also not admissible under Rule 901(b)(4) (authentication by distinctive characteristics) given the dubious production circumstances and inconsistencies. Lastly, the court rejected admissibility under Rule 703 (expert reliance), clarifying that Rule 703 does not make otherwise inadmissible evidence admissible, but merely allows an expert to base an opinion on such data if experts in the field reasonably rely on it. Wi-LAN was attempting to use its expert as an impermissible 'conduit' for hearsay and failed to demonstrate that experts reasonably rely on unauthenticated source code printouts. The district court also properly denied Wi-LAN additional time, as Wi-LAN had ample opportunity over years of litigation to obtain admissible evidence. Regarding the ’250 patent, the Federal Circuit upheld the district court’s claim construction. It affirmed that "output multimedia data stream" means a "combined audio and video stream that are output from the system," consistent with the patent specification's descriptions of data being transmitted from the integrated multimedia encoding system to other components. Similarly, "a multimedia processor, coupled to the data rate analyzer" was correctly construed to mean "a multimedia processor connected to the data rate analyzer, where the multimedia processor is separate from, and not a sub-component of, the data rate analyzer," based on the patent's consistent use of "coupled" for separate components versus "in" for sub-components.
Analysis:
This case significantly clarifies the evidentiary hurdles for proving patent infringement, particularly when relying on complex technical evidence like source code from third-party manufacturers. It reinforces that Federal Rules of Evidence 803(6), 901(b)(4), and 703 serve as vital gatekeepers, preventing the introduction of untrustworthy or unauthenticated evidence, even when an expert purports to rely on it. The decision emphasizes that Rule 703 does not permit an expert to be a mere 'conduit' for otherwise inadmissible hearsay and that 'reasonable reliance' requires an actual showing that experts in the field would rely on unauthenticated data. This ruling will likely compel patentees to be more diligent and proactive in securing properly authenticated evidence during discovery, potentially influencing discovery practices in patent litigation involving complex embedded technologies.
