$166 Million Verdict Vacated: The Perils of Confused Expert Testimony

The Federal Circuit has issued a decision reversing a district court’s denial of judgment as a matter of law regarding noninfringement of a radio-related patent. The court also vacated a significant damage award in favor of Finesse Wireless LLC.

As the court explained,

Finesse Wireless LLC (Finesse) owns the ’134 and ’775 patents, which generally relate to methods for mitigating intermodulation product (IMP) interference in radios.

Finesse sued AT&T for allegedly infringing claims 1–3 of the ’134 patent and claims 1, 4, 9, 16, 21, 29, and 36 of the ’775 patent by using the PIM cancellation (PIM-C) feature in Nokia radios.

A jury found all asserted claims valid and infringed, and awarded $166,303,391 in lump-sum damages for the remaining life of the patents.

AT&T and the other defendants moved for judgment as a matter of law (JMOL) of noninfringement, which the district court denied.

The Federal Circuit found that the jury’s verdict wasn’t supported by substantial evidence.

In particular, the court found that Finesse’s expert witness on infringement misinterpreted Nokia's technical documents.

As the court explained,

At trial, Finesse’s infringement expert, Dr. Jonathan Wells, testified that the accused radios infringe the asserted claims of the ’134 patent by relying on a Nokia technical document depicting how the accused radios operate….

Dr. Wells testified that the radio frequency analog-to-digital converter (RF ADC, depicted in the blue box) is a receiver that samples the claimed “signals of interest” and “interference generating signals” (both depicted in the dashed red path) to create a bit stream… Dr. Wells consistently and repeatedly testified he mapped “signals of interest” to the downlink transmit (DL(TX)) reference and “interference generating signals” to the modeled PIM path…

However, as the court noted,

On cross-examination, Appellants’ counsel pointed out that the RF ADC cannot sample the modeled PIM path because the modeled PIM path is generated downstream of the RF ADC after sampling occurs. Signals cannot be sampled before they are generated.

On appeal, Finesse argued that in connection with the ‘134 patent,

Dr. Wells identified the two signals on the red path as the DL(TX) reference for “signals of interest” and the modeled PIM path for “interference generating signals” because he was relying on the Nokia document’s legend, which says “Red – DL (TX) reference & modeled PIM path,” when he was really referring to x1 and x2. … Finesse claims Dr. Wells was “laboring under the misimpression that x1 and x2 correspond to DL[(TX) reference] and modeled PIM [path].”

The Federal Circuit noted that “Dr. Wells’ testimony was confusing and unclear even after he was made aware of his alleged misimpression.”

The district court found “Dr. Wells testified that two signals are entering the RF ADC, and that those are signals of interest and the interference-generating signals. Dr. Wells is clearly referring to x1 and x2.”

However, said the Federal Circuit, “There is nothing clear about Dr. Wells’ testimony.”

Said the court,

Dr. Wells never testified that x1 and x2 correspond to the “signals of interest” and “interference generating signals.”…. Instead, Finesse makes that inference by piecing together parts of Dr. Wells’ testimony over ninety pages apart in the record.

Also, said the court,

Even if Dr. Wells did testify that x1 and x2 are the “signals of interest” and “interference generating signals,” he repeatedly testified that the DL(TX) reference and modeled PIM path correspond to the claimed signals, and offered no clear or detailed explanation for his contradictory testimony.

The court concluded that

This confusing change of course is insufficient to support the jury verdict. When the party with the burden of proof, such as Finesse, rests its case on an expert’s self-contradictory testimony, we may conclude the evidence is insufficient to satisfy that standard.

The ‘775 patent claims a method for reducing IMP interference in a receiver by digitally multiplying three signals in seven multiplications to generate IMP cancellation signals.

At trial, Dr. Wells testified that the accused radios infringe the asserted claims of the ’775 patent by relying on a Nokia technical document depicting how the accused radios operate. He testified that the accused radios generate three separate, identifiable signals and equated the three distinct multiplications listed in the Nokia document with the seven claimed multiplications.

The district court found that using two signals, together with a copy of one of them, was sufficient to meet its construction of three separately identifiable signals.

The appellants argued that no reasonable jury could have found that the accused radios generate cancellation signals by multiplying three signals, because the accused radios use only two signals: x1 and x2.

The appellants also argued that no reasonable jury could have found the accused radios performed the seven claimed multiplications because Dr. Wells identified only three multiplications.

The Federal Circuit disagreed on the first point but agreed that no reasonable jury could have found the accused radios perform the seven claimed multiplications.

At trial, noted the court,

Dr. Wells relied on a Nokia document to show the accused radios perform the claimed multiplications. … But the document involves modulus and complex conjugate operations and does not show the accused radios perform the seven claimed multiplications.

Instead, the Nokia document only lists three distinct multiplications.

Dr. Wells didn’t testify to how those three distinct multiplications mapped onto the seven claimed multiplications.

Finesse tried to clarify the mapping on appeal, but the court noted that evidence was never presented to the jury.

The Federal Circuit thus reversed the district court’s denial of JMOL of noninfringement for the asserted claims of the ’775 patent because the jury’s infringement verdict was not supported by substantial evidence.

The court also vacated the damages award.

As Reuters explained,

Finesse, a Park City, Utah-based company owned by inventor Francis Smith, sued AT&T in 2021 for allegedly infringing patents related to reducing wireless signal interference. Nokia, which designed and manufactured base stations used with AT&T's networks, later intervened in the case that year to contest Finesse's claims.

Finesse has separately settled patent disputes with Ericsson and Verizon Wireless.

The case is Finesse Wireless LLC v. AT&T Mobility LLC, U.S. Court of Appeals for the Federal Circuit, No. 24-1039.