Archive for April, 2011

Zow, the nerve of these cons from China – stealing a billion dollar trade secret from St. Jude’s

28 Apr

Zow!, the nerve of these cons. A 2.3 billion dollar trade secret judgment against a Chinese trade secret thief Zou and his company Nervicon, who stole a billion dollar trade secret from, get this, St. Jude’s Medical.  No amount of money is enough punishment for that, but $500M in punitives is a goodly amount.


TiVo awarded $90M in sanctions against EchoStar (Dish network) in patent infringement case

21 Apr

This post on gametimeip

is a major misreading of today’s en banc TiVo v EchoStar decision, in my opinion. I suspect that post took the dissent to be the decision rather than the majority opinion, or perhaps they overlooked that this is a sanctions case, not an infringement decision, or they overlooked that TiVo won affirmance of 100% of the $90M sanction award amount. gametimeip says the decision renders permanent injunctions worthless. Yet, the CAFC affirmed the lower court’s $90M sanction against Echo Star for the ENTIRE $90M awarded below. The CAFC noted that two injunctions were issued and affirmed the entire sanction award for violating the second injunction, even though they remanded on the issue of violation of the 1st injunction. That is not a worthless injunction, as monetarily it is a total victory for TiVo. The dissent, on the other hand, would have zeroed the sanction award in a clear case of direct violation of the express wording of an injunction and that would have made injunctions of much less value.

The remand was because on the first issue, the CAFC found 12-0 that the USDC-TX-E committed error in finding there were no colorable differences of the redesigned product from the claims without doing an element by element analysis to determine if there were “colorable differences” as to any element sufficient to raise a reasonable issue of non-infringement. If the DC on remand still finds there were, the sanctions will not decrease and if they find there weren’t the sanctions will not increase, so the contempt issue is over (barring an unlikely appeal to the S. Ct.) and TiVo has won 100% of the amount of the sanction awarded below. The trial court has already held the claims are infringed by the new product so it is a virtual cinch that, after the required element by element analysis, TiVo will get another infringement judgment for another huge amount for infringement by the newly downloaded software.

The contempt which won the day for TiVo, was Echo Star’s violation of the second part of the injunction which required EchoStar to disable the DVR functionality of 8 models, because EchoStar did not disable the DVR functionality of any of the 8 models but rather kept selling and using the 8 models and instead just downloaded new software that they unsuccessfully claimed designed around TiVo’s claims and avoided infringement. The injunction did not provide for not disabling the DVR functionality, and EchoStar did not get clearance of the Court before doing something on its own in lieu of disabling the DVR functionality as ordered, so EchoStar should have gone back to the Court and sought clarification before violating the express terms of the second injunction by not disabling DVR functionality of the 8 models. Ignoring the injunction and fashioning its own unauthorized alternative approach turned out to be a $90M error.

So, that is $90M in sanctions in addition to the $74M previously awarded. Worthless? $164M in total award is worthless? Wow, what a misreading of the case. And, once the DC gets the case back on remand, more damages will likely be coming for the infringement the Court already found once on the design around software. So, $164M is likely to be even bigger by the end of this. And that is worthless? Man, I hope my clients get some of those “worthless” injunctions like TiVo got.

Lesson to be Learned: Be careful not to jump to the end of opinions for a quickie view of the case, since the dissent comes last. Also, follow the money and, if you get all you asked for, that is a victory, not “worthless.”


Ocean Tomo auction of Round Rock Research, LLP Covenant Not To Sue raises new questions

12 Apr

Ocean Tomo hypes it this way: “Forever changing the way companies manage the risk of the unpredictable IP enforcement market, the sale of Round Rock Research’s Covenant Not to Sue marks a new day for licensing and litigation in the IP world. The covenant grants the acquirer freedom to operate under one or more patents – in this case, Round Rock’s portfolio of approximately 4,200 patents and pending applications, which spans several industries such as semiconductors, display technologies, flash, memory, and microprocessors. “The sale of this covenant not to sue is a game changer in the IP space,” said Dean Becker, CEO of ICAP Ocean Tomo. “Securing a covenant is as beneficial to a company’s freedom to operate as acquiring the patents themselves, so we believe that covenants are on their way to becoming a key component of strong IP portfolios globally.”

Ignoring the false hype from Ocean Tomo that covenants not to sue are something new for IP owners’ portfolios, it is interesting Round Rock Research, LLC chose to auction a Covenant Not to Sue when TransCore v ETC holds that such a covenant exhausts patent rights and when it will probably set a ceiling on reasonable royalty. They may have outsmarted themselves on this one. So Ocean Tomo will now auction patent licenses and covenants not to sue as well as patents? Increases the asset base and that raises possibilities for other auction houses to take on IP and compete with Ocean Tomo. Is Christies or Sotheby next? Raises some interesting issues, such as (1) Is this grounds for a DJ action by anyone who feels threatened by the patent ? (2) What if the patentee (Round Rock Research, LLC in this case) advises a possible infringer of the auction, does that justify a DJ? (3) What if the auction house (Ocean Tomo in this case) advises a possible infringer of the auction, does that justify a DJ? (4) Is this a way to threaten infringers without triggering a DJ since an auction is ostensibly not aimed at anyone in particular? (5) How does this affect “reasonable royalty” determinations (does it cap it, floor it, or standardize it)?