Full opinion text
OPINION MCKELVIE, District Judge. This is a patent case. Plaintiff IPPV Enterprises, LLC is a Nevada limited liability corporation with its principal place of business in Reno, Nevada. IPPV is the owner of U.S. Patent Nos. 4,163,254 (the ’254 patent); 4,225,884 (the ’884 patent); 4,528,589 (the ’589 patent); and 4,484,217 (the ’217 patent), all of which relate to features for pay television service, including methods to keep track of the programs viewed by pay television subscribers, to bill and collect from subscribers for watching these programs, and to permit the subscriber to control what types of programs can be seen on their television. Plaintiff MAAST, Inc. is a Delaware corporation with its principal place of business in Sparks, Nevada. MAAST is one of the companies that owns IPPV. MAAST assigned the ’254, ’884, ’589, and ’217 patents to IPPV and itself owns U.S. Patent No. 4,600,942 (the ’942 patent), which relates to the encryption and decryption of pay-per-view television broadcasts. Defendant Echostar Communications Corp. is a Nevada corporation with its principal place of business in Littleton, Colorado. Echostar Communications operates a direct broadcast satellite subscriber television service known as the DISH Network. The DISH network transmits signals in digital format. To ensure secure transmission and delivery of signals, the broadcast signals are encrypted prior to satellite transmission and are subsequently decrypted at the subscriber location. Defendant NagraVision, S.A. is a Swiss corporation with its principal place of business in Cheseaux, Switzerland. Defendant NagraStar L.L.C. is a Colorado limited liability corporation with its principal place of business in Englewood, Colorado. Na-graVision and NagraStar supply Echostar Communications with certain enabling technology that is used in the DISH Network satellite receivers. On August 26, 1999, IPPV and MAAST (collectively, “IPPV”) filed a complaint in this case, alleging that Echostar Communications’ operation of the DISH Network infringes, or induces infringement of, certain claims of the ’254, ’884, ’589, ’217, and ’942 patents. IPPV subsequently abandoned its allegations with respect to the ’589 patent. On December 28, 1999, Echostar Communications answered the complaint, denying infringement and asserting certain affirmative defenses. On July 20, 2000, IPPV amended its complaint to add NagraVision and Na-graStar as defendants, alleging that Na-graVision and NagraStar contributorily infringed or induced the infringement of certain claims of the ’217 and ’942 patents. Echostar Communications, NagraVision and NagraStar (collectively, “Echostar”) answered the amended complaint and asserted certain counterclaims on August 24, 2000. On two occasions before trial, the court conducted oral arguments and made rulings on the construction of the disputed terms and phrases of the asserted claims in accordance with Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). First, in an opinion dated July 28, 2000, the court construed the claim term “television program signal,” as used in claim 21 of the ’942 patent, in order to resolve a discovery-dispute that turned on the construction of that term. See IPPV Enters., LLC v. Echostar Communications Corp., 106 F.Supp.2d 595 (D.Del.2000) (“IPPV I”). Then, on July 3, 2001, the court issued its claim construction opinion on the remaining disputed terms of the four patents at issue. See IPPV Enters., LLC v. Echostar Communications Corp., 146 F.Supp.2d 498 (D.Del.2001) (“IPPVII”). On September 19, 2000, Echostar moved for summary judgment that it does not infringe the ’942 patent based on the court’s construction of “television program signal.” MAAST opposed Echostar’s motion and sought reconsideration of the court’s IPPV I claim construction opinion on October 18, 2000, On December 12, 2000, the court entered an order denying Echostar’s motion for summary judgment of non-infringement, but invited the parties to file motions on potential liability for infringement under the doctrine of equivalents following the Federal Circuit’s decision in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 234 F.3d 558 (Fed.Cir.2000) (en banc). The court also denied MAAST’s motion for reconsideration of its IPPV I opinion. In a pre-trial conference on July 5, 2001, however, plaintiff MAAST conceded that, unless the court reconsidered its claim construction findings with respect to the ’942 patent, the defendants were entitled to summary judgment of non-infringement of the ’942 patent. Accordingly, MAAST did not participate in the trial and the infringement allegations relating to the ’942 patent were not at issue in the trial. Beginning on July 9, 2001, the court held a jury trial on IPPV’s claims of infringement of the ’254, ’217, and ’884 patents, Echostar’s non-infringement defense as to the patents in suit, and Echostar’s invalidity defense relating to the ’217 patent. As described below, infringement of the ’217 patent was established as a matter of law and was not an issue that was before the jury. On July 13, 2001, the jury rendered its verdict finding: (i) that the accused Echostar Communications products literally infringed claims 8 and 9 of the ’254 patent; (ii) that the accused Ech-ostar Communications products infringed claim 4 of the ’884 patent under the doctrine of equivalents; (iii) that the ’217 patent is not invalid; (iv) that each of the three defendants’ infringement was willful; and (v) that the plaintiffs were entitled to “bundled” damages award of $15 million for the infringement of the ’254, ’884, and ’217 patents. Judgment has not yet been entered on the verdict. On a certain affirmative defenses which Echostar had asserted that it would raise prior to trial, but then failed to raise at trial, the court granted judgment for the plaintiff as a matter of law. These included: (i) that the accused Echostar Communications product literally infringed claims 1, 2, 3, 6, 7, 8, 13, 14, and 15 of the ’217 patent; (ii) that NagraVision and NagraStar induced infringement of and contributorily infringed those claims; and (iii) that various invalidity positions that were no longer being pursued were out of the case. At the close of IPPV’s case, and again at the close of all of the evidence, Echostar moved for judgment as a matter of law under Rule 50(b). IPPV also moved for judgment as a matter of law. Soon after the conclusion of the jury trial, the parties filed a number of post-trial motions. On August 27, 2001, the defendants renewed their motion for judgment as a matter of law on the ’254, ’884, and ’217 patents under Rule 50(b), and alternatively moved for a new trial under Rule 59. The issues raised by Echostar include (i) whether sufficient evidence supports the jury’s finding that Echostar literally infringed the asserted claims of the ’254 and ’884 patents; (ii) whether sufficient evidence supports the jury’s finding that Echostar infringed step 3 of claim 4 of the ’884 patent under the doctrine of equivalence; (in) whether the jury was unreasonable in concluding that the asserted claims of the ’217 patent were not invalid in light of U.S. Patent No. 3,885,089 (“the Calíais patent”), the prior art reference that the defendants assert anticipates it; (iv) whether the jury’s finding of willfulness with respect to Echostar Communications, NagraVision, and NagraStar is supported by sufficient evidence; and (v) whether the defendants were unfairly prejudiced by the following, either individually or collectively: the verdict form, the bundling of damages by the jury, the admission into evidence of a settlement agreement between IPPV and Echostar’s competitor, DirectTV, the plaintiffs presentation of a new damages theory at trial, or the exclusion from evidence of the defendants’ expert’s ’217 patent invalidity chart. This is the court’s decision on Echostar’s motion for judgment as a matter of law or for a new trial. I. PROCEDURAL AND FACTUAL BACKGROUND The court draws the following facts from the evidence presented to the jury during the trial. The general background on the patents is drawn from the patents themselves and the court’s claim construction opinions in the case. A. The Patented Technology The following section will briefly describe each of the patents that were at issue at the trial. For a more detailed discussion of the patented technology at issue in this case and the procedural history of the three patents at issue, see IPPV II, 146 F.Supp.2d at 501-513. 1. The ’254. patent The ’254 patent, which is entitled “Method and system for subscription television billing and access,” relates to the use of program identification codes in pay television for use in customer billing. It discloses a method of placing identification codes in a television program signal and storing those codes at the subscriber’s location for later retrieval and use in billing the subscriber for programs viewed. IPPV alleged that Echostar Communications infringed method claims 8 and 9 of the ’254 patent. Claim 8 recites: A method for billing a subscriber of a pay television system for programs actually viewed by the subscriber at a subscriber station comprising the steps of: transmitting at a predetermined carrier frequency a scrambled television program signal that includes an identification code unique to a block of program material being transmitted; selectively receiving the transmitted program signal at the subscriber station and selectively unscrambling the received signal in response to subscriber action indicating acceptance for viewing of the block of program material; detecting the identification code in the program signal received at the subscriber station and temporarily storing a program identification code for billing purposes in response to the action of the subscriber indicating acceptance for viewing of the block of program material being received; selectively accessing the subscriber station from a remote location to obtain access to each program identification code stored at the subscriber station; and billing the subscriber in accordance with the stored program identification codes accessed from the remote location. Claim 9 recites: A method for billing a subscriber of a pay television system for programs actually viewed by the subscriber at a subscriber station comprising the steps of: receiving at a predetermined carrier frequency a scrambled television program signal that includes an identification code unique to a block of program material; selectively unscrambling the received signal in response to subscriber action indicating acceptance for viewing of the block of program material; detecting the identification code in the program signal received at the subscriber station and storing a program identification code in response to the action of the subscriber indicating acceptance for viewing of the block of program material being received; selectively connecting the subscriber station to a remote location over non-dedicated telephone lines on a periodic basis unrelated to the receiving of the scrambled program signal; selectively transmitting each program identification code stored at the subscriber station to the remote location in response to a command signal transmitted from the remote location over the non-dedicated telephone lines; and billing the subscriber in accordance with the stored program identification codes transmitted to the remote location. 2. The ’884 patent The ’884 patent, which is also entitled “Method and system for subscription television billing and access,” relates to the use of category identification codes in a pay television system. According to the methods disclosed in the ’884 patent, category identification codes, which may be associated, for example, with parental control ratings such as the “G,” “PG,” “R,” and “X” movie ratings, are inserted into a scrambled television program signal. At the subscriber’s location, these codes are then detected and compared to codes that are set by the subscriber. In a system that employs the claimed method, the television signal may only be unscrambled and viewed if the control codes match the ratings level allowed in the subscriber’s profile. IPPV alleged that EchoStar Communications infringed method claim 4 of the ’884 patent. Claim 4 recites: In a pay television system, a method of providing subscriber control over television programs which can be viewed at the subscriber location comprising the steps of: transmitting from a remote location a scrambled television program signal; inserting a category identification signal into the scrambled program signal at the remote location for transmission thereof with the program signal; receiving the scrambled program signal, including the category identification signal, at the subscriber location; generating a signal at the subscriber location identifying at least one category of programs which are acceptable for viewing; comparing the received category identification signal with the generated signal; and enabling the received program signal to be unscrambled if the compared signals correspond. 3. The ’217 patent The ’217 patent, which is entitled “Method and system for remote reporting, particularly for pay television billing,” relates to the use of program cost signals in subscription television services, which capture the cost or charge associated "with a program transmission. According to the claimed methods, when the program transmission is received by the subscriber, the cost signals are compared to a previously stored credit value. If the subscriber’s available credit is greater than the cost of program, the program is decoded and is made available for viewing. Otherwise, subscriber access remains blocked. IPPV alleged that EchoStar Communications infringed independent method claims 1 and 13 of the ’217 patent, and various dependent claims. Claim 1 recites: A method for providing subscription services involving transmissions from a remote location to a subscriber location and for which payment is required for access, the method comprising the steps of: (a) transmitting a cost signal containing a charge associated with the transmissions; (b) storing a credit at the subscriber location; (c) comparing the magnitude of the charge contained in the cost signal with the magnitude of the stored credit; and, (d) enabling access by the subscriber to the transmissions associated with the cost signal in response to the relative magnitudes of the charge and stored credit. Claim 13 recites: A method for providing impulse purchase capability in a subscription television system in which access to information transmissions from a remote location to a subscriber location is at least limited to subscribers requesting access, comprising the steps of: (a) transmitting within at least one allocated television channel frequency band, together with the information transmissions a cost signal indicating the magnitude of the charge for access to the information in the transmissions; (b) storing, at the subscriber location a credit indicating an amount available for future payment of charges for access to information in the transmissions; (c) comparing the magnitude of the charge contained in the cost signal with the magnitude of the stored credit; and, (d) enabling access by the subscriber to the information in the transmissions associated with the cost signal in response to the relative magnitudes of the charge and the stored credit. B. The Accused Products In March 1996, EchoStar Communications created and launched the DISH Network, a direct broadcast satellite subscriber television service. The DISH Network transmits signals in digital format. To ensure the secure transmission and delivery of the signals, the broadcast signals are encrypted prior to satellite transmission and are subsequently decrypted at the subscriber location. IPPV’s infringement allegations for the above described patent claims focus on three particular features of the DISH Network. First, the DISH Network includes an “Impulse Pay-Per-View” feature. This feature allows for the billing of DISH Network subscribers who purchase pay-per-view programming directly through the television. IPPV contends that this “store and forward” billing feature infringes claims 8 and 9 of its ’254 patent. Second, the DISH Network includes a parental control feature that allows subscribers to block certain categories of programming from being viewed. IPPV contends that this feature infringes claim 4 of its ’884 patent. Third, the DISH Network includes a stored credit limit feature that prevents access to a pay-per-view program if the cost of that program exceeds the subscriber’s available credit. IPPV contends that this stored credit feature infringes claims 1, 2, 8, 6, 7, 8, 13, 14, and 15 of its ’217 patent. NagraVision and NagraStar help Ech-ostar Communications to design and supply some of the equipment used in the DISH Network system. That equipment includes smart cards, cards inserted into the set-top box that implement certain access control techniques which are used in the Echostar equipment. NagraVision developed and supplies the conditional access system for the DISH Netvrórk system. NagraStar provides hardware and software services to Echostar for the conditional access system and the DISH Network system, including the above referenced smart cards that it purchased from NagraVision. IPPV contends that Nagra-Vision and NagraStar have induced and contributed to Echostar’s direct infringement of the asserted claims of the ’217 patent. ■ C. Claim Construction On June 8, 2001, the parties submitted their briefs on all remaining claim construction issues that were not addressed in the court’s IPPV I opinion. On June 18, 2001, the court held a hearing in accordance with Markman v. Westview Instruments, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996), to construe the balance of the disputed terms and phrases of the asserted claims of the patents in suit. On July 3, 2001, the court issued its claim construction opinion, which addressed the disputed terms of the asserted claims of the ’254, ’884, ’217, and ’942. patents. See IPPV II, 146 F.Supp.2d 498 (D.Del.2001). Because .the infringement allegations with respect to the ’942 patent were not pursued at trial after the court’s IPPV II claim construction opinion, the court will not discuss its earlier claim construction findings with respect to that patent in IPPV I, 106 F.Supp.2d 595, 603-606 (construing the term “television program signal,” as used in claim 21 of the ’942 patent to mean “analog television signal”). Rather, the court will focus exclusively on IPPV II, 146 F.Supp.2d 498 (D.Del.2001). The court will only review the aspects of that claim construction opinion regarding the ’942 patent that are relevant to the construction of the asserted claims of the ’254, ’884, or ’217 patents, which were the set of claims at issue at trial. In the July 3, 2001 claim construction opinion construing the disputed claims of the ’254, ’884, ’217, and ’942 patents, the court made a number of findings relevant to the consideration of defendants’ instant motion. The court first addressed the ’254 patent, finding, among other things, that the term “includes” in the phrase “a scrambled television signal that includes an identification code” contained in claim 8 requires “that the identification code be part of the transmitted program signal,” but does not “limit the location of the code within the program to the retrace interval.” Id. at 515. With regard to the ’884 patent, the court found that .the words “inserting ... into” in the phrase “inserting a category identification signal into the scrambled program signal at the remote location for transmission thereof with the program signal” of claim 4 requires “the identification signal to be placed inside of the program signal.” Id. at 521. With regard to the ’217 patent, the court construed the phrase “with the information transmissions,” and found that, because the cost signal is placed inside the program signal, which is a continuous signal by nature, “to the extent [the phrase] ‘with the information transmissions’ refers to the relationship between the cost signal and the information transmissions, the words mean closely associated in time.” Id. at 520. With regard to the ’942 patent, the parties disputed whether the meaning of the phrase “television program signal” of claim 21 “includes video information,” which was IPPV’s position, or whether “ ‘television program signal’ comprises video information in combination with audio information,” which was Echostar’s position. Id. at 521. After considering the parties’ arguments, the court found no reason to limit the conventional definition of the phrase and concluded that a “television program signal” “comprises audio and video signals that are broadcast simultaneously to produce the sound and picture portions of a televised scene.” Id. When the court construed the term “television program signal,” as used in the ’942 patent, it also intended that construction to apply to the term “television program signal,” as used in the other patents. Moreover, the parties were aware that the term “television program signal” was to be construed identically for each instance of the term in the asserted patents and did not at that time contend that a different meaning should be applied. See June 8, 2001, Claim Construction Hearing Tr. at 19-20 (plaintiffs’ counsel: “I don’t think we have any disagreement as to what makes up part of the program signal ...Id. at 27 (defendants’ counsel: “I understand now that we have an agreement that television program signal consists of an audio and video signal. So we don’t have to go back there each time that term appears in these patents .... ”). However, because the parties did not raise as disputed the term “scrambled”— found in the phrase, “scrambled television signal” — at the Markman hearing or in the claim construction briefing, the court did not issue a construction of the term “scrambled” as used in the asserted claims of the ’254 and ’884 patents. As further discussed below, the proper definition of the term “scrambled television program signal” was debated between the parties throughout the trial and remains a contentious subject in the parties’ post-trial briefs. See Trial Tr. at 655-65; 679-85. D. The Trial On July 9, 2001, the parties commenced a jury trial. The following sections will describe the contentions of the parties and summarize the evidence and testimony presented in support of the parties’ positions. 1. IPPV’s contentions IPPV contends that the defendants have infringed the patents in suit through their operation of the DISH Network digital satellite subscription television system and that it is entitled to damages as a result of the defendants’ infringement. More specifically, IPPV asserts direct infringement of the ’254, ’884, and ’217 patents, both literally and under the doctrine of equivalents, against Echostar Communications, and further contends that NagraVision and NagraStar contributorily infringe or induce the infringement of the ’217 patent. While the ’254 and ’884 patents expired before the suit was filed, IPPV is seeking damages for Echostar’s operation of its DISH Network for a period of time that runs from March 1996 until the patents’ expiration in early 1997. With respect to the ’217 patent, which has not yet expired, IPPV seeks damages and an injunction. IPPV also asserts that the defendants’ infringement of the ’217 patent was, and continues to be, willful. 2. Echostar’s contentions EchoStar argues that the DISH Network does not infringe the ’254 or ’884 patents and that the ’217 patent is invalid. Echostar’s non-infringement position with respect to the ’254 and ’884 patents is that the features implemented in the DISH Network do not insert identification codes into a television program signal, as required by the asserted claims. More specifically, Echostar contends that because the DISH Network multiplexes separate digital packets of video data, audio data, and identification codes into a time division multiplexed transport stream prior to sending the signal, it does not “insert” or “include” identification codes in a “television program signal.” Echostar’s invalidity position with respect to the asserted method claims of the ’217 patent is that they are fully disclosed in the prior art reference referred to by the parties as the Calíais patent, a patent on card-operated pay TV systems, and are therefore anticipated under 35 U.S.C. § 102. 3. Evidence giving background information as to the patents-in-suit IPPV called Robert S. Block to give background about IPPV and the pay television features that are embodied in IPPV’s patents-in-suit. Block is the Manager of IPPV Enterprises, the Chairman of MAAST, and the co-inventor of the three patents at issue in this lawsuit. Block began by discussing the ’254 patent, the “Impulse Pay-Per-View Patent.” He stated that he considered the invention of the ’254 patent to be the “idea of identifying the program, storing the program ... — not requiring the customer to get permission, saying that he buys the program by simply pressing a button or accepting the program in some way, storing the fact that he bought the program, [and] retrieving the information that he bought that program for billing purposes at a later time.” He next turned to the ’884 patent, explaining that he wanted to create a feature that would give parents control over the content of their television, “so they could decide the level of programming that came at any given moment.” Block explained that the ’884 patent is directed at this feature, stating that the invention of the ’884 patent is “the concept of rating the program, transmitting that rating to the set-top [box], allowing the subscriber or user to set their own rating control, comparing the rating control that the users set with the rating of the program, and allowing or not allowing the program to be viewed, depending on whether the program meets the test set up by the user.” Last, Block addressed the ’217 patent, describing the moment that he conceived of the idea behind that patent. Block testified that he set out to solve the problem of how to set up a pay-per-view service without requiring the customer to use a telephone line to communicate to the provider which programs he or she desires. He stated that the invention of the ’217 patent was the answer — “we would take a program and give it an identification code .... ” We have the customer press a button or some other way to accept the program. And we would store the identification code in the program .... Then we would send along with that program a charge.... And we would accumulate that charge, so that at the end of the month we could tell the customer how much he owed ... [and] how much he purchased. 4. Evidence relating to infringement of the ’254 and ’884 patents a. Opinion testimony of plaintiffs expert — Roy Griffin IPPV called Roy Griffin, who is a senior electrical design engineer and consultant with Sherwood Engineering Design Services in El Paso, Texas. Griffin has worked on cable set-top box technology for a number of companies in the cable television industry since graduating with a Bachelors of Science and Engineering in Electrical Engineering from the University of Texas at El Paso in 1981. Griffin’s substantive testimony began with an explanation of how pictures are displayed on a television set. He next referred to the analog signal in Figure 2 of the ’254 patent and noted that the patent “describes one way of putting in information into the television signal” by placing scramble codes and program identification codes in the vertical retrace of the analog video signal. He confirmed that the signal described in the specification and drawings of the ’884 patent was the same as the signal described in Figure 2 of the ’254 patent. Griffin also explained that analog signals were present in the EchoStar system prior to digitizing and again, after transmission, at the subscriber’s television set. Griffin explained that the one difference between the analog signal illustrated in the patent and the signals used in the EchoS-tar system is the delivery mechanism. In an analog pay television broadcast system, as disclosed in the patents, an antenna connected to a user’s television set picks up analog television program signals that are broadcast via a large antenna. A set-top decoder box then unscrambles the analog signals. In contrast, the EchoStar system converts analog television program signals into a scrambled digital signal and directs that signal to subscriber’s home via satellite where it is then decoded back into analog form. Griffin went on to state, however, that under the claims of the ’254 and ’884 patents and the court’s claim construction opinion, it does not matter whether the scrambled program signal is an analog or digital transmission, and further opined that the transmission of analog and digital signals are equivalent because both perform the identical function of representing information that is used in reproducing a television program by conveying the information about the intensity and color of television tube pixels as a function of time. Griffin further explained that “the DISH Network [itself] provides a lot of evidence that [the transmission of analog and digital signals are] interchangeable, because you start with analog, you transmit it. When you’re back at the television set, you’re analog again. So you can see the interchangeability of that.” Griffin next explained how Echostar’s system transmits signals. He first noted that because of the increased bandwidth capabilities of Echostar’s satellite feed and the compression techniques used by Ech-oStar, the DISH Network is capable of transmitting a number of different television program signals at the same time. Therefore, the DISH Network’s time-division multiplex transport stream contains multiple television program signals. This transport stream is comprised of separate video, audio, and data packets sent in separate “little time slices” into the transport stream, which is transmitted in “one long big continuous string.” He noted that the data packets that accompany the digital and audio packets in the Echostar transport stream include codes such as scramble codes, which are used to unscramble the scrambled television signal; program identification codes, which are used to determine whether to let a subscriber access a program; and parental control codes (called MPAA codes in the DISH Network system), which are also used to determine whether to let a user access a program. Griffin opined that while the patents’ specifications describe a single analog television program signal, the claim limitations of the patents may still be met by a digital system, such as the DISH Network, that sends multiple television program signals in accordance with the claimed methods. After acknowledging that he was aware of an issue in the case concerning what the “television program signal” is in the Ech-ostar system and whether data is transmitted in that program signal, Griffin stated that the Echostar transport stream contains interleaved packets of scrambled video, scrambled audio, and data. In his opinion, Griffin testified, the Echostar transport stream was a “television program signal,” within the meaning of the •asserted patent claims. Griffin explained that in a scrambled system, like that described by the patents at issue and the accused DISH Network, keys to unscrambling the video and audio data called scramble codes must be sent with the television signals so that the scrambled television program signals can be unscrambled. He noted that the data packets, which contain program identification codes, are placed in the transport stream, and opined that in a digital system like Echostar, “you would never put [the codes] in [the actual video or audio] packets,” for two reasons. First, “if you put it in [that] portion of the television signal, you could never get it out because ... it’s scrambled.” Second, if you literally inserted the data packet into the video packet, “you [would] mess up the video signal.” He then described how the impulse pay-per-view, parental control, and credit limit features are implemented in the DISH Network using the program identification codes that are sent in the transport stream. Next, Griffin walked through each element of each of the asserted claims of the ’254, ’884, and ’217 patents, and concluded that each element was present in the accused products, because the Echostar transport stream is comprised of a number of “television program signals” and the system inserted and used program codes for those program signals in accordance with the various disclosed methods of the patents at issue. In conclusion, Griffin opined that the Echostar DISH Network infringes each of the claims of the asserted patents. On cross-examination, Griffin confirmed that Echostar’s time-division multiplex system transmitted separate audio and video packets, that each separate packet is transmitted at a slightly different time, and that the program identification and category control codes in the Echostar system are never inserted directly into the audio or video packets but are inserted into the interleaved transport stream and transmitted in separate packets as “part of the overall transport scheme.” b. Testimony of Echostar employee, David Kummer Defendants called David Kummer, an Echostar employee, who was hired to develop its digital system and was lead architect on set-top box development. Kummer did not submit an expert report and was not an expert witness for the defendants. Rather his testimony was limited to testifying about his knowledge and observations regarding the DISH Network. Kummer testified that the DISH Network is a digital television system, and that the transport stream in the DISH Network is used to transport separate audio, video, and data packets from the Ech-ostar transmitter to a subscriber’s receiver, which picks out the audio and video packets that the subscriber is interested in watching, and converts those signals back to a television program signal for display on a television set. Kummer then explained that the EchoS-tar system uses program and category identification codes, which are separately packetized, transmitted as part, of a multiplexed transport stream, and then removed by the receiver and stored in memory or tables in the receiver. He also stated that the program and category ID codes are never inserted into the audio or video packets of the DISH Network transport stream. On cross-examination, Kummer stated that although the identification codes are not literally in the video packets, the identification codes would normally be in the horizontal or vertical blanking intervals of the video signal in an analog signal, but in a digital signal are instead contained in data packets. He also reported that, in a pay-per-view system, the identification codes are necessary for the system to unscramble the signals and properly perform the impulse pay-per-view and parental control features. c. Opinion testimony of defendants’ expert — Graham Stubbs Defendants called Graham Stubbs, who has worked in the cable television industry for roughly 25 years. Stubbs has a Bachelor of Science degree in Physics and Electronics, which he obtained in London, England, and also has a graduate degree from the Executive Program for Scientists and Engineers at University of California, San Diego. Stubbs opined that Eehostar did not infringe claims 8 and 9 of the ’254 patent because the DISH Network did not “in-elude” a program ID code in the “scrambled television program signal.” Stubbs also opined that Eehostar did not infringe claim 4 of the ’884 patent because the DISH Network did not “insert [a category ID code] into” the “scrambled television program signal.” On cross-examination, Stubbs agreed that aside from those claim elements on which he testified, he expressed no opinion “as to whether or not the other elements of those claims are in the Eehostar system.” 5. Evidence of invalidity of the ’217 patent Stubbs also testified that, in his opinion, the ’217 patent was invalid in view of U.S. Patent No. 3,885,089, which was referred to throughout the trial as the Calíais patent. He testified that he had studied the Calíais patent and had found that each and every- element of the asserted claims of the ’217 patent was present in the Calíais patent, and that, as part of his work in the case, he had prepared an invalidity claim chart in which he had matched each element of the asserted claims with the corresponding reference in the Calíais patent. On cross-examination, counsel for IPPV brought to Stubbs’ attention that language from his invalidity claim chart exactly matched language in a document prepared by defendants’ counsel in September 2000, three months before Stubbs was hired. During his redirect examination, Stubbs highlighted the language in his claim chart to clarify which words were written by him, which words were written by lawyers, and which words were quoted from the Calíais patent. Both the Calíais patent and the claim chart were published to the jury, but only the Calíais patent was admitted into evidence. 6. Evidence of willful infringement of the ’217 patent a. Testimony of Kerry Miller IPPV called Kerry Miller, Esquire, Director of Intellectual Property for Echos-tar. Miller testified that his current job at Echostar involves taking care of legal issues concerning patents. He also testified that prior to holding his present position at Echostar, he was the senior patent counsel at Thomson Consumer Electronics. Miller held that position at Thomson from 1997 until he joined Echostar in June 1999, two months before this suit was filed. Miller also confirmed that, while at Thomson, he was involved in a litigation brought by IPPV against Thomson and other companies that were suppliers to DirectTV and that during the course of the litigation he learned of some of the patents involved in this litigation. However, during his cross-examination, Miller testified that he did not tell Echostar about the patents in suit when he joined Echostar because “I wasn’t thinking about these patents ... [t]hey had a whole slate of new work for me and I got to work on that.” During his testimony, Miller also stated that based on his search of Echostar’s files, Echostar had no record of receiving the December 30, 1998 letter purportedly sent by plaintiffs counsel that informed Echostar of the ’217 patent and of plaintiffs belief that Echostar was infringing that patent. The letter, which was subsequently moved into evidence, was properly addressed to Echostar’s Chairman and CEO, Mr. Charles Ergen, at Echostar Communications Corporation in Littleton, Colorado. Miller also stated that to the best of his knowledge, no one at Echostar had attempted to get an opinion of counsel with respect to the patents in this lawsuit prior to the time he joined Echostar. Miller did acknowledge that Echostar received the letter dated August 31, 1999 that advised Echostar that this suit had been filed. Ergen did not appear to testify as to whether he received the letter. The defendants did not introduce an opinion of counsel regarding the patents in suit, b. Testimony of Germar Schaefer and Rex Povenmire IPPV called Dr. Germar Schaefer and Rex Povenmire to testify. Both are Ech-ostar employees and were Echostar Rule 30(b)(6) designees in this case. Schaefer testified that Echostar had to implement the allegedly infringing credit limit feature in its DISH Network because: (i) its competitor DirectTV had it; and, (ii) there were good business reasons for managing credit limits. Povenmire explained that the credit limit function was needed to prevent Echostar’s customers from charging a lot of money that they could not pay. 7. Evidence of damages a. Testimony of Robert Block In addition to his earlier testimony regarding his invention of the patents-in-suit, Block also testified about IPPV’s past licensing practices. This testimony was offered as being relevant to damages. Block discussed IPPV’s licensing history regarding the ’264, ’884, and ’217 patents. He reported that, as part of a joint venture, IPPV had licensed those patents to Scientific-Atlanta and to MAAST under the following royalty terms — (i) cable royalties were $2 for the first 50,000 boxes and $1.37 for boxes above 50,000; (ii) royalties for direct broadcast were $3 for the first 50,000 boxes and $2 for boxes over 50,000. He also reported that IPPV had settled a lawsuit with General Instrument for $6.1 million in royalties plus legal fees. Block next testified about the DirectTV settlement agreement, a copy of which was in the jury’s notebooks. Without stating the dollar amount of the agreement in open court — which was approximately $20 million — Block testified that at the time he negotiated that agreement he was “having a very tough time,” financially. As a result, he testified that terms of the DirectTV license, which ultimately included a license to the ’942 patent in addition to a license to the three patents in suit, were at “a very deep discount to what we thought those patents were worth to DirectTV.” In the DirectTV action, IPPV had sued on the ’217, ’254, and ’884 patents. Block testified that as a condition of accepting the settlement of the case, DirectTV also wanted the settlement to include a license on the ’942 patent. On cross-examination, in response to questioning by Echostar’s counsel, Block confirmed that he understood that the licensing agreements he testified about included licenses for patents that were not in this case — the ’942 patent (which IPPV decided not to pursue after the court’s Markman ruling) and the ’589 patent (which IPPV chose to voluntarily dismiss from the case). Echostar’s counsel also asked whether Block understood that “when you filed this suit, you asked for $80 million on the ’942 patent that is no longer in this case.” Block ultimately testified that he did so understand. b. Opinion testimony of plaintiff's expert — Stuart J. Lipoff IPPV called Stuart J. Lipoff to testify to the issue of what a reasonable royalty would be should IPPV prevail on its infringement case. Lipoff has Bachelors degrees in physics and electrical engineering, a Master’s degree in Electrical Engineering, and a Master’s degree in Business Administration with a concentration in Managerial Finance. For the past twenty-five years, he has been employed by Arthur D. Little. Lipoff is currently the Vice President of Communications and Information Technology and Electronics at Arthur Little and has worked with clients in the communications-related industries, with a particular focus on multi-channel programming. He has experience working on projects that involve evaluating and valuing technology. After a reviewing his educational and professional background, Lipoffs substantive testimony began with a general description of the valuation methodology that he and his team used in reaching their conclusions as to the damages for infringement. Lipoff explained that his team used the “income method” of valuation, whose first step was to determine the total value of the patents-in-suit by comparing the actual value of Echostar’s business against their team’s calculation of what Echostar’s business would have been worth had Ech-oStar not used the features that allegedly infringe the asserted claims of the patents-in-suit. Lipoff stated that he and his team determined that the value of the ’884 patent was $19.78 million, the value of the ’217 patent was $1.78 million, and the value of the ’254 patent was “a little bit over a million dollars.” The total valuation of all three patents that Lipoff testified to was $22.7 million, “where most of the value comes from the ’884 patent.” Lipoff next explained that the second step of his analysis was to determine what a “reasonable royalty” would be for those patents had the parties negotiated a license at the time the infringement began. The total damages figure was then arrived at by multiplying the total value of the patents-in-suit by the estimated reasonable royalty rate. Lipoff stated that prior to the trial his team had arrived at a reasonable royalty rate of 35 percent, which when applied to the total value of $22.7 million yields a total damages amount of $7,944 million. Lipoff then testified that he and his team concluded that: [I]t would have been reasonable for these parties at the time they were sitting down in March ’96 to have agreed that $22 million, $22.7 million, was the full value [of the three patents]. That given all the other things Echostar was doing, they would come down to $8 million as agreeing to being a reasonable royalty. And they would further agree to spread that royalty out over a period of time through the life of the longest patent that was part of the package, the credit limit patent, ’217, till May 2002. Lipoff was then asked whether he “gave any consideration that the royalty could be 100 percent” instead of the 35 percent figure that he indicated was reasonable in his report. He responded that while “there certainly are instances that exist where a licensee has been willing to pay the full 100 percent ... we started at that 100 percent level and felt that there would be a willingness to discount that, to come down from the number more in that range of 35 to 50 percent.” As Lipoff conceded on cross-examination, this statement mirrors his expert report, which states: Based on these two factors, we would adjust the royalty percentages to 35 to 50 percent of the value of the three patents. On further consideration of the other Georgia-Pacific factors, we would set the percentage at the bottom end of this range, i.e., 35 percent. However, in response to a question as to whether Echostar could have afforded to pay $22.7 million if they had to, Lipoff opined that “they could afford to pay the full $22 million and still have met all of their business plans.” Lipoff also testified that Echostar would have paid this royalty on a “per-subscriber” basis. He reported that he and his team attempted to verify his conclusions by checking the implicit “per-subscriber” royalty rate of $2.59 ($8 million divided by the 3 million projected subscribers) and checking it against other licensing offers made by IPPV. Lipoff stated that this exercise proved that the $8 million figure in his expert report was “conservative.” Lipoff explained that the report of Echos-tar’s damages expert, Mr. Degen, contained “information that had not previously been made available to us about the number of boxes that each subscriber buys,” and that the projected number of boxes sold as reported in Degen’s report, which was issued after Lipoff s expert report was finished, was actually 11 million and not the 3 million used in Lipoff s report. He testified that other licensing offers made by IPPV in the marketplace to license these patents indicated that the patents-in-suit could be licensed at a per-box royalty rate of $2.40. He then noted that $2.40 “is very close to the $2.59,” which was his per-subscriber royalty rate based on the $8 million figure divided by 3 million subscribers. He testified that multiplying a per-box royalty of $2.40 by the 11 million set-top boxes identified in Degen’s report yielded a total damages number in the range of $22 million. On cross-examination, Lipoff stated that although his report concluded that the total damages should be $7,944 million, based on a $22.7 total value and a 35 percent reasonable royalty rate: the only adjustment I would make had I — were I to write the report over, using new information that was not made available to us until after we wrote the report, was perhaps a correction of about 1.6 times higher, given the fact we now know there are more boxes sold per home than was information was made available to us at the time we wrote the reports. He also confirmed that when he was asked at his deposition whether he ought to approach his damages analysis on a per-box basis, Lipoff stated that “for the purposes of coming up with a value of the patents, we believed using the per-box method ... was inappropriate.” Block did not testify about IPPV’s previous licenses involving the patents-in-suit. E. The Jury’s Verdict On July 13, the jury returned its verdict. 1.Infringement With respect to the ’254 patent, the jury found that Echostar had literally infringed claims 8 and 9. With respect to claim 4 of the ’884 patent, the jury only needed to make two factual findings. In order to make these determinations, the jury had to resolve one disputed issue: whether the placement of an MPAA rating code into a service information (SI) packet and/or the placement of the SI packet into the transport stream with audio and video packets corresponds to the “inserting ... into” and “including” limitations of claim 4. The jury found that Echostar had literally infringed step 4 of claim 4, which recites the following limitation: (“receiving the scrambled program signal, including the category identification signal, at the subscriber location”). With respect to step 3 of claim 4, “inserting a category identification signal into the scrambled program signal ....,” the jury found that Echostar infringed this limitation under the doctrine of equivalents. With respect to the ’217 patent, because Echostar failed to pursue its non-infringement contentions with respect to that patent at trial and instead relied only on its invalidity argument, the court granted judgment as a matter of law that Echostar Communications infringed the ’217 patent directly and that NagraStar and NagraVision contributorily infringed and induced the infringement of the ’217 patent. These judgments were indicated in the verdict form by marking the answers to those questions consistently with this judgment. In this way, the court communicated to the jury that they should not address these portions of the verdict form. 2. Invalidity — Anticipation Although Echostar originally purported to pursue various invalidity arguments based on obviousness, anticipation, and a number of prior art references, the lone invalidity argument that the defendants pursued at trial was that the ’217 patent was invalid as anticipated by the Calíais patent. The jury found that Echostar did not meet its burden of proving by clear and convincing evidence that the asserted claims of the ’217 patent were invalid. Because Echostar failed to pursue its invalidity contentions with respect to the ’884 patent, the court granted judgment as a matter of law that Echostar had failed to meet its burden of proving that the ’884 patent was invalid. This judgment was also indicated in the verdict form by marking the answers to those questions consistently with those judgments. Additionally, for issues that defendants had abandoned at the last minute and did not raise at trial, the court blacked out the relevant areas of the verdict form in order to indicate to the jury that they no longer had to be considered. 3. Willfulness The jury also found that IPPV met its burden of proving by clear and convincing evidence that Echostar Communications, NagraVision, and NagraStar willfully infringed the claims of the ’217 patent. 4. Damages The jury awarded lump sum damages in the amount of $15,000,000. They indicated this on the verdict form, by crossing out the blank lines next to the ’254, ’884, and ’217 patents, and writing in the margin “bundle $15 million.” During his closing statement, counsel for IPPV encouraged the jury to bundle damages in this manner. F. Post-Trial Proceedings At the close of IPPV’s case, and again at the close of all of the evidence, the defendants, Echostar Communications, Nagra-Vision, and NagraStar, moved for judgment as a matter of law under Rule 50(b). On August 27, 2001, the defendants renewed their motions for judgment as a matter of law on the ’254, ’884, and ’217 patents under Rule 50(b), and alternatively moved for a new trial under Rule 59. II. DISCUSSION A. Echostar’s Motion for Judgment as a Matter of Law The court may grant Echostar’s motion for judgment,as a matter of law only if “there is no legally sufficient evidentiary basis for a reasonable jury” to have found for IPPV on an issue. See Fed.R.Civ.P. 50(a). Thus “[a] motion for judgment as a matter of law under Federal Rule 50(a) ‘should be granted only if, viewing the evidence in the light most favorable to the nonmoving party, there is no question of material fact for the jury and any verdict other than the one directed would be erroneous under the governing law.’ ” Beck v. City of Pittsburgh, 89 F.3d 966, 971 (3d Cir.1996) (quoting Macleary v. Hines, 817 F.2d 1081, 1083 (3d Cir.1987)); see also Embrex, Inc. v. Service Eng’g Corp., 216 F.3d 1343, 1347 (Fed.Cir.2000). In other words, to overturn a jury verdict, the party against whom the verdict was rendered must show either that the jury’s findings are not supported by substantial evidence, or, if they were, that the legal conclusions implied from the jury’s verdict cannot be supported as a matter of law. Applied Med. Res. Corp. v. United States Surgical Corp., 147 F.3d 1374, 1376 (Fed.Cir.1998); Read Corp. v. Portec, Inc., 970 F.2d 816, 821 (Fed.Cir.1992). “The ‘substantial evidence’ standard for reviewing a finding of fact raises the question whether the jury’s resolution of a factual dispute was reasonable.” Read, 970 F.2d at 821. (emphasis in original). 1. Infringement Issues At trial, defendants conceded that many of the steps and limitations of the ’254 and ’884 patents read literally on the accused processes. What was left for the jury to decide on the topic of infringement related to whether the Echostar DISH Network contained a “scrambled television program signal,” and whether the system “included” or “inserted [codes] into” such signal. Claims 8 and 9 of the ’254 patent, which the jury found to be literally infringed by the DISH Network, require transmitting and receiving (emphasis added): at a predetermined carrier frequency a scrambled television program signal that includes an identification code unique to a block of program material. Steps 3 and 4 of claim 4 of the ’884 patent require (emphasis added): inserting a category identification signal into the scrambled television program signal at the remote location for transmission thereof with the program signal, receiving the scrambled [television] program signal, including the category identification signal, at the subscriber location. As noted above, the jury found that the DISH Network literally infringed step 4 and infringed step 3 under the doctrine of equivalents. Echostar contends that there is insufficient evidence to support the jury’s verdict that it infringes the ’254 and ’884 patents and enumerates several supporting arguments. Some of its arguments turn on claim construction issues and relate to the jury’s literal infringement findings, while the last relates to sufficiency of the record supporting the jury’s finding that one of the steps in claim 4 of the ’884 patent was infringed under the doctrine of equivalents. a. Was plaintiffs evidence sufficient to support the jury’s finding infringement of claims 8 and 9 of the ’254 patent and of claim 4 of the ’884-patent? Echostar first contends that no substantial evidence supported the jury’s finding that the time-division multiplexed transport stream transmitted by the DISH Network is a “television program signal,” a claim limitation found in claims 8 and 9 of the ’254 patent and claim 4 of the ’884 patent, which was defined by the court in IPPV II. Echostar also argues that there is no substantial evidence supporting the jury’s verdict that the DISH Network literally meets the “includes” limitation of the claims ’254 patent or the “inserting ... into” limitation of the ’884 patent, as those terms had been defined by the court in IPPV II. The central issue to each of these three contentions is whether the court’s definition of “television program signal,” which requires the audio and video components to be broadcast “simultaneously,” precludes a finding that the Echostar DISH Network, which transmits a time-division multiplexed transport stream that divides audio and video signals into discrete packets and then transmits a stream of those packets along with data packets containing program identification codes, transmits a “scrambled television program signal.” Echostar argues that in reaching its finding of literal infringement, the jury was misled by plaintiffs counsel, asserting that during plaintiffs closing argument to the jury, counsel ignored the court’s claim construction and instructed the jury that they could disregard the court’s definition of “television program signal,” “included,” and “inserted ... into” when he urged them that: scrambled television program signals ... include not only the program signals, but the codes that you need to unscramble them, to store I.D. codes, to determine whether or not they’re acceptable for viewing. So, the definition that you should be trying to figure out as you look at these claims is what you think a scrambled television program signal is and not a television-a television program signal. Now, you have to use the Judge’s instruction as to what a television signal is. But that’s not in this claim in that particular form. Trial Tr. at 744-45. The phrase “scrambled television program signal” appears in claims 8 and 9 of the ’254 patent and in claim 4 of the ’884 patent. This specific term was not addressed in the claim construction briefing or in the IPPV II claim construction opinion. Plaintiff IPPV did not ask the court to construe the phrase and asserts that the reason it did not do so was because “the patents themselves clearly define scrambled television programs [sic] signal to include audio, video, and associated synchronizing signals and codes.” Defendants’ claim construction brief simply asked the court to interpret the term “program signal,” to mean something other than “an entire time division multiplexed transmission.” During the trial, just prior to closing arguments, both sides again presented arguments to the court on the proper definition of “television program signal.” The defendants asked the court to construe the phrase “television program signal,” as it appears in the claims of the ’254 and ’884 patents, according to the following definition taken from the Modern Dictionary of Electronics (1999): television signal: the audio signal and video signal that are broadcast simultaneously to produce the sound and picture portions of a televised scene. This definition was originally proposed by the defendants with respect to the phrase “television program signal” as appears in claim 21 of the ’942 patent. Plaintiff argued that this definition was, in its view, improper because it defines the phrase “television signal” and not the phrase that appears in the asserted claims of the two patents at issue: “scrambled television program signal.” Second, plaintiff argued that if any definition of this term is to be adopted, the court should adopt the definition given in the ’264 and ’884 patent specifications, which defines the term as a signal that comprises video, audio, and other signals and codes associated with the transmission. Plaintiff also proposed another definition, from the McGraw-Hill Dictionary of Scientific and Technical Terms (2nd Edition 1978), a dictionary that was published at around the same time as the filing date of the patents, which defined the phra