The attorneys in Widevine v. Verimatrix, 2:07cv321, a patent case pending before Judge T. John Ward in Marshall got a bit of a surprise today when Judge Ward reset this case (currently set for jury selection in February 2010) for jury selection two months later in April and reassigned the case to one Randall Rader.
Judge Rader, of course, has been serving on the Federal Circuit since 1990, and will be next in line for chief judge when Judge Michel steps down effective May 31, 2010.
It's been a busy week for Judge Leonard Davis in Tyler. Last week while he was busy trying a patent case in Tyler the Federal Circuit sent him a load of coal and sticks by granting a mandamus in the Nintendo case ordering a patent case transferred to Washington state.
But the judge got a big ol' Walmart gift card from the Fed Circuit today when that court affirmed his actions in the i4i v. Microsoft case, a widely-followed case involving sales of Microsoft's Word software in which Microsoft's appeal contained some fairly strong language taking issue with Judge Davis' sanctioning it for certain conduct during the trial, as well as his substantive rulings. The Federal Circuit today upheld the $290 million judgment, and then entered an injunction preventing further sale of Word starting January 11, 2010 (so be sure to grab your still-legal copies for the holidays). I'm sure other patent commentators will have a lot to say, so keep an eye out for what Dennis Crouch (here) and Peter Zura have to say.
This decision is also a stocking-stuffer for your favorite civil procedure or trial practice professor (mine's Gerald Powell at Baylor Law School) because of a failure to preserve a complaint for appeal issue. The Federal Circuit decided hat it could not review the jury's award of $200 million in reasonable royalty because Microsoft failed to assert a pre-verdict (or Rule 50(a)) motion for judgment as a matter of law on the point. As FRCP 50 makes clear, a 50(a) motion is a prerequisite to a 50(b) motion after the verdict. (The rule was loosened in 2006 to eliminate the need to assert the motion repeatedly before a verdict - just once is enough). See O'Connor's Federal Rules * Civil Trials, p. 622, (really 676 is where you get that sinking feeling when you realize there wasn't a 50(a) motion). Without that motion the standard of review - as was the case here - precluded the appellate court from reviewing the award under any but the most deferntial possible standard. Which it mournfully noted kept it from doing things to the award. (Don't you hate it when that happens?)
Anyway, Friday saw another jury verdict in a patent/trade secrets case, with a Tyler jury in Judge Davis' court finding infringment (no on invalidity) and assessing damages at $1,571,103 in Retractable Technologies' case versus Occupational & Medical Innovations, Ltd. The jury also found for the plaintiff on its trade secrets claim and awarded $2,240,640 in damages. Judge Davis required that all post-verdict motions be filed by January 18, responses by January 28, replies by Fe. 4, and surreplies by Feb. 9, and included page limits
Judge: John Love
Holding: Motion for Entry of Judgment on the Verdict GRANTED
I am currently way, way behind on a paper updating attendees at the State Bar of Texas' Litigation Update seminar next week on recent developments in patent litigation. One of the benefits of being terribly, terribly late, however, is that I can include significant recent cases, like this one, which discusses the effect of eBay on Yahoo!. (Stop and think how little sense that would have made only a few years ago - what a world we live in).
One of the more significant recent developments in patent litigation at the district court level, in the wake of eBay's elimination of the previous default rule that injunctions issue once infringement and non-invalidity are shown, is future damages. Judge Clark addressed this in some detail in the recent Cummins-Allison case dealing with postverdict and pre-injunction damages, and here Judge Love takes up the torch with following an evidentiary hearing on a reasonable ongoing royalty rate. (Judge Love reserved for a later order the pending issues of enhanced damages, attorney's fees and pre and postjudgment interest, as well as the exceptional case determination, so willful infringement damages groupies stay tuned - fresh meat is coming down the pike).
On May 15, 2009, a Tyler jury in Judge Love's court found that the asserted claim of the patent in suit was infringed by Yahoo's Messenger program and assessed $6,625,584 in damages, which was based on a 20% royalty rate. CIAC sought a royalty rate of 23% postverdict, and Yahoo! cried "TIVO!" (meaning that its service had been modified so that it no longer infringed, which essentially adds to the routine "dog doesn't bite, not my dog" argument that the dog has now had its lower jaw sawn off).
Judge Love's lengthy opinion discusses eBay, the Federal Circuit's opinion in Paice (and Judge Folsom's opinion on remand), and the courts' extension of the supplemental damages courts had traditionally awarded for the gap between verdict and judgment and injunction now that in many cases injunctions are not available to halt future infringement. Judge Love notes - politely - that the law is less than settled with respect to how district courts are to go about setting a royalty rate for future damages, including the elephant in the room, which is what effect a jury's verdict of infringement should have on the parties' hypothetical negotiations. (Which sort of reminds me of objections from Star Trek fans that a particular episode's description of the way dilithium chambers operate isn't correct. If something is fictional to start with, at what point can a description of its workings be wrong or right? Interesting intellectual question - but this is the sort of thing I'm used to with a ten year old and seven year old twins that were playing Star Trek last night and arguing over what was and wasn't "right" about how phasers and warp engines worked. Tip: the answer is to hand them your dog-eared copy of the 1974 Starfleet Technical Manual. Worked like a charm). But I digress.
Judge Love determined first of all, applying eBay that an injunction should not issue. Having firmly located himself in the swamp, he began to drain said swamp by noting who had the burden of proof of showing the appropriate royalty rate (noting that this appeared to be a question of first impression, he decided the plaintiff) as well as showing that the new version of Yahoo Messenger was no more than a "colorable variation" of the adjudicated prior version. (Ed. note: the phraseology here is not completely consistent - it seems to me that thr showing is that the product is not colorably different in order to keep it under the infringement finding, but I'm not going to argue with however the cases have put it, since the concept is a pretty simple one to follow, despite the wording courts are using. Basically, have you changed the thing enough that the prior infringement finding shouldn't apply?). The Court then concluded that CIAV had met its burden to show that Yahoo had not disabled the infringing version, so royalties were still due on that. As for the new version which Yahoo claimed did not infringe, the Court found that the plaintiff met its burden to show that the new version infringed as well, i.e. it was not sufficiently different to get out from under the prior finding of infringement, i.e. the "colorable-something" analysis noted above.
With liability established, Judge Love turned to the issue of the royalty rate. Here's where, for lack of a more appropriate word, it gets fun. Judge Love selected the analysis, consisting of Paice plus a helping of modified Georgia-Pacific, and agreed with the plaintiff's expert that the 20% rate that the jury found should be adjusted upward to 23% for an ongoing royalty in light of the parties' changed relationship, and Yahoo!'s decision not to design around or otherwise stop infringing.
So how much money are we talking here? The Court ordered a $185,694 payment for the five and a half months described in a report (20% of Yahoo's revenues from the relevant product) and quarterly payments of 23% of revenues going forward.
Judge: John Love
Holding: Motion to Strike Motion for Partial Summary Judgment of Indefiniteness DENIED
Well, it's really offsetting penalties, not just a false start, and Flozell Adams isn't even to blame.
Judge Love denied the plaintiff's motion to strike defendant's motion for summary judgment of indefiniteness on the basis defendant failed to adequately disclose its invalidity positions in its P.R. 3-3 contentions. He found that the plaintiff faced prejudice because of the defendant's delay in providing complete invalidity contentions, since it appeared that there had previously been an agreement of some sort that indefiniteness would not be asserted, and the plaintiff seemed to have been caught short when that situation changed. Accordingly, the Court directed the parties to go back, provide complete proposed definitions (including amending infringement contentions narrowly if necessary), and determine whether there was still an indefiniteness issue. If there was, let the Court know and he'd address the summary judgment motion at that time, using an expedited schedule set forth in the order, which required briefing to be completed by January 22.
Replay the down..
from Docket Navigator.
Okay, it may not be the right logo, but I thought the post needed some visual bling. This
is a patent case dealing with tire monitoring system on cars. If the name look familiar it's because this litigation gave rise to the two Federal Circuit In re Volkswagen mandamus opinions in the last year - one in 2008 affirming a Michigan judge's decision to transfer a related case to Marshall, where prior litigation was pending, and one this year in this case affirming Judge Ward's decision to keep the related litigation in his court (relying in part on the prior mandamus ruling in the same litigation). (Incidentally, I highly recommend reading Judge Ward's venue opinion in this case, reported at 2009 WL 440627. It was his first venue opinion in a patent case following In re VW II and In re TS Tech and I think still remains the most thorough treatment of the various factors that a defendant uses in trying to show whether a proposed transferee forum is "clearly more convenient" as set forth in those opinions).
This case was set to go to trial next month and yesterday Judge Ward notified the parties that he had determined that summary judgment of noninfringement would be granted as to certain of the accused products. Since it was not clear what this meant for certain other products in the case the Court set a phone conference for later this week. A written order detailing the court's analysis is to follow, and I'll post on it when it comes out.
IP Co., LLC v. Intus IQ, 2:09cv37 (E.D. Tex. 8/3/09)
Judge: David Folsom
Holding: Motion to Transfer Venue DENIED
Judge Folsom denied a motion by one defendant for a severance and transfer of the plaintiff's claims against it. Noting that a severance would create an additional case and that the Federal Circuit recently counseled in In re VW (the second In re VW by the FC - keep your eyes on the ball here, folks) that the existence of multiple suits involving the same issues is a "paramount consideration" when determining whether a transfer is in the interest of justice, Judge Folsom denied the motion.
Digital-Vending v. Univ. of Phoenix, 2:08cv91
Judge: Chad Everingham
Holding: Motion to Transfer Venue GRANTED
Judge Everingham denied the defendants' motion to transfer to the District of Columbia as moot because he granted the alternative motion to transfer to a different location. Although Plaintiff opposed Defendants’ motion to transfer to DC and argued that a transfer was not appropriate, Plaintiff argued that if the Court determines that transfer is appropriate, that a transfer to the Eastern District of Virginia is more convenient and appropriate.than a transfer to the District of Columbia. Judge Everingham agreed and sent the case to Virginia, where he found numerous witnesses were located.
Versata v. Internet Brands, et al., 2:08cv313 (E.D. Tex. Sept. 30, 2009)
Judge: Chad Everingham
Holding: Motion to Transfer Venue DENIED
Judge Everingham denied a motion to dismiss for lack of personal jurisdiction, improper venue and to transfer for inconvenient venue. Plaintiffs were Austin, Texas-based companies. Defendants were located in California, Canada and Michigan.
Judge Everingham held that the defendants' interactive websites satisfied the test for personal jurisdiction, which in turn made venue proper, citing Trintec v. Pedre. With respect to the convenience motion, after balancing the various factors, the Court concluded that the defendants had not met their burden to show that the Western District of Texas was "clearly more convenient".