Mentor Graphics Corporation v. Eve-Usa, Inc.

United States Court of Appeals
for the Federal Circuit
______________________
MENTOR GRAPHICS CORPORATION,
AN OREGON CORPORATION,
Plaintiff-Cross-Appellant
v.
EVE-USA, INC., A DELAWARE CORPORATION,
SYNOPSYS EMULATION AND VERIFICATION
S.A.S., FORMED UNDER THE LAWS OF FRANCE,
SYNOPSYS, INC., A DELAWARE CORPORATION,
Defendants-Appellants
______________________
2015-1470, 2015-1554, 2015-1556
______________________
Appeals from the United States District Court for the
District of Oregon in Nos. 3:10-cv-00954-MO, 3:12-cv-
01500-MO, 3:13-cv-00579-MO, Judge Michael W.
Mosman.
______________________
Decided: March 16, 2017
______________________
MARK E. MILLER, O’Melveny & Myers LLP, San Fran-
cisco, CA, argued for plaintiff-cross-appellant. Also repre-
sented by ANNE E. HUFFSMITH, LUANN LORAINE SIMMONS.
E. JOSHUA ROSENKRANZ, Orrick, Herrington & Sut-
cliffe LLP, New York, NY, argued for defendants-
appellants. Also represented by DANIEL A. RUBENS,
2 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
ANDREW D. SILVERMAN; ROBERT M. LOEB, ERIC SHUMSKY,
Washington, DC; INDRA NEEL CHATTERJEE, VICKI L.
FEEMAN, TRAVIS JENSEN, SCOTT T. LONARDO, Menlo Park,
CA; WILLIAM H. WRIGHT, Los Angeles, CA.
SEAN C. CUNNINGHAM, DLA Piper LLP (US), San Die-
go, CA, for amici curiae Hewlett-Packard Company,
Aruba Networks, Inc., NETGEAR, Inc., Newegg Inc.,
Oracle America, Inc., Ruckus Wireless, Inc., Safeway Inc.,
SAS Institute Inc., Varian Medical Systems, Inc., Veri-
Fone, Inc., VIZIO, Inc.
______________________
Before LOURIE, MOORE, and CHEN, Circuit Judges.
MOORE, Circuit Judge.
The present appeal arises from litigation in the Dis-
trict of Oregon between Mentor Graphics Corp. (“Mentor”)
and Synopsys, Inc., Synopsys Emulation and Verification
S.A.S., and EVE-USA, Inc. (“EVE”) (collectively, “Synop-
sys”). 1 Mentor asserted several patents against Synopsys,
including U.S. Patent Nos. 6,240,376 (“the ’376 patent”),
6,947,882 (“the ’882 patent”), 6,009,531 (“the ’531 pa-
tent”), and 5,649,176 (“the ’176 patent”). Synopsys as-
serted two patents against Mentor—U.S. Patent Nos.
6,132,109 (“the ’109 patent”) and 7,069,526 (“the ’526
patent”).
The ’376 patent was the only patent tried to the jury.
Prior to trial, the district court granted summary judg-
ment barring Synopsys from challenging the ’376 patent’s
validity because of assignor estoppel. It also granted
Synopsys’ motion in limine precluding Mentor from
1 EVE is a subsidiary of Synopsys. References to
Synopsys refer to all the Synopsys and EVE entities
unless otherwise noted.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 3
introducing evidence of willful infringement. The jury
found in favor of Mentor and found damages of approxi-
mately $36,000,000. Synopsys appeals the infringement
verdict, the damages award, and the summary judgment
of assignor estoppel. Mentor cross-appeals the motion in
limine regarding willfulness.
The district court granted summary judgment on the
remaining patents prior to trial. It held that Synopsys’
’109 patent was indefinite and Synopsys’ ’526 patent
lacked patent-eligible subject matter. Synopsys appeals
both decisions. The district court also held that the
claims of Mentor’s ’882 patent lacked written description
support and its infringement allegations relating to the
’531 and ’176 patents were barred by claim preclusion.
Mentor cross-appeals both decisions.
We hold there was substantial evidence to support the
jury’s infringement verdict regarding the ’376 patent and
affirm the district court’s denial of judgment as a matter
of law. We affirm the damages award. We affirm the
summary judgment that assignor estoppel bars Synopsys
from challenging the validity of the ’376 patent. We
reverse the summary judgment that Synopsys’ ’109 patent
is indefinite. We affirm the summary judgment that
Synopsys’ ’526 patent lacks patent-eligible subject matter.
We vacate the motion in limine precluding Mentor from
presenting evidence of willful infringement. We reverse
the summary judgment that Mentor’s ’882 patent lacks
written description support. Finally, we reverse the
summary judgment that Mentor’s infringement allega-
tions regarding the ’531 and ’176 patents are barred by
claim preclusion.
I. BACKGROUND
Every patent in this case involves simula-
tion/emulation technology. The parties have a complicat-
ed litigation history, and only the relevant portions
thereof are addressed here. In 1998, Mentor filed the
4 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
application that would become the ’376 patent. The two
inventors, Dr. Alain Raynaud and Dr. Luc Burgun, were
Mentor employees and assigned the invention to Mentor.
Dr. Raynaud and Dr. Burgun subsequently left Mentor
and founded EVE, with Dr. Burgun serving as president
and CEO and Dr. Raynaud serving as a Technology
Center Director. In 2006, Mentor sued EVE for infringe-
ment of the ’376, ’531, and ’176 patents, alleging EVE’s
“ZeBu” emulation and verification system infringed the
patents. Mentor and EVE settled prior to trial, and EVE
obtained a license to the three patents. The license
contained a provision terminating the license if EVE were
acquired by another company in the emulation industry.
In 2012, Mentor learned Synopsys was in discussions
to acquire EVE. Mentor’s CEO contacted his counterpart
at Synopsys and offered to waive the confidentiality
provision of the Mentor-EVE license to inform Synopsys
that the license would terminate if Synopsys acquired
EVE. Synopsys and EVE subsequently filed a declaratory
judgment action, seeking a declaration that the ’531, ’176,
and ’376 patents were invalid and not infringed. One
week later, Synopsys acquired EVE. Mentor answered
the declaratory judgment complaint, adding counter-
claims of willful infringement of the ’531, ’176, and ’376
patents. Synopsys then amended its complaint to assert
claims of infringement of the ’526 and ’109 patents
against Mentor. The district court consolidated the suit
with another involving Mentor’s ’882 patent.
The parties appeal the various summary judgment
and post-trial rulings. We have jurisdiction pursuant to
28 U.S.C. § 1295(a)(1).
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 5
II. ANALYSIS
A. Synopsys’ Appeal
1. Infringement of Mentor’s ’376 Patent
The jury found Synopsys infringed claims 1, 24, and
26–28 of the ’376 patent and awarded damages. Synopsys
moved for JMOL that its products did not infringe. The
district court denied the motion, and Synopsys appeals.
We affirm the denial of JMOL.
We apply the law of the regional circuit when review-
ing a denial of JMOL after a jury verdict. In the Ninth
Circuit, JMOL is appropriate only “if the evidence, con-
strued in the light most favorable to the nonmoving party,
permits only one reasonable conclusion, and that conclu-
sion is contrary to the jury’s verdict.” Pavao v. Pagay, 307
F.3d 915, 918 (9th Cir. 2002).
The ’376 patent relates to debugging source code after
synthesis. Synthesis is the process of transforming
Hardware Description Language (“HDL”) into gate-level
“netlists.” ’376 patent at 1:26–27. Much of the patent’s
disclosure addresses Register Transfer Level (“RTL”)
source code, which is a subset of HDL. See id. at 1:27–31.
The patent teaches that prior art HDL simulators were
limited because a developer could only view the input and
ultimate output of a netlist; there was no way to “step
through” the intermediate gates. Id. at 2:1–17. Without
the ability to measure intermediate values, “the ability to
debug the design at the gate level [was] severely limited.”
Id. at 2:20–23. Additionally, to the extent intermediate
signals could be measured, there was no way to map a
value within a netlist to its corresponding RTL logic
within the source code. Id. at 2:13–17.
The ’376 patent seeks to solve these problems by allow-
ing developers to insert test probes at various stages of a
netlist to monitor intermediate values. Id. at 2:30–39;
6 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
Figs. 1, 2. The probe results are referred to as “instru-
mentation signals.” Id. at 6:32–34. The system correlates
instrumentation signals with corresponding portions of
the RTL code and displays the results to a user. Id. at
2:30–34. Asserted claim 1 is representative:
1. A method comprising the steps of:
a) identifying at least one statement within a
register transfer level (RTL) synthesizable
source code; and
b) synthesizing the source code into a gate-level
netlist including at least one instrumentation
signal, wherein the instrumentation signal is
indicative of an execution status of the at least
one statement.
Id. at 15:1–8 (emphasis added).
Mentor accused Synopsys’ ZeBu emulators of infring-
ing. The ZeBu emulators allow developers to insert
“flexible probes” and “value-change probes” into a netlist.
These probes measure values at various intermediate
stages of a netlist. The ZeBu emulators output the test
results to a waveform viewer. Mentor’s expert Dr. Sar-
rafzadeh testified that each probe signal shown in the
waveform viewer identifies a portion of RTL by name, and
the RTL name can be used to locate the corresponding
source code.
Synopsys argues it does not infringe because its ZeBu
emulators do not “indicate” an RTL statement but rather
merely provide the name of a block of RTL that a develop-
er can use to locate corresponding code. It argues “you
don’t ‘indicate’ information by providing other data that
might help you indirectly figure out the needed infor-
mation.” Synopsys Br. 32. We note at the outset that
neither party asked the district court to construe “indica-
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 7
tive,” and the parties agreed the plain and ordinary
meaning of the term governs. 2 The question presented on
appeal is whether there is substantial evidence for the
jury verdict that the ZeBu infringed.
We hold there was substantial evidence to support the
jury’s infringement verdict. A developer using the ZeBu
emulator can create a test file called a “Tcl” file and input
test probes into a netlist using the “probe signals” com-
mand. J.A. 43212. Dr. Sarrafzadeh testified that the
probe signal command creates instrumentation signals
when the simulation is run. J.A. 41127:12–41129:14. He
then explained how a developer could use the simulation
results to locate a particular line of RTL code correspond-
ing to an instrumentation signal. He explained that the
Tcl file identifies a particular line of RTL code by identify-
ing the name of a block of code, and then a developer can
use that name to locate the specific lines of corresponding
RTL code. J.A. 41130:7–21. He testified that “you look at
the name of the signal, on flexible probes, for example,
and you associate that back to the RTL source.” J.A.
42417:3–5; see J.A. 42423:10–18 (“Q: How do you know if
you have tens of thousands of instrumentation signals,
which signal corresponds to the RTL that you are looking
at? A: Fantastic question. I look at the name of the
signal. If the name is S, I go and look for it. If the name
is S5, I will go and look for it. So based on the name of
the signal, I will know, among millions of lines of code,
which ones I’m talking about.”); J.A. 42426:7–10 (“Q: How
would you find a particular process? A: Same thing, by
looking at, for example, the sensitivity list and using its
name identifier, you know which process you are talking
about.”). This is substantial evidence to support the jury’s
2 We have considered Synopsys’ arguments regard-
ing plain meaning and disclaimer and find them to be
without merit.
8 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
finding that the instrumentation signal indicates at least
one RTL statement.
We affirm the district court’s denial of JMOL.
2. Assignor Estoppel of Mentor’s ’376 Patent
Synopsys briefly challenges the district court’s grant of
summary judgment that it was barred from challenging
the validity of the ’376 patent because of assignor estop-
pel. Synopsys does not dispute that assignor estoppel
applies to the facts of this case, but it argues the Supreme
Court “demolished the doctrinal underpinnings of assign-
or estoppel in the decision that abolished the comparable
licensee estoppel in Lear, Inc. v. Adkins, 395 U.S. 653
(1969).” Synopsys Br. 42. We disagree. In Diamond
Scientific, we emphasized the continued vitality of the
doctrine of assignor estoppel after Lear. Diamond Sci. Co.
v. Ambico, Inc., 848 F.2d 1220, 1222–26 (Fed. Cir. 1988);
see also MAG Aerospace Indus., Inc. v. B/E Aerospace,
Inc., 816 F.3d 1374, 1380–81 (Fed. Cir. 2016). The district
court’s grant of summary judgment that assignor estoppel
applies is affirmed.
3. Damages for Synopsys’ Infringement of Mentor’s
’376 Patent
At trial, Mentor argued it was entitled to obtain lost
profit damages for lost sales of its Veloce emulators
resulting from Synopsys’ infringing sales of its ZeBu
emulators because Mentor would have made additional
Veloce sales but for Synopsys’ infringing ZeBu sales. The
district court gave detailed instructions to the jury about
the standard for awarding lost profits, including extensive
discussion of each of the four Panduit factors. J.A. 164–
75. The jury ultimately awarded Mentor $36,417,661 in
lost profits and another $242,110.45 in reasonable royal-
ties. J.A. 187. Synopsys appeals arguing that the dam-
age award should be vacated because the district court
failed to apportion the lost profits. We do not agree.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 9
The Patent Act provides: “the court shall award [the
patent owner] damages adequate to compensate for the
infringement but in no event less than a reasonable
royalty for the use made of the invention by the infring-
er.” 35 U.S.C. § 284. Under the statute, “damages ade-
quate to compensate” means “full compensation for any
‘any damages’ [the patent owner] suffered as a result of
the infringement.” Gen. Motors Corp. v. Devex Corp., 461
U.S. 648, 654–55 (1983). As the Supreme Court explained
in Aro Mfg. Co. v. Convertible Top Replacement Co., 377
U.S 476, 507 (1964) (plurality opinion), the statutory
measure of damages is “the difference between [the pa-
tent owner’s] pecuniary condition after the infringement,
and what his condition would have been if the infringe-
ment had not occurred.” The Court went on to distinguish
between disgorgement of defendant’s profits, which had
been allowed prior to the 1946 statutory amendment, and
the compensatory damages of § 284, which are defined as
“compensation for pecuniary loss he (the patentee) has
suffered from the infringement, without regard to the
question whether the defendant has gained or lost by his
unlawful acts.” Id. (quoting Coupe v. Royer, 155 U.S. 565,
582 (1895)). 3 Section 284 damages “have been said to
3 Synopsys cites a number of pre-1946 Supreme
Court cases discussing apportionment in the context of
the pre-1946 state of the law which reference disgorge-
ment of the defendant’s profits and patentee’s damages to
argue that lost profits must be further apportioned after
applying the Panduit factors. See Garretson v. Clark, 111
U.S. 120, 121 (1884); Dowagiac Mfg. Co. v. Minn. Moline
Plow Co., 235 U.S. 641, 646 (1915); Seymour v. McCor-
mick, 57 U.S. 480, 487 (1853). While these pre-§ 284
cases apply to a different damages regime, nonetheless,
we find the basic principle of apportionment which they
espouse applies in all of patent damages. We do not
depart from this principle today. Rather we hold that in
10 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
constitute ‘the difference between his pecuniary condition
after the infringement, and what his condition would have
been if the infringement had not occurred.’” Id. (quoting
Yale Lock Mfg. Co. v. Sargent, 117 U.S. 536, 552 (1886)).
Put simply, “[t]he question to be asked in determining
damages is ‘how much had the Patent Holder and Licen-
see suffered by the infringement. And that question (is)
primarily: had the Infringer not infringed, what would
Patent Holder-Licensee have made?’” Id.
Compensatory damages are a staple across most every
area of law. And compensatory damages under the patent
statute, which calls for damages adequate to compensate
the plaintiff for its loss due to the defendant’s infringe-
ment, should be treated no differently than the compensa-
tory damages in other fields of law. See Livesay Window
Co. v. Livesay Indus., Inc., 251 F.2d 469, 471 (5th Cir.
1958) (“To allow a patent owner to recover lost profits
from an infringer is no unique treatment of this one type
of wrongdoing, and [it] is essentially the same problem
which inheres in other instances of an interference with a
valuable business right.”). Their form is fairly standard;
“but for” some harmful act by a defendant, a plaintiff
would be in a certain position. When a plaintiff proves it
would have been in a certain position but for a defend-
ant’s harmful act, it is entitled to damages to put it in the
same position it would have occupied had the harmful act
never occurred. In breach of contract disputes, injured
parties are awarded expectancy damages designed to
replicate full performance of the contract. The goal of
expectancy damages is to put the non-breaching party in
the position it would have occupied but for the breach.
See, e.g., Fifth Third Bank v. United States, 518 F.3d
1368, 1374 (Fed. Cir. 2008); California Fed. Bank v.
this case, on these facts, apportionment is achieved
though the court’s use of the Panduit factors.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 11
United States, 395 F.3d 1263, 1267 (Fed. Cir. 2005);
Glendale Fed. Bank, FSB v. United States, 239 F.3d 1374,
1380 (Fed. Cir. 2001). Similarly, under tort law, injured
parties receive damages sufficient to put them in the
same position they would have occupied had the injury
never occurred. See, e.g., Cooper Indus., Inc. v. Leather-
man Tool Grp., Inc., 532 U.S. 424, 432 (2001) (“[Compen-
satory damages] are intended to redress the concrete loss
that the plaintiff has suffered by reason of the defendant’s
wrongful conduct.”); Kansas v. Colorado, 533 U.S. 1, 13
(2001) (state against state tort); New York, L.E. & W.R.
Co. v. Estill, 147 U.S. 591, 616–17 (1893) (business tort).
The “but for” damages the patentee must establish in
patent law, as the Supreme Court explained, are an
answer to a simply stated question: “[H]ad the Infringer
not infringed, what would the Patent Holder-Licensee
have made?” Aro Mfg. Co., 377 U.S. at 507.
There is no particular required method to prove but for
causation. One “useful, but non-exclusive” method to
establish the patentee’s entitlement to lost profits is the
Panduit test first articulated by the Sixth Circuit. Rite-
Hite Corp. v. Kelley Co., 56 F.3d 1538, 1545 (Fed. Cir.
1995) (en banc) (citing Panduit Corp. v. Stahlin Bros.
Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978)). When a
patentee proves it would have made additional sales but
for a defendant’s infringement, the patentee is entitled to
be made whole for the profits it proves it lost. See, e.g.,
Asetek Danmark A/S v. CMI USA Inc., 842 F.3d 1350,
1361 (Fed. Cir. 2016); Versata Software, Inc. v. SAP Am.,
Inc., 717 F.3d 1255, 1263–64 (Fed. Cir. 2013); Grain
Processing Corp. v. Am. Maize-Prods. Co., 185 F.3d 1341,
1352–53 (Fed. Cir. 1999); Photo Elecs. Corp. v. England,
581 F.2d 772, 784 (9th Cir. 1978); Livesay Window, 251
F.2d at 471. The goal of lost profit damages is to place the
patentee in the same position it would have occupied had
12 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
there been no infringement. 4 In this regard, lost profit
patent damages are no different than breach of contract
or general tort damages. Thus, the fact finder’s job is to
determine what would the patent holder have made (what
would his profits have been) if the infringer had not
infringed.
Under the Panduit test, a patentee is entitled to lost
profit damages if it can establish four things:
(1) demand for the patented product;
(2) absence of acceptable non-infringing alternatives;
(3) manufacturing and marketing capability to exploit
the demand; and
(4) the amount of profit it would have made.
Panduit, 575 F.2d at 1156. Damages under Panduit are
not easy to prove. See, e.g., Ian Ayres & Paul Klemperer,
Limiting Patentees’ Market Power Without Reducing
Innovation Incentives: The Perverse Benefits of Uncertain-
ty and Non-Injunctive Remedies, 97 MICH. L. REV. 985,
1030 (1999) (“The difficulties that patentees frequently
have in proving the four Panduit prerequisites often mean
that instead of being awarded lost profits (what amounts
to make-whole damages), patentees must settle for the
smaller reasonable royalty measure.”); Christopher Sea-
man, Reconsidering the Georgia-Pacific Standard for
Reasonable Royalty Patent Damages, 2010 B.Y.U. L. REV.
1661, 1675 (2010) (“[S]uccessful claims for lost profits are
becoming less common as courts have insisted on strict
standards of proof for entitlement to lost profits.” (quota-
4 As we explained in Rite Hite, lost profit damages
are limited to those that are “reasonably foreseeable by an
infringing competitor in the relevant market.” Rite-Hite,
56 F.3d at 1546. Synopsys does not argue that Mentor’s
lost emulator sales were not reasonably foreseeable.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 13
tions omitted)); Mark Lemley, Distinguishing Lost Profits
from Reasonable Royalties, 51 WM. & MARY L. REV. 655,
657 (2009) (“Proving lost profits has not been easy, how-
ever.”); see also Grain Processing, 185 F.3d at 1349–53
(patentee could not obtain damages under Panduit be-
cause a product that was not even sold on the market was
considered an acceptable non-infringing alternative); BIC
Leisure Prods., Inc. v. Windsurfing Int’l, Inc., 1 F.3d 1214,
1218–19 (Fed. Cir. 1993) (patentee could not obtain
damages under Panduit because it sold its products in a
different price segment in the market than the infringing
products); SmithKline Diagnostics, Inc. v. Helena Labs.
Corp., 926 F.2d 1161, 1165–66 (Fed. Cir. 1991).
We have explained the relationship between the first
two Panduit factors. The first factor—demand for the
patented product—considers demand for the product as a
whole. DePuy Spine, Inc. v. Medtronic Sofamor Danek,
Inc., 567 F.3d 1314, 1330–31 (Fed. Cir. 2009). The second
factor—the absence of non-infringing alternatives—
considers demand for particular limitations or features of
the claimed invention. Id. at 1331. Together, requiring
patentees to prove demand for the product as a whole and
the absence of non-infringing alternatives ties lost profit
damages to specific claim limitations and ensures that
damages are commensurate with the value of the patent-
ed features. See Presidio Components, Inc. v. Am. Tech.
Ceramics Corp., 702 F.3d 1351, 1361 (Fed. Cir. 2012)
(“[P]roducts lacking the advantages of the patented
invention can hardly be termed a substitute acceptable to
the customer who wants those advantages.” (quotations
omitted)); Grain Processing, 185 F.3d at 1354 (holding
that customers would have found a particular claim
limitation “irrelevant,” so the patentee could not rely on
that limitation for the second Panduit factor); Standard
Haven Prods., Inc. v. Gencor Indus., Inc., 953 F.2d 1360,
1373 (Fed. Cir. 1991) (“If purchasers are motivated to
purchase because of particular features available only
14 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
from the patented product, products without such fea-
tures–even if otherwise competing in the marketplace–
would not be acceptable noninfringing substitutes.”);
SmithKline Diagnostics, 926 F.2d at 1166 (“If purchasers
are motivated to purchase because of particular features
of a product available only from the patent owner and
infringers, products without such features would obvious-
ly not be acceptable noninfringing substitutes.”).
The second factor, absence of acceptable non-infringing
alternatives, often proves the most difficult obstacle for
patent holders. Under this factor, if there is a non-
infringing alternative which any given purchaser would
have found acceptable and bought, then the patentee
cannot obtain lost profits for that particular sale. 5 For
example, if the customer would have bought the infring-
ing product without the patented feature or with a differ-
ent, non-infringing alternative to the patented feature,
then the patentee cannot establish entitlement to lost
profits for that particular sale. And this determination is
made on a customer-by-customer basis. For this reason,
it is quite common to see damage awards where, as in this
case, the patentee proves entitlement to lost profits for
some of its sales, but not others. See BIC Leisure, 1 F.3d
at 1219–20; DePuy Spine, 567 at 1333–34. For sales in
which the patentee cannot prove the elements necessary
to establish entitlement to lost profits, the statute guar-
5 In a complex market with numerous competitors,
a patentee may be awarded lost profit damages calculated
using its market share among its competitors. See State
Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.3d 1573, 1577–
78 (Fed. Cir. 1989). The market share theory is irrelevant
in this case because the jury made a factual finding,
which Synopsys does not challenge on appeal, that the
relevant emulator market for sales to Intel was a two-
supplier market. See J.A. 164.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 15
antees the patentee a reasonable royalty for those sales.
In those circumstances, the patentee obtains its lost
profits on the sales where it can prove all the Panduit
factors and a reasonable royalty on the other infringing
sales.
The facts of this case are remarkably simple for a pa-
tent damages appeal and Synopsys does not dispute any
of them. The relevant market (suppliers of emulators to
Intel) contained two parties, Synopsys and Mentor.
Mentor sold its own Veloce emulators to Intel and Synop-
sys sold its ZeBu emulators to Intel which were found to
infringe Mentor’s ’376 patent claims. Synopsys does not
dispute that but for its infringement, Mentor would have
made each of the infringing emulator sales to Intel. Nor
does it dispute how much Mentor would have earned, the
precise numbers of sales Mentor would have made,
whether there were any alternatives that Intel may have
preferred over the purchase of Mentor’s product, or
whether Intel would have chosen to purchase fewer
emulators. In short, Synopsys does not dispute on appeal
that for each infringing sale it made to Intel, Mentor lost
that exact sale.
This is important as it makes this case quite narrow
and unlike the complicated fact patterns that impact so
many damages models in patent cases. The jury found,
and Synopsys does not dispute on appeal, that Mentor
satisfied all of the Panduit factors with regard to the sales
to Intel for which the jury awarded lost profits:
(1) there was a demand by Intel for the patented prod-
uct; 6
6 The jury was expressly instructed that it could not
award lost profits unless it found that “there were only
two acceptable, available alternatives in the Intel market
during the damages period: Mentor-Graphics’ emulation
16 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
(2) there were no non-infringing alternative emulator
systems acceptable to Intel;
(3) Mentor had the manufacturing and marketing ca-
pability to satisfy Intel’s demand; and,
(4) Mentor established the amount of profit it would
have made if Synopsys had not infringed.
Synopsys does not challenge the sufficiency of Mentor’s
evidence with regard to the individual Panduit factors. In
this case, the jury found, and Synopsys does not dispute,
that Intel would not have purchased the Synopsys emula-
tor system without the two patented features and that
there were no other alternatives available. Despite
hearing evidence that there were many valuable and
important features in the emulator system, this jury
found that if Synopsys could not have sold its emulator
system with the two infringing features (Mentor’s patent-
ed features), Intel would have bought the emulators from
Mentor. There were no other competitors, and the jury
found there were no non-infringing alternative emulator
systems which would have satisfied Intel. Thus, what did
Mentor lose when Synopsys appropriated its two patented
features? It lost the profits it would have made on the
sale of its emulators to Intel. These are the simple,
undisputed facts on appeal.
Synopsys largely ignores these facts and seeks to have
us depart from basic compensatory damages principles
equally applied across many areas of law. Synopsys
advocates for a two-step process for calculating lost prof-
its. First, Synopsys argues a patentee must calculate the
amount of profits it lost as a result of the infringement
using the Panduit factors. Second, Synopsys argues a
patentee must further apportion its lost profits to cover
system and Synopsys’ allegedly infringing emulation
system.” J.A. 164.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 17
only the patentee’s inventive contribution. See Synopsys
Br. 51. Synopsys does not dispute that “but for” its in-
fringement, Mentor would have made $36,417,661 in lost
profits. Instead, Synopsys argues that the allegedly
infringing features were just two features of emulators
that comprise thousands of hardware and software fea-
tures. Synopsys Br. 48. Thus, according to Synopsys,
Mentor is not entitled to recover what it lost, the amount
necessary to make it whole for the sales it lost, but rather
the value attributable to its patented features.
Synopsys argues that “[p]rinciples of apportionment
play an especially vital role in this age of complex, multi-
component electronic devices.” Synopsys Br. 44. Synop-
sys argues that the patentee does not “deserve,” id. at 46,
lost profits for the whole emulator when it only invented
some of the features on the emulator. Thus, according to
Synopsys the damages should not be the profits the
patentee lost when it lost the emulator sale because of
Synopsys’ infringement, but rather only the amount of
profit properly attributable to its patented features.
We agree with Synopsys that apportionment is an im-
portant component of damages law generally, and we
believe it is necessary in both reasonable royalty and lost
profits analysis. See Ericsson, Inc. v. D-Link Sys., Inc.,
773 F.3d 1201, 1226 (Fed. Cir. 2014) (“Apportionment is
required even for non-royalty forms of damages.” (citing
Garretson, 111 U.S. at 121)); VirnetX, Inc. v. Cisco Sys.,
Inc., 767 F.3d 1308, 1326 (Fed. Cir. 2014) (“No matter
what the form of the royalty, a patentee must take care to
seek only those damages attributable to the infringing
features.” (citing Garretson, 111 U.S. at 120–21)). In this
case, apportionment was properly incorporated into the
lost profits analysis and in particular through the Panduit
factors. Panduit’s requirement that patentees prove
demand for the product as a whole and the absence of
non-infringing alternatives ties lost profit damages to
specific claim limitations and ensures that damages are
18 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
commensurate with the value of the patented features.
We leave for another day whether a different theory of
“but for” damages adequately incorporates apportionment
principles. 7 We hold today that on the undisputed facts of
this record, satisfaction of the Panduit factors satisfies
principles of apportionment: Mentor’s damages are tied
to the worth of its patented features.
The jury found, and Synopsys does not dispute, there
were only two acceptable alternatives to Intel: Mentor’s
emulator and Synopsys’ infringing emulator. The jury
was properly instructed that if there were any other
acceptable, non-infringing emulation system or if there
were prototypes that may have been acceptable or if there
was any acceptable non-infringing alternative that could
have been made available (even if they did not already
exist), then Mentor could not receive lost profits on those
7 Synopsys argues that we have held in other cases
that lost profits must be apportioned. Synopsys Br. 51–
56. The cases cited by Synopsys, however, did not address
whether lost profits were appropriate under the Panduit
factors (where the apportionment was subsumed within
the Panduit analysis). Id. (citing Ferguson Beaure-
gard/Logic Controls v. Mega Sys., LLC, 350 F.3d 1327,
1345–46 (Fed. Cir. 2003); Kori Corp. v. Wilco Marsh
Buggies & Draglines, Inc., 761 F.2d 649, 656 (Fed. Cir.
1985)). Synopsys recognizes, however, that in other cases,
we have declined to apportion when the four-part Panduit
test establishing but for causation has been met. See, e.g.,
Synopsys Rep. Br. 24–25 (citing Paper Converting Mach.
v. Magna-Graphics Corp., 745 F.2d 11, 22–23 (Fed. Cir.
1984) (declining to further apportion a lost profits award
because the patentee proved it would have made the sales
in question but for the infringing sales)).
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 19
particular sales. J.A. 164. 8 The jury was also instructed
that it could have found the patented features were not
critical to Intel and that it would have purchased Synop-
sys’ emulators without the features. The instruction
expressly stated that Mentor could not obtain lost profit
damages if “Synopsys could have made available during
the damages period an acceptable, non-infringing alterna-
tive to Mentor-Graphics’ emulation system and Synopsys’
infringing emulation system.” J.A. 164. Synopsys could
have made its emulator system minus the two infringing
features—that would have been an alternative to the
“Synopsys infringing emulation system.” However, the
jury concluded, and Synopsys does not dispute on appeal
the jury’s Panduit fact findings, that there was no such
non-infringing alternative that Intel would have pur-
chased.
On appeal, Synopsys argues that its emulators “out-
perform Mentor’s in price, size, speed, and capacity.”
Synopsys Br. 49. If the evidentiary record is as Synopsys
claims it is, then it had recourse—it could have appealed
the jury’s Panduit fact findings as not supported by
substantial evidence. But it did not. And thus on appeal,
it is left with a jury fact finding that Intel would not have
bought Synopsys’ emulation system without the two
infringing features, and Mentor would have made every
single sale to Intel that Synopsys otherwise made. This is
a highly factual case, and Synopsys did not appeal any of
the jury’s fact findings relating to damages.
Synopsys and the amicus brief argue that complex
multi-feature devices necessitate change in patent dam-
ages law. They argue that not requiring an additional
8 The instruction also explained that if Intel would
have bought fewer or no emulation systems in place of
those it bought from Synopsys then lost profits cannot be
awarded on those sales. J.A. 165.
20 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
apportionment step after the Panduit test has been met
would “allow multiple entities to obtain lost profits on the
same product where each entity holds a patent on a
different ‘but for’ feature of the same product.” Amicus
Br. 11. This claimed threat of “serial infringement
claims” is not correct. Again, we do not speak to all
damages models. Under Panduit, however, there can only
be one recovery of lost profits for any particular sale.
This case, for example, involved lost profits for an
emulator system with the two patented features based on
certain sales Synopsys made to Intel. To be entitled to
lost profits damages, Mentor had to prove no other sup-
plier could have made those specific sales to Intel. If
there were any acceptable non-infringing alternative Intel
would have purchased instead of Mentor’s emulator, then
Mentor could not obtain lost profits.
The jury found (and Synopsys does not challenge on
appeal) that Intel would not have purchased emulators
without the features claimed in Mentor’s ’376 patent.
While there may have been other features of the emulator
that were important to Intel, only Mentor could sell Intel
an emulator with all the features it required. Because
Mentor had proprietary rights to the only means of satis-
fying this demand by Intel, because no other party could
sell Intel an emulator with those two components, no one
else had the right to sell emulators to Intel that satisfied
all of Intel’s requirements. In short, for these particular
sales, no other party could satisfy the Panduit factors,
making it impossible for multiple patentees to obtain lost
profit damages for the same sales.
Applying this logic to Synopsys’ laptop example, Syn-
opsys argues that “nearly every component is a but-for
cause of most sales.” Synopsys Rep. Br. 20. Synopsys
argues that “the reality” is “that sales of a complex prod-
uct may be driven by ‘a plethora of features,’” many of
which are patented. Id. If true, however, then lost profits
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 21
on the laptop would not be available. In Synopsys’ exam-
ple, the customer demands a laptop with a high resolution
screen, responsive keyboard, a fast wireless network
receiver, and an extended-life battery. 9 Id. at 18. If each
are patented by separate companies, and no manufacturer
has the right to sell them all, then no manufacturer could
obtain lost profits on such a laptop (none could satisfy the
demand for everything). Thus, each patentee would get a
reasonable royalty on their respective component.
With such multi-component products, it may often be
the case that no one patentee can obtain lost profits on
the overall product—the Panduit test is a demanding one.
A patentee cannot obtain lost profits unless it and only it
could have made the sale—there are no non-infringing
alternatives or, put differently, the customer would not
have purchased the product without the infringing fea-
ture.
Consider the laptop example. If the only patented
component is the extended life battery and a customer
will only buy a laptop with this battery (meaning a laptop
with a lower quality battery is not an acceptable non-
infringing alternative to the customer), then when an
infringer who appropriates the patented extended life
battery sells a laptop, the infringer has deprived the
patentee of the lost profits on the laptop sale which only it
could have made. If a laptop with a lower-quality battery
would be an acceptable non-infringing alternative to
certain customers, the patentee would not be entitled to
lost profits for these laptop sales. For those customers,
9 Synopsys cites LaserDynamics for this example.
LaserDynamics, however, does not analyze but for causa-
tion using the Panduit factors and is not even a lost
profits case. The LaserDynamics analysis was limited to
reasonable royalties. LaserDynamics, Inc. v. Quanta
Comp., Inc., 694 F.3d 51, 66 (Fed. Cir. 2012).
22 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
the patented battery was not a factor in their purchasing
decision; it was not necessary for the sale. The only sales
for which the patentee can obtain lost profits are the
customers who would refuse to purchase laptops without
the patented extended-life battery. For these lost custom-
ers, the extended-life battery drives their purchasing
decisions.
When a patentee proves it is entitled to recover lost
profit damages, as Synopsys concedes Mentor has done
here, it is entitled to be made whole for the injuries it
suffered as a result of the infringement. See, e.g., State
Indus., 883 F.2d at 1577 (“The measure of damages is an
amount which will compensate the patent owner for the
pecuniary loss sustained because of the infringement.”).
In this case, the jury answered the question: “Had the
Infringer not infringed, what would the Patent Hold-
er/licensee have made?” Mentor has proven it would have
earned certain profits but for Synopsys’ infringement. It
is entitled to be made whole for the profits it proves it lost
because Synopsys infringed. The jury found that if Syn-
opsys had not infringed the Mentor patent by incorporat-
ing the two patented features into its emulators, Intel
would not have purchased these products from Synopsys
and would instead have purchased the emulators from
Mentor—there were no non-infringing alternative emula-
tors which would have satisfied Intel. Panduit limits lost
profits to sales where there are no acceptable non-
infringing alternatives that the customer would have
purchased. We hold that the district court did not err in
refusing to further apportion lost profits after the jury
returned its verdict applying the Panduit factors. We
conclude that, when the Panduit factors are met, they
incorporate into their very analysis the value properly
attributed to the patented feature. We affirm the district
court’s denial of judgment as a matter of law and/or
motion for new trial with regard to damages.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 23
4. Indefiniteness of Synopsys’ ’109 Patent
The district court granted summary judgment that
claim 1 of Synopsys’ ’109 patent is indefinite. J.A. 121. A
claim is indefinite if the claim, “read in light of the speci-
fication delineating the patent, and the prosecution
history, fail[s] to inform, with reasonable certainty, those
skilled in the art about the scope of the invention.” Nauti-
lus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124
(2014). Definiteness requires clarity, though “absolute
precision is unattainable.” Id. at 2129. Claims reciting
terms of degree “ha[ve] long been found definite” if they
provide reasonable certainty to a skilled artisan when
read in the context of the patent. Biosig Instruments, Inc.
v. Nautilus, Inc., 783 F.3d 1374, 1378 (Fed. Cir. 2015)
(quoting Interval Licensing LLC v. AOL, Inc., 766 F.3d
1364, 1370 (Fed. Cir. 2014)). This requires a patent to
provide “some standard for measuring that [term of]
degree.” Id. For example, in Nautilus we found the
phrase “spaced relationship” definite because a “skilled
artisan would understand the inherent parameters of the
invention as provided in the intrinsic evidence.” Id. at
1384. In Sonix Technology, we found the phrase “visually
negligible” definite based on examples from the specifica-
tion and prosecution history. Sonix Tech. Co. v. Publ’ns
Int’l, Ltd., 844 F.3d 1370, 1379–80 (Fed. Cir. 2017). And
in DDR Holdings, LLC v. Hotels.com, L.P., we found the
phrase “look and feel” definite because it had “an estab-
lished meaning in the art by the relevant timeframe”
consistent with how the phrase was used in the specifica-
tion. 773 F.3d 1245, 1261 (Fed. Cir. 2014).
The ’109 patent discloses “a method for displaying the
results of synthesized circuit analysis visually near the
HDL source specification that generated the circuit.” ’109
patent at 7:57–59 (emphasis added). It explains that the
method “uses information developed during translation to
relate the results of the analysis to the HDL source . . . .”
Id. at 11:29–32. It teaches that by displaying the circuit
24 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
analysis results “near” the corresponding HDL code, “the
present invention allows a designer to make more effec-
tive use of logic synthesis and reduce the complexity of
the circuit debugging process.” Id. at 8:59–63.
Claim 1 requires “displaying said characteristics asso-
ciated with those said final circuit’s nets and parts that
correspond directly with said initial circuit’s nets and
parts near said portions of said synthesis source text file
that created said corresponding initial circuit parts and
nets.” Id. at 22:52–56 (emphasis added). Mentor moved
for summary judgment that the word “near” was indefi-
nite. The district court granted the motion, holding “[t]he
patent’s claims and specification do not permit a person of
ordinary skill in the art to define the claim term ‘near’
with reasonable certainty.” J.A. 121. We conclude that
the court erred as a matter of law.
We hold the term “near” informs a person of ordinary
skill in the art about the scope of the invention with
reasonable certainty. A goal of the ’109 patent is to aid
developers when debugging HDL. ’109 patent at 8:59–63.
To accomplish this, the patent “relates” circuit analysis
results with the HDL corresponding to a particular result,
and then places the two pieces of information “near” each
other on the display screen. Id. at 7:57–64. This allows a
developer to identify and fix problems with specific lines
of HDL when debugging. Id. at 11:29–35. In order for the
patent’s stated objective to occur, the system must display
the related HDL and analysis results “near” enough to
each other such that a developer would “relate” the two.
Thus, we hold a skilled artisan would understand “near”
requires the HDL code and its corresponding circuit
analysis to be displayed in a manner that physically
associates the two.
The patent provides examples of HDL displayed near
the corresponding circuit tracing results. Figure 11
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 25
discloses HDL code fragment 400 displayed next to timing
result 500:
Id. at Fig. 11. The specification explains that the circuit
analysis “can be displayed next to the appropriate line of
the output.” Id. at 13:25–28. Similarly, Figure 19 dis-
plays “timing and area analysis” next to the correspond-
ing HDL code:
26 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
Id. at Fig. 19, 14:32–34. A skilled artisan viewing Figures
11 and 19 would readily understand which HDL code
corresponds to which timing result, based on the way the
information is displayed on the screen. These examples
support the conclusion that skilled artisans would under-
stand the meaning of “near” with reasonable certainty.
See Sonix Tech., 844 F.3d at 1379–80 (relying on specific
examples from the specification to find a term definite).
Mentor cites Figure 30, which it argues demonstrates
“near” is ambiguous:
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 27
’109 patent at Fig. 30. Figure 30 discloses an embodiment
where the circuit analysis 3030 is displayed in a separate
window in the corner of the display screen. Id. at 21:2–3.
Circuit analysis 3030 corresponds to the HDL code high-
lighted in text box 3020. Id. at 21:8–9. In this embodi-
ment, the circuit analysis and corresponding HDL are not
displayed necessarily “near” each other.
We conclude that the Figure 30 embodiment is a dif-
ferent embodiment than the claimed embodiment. See
Intamin Ltd. v. Magnetar Techs., Corp., 483 F.3d 1328,
1336–37 (Fed. Cir. 2007) (claims may exclude embodi-
ments if the specification discloses multiple embodi-
ments); Baran v. Med. Device Techs., Inc., 616 F.3d 1309,
1316 (Fed. Cir. 2010). The purpose of the claimed “near”
requirement is to allow a developer to associate HDL with
its corresponding tracing analysis. See ’109 patent at
7:61–64 (“The present invention relates the analysis
results of each portion of the synthesized circuit to the
particular part of the HDL specification that generated
28 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
that circuit portion.”). This includes the embodiments
shown in Figures 11 and 19. Figure 30 discloses an
alternative scheme for associating HDL and circuit analy-
sis. Rather than placing HDL code and tracing results
“near” one another, the HDL code is highlighted (3020 in
Fig. 30) and the tracing results for the highlighted code
are placed in a separate window (3030 in Fig. 30). Id. at
21:2–9. Thus, there is no need to place the HDL code and
circuit analysis near each other because they are already
associated by alternative means. See id. at 21:15–16
(“Here, cursor window 3030 could display other character-
istics associated with the object under the cursor.”) (em-
phasis added).
We reverse the grant of summary judgment of indefi-
niteness of claim 1 of the ’109 patent. We hold that the
term “near” informs those of skill in the art about the
scope of the invention with reasonable certainty.
5. Patent-eligibility of Synopsys’ ’526 Patent
The district court granted summary judgment that
claims 19, 24, 28, 30, and 33 of the ’526 patent lack pa-
tentable subject matter, holding the “claims embrace
unpatentable electromagnetic carrier waves.” J.A. 121.
We affirm.
Mentor argues the term “machine-readable medium,”
present in every challenged claim, renders the claimed
subject matter invalid under 35 U.S.C. § 101. A patentee
is free to be his own lexicographer. Phillips v. AWH
Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005) (en banc).
Here, the specification expressly defines the term: “The
computer readable medium is any data storage device
that can store data which can be thereafter be [sic] read
by a computer system. Examples of the computer reada-
ble medium include read-only memory, random-access
memory, CD-ROMs, magnetic tape, optical data storage
devices, carrier waves.” ’526 patent at 52:31–36 (empha-
sis added). Mentor argues that because the ’526 patent
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 29
defines a “machine-readable medium” as including “carri-
er waves,” the claims are invalid under In re Nuijten, 500
F.3d 1346 (Fed. Cir. 2007).
In Nuijten, we addressed whether a claim covering a
signal was eligible for patenting under 35 U.S.C. § 101.
The claimed signal in Nuijten was not limited to a partic-
ular medium or carrier but rather covered “any tangible
means of information carriage.” Id. at 1353. We held
that a “transitory, propagating signal” did not fall within
any statutory category of subject matter: process, ma-
chine, manufacture, or composition of matter. Id. There-
fore, because the claims covered “the signal itself,” they
were not eligible subject matter. Id. at 1357.
Because the challenged ’526 claims are expressly de-
fined by the specification to cover carrier waves, they are
similar to the ineligible Nuijten claims. Here, the specifi-
cation defined the claimed machine-readable medium as
including read-only memory, random-access memory, CD-
ROMs, magnetic tape, optical data storage devices, and
carrier waves. Even though carrier waves differ greatly
from the other disclosed mediums (such as CD-ROMs or
magnetic tape), we are bound by the patentee’s lexicogra-
phy. See Thorner v. Sony Comput. Entm’t Am. LLC, 669
F.3d 1362, 1365 (Fed. Cir. 2012). Thus, the claims cover
carrier signals themselves. The “presence of [other] acts
recited in the claim[s] does not transform a claim covering
a thing—the signal itself—into one covering the process
by which that thing was made.” Nuijten, 500 F.3d at
1355.
The challenged ’526 claims present a scenario where
there are multiple covered embodiments, and not all
covered embodiments are patent-eligible. For example, if
the machine-readable medium used was a “random-access
memory” or “optical data storage device,” the claims
would not run afoul of Nuijten. Synopsys contends a
“nonexclusive example, from an alternate embodiment”
30 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
does not render the entire claim ineligible. Synopsys Br.
69. While not binding on our court, the Manual of Patent
Examining Procedure (“MPEP”) is instructive on this
point. The MPEP instructs that when a claim covers
“both statutory and non-statutory embodiments,” it is not
eligible for patenting. MPEP § 2106 (9th ed. Mar. 2014).
As an example, it states that “a claim to a computer
readable medium that can be a compact disc or a carrier
wave covers a non-statutory embodiment and therefore
should be rejected under 35 U.S.C. § 101 as being directed
to non-statutory subject matter.” 10 Id.
We affirm the district court’s grant of summary judg-
ment that claims 19, 24, 28, 30, and 33 of the ’526 patent
lack patentable subject matter.
B. Mentor’s Cross-Appeal
1. Mentor’s Allegations of Willful Infringement of the
’376 Patent
The district court granted a motion in limine preclud-
ing Mentor from presenting evidence of willful infringe-
ment of the ’376 patent. J.A. 40,545–47. We reverse.
We review evidentiary rulings under Ninth Circuit
law, which reviews for abuse of discretion. Advance
Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294,
1308 (Fed. Cir. 2001). After Synopsys filed an action
seeking declaratory judgment that the ’376 patent was
invalid and not infringed, Mentor answered and counter-
claimed that Synopsys willfully infringed. The district
court granted Synopsys’ motion in limine to preclude
10We note that Synopsys was later granted a second
patent based on the ’526 patent’s disclosure (U.S. Patent
No. 8,099,271) in which Synopsys drafted its claims to
cover a “non-transitory machine-readable medium,”
thereby excluding the carrier waves embodiment.
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 31
Mentor from presenting evidence of willfulness. The court
held that Mentor was precluded from presenting evidence
of willfulness because it relied exclusively on post-suit
willfulness conduct, and it had not first sought a prelimi-
nary injunction. It stated, “I think Synopsys is right
about what we will call the Seagate rule, which is if you
don’t seek an injunction, you can’t seek willful infringe-
ment for post-filing conduct.” J.A. 40,547; see In re
Seagate Tech., LLC, 497 F.3d 1360, 1374 (Fed. Cir. 2007)
(“[W]hen an accused infringer’s post-filing conduct is
reckless, a patentee can move for a preliminary injunc-
tion, which generally provides an adequate remedy for
combating post-filing willful infringement.” (citations
omitted)). On route to this conclusion, the district court
made two errors. First, it erred in determining that the
alleged conduct was post-suit conduct because it erred in
determining the filing date of the relevant suit. Second, it
erred in concluding that Synopsys could not present
evidence of post-filing willful infringement because Syn-
opsys did not seek a preliminary injunction.
The relevant date for determining which conduct is
pre-suit is the date of the patentee’s affirmative allegation
of infringement, in this case the date of Mentor’s counter-
claim. See Seagate, 497 F.3d at 1374 (explaining that “in
ordinary circumstances, willfulness will depend on an
infringer’s prelitigation conduct” because “a patentee
must have a good faith basis for alleging willful infringe-
ment”). Mentor relies on Synopsys’ acquisition of EVE,
which terminated the license and rendered all subsequent
sales infringing. These events occurred after the declara-
tory judgment was filed but prior to Mentor’s counter-
claim for infringement. The alleged acts of infringement
are thus pre-suit acts, and there is accordingly no basis
for excluding Mentor’s evidence of willfulness.
We also disagree with the district court’s second deci-
sion—that Mentor could not assert willful infringement
because it did not seek a preliminary injunction. As we
32 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
noted in Aqua Shield, there is “no rigid rule” that a pa-
tentee must seek a preliminary injunction in order to seek
enhanced damages. Aqua Shield v. Inter Pool Cover
Team, 774 F.3d 766, 773–74 (Fed. Cir. 2014); see Halo
Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1934
(2016) (“[W]e eschew any rigid formula for awarding
enhanced damages under § 284 . . . .”).
We hold that the district court abused its discretion in
precluding Mentor from presenting evidence of willful
infringement. Because the district court determined
Mentor’s willfulness allegations were improper, there are
no findings on willfulness for appellate review. We vacate
the district court’s grant of the motion in limine and
remand for further proceedings consistent with Halo.
2. Written Description of Mentor’s ’882 Patent
The district court granted summary judgment that
claims 7, 9, and 13 of the ’882 patent are invalid for lack
of written description. We reverse.
The ’882 patent discloses an emulator comprised of a
series of field programmable gate arrays (FPGAs, also
referred to as “reconfigurable logic devices” in the patent).
’882 patent at 2:10–13. Each FPGA is comprised of a
collection of smaller logic elements (called “reconfigurable
logic elements”). Id. Some simulations require more than
one FPGA to model. Id. at 2:13–21. When that occurs,
the emulator connects multiple FPGAs to create larger
circuits. Id. This can lead to timing errors if signals
progress through individual FPGAs at different lengths of
time. Id. at 1:21–32. To address this problem, the ’882
patent discloses using at least two different clocks: a user
clock for the logic elements within a FPGA, and a signal
routing clock for the timing between FPGAs. Id. at 4:13–
16.
Each asserted claim requires that “the signal routing
clock is independent of the first clock signal and the
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 33
second clock signal.” The district court construed “inde-
pendent” as “wherein there is no required timing relation-
ship between clock edges.” J.A. 10,848. Synopsys moved
for summary judgment that the ’882 patent’s specification
failed to disclose written description support for an “inde-
pendent” signal routing clock. The district court granted
the motion:
The motion is GRANTED with respect to invalidi-
ty of claims 7, 9, and 13 of U.S. Patent No.
6,947,882. The 882 Patents [sic] specification de-
scribes the minimum frequency relationship be-
tween the signal routing clock signal and the first
and second clock signals as an exception to inde-
pendent clocking. As a result, the specification
does not demonstrate possession of the unquali-
fiedly independent clocking that the asserted
claims require, and the claims do not meet the
written description requirement.
J.A. 23,749–50.
A patent satisfies the written description requirement
when “the disclosure of the application relied upon rea-
sonably conveys to those skilled in the art that the inven-
tor had possession of the claimed subject matter as of the
filing date.” Ariad Pharms., Inc. v. Eli Lilly & Co., 598
F.3d 1336, 1351 (Fed. Cir. 2010). We review a grant of
summary judgment of no written description de novo.
Crown Packaging Tech. v. Ball Metal Beverage, 635 F.3d
1373, 1380 (Fed. Cir. 2011).
Synopsys’ argument before the district court and on
appeal is based on the following passage from the ’882
patent’s specification:
As illustrated in FIG. 2, I/O circuitry 115 and 116
are clocked by signal routing clocks 117 whereas
the LEs are clocked by a different clock signal (or
signals), user clock(s) 118. Except for the relation-
34 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
ship that each of signal routing clock 117 having a
higher frequency than an associated user clock
118, signal routing clocks 117 are independent of
user clocks 118.
’882 patent at 4:13–19 (emphasis added). Synopsys
argues this passage requires each signal routing clock to
run faster than its associated user clock. It argues this
means there is a relationship between the signal routing
clock and the user clock, given that the signal routing
clock must operate at a higher frequency than the user
clock. Therefore, the specification does not disclose an
“independent” signal routing clock.
We do not agree. The very language of claim 1 which
the court held was not supported by the specification was
present in the originally-filed claims. Original claims are
part of the original specification and in many cases will
satisfy the written description requirement. Ariad, 598
F.3d at 1349; see ScriptPro LLC v. Innovation Assocs.,
Inc., 833 F.3d 1336, 1341 (Fed. Cir. 2016); Crown Packag-
ing, 635 F.3d at 1381. These claims raise none of the
genus/species concerns that have caused us to question
whether originally filed claims satisfy written description.
See, e.g., Ariad, 598 F.3d at 1349–51. The claims at issue
in this case are indistinguishable from other cases relying
on originally-filed claims to satisfy the written description
requirement. Like Crown Packaging, the “original claims
clearly show that the applicants recognized and were
claiming [the disputed limitation]. . . . These claims show,
as Ariad recognized many original claims do, that the
applicants had in mind the invention as claimed” and
described it. 635 F.3d at 1381. Original claim 1 recites
“one or more signal routing clock signals which are inde-
pendent of the first and second clock signals.” J.A.
19,441. This is the precise language the district court
found missing from the ’882 specification. See J.A.
23,749–50 (“[T]he specification does not demonstrate
possession of the unqualifiedly independent clocking that
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 35
the asserted claims require . . . .”) (JMOL order); compare
ScriptPro, 833 F.3d at 1341 (finding written description
support when the original claims and the challenged
claims recited the same limitation). We conclude that this
original claim language clearly demonstrates that the
inventor possessed an invention including “one or more
signal routing clock signals which are independent of the
first and second clock signals” and described it.
We reverse the grant of summary judgment that
claims 7, 9, and 13 of the ’882 patent are invalid for lack
of written description and remand for further proceed-
ings. 11
3. Claim Preclusion Relating to Mentor’s ’531 and ’176
Patents
The ’176 and ’531 patents are two of the three patents
litigated in the 2006 lawsuit between Mentor and EVE.
Mentor and EVE settled the litigation when EVE took a
license to the asserted patents, and Mentor dismissed its
claims with prejudice. Synopsys’ 2012 acquisition of EVE
automatically terminated the Mentor/EVE license. Syn-
opsys then filed a declaratory judgment action for non-
infringement of the ’176 and ’531 patents, and Mentor
counterclaimed for infringement. Mentor contends its
infringement allegations were “based exclusively on acts
11 Synopsys filed a motion to strike portions of Men-
tor’s reply brief. Docket No. 90. Synopsys argues Mentor
raised five new arguments relating to the ’882 patent’s
written description that it did not raise before the district
court or in its opening brief to our court, and it contends
those arguments should be struck. Because we decide the
written description issue in Mentor’s favor on the argu-
ment it undisputedly properly raised, we need not consid-
er the arguments arguably made for the first time in the
reply brief. We deny the motion.
36 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
of infringement that occurred after October 4, 2012”—the
date Synopsys acquired EVE. Mentor Br. 72. Synopsys
moved for summary judgment that claim preclusion
barred Mentor’s infringement allegations, and the district
court granted the motion.
Whether a cause of action is barred by claim preclu-
sion is a question of law reviewed without deference.
Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1052 (Fed.
Cir. 2014). We apply regional circuit law when determin-
ing whether claim preclusion applies. Id. In the Ninth
Circuit, claim preclusion applies when the prior suit: (1)
involved the same claim or cause of action as the later
suit; (2) reached a final judgment on the merits; and (3)
involved the same parties or privies. Id. (citing Mpoyo v.
Litton Electro-Optical Sys., 430 F.3d 985, 987 (9th Cir.
2005)). Whether two infringement allegations constitute
the same claim or cause of action is an issue particular to
patent law, and we apply our own law. Id.
Mentor and Synopsys dispute the applicable law. Our
recent decisions in Aspex Eyewear and Brain Life are
squarely on point. In Aspex Eyewear, we addressed the
third suit in a series of related actions involving the same
patent and patentee. Aspex Eyewear, Inc. v. Marchon
Eyewear, Inc., 672 F.3d 1335 (Fed. Cir. 2012). In the first
action, the patentee asserted the patent against a first
defendant. Id. at 1338. The district court found the
patent infringed and not invalid. Id. at 1339. After a jury
trial on damages, we affirmed. Id. In the second action,
the patentee asserted the patent against a second defend-
ant. Id. The parties ultimately settled. Id. The settle-
ment agreement contained a provision that the parties
“stipulate to dismissal with prejudice of [the action],
including all claims and counterclaims, and any claim
which would have been had by and between the Parties
arising from or connected with [the action].” Id. (altera-
tions in original). Subsequently, the patentee filed a third
action asserting the same patent against the same de-
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 37
fendants from the two prior actions, this time alleging
infringement by newer models of the previously-accused
products. Id. at 1340. The district court granted sum-
mary judgment that the patentee’s claims were barred by
claim preclusion. Id. It held that the patentee’s in-
fringement allegations “were the same as the claims that
either were, or could have been, raised in the [previous
actions]” and that the new accused products were “essen-
tially the same” as the previously litigated ones. Id.
We reversed. We explained that claim preclusion does
not bar later infringement allegations “with respect to
accused products that were not in existence at the time of
the [previous actions] for the simple reason that [claim
preclusion] requires that in order for a particular claim to
be barred, it is necessary that the claim either was as-
serted, or could have been asserted, in the prior action.”
Id. at 1342. We explained that claim preclusion did not
bar infringement allegations that “did not exist at the
time of the earlier action.” Id. We held that “if the party
could not have asserted particular claims [in a previous
action]—because the tortious conduct in question had not
occurred at that time—those claims could not have been
asserted and therefore are not barred.” Id. (citing Lawlor
v. Nat’l Screen Serv. Corp., 349 U.S. 322, 328 (1955)).
And we explained that for products made or sold after the
previous actions, it did not matter whether the new
products were “essentially the same” as the previously
accused products—claim preclusion did not bar the in-
fringement allegations as to the new products. Id.
We reemphasized that decision in Brain Life, where
we addressed a second action involving the same patent
as a prior litigation. Brain Life, 746 F.3d at 1050. In the
first action, the jury found infringement and awarded
damages. Id. We reversed on claim construction grounds,
and the district court entered final judgment of no in-
fringement. Id. After the final judgment, the patentee
licensed the asserted patent to a new entity, and the new
38 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
licensee filed suit against the same defendant from the
first action. Id. at 1050–51. The licensee accused new
products (that were not at issue in the prior litigation) of
infringement, but it conceded “there was no material
difference between the currently accused products and the
previously adjudicated noninfringing products.” Id. at
1051. The district court granted summary judgment that
claim preclusion barred the licensee’s infringement alle-
gations. Id. We reversed. We held that claim preclusion
did not bar any infringement allegations that postdated
the prior judgment. Id. at 1054 (“We find that [the pa-
tentee’s] second suit is not barred by claim preclusion—
regardless of whether the same transactional facts are
present in both suits—to the extent [the patentee’s]
current infringement allegations are temporally limited to
acts occurring after the final judgment was entered in the
first suit.”). We explained that claim preclusion did not
bar allegations of infringement occurring after the prior
final judgment because the patentee could not have
brought those claims in the prior case. Id.
Exactly like Aspex Eyewear and Brain Life, Mentor’s
infringement allegations are based on alleged acts of
infringement that occurred after the Mentor/EVE license
terminated and were not part of the previous lawsuit. See
J.A. 1223–27 (Mentor’s 2013 counterclaims of infringe-
ment); Mentor Br. 72. Claim preclusion does not bar
these allegations because Mentor could not have previous-
ly brought them. See Brain Life, 746 F.3d at 1054. The
present lawsuit is based on post-license conduct, so the
alleged infringement did not exist during the previous
action. See Lawlor, 349 U.S. at 328 (“[The prior judg-
ment] cannot be given the effect of extinguishing claims
which did not even then exist and which could not possi-
bly have been sued upon in the previous case.”); Asetek
Danmark, 842 F.3d at 1362 (“It is well established, how-
ever, that the difference in timing means that the two
situations do not involve the same ‘claim’ for claim-
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 39
preclusion purposes, even if all the conduct is alleged to
be unlawful for the same reason.”). Thus, Mentor’s alle-
gations are not barred. See Aspex Eyewear, 672 F.3d at
1342. Because the allegations could not have been
brought in the first action, we need not determine wheth-
er the newly accused products are “essentially the same”
as the products litigated in the first action. See id.
Synopsys contends Aspex Eyewear and Brain Life are
inconsistent with our decisions in the Foster cases, which
it argues control because they were issued prior to Aspex
Eyewear and Brain Life. See Foster v. Hallco Mfg. Co.,
947 F.2d 469 (Fed. Cir. 1991) (“Foster I”); Hallco Mfg. Co.
v. Foster, 256 F.3d 1290 (Fed. Cir. 2001) (“Foster II”).
Foster I addressed a second action after a previous action
ended with a consent judgment. Foster I, 947 F.2d at 472.
In the first action, the parties settled, and the defendant
obtained a license to the asserted patents. Id. The con-
sent judgment contained a provision saying the asserted
patents were “valid and enforceable in all respects.” Id.
The defendant subsequently began manufacturing new
products and filed suit seeking a declaration that the
asserted patents were invalid and the new products did
not infringe. Id. at 473. We held that claim preclusion
barred relitigation of the patents’ validity only if the
patentee’s “claim” was identical to its previous claims. Id.
at 478. We explained that “a ‘claim’ rests on a particular
factual transaction or series thereof on which a suit is
brought.” Id. at 479. We were “unpersuaded that an
‘infringement claim,’ for purposes of claim preclusion,
embraces more than the specific devices before the court
in the first suit.” Id. In Foster II—an unrelated lawsuit
involving the same parties—we addressed whether a
defendant could challenge a patent’s validity in a second
action after a first action involving the patent was dis-
missed with prejudice after a settlement. Foster II, 256
F.3d at 1294. We held that claim preclusion bars re-
litigation of the patent’s validity only if the accused
40 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
devices “are essentially the same, or if any differences
between them are merely colorable.” Id. at 1297.
There is language in the Foster cases that could be
read as inconsistent with Aspex Eyewear and Brain Life.
However, the cases addressed different factual issues.
Foster I and Foster II both addressed whether a defendant
could re-raise validity challenges in a subsequent action.
In Foster II, we specifically characterized Foster I as
addressing “under what circumstances, if any, claim
preclusion would operate to prevent a subsequent chal-
lenge to patent validity when the device in the second
action was not involved in the first action.” Foster II, 256
F.3d at 1295. Neither case addressed whether a patentee
could bring new infringement allegations based on con-
duct occurring after a previous litigation ended. This is
the precise issue addressed in Aspex Eyewear and Brain
Life and the precise issue now before us.
Reading the Foster cases as Synopsys requests—that
claim preclusion bars successive infringement suits when
the accused products are essentially the same—would not
only create an intra-circuit split, but also would be incon-
sistent with the Supreme Court’s decision in Lawlor. In
Lawlor, the Supreme Court instructed that a prior judg-
ment “cannot be given the effect of extinguishing claims
which did not even then exist and which could not possi-
bly have been sued upon in the previous case.” Lawlor,
349 U.S. at 328. Aspex Eyewear and Brain Life are con-
sistent with this holding. Conversely, interpreting the
Foster cases as barring a patentee from asserting in-
fringement allegations that did not exist at the time of a
previous action would be at odds with Lawlor.
The facts of the underlying case further weigh against
Synopsys’ position. Synopsys consciously terminated the
Mentor/EVE license by acquiring EVE. Similarly, EVE
consciously terminated the Mentor/EVE license by allow-
ing itself to be acquired by Synopsys. Synopsys/EVE
MENTOR GRAPHICS CORPORATION v. EVE-USA, INC. 41
should not be able to use the fact that it voluntarily
terminated the Mentor/EVE license as a shield from
further infringement liability. If we adopted Synopsys’
position, any licensee holding a license obtained through
litigation could breach that license, yet prevent the pa-
tentee from asserting infringement against new products
not covered by the license. A licensee should not be able
to use the fact that it voluntarily terminated a license as a
shield against future infringement liability. 12
Synopsys also argues Mentor’s infringement allega-
tions are barred by the Kessler decision. See Kessler v.
Eldred, 206 U.S. 285 (1907). The Kessler decision permits
an adjudicated non-infringer “to continue the same activi-
ty in which it engaged prior to the infringement allega-
tions once it ha[s] defeated those contentions in the first
suit.” Brain Life, 746 F.3d at 1056. It allows “an ad-
judged non-infringer to avoid repeated harassment for
continuing its business as usual post-final judgment in a
patent action where circumstances justify that result.”
Id. (emphasis in original). EVE is not an adjudicated non-
infringer; it was a willing licensee that was granted a
license to the ’176 and ’531 patents, which terminated
when it was acquired by Synopsys. Without a valid
license from Mentor, it could not “continue the same
activity in which it engaged prior to the infringement
allegations.” The Kessler decision does not apply.
Consistent with the Supreme Court’s Lawlor decision
and our decisions in Aspex Eyewear and Brain Life, we
hold that claim preclusion does not bar a patentee from
12 Mentor filed its ’176 and ’531 infringement allega-
tions as a counterclaim to Synopsys’ declaratory judgment
of non-infringement. J.A. 1216–29. It would be strange
to hold that claim preclusion barred a patentee from
raising a counterclaim of infringement when it was sued
for a declaration of non-infringement.
42 MENTOR GRAPHICS CORPORATION v. EVE-USA, INC.
bringing infringement claims for acts of infringement
occurring after the final judgment in a previous case. We
reverse the grant of summary judgment that claim pre-
clusion barred Mentor’s assertion of the ’531 and ’176
patents and remand for further proceedings.
III. CONCLUSION
We hold there was substantial evidence to support the
jury’s infringement verdict regarding the ’376 patent and
affirm the district court’s denial of judgment as a matter
of law. We affirm the damages award. We affirm the
summary judgment that assignor estoppel bars Synopsys
from challenging the validity of the ’376 patent. We
reverse the summary judgment that Synopsys’ ’109 patent
is indefinite. We affirm the summary judgment that
Synopsys’ ’526 patent lacks eligible subject matter. We
vacate the order granting the motion in limine precluding
Mentor from presenting evidence of willful infringement
and remand for a trial of that issue and assessment of
Mentor’s claim for enhanced damages. We reverse the
summary judgment that Mentor’s ’882 patent lacks
written description support. Finally, we reverse the
summary judgment that Mentor’s infringement allega-
tions regarding the ’531 and ’176 patents are barred by
claim preclusion.
We remand for further proceedings consistent with
this opinion.
AFFIRMED-IN-PART, REVERSED-IN-PART,
VACATED-IN-PART, AND REMANDED
COSTS
Costs to Mentor.