Appeals Court Reverses ITC Decision in Vizio-Funai Patent Case

A divided federal appeals court said Vizio’s “work around” digital TVs don’t infringe Funai patents. The ruling by the U.S. Court of Appeals for the Federal Circuit upends a ban last year by the International Trade Commission, a federal agency, on imports of Vizio DTV sets on grounds that they infringed Funai’s channel-mapping patents. Funai sued Vizio, Amtran, which assembles TV for Vizio, and 12 other companies on infringement allegations three years ago.

The appeals court upheld an ITC holding that Vizio “legacy” TVs infringed Funai’s patents. But the work-around sets don’t convert all channel information from the virtual channel map into a usable format as required by the patent, the court said in a decision signed by Judges Haldane Mayer and Timothy Dyk. “Thus the work around products do not satisfy ’suitable for use’ for identifying and decoding limitations as the patent requires,” they said. All four minimum data components in the channel map are required to be suitable for use for decoding because the “very purpose” of the Funai patent is to replicate all MPEG program map table information needed to identify and acquire content, the court ruled. Vizio’s legacy sets converted all program data into a usable format, it found.

The appeals court backed Vizio’s argument that the patent claims require more than the receipt and storage of the virtual channel map in the TV’s DRAM. “The channel map information must also actually be capable of being used for identifying the desired program,” the court ruled.

Judge Raymond Clevenger supported the court’s conclusion that Vizio’s legacy TV violated Funai’s patents. But he maintained that the patent requires only the “simple” formation of the channel map, not its actual use. The commission had ruled that by having the means to form a channel map, the Vizio TVs infringed the patent, Clevenger said. That “finding is sufficient to sustain” the ITC’s decision that the work-around sets also infringed the patent, he said. The patent requires “only the means” for creating a channel map, Clevenger said.

Vizio continued importing TVs into the U.S. while it appealed the commission ruling, by agreeing to pay a bond of $2.50 for each set brought into the country. “We are gratified that the opinion vindicated our non-infringement position on the ‘work-around’ products,” said Rob Brinkman, Vizio vice president of operations and administration. Funai officials weren’t immediately available to comment.