IP Law Daily, PATENT—C.D. Cal.: Infringement verdict for data storage handshake patent upheld; $315M damages cut to $1, (Jun 24, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Plaintiff failed to apportion damages to patented features; infringement verdict supported by substantial expert evidence.

A federal district court in California denied Western Digital Corporation’s post-trial motion for judgment as a matter of law on liability but granted its motion to vacate a $315 million jury damages award in an infringement lawsuit brought by SPEX Technologies, Inc. The court concluded that while the jury reasonably found Western Digital’s My Book and Ultrastar He10 products infringed the relevant claim of the asserted patent, SPEX’s damages theory lacked sufficient evidentiary support. In particular, SPEX failed to properly apportion the asserted encryption-related price premiums to the patented technology. The court accordingly entered nominal damages of $1 (SPEX Technologies, Inc. v. Western Digital Corp., No. 8:16-cv-01799-JVS-AGR (C.D. Cal. Jun. 16, 2025)).

Background. The plaintiff, SPEX Technologies, Inc., a company specializing in secure digital storage technologies, initiated this action in 2016 against the defendants Western Digital Corporation, Western Digital Technologies, Inc., and HGST, Inc. All defendants are affiliated companies engaged in manufacturing and distributing computer storage devices, including external hard drives with built-in encryption features. The parties operate in overlapping markets, and the accused products compete directly with SPEX’s technology offerings.

The asserted patent, U.S. Patent No. 6,088,802 (the '802 patent), covers systems for securing peripheral data storage devices through a modular architecture. SPEX proceeded to trial on Claim 25, which depends on Claim 24. Among other limitations, the claim requires a "target means for enabling a defined interaction with a host computing device," a "means for providing" identifying information in response to a host query, and a "means for enabling communication" between security and target modules.

After protracted litigation and a remand from the Federal Circuit concerning indefiniteness, the case proceeded to trial in October 2024 on Claim 25 alone. The jury found that Western Digital’s accused Ultrastar and My Book products infringed the asserted patent and awarded $315,715,900 in damages. Western Digital subsequently filed motions under Rule 50(b) and Rule 59, challenging both liability and the award of damages.

Target means and defined interaction. Western Digital contended that SPEX’s expert, Dr. Rhyne, had undermined the infringement finding by conceding that the accused spinning disk alone could not “enable” the claimed “defined interaction.” The court disagreed, concluding that Rhyne consistently presented two valid interpretations of “enables,” one active and one passive. On this basis, and relying on Presidio Components, Inc. v. Am. Tech. Ceramics Corp., 702 F.3d 1351, 1359 (Fed. Cir. 2012), the court determined that the jury could credit Rhyne’s testimony that the rotating disk, when identified during the USB handshake process, satisfied the limitation.

The court also reaffirmed its earlier claim construction, originally adopted in related litigation against Apricorn, holding that “enables” does not require active participation (SPEX Techs., Inc. v. Apricorn, No. 16-cv-07349, C.D. Cal. Jan. 7, 2020). Thus, the court found no basis to overturn the jury’s determination.

Means for providing to a host. Western Digital also argued that the handshake protocol could not simultaneously satisfy both the "defined interaction" and the "means for providing" limitations. Relying on Becton, Dickinson & Co. v. Tyco Healthcare Grp., LP, 616 F.3d 1249 (Fed. Cir. 2010), it urged that the two elements must be treated as distinct. The court rejected this strict separation, citing Applied Med. Res. Corp. v. U.S. Surgical Corp., 448 F.3d 1324 (Fed. Cir. 2006) and Google LLC v. EcoFactor, Inc., 92 F.4th 1049 (Fed. Cir. 2024), and held that the plain language and specification did not require different protocols or structures.

Means for enabling communication. On the “means for enabling communication” element, the court found substantial evidence supported the jury’s finding. While Western Digital asserted that SPEX’s expert relied on a generic “computer bus” rather than the disclosed “conventional computer bus 615” of the patent specification, the court determined that the term was used generically in the ’802 patent. It cited Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 296 F.3d 1106, 1119 (Fed. Cir. 2002), and Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999), to confirm that literal infringement requires only identity or equivalence in structure and function, both of which were shown by the trial evidence.

Damages. The court rejected SPEX’s reliance on a $10–$20 “adder” for encryption features derived from a Western Digital pricing spreadsheet (PX686) and lay testimony. The document postdated the infringement period by nearly a decade and related only to HGST products—not the My Book line. The court held that no admissible evidence tied the identified price premiums to the accused My Book products.

Even for the Ultrastar products, the adder values were found to reflect non-patented features such as FIPS certification and self-encrypting drives, which SPEX had failed to apportion out. Citing Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 904 F.3d 965, 977 (Fed. Cir. 2018), the court stressed that reasonable royalty awards must be based on the value attributable solely to the patented features.

Hypothetical negotiation. Although Western Digital argued that SPEX had presented insufficient evidence regarding the hypothetical negotiation, the court found enough testimony and documents to suggest that both parties would have considered licensing encryption technology in 2007. Nonetheless, this limited record could not support the damages figure awarded by the jury.

Apportionment failure and nominal damages. The court further faulted SPEX for failing to exclude non-infringing features in its profit calculation. The inclusion of features like TCG compliance and other enhancements not tied to the patented claim meant the entire analytical damages theory lacked foundation. As in TecSec, Inc. v. Adobe Inc., 978 F.3d 1278, 1291 (Fed. Cir. 2020), the court held that nominal damages were appropriate where no reliable royalty figure could be determined.

No new trial. The court rejected Western Digital's request for a new trial on the issue of liability. It held that the jury instructions, including the clarification that "enabling" does not require active participation, were not misleading. The court also found that SPEX's closing argument did not mischaracterize expert testimony in a way that prejudiced the jury.

Conclusion. Thus, the district court upheld the jury’s verdict on infringement but reduced the damages award to $1 due to lack of evidentiary support. Western Digital’s Rule 50(b) motion was denied in part and granted in part; its Rule 59 motion was denied in part and deemed moot in part.

The Case is No. 8:16-cv-01799-JVS-AGR.

Judge: Selna, J.

Attorneys: Marc A. Fenster (Russ August and Kabat) for Spex Technologies, Inc. Jason C. Lo (Gibson Dunn and Crutcher LLP) for Western Digital Technologies, Inc.

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