Today the Federal Circuit vacated Judge Selna’s bench trial decision in the much-watched TCL v. Ericsson case, ruling that Ericsson has the right to a jury trial to determine compensation for past infringement of Ericsson’s standard essential patents (SEPs) under the Seventh Amendment of the U.S. Constitution. So this case involving a FRAND computation method used by Judge Selna that captured the world’s attention, at this point, is now more a footnote on U.S. Constitutional law on the right to jury trial in patent cases.
Our January 3, 2018 post summarizes Judge Selna’s bench trial decision and our February 13, 2018 post explained some minor changes he made to it. We provide below a very quick summary of what the Federal Circuit’s decision means for this case, leaving detailed reading of the decision to those interested in the right to jury trial in patent cases under the U.S. Constitution.
The Federal Circuit explained that there were four determinations made by Judge Selna in his bench trial that are at issue:
- Judge Selna’s determination “that Ericsson’s proposed terms to TCL were not FRAND.”
- Judge Selna “set[ting] a prospective FRAND royalty rate for TCL’s future use of Ericsson’s SEPs, relying on a combination of methodologies, including its own modified version of TCL’s proposed top-down approach and comparable licenses.”
- Judge Selna “set[ting] a “release payment for TCL’s past unlicensed sales” by “adjusting its calculated prospective FRAND royalty rate.”
- Judge Selna’s “dismissal of Ericsson’s patent infringement claims and TCL’s related counterclaims of invalidity and non-infringement as moot in light of the relief granted in the release payment, because any damages amount from those infringement claims were already subsumed in the release payment determination.”
The Federal Circuit resolved all these issues based on Ericsson’s constitutional challenge of a right to jury trial:
Because we conclude that the release payment is in substance compensatory relief for TCL’s past wrongs (i.e., practicing Ericsson’s patented technologies without a license), we hold that the district court deprived Ericsson of its constitutional right to a jury trial on that legal relief by requiring that Ericsson adjudicate that relief in a bench trial.
The Federal Circuit then went through the constitutional analysis of right to a jury trial, which we leave for you to read yourself. After deciding that Ericsson had a right to jury trial on the monetary relief for past unlicensed infringement, the Federal Circuit explained that it was vacating Judge Selna’s decision and remanding for a jury trial:
Accordingly, we vacate the district court’s determination of the release payment, including the underlying question of whether Ericsson’s Option A and Option B offers that include the release payment term are FRAND. We also vacate the court’s determination that Ericsson’s offers are not FRAND and its determination of prospective FRAND royalty rates because both determinations were predicated on common issues to the improperly decided release payment. Because the release payment will be re-decided by the jury, we reverse the dismissal of Ericsson’s patent infringement claims and TCL’s related counterclaims of invalidity and non-infringement as no longer moot. Finally, we remand all above determinations for further proceedings consistent with this opinion.