Eastern District of Texas Federal Court Practice

Federal Courts Set to Conduct First Hearing in Restored Marshall County Courthouse

It's been fifteen years in the making, but later this afternoon Judge Chad Everingham is slated to make history by conducting the first judicial hearing in at least 44 years in the restored Harrison County Courthouse across the street from the federal courthouse.
The courtroom in which Judge Everingham will conduct the hearing will be the showpiece of the historic 1901 Harrison County Courthouse, constructed by the citizens of Harrison County at the turn of the last century. 

This courthouse, the third on this site, was designed by noted Texas courthouse architect J. Riely Gordon and served as the seat of county government until 1964, when a new courthouse was built across the square.  In many ways, it is a miniature of the Texas Capitol, with an elaborate rotunda and dome, complete with the glass block floor that the Texas Capitol lost in a 1936 removation.  The courtroom is also related to another state capitol, incidentally.  In 1901 Gordon also designed the Arizona Territorial Capitol, still in use as the Arizona State Capitol, and the interior details of that building's House and Senate chambers served as important references for the similar district courtroom in the Marshall building, which had been divided into nine rooms across two floors after losing its balcony in a 1960's renovation.  After the county moved out in 1964 the old courthouse then served as home to the Harrison County Historical Museum for over thirty years before being closed for renovations which began in 1999 after five years of planning and fundraising. 
This spring, after some fifteen years of effort on the part of interested citizens of Marshall, Harrison County, and beyond, the renovation of this building is finally concluding, and soon the executive offices of Harrison County’s government will reopen their offices here, as will other users, including the historical museum, local tourism offices, and local courts.
As you can tell from the workers and folding chairs, however, the renovation won't be complete for some weeks yet .  The urgency of conducting a hearing here came about because both Judge Ward and Judge Davis are conducting jury trials in the two courtrooms in the Marshall federal building this morning, thus requiring Judge Everingham to borrow courtroom space elsewhere.  Fortunately the restoration was far enough along that the courtroom - which contains only an unfinished bench and folding tables and chairs at the moment - could accommodate him.

Law Office Management: Lawyer v. Airline Seat

If your practice is like mine, you spend a fair amount of time in airline seats going to and from meetings, seminars, and various other events.  I don't mind flying at all - but being bent over in airline seats for hours at a time really tends to induce fatigue and headaches, and sleep is often pretty difficult. 
I ran across something in a travel magazine the other day called the "1st Class Sleeper" that I thought might be of some use, and after trying it out last week I thought readers would be interested in it.  The thing is an inflatable back rest (goes from head to seat) that you lay on the seat behind you then inflate only partially using a tube next to your head (just 10-11 breaths), then relax back into.  The diagram to the right pretty accurately explains what it does - it provides support around your back and a lot of support in your lower back, as well as support on either side of your head, eliminating the bizarre contortion that the seat normally puts on your back and neck.  You stick your legs under the seat in front (but bending at the knees and sitting like a normal person worked just as well). The diagram makes it look uncomfortable, but it was anything but.
I put it in place leaving Dallas Thursday, blew it up as as directed, buckled in, reclined my seat after we took off ... and then woke up an hour later.  I don't even remember falling asleep.  I bought a second for my wife immediately, as she has some trips coming up as well.
Again, the "LOM" header is always your indication that the upcoming post won't have anything to do with practice in Eastern District federal court - but if your practice involves traveling to our fair district - maybe this one will after all.  No promises whether courts will discount travel inconvenience for witnesses if plaintiffs offer to provide them with one of these, but I'd sure say it reduced my inconvenience!

Marshall Juries Split on a Pair of Patent Cases

As I wrote a few days ago, it's been a busy couple of weeks for the court in Marshall, where Judge Everingham has been trying a case downstairs and Judge Ward upstairs,  First across the finish line was Opti v. Apple, 2:07cv21 in which the jury yesterday found that Apple willfully infringed Opti's patent, and that Apple had not shown by clear and convincing evidence that the patent was invalid either as anticipated or obvious.  The jury set damages at $19,009,728.
Things didn't go so well for the plaintiff upstairs in Judge Ward's court.  This afternoon the jury in Versata Software v. Sun Microsystems, 2:06cv358.  the jury found that neither patent was infringed, and all the asserted claims of both patents were shown be clear and convincing evidence to be invalid.  The jury disregarded the instruction not to answer the damages question put down a zero anyway, and then proceeded to find that Sun had provne its patent license defense, that Sun had not breached a license agreement that was at issue, and again, insisted in putting down a zero for damages.  The jury found that Sun had not misappropriated Versata's trade secrets or intentionally interefered with contractual relations - and - again - put down zero in damages for both claims just to be safe.

Judgment entered (again) in Paice v. Toyota - ongoing royalty set at 1/4-1/2%

In December 2005 a Marshall jury found for plaintiff Paice in its case against Toyota and awarded approximately $4 million (I was there for closing arguments and recall the plaintiff asking for around $32 million, for what that's worth).  In 2006 Judge Folsom issued orders on requests for injunctions in two trials where plaintiffs had prevailed, granting the injunction in one case (TiVo v. Echostar) but denying it in the other, this case.  In 2007 the Federal Circuit ruled on the appeal in this case.  The court affimed the jury's finding of infringement under equivalents and its decision not to find literal infringement.  It was also okay with the decision not to grant an injunction and with the idea of  an ongoing royalty (which it wouldn't call a compulsory license). 
What it was not okay with and remanded for a redetermination was the district court's setting the royalty at the $25 per engine found by the jury, noting in passing that the plaintiff does not get a jury to determine the ongoing rate.  The reason for the remand was because the court "was unable to determine whether the district court abused its discretion" with respect to calculating the royalty because the district court didn't provide any basis for that number beyond the jury's verdict.  It wasn't saying $25 an engine was wrong - but there must be some (unidentified) analysis backing it up and an explicit opportunity for the parties to negotiate out a royalty rate before the court sets one.  
On Friday, two years and eight months after initially entering judgment, Judge Folsom again entered a final judgment, this time for $4,269,950.00 plus pre and postjudgment interest, plus an ongoing royalty for the remaining life of the ’970 Patent, as a percentage of wholesale vehicle price, of 0.48% for each Toyota Prius II, 0.32% for each Toyota Highlander, and 0.26% for each Lexus RX400H sold after the entry of the Court’s original Final Judgment—August 16, 2006.  For the period of time between the jury’s verdict and final judgment, the Court found the applicable royalty was still $25 per infringing vehicle sale - which looks to me to be a a fraction of the new royalty.

Homer Reynolds III (1961-2009)

I am sorry to report the untimely death of one of our partners Homer Reynolds III, who passed away at his ranch in Oklahoma recently.  In addition to being a partner in Siebman, Reynolds, Burg, Phillips & Smith, LLP, Homer also served on the boards of several local corporations and charities, including the board of Presbyterian Healthcare System, Inc.
Homer Reynolds was a 1980 graduate of Plano Senior High School. He graduated from SMU, Magna Cum Laude with a dual major in history and political science in 1984, and earned his J.D. from the SMU School of Law in 1987.
The Collin County Observer has a page with tributes to Homer that provides some observations on what an exceptional man Homer was, and how much of a loss this is not just for his family, but also his friends and his community.   

CSIRO settles during trial

On day 6 of trial, the CSIRO case (CSIRO v. Buffalo et al and Microsoft v. CSIRO).  That leaves only two patent cases being tried in the district as we speak, and both are in Marshall, where the taxpayers are getting their money's worth out of the old 1912 post office that was converted to courthouse use in 1964, and renovated to add a second courtroom in the basement a few years back.

Motion to Bifurcate and Stay Defendants' Non-Patent Counterclaims Denied

j2 Global Communications Inc v. Captaris Inc (6-08-cv-00262) (E.D. Tex. April 16, 2009)
Judge: John D. Love   
Holding: Motion to Bifurcate and Stay Non-Patent Counterclaims DENIED without prejudice
Interesting case last week from Judge Love on bifurcation in a patent case.  In j2 Global v. Captaris, the defendants brought antitrust and unfair competition counterclaims against the plaintiff.  Plaintiff's motion to bifurcate defendant's anti-trust and unfair competition claims, and stay discovery on them until after the trial on the plaintiff's patent claims was denied despite the court's acknowledgement that "the Federal Circuit has described bifurcation of patent claims and antitrust claims as a 'standard practice.' "
The court found that it could not at this stage reliably determine whether bifurcation would increase or decrease judicial economy. While of course a separate patent trial could obviate the need for trial on the antitrust counterclaims, Judge Love noted that if the Court were to stay discovery related to Captaris's antitrust claims now, a trial on these claims could be pushed back until long after the trial on the patent claims, which would dramatically decrease judicial economy.  Accordingly he denied the motion without prejudice to refiling, noting that the issue of whether the trial should be bifurcated could be revisited after discovery was complete - but that the Court anticipated that if it was, he would use the same jury "so as not to lose the jurors' familiarity with the parties and technology at issue."
Note: The image is a "bifurcation tree" from a discussion of chaos theory - which is actually sometimes contended to be what bifurcation creates, come to think of it.  The ratio of the bifurcations of the tree is called Feigenbaum's Delta, after its inventor Mitchell Feigenbaum, who discovered in 1975 that there was a mathematical constant that described the onset of chaos, and other graphical representation of it are even more disturbing if you're as compulsive-retentive as me.  I'm not aware of any opinions relating chaos theory to bifurcation, but then I haven't read all of Judge Clark's opinions lately.

Law Office Management: Ruminations on Briefcases and Office Chairs

For readers interested in my ongoing search for the perfect briefcase and discovery of the benefits of a decent office chair, both of significant daily relevance when trying to run a law office efficiently, I have posts on both on my personal weblog, Puttering in the Study.  But you really should have better things to do on a Saturday morning.  (Apparently I don't).

2009 so far...

I was updating my list of recent patent verdicts this afternoon and noticed something noteworthy.  Of the five or so patent cases that have reached trial in the Eastern District since the beginning of the year, only one resulted in a complete plaintiff's verdict.  One of the others resulted in a defense verdict, two were dismissed during trial either by the granting of a summary judgment or a judgment as a matter of law at the close of the plaintiff's case in chief, and the fourth resulted in a partially hung jury - the jury found infringement, but hung on damages, requiring a retrial on at least that much of the case.  And that one plaintiff's verdict?  It was $4.622 million, but was reduced by another JMOL to $1.39 million before judgment was entered.  The last verdict of 2008 was similar - the plaintiff obtained a verdict for $3.5 million, but Judge Ward eventually entered a take-nothing judgment after invalidating a patent and granting JMOL motions.  So the total recovery for plaintiffs in the last six cases tried locally was one judgment for $1.4 million.
You have to go back to last November to find some plaintiff's verdicts - $18.5 million for Agere against Sony and a little under $3 million in the Mass v. Ergotron case Judge Davis just issued his posttrial rulings on this morning.  Of course last year ended up essentially 11-6 for plaintiff's (after 2007's disastrous 3-6) but this drops the win rate for the past year and a quarter to approximately 12-9 and for the past two and a quarter years to a dead-even 15-15 (not counting any reversals on appeals).  I have to point out that these numbers are somewhat subjective because I'm factoring in the results of posttrial motions and at some point a recovery drops to the point that a win for the plaintiff at trial essentially ends up as a win for the defendant on damages.  But over the long term I think they're more accurate this way.
Of course with patents trials going on as we speak in Marshall and Tyler, and another slated to start today downstairs in Marshall, these numbers are likely to change one way or another soon.

Post-trial Motions Resolved in Mass v. Ergotron

 Mass Engineered Design, Inc. v. Ergotron, Inc., 2:06cv00272 (E.D. Tex. April 17, 2009)
Judge: Leonard Davis
Holding: Request for a Permanent Injunction or Ongoing Royalties DENIED; JMOL & motion for new trial DENIED; Motion for post-trial relief granted and requests for enhanced damages and fees DENIED.
Here's a opinion you can really latch on to.  (Yeah, it hurt me to write it too).  This case was tried to a Marshall jury last November, resulting in a jury verdict of three million against the five defendants, plus a setoff of 120k in favor of defendant Dell.  Readers will recall that Judge Davis recently entered and order denying Dell's motion for a permanent injunction and also rejected the notion of an annual flat-rate royalty, and expressing his displeasure with the parties' proposal re: future royalty rates, instead "preliminarily" setting an ongoing royalty of $4 per infringing unit and ordering the parties to meet and confer. This morning he issued an exhaustive (47 pages) order resolving the many post-trial motions.
I particularly like post-trial orders like this because they give a reader a way to, well, latch on to the various issues that come up in a patent case by discussing them in the context of a trial and the standards by which a jury's determinations are viewed.  What the order technically does is deny Dell’s Motion for Permanent Injunction or Reasonable Royalty, Dell’s Motion for Enhanced Damages and Attorneys’ Fees, and the Defendants’ Motion for Judgment as a Matter of Law (“JMOL”) or New Trial, and grants in part Plaintiffs’ Motion for Post-Trial Relief (by granting JMOL on its implied license defense with respect to Dell's claim, but denying it as to a new trial on damages and enhanced damages, if I'm getting this all right).   This opinion also included the Court’s findings of fact and conclusions of law regarding Defendants’ affirmative defenses of inequitable conduct, laches, and equitable estoppel and Plaintiffs’ affirmative defense of equitable estoppel.   Judge Davis also grants the plaintiff's request for an injunction, but orders the parties to confer on the language of a proposed injunction.  There are not a lot of issues that come up in frequently patent cases that aren't addressed here, so it may be useful reading to see Judge Davis discuss the what's, why's and "how come's" of the case.
This case was more complicated than some because one of the defendants, Dell, asserted patent claims against the plaintiff, so if the names of the motions don't seem consistent with who the parties are, that may be why.