Finisar Corp. v. DirectTv Group, Inc.

By a jury verdict, the United States District Court for the Eastern District of Texas found that The DirecTV Group, Inc., DirecTV Holdings, LLC, DirecTV Enterprises, LLC, DirecTV Operations, LLC, and DirecTV, Inc. (collectively DirecTV) had infringed U.S. Patent No. 5,404,505 (the ’505 patent), assigned to Finisar Corporation (Finisar). Finding DirecTV’s infringement to have been willful, the jury awarded $78.9 million in reasonable royalty damages. The district court sustained the jury’s verdict, except with respect to induced and contributory infringement, denied Finisar’s request for injunctive relief, imposed a compulsory license, and awarded Finisar $25 million in enhanced damages. Finisar Corp. v. DirecTV Group, Inc., No. 1:05-CV-00264 (E.D. Tex. July 7, 2006) (Final Judgment). The district court also denied DirecTV’s post-judgment motions for judgment as a matter of law (JMOL) or a new trial. Finisar Corp. v. DirecTV Group, Inc., Case No. 1:05-CV-00264 (E.D. Tex. Sept. 1, 2006) (JMOL Order).
Because the district court incorrectly construed a vital term featured prominently in each asserted claim, this court vacates the verdict of infringement. Furthermore, the district court erred in ruling that the prior art did not anticipate claim 16. This error also infects the scope of the prior art for assessing the validity of the rest of the claims. Therefore, this court remands for a new trial on both infringement and validity of claims 17, 22, 24, 26, 39, and 44.

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