text:
    ADT LLC, Plaintiff-Appellee, v. NORTHSTAR ALARM SERVICES, LLC, Interested Party-Appellant.
    No. 16-15351
    United States Court of Appeals, Eleventh Circuit.
    (April 14, 2017)

      Charles Sanders McNew, McNew, PA, Boca Raton, FL, for Plaintiff-Appellee.
    Matthew R. Chait, Eric C. Christu, Jonathan P. Hart, Shutts & Bowen, LLP, West Palm Beach, FL, Bruce Stephen Ro-gow, Tara A. Campion, Bruce S. Rogow, PA, Fort Lauderdale, FL, for Interested Party-Appellant.

      Before WILLIAM PRYOR and MARTIN, Circuit Judges, and DUFFEY, District Judge.

       Honorable William S. Duffey, Jr., United States District Judge for the Northern District of Georgia, sitting by designation.

   WILLIAM PRYOR, Circuit Judge:

This appeal presents the question whether a nonparty, not in privity with a party to an injunction, may be bound by that injunction as a successor in interest under the theory of de facto merger. After ADT LLC, sued Vision Security, LLC, for violations of the Lanham Act, 15 U.S.C. § 1125(a), the parties agreed to an injunction that prohibited Vision Security from using certain sales tactics. NorthStar Alarm Services, LLC, then acquired customer accounts, rental leases, and other assets from Vision Security and hired four senior officers and some of the sales team of Vision Security. When NorthStar allegedly used sales tactics prohibited by the injunction, ADT moved the district court to hold NorthStar in contempt of the injunction. The district court determined that, although NorthStar and Vision Security were not in privity, NorthStar was bound by the injunction as a successor to Vision Security under a state-law theory of de facto merger. We disagree. NorthStar cannot be bound by the injunction when it is not in privity with Vision Security and in the absence of any evidence that it had notice of the injunction, Fed. R. Civ. P. 65(d)(2). We vacate the order that held that NorthStar is bound by the injunction.

I. BACKGROUND

In 2012, ADT filed a complaint against Vision Security that alleged violations of the Lanham Act, 15 U.S.C. § 1125(a). ADT alleged that Vision Security made false statements to customers of ADT to trick them into signing contracts with a different security alarm company. The parties settled the lawsuit by agreeing to an injunction, which prohibited Vision Security from making false statements about ADT and from training “any person who may sell for or solicit customer[s] on behalf of Vision! ] to violate the terms of th[e] Permanent Injunction.”

In January 2015, Vision Security executed an asset purchase agreement with NorthStar. Although ADT argues that the agreement effected a corporate merger, NorthStar insists that the agreement involved only the purchase of some customer accounts from Vision Security. Under the agreement, NorthStar acquired from Vision Security 8,000 customer accounts to add to the 35,000 accounts NorthStar had before the agreement, goodwill, deferred revenues relating to the customer accounts, all the furniture, fixtures and equipment used in connection with the business that relate to the customer accounts, and obligations under some contracts, including real estate leases in Arizona and Utah. The agreement also specified that NorthStar did not acquire from Vision Security cash, bank accounts, customer accounts, contracts, and other accounts and assets not listed in the agreement, intellectual property, books of account and books of original entry, personnel records, any. insurance policies or associated causes of action, all claims for tax refunds, all rights of Vision Security, and the equipment of the sole remaining employee of Vision Security, Danielle Paletz. The agreement never mentioned the injunction in favor of ADT.

The agreement provided that NorthStar would hire four senior officers from Vision Security. One officer, Robert Harris, was the owner and chief executive officer of Vision Security and became the president of NorthStar. He also became a member of the board of directors of NorthStar and received almost fourteen percent of its stock. In his new position at NorthStar, Harris oversaw seven or eight regional sales managers, four of whom came to NorthStar from Vision Security. He testified that “[t]he leadership of the sales organization report directly to [him.]” But he also testified that his “primary role at NorthStar is involved in recruiting people to come work for NorthStar” and that he did not “personally do any sales training at NorthStar.” NorthStar also hired between thirty and thirty-five of the 250 sales representatives of Vision Security. But there was high turnover in the sales staff of Vision Security from year to year because most of the sales agents were seasonal independent contractors.

Vision Security terminated its sales force after it executed the agreement, consistent with a clause that prohibited Vision Security and Harris from competing with NorthStar for five years. But Paletz remained employed by Vision Security to service between 1,500 and 2,000 accounts that Vision Security retained. Another company provided monitoring services for those accounts.

About one year after the entry of the injunction against Vision Security, ADT determined that NorthStar was violating the terms of the injunction. It moved the district court for an order to show cause why NorthStar and Harris should not be held in contempt of the injunction. ADT argued that that the injunction against Vision Security bound NorthStar because NorthStar had purchased part of the alarm business of Vision Security.

After a hearing, a magistrate judge recommended that NorthStar and Harris be bound by the injunction. The magistrate judge determined that NorthStar and Vision Security were not in privity, but that NorthStar was bound by the injunction as a successor to Vision Security under a state-law theory of de facto merger. The magistrate judge also determined that Harris was bound “because in his capacity as CEO and sole managing member of Vision [Security], his liability is the same as if he had been a named party in the underlying lawsuit.” The district court adopted the recommendation of the magistrate judge, and only NorthStar appealed.

II. STANDARDS OF REVIEW

We review an order that grants, continues, or modifies an injunction for abuse of discretion. Siegel v. LePore, 234 F.3d 1163, 1178 (11th Cir. 2000) (en banc). “We review the underlying, findings of fact for clear error and conclusions of law de novo.” Common Cause/Ga. v. Billups, 554 F.3d 1340, 1349 (11th Cir. 2009). Whether a party is in privity with another party is a question of fact that we review for clear error. See E.E.O.C. v. Pemco Aeroplex, Inc., 383 F.3d 1280, 1285 (11th Cir. 2004).

III. DISCUSSION

Federal Rule of Civil Procedure 65 governs who may be bound by a federal injunction:

(2) Persons Bound. The order binds only the following who receive actual notice of it by personal service or otherwise:
(A) the parties;
(B) the parties’ officers, agents, servants, employees, and attorneys; and
(C) other persons who are in active concert or participation with anyone described in Rule 65(d)(2)(A) or (B).

Fed. R. Civ. P. 65(d)(2) (second and third emphases added). The rule “does not really add or detract from the range of persons that were bound by a decree under basic equity practice and due-process principles applied on the equity side of the federal courts prior to 1938.” 11A Charles Alan Wright, Arthur R. Miller, et al., Federal Practice and Procedure § 2956 (3d ed.), 11A Fed. Prac. & Proc. § 2956, West-law (database updated Jan. 2017) (citation omitted). That is, Rule 65(d) “embodies] rather than ... limitfe]” the common law powers of the district court. United States v. Hall, 472 F.2d 261, 267 (5th Cir. 1972) (Wisdom, J.). At common law, an injunction bound “not only ... the parties defendant but also those identified with them in interest, in ‘privity’ with them, represented by them or subject to their control.” Regal Knitwear Co. v. N.L.R.B., 324 U.S. 9, 14, 65 S.Ct. 478, 89 L.Ed. 661 (1945).

“Broadly speaking, both [Rule 65] and the common-law doctrine contemplate two categories of nonparties potentially bound by an injunction.” Nat’l Spiritual Assembly of Bahá’is of the U.S. under the Hereditary Guardianship, Inc. v. Nat’l Spiritual Assembly of the Bahá’is of the U.S., 628 F.3d 837, 848 (7th Cir. 2010) (Sykes, J.). The first category is comprised of parties who aid and abet the party bound by the injunction in carrying out prohibited acts. See F.T.C. v. Leshin, 618 F.3d 1221, 1236 (11th Cir. 2010). The second category, “captured under the general rubric of ‘privity,’ ” includes “nonparty successors in interest” and nonparties “otherwise ‘legally identified’ with the enjoined party.” Nat’l Spiritual Assembly, 628 F.3d at 848-49 (citation omitted); see also Wright & Miller, supra, § 2956. This appeal concerns the second category.

We divide our discussion in two parts. We first explain that NorthStar and Vision are not in privity. We then explain that NorthStar may not be'bound by the injunction under the theory of de facto merger because NorthStar lacked notice of the injunction.

A. NorthStar and Vision Security Are Not in Privity.

“ ‘[P]rivity’ denotes a legal conclusion rather than a judgmental process.” Sw. Airlines Co. v. Tex. Int’l Airlines, Inc., 546 F.2d 84, 95 (5th Cir. 1977) (Wisdom, J.). It “represents a legal conclusion that the relationship between the one who is a party on the record and the non-party is sufficiently close” to bind the nonparty to the injunction. Id. (citation omitted). But “[t]he concept of privity ... is ultimately bounded by due process.” Nat’l Spiritual Assembly, 628 F.3d at 849. An injunction may not extend to “persons who act independently and whose rights have not been adjudged according to law.” Chase Nat’l Bank v. City of Norwalk, 291 U.S. 431, 437, 54 S.Ct. 475, 78 L.Ed. 894 (1934) (citations omitted); see also Wright & Miller, supra, § 2956 (explaining that a court may not bind a party that is not “so identified in interest with those named in the decree that it would be reasonable to conclude that their rights and interests have been represented and adjudicated in the original injunction proceeding” (citations omitted)). A similar requirement governs when res judicata may bind a nonparty to a prior judgment. See Pemco Aeroplex, 383 F.3d at 1286 (explaining that the rule that “a party cannot be bound by a judgment in a prior suit in which it was neither a party nor in privity with a party” is “part of our deep-rooted historic tradition that everyone should have his own day in court” (internal quotation marks and citations omitted)).

The district court determined that NorthStar and Vision Security are not in privity because there was “insufficient evidence to conclude that NorthStar’s interests are so intertwined with Vision’s that NorthStar should be bound by the injunction.” The district court found that North-Star “was a much larger alarm company” that “existed for fourteen years before acquiring some of Vision’s assets” and that “NorthStar’s sales tactics were clearly established prior to, and independent of, NorthStar’s relationship with Vision.” The district court explained the lack of any evidence that NorthStar had a relationship with Vision before the agreement or that NorthStar and Vision Security controlled each other. And, “[m]ost importantly,” the district court found that “NorthStar did not have any involvement in the underlying litigation, and its interests were not represented when the injunction was negotiated.”

ADT argues that NorthStar and Vision Security are in privity based on the decision in Golden State Bottling Co., Inc. v. N.L.R.B., 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973). ADT contends that Golden State stands for the proposition that privity “is shown where the successor buys the predecessor’s business, in circumstances where the successor may fairly be charged with knowledge of the injunction at the time of the purchase.” But the facts of this appeal are distinguishable from Golden State.

Golden State held that “a bona fide purchaser, acquiring, with knowledge that the wrong remains unremedied, [an] employing enterprise which was the locus of [an] unfair labor practice, may be considered in privity with its predecessor for purposes of Rule 65(d).” 414 U.S. at 180, 94 S.Ct. 414 (citations omitted). All American Beverages, Inc. purchased the soft drink bottling and distribution business of Golden State after the National Labor Relations Board ordered Golden State to reinstate an employee with back pay. Id. at 170, 94 S.Ct. 414. Later, the Board “found that All American continued after the acquisition to carry on the business [of Golden State] without interruption or substantial changes in method of operation, employee complement, or supervisory personnel.” Id. at 171, 94 S.Ct. 414. The Board also found that All American purchased Golden State with knowledge of the unfair labor practice that was the subject of the order entered against Golden State. Id. at 173, 94 S.Ct. 414. The trial examiner discredited the testimony of the manager and the president of Golden State that they did not inform All American of the litigation before the completion of the sale and “inferred from the unexplained failure of All American to produce its negotiators as witnesses that their testimony would not have supported All American’s disclaimer of knowledge.” Id. at 174, 94 S.Ct. 414 (citations omitted).. The Supreme Court affirmed the determination that All American knew about the unfair labor practice and held that All American could be considered “in privity” with Golden State under Rule 65(d). Id. at 173, 180, 94 S.Ct. 414. The Court also explained that its decision did not “contravene[ ] the policy underlying Rule 65(d)[] of not having ‘order(s) or injunction(s) so broad as to make punishable the conduct of persons who act independently and whose rights have not been adjudged according to law’ ” because “[t]he tie between the offending employer and the bona fide purchaser of the business, supplied by a ... finding of a continuing business enterprise, established] the requisite relationship of dependence.” Id. at 180, 94 S.Ct. 414 (quoting Regal Knitwear, 324 U.S. at 13, 65 S.Ct. 478).

In contrast with Golden State, the record before us contains no evidence that NorthStar knew about the injunction before it acquired assets from or hired employees of Vision Security. Golden State explained that a successor “may” be considered in privity with a predecessor where it acquires an entity that is the subject of the injunction “with knowledge that the wrong remains unremedied.” Id. (emphasis added); see also Brunswick Corp. v. Chrysler Corp., 408 F.2d 335, 337 (7th Cir. 1969) (binding the successor of a business to an injunction that bound its predecessor where it purchased the predecessor with knowledge of the injunction). But the district court made no finding that NorthStar knew about the injunction when it entered the asset purchase agreement with Vision Security, and ADT offers no evidence that NorthStar knew about the injunction.

ADT argues that Golden State stands for the proposition that “the acquirer’s knowledge may be inferred where the manager of the predecessor business continues as its manager and ‘president’ after the sale,” but Golden State does not hold that knowledge must be inferred when the head of a company bound by an injunction takes a job with another company. In Golden State, the trier of fact drew an inference of knowledge after hearing testimony and reviewing the record. Golden State, 414 U.S. at 173, 94 S.Ct. 414. But the district court drew no such inference about NorthStar. The chief executive officer of NorthStar never testified that he knew about the injunction, and Harris never testified that he informed anyone else at NorthStar about the injunction. And the asset purchase agreement did not disclose the injunction in its schedule of litigation. As a court of appellate review, we cannot say, based on this record, that NorthStar knew of any wrongdoing by Vision Security when they entered into their agreement.

B. NorthStar Cannot Be Bound as a Successor in Interest.

The district court determined that, although NorthStar and Vision Security were not in privity, NorthStar could be bound as a successor in interest to Vision Security under the theory of de facto merger. De facto merger is a state-law exception to the general rule that a “corporation that purchases or otherwise acquires the assets of a second corporation does not assume the debts and liabilities of the second corporation.” Bud Antle, Inc. v. E. Foods, Inc., 758 F.2d 1451, 1456-57 (11th Cir. 1985). It applies “where a sale is really a merger [of] one corporation absorbing the other, the absorbed corporation going out of existence and losing its identity to the absorbing corporation that remains.” Atlas Tool Co., Inc. v. Commissioner, 614 F.2d 860, 870 (3d Cir. 1980).

Even if Vision Security and NorthStar de facto merged, that North-Star is a successor to Vision Security under state law does not mean that NorthStar is bound by a federal injunction issued against Vision Security. “[T]he question of the extent to which a federal injunction applies to non-parties is governed by Federal Rule of Civil Procedure 65(d), not by state law.” Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345, 1355 (Fed. Cir. 1998); accord Hall, 472 F.2d at 266-67. Rule 65 requires that a party have notice of an injunction before that party may be bound by the injunction. See Rule 65(d)(2) (stating that an injunction binds only enumerated parties “who receive actual notice” of the injunction “by personal service or otherwise”); see also Brunswick Corp., 408 F.2d at 337 (binding a nonparty to a consent decree where the nonparty was in privity with a party to the consent decree and had knowledge of the consent decree); Interstate Commerce Comm’n v. Rio Grande Growers Co-op., 564 F.2d 848, 849 (9th Cir. 1977) (binding a nonparty to an injunction where the nonparty was a successor to a party to the injunction and the incorporator of the successor had knowledge of the injunction); New York v. Operation Rescue Nat’l, 80 F.3d 64, 70-71 (2d Cir. 1996) (binding a nonparty to an injunction where the nonparty was a successor of a party to the injunction and had notice of the injunction). An order may not be “so broad as to make punishable the conduct of persons who act independently and whose rights have not been adjudged according to law.” Regal Knitwear, 324 U.S. at 13, 65 S.Ct. 478.

The district court made no finding that NorthStar had knowledge of the injunction against Vision Security, as required by Rule 65(d). The district court found that the interests of NorthStar were not represented when the injunction was negotiated, and it found that the sales practices at issue in this appeal developed “prior to, and independent of, NorthStar’s relationship with Vision [Security].”

ADT counters that “sueeessorship liability do[es] not distinguish between so-called ‘independent’ actions of the successor, as opposed to continued acts by agents or assets of the predecessor,” but the caselaw cited by ADT addresses factors that apply in the context of employment discrimination. Criswell v. Delta Air Lines, Inc., 868 F.2d 1093, 1094 (9th Cir. 1989). And even in that context, one factor that is “critical to the imposition of successor liability” requires “notice to the successor employer of its predecessor’s legal obligation.” Id. (quoting Musikiwamba v. ESSI Inc., 760 F.2d 740, 750 (7th Cir. 1985)).

In the absence of a finding that North-Star knew about the injunction against Vision Security, the district court erred when it ruled that NorthStar was bound by the injunction under a theory of de facto merger. A court cannot bind a party whose “rights have not been adjudged according to law.” Regal Knitwear, 324 U.S. at 13, 65 S.Ct. 478. The record does not support a ruling that NorthStar is bound by the injunction.

IV. CONCLUSION

We VACATE the order that NorthStar is bound by the injunction.


source: Caselaw Access Project

author: WALLACH, Circuit Judge.

license: Public Domain

text:
    Kevin DIAZ, Plaintiff-Appellant v. UNITED STATES, Defendant-Appellee
    2016-2501
    United States Court of Appeals, Federal Circuit.
    Decided: April 11, 2017

      Kevin Diaz, Boston, MA, pro se.
    Alison Vicks, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, for defendant-appellee. Also represented by Benjamin C. Mizer, Robert E. Kirschman, Jr., Douglas K. Mickle.
    Before WALLACH, CHEN, and STOLL, Circuit Judges.
   WALLACH, Circuit Judge.

Appellant Kevin Diaz submitted an unsolicited proposal to the U.S. Department of the Navy’s (“Navy”) Indian Head Explosive Ordnance Disposal Technology Division (“IHEODTD”) pursuant to 48 C.F.R. (Federal Acquisition Regulation (“FAR”)) Subpart 15.6 (2015). A contracting officer from the IHEODTD conducted an initial review of Mr. Diaz’s proposal and determined that it did not satisfy the requirements of FAR 15.606-1, a decision that the Contracting Officer affirmed when Mr. Diaz requested reconsideration.

Mr. Diaz filed a complaint in the U.S. Court of Federal Claims challenging the Contracting Officer’s rejection of his unsolicited proposal. Appellee the United States (“the Government”) moved to dismiss. The Court of Federal Claims granted the Government’s motion and dismissed Mr. Diaz’s Complaint for, inter alia, lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Rules of the Court of Federal Claims (“RCFC”) because he lacked standing under 28 U.S.C. § 1491(b)(1) (2012). See Diaz v. United States, 127 Fed.Cl. 664, 677 (2016).

Mr. Diaz appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). We affirm.

Discussion

I. Standard of Review and Legal Standards

We review a Court of Federal Claims decision to dismiss for lack of jurisdiction de novo. Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1242 (Fed. Cir. 2010). The plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. Brandt v. United States, 710 F.3d 1369, 1373 (Fed. Cir. 2013).

The Court of Federal Claims’s jurisdiction over bid protest disputes is articulated in § 1491(b)(1). It provides that the Court of Federal Claims has jurisdiction to adjudicate an “action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” Id. Section 1491(b)(1) includes three related requirements that are pertinent to the jurisdictional inquiry in this case, with the first addressing the Court of Federal Claims’s subject matter jurisdiction and the second and third addressing standing.

First, subject matter jurisdiction under § 1491(b)(1) may be established for a “violation of a statute or regulation in connection with a procurement or a proposed procurement.” RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999). The phrase “in connection with” is “very sweeping in scope” and “includes all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout.” Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1345 (Fed. Cir. 2008) (internal quotation marks, emphasis, and citations omitted). Under the circumstances here, Mr. Diaz’s allegation that the Contracting Officer improperly rejected his unsolicited proposal pursuant to FAR 15.606-1 constitutes a non-frivolous allegation of a violation of a regulation in connection with a proposed procurement and, thus, is sufficient to meet the “in connection with” requirement of the statute. See id. at 1345 n.1 (“A non-frivolous allegation of a statutory or regulatory violation in connection with a procurement or proposed procurement is sufficient to establish jurisdiction.”). Mr. Diaz’s proposal qualifies as a “proposed procurement” that was reviewed by the Government, as indicated in the record by Mr. Diaz’s receipt of a significant number of emails from government personnel regarding the status of his proposal, see Resp’t’s App. at 88-154, and the Contracting Officer’s “careful and specific” review of, and response to, the proposal, Diaz, 127 Fed.Cl. at 675.

The second and third, of the three requirements of § 1491(b)(1) that are pertinent to the jurisdictional inquiry relate to a party’s standing to file a bid protest. See, e.g., Myers Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002). A party seeking to establish jurisdiction under § 1491(b)(1) must show that it meets § 1491(b)(1)’s standing requirements, which are “more stringent” than the standing requirements imposed by Article III of the Constitution. Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed. Cir. 2009). To meet these more stringent requirements, a plaintiff must make two separate showings. The party first must show that it is an “interested party.” Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380, 1384 (Fed. Cir. 2012). To satisfy the interested party requirement, “a party must show that it [ (1) ] is ... an actual or prospective bidder and [ (2) ] ... has a direct economic interest” in the procurement or proposed procurement. Id. “To prove a direct economic interest, a party must show that it had a substantial chance of winning the contract.” Id. (internal quotation marks and citation omitted).

The second standing requirement requires a party “show that it was prejudiced by a significant error in the procurement process.” Labatt Food Serv., Inc. v. United States, 577 F.3d 1375, 1378 (Fed. Cir. 2009) (citation omitted); see id. at 1380 (explaining that courts should not “conflat[e] the standing requirements of prejudicial error and [direct] economic interest,” such that “there would be no such thing as an error non-prejudicial to an economically interested offeror,” and “reit-erat[ing] the established law ... that nonprejudicial errors in a bid process do not automatically invalidate a procurement” (citations omitted)). To satisfy the prejudice requirement, the party must show that “but for the [Government’s] error,” the party “would have had a substantial chance of securing the contract.” Id. at 1378 (emphasis added) (citations omitted). Prejudice is a factual question that we review for clear error. Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d 1353, 1357-58 (Fed. Cir. 2015).

II. Mr. Diaz Does Not Have Standing to Allege his Bid Protest Claim

The standing inquiry requires us to consider interested party status and prejudice, but the instant appeal hinges on the second element of the interested party requirement of the standing inquiry. It presents the novel issue of whether Mr. Diaz possessed a direct economic interest because he had a “substantial chance of winning a contract” that the Government never solicited. If he does not possess the requisite direct economic interest, Mr. Diaz would not be an interested party and would not have standing to sue. We hold that he did not possess the requisite interest and, thus, that Mr. Diaz has not satisfied his “burden of establishing the elements of standing.” Myers, 275 F.3d at 1369 (internal quotation marks, brackets, and citations omitted).

Mr. Diaz cannot demonstrate that he “had a substantial chance of winning the contract” because, at the very least, his proposal did not conform to the requirements of FAR Subpart 15.6, which governs unsolicited proposals. Pursuant to FAR Subpart 15.6, consideration of unsolicited proposals involves three stages: (1) initial review; (2) comprehensive evaluation; and (3)negotiations. See FAR 15.6064(a), 15.606-2, 15.607(b).

During the initial review, “the agency contact point shall determine if the proposal,” inter alia, “[i]s a valid unsolicited proposal.” FAR 15.6064(a)(1). To be “valid,” an unsolicited proposal must

(1) [b]e innovative and unique;
(2) [b]e independently originated and developed by the offeror;
(3) [b]e prepared without Government supervision, endorsement, direction, or direct Government involvement;
(4) [finclude sufficient detail to permit a determination that Government support could be worthwhile and the proposed work could benefit the agency’s research and development or other mission responsibilities;
(5) [n]ot be an advance proposal for a known agency requirement that can be acquired by competitive methods; and
(6) [n]ot address a previously published agency requirement.

FAR 15.603(c) (emphasis added). In this case, the Contracting Officer determined that Mr. Diaz’s proposal did not meet the first and fourth requirements and that she could not determine whether Mr. Diaz had met the remaining requirements, such that it was not a valid proposal. Appellee’s App. 82-84. Therefore, the Contracting Officer rejected Mr. Diaz’s unsolicited proposal at the initial review stage. Id.

In the Complaint, Mr. Diaz argues that he satisfied the third, fifth, and sixth requirements of FAR 15.603(c), id. at 44; however, Mr. Diaz has not presented any arguments or evidence as to the first, second, or fourth factors in the Complaint, see id. at 15-53, or in his briefs before this court, see generally Appellant’s Br.; Appellant’s Reply. Because an offeror submitting an unsolicited proposal must satisfy all six requirements in FAR 15.603(c) for a proposal to be valid under FAR 15.606-1(a)(1), see FAR 15.603(c) (using the conjunctive “and”), Mr. Diaz has failed to demonstrate that the Contracting Officer incorrectly determined that his proposal was not “valid” and, thus, Mr. Diaz has failed to satisfy his burden of demonstrating that he “had a substantial chance of winning the contract,” Digitalis, 664 F.3d at 1384 (internal quotation marks and citation omitted).

Conclusion

We have considered Mr. Diaz’s remaining arguments and find them unpersuasive. Accordingly, the final decision of the U.S. Court of Federal Claims is

AFFIRMED.

      . "A protest will, by its nature, dictate the necessary factors for a direct economic interest.” Sys. Application & Techs., Inc. v. United States, 691 F.3d 1374, 1382 (Fed. Cir. 2012) (internal quotation marks omitted). For example, "[i]n pre-award protests, ... the plaintiff must show a non-trivial competitive injury which can be addressed by judicial review,” whereas "[i]n post-award protests, the plaintiff must show it had a substantial chance of receiving the contract.” Id. (internal quotation marks and citations omitted). We have not established a standard for evaluating whether a party has a direct economic interest in an unsolicited proposal submitted pursuant to FAR Subpart 15.6. However, the Court of Federal Claims applied the "substantial chance” standard when evaluating whether Mr. Diaz has a "direct economic interest,” Diaz, 127 Fed.Cl. at 675, and neither party contests the use of this standard, see- generally Appellant’s Br.; Appellee’s Br. We find that standard reasonable for the purposes of this appeal and, accordingly, we evaluate whether Mr. Diaz has a "direct economic interest” by considering whether he has ”show[n] that [he] had a substantial chance of winning the contract.” Digitalis, 664 F.3d at 1384 (internal quotation marks and citation omitted).

      . With respect to the first element of the interested party requirement, it is undisputed that Mr. Diaz properly submitted an offer to the IHEODTD. See Appellant’s Br. 6; Appel-lee’s Br. 5-6; see also Appellee’s App. 55-80. Therefore, Mr. Diaz is an actual bidder pursuant to the first element of the interested party requirement. Cf. Distributed Sols., 539 F.3d at 1345 (Fed. Cir. 2008) (holding that the plaintiffs were prospective bidders because “they submitted qualifying proposals” and stated in their complaint that they “were prepared to submit bids”).

      . Because Mr. Diaz has not shown that he meets the interested party requirement of the standing inquiry, we need not address whether he has demonstrated the requisite prejudice to satisfy the second requirement of that inquiry.


author: BRYSON, Circuit Judge.

text:
    CORE WIRELESS LICENSING S.A.R.L., Plaintiff-Appellant v. APPLE INC., Defendant-Appellee
    2015-2037
    United States Court of Appeals, Federal Circuit.
    Decided: April 14, 2017

      Devan V. Padmanabhan, Winthrop & Weinstine, P.A., Minneapolis, MN, argued for plaintiff-appellant. Also represented by Paul J. Robbennolt; Henry Charles Bun-sow, Brian A. E. Smith, Bunsow, De Mory, Smith & Allison LLP, San Francisco, CA; Denise Marie De Mory, Craig Y. Allison, Redwood City, CA.
    Joseph J. Mueller, Wilmer Cutler Pickering Hale & Dorr LLP, Boston, MA, argued for defendant-appellee. Also represented by Cynthia D. Vreeland, Richard W. O’Neill, Michael Wolin.
    Before O’MALLEY, BRYSON, and WALLACH, Circuit Judges.
   BRYSON, Circuit Judge.

This appeal arises from a patent infringement action brought in the United States District Court for the Eastern District of Texas. The plaintiff, Core Wireless Licensing S.a.r.l., is the owner of U.S. Patent No. 6,978,143 (“the ’143 patent”). Claim 17 of the patent, the only claim at issue in this appeal, recites a mobile station, such as a mobile telephone, that is connected to a cellular system or network. The claim is directed to means for sending packet data from the mobile station to the network using a selected channel.

Following trial, the jury found that the defendant, Apple Inc., did not infringe any of the asserted claims. The district court denied Core Wireless’s motion for judgment as a matter of law, and Core Wireless took this appeal. We affirm.

I

Mobile stations such as cellular. telephones can transmit data packets to a cellular network (known as an uplink) in one of two ways — either by using a shared “common channel,” which carries transmissions from multiple mobile stations, or by using a “dedicated channel,” which carries transmissions from a single mobile station without competing transmissions from other mobile stations. Dedicated channels are valuable because they permit faster and more reliable transmissions than common channels. But dedicated channels are at a premium, as there are not enough dedicated channels to carry all cellular transmissions. The industry has therefore worked to solve the problem of how to allocate dedicated channels (when the need for a dedicated channel is greatest).

One aspect of this problem is whether the network or the mobile station should select the channel for the uplink. The network initially has no information about the data packet to be sent, such as data packet size, and therefore does not have the necessary information to make a channel selection decision. In the prior art, the mobile station would send the network information about the data packet to be sent so that the network could make the channel selection decision. As noted in the ’143 patent, selection by the network wastes valuable system resources, because it requires the mobile station to send a message to the network regarding the data packet the mobile station wants to transmit, and then requires the network to make the channel selection decision. See ’143 patent, col. 3, 11. 41-49.

The solution provided by the ’143 patent is to have the mobile station, not the network, make the uplink channel selection decision. The way that is done is for the network to provide the mobile station with certain parameters that the mobile station is directed to apply in determining whether to use a dedicated channel or a common channel. See ’143 patent, col. 3, 11. 53-56; id., col. 4, 11. 37-58. According to the patent, the described method reduces “the signaling load associated with the allocation of packet data transfer” and reduces “the delay associated with the starting of data transfer.” Id., col. 3; 11. 64-67. Because the mobile station makes the channel selection decision, it does not use up traffic capacity by sending the message about the data packet to the network so that the network may select a channel. Id., col. 3,11. 40-49.

Although Core Wireless initially asserted a number of claims from several different patents against Apple, this appeal involves only a single claim — claim 17 of the ’143 patent. That claim reads as follows:

A mobile station connected with a cellular system, comprising means for sending uplink packet data to the system using a selected channel, wherein the selected channel is either a common channel (RACH) or dedicated channel (DCH), characterized in that it also comprises:
means for receiving a threshold value of the channel selection parameter from the system,
means for storing said threshold value of the channel selection parameter, and
means for comparing said threshold value of the channel selection parameter to a current value of the channel selection parameter for basis of said channel selection.

A magistrate judge conducted the claim construction proceedings and construed the “means for comparing” limitation of claim 17 to have the function of “comparing said threshold value of the channel selection parameter to a current value of the channel selection parameter for basis of said channel selection.”

The magistrate judge construed the corresponding structure for performing that function to be

[a] control unit 803 [in the mobile station] wherein the control unit 803 is programmed to control the comparison of the threshold value of the channel selection parameter to the current value of the channel selection parameter in accordance with the algorithm shown in Fig. 6, step 650, and described in 6:20-39; 7:17-20; and 7:24-28 of the ’143 specification; and statutory equivalents thereof.

At trial, Apple introduced evidence that Apple’s accused mobile stations lack the capability to select between common and dedicated channels for packet data transfer. Instead, in systems in which Apple’s devices are used, Apple’s evidence showed that the network, not the mobile station, is responsible for selecting which channel to use for uplink transmissions. At the conclusion of the trial, the jury found that Apple did not infringe claim 17 of the 143 patent.

In its post-trial motion for judgment as a matter of law (“JMOL”), Core Wireless argued that Apple had misapplied the court’s construction of claim 17 when it interpreted the court’s construction to mean that the “means for comparing” limitation requires the mobile station to be capable of making uplink channel decisions. The district court disagreed, holding that the claim requires that the mobile station “must have the capability to perform ‘channel selection,’ even if that capability was not used during the actual alleged performance of the claimed method.” The court concluded that there was sufficient evidence from which a reasonable jury could find noninfringement based on that claim construction.

II

Core Wireless does not object to the claim construction that was given to the jury, which was the same as the claim construction adopted by the magistrate judge. Instead, Core Wireless argues both that the district court misapplied the magistrate judge’s pretrial claim construction, and that the claim construction adopted by the district court was erroneous.

A

Core Wireless’s first argument is that Apple took a position at trial that was contrary to the magistrate judge’s claim construction, and that the district court improperly upheld the jury’s verdict in favor of Apple by in effect altering the magistrate judge’s claim construction.

Core Wireless explains its view of the difference between the magistrate judge’s pretrial claim construction and Apple’s construction as follows: Under the magistrate judge’s claim construction, as Core Wireless interprets it, an infringing device need only be capable of performing the functions of receiving a threshold parameter from the cellular network, storing that threshold parameter in local memory, and then comparing a current value of that parameter to the threshold. Under Apple’s construction, in order to infringe, a mobile station must also be able to make a channel selection decision based on that comparison, rather than leaving the channel selection decision to the network. That is, Core Wireless contends that under the magistrate judge’s claim construction the mobile station need do no more than make a comparison, while Apple contends that the mobile station must have the capability to select a dedicated channel when the relevant threshold conditions are met.

The problem with Core Wireless’s argument is that the premise is incorrect: The magistrate judge did not clearly reject Apple’s position and adopt Core Wireless’s position. Core Wireless bases its argument on the magistrate judge’s failure to include certain language, proposed by Apple, in the description of the corresponding structure for performing the “means for comparing” limitation. As Core Wireless points out, the magistrate judge did not include Apple’s suggested language that control unit 803 “provide[s] the comparison result to a channel selection function within the mobile station” and Apple’s reference to step 660 of Figure 6 in the patent. Those exclusions, Core Wireless contends, indicate that the magistrate judge rejected Apple’s position on the construction of that limitation.

We disagree. The magistrate judge did not state at the hearing or include in his order any explanation for omitting Apple’s proposed text from the claim construction. Instead, he focused primarily on whether control unit 803 was a general purpose processor within the meaning of WMS Gaming Inc. v. International Game Technology, 184 F.3d 1339 (Fed. Cir. 1999). Significantly, the magistrate judge included in his construction references to Figure 6, step 650, and to column 7, lines 17-20, of the ’143 patent. As discussed below in further detail, both of those references indicate that channel selection can be performed by the mobile station, consistent with the district court’s discussion of the claim construction issue in its JMOL order.

Core Wireless did not raise the issue of Apple’s allegedly improper interpretation of the magistrate judge’s claim construction during trial, when it had the opportunity to do so. Core Wireless contends that Apple improperly offered evidence and argument to the jury that Core Wireless was required to prove that Apple’s accused devices had the capability to make channel selection decisions. In fact, Core Wireless states that Apple’s noninfringement position at trial was based exclusively on that theory. But Core Wireless did not object to Apple’s evidence on that ground, nor did it object to Apple’s argument to the jury as contrary to the proper claim construction. Moreover, although Core Wireless contends that the magistrate judge’s pretrial claim construction did not require a showing that the mobile station was capable of making channel selection decisions, Core Wireless did not seek a clarification of the claim construction on that ground either during the trial or before the jury was instructed.

Based on Core Wireless’s failure to seek clarification of the pretrial claim construction, Apple argues that Core Wireless has waived its claim construction argument. Citing Moba, B.V. v. Diamond Automation, Inc., 325 F.3d 1306, 1314 (Fed. Cir. 2003), Core Wireless responds that it made its position known by moving for judgment of infringement as a matter of law under Fed. R. Civ. P. 50(a) at the close of the evidence, and thereby preserved its claim construction argument for review.

We find it unnecessary to decide whether Core Wireless waived its claim construction argument by failing to seek clarification of the pretrial claim construction at trial. That is because we do not agree that the magistrate judge adopted Core Wireless’s position on claim construction and because, for the reasons discussed below, Core Wireless’s claim construction argument is erroneous on the merits.

B

Core Wireless argues that the district court erred in its JMOL order, where it explicitly construed the “means for comparing” limitation of claim 17 of the ’143 patent to require that the mobile station have the capability to make channel selections. We conclude that the district court was correct, as it stated in its JMOL order, that claim 17 of the ’143 patent requires a showing that the accused mobile stations were capable of making channel selection decisions.

The invention disclosed in the 143 patent is a system in which the mobile station gathers and analyzes appropriate information and makes a channel selection decision. The basic architecture of the system depicted in the 143 specification is depicted in Figure 6 of the patent. The patent characterizes Figure 6, which is set forth below, as “a flow chart of a method according to the invention for transferring packet data in the uplink direction.” 143 patent, col. 5, 11. 58-59.

Figure 6 shows that “threshold values are determined for the channel selection parameters and stored in the mobile station’s memory,” as depicted at step 620.-143 patent, col. 5, 11. 60-62. At step 630, the base station sends to the mobile station “one or more of said channel selection parameters,” i.e., the factors on which the channel selection is based. Id., col. 6, 11. 1-9. Once the mobile station receives a request to send a data packet, as depicted at step 640, “the (RLC/)MAC layer [of the mobile station] either makes an autonomous decision on the use of a common channel vs. dedicated channel on the basis of parameters received from the system or requests the RRC layer [of the mobile station] to determine the appropriate channel type.” Id., col. 6, 11. 14-19. The description of Figure 6 set forth in the specification thus makes clear that the channel selection process occurs in the mobile station and is not made by the network, although if the mobile station selects a dedicated channel, the mobile station may need to then request that the network allocate the dedicated channel (step 680) before the mobile station can actually transmit on that channel. See id., col. 3, 11. 10-30.

Core Wireless’s position is that Figure 6, as well as other portions of the specification that describe the process by which the mobile station makes the channel selection decision, all simply describe preferred embodiments of the invention. According to Core Wireless, claim 17 recites a different process in which the mobile station is not required to perform the channel selection. The problem with Core Wireless’s theory is that the entire point of the invention is to enable the mobile station to make the channel selection decision in order to minimize traffic between the mobile station and the network.

Claim 17 is a means-plus-function claim and thus is controlled by 35 U.S.C. § 112, ¶ 6 (now codified as section 112(f) under the America Invents Act, which does not apply to this case). As such, claim 17 covers any device that performs the function recited in the claim with structure described in the specification or its equivalents. Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 934 (Fed. Cir. 1987) (en banc).

The function recited in claim 17 is “comparing said threshold value of the channel selection parameter to a current value of the channel selection parameter for basis of said channel selection.” ’143 patent, col. 9, 11. 14-16. The structure that performs that function is the structure described in Figure 6 and the accompanying text, as well as elsewhere in the specification.

As stated in the magistrate judge’s claim construction, adopted by the district court, the recited structure includes the algorithm shown in Figure 6 and described in the specification, and in particular in column 6, lines 20-39, and column 7, lines 17-20 and 24-28. See WMS Gaming, Inc. v. Int’l Game Tech., 184 F.3d 1339, 1349 (Fed. Cir. 1999) (“In a means-plus-function claim in which the disclosed structure is a computer, or • microprocessor, programmed to carry out an algorithm, the disclosed structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm.”); see also Ergo Licensing, LLC v. CareFusion 303, Inc., 673 F.3d 1361, 1364 (Fed. Cir. 2012) (“Requiring disclosure of an algorithm properly defines the scope of the claim and prevents pure functional claiming.”). The recited portions of the specification describe an algorithm in which the threshold value for the channel selection parameter is provided to the mobile station, the mobile station compares that threshold value with the current value of the channel selection parameter, and the mobile station then uses the result of that comparison as the basis for the channel selection decision.

In addition to the portions of the specification that describe the algorithm depicted in Figure 6, each description of the structure that performs the recited function depicts the mobile station as making the channel selection decision. Beginning with the Abstract, the patent describes a structure in which “[t]he decision about the channel used for the transfer of packet data is made based on a channel selection parameter and values of the parameters needed in the decision-making are sent to the mobile station.”

The summary of the invention describes the “method according to the invention for the uplink transfer of packet data from a mobile station to the system in such a manner that ... [the] channel selection parameter is sent from the system to the mobile station, and said selection is made on the basis of said value of the channel selection parameter.” 143 patent, col. 4, 11. 38-51.

In one embodiment, a threshold value of the channel selection parameter is stored at the mobile station. The current value of the channel selection parameter is sent to the mobile station. And that current value “is compared to said threshold value of the channel selection parameter, and said selection is made on the basis of said comparison.” Id., col. 4, 11. 52-58.

In another embodiment, a value corresponding to the channel selection parameter is calculated at the mobile station on the basis of the parameters of the data packet to be transferred. The last current value of the channel selection parameter that was sent to the mobile station is then compared to the calculated value of the channel selection parameter. And a channel selection is made on the basis of that comparison. Id., col. 4, 11. 60-67.

Significantly, in each of the embodiments the comparison between the threshold value of the channel selection parameter and the current value is made at the mobile station, and the clear implication is that the channel selection decision, which is based on that comparison, is also made at the mobile station. Meanwhile, nowhere does the patent describe an embodiment in which the network expressly, or by clear implication, makes the channel selection decision.

Other portions of the specification support that interpretation. The specification describes the “cellular system according to the invention” as having “means for sending the value of said channel selection parameter from the system to the mobile station in order to make said selection on the basis of the value of the channel selection parameter.” '43 patent, col. 5, 11. 1-15. And the specification describes the “mobile station according to the invention” as having “means for receiving a channel selection parameter value from the system, and means for making said selection dependent on said channel selection parameter value.” Id., col. 5, 11. 16-25. Once again, the description of the structure that performs the claimed function contemplates a mobile station that has the means to make the channel selection decision.

Column 7 of the patent describes Figure 8, which is a schematic drawing of the mobile station of the invention. The specification explains that the control unit 803 in the mobile station “controls the reception blocks in such a manner that the parameters relating to the selection of the uplink channel are received from a common channel in accordance with the invention. Channel selection is advantageously performed in the control unit 803 which also controls the transmission blocks such that the packet data are transmitted on the selected channel.” '43 patent, col. 7, 11. 14-20. The specification then states that the base station “sends the parameters associated with the selection of the packet data transfer channel to the mobile station in accordance with the invention and receives the packet data sent by the mobile station through a channel selected by the mobile station.” Id., col. 7, 11. 37-42 (emphasis added).

Although that passage from the specification would seem to be dispositive, Core Wireless argues that the description of the mobile station selecting the channel to be used for the uplink transmission is only a preferred embodiment, and that other aspects of the ’143 patent support Core Wireless’s position that claim 17 does not require that the mobile station be capable of making the channel selection decision.

In particular, Core Wireless points to the language at column 7, lines 17-20, which states: “Channel selection is advantageously performed in the control unit 803 which also controls the transmission blocks such that the packet data are transmitted on the selected channel.” The use of the term “advantageously,” according to Core Wireless, shows that the patent may prefer embodiments in which the mobile station makes the channel selections, but that the patent is not limited to such embodiments.

The more natural reading of the passage in question is that the function of channel selection is “advantageously” performed in the control unit 803 of the mobile station, as opposed to in some other component of the mobile station that is controlled by control unit 803. The previous sentence states that “control unit 803 controls the reception blocks [in the mobile station] in such a manner that the parameters relating to selection of the uplink channel are received from a common channel in accordance with the invention.” '43 patent, col.. 7, 31. 14-17. The rest of the sentence in' question refers to the control unit 803 as also controlling the transmission blocks so as to enable the transmission of the data packets on the selected channel. Id., col. 7, 11. 18-20. That suggests that the term “advantageously” alludes to the advantage of having one component with all the necessary information' — -the control unit 803, which controls both the reception blocks (incoming information) and transmission blocks (outgoing information) — make the channel selection decisions. The language of that passage thus supports the inference that the mobile station must be capable of channel selection, particularly in light of the unambiguous statement a few lines farther down in the same column that the “packet data [is] sent by the mobile station through a channel selected by the mobile station.” Id., col. 7, 11. 40-42.

Core Wireless next points to claim 18 of the ’143 patent, which depends from claim 17 but adds “means for making said channel selection on the basis of the result of said comparison.” According to Core Wireless, the added language in the dependent claim indicates that claim 17 does not speak to the structure that makes the channel selection decision.

The language of the dependent claim does not support Core Wireless’s claim construction argument. The dependent claim does not focus on the performance of the channel selection process in the mobile station, but instead focuses on the fact that the channel selection process is based on. the result of the comparison between the threshold value of a channel selection parameter and the current value of the channel selection parameter. The comparison in independent claim 17 is performed “for basis of said channel selection” but is not necessarily the actual basis of the subsequent channel selection, which may be based on other parameters. In contrast, the comparison in dependent claim 18 must in fact be the basis of the subsequent channel selection. Thus, under claim 17, the channel selection process is not strictly tied to the result of the comparison of those values, while under claim 18, it is. For that reason, nothing in claim 18 suggests that the only limitation added in that claim — and thus absent from claim 17 — is the requirement that the mobile station be capable of channel selection.

Core Wireless makes much of the fact that claim 17 has four “means” clauses, none of which expressly refers to the means for selecting the channel to be used for particular uplink transmissions. But that argument overlooks the full text of the “means for comparing” limitation. That limitation provides “means for comparing said threshold value of the channel selection parameter to a current value of the channel selection parameter for basis of said channel selection.” ’143 patent, col. 9, 11. 14-16 (emphasis added). Given that the function of that limitation is to compare the values for the purpose of channel selection, the corresponding structure must be the structure that compares those values for the subsequent channel selection. And the only structure in the specification that compares values for the purpose of channel selection is the structure that performs both the comparison and the selection in the mobile station.

In addition to the textual support in the patent, both the prosecution history and the extrinsic evidence confirm that the district court was correct in construing claim 17 to require that the mobile station have uplink channel selection capabilities. In a brief filed with the Board of Patent Appeals and Interferences in connection with an appeal from an examiner’s rejection, the applicant described “the present invention” as comprising a system in which “a channel selection threshold value is sent from the system to the mobile station,” and “[a]t the mobile station the received threshold value is compared with a current value (650), and then a channel selection decision is made (660, page 10, lines 3-6 [of the specification]).” Appellants’ Br. Serial No. 09/507,804 (July 24, 2003), at 3. That the brief describes the channel selection as being made by the mobile station is confirmed by the citation to the specification, which refers to the statement (found at column 6, lines 14-19 of the issued ’143 patent) that “the (RLC/)MAC layer [of the mobile station] either makes an autonomous decision on the use of the a common channel vs. dedicated channel on the basis of parameters received from the system or requests the RRC layer [of the mobile station] to determine the appropriate channel type.” That reference makes clear that during the prosecution the applicant’s position was that channel selection would be performed in the mobile station.

With regard to extrinsic evidence, the applicant was even more explicit on this point in the invention disclosure for the ’143 patent. He stated that the “(RLC/)MAC layer [in the mobile station], upon reception of a request to send a data packet, makes a decision between common and dedicated channel by using the information received and information of the data packet to be sent.” The applicant added that the network supplies information “that MS [mobile station] uses to make decisions whether to send uplink packet data on common channels or on dedicated physical channel,” and that the decision to use either common channel or dedicated channel ... will be done in (RLC/)MAC layer [in the mobile station].” Those statements unambiguously describe a system in which the mobile station is capable of making channel selection decisions, contrary to the way the evidence showed the accused Apple devices operate.

Similarly, in a contemporaneous presentation made to the European Telecommunications Standards Institute, the inventor described his proposal as one in which the mobile station “itself should be able to make decision whether to send data packets on [the common channel] or whether to request a [dedicated channel]. Otherwise there will be unnecessary signalling [sic] ... before [the mobile station] can send a data packet on the [common] channel.” Although Core Wireless argues that the proposal represents only a “subset” of the invention disclosed in the ’143 patent, the proposal — like the patent — is clear that the invention requires the mobile station to make the selection decision in order to solve the prior art problem. The language of that proposal provides further support for the district court’s ruling in the JMOL opinion that claim 17 of the ’143 patent requires that the mobile station must have the capability to make channel selection decisions.

C

Core Wireless also argues in the alternative that Apple’s devices infringe even if claim 17 requires the mobile station to be capable of channel selection. Core Wireless points to the Event 4a measurement report, a traffic volume report that Apple’s devices generate and send to the network. Apple, however, introduced testimony from its expert and an engineer that the network may choose not to use the report in its channel selection decision or even use the report at all, and that the mobile station has no further input beyond merely sending the report. Thus, sending the report is not a channel selection decision by the mobile station because it is up to the network to decide what to do with the transmitted information, if anything. We agree with the district court that a reasonable jury could find Apple’s devices noninfringing based on that evidence.

We conclude that the district court correctly denied Core Wireless’s motion for judgment as a matter of law and properly upheld the jury’s verdict of noninfringement.

AFFIRMED.