How To Lose $388M In Five Easy Steps

Submitted by patentadmin on Wed, 10/21/2009 - 22:02

Whatever else you may want to say about Microsoft Corporation, they certainly know how to overcome an adverse jury verdict in a patent infringement case. Of course, sometimes the plaintiff goes out of its way to help them.

In a recent case, Uniloc USA, Inc. and Uniloc Singapore Private Limited v. Microsoft Corporation, the jury found the patent-in-suit valid and infringed. They found the infringement to be willful. They awarded the plaintiffs damages of $388M – before any enhancement.

Undaunted, Microsoft moved for Judgment As A Matter Of Law (JMOL) with respect to all of the issues presented to the jury and (figuratively) walked out of court successful on ALL counts. In a lengthy – 66 pages – but surprisingly readable decision, the Court catalogued the various sins – some of commission and some of omission – committed by the plaintiffs. After much thoughtful analysis, and a couple of shots of Jack Daniels (a much favored aid to legal analysis), we are able to present 5 Rules For Overturning A Jury Verdict.

RULE 1: Confuse and mislead the jury.
Simplification is good; oversimplification is not. Microsoft’s overall theme was that the jury failed to grasp the complexity of the case due to Uniloc’s "ceaseless rhetoric and innuendo." The Court found that Uniloc’s approach was "to boil down complex computer software programs to a kind of generic word find puzzle, that ignores how the allegedly infringing system actually works and, most important, the actual disclosure in the '216 patent."

As a result, the Court concluded that the jury "lacked a grasp of the issues before it and reached a finding without a legally sufficient basis."

RULE 2: When drafting a patent application, limit disclosure of claimed algorithms.
Although the jury found the patent infringed, the Court disagreed, finding that "[t]he skeletal disclosure in the '216 patent with three plus signs and the phrases 'by addition' and 'items to be summed' cannot be so broad as to capture within its scope (to one of ordinary skill in the art) virtually any and all software algorithms that include addition as one mathematical component, no matter how minor."

The Court held that allowing the jury's embrace of Uniloc's "simplistic and clever gloss on the patent's disclosed structure" would impermissibly broaden "the scope of [the] means-plus-function claim language beyond the structure disclosed in the specification and its equivalents."

RULE 3: Rely on a limited and simplistic expert's report.
This rule may be deemed a corollary to Rules 1 and 2. The Court found that the Uniloc expert's report "disclosed next to nothing about his opinions…or the principles he discussed." This created a "problem with relying upon [the expert's] incomplete, oversimplified and frankly inappropriate explanation to support the verdict." The Court solved this problem by largely ignoring the opinion.

RULE 4: Get greedy; and ignore the Court's instructions.
Of late, this rule has frequently been honored in the breach (see recent blogs entries, The Value Of A Date-Picker and The Incredible Shrinking Judgment).

Microsoft objected to Uniloc's introduction of a demonstrative pie chart wherein Uniloc sought to apply the entire market value rule to Microsoft's total sales ($19.27B) of accused products, to yield a royalty of about $565M. The Court "instructed counsel to stay away from the $19 billion figure. Yet, the figure continued to rear its head through the back door during cross-examination of Microsoft’s expert and in closing."

The Court held that this improperly encouraged "awarding damages far in excess of the contribution of the precise patented invention…[s]hould the need for a new trial arise, Microsoft is entitled to a new determination of damages without the taint of this irrelevant evidence…"

RULE 5: Always argue that infringement was willful – even if you lack any real evidence.
The Court held that Uniloc’s "evidence" of willfulness "could not, as a matter of law, have left the jurors with a 'clear conviction or firm belief' that Microsoft knew it infringed because it stole some idea of Uniloc's", thus denying any enhanced damages.

More importantly, however, the Court also held that Uniloc’s abundance of copying "evidence" could not be deemed "harmless insofar as its likelihood to confuse, distract and taint consideration of the other issues."

This was the tipping point in the Court’s decision to grant Microsoft a new trial on liability to "prevent a miscarriage of justice." Thus, an ill-conceived claim proved to be Uniloc's possible undoing – at least with respect to patent validity.

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