IP Law Daily, PATENT—FedCir: Jury Verdict of Infringement of Hearing Aid Feedback Reduction Method Patent Upheld, (Oct 15, 2012)

By Thomas Long, J.D.

A district court’s denial of a motion for a new trial or relief from judgment after a jury found that hearing aid manufacturers (“Demant” and “Widex”) infringed a patent (“the '850 patent”) held by Energy Transportation Group, Inc. (“ETG”) has been affirmed by the U.S. Court of Appeals for the Federal Circuit (Energy Transportation Group, Inc. v. William Demant Holding A/S, October 12, 2012, Rader, R.). The appellate court also affirmed the district court’s judgment as a matter of law of noninfringement of ETG’s '749 patent on the basis that prosecution history barred the jury’s finding of infringement under the doctrine of equivalents.

The ETG Patents

The '749 patent and the '850 patent—the “ETG Patents”—related to technology for reducing acoustic feedback in a programmable hearing aid. The ETG Patents shared a common specification with priority date of 1986, describing a method of reducing feedback by creating an electrical feedback path and inserting a programmable filter in that path to mimic the effects of acoustic feedback on the phase and amplitude of a sound signal in the transmission channel, which then cancels the acoustic feedback channel. The ETC Patents described a method of programming coefficients for the acoustic feedback filter with the use of a “host controller.” Using “adaptive strategies,” the filter can be programmed with different sets of coefficients and compared to identify the best response for the wearer.

The Accused Devices

The accused devices entered the market around 2001 to 2002 and used an adaptive filter technology for feedback reduction. The accused devices used a Least Mean Squares algorithm to recalculate and update the coefficients in the delay line repeatedly, during normal hearing aid operation, to cancel and eliminate feedback.

Claim Construction—“Programmed”

The asserted claims of the '850 patent recited “a programmable filter,” “a programmable delay line filter,” or a filter that is “programmed” to reduce acoustic feedback. The district court construed “programmed” to mean “provided with one or more values so as to produce a response.” Demant and Widex asserted that the district court erred by not limiting “programmed” to require that the values in the claimed invention are “externally calculated” or are “fixed” to impart cancellation of acoustic feedback.

According to the Federal Circuit, nothing in the '850 patent claims indicated that the plain and ordinary meaning of “programmed” should be limited to external or fixed programming. The claims did not specify where the programming was done, how often it was done, or what structure provided the programming. Thus, the language of the claims supported the district court’s decision to refrain from limiting the term “programmed” to require fixed or external operation, the appellate court said.

The specification contemplated that an adaptive filter would fit within the meaning of “programmable,” in the court’s view. The specification also referred to “de-programming the hearing aid to minimize acoustic feedback,” so it did not envision a filter with permanently “fixed” coefficients.

Invalidity—Written Description

Demant and Widex contended that the claims of the '850 patent lacked adequate written description because the specification only described external calculation of coefficients that are fixed during normal operation of the hearing aid. However, substantial evidence supported the jury’s determination that the '850 patent was not invalid for lack of written description, the court held.

As discussed earlier, the specification supported the district court’s claim construction and provided adequate written description to support the full scope of the claims as construed. The inventor testified that the patent explicitly indicated to one skilled in the art that the hearing aid of the invention was “adaptive.” The defendants’ expert admitted that a person of ordinary skill in the art would have understood that the programmable filter of the '850 patent could be an adaptive filter.

Invalidity—Anticipation

Also supported by evidence was the jury’s determination that the defendants did not prove by clear and convincing evidence that any of the asserted claims of the ETG Patents were invalid for anticipation, the court said. Demant and Widex asserted that Claim 19 of the '850 patent was invalid for anticipation by a prior patent (“Graupe”). Graupe disclosed a hearing aid that periodically entered an “anticipation mode” during which the amplifier was disconnected and a test signal was supplied to the speaker and run through a circuit to calculation new coefficients to reduce feedback. Expert testimony revealed that Graupe did not consider the effect of acoustic feedback on a signal in the transmission channel and therefore did not disclose a filter that is “programmed to effect substantial reduction of acoustic feedback,” as per the '850 patent. Therefore, the court said, Graupe did not disclose an important claimed feature of the '850 patent.

Infringement

The jury found no literal infringement of method claims 13, 14, and 16 of the '850 patent but found that Demant and Widex both had infringed those claims under the doctrine of equivalents. The Federal Circuit affirmed the district court’s denial of the defendants’ motions for JMOL of no infringement under the doctrine of equivalents.

The jury had substantial evidence from which to conclude that the defendants’ products met each of the disputed limitations—the “determining” step, the “inserting” step, and the “programmable filter”/”filter therein programmed”—the court said.

Demant and Widex argued that their devices could not be found to infringe under the doctrine of equivalents because, if the claims were “expanded” to cover the adaptive filters in the accused devices, the claims would then also extend to the prior art Graupe patent. However, the court noted, adaptive filters were within the literal scope of the claims. The court had rejected the defendants’ arguments seeking limitation of the term “programmable” to filters with fixed or externally calculated coefficients.

Damages

Demant and Widex also sought a new trial on damages. However, they failed to show that the jury’s award was “outrageously high” or unsupported by evidence. The appellate court rejected challenges by the defendants to the admission of a report from the German Federal Cartel Office (“Cartel Report”), the use of the 25 percent rule of thumb by ETG’s damages expert, the amount of the damages award, and the award of pre-judgment interest.

The district court did not err by finding that the probative value of the Cartel Report outweighed any prejudice, even though the Cartel Report’s conclusion that an “oligopoly” existed in the hearing aid industry was subsequently overturned by a German appellate court, after trial in this case. ETG had relied on the facts presented in the Cartel Report regarding the hearing aid market and the industry structure, and not the legal conclusion that the market was an oligopoly. These facts were relevant to the determination of a reasonable royalty, the Federal Circuit said.

Expert testimony making reference to the 25 percent “rule”—which was no longer applied as a rule—did not irretrievably damage the reasonableness of the expert’s method and result in arriving at recommended royalty rates, the court said. The jury did not adopt the expert’s damages analysis wholesale, but awarded lump sum damages that equated to effective royalty rates in the range of 4 to 5 percent. The defendants did not show that the award was outrageous or grossly excessive, the court said.

Noninfringement of '749 Patent

The district court found that prosecution history estoppel barred assertion of the doctrine of equivalents with regard to the '749 patent. During prosecution, ETG had made a narrowing amendment to a claim because the claim as originally submitted was similar to a claim that had been rejected in another application in view of prior art. The amendment narrowed the claimed method of cancelling feedback from one requiring only modifying frequency gain and unspecified “feedback characteristics” to one specifically requiring measurement of phase and amplitude.

ETG did not overcome the presumption that the narrowing amendment was made to secure the patent, the Federal Circuit said. There was no other explanation for the limitation.

The case is No. 2011-1487, 2011-1488, and 2011-1489.

Brian M. Buroker (Gibson, Dunn & Crutcher, LLP) for Energy Transportation Group, Inc. Robert Green Sterne (Sterne, Kessler, Goldstein, & Fox, PLLC) for William Demant Holding A/S. William H. Mandir (Sughrue Mion, PLLC) for Widex A/S.

Cases: Patent FedCir