Patent Litigation Weekly: So What Do E.D. Texas Jurors Really Think?

This week: The Prior Art returns after its winter blogging break. As Microsoft gets set to scrap software found to infringe a Canadian company's software, The Prior Art discusses the case with three of the eight jurors whose verdict helped put the software giant in this predicament.

As of Monday—thanks to a permanent injunction issued in August by Judge Leonard Davis of the Eastern District of Texas and upheld last month by the Federal Circuit Court of Appeals—Microsoft Inc. must stop selling any version of Microsoft Word 2007 or Microsoft Office 2007 that includes a custom XML editor found to infringe a patent held by a small Canadian software company called i4i, Inc.

It’s not every day that such a well-known product has to be modified—or possibly removed from store shelves—because of a patent dispute. Indeed, the U.S. Supreme Court made getting such an injunction in a patent case extremely difficult with its landmark eBay v. MercExchange ruling in 2006.

Microsoft isn’t giving up the court fight over the patent at issue just yet. On Friday, the company’s legal team, led by Matthew Powers of Weil, Gotshal & Manges, filed a petition with the Federal Circuit asking for a rehearing en banc. Powers didn't return calls for this story. Earlier coverage on i4i's trial win, post-trial action, and Federal Circuit win is available from the AmLaw Litigation Daily.

Regardless of whether that petition is accepted, Microsoft spokesman Kevin Kutz said in a statement that the company will comply with the injunction: "We have been preparing for this possibility since the District Court issued its injunction in August 2009 and have put the wheels in motion to remove this little-used feature from these products."

Microsoft no doubt wants to downplay the matter, but the simple fact of the injunction adds significance to the case beyond the hefty $290 million in damages the company must pay i4i (the figure includes $200 million awarded by the jury that that heard the case, plus $90 million in enhanced damages, post-verdict damages and interest tacked on by Davis).

As the legal machinations continue, The Prior Art decided to check in with some of the jurors who heard the case, hoping to glean some insight into how they resolved a major patent dispute in a popular venue widely considered to be extremely plaintiff-friendly. TPA was able to contact three of the eight jurors on the case.

The first juror we caught up with was Barbara Greer, a school counselor who served as the forewoman. Greer says she had no doubt about how she would vote once testimony wrapped up.

“I felt that i4i had a really strong case,” she says. “It was evident that Microsoft knew that [i4i] had a patent," and still decided “all of a sudden” to create its own version. “It just didn't sound believable from the Microsoft side.”

Greer was surprised that the software giant wasn’t able to make a stronger argument: “I expected Microsoft to have done a better job in proving their case, I guess, just because it's a big company.”

As far as Microsoft’s claim that the i4i patent at issue should be invalidated, Greer says she didn’t buy that argument: “I really felt like with experts in the patent office…they knew what they were doing. I suppose I really have a lot of confidence in the U.S. patent office.”

After the trial ended, Judge Davis spent some time talking with the jurors, several of whom, Greer says, had the same question: “We were wondering how such a big case ended up in Tyler.” Davis, she says, “said that usually things come through a lot faster in East Texas than in some other federal courts, so companies sometimes come here to get their cases heard.”

A second juror, electrician Jarrett Stephenson, says he was struck that Microsoft’s lone witness was a software engineer, unlike i4i, whose founder, Michael Vulpe, testified. “I think a lot of the jurors, we all thought if this was that big a deal to Microsoft, they might have had some of their more executive-type people present."

In describing his take on the case, Stephenson strikes something of a populist tone.  “It's the same thing going on with America these days. It's big business. They just don't care. Two hundred million dollars seems to me like a great amount of money…I would think if I was Bill Gates, and had $200 million on the line, I would want to be present.”

Testimony during the trial revealed that i4i and Microsoft representatives met at one point to discuss Microsoft’s interest in i4i's software, a type of XML editor that could be used in conjunction with Microsoft Word. Stephenson says that was an important factor in helping him reach his decision. "[Microsoft] got their foot in the door and got enough information, and then took it.”

Of the lawyers who tried the case—Powers for Microsoft and Douglas Cawley of McKool Smith for i4i—Stephenson says they “both seemed really intelligent.”  But, he says, the jury found Cawley “much more genuine and sincere.” Powers, Stephenson says, “came across as being cocky, and kind of always on the defensive about everything. He made several low blows and comments about i4i's lawyer and Michael Vulpe. That was frowned upon by the jurors.“

After the trial, Stephenson also recalled how he and others asked Davis why such a big technology lawsuit was being heard in Tyler: "He told us, in federal courts, it's kind of like other parts of the country are known for particular types of cases. Tyler’s known for patent infringement cases.”

Betsy Cook, a customer service representative, also says she was sure which party prevailed in court. “It was very plain and very clear, throughout the testimony that what Microsoft said and did wasn't right,” Cook says. “It felt like they thought they were bigger than the law.”

Like Stephenson, Cook says one thing that tipped the scales in i4i’s favor was the testimony about a meeting between representatives of the two companies to discuss Microsoft’s interest in i4i’s software.

“At the meeting, when [i4i] actually showed [the XML software] to [Microsoft] …Microsoft was very excited about it.” Then, she says, Microsoft “started figuring out what it was and started using it.”

Once the trial ended, Cook went online and read up on what others were saying about the case she’d just sat on, and it wasn't all pleasant. “They talked about stupid people in Texas, ignorant people in Texas, on a lot of the blogs,” she says. "They talked about how patent companies were coming to Texas because there were dumb people on the juries.”

But those people didn't hear the testimony in the case.

"If you sat through that trial at all, you would know, it was just so clear cut. They weren't there. They didn't know. If they had heard what I heard, they could not have come up with any other verdict.” None of the eight jurors was even slightly inclined to find for Microsoft, says Cook.

“I wanted Microsoft to be right,” she says. "Microsoft employs a lot of people. I didn't want a Canadian company to come here and take our money. There were a lot of reasons I didn't want it to be that way.”

The only matter of debate once deliberations began, Cook says, was the size of the award. “We went lower than what I wanted to.” In her opinion, Microsoft displayed “blatant disregard [for] the other company” that left her feeling “a statement needed to be made.”

As for the $200 million verdict (to which Davis added an additional $90 million in damages), Cook says that it's hard to know how much an award like that really means in context: “We've never seen that, never will see it.”

Echoing the sentiments of other jurors, Cook says the technical nature of the case made her nervous, at first, about serving.

"I felt very incapable," she says. "I did not think it would be possible for me to be on a jury like that. But when we got through with it, I felt very confident we had done the right thing."

At the same time, she adds, “I know a whole lot more about patents than I ever wanted to.  And a whole lot more about Microsoft Word than I ever wanted to know."

Many other documents on the case are available on the the website of i4i LP, the partnership organized to prosecute the infringement case for its patent, which is U.S. Patent No. 5,787,449.

Photo via Wikimedia

Comments

[IDBIIP]

I'm sad that the reasons given were "America vs. Canada" and how they don't have much of a problem with how EDT is run or realize that the PTO is clueless/overworked enough to grant patents on perpetual motion machines by mistake these days. But I guess most people don't pay attention to that stuff.

That said, I do think that their verdict, even if they arrived at it in an odd way, because according to all accounts, Microsoft stabbed yet another "partner" in the back. I have little doubt that Microsoft decided that it would be cheaper to screw some small company over, rather than buying their technology. Every time I hear about how Microsoft "respects intellectual property rights" I think of cases like this one...

[cadstarsucks]

why should it surprise anyone when a company who's founder is a college drop out and a substandard programmer who started the company by dumpster diving for unix code and stole basic from the public?

[Jackie Hutter]

Thank you, Joe. This reporting is very illuminating, and those of us in the biz are lucky to have you doing this.

[Mike]

Reading through the opinion and other available documents, it doesn't seem like Microsoft spent the time or money to put together a good case. They tried trash talk, a slick lawyer and thought that was enough. Plus, they did blatantly steal i4i's developed software if not directly, they at least stole the ideas and solutions from them. I can hear the P-H-B now, "Boy what i4i showed us looks great! Can our software engineers make something that is exactly the same?"

[Name is required]

Welcome back, Joe. Powers' cockiness yet again shines through. What works in Wilmington doesn't play in Peoria (or Tyler). When will big companies learn to use local counsel effectively? See TiVo v. EchoStar. That being said, I don't think anyone could have saved Microsoft given those facts.

[Paul Adams]

Thanks, Joe. Very illuminating. I love to hear what jurors say in patent cases. It would be interesting to review the transcript. I wonder if that one juror who consulted the blogs really did so after the verdict, not before.