O2 International Ltd. v. Beyond Innovation Technology Co., Ltd. ( 2011 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
O2 MICRO INTERNATIONAL LTD.,
Plaintiff-Appellee,
v.
BEYOND INNOVATION TECHNOLOGY CO., LTD.,
Defendant-Appellant,
and
FSP TECHNOLOGY, INC. (FORMERLY KNOWN AS SPI
ELECTRONIC CO., LTD.), FSP GROUP, AND LIEN
CHANG ELECTRONIC ENTERPRISE CO., LTD.,
Defendants.
__________________________
2011-1054
__________________________
Appeal from the United States District Court for the
Eastern District of Texas in Case No. 04-CV-0032, Magis-
trate Judge Charles Everingham, IV.
____________________________
Decided: November 18, 2011
____________________________
ROBERT M. HARKINS, JR., Sedwick, LLP, of San Fran-
cisco, California, argued for plaintiff-appellee. Of counsel
were RICHARD C. LIN and HENRY C. SU.
O2 MICRO INTL v. BEYOND INNOVATION 2
DONALD R. MCPHAIL, Duane Morris, LLP, of Washing-
ton, DC, argued for defendant-appellant. With him on the
brief was KRISTINA A. CAGGIANO. Of counsel on the brief
was ROBERT L. BYER, of Philadelphia, Pennsylvania.
__________________________
Before RADER, Chief Judge, and LOURIE and PROST,
Circuit Judges.
Opinion for the court filed by Circuit Judge LOURIE.
Dissenting opinion filed by Circuit Judge PROST.
LOURIE, Circuit Judge.
Beyond Innovation Technology Co., Ltd. (“BiTEK”)
appeals from the district court’s final judgment in favor of
O2 Micro International Ltd. (“O2 Micro”). Final Judg-
ment and Permanent Injunction, O2 Micro Int’l Ltd. v.
Beyond Innovation Tech. Co., No. 2:04-CV-0032 (E.D. Tex.
Sept. 27, 2010), ECF No. 669 (“Final Judgment”). The
judgment follows a bench trial in which the district court
found that BiTEK induced infringement of various claims
of O2 Micro’s U.S. Patents 6,259,615 (“the ’615 patent”)
and 6,396,722 (“the ’722 patent”) and imposed a perma-
nent injunction. Id. at 1–2.
In this appeal, BiTEK challenges the district court’s
finding of induced infringement and the grant and scope
of the permanent injunction. BiTEK also appeals the
district court’s precluding testimony from its nonin-
fringement expert as a sanction for violating an order in
limine. See O2 Micro Int’l Ltd. v. Beyond Innovation
Tech. Co., No. 2:04-CV-0032, 2009 WL 2047617, at *3
(E.D. Tex. July 10, 2009) (“Sanctions Order”). Because
the district court did not clearly err in its finding that
BiTEK induced infringement, did not abuse its discretion
in precluding testimony from BiTEK’s noninfringement
3 O2 MICRO INTL v. BEYOND INNOVATION
expert, and did not commit reversible error in granting
the permanent injunction, we affirm.
BACKGROUND
This patent case relates to integrated circuits that
control the power delivered to fluorescent lamps that light
electronic displays, such as liquid crystal displays (LCDs)
used by computers, laptops, and smart phones. The
integrated circuits are referred to as “current inverter
controllers,” and both O2 Micro and BiTEK design and
sell these controllers.
The issues on appeal focus on the commercial rela-
tionships and global nature of the marketplace for current
inverter controllers and their end products rather than
the technical details of the asserted patents or the ac-
cused products. BiTEK, which is headquartered in Asia,
manufactures current inverter controllers in Taiwan and
sells the controllers to companies in Asia that combine
them with other circuit components to create inverter
control modules. BiTEK’s customers in turn sell the
modules in Asia to companies such as Samsung, which
incorporate the modules into LCD products and import
those products into the United States.
This case has a long procedural history. In 2004, O2
Micro sued BiTEK and a number of other defendants in
the U.S. District Court for the Eastern District of Texas,
alleging that BiTEK induced infringement of the ’615 and
’722 patents. In a separate lawsuit brought against
Samsung in the same court, O2 Micro alleged that Sam-
sung’s LCD products contained current inverter technol-
ogy that directly infringed the ’615 and ’722 patents.
O2 Micro’s infringement action against BiTEK was
tried to a jury in 2006. Prior to trial, the district court
O2 MICRO INTL v. BEYOND INNOVATION 4
entered the following in limine order relating to O2 Mi-
cro’s incorporation in the Cayman Islands:
4. Preclude evidence relating to O2’s selection of
Cayman Islands for its headquarters: Granted in
part and denied in part. Defendants may refer to
the fact that O2 is a Cayman Island corporation.
The motion is granted to the extent defendants
seek to offer evidence relating to taxation.
Sanctions Order, 2009 WL 2047617, at *1. O2 Micro
prevailed in the first case, and the district court, applying
the factors recited in eBay Inc. v. MercExchange, L.L.C.,
547 U.S. 388 (2006), imposed a permanent injunction.
About one month later, O2 Micro and Samsung entered
into a settlement agreement (the “Samsung Agreement”).
The Samsung Agreement is marked confidential and we
disclose here only such information as is necessary to
explain our decision. The Agreement contains three key
provisions for the purposes of this appeal: a covenant not
to sue Samsung or its customers; an “abide by” clause
that requires Samsung to abide by the terms of any
injunctions entered; and a supply agreement. J.A. 1969–
70.
BiTEK appealed from the district court’s judgment.
On appeal, we vacated the district court’s infringement
judgment and remanded the case for a second trial be-
cause the district court failed to resolve the parties’ dis-
pute on claim scope and allowed the parties to submit to
the jury competing expert testimony on the claim con-
struction issue. O2 Micro Int’l Ltd. v. Beyond Innovation
Tech. Co., 521 F.3d 1351, 1361–63 (Fed. Cir. 2008).
Prior to a second jury trial, the district court restated
the in limine order regarding O2 Micro’s selection of the
Cayman Islands as its headquarters. Sanctions Order,
2009 WL 2047617, at *1. During the pretrial conference,
5 O2 MICRO INTL v. BEYOND INNOVATION
the district court warned counsel to approach the bench
before they “launch into something that’s covered by the
motion in limine.” J.A. 286–87.
During jury selection in the second case, O2 Micro’s
counsel informed the jury panel that O2 Micro was head-
quartered in the Cayman Islands. Sanctions Order, 2009
WL 2047617, at *2. During BiTEK’s allotment for jury
selection, BiTEK’s counsel stated that “BiTEK was a little
bit surprised when it was sued in Texas by this Cayman
Island company, O2 Micro.” J.A. 467. Shortly thereafter,
without approaching the bench, he asked the jury panel
the following question:
Now, are there any of you who have a problem
with a company that puts its headquarters off-
shore on a Caribbean island in order to avoid pay-
ing U.S. taxes?
J.A. 472; Sanctions Order, 2009 WL 2047617, at *2. O2
Micro objected. The district court, after holding a bench
conference and a hearing, found that BiTEK’s counsel had
willfully violated the in limine order and held BiTEK’s
counsel in contempt. Id. At O2 Micro’s election, the
district court declared a mistrial and reset the case for
trial before a new jury. Order, O2 Micro Int’l Ltd. v.
Beyond Innovation Tech. Co., No. 2:04-CV-0032 (E.D. Tex.
July 21, 2009), ECF No. 625; Sanctions Order, 2009 WL
2047617, at *3.
The court also imposed a variety of sanctions against
BiTEK. Those sanctions included (1) imposing on BiTEK
the costs and attorney fees incurred by all parties for the
first jury selection; (2) severing BiTEK from the other
defendants; (3) awarding the costs and attorney fees
incurred by O2 Micro for trying its case against the sev-
ered defendants; (4) limiting BiTEK’s voir dire time and
number of peremptory challenges in the second jury
O2 MICRO INTL v. BEYOND INNOVATION 6
selection; (5) instructing the jury panel that BiTEK re-
ceived limited time to conduct voir dire because it inten-
tionally violated a court order resulting in the dismissal of
the previous jury and the summoning of the second jury
panel; and (6) precluding BiTEK from presenting expert
witness testimony on the issue of infringement. Id. at *2–
*3.
The case then proceeded to the second jury trial. On
the second day of trial, upon questioning by the district
court, BiTEK withdrew its state law counterclaims of
sham litigation. J.A. 8089–93. Because O2 Micro only
sought equitable relief for BiTEK’s alleged infringement,
the case proceeded by agreement to a bench trial. Id.
At trial, O2 Micro proffered two instances of direct in-
fringement: Samsung’s sale of LCD products in the
United States and sales of LCD products in the United
States by another company, LG. Regarding Samsung, O2
Micro presented evidence that, in January 2004, one of its
employees purchased three Samsung monitors from
Samsung Electronics in Texas that contained the accused
BiTEK current inverter controllers. J.A. 6.
With regard to LG, O2 Micro did not present any di-
rect evidence that LG sold LCD products in the United
States that contained the accused BiTEK current inverter
controllers. Rather, O2 Micro presented circumstantial
evidence. First, the parties stipulated that LCD monitors
that contained the accused models of BiTEK current
inverter controllers were sold in the United States. J.A.
6. Second, the parties stipulated that LG, somewhere in
the world, sold LCD monitors that contained the same
accused models of BiTEK current inverter controllers. Id.
Third, O2 Micro presented evidence that the United
States was the largest market for LCD monitors. J.A. 16.
Finally, O2 Micro presented evidence that BiTEK knew
7 O2 MICRO INTL v. BEYOND INNOVATION
that its current inverter controllers, as part of LCD moni-
tors, were imported into the United States. Id.
In addition, O2 Micro presented evidence that BiTEK
specifically intended that its accused current inverter
controllers would be incorporated into products for sale in
the United States. In particular, the district court found
that BiTEK provided customers with datasheets for the
accused current inverter controllers, provided technical
support, entered into an indemnification agreement with
a customer, and offered discounts to Samsung after O2
Micro sued Samsung for patent infringement in the
United States. J.A. 25–26.
After trial, the district court found that BiTEK in-
fringed the asserted patents by inducing the direct in-
fringement by LG and Samsung and concluded, for the
same reasons it delineated after the first trial in 2006,
that a permanent injunction should issue. J.A. 23–28.
The district court then asked O2 Micro to propose a form
of the injunction, J.A. 28, and O2 Micro submitted its
proposed language, Submission of Proposed Form of
Judgment, O2 Micro Int’l Ltd. v. Beyond Innovation Tech.
Co., No. 2:04-CV-0032 (E.D. Tex. July 19, 2010), ECF No.
667.
After O2 Micro submitted its proposed language for
the injunction, BiTEK conferred with O2 Micro and
submitted its proposed language, language that O2 Micro
did not oppose. Submission of Amended Proposed Form of
Judgment, O2 Micro Int’l Ltd. v. Beyond Innovation Tech.
Co., No. 2:04-CV-0032 (E.D. Tex. July 21, 2010), ECF No.
668. The district court adopted BiTEK’s proposed form,
and entered a permanent injunction containing BiTEK’s
proposed language, including the specific language that
BiTEK now challenges on appeal. Final Judgment, at 2.
Along with the permanent injunction, the district court
O2 MICRO INTL v. BEYOND INNOVATION 8
entered a final judgment against BiTEK, id. at 1, from
which BiTEK timely appealed. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
BiTEK appeals from the district court’s infringement
finding, its precluding testimony from its noninfringe-
ment expert, and the issuance of the permanent injunc-
tion. We address each issue below.
A. Infringement
Under 35 U.S.C. § 271(b), a party that actively in-
duces infringement of a patent is liable as an infringer.
To prevail on a claim of induced infringement, in addition
to inducement by the defendant, the patentee must also
show that the asserted patent was directly infringed.
Epcon Gas Sys., Inc. v. Bauer Compressors, Inc., 279 F.3d
1022, 1033 (Fed. Cir. 2002). After a full bench trial on the
issue of infringement, we will overturn the district court’s
factual findings only if those findings are clearly errone-
ous. FED. R. CIV. P. 52(a)(6); Amgen Inc. v. Hoechst
Marion Roussel, Inc., 314 F.3d 1313, 1339 (Fed. Cir.
2003). A finding is clearly erroneous when, after review-
ing the record, we are left with the “definite and firm
conviction that a mistake has been committed.” Inwood
Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 855 (1982)
(quoting United States v. U.S. Gypsum Co., 333 U.S. 364,
395 (1948)).
On appeal, the issues of inducement raised by BiTEK
relate only to direct infringement by companies that
purchased BiTEK’s controllers, specifically, LG and
Samsung, not to actions by BiTEK. At trial, O2 Micro
offered two instances of direct infringement by purchasers
of BiTEK controllers: (1) sales of LCD monitors by Sam-
sung; and (2) sales of LCD monitors by LG.
9 O2 MICRO INTL v. BEYOND INNOVATION
BiTEK argues that O2 Micro failed to prove either in-
stance of direct infringement, and, hence that BiTEK
cannot be found to have induced infringement. In par-
ticular, BiTEK argues that Samsung was not a direct
infringer because the Samsung Agreement was a license
that authorized Samsung to sell infringing products.
Regarding LG, BiTEK argues that there was no evidence
presented at trial that LG sold an accused product in the
United States. Because we conclude that O2 Micro pre-
sented sufficient evidence that LG directly infringed the
asserted claims, we decline to address BiTEK’s arguments
regarding Samsung and only address BiTEK’s arguments
that relate to LG.
Turning to its arguments, BiTEK argues that there
was no evidence presented at trial that LG sold any
products containing BiTEK current inverter controllers in
the United States. Specifically, BiTEK argues that the
parties’ stipulations are insufficient to support the in-
fringement finding because those stipulations do not
provide any indication that any LG product with an
accused controller entered the United States. Finally,
BiTEK argues that the district court erred because its
written opinion failed to make a specific finding that LG
imported or sold LCD monitors in the United States.
We disagree. A patentee may prove infringement by
direct or circumstantial evidence, Lucent Technologies,
Inc. v. Gateway, Inc., 580 F.3d 1301, 1318 (Fed. Cir.
2009); a patentee is not required to present direct evi-
dence of infringement, Symantec Corp. v. Computer
Associates International, Inc., 522 F.3d 1279, 1293 (Fed.
Cir. 2008). Indeed, “[i]t is hornbook law that direct evi-
dence of a fact is not necessary” to meet a party’s burden
of proof on an issue of fact. Moleculon Research Corp. v.
CBS, Inc., 793 F.2d 1261, 1272 (Fed. Cir. 1986).
O2 MICRO INTL v. BEYOND INNOVATION 10
Nor is a patentee required to prove direct infringe-
ment to a complete certainty. A patentee is only required
to prove direct infringement by a preponderance of the
evidence—that it is more likely than not that the direct
infringement occurred. Lucent, 580 F.3d at 1317–18.
Our decision in Lucent illustrates these principles. In
Lucent, we concluded that substantial evidence supported
a verdict of indirect infringement where the patentee
presented circumstantial evidence that some party com-
mitted direct infringement of the asserted method claims
by using the accused product. 580 F.3d at 1317–19. The
evidence in Lucent consisted of the defendant’s sales of
the accused product, the defendant’s dissemination of
instruction manuals with its products, and testimony
from the patentee’s expert that “[i]t’s hard to imagine”
that the expert and his wife were the only two people ever
to use the accused functionality. Id. While that circum-
stantial evidence was “something less than the weight of
the evidence,” we concluded that Lucent had presented
substantial evidence of direct infringement. Id. at 1319
(quoting Consolo v. Fed. Maritime Comm’n, 383 U.S. 607,
620 (1966)).
In this case, O2 Micro presented sufficient circum-
stantial evidence from which the district court could find
that it was more likely than not that LG sold LCD moni-
tors in the United States containing the accused BiTEK
controllers. As described above, that evidence showed (1)
that the accused BiTEK controllers have been sold in the
United States; (2) that BiTEK knew that its accused
controllers entered the United States as part of LCD
monitors and committed acts of inducement with specific
intent; (3) that LG had sold LCD monitors that contain
the accused BiTEK controllers; and (4) that the United
States is the largest consumer market for LCD monitors
worldwide. While it is arguable that this circumstantial
11 O2 MICRO INTL v. BEYOND INNOVATION
evidence would not persuade a particular fact finder in
the first instance that it was more likely than not that an
accused BiTEK controller entered the United States in an
LCD monitor sold by LG, the district court, sitting as the
fact finder in this case, did find infringement. We review
the district court’s infringement finding for clear error,
and we find none here.
BiTEK’s attack on the district court’s failure to men-
tion LG in its ultimate infringement finding is also un-
sound. Federal Rule of Civil Procedure 52(a) does not
require “elaborate, detailed findings on every factual issue
raised,” Atlantic Thermoplastics Co. v. Faytex Corp., 5
F.3d 1477, 1479 (Fed. Cir. 1993), and a district court’s
findings of fact are adequate if the findings are “suffi-
ciently comprehensive and pertinent to the issue to form a
basis for the decision,” Medtronic, Inc. v. Daig Corp., 789
F.2d 903, 906 (Fed. Cir. 1986) (quoting Loctite Corp. v.
Ultaseal Ltd., 781 F.2d 861, 873 (Fed. Cir. 1985)). Here,
the district court delineated specific findings of fact relat-
ing to LG’s sale of LCD monitors and the market for the
accused controllers and LCD products. J.A. 6, 16. After
making those findings, the district court found that “O2
Micro has proven by a preponderance of the evidence that
LCD monitors sold in the United States containing . . .
[the accused controllers] directly and literally infringe
[the asserted claims].” J.A. 25. Those findings were
sufficiently comprehensive and pertinent to the issue of
direct infringement.
Thus, we conclude that the district court did not
commit clear error in finding that LG directly infringed
the asserted claims as a basis for finding induced in-
fringement by BiTEK.
O2 MICRO INTL v. BEYOND INNOVATION 12
B. Precluding BiTEK’s Noninfringement Expert’s
Testimony
BiTEK also challenges the district court’s sanction of
precluding BiTEK from presenting expert testimony on
the issue of infringement. BiTEK argues that while the
sanction was not an outright dismissal of the case, the
sanction nonetheless imposed the “death penalty” on
BiTEK’s infringement defense. BiTEK argues that the
district court abused its discretion, citing a number of
reasons: the sanction punished BiTEK for its attorney’s
misconduct of which BiTEK was not culpable; the other
sanctions imposed by the district court were sufficient to
compensate O2 Micro; and the other sanctions were
sufficient to deter future violations of the district court’s
orders.
We disagree. Federal courts possess inherent power
to sanction litigants and their attorneys, and we review a
district court’s use of its inherent power for an abuse of
discretion. Chambers v. NASCO, Inc., 501 U.S. 32, 55
(1991). Because a district court’s invocation of its inher-
ent powers is not an issue unique to patent law, we apply
the law of the regional circuit, here the Fifth Circuit. See
ClearValue, Inc. v. Pearl River Polymers, Inc., 560 F.3d
1291, 1308–09 (Fed. Cir. 2009).
The Fifth Circuit has noted that a court’s inherent
powers include “the authority to punish for contempt in
order to maintain obedience to court orders and the
authority to impose reasonable and appropriate sanctions
on errant lawyers practicing before the court.” Natural
Gas Pipeline Co. v. Energy Gathering, Inc., 86 F.3d 464,
467 (5th Cir. 1996). However, because of the severity of
the inherent powers possessed by a court and the possi-
bilities of their misuse, a court must exercise “great
restraint and caution” when invoking its inherent powers.
13 O2 MICRO INTL v. BEYOND INNOVATION
Id. When imposing sanctions pursuant to its inherent
power, a court must make a specific finding of bad faith.
Goldin v. Bartholow, 166 F.3d 710, 722 (5th Cir.1999);
Chambers, 501 U.S. at 50 (“A court must, of course,
exercise caution in invoking its inherent power, and it
must comply with the mandates of due process, both in
determining that the requisite bad faith exists and in
assessing fees.”) (internal citation omitted). In addition, a
court may exercise its inherent power only if essential to
preserve the authority of the court. Natural Gas Pipeline,
86 F.3d at 467. As a corollary, the sanction chosen must
employ “the least possible power adequate to the end
proposed.” Id. (quoting Spallone v. United States, 493
U.S. 265, 280 (1990)).
We conclude that the district court did not abuse its
discretion in precluding BiTEK from presenting expert
testimony on the issue of infringement. BiTEK does not
challenge the district court’s finding that BiTEK’s counsel
willfully violated the in limine order in bad faith, but
instead argues that the district court failed to find bad
faith on the part of BiTEK. That argument is without
merit. The district court, after finding that BiTEK’s
counsel acted in bad faith, specifically found that “BiTEK,
through its counsel, has undermined the parties’ expecta-
tions to a trial by a jury selected from the panel sum-
moned according to the regular process of the court.”
Sanctions Order, 2009 WL 2047617, at *2. While BiTEK
argues that the sanctions were imposed for conduct that
was attributable solely to its attorney, the finding that
BiTEK was acting through its counsel comports with the
well-settled principle that a client is responsible for its
attorney’s conduct in the courtroom. Link v. Wabash
R.R., 370 U.S. 626, 633–34 (1962).
Similarly, BiTEK’s argument that excluding its ex-
pert’s testimony amounted to a “death penalty sanction”
O2 MICRO INTL v. BEYOND INNOVATION 14
lacks merit. Under Fifth Circuit law, a district court
imposes “death penalty” sanctions if the sanctions consti-
tute dismissal of the sanctioned party’s pleading and
entry of judgment against the sanctioned party. EEOC v.
Gen. Dynamics Corp., 999 F.2d 113, 118–19 (5th Cir.
1993); see also CQ, Inc. v. TXU Mining Co., 565 F.3d 268,
280 n.7 (5th Cir. 2009) (upholding the district court’s
exclusion of the plaintiff’s damages evidence where the
evidence, while important, was not essential to the under-
lying recovery and noting that “this is not a case in which
the district court’s exclusion of the evidence constituted
dismissal of the plaintiff’s claims”).
The district court did not impose “death penalty sanc-
tions.” It did not dismiss BiTEK’s case. As an initial
matter, O2 Micro, not BiTEK, had the burden of proof on
the issue of infringement. Cybor Corp. v. FAS Techs.,
Inc., 138 F.3d 1448, 1467 (Fed. Cir. 1998) (en banc). As
part of its defense to O2 Micro’s infringement allegations,
expert testimony was not the only evidence that BiTEK
could employ. BiTEK had the ability to advance its
noninfringement defense through documentary evidence,
testimony from its technical fact witnesses, and testimony
from O2 Micro’s technical expert on cross-examination,
each of which BiTEK presented at trial. Those classes of
evidence may support a judgment of no literal infringe-
ment. See Johns Hopkins Univ. v. Datascope Corp., 543
F.3d 1342, 1345–49 (Fed. Cir. 2008) (entering judgment of
noninfringement as a matter of law based on testimony by
the patentee’s technical expert). Thus, the district court’s
exclusion of the expert testimony on noninfringement was
not the equivalent of entering judgment against BiTEK
on the issue of literal infringement.
The exclusion of expert testimony, however, did ham-
per BiTEK’s ability to present its noninfringement theory
through the witness it desired. Otherwise, there would be
15 O2 MICRO INTL v. BEYOND INNOVATION
no deterrent effect of the sanction. But that prejudice to
BiTEK’s ability to choose the form or presentation order
of its supporting evidence does not recast the district
court’s exclusion of BiTEK’s noninfringement expert into
a “death penalty sanction.”
With the exclusion of BiTEK’s expert testimony prop-
erly characterized, we cannot conclude that the district
court abused its discretion by imposing that sanction.
BiTEK asserts on appeal that the other sanctions imposed
by the district court were sufficient to compensate O2
Micro and deter future violations of the court’s orders, but
we conclude that the district court acted within its discre-
tion. The district court found that monetary sanctions
alone were inappropriate because “[t]o hold otherwise
would effectively allow a litigant to buy a new jury panel
by intentionally violating the court’s orders in limine.”
Sanctions Order, 2009 WL 2047617, at *3. Regarding the
non-monetary sanctions, including precluding testimony
from BiTEK’s noninfringement expert, we decline
BiTEK’s invitation to second-guess the district court’s
conclusion that those sanctions were necessary to deter
future violations of its orders, especially after properly
characterizing the effect of the exclusion of expert testi-
mony on noninfringement. Thus, we affirm the district
court’s precluding testimony of BiTEK’s noninfringement
expert as a sanction for violating an order in limine.
C. Permanent Injunction
Lastly, BiTEK challenges the district court’s perma-
nent injunction on two grounds: that the injunctive relief
was not warranted under eBay; and that the injunction is
overbroad and improperly enjoins BiTEK from engaging
in activities that occur solely overseas. We address each
argument below.
O2 MICRO INTL v. BEYOND INNOVATION 16
1. Issuance of the Injunction
To obtain a permanent injunction, a patentee must
demonstrate the following four factors: “(1) that it has
suffered an irreparable injury; (2) that remedies available
at law, such as monetary damages, are inadequate to
compensate for that injury; (3) that, considering the
balance of hardships between the plaintiff and defendant,
a remedy in equity is warranted; and (4) that the public
interest would not be disserved by a permanent injunc-
tion.” eBay, 547 U.S. at 391. We review the issuance of a
permanent injunction for an abuse of discretion. Joy
Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 772 (Fed. Cir. 1993).
We review the district court’s conclusion as to the eBay
factors for an abuse of discretion and review the district
court’s underlying factual findings for clear error. Acu-
med LLC v. Stryker Corp., 551 F.3d 1323, 1327–31 (Fed.
Cir. 2008).
In its conclusion after the second trial, the district
court specifically stated that, under the eBay factors, a
permanent injunction should issue. J.A. 28. In so con-
cluding, the district court referred to the opinion that the
district court issued at the conclusion of the first trial in
2007. Id. BiTEK argues that the district court failed to
consider significant changes in circumstances after the
first BiTEK trial. Specifically, BiTEK challenges the
district court’s findings regarding the first two eBay
factors, irreparable harm and inadequate legal remedy.
Regarding these factors, the district court issued the
following conclusions after the first trial: (1) that O2
Micro has demonstrated an irreparable injury because it
directly competes with BiTEK, causing a loss in O2 Mi-
cro’s market share; and (2) that O2 Micro demonstrated
the inadequacy of a legal remedy based, in part, on the
difficulty of collecting damages from BiTEK. Memoran-
dum and Opinion and Order, O2 Micro Int’l Ltd. v. Be-
17 O2 MICRO INTL v. BEYOND INNOVATION
yond Innovation Tech. Co., No. 2:04-CV-0032 (E.D. Tex.
Mar. 21, 2007), ECF No. 424. We address each of
BiTEK’s arguments below.
a. Irreparable Harm
BiTEK argues that the injunction here only remedies
past infringement rather than grants prospective relief
because O2 Micro only relied on past acts of infringement
during the second trial. We do not agree.
The purpose of a permanent injunction is to prevent
future infringement rather than compensate a patentee
for past infringement or punish an infringer for past
infringement. Johns Hopkins Univ. v. CellPro, Inc., 152
F.3d 1342, 1365–67 (Fed. Cir. 1998). As part of the eBay
analysis to determine if an injunction should issue, how-
ever, it is proper for a district court to consider past harm
to a patentee when determining if the patentee is entitled
to an injunction. i4i Ltd. v. Microsoft Corp., 598 F.3d 831,
861–62 (Fed. Cir. 2010). Specifically, “[p]ast harm to a
patentee’s market share, revenues, and brand recognition
is relevant to determining whether the patentee ‘has
suffered an irreparable injury.’” Id. (quoting eBay, 547
U.S. at 391).
It is true that the evidence of infringement and the re-
lated harm to O2 Micro had lost its freshness in the over
three years that lapsed between the first and second
trials. But that passage of time, which resulted from
BiTEK’s first appeal and the district court’s trial sched-
ule, does not render the permanent injunction punitive or
a remedy to compensate for past infringement. See i4i,
598 F.3d at 861–62. No relevant circumstances have
changed since the district court found in 2007 that O2
Micro and BiTEK are direct competitors and that BiTEK’s
infringement caused O2 Micro to lose market share.
Thus, the district court’s reliance on those findings was
O2 MICRO INTL v. BEYOND INNOVATION 18
not an abuse of discretion. Nothing in the record in this
case indicates that the district court entered the injunc-
tion, whose terms are prospective, to compensate O2
Micro for past infringement or to punish BiTEK.
b. Inadequate Remedy at Law
Regarding the second eBay factor, BiTEK raises two
arguments. First, BiTEK argues that the Samsung
Agreement, executed in 2007, provides strong evidence
that O2 Micro has an adequate remedy at law, viz., dam-
ages. Second, BiTEK also argues that the district court’s
finding that O2 Micro would have difficulty collecting
damages from BiTEK was “unfounded speculation.”
Opening Br. O2 Micro Int’l Ltd. at 43, 2011 WL 881998
(“Appellant Br.”). Thus, concludes BiTEK, the district
court abused its discretion in concluding that O2 Micro
did not have an adequate remedy at law.
We disagree. We analyze the adequacy of a remedy at
law in practical terms. See Beacon Theatres, Inc. v.
Westover, 359 U.S. 500, 506–07 (1959); i4i, 598 F.3d at
862 (“Difficulty in estimating monetary damages is evi-
dence that remedies at law are inadequate.” (citing
Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 703–04
(Fed. Cir. 2008))). Even if we were to assume that the
Samsung Agreement contained an unrestricted license,
“the fact that a patentee has previously chosen to license
the patent,” while it “may indicate that a reasonable
royalty does compensate for an infringement,” is “but one
factor for the district court to consider” when determining
if injunctive relief is warranted. Acumed, 551 F.3d at
1328. “The fact of the grant of previous licenses, the
identity of the past licensees, the experience in the mar-
ket since the licenses were granted, and the identity of
the new infringer” may all affect the district court’s dis-
cretionary decision to determine if the patentee has
19 O2 MICRO INTL v. BEYOND INNOVATION
shown that it does not possess an adequate remedy at
law. Id.
The district court had the Samsung Agreement before
it in fashioning its findings of fact and conclusions of law,
and concluded that an injunction should issue. At trial,
O2 Micro presented evidence that Samsung, a customer of
and situated downstream from O2 Micro, was in a differ-
ent market position from BiTEK, which directly competes
with O2 Micro. J.A. 28, 1969–71. In addition, the Sam-
sung Agreement does not simply provide for an exchange
of money in return for a nonexclusive license, but it
contains provisions consistent with O2 Micro’s status as a
Samsung supplier that competes with other suppliers
such as BiTEK. J.A. 1969–71. BiTEK does not dispute
these facts, which support the district court’s entry of the
permanent injunction. See Acumed, 551 F.3d at 1328
(“The essential attribute of a patent grant is that it pro-
vides a right to exclude competitors from infringing the
patent.” (citing 35 U.S.C. § 154(a)(1))).
We also reject BiTEK’s argument that the district
court engaged in “unfounded speculation” in finding that
O2 Micro would have difficulty collecting money damages
from BiTEK because BiTEK lacks substantial assets in
the United States. On appeal, BiTEK states that “[a]ll of
BiTEK’s research and design, manufacturing and sales
take place entirely in Asia,” Appellant Br. at 7, which
supports the district court’s finding. In sum, BiTEK has
failed to show that the district court abused its discretion
in concluding that O2 Micro lacked an adequate remedy
at law.
As the applicability of the remaining two factors rele-
vant to the grant of an injunction, viz., the balance of the
hardships and the public interest, is not challenged on
appeal, we need not address them here.
O2 MICRO INTL v. BEYOND INNOVATION 20
2. Form of the Injunction
BiTEK raises a number of arguments that attack the
form of the injunction. First, BiTEK argues that the
injunction lacks the specificity required for an enforceable
injunction. Second, BiTEK argues that the injunction is
improper because it enjoins activities that occur wholly
outside the United States, whereas BiTEK is situated two
transactions upstream from the acts that O2 Micro al-
leges directly infringed its asserted patents. Finally,
BiTEK argues that the form of the injunction is improper
because it enjoins overseas sales to Samsung, which, as
discussed above, BiTEK argues is authorized to sell
products that are covered by the asserted patents.
O2 Micro responds that BiTEK has waived any objec-
tion to the form of the injunction because BiTEK proposed
the form of the injunction that the district court entered.
O2 Micro also argues that BiTEK also waived its argu-
ments regarding the scope of the injunction because it
failed to raise those objections with the district court.
We agree that BiTEK has waived its right to appeal
the form of the injunction. BiTEK specifically proposed to
the district court the language that it now challenges on
appeal and failed to raise before the district court any of
the overbreadth and extraterritorial arguments stemming
from its proposed language. “The impropriety of asserting
a position which the trial court adopts and then complain-
ing about it on appeal should be obvious on its face, and
litigants hardly need warning not to engage in such
conduct.” Key Pharm. v. Hercon Labs. Corp., 161 F.3d
709, 715 (Fed. Cir. 1998); see also Harris Corp. v. Ericsson
Inc., 417 F.3d 1241, 1258 (Fed. Cir. 2005) (summarizing
Federal Circuit and Fifth Circuit precedent on waiver by
invited error). Absent unique circumstances, not present
here, we generally consider such arguments waived. E.g.,
21 O2 MICRO INTL v. BEYOND INNOVATION
Key Pharm., 161 F.3d at 715–16 (addressing, in “an
abundance of fairness,” the defendant’s argument that the
claim construction it advanced below was erroneous
where the plaintiff did not object and failed to raise on
appeal the doctrines that ordinarily prohibit a party from
asserting as error a position that it advocated below);
United States v. Rodriguez, 602 F.3d 346, 350–51 (5th Cir.
2010) (“Review of invited errors is . . . precluded; such
errors are reviewed only for ‘manifest injustice.’”).
Here, BiTEK submitted to the district court the pro-
posed language that it now claims is “overbroad” and
“exceeds the authority of a United States District Court.”
Appellant Br. at 40–41. While BiTEK asserts that it
reserved the right to later object to the language of the
injunction that it proposed, we do not find it to be a suit-
able tactic in litigation to propose language to a court
with one’s fingers crossed, so to speak, and come back
later and disown that language. We might have consid-
ered BiTEK’s arguments differently had the district court,
without briefing, adopted O2 Micro’s proposed injunction
and had BiTEK properly objected to the form of the
injunction. See Ortho-McNeil Pharm., Inc. v. Lupin
Pharm., Inc., 603 F.3d 1377, 1381–82 (Fed. Cir. 2010).
But we will not review the form of the injunction where
BiTEK actively participated in the crafting of the injunc-
tion and, in the course of that participation, offered the
district court the specific language that BiTEK now
claims was an abuse of discretion to adopt. Thus, the
district court did not err in holding BiTEK to the lan-
guage it proposed.
CONCLUSION
We have considered BiTEK’s remaining arguments
and conclude that they are without merit. For the forego-
ing reasons, the judgment of the district court is
O2 MICRO INTL v. BEYOND INNOVATION 22
AFFIRMED
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
O2 MICRO INTERNATIONAL LTD.,
Plaintiff-Appellee,
v.
BEYOND INNOVATION TECHNOLOGY CO., LTD.,
Defendant-Appellant,
and
FSP TECHNOLOGY, INC. (FORMERLY KNOWN AS SPI
ELECTRONIC CO., LTD.),
FSP GROUP, AND LIEN CHANG ELECTRONIC
ENTERPRISE CO., LTD.,
Defendants.
__________________________
2011-1054
__________________________
Appeal from the United States District Court for the
Eastern District of Texas in case no. 04-CV-0032, Magis-
trate Judge Charles Everingham, IV.
__________________________
PROST, Circuit Judge, dissenting.
In this case, only two possible entities can provide the
underlying direct infringement for O2 Micro International
O2 MICRO INTL v. BEYOND INNOVATION 2
Ltd.’s (“O2 Micro”) inducement claim against Beyond
Innovation Technology Co., Ltd. (“BiTEK”): LG and
Samsung. The majority relies solely on LG’s conduct in
concluding that BiTEK was liable for induced infringe-
ment. I respectfully dissent because I believe that O2
Micro failed to proffer sufficient evidence showing that
LG sold an infringing product in the United States—
meaning that LG cannot qualify as a direct infringer.
Because I also believe that Samsung is not a direct in-
fringer, I would vacate the district court’s injunction.
BiTEK argues that O2 Micro failed to proffer suffi-
cient evidence showing that LG sold a device in the
United States containing the BiTEK accused product. As
a result, contends BiTEK, O2 Micro did not meet its
burden of showing that LG directly infringed. The major-
ity disagrees, finding that “O2 Micro presented sufficient
circumstantial evidence from which the district court
could find that it was more likely than not that LG sold
LCD monitors in the United States containing the ac-
cused BiTEK controllers.” Majority Op. at 10.
I conclude otherwise. The evidence in this case per-
taining to LG is sparse. In particular, while O2 Micro
purchased Samsung liquid crystal display (“LCD”) moni-
tors domestically and introduced them into evidence, the
same cannot be said for LG monitors. Moreover, O2
Micro did not submit any purchase orders, product litera-
ture, shipping contracts, or employee testimony suggest-
ing that LG devices containing accused BiTEK products
were sold in the United States (i.e., common forms of
circumstantial evidence in patent cases). O2 Micro’s
entire case regarding LG’s direct infringement rests on
four premises shown by the evidence: (1) accused BiTEK
products were sold in the United States; (2) BiTEK knew
that accused products entered the United States as part
3 O2 MICRO INTL v. BEYOND INNOVATION
of LCD monitors; (3) LG sells LCD monitors containing
the accused BiTEK products worldwide; and (4) the
United States is the largest consumer market for LCD
monitors worldwide. As the majority explains, the dis-
trict court failed to specifically conclude from these four
premises that LG sold an infringing product in the United
States. Instead, the district court merely concluded that
someone, either Samsung, LG, or both, sold an infringing
product.
Notably, only one of these four premises even men-
tions LG, and that premise merely represents that LG
sold LCD monitors containing the accused products
somewhere in the world. As BiTEK argues, the LCD
monitor market is a worldwide market with many players
in addition to the United States. Moreover, LG is not
BiTEK’s sole customer, and BiTEK is not LG’s sole sup-
plier. Thus, the evidence in this case does nothing to
preclude the possibility that the chips LG bought from
BiTEK were incorporated into products never sold in the
United States.
Indeed, a significant gap exists between the four evi-
dentiary premises and the district court’s conclusion that
someone, either Samsung, LG, or both, sold an infringing
product in the United States. This gap can only be
bridged with speculation. While the four premises may be
adequate to raise the possibility that LG sold an infring-
ing device in the United States, that possibility is entirely
speculative, failing, as it does, to eliminate a multitude of
other comparable possibilities. Therefore, I view the
evidence in this case as insufficient to prove that LG
“more likely than not” sold an infringing product domesti-
cally. I would also characterize the district court’s gen-
eral infringement holding that O2 Micro proved by
preponderant evidence that either Samsung, LG, or both,
O2 MICRO INTL v. BEYOND INNOVATION 4
sold an infringing product in the United States as clearly
erroneous to the extent that conclusion is aimed at LG.
Given this lack of evidence regarding LG’s sales, I would
conclude that LG cannot qualify as an underlying direct
infringer for O2 Micro’s inducement claim against BiTEK.
Because I also believe that Samsung is not a direct in-
fringer, a question not reached by the majority, I would
vacate the district court’s injunction.