Roland Corporation v. inMusic Brands, Inc., decided March 27, 2025

Case Citation: ROLAND CORPORATION v. INMUSIC BRANDS, INC., Nos. 2023-1327, 2023-1564, 2023-1565, 2023-1401 (Fed. Cir. March 27, 2025) (nonprecedential)

I. Executive Summary:

The United States Court of Appeals for the Federal Circuit reviewed a district court decision in a patent infringement lawsuit brought by Roland Corporation against inMusic Brands, Inc. involving eight patents related to electronic drums and cymbals. The Federal Circuit affirmed in part, reversed in part, vacated in part, dismissed in part, and remanded the case. Key findings include:

• Liability: The Federal Circuit affirmed the district court's decisions regarding the admissibility of Roland's technical expert's testimony, the denial of inMusic's motions for judgment as a matter of law (JMOL) and a new trial on infringement and invalidity, and the denial of inMusic's equitable estoppel defense. Thus, the jury's finding of infringement and non-invalidity for the claims asserted at trial stands.

• Damages: The Federal Circuit reversed the denial of a new trial on damages, vacated the damages award ($2.7 million in lost profits and $1.9 million in reasonable royalties), and remanded for a new trial on damages. The court found insufficient evidence to support the lost profits award (specifically the inclusion of a subsidiary's profits) and the reasonable royalty award (due to issues with comparability of prior licenses and the inclusion of non-infringing sales).

• Prejudgment Interest: The Federal Circuit vacated the district court's order denying Roland prejudgment interest and remanded for reconsideration, finding that the district court relied on inconsistent findings regarding Roland's knowledge and applied an incorrect legal standard for prejudice.

• Roland's Cross-Appeal: The portion of Roland's cross-appeal challenging claim construction and summary judgment of non-infringement was dismissed because the judgment of liability was not disturbed.

In essence, while the Federal Circuit upheld the finding that inMusic infringed Roland's patents, it found significant errors in the calculation and award of damages, necessitating a new trial on this issue.

II. Background:

Roland sued inMusic for infringement of eight patents related to electronic drums and cymbals (the "Asserted Patents"). The district court granted summary judgment of non-infringement for four patents. The remaining four patents proceeded to a jury trial where all asserted claims were found infringed and not invalid, with a damages award to Roland. The district court subsequently denied various post-trial motions from both parties, leading to the present appeals.

A. The Asserted Patents:

• Drum Patents (5 patents): These patents aimed to solve issues with the "repulsive feeling" and "significant" acoustic noise of prior art electronic drums. The invention utilized a "net-like raw material" for the percussion surface, offering better feel and reduced noise due to its elasticity and air permeability. The patents disclosed both "head sensors" and "rim-shot sensors." Claim 1 of the ’458 patent, representative of claims without electronic components, recites:

• "A head for an electronic percussion instrument, the head comprising a frame and a net-like material comprising first and second net members, each supported by said frame, said net-like material having openings through which air may pass." Claim 23 of the ’535 patent, representative of claims with a "sensor" limitation, recites: "A percussion instrument, comprising: a generally hollow body having an opening into a body interior; a generally flexible, net-like material tensioned state across the opening of the generally hollow body, the net-like material defining a percussion surface for receiving a percussion impact, the net-like material also having openings of a size sufficient to allow air to pass therethrough, upon receiving a percussion impact on the percussion surface; and a sensor supported by said generally hollow body, for providing an electronic signal in response to a percussion impact on the percussion surface of the generally flexible, net-like material."

• Cymbal Patents (2 patents relevant to appeal): These patents addressed issues with the unrealistic striking sensation and difficulty in detecting striking position and force in prior art electronic cymbals made of hard resin. The disclosed cymbals aimed for quicker vibration attenuation, accurate strike detection, and a striking sensation similar to acoustic cymbals, utilizing a "piezoelectric sensor." Independent claim 28 of the ’885 patent is representative:

• "An electronic pad receiving a strike, detecting the strike and outputting a signal representative of the strike comprising: a frame having a striking surface with a peripheral edge portion; a cover covering the striking surface of the frame; a striking sensor provided on a part of, but not the entire peripheral edge portion of the frame, the striking sensor for detecting the strike transmitted to the frame through the cover; and a jack affixed to the frame and electrically coupled to the striking sensor for outputting signals from the striking sensor, the jack having an opening of a receiving space for receiving an electrical plug, the opening of the receiving space facing in a direction away from the part of the peripheral edge portion of the frame having the striking sensor."

  
  

B. Factual and Procedural History:

Roland first accused inMusic of infringement in 2011. After some communication where inMusic stated it was discontinuing the accused cymbals, Roland indicated it would not pursue the matter if the discontinuation occurred and inMusic did not engage in other infringing activities. However, Roland again accused inMusic of infringement in 2015, leading to the lawsuit in 2016. The case was transferred to the Southern District of Florida.

The district court construed disputed claim terms, granted partial summary judgment of non-infringement, and held a jury trial on the remaining patents. The jury found infringement and non-invalidity. The damages phase followed, with strict time limitations for expert testimony due to scheduling conflicts. The jury awarded $4.6 million in total damages. Post-trial motions were largely denied, leading to the appeals.

III. Main Themes and Important Ideas/Facts:

A. Infringement Liability Affirmed:

• Dr. Lehrman's Testimony: inMusic argued that Roland's technical expert's testimony was unreliable due to an initial incorrect understanding of the "all-elements rule" and issues with his testing methodology for the "striking sensor" limitation. The Federal Circuit found that Dr. Lehrman ultimately corrected his understanding of the all-elements rule and that inMusic failed to demonstrate that his testing for vibration detection was unreliable. The court stated:

• "Dr. Lehrman clearly expressed to the jury that his ‘conclusion was that all the accused products infringed on the patents’ because he demonstrated that ‘all the limitations of all the claims were met by infringing products.’"

• JMOL of Non-Infringement Denied: inMusic's arguments for JMOL of non-infringement, again focusing on Dr. Lehrman's testimony and the "head sensor" and "striking sensor" limitations, were rejected. The court found substantial evidence supporting the jury's findings of infringement based on Dr. Lehrman's analysis and testing.

• New Trial on Infringement Denied: inMusic sought a new trial based on the district court providing Roland's infringement claim chart to the jury. The Federal Circuit acknowledged the recent Federal Rule of Evidence 107 regarding illustrative aids but found any error in providing the chart was harmless because "Roland’s claim chart was substantively duplicative of and consistent with admitted evidence."

  
  

B. Invalidity Arguments Rejected:

• JMOL and New Trial on Invalidity Denied: inMusic argued that prior art references (Ishida and Hayashi) anticipated certain claims of the Drum Patents. The Federal Circuit found that Roland presented sufficient evidence (including testimony from a co-inventor and cross-examination of inMusic's expert) for a reasonable jury to conclude that these prior art references did not disclose all limitations of the claims, particularly regarding air permeability and multiple net members. The court noted regarding Hayashi, "On cross-examination, Dr. Kytomaa admitted that ‘the emphasis of Hayashi is not sound reduction’ but rather ‘the selection of different fibrous materials to influence the sound of the diaphragm.’"

  
  

C. Damages Award Vacated and Remanded:

• Lost Profits: The Federal Circuit found insufficient evidence to support the inclusion of Roland U.S.'s lost profits in the award under the "inexorable flow" theory. The court stated:

• "Mr. Tamura’s conclusory testimony provided no basis for the jury to find that Roland U.S.’s profits inherently flowed to Roland during the relevant period other than the fact that Roland U.S. is a wholly owned subsidiary. In Mars, we rejected the notion that such a corporate relationship, without more, was sufficient to recover the subsidiary’s lost profits." Because the jury rendered a single lost profits award without separating Roland's and its subsidiary's profits, the entire award was vacated.

• Reasonable Royalties for Drum Patents: Ms. Heinemann's reliance on prior licenses for single-layer mesh drumheads to determine a reasonable royalty for the double-layer mesh at issue was deemed insufficient. The court highlighted issues such as the inclusion of non-asserted patents in the licenses, the settlement context of one license, and the lack of coherent explanation for the derived royalty rate. The court stated, "For each of these reasons, Roland ‘did not present to the jury a basis in fact to associate the royalty rates used in prior licenses to the particular hypothetical negotiation at issue in this case.’"

• Reasonable Royalties for Cymbal Patents: Ms. Heinemann's calculation included sales of cymbals prior to a redesign that the jury found to be infringing. The court emphasized, "'As we have held, a reasonable royalty ‘cannot include activities that do not constitute patent infringement, as patent damages are limited to those “adequate to compensate for the infringement.”’" Furthermore, the use of an incorrect hypothetical negotiation date was noted as an additional flaw.

• Remedy: The Federal Circuit remanded for a new trial on damages, noting the "unusually brief time" afforded for expert examination during the first trial due to scheduling constraints. The court explicitly stated regarding the time limitations, "The length of a TED Talk, however, is not an appropriate benchmark for the presentation of expert testimony in a trial, let alone a patent trial with millions of dollars in damages at stake."

  
  

D. Equitable Estoppel Defense Rejected:

• The Federal Circuit affirmed the district court's denial of inMusic's equitable estoppel defense. inMusic argued that Roland's delay in complaining about the redesigned cymbals led them to believe their infringement was permissible. However, the court found competing testimony regarding a 2011 communication insufficient to establish that Roland misled inMusic. The court described the situation as essentially a "'he said, [he] said' situation."

  
  

E. Prejudgment Interest Vacated and Remanded:

• The district court's denial of prejudgment interest based on Roland's alleged undue delay was vacated. The Federal Circuit found the district court's finding of undue delay inconsistent with its findings on equitable estoppel regarding Roland's knowledge. Additionally, the court held that the district court applied an incorrect standard for prejudice, relying on speculation about what inMusic "could have" done. The court clarified the correct standard:

• "The key question is whether, in the absence of Roland’s delay (if any), inMusic would have abandoned or further altered its cymbal line to avoid infringement."

  
  

IV. Significance of the Decision:

This decision highlights several important aspects of patent litigation:

• Upholding Liability While Correcting Damages: The Federal Circuit's decision underscores that a finding of infringement does not automatically guarantee the awarded damages. Flaws in the methodology and evidence used to calculate damages can lead to the vacatur of the award and a new trial on damages.

• Scrutiny of Expert Testimony: While the court upheld the admissibility of the technical expert's testimony, it closely scrutinized the damages expert's analysis, emphasizing the need for a clear and factually supported basis for opinions, especially regarding the comparability of licenses and the inclusion of only infringing activity in royalty calculations.

• Importance of Consistent Findings: The court's vacatur of the denial of prejudgment interest demonstrates the need for district courts to maintain consistency in their factual findings across different aspects of a case, such as equitable defenses and remedies.

• Application of Procedural Rules: The discussion of Federal Rule of Evidence 107 indicates the evolving landscape of how illustrative aids are treated in jury trials.

  
  

V. Next Steps/Considerations:

• The case will be remanded to the Southern District of Florida for a new trial solely on the issue of damages.

• Roland will need to present revised damages evidence that addresses the deficiencies identified by the Federal Circuit, including a clear separation of its own lost profits from its subsidiary's, a more robust and clearly explained analysis of comparable licenses for reasonable royalties on the Drum Patents, and a royalty calculation for the Cymbal Patents that only includes infringing sales and uses the correct hypothetical negotiation date.

• The district court will need to reconsider the issue of prejudgment interest, ensuring its findings on Roland's alleged delay are consistent with the evidence and applying the correct legal standard for prejudice to inMusic.