This week: Both floors of the best little courthouse in Texas have been busy—producing very different results.
Taking A Big Bite Out of Apple
OPTi, Inc. v. Apple, Inc.
07-cv-00021, E.D. Texas (Marshall), filed 1/17/2007.
OPTi Inc. is a Palo Alto company that used to manufacture chipsets for computers. In 2002, after Intel decided to stop using OPTi’s chipsets, the company shuttered its operations and moved into the patent-licensing business. Since then, as OPTi said in its SEC filings, the company has been “engaged in perfecting its intellectual property position" by investigating the unlicensed use of its technology, and filing lawsuits against alleged infringers. As of now, OPTi—still a public company, although it's not traded on any major exchange—has only one full-time employee: CEO Bernard Marren. (The OPTi we discuss here should not be confused with OPTI Canada, an operating energy company.)
Last week, OPTi wrapped up the first jury trial of its new incarnation—and wound up a winner. In ruling for OPTi and against Apple, a Marshall jury awarded the former more than $19 million for willfull infringement. It's a remarkable victory, in part because the jury gave the plaintiff exactly what it had asked for and accepted its testimony on damages wholesale. OPTi's lawyers interviewed by TPA said Apple’s expert witnesses
suggested that—if the computer maker had infringed—it only owed OPTi
about $300,000.
Magistrate Judge Charles Everingham, the Judge T. John Ward protégé who oversaw the trial, awarded OPTi a summary judgment of infringement before the trial even began, leaving Apple only able to argue an invalidity defense: that an earlier Compaq invention should render OPTi's patent invalid.
OPTi's asserted patent, 6,405,291, claims to cover technology related to how data moves from a computer's memory to various input/output devices such disk drives and USB ports. OPTi accused Apple of using the technology described in the patent—which is oddly named "predictive snooping"—in certain of the computers it makes and sells. OPTi did not accuse Apple of copying its products or its patents.
The royalty the plaintiffs asked for, and received, amounted to 75 cents per port on 2,664,053 Apple computers made between 2005, when OPTi first accused Apple of infringing its patents, and 2007, when Apple stopped selling computers with PowerPC processors and moved to Intel chips. (Intel has a license to OPTi patents.)
"OPTi was there at the creation of this type of technology," says Michael Brody, the Winston & Strawn partner who planned OPTi's legal effort. "It was forced out of that market by conditions that were beyond its control. It ultimately was left with the technology it had created as a way of returning something to its investors."
Those investors should be happy with the results. Since the verdict, OPTi's stock price has shot up by about 50 percent, and now stands at $3.13 per share.
Brody's team worked with lawyers from McKool Smith's Dallas office, which includes two partners with deep E.D. Tex litigation experience, Sam Baxter and Gary Kitchen. Kitchen, reached yesterday, said that the verdict affirms the power of OPTi's patent and will help it in any upcoming cases.
The company has a suit based on the same patent pending against AMD. OPTI previously settled another suit, against NVIDIA, in exchange for $11 million plus ongoing installment payments.
"The jury evidently determined that OPTi invented first," says Kitchen. "And the evidence in the case indicated that Apple had been notified very early on as to the potential infringement of OPTis patents, and had chosen to continue on [marketing the accused products] for a two year period without engaging OPTi in any way."
Both Brody and Kitchen also attributed the win to strong testimony from OPTi witnesses, including CEO Marren and part-time CFO Michael Mazzoni. Inventor Subir Ghosh, no longer an OPTi employee, also testified.
"We had some really strong witnesses, who told a story that the jury could understand and sympathize with," says Michael Brody.
Apple was represented by lawyers from Cooley Godward Kronish in Palo Alto, who did not return a request for comment. Local counsel included Troll Tracker defamation litigant Eric Albritton and Danny Williams of Williams, Morgan & Amerson.
Sun Shines in Judge’s Ward’s Courtroom
Versata Software, Inc. et al v. Sun Microsystems, Inc.
06-cv-00358, E.D. Texas (Marshall). Filed 9/11/2006.
Above Everingham’s courtroom, meanwhile, Judge Ward presided upstairs over a trial that ended on an entirely different note, with the defendants knocking the proverbial ball out of the park, as Michael Smith notes.
Versata's patent claims were unusual in that the company actually had a previous business relationship with Sun and accused Sun of stealing its technology. So, in addition to claiming its 5,515,524 and 5,708,798 patents were infringed, Versata made claims against Sun for trade secret misappropriation, breach of contract, and contractual interference.
The jury vindicated Sun on all claims and invalidated the patent claims asserted. See more coverage at AmLaw Daily, eWeek, and Bloomberg. Sun was represented by a team led by Jeff Randall, of Skadden Arps Slate Meagher & Flom.
Versata previously asserted the now-invalid patents against Selectica, Inc., which settled with Versata in 2007. The company has litigation pending against a number of other companies, including the software company SAP, which is accused of infringing the invalidated '798 patent—as well as four other patents not asserted against Sun. Versata has enough other patents in play that these two invalidations shouldn't make a big dent in its campaign.
Photo: Wikimedia / Rasbak
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