  United States Court of Appeals
      for the Federal Circuit
                ______________________

          JVC KENWOOD CORPORATION,
                Plaintiff-Appellant

                           v.

                     NERO, INC.,
                  Defendant-Appellee
                ______________________

                      2014-1011
                ______________________

    Appeal from the United States District Court for the
Central District of California in No. 2:12-cv-03662-MRP-
JC, Senior Judge Mariana R. Pfaelzer.
                 ______________________

               Decided: August 17, 2015
                ______________________

    EVAN FINKEL, Pillsbury Winthrop Shaw Pittman LLP,
Los Angeles, CA, argued for plaintiff-appellant. Also
represented by JAMES CHANG.

    ADRIAN MARY PRUETZ, Glaser Weil, Fink, Jacobs,
Howard, Avchen & Shapiro LLP, Los Angeles, CA, argued
for defendant-appellee. Also represented by ANDREW
YOUNG CHOUNG, ERICA J. VAN LOON, CHARLES CHRISTIAN
KOOLE.
                ______________________
    Before NEWMAN, DYK, and REYNA, Circuit Judges.
2                   JVC KENWOOD CORPORATION    v. NERO, INC.



NEWMAN, Circuit Judge.
     JVC Kenwood Corporation (“JVC”) sued Nero, Inc.
and Arcsoft, Inc. for contributory and induced infringe-
ment (“indirect infringement”) of certain JVC patents
directed to various uses of DVD and Blu-ray optical discs.
The charge of indirect infringement is based on Nero’s
sale of software to end users of DVD and Blu-ray discs,
who allegedly directly infringe the JVC patents. The
district court summarized JVC’s infringement theory as
follows:
    JVC’s theory of infringement rests on the compli-
    ance of Nero’s software with the same DVD and
    Blu-ray standards deemed essential to the manu-
    facture, sale, and use of the licensed DVD and
    Blu-ray optical discs. This theory states that each
    Patent is essential to playing, copying, and record-
    ing data on an optical disc compliant with the
    DVD or Blu-ray standard. The Nero software
    must practice the Patents because the Nero soft-
    ware is used in conjunction with standards-
    compliant DVD or Blu-ray optical discs.
JVC Kenwood Corp. v. Arcsoft, Inc., 966 F. Supp. 2d 1003,
1014 (C.D. Cal. 2013) (“Dist. Ct. Op.”).
    The district court did not accept JVC’s theory. The
court held, on summary judgment, that JVC is “barred
from asserting claims of direct infringement against end
users for use of Nero software with DVD and Blu-ray
optical discs made or sold by a party whose products have
been expressly released from claims of infringement by
JVC with regard to the Patents.” Id. at 1018. The court
held that, absent direct infringement, Nero cannot be
liable for indirect infringement. Id. The court alterna-
tively held that: “End users’ use of Nero software with
DVD and Blu-ray optical discs licensed under the Patents
is subject to the complete affirmative defense of patent
JVC KENWOOD CORPORATION    v. NERO, INC.                  3



exhaustion with regard to infringement of the Patents.”
Id.
   We conclude that the district court correctly held that,
on JVC’s theory and proffered evidence of infringement,
summary judgment of non-infringement was properly
granted. However, facts material to the issue of patent
exhaustion were insufficiently developed to warrant
summary judgment on that alternative ground.
                       DISCUSSION
    Summary judgment is appropriate when, drawing all
justifiable inferences in favor of the non-movant, “there is
no genuine dispute as to any material fact and the mo-
vant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986). We give plenary review to the district
court’s grant of summary judgment. Earl v. Nielsen
Media Research, Inc., 658 F.3d 1108, 1112 (9th Cir. 2011)
(Ninth Circuit standard); see Lexion Med., LLC v.
Northgate Techs., Inc., 641 F.3d 1352, 1358 (Fed. Cir.
2011) (applying regional circuit standard of review).
    The district court’s action to reject a proffered expert
declaration is reviewed on the standard of abuse of discre-
tion. Maffei v. N. Ins. Co. of N.Y., 12 F.3d 892, 897 (9th
Cir. 1993); see Anchor Wall Sys., Inc. v. Rockwood Retain-
ing Walls, Inc., 340 F.3d 1298, 1313 (Fed. Cir. 2003)
(applying regional circuit standard of review).
                             A
                    THE JVC PATENTS
    Six JVC Patents are at issue, directed to optical discs
and specific structures, methods, or systems used with
optical discs: U.S. Patent No. 6,141,491 (the ’491 Patent),
No. 5,535,008 (the ’008 Patent), No. 6,522,692 (the ’692
Patent), No. 6,212,329 (the ’329 Patent), No. 6,490,404
(the ’404 Patent), and No. 6,788,881 (the ’881 Patent).
4                   JVC KENWOOD CORPORATION    v. NERO, INC.



JVC states that users of Nero’s software-implemented
systems and methods, in conjunction with DVD and Blu-
ray optical discs, directly infringe relevant Patents. Thus
JVC argues that Nero, as provider of the software, is
liable for contributory or induced infringement.
    The ’008 and ’491 Patents
     JVC asserted claims 1, 2, and 4 of the ’491 Patent and
claims 1, 2, 7, and 8 of the ’008 Patent. The ’491 Patent is
a division of the ’008 Patent and both relate to “jump
reproduction”–e.g., fast-forwarding, fast-rewinding, etc.–
through moving picture data that is stored on a disc in a
coded and compressed format. The specifications of the
’491 and ’008 Patents state: “An object of the present
invention is to provide a recording medium, a reproduc-
tion method and a reproduction system, which are suita-
ble for jump reproducing video data coded with high
efficiency by an MPEG method or the like.” ’008 Patent
col. 6 ll. 13-26; ’491 Patent col. 6 ll. 12-25.
    The ’491 Patent includes claims to methods for record-
ing and reproducing moving picture data, as well as
claims to optical discs containing moving picture data.
For example, claim 1 of the ’491 Patent is directed to an
optical disc coded with moving picture data according to a
specified method or format, and claim 2 is directed to the
“method of recording moving picture data on a recording
medium.” ’491 Patent col. 21 l. 54 to col. 24 l. 19. The
’008 Patent claims methods for reproducing data, as well
as “reproduction systems” for “outputting a plurality of
data groups.” ’008 Patent col. 21 l. 62 to col. 24 l. 56.
Only the method claims of the ’008 Patent are asserted,
while both product and method claims of the ’491 Patent
are asserted.
    JVC states that when end-users use Nero software
with blank optical discs to record moving picture data,
they directly infringe by practicing the specified “method
of recording moving picture data on a recording medium,”
JVC KENWOOD CORPORATION    v. NERO, INC.                  5



claim 2 of the ’491 Patent, thereby making a “recording
medium on which moving picture data is recorded,” as
recited in claim 1. JVC Br. 33.
    JVC states that Nero’s accused products meet the “for
reproducing data from a plurality of data groups having
at least a first data group and a second data group” limi-
tation of claim 1 of the ’008 patent because the accused
products enable playback of media on a disk recorded in
compliance with DVD specifications. JVC states that
“when the end-user then uses Nero software to reproduce
(playback) the moving picture data and to fast forward (or
fast reverse) through the content, the end-user directly
infringes claim 4 of the ’491 Patent and claims 1, 2, 7 and
8 of the [’008] Patent, all directed to a reproduction meth-
od.” JVC Br. 33.
   The ’692 and ’329 Patents
    JVC asserted claim 2 of the ’692 Patent and claims 3
and 6 of the ’329 Patent. The ’692 Patent is a division of
the ’329 Patent, and both Patents relate to regional and
parental controls on content-bearing optical discs. The
asserted claims are directed to methods of controlling
whether certain kinds of content, such as a movie on an
optical disc, should be decoded and played according to
preconditions, e.g., “R” rated content or “PG13” rated
content. JVC states that when an end-user uses Nero
software to perform the parental/regional control func-
tions as recited in the claims, the end-user directly in-
fringes the ’692 and ’329 Patents.
   The ’404 Patent
    JVC asserted claim 1 of the ’404 Patent. The ’404 Pa-
tent is directed to the recording regions on an optical disc
and a method and apparatus for editing data on a disc
that is formatted in accordance with the claims. Claim 1
is directed to a rewritable optical disc comprising two
recording regions on which data are recorded according to
6                     JVC KENWOOD CORPORATION   v. NERO, INC.



a specified format. JVC states that when an end-user
uses Nero software to record to a blank rewritable optical
disc in accordance with the format set out in claim 1, the
end-user directly infringes the claim.
    The ’881 Patent
    JVC asserted claims 1 and 2 of the ’881 Patent. The
’881 Patent relates to editing audio data recorded on a
storage medium such as a rewritable optical disc. Claim 1
is directed to a writable storage medium including a first
and second storage area containing multiplexed packs of
compressed audio and moving picture video data, and a
third storage area containing specified additional infor-
mation; as follows:
    1. A writable storage medium comprising:
        a first storage area divided into a plurality of
    sectors having the same data capacity;
         a second storage area involved in the first
    storage area, storing a plurality of moving picture
    packs of moving picture data encoded by variable
    bit rate compression encoding and a plurality of
    audio packs of audio data encoded by constant bit
    rate compression encoding, the moving picture
    packs and the audio packs being multiplexed per
    pack and stored sequentially from a specific sector
    among the sectors, each pack corresponding to a
    unit of data transfer and containing data an
    amount of which is equal to the data capacity of
    each sector; and
         a third storage area involved in the first stor-
    age area but located different from the second
    storage area, the third storage area storing a table
    listing at least first information indicating wheth-
    er after-recording to the audio data is allowable,
    second information indicating an encoding method
    by which the audio data has been encoded and
JVC KENWOOD CORPORATION    v. NERO, INC.                      7



   third information indicating the number of audio
   channels of the audio data.
JVC states that when an end user uses Nero software to
store data to an optical disc in accordance with the
claimed format, the end user directly infringes the claim
“by making (creating) a writable storage medium (record-
ed optical disc) as recited in claim 1.” JVC Br. 37.
   For all six Patents, JVC states that since Nero’s soft-
ware customers are direct infringers, Nero is liable for
induced or contributory infringement.
                              B
             JVC’S THEORY OF INFRINGEMENT
    JVC did not provide or proffer evidence of specific di-
rect infringement by any end user, but instead advanced a
standards-compliance theory of infringement; viz., that
use of Nero’s software for the purposes described in any of
the Patents, and in compliance with the DVD and Blu-ray
industry standards, directly infringes the relevant Patent.
JVC’s Complaint states:
   ¶9. . . . . The right to relief is asserted, in part, on
   the defendants’ common compliance with industry
   standard specifications, known generally as the
   “DVD Specification” and the “BD Specification.”
   This is not an action where joinder is based solely
   on allegations that multiple parties have infringed
   the patents in suit. In addition, it is based on the
   allegation that compliance with an industry
   standard, which is co-terminous with asserted pa-
   tent claim language, has commonly occurred
   among infringers.
First Am. Compl. at 5, ECF 32.
   JVC stresses that its theory of infringement is that
end users of Nero’s software, when used with DVD and
Blu-Ray discs, comply with the DVD and Blu-ray stand-
8                   JVC KENWOOD CORPORATION    v. NERO, INC.



ards to which the JVC Patents are essential, whereby the
end users “must necessarily” infringe the Patents. At the
claim construction hearing JVC stated:
    We’ve asserted essential patents to which if a user
    does what the user must do with the Nero soft-
    ware, that use must indeed infringe the DVD
    specification which is called for in the patents and
    also—I’m sorry, complies with DVD specifications
    and, therefore, infringes the patents, or must
    comply with Blu-ray specification which then in-
    fringes the patents. And they must necessarily do
    so.
Nero Br. 7, quoting Claim Const. Hr’g. Tr. at 5-6, ECF 74.
    The district court probed JVC’s “Theory of the Case”
and secured additional briefing and argument, for JVC
relied on this theory to “necessarily” establish infringe-
ment. The district court summarized that, according to
JVC, “When an end user uses Nero’s software on that
licensed disc according to the DVD6C standards specifica-
tion, that end user necessarily directly infringes one or
more Patents not included in the license.” Dist. Ct. Op. at
1011.
    The court further summarized JVC’s position: “The
Nero software must practice the Patents because the Nero
software is used in conjunction with standards-compliant
DVD or Blu-ray optical discs.” Id. at 1014. JVC’s claim
charts consistently reference that Nero’s software com-
plies with relevant DVD or Blue-ray specifications, and
that the Patents are included in the licensing pools for
DVD and Blu-ray disc products.
    The record describes two licensing pools for optical
disc technology, viz., the DVD Patent Licensing Group
(also called DVD6C), and One Blue LLC for Blu-ray
technology. JVC is a member of both groups, and the
Patents in suit are included in both pools.
JVC KENWOOD CORPORATION    v. NERO, INC.                  9



    The pools and the standard pool license agreements
received extensive exploration in the district court. For
the DVD6C pool, a licensee designates the product catego-
ries for which a license is desired. The categories from
which the licensee may select are: DVD-Video Players;
DVD-Audio Players; DVD-ROM Drives; DVD-ROM Discs;
DVD-Video Discs; DVD Audio Discs; DVD Decoders; DVD
Video Recorders; DVD (Recordable Disc Drives); DVD
Encoders; DVD-R Discs; DVD-RW Discs; DVD-RAM
Discs; DVD Recordable Disc Cases; +R Discs; +RW Discs.
Koole Decl. Ex. 73, at Art. 2 §2.1.3, Ex. 3-1, ECF 90-23.
    The DVD6C license agreement grants a “non-
exclusive, nontransferable license, without any sublicense
right, to make, have made, use, import, offer to sell, sell
and otherwise dispose of DVD Products under the DVD
patents or any of their claims.” Id. at Art. 2 §2.1.1. The
license for DVD Patents “extends only to the structure,
features and functions of a DVD Product used to practice
those DVD Standard Specifications or +R/+RW Standard
Specifications applicable to that DVD Product and for
which the DVD Patents are Essential.” Id. at Art. 2
§2.1.2. The DVD Standard Specifications are a series of
documents setting forth the technical qualifications for
standards-compliant products. They are published by the
DVD Forum, an international association tasked with
defining the DVD Specifications.
    “DVD Patents” are defined as “all patents owned by
members of the Group, now, or hereafter during the term
of this Agreement that are Essential to make, use or sell
DVD Products.” Id. at Ex. 2-2 §1.9. The DVD6C license
agreement provides that “Essential” “with respect to the
definition of DVD Patents shall mean necessarily in-
fringed when implementing the DVD Standard Specifica-
tions and/or the +R/+RW Standard Specifications or
claiming technologies for which there is no realistic alter-
native in implementing the DVD Standard Specifications
and/or the +R/+RW Standard Specifications.” Id. at Ex.
10                  JVC KENWOOD CORPORATION    v. NERO, INC.



2-2 §1.16. The agreement further provides that “[t]he
license conferred . . . covers only the DVD Products select-
ed . . . and does not cover any other DVD Products.” Id. at
Art. 2 §2.1.3.
    The One Blue patent licensing arrangement is simi-
lar. One-Blue licenses can be obtained for specific catego-
ries of Blu-ray products, including patents that are
“Technically Essential” or “Commercially Essential.”
“Technically Essential Patents” is defined as those pa-
tents “containing one or more claims that is/are necessari-
ly infringed in an implementation of the relevant BD-
R/RE Disc Standards.” Koole Decl. Ex 75, at 10, ECF 90-
25. “Commercially Essential Patents” is defined as those
patents “that contain[] one or more claims that is/are
necessary as a practical matter on the basis that there are
no economically viable substitutes to implement the
relevant BD-R/RE Disc Standards.” Id. at 6.
    The One Blue agreement further provides that the li-
cense “applies only to the extent the structure, features
and functions of a BD Registered Product are used to
practice” the applicable standards. Id. at 7. “BD Regis-
tered Product” refers to the Blu-ray disc product covered
by the applicable license agreement; e.g., BD-ROM (Blu-
ray read only memory) movie or data discs, BD-R and BD-
RE (Blu-ray recordable and rewritable) discs, etc. The
Blu-ray Disc Association is an industry consortium that
establishes the Blu-ray standards specifications.
     JVC points out that Nero is a licensed member of the
DVD Format/Logo Licensing Corporation (“DVD FLLC”),
the licensing agent for the DVD Forum, which is respon-
sible for licensing the Format Books setting forth the
DVD standards specifications and the DVD logo. JVC
states that Nero is bound by the terms of the DVD FLLC
license agreement, which requires all products manufac-
tured or sold by the licensee to comply with the standards
set forth in the Format Books.
JVC KENWOOD CORPORATION    v. NERO, INC.                 11



    In its infringement contentions, JVC alleged that
since Nero’s software necessarily complies with the
standards specifications, end users necessarily infringe
the asserted Patents, which are standards-compliant.
     Reasoning from JVC’s theory of infringement, the dis-
trict court accepted JVC’s position that the Patents’
claims to software-implemented methods are embodied by
the discs, stating: “If these claims are essential to the
licensed DVD and Blu-ray optical discs, then those discs
must embody the elements described in those claims.”
Dist. Ct. Op. at 1014. The court further stated, as to the
only Patent that contained no claims that included an
optical disc, the ’008 Patent, that its novel aspects may be
embodied by an optical disc “that contains or is manufac-
tured to be capable of containing data ordered, grouped,
and accessed as described in the ’008 Patent.” Id. at 1015.
    On these premises, the district court held that direct
infringement of the patented systems, methods, and
apparatuses, as “generally alleged” by JVC, is negated by
the “extensive licensing program, both as part of the
DVD6C and One Blue patent pools as well as through
JVC’s individual licensing program.” Id. at 1018. The
court observed that licensees cannot be infringers.
    JVC now argues that licensees to the DVD6C pool on-
ly receive a license to those patents related to particular
products, selected by the licensee, which “practice the
DVD Standard Specifications” applicable to the licensee’s
products, citing the DVD6C License Agreement at Art. 2
§§2.1.1 and 2.1.2. JVC Br. 13-14. Nero points out that
the pool license structure was the basis for the JVC
argument that infringement “must necessarily” be in-
ferred because the Patents are included in these licensing
pools, and Nero’s software implements the Patents.
    The district court held that infringement could not be
inferred. The court stated:
12                   JVC KENWOOD CORPORATION    v. NERO, INC.



     Nero has shown an extensive licensing program,
     both as part of the DVD6C and One Blue patent
     pools as well as through JVC’s individual licens-
     ing program. Therefore, without specific allega-
     tions and evidence showing use of unlicensed
     optical discs, Nero has established a complete de-
     fense to all of JVC’s allegations of infringement
     under the Patents.
Dist. Ct. Op. at 1018. JVC cited no “specific allegations
and evidence” of unlicensed discs, and the district court
correctly rejected JVC’s argument that it was not its
burden to make such a showing. Having failed to present
any evidence of unlicensed disks, JVC argues that the
district court erred in denying JVC’s request for addition-
al discovery to “collect specific information regarding
customers that are using Nero software with unlicensed
optical disks.” JVC Opp’n Summ. J. 16, ECF No. 93
(emphasis omitted); see also id. at 25. Under Rule 56(d),
the party requesting discovery must show, inter alia, that
“the facts sought exist.” Family Home & Fin. Ctr., Inc. v.
Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir.
2008) (setting forth the requirements of Rule 56(d)). The
district court reasoned that with respect to unlicensed
disks, JVC “has failed to present such evidence or even
specifically allege these facts.” Dist. Ct. Op. at 1009. In
light of that failure, the district court did not abuse its
discretion in refusing to grant additional discovery on the
issue of unlicensed disks.
    On JVC’s premise that these Patents are essential
and are directly infringed by users of Nero software, it
was JVC’s burden to proffer at least plausible evidence in
support of its position. On the summary judgment record,
the district court correctly held that:
     JVC cannot have it both ways—either the Patent
     is essential and licensed or JVC cannot rely on the
JVC KENWOOD CORPORATION    v. NERO, INC.                 13



    standards to show infringement as it has chosen
    to do.
Dist. Ct. Op. at 1011.
    We agree with the district court that, on JVC’s theory
of the case, summary judgment of non-infringement was
properly granted.
                             C
                   PATENT EXHAUSTION
    The district court alternatively relied on patent ex-
haustion, holding that the conditions for exhaustion, as
set forth by the Supreme Court in Quanta Computer, Inc.
v. LG Electronics, Inc., 553 U.S. 617 (2008), were met on
JVC’s theory of infringement. The district court conclud-
ed that the “use of Nero software with DVD and Blu-ray
optical discs licensed under the Patents is subject to the
complete affirmative defense of patent exhaustion with
regard to infringement of the Patents.” Dist. Ct. Op. at
1018.
     We conclude that the summary judgment record does
not clearly establish the conditions for patent exhaustion,
for it is silent as to some essential aspects. As the Court
explained: “Exhaustion is triggered only by a sale author-
ized by the patent holder,” 553 U.S. at 636, whereby if the
thing that is sold “substantially embodies” patented
subject matter owned by the entity that authorized the
sale, then the patent is exhausted as to the thing sold. Id.
at 638. “Substantial embodiment” is established if (1) the
only reasonable and intended use of the article is to
practice the allegedly exhausted patent; and (2) the
article embodies the essential or inventive features of the
allegedly exhausted patent. See id. at 631; LifeScan
Scotland, Ltd. v. Shasta Techs., LLC, 734 F.3d 1361,
1368-70 (Fed. Cir. 2013). The Court in Quanta explained
that, to determine whether the article sold has a reasona-
ble and intended use that does not practice the patent,
14                    JVC KENWOOD CORPORATION    v. NERO, INC.



“the features partially practicing the patent are what
must have an alternative use.” Quanta, 553 U.S. at 632
n.6.
     JVC argued, and the district court found, that the in-
tended use of DVD and Blu-ray optical discs is to “play,
copy, and record data in conformance with the DVD and
Blu-ray standards specifications.” Dist. Ct. Op. at 1013.
The court concluded that since the optical discs comply
with the standards, and their use complies with the
standards to which JVC alleges its asserted Patents are
essential, the asserted Patents are exhausted. The dis-
trict court observed:
     As in Quanta, “here, [JVC] has suggested no rea-
     sonable use for the [licensed DVD and Blu-ray op-
     tical discs] other than . . . practice[ing] the [JVC]
     Patents.” . . . In addition, the only reasonable
     and intended use of an optical disc, licensed under
     standards-essential patents must be to practice
     those patents because there is no alternative use.
Id. (alteration and emphasis in original) (quoting Quanta,
553 U.S. at 632).
    JVC argues that it was not established that the discs
sold to Nero’s customers were licensed, and that it was
not established that the licensed aspects of the ’491, ’404,
and ’881 Patents are essential to all uses of the DVD6C or
One Blue discs. JVC states that users of the Nero soft-
ware could have been using unlicensed discs, and that the
sale of unlicensed discs would not trigger exhaustion of
even “standards essential” software patents. The district
court remarked that JVC provided no support for the
existence of unlicensed manufacturers of unlicensed
standards-compliant discs, and correctly rejected JVC’s
argument that it did not bear the burden of coming for-
ward with such evidence.
JVC KENWOOD CORPORATION    v. NERO, INC.                  15



    JVC states that Nero’s software, not the disc sellers or
users, practices the Patents, and thus that patent exhaus-
tion does not apply. JVC does not resolve the contradic-
tion on which the district court focused, that if the
Patents represent a “substantial embodiment” of the
optical discs as sold—as JVC argued in support of in-
fringement—then the Patents are exhausted on sale of
the discs. However, in arguing that the district court
improperly applied the criteria of patent exhaustion, JVC
also negated its own theory of infringement—as the
district court recognized.
    On the sketchy record, contradictory arguments, and
undeveloped facts before us, we decline to expand the
theory of patent exhaustion to reach this case. “Patent
exhaustion is a judicially fashioned doctrine without a
specific source in congressionally enacted text stating the
terms of this limitation on patent rights.” Helferich
Patent Licensing, LLC v. New York Times Co., 778 F.3d
1293, 1305 (Fed. Cir. 2015).
    On application of the principle of exhaustion as set
forth in Quanta, the threshold criterion is that the prod-
uct whose sale is suggested to exhaust the patent must
have originated from or through the patentee; the record
of this case does not so establish. See Quanta, 553 U.S. at
636 (“Exhaustion is triggered only by a sale authorized by
the patent holder.”).
    In this case, where the district court clearly and effec-
tively determined that infringement had not been shown
on JVC’s theory and argument of the case, we affirm on
that ground. Thus we vacate the district court’s ruling
with respect to patent exhaustion.
                             D
           MOTIONS TO STRIKE DECLARATIONS
   In responding to Nero’s motion for summary judg-
ment, JVC submitted the declarations of technical expert
16                  JVC KENWOOD CORPORATION    v. NERO, INC.



Dr. Faramarz Azadegan, JVC employee Tetsuro Fuse,
and attorney James Chang. The district court granted
Nero’s motion to strike the declarations. JVC states that
the district court abused its discretion, and that these
Declarations provide any missing support for JVC’s
position.
    Dr. Azadegan declared that standards-compliant DVD
and Blu-ray optical discs have uses other than those
specified and claimed in the asserted Patents. He de-
clared that the essential features of the asserted Patents
are not embodied in clean discs. The district court ob-
served that the position presented by Dr. Azadegan is
inconsistent with JVC’s statements on claim construction,
and that: “This hardware/software distinction that JVC
now offers is exactly the distinction that JVC has argued
to overcome in applying its hardware claims to Nero’s
software product.” Dist. Ct. Op. at 1017. The court also
referred to JVC’s theory, fundamental to its case, that the
asserted Patents are “necessarily infringed” because the
claimed subject matter is “essential.” The district court
had accepted these positions in refusing to dismiss at the
claim construction stage, and declined to accept the
contrary position in response to Nero’s motion for sum-
mary judgment.
    With respect to the declarations of Mr. Fuse and Mr.
Chang, Mr. Fuse presented statistical reports of the
worldwide licensing of the Patents, and Mr. Chang pro-
vided website information “purporting” to list parties and
terms of the patent pool licenses. The district court
rejected these declarations as irrelevant and as inadmis-
sible hearsay.
    We discern no abuse of discretion in the court’s treat-
ment of these declarations in the context of the pleadings,
the argument, and JVC’s theory of the case.
JVC KENWOOD CORPORATION   v. NERO, INC.             17



                     CONCLUSION
    On the summary judgment record, direct infringe-
ment was not established, and thus Nero was not shown
to be potentially liable for indirect infringement. The
district court’s judgment is affirmed.
                     AFFIRMED
