Skilled in the Art: Quinn's Billion-Dollar Apple & Broadcom Verdict + Gil Hyatt Closes in on Long-Fought Patents + Federal Circuit Revisits Damages
Quinn Emanuel sees your nine-figure verdict, and raises you ten.
January 31, 2020 at 03:25 PM
8 minute read
Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. Here's what's cooking today:
• Quinn Emanuel sees your nine-figure verdict, and raises you ten.
• After 25 years, Gil Hyatt gets a Federal Circuit hearing on his patent claims.
• Federal Circuit cuts to the chase on patent damages.
As always, you can email me your feedback and follow me on Twitter.
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Quinn Emanuel Chuckles at Your Nine-Figure Verdicts
Quinn Emanuel Urquhart & Sullivan is to patent infringement jury verdicts as Michael Bloomberg is to campaign spending.
Do you remember, just last Tuesday, I was musing about the recent flurry of nine-figure patent verdicts? Last week's $85 million jury verdict against Apple and $236 million verdict against VMWare seemed like pretty big deals back then.
Now Quinn Emanuel and Caltech have hit Apple and Broadcom for $1.1 billion, with a B, rendering last week's dollar figures Buttigieg- and Klobuchar-esque by comparison.
Quinn's team featured partners James Asperger, Rachael McCracken, Kevin Johnson and Bill Price. They argued that Broadcom incorporated infringing error-correction technology into its Wi-Fi chips at Apple's direction and supplied them to more than 1 billion devices around the world.
Jurors in the Los Angeles courtroom of U.S. District Judge George Wu returned a verdict Wednesday of $838 million against Apple and $270 million against Broadcom. Apple has argued in court papers that Caltech's real beef is with Broadcom, not with Apple.
As with several of the recent nine-figure verdicts, the accused infringers had tried but failed to kill the patents at the PTAB. When jurors aren't hearing anything about invalidity, the sky seems to be the limit on damages.
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Who's Arguing?
Next week is a calendar week at the Federal Circuit. Here are a few cases I've got my eye on:
➤ Hyatt v. Iancu: It's taken 25 years, a trip to the Supreme Court and $7 million in U.S. Patent and Trademark Office fees. But tech inventor Gilbert Hyatt is on the cusp of obtaining some of the patents he began applying for in 1995. The only thing standing in his way now is a PTO appeal that will be heard Thursday.
Hyatt is the named inventor on about 70 patents dating from the '60s, '70s and '80s. When the U.S. switched its patent priority system in the early '90s, Hyatt, like many inventors at the time, filed a number of transitional applications claiming priority to earlier inventions. But Hyatt's were especially lengthy and technical. With amendments, they grew to 400 applications presenting more than 115,000 claims, according to the PTO, which also accused Hyatt of being uncooperative during prosecution.
He and the agency have been at war ever since. The PTO's statement of related cases includes nine Federal Circuit decisions, starting with a 1983 opinion by Judge Giles Rich. Hyatt has won two key battles: One was a 2012 Supreme Court decision that expanded district court review of PTO rejections. The other is a 2017 decision from U.S. District Judge Royce Lamberth that accused the PTO of sending Hyatt's applications "to Never-Never Land" for 10 years, and ordering the agency to award patents covering some 82 claims from three applications.
PTO Solicitor Thomas Krause will ask the Federal Circuit to reverse Lamberth and throw out Hyatt's applications on the basis of prosecution laches. Baker & Hostetler partner Andrew Grossman will defend Lamberth's decision.
➤ BASF v. SNF Holding: A lot will be at stake when German chemical giant BASF squares off with French rival SNF on Friday. Nominally in play is the validity of a BASF patent on a process for manufacturing super-absorbent polymers known as polyacrylamides. Lurking in the background are claims under Georgia's Bad Faith Assertions of Patent Infringement Act and the state's RICO law.
BASF sued SNF's U.S. subsidiaries in 2014, accusing them of infringing its patented process of inserting an inert gas into a tubular reactor with a tapered end. "Prior to the invention of the '329 patent, conical tapers and inert gas had never been used to remove polymer gels from reactors," BASF contended during a 2015 IPR proceeding that it ended up winning.
It turns out that what BASF meant was that use wasn't publicly known. Ten years before the patent was granted, Japanese company Sanyo had confidentially licensed a similar process to Celanese for use at a plant in Virginia. U.S. District Judge Stan Baker granted summary judgment of invalidity, saying the invention was "on sale" in the United States a year before it was patented.
BASF's Kirkland & Ellis attorneys say that's mistaken. "Third-party confidential knowledge and use are not prior art because such information is not publicly accessible and is not removed from the public domain by granting a patent," they argue in their brief to the Federal Circuit.
Didn't the Supreme Court just rule last year that secret sales can trigger the on-sale bar? Yes, but Helsinn Healthcare applies only to inventors who sell products, not third parties that sell processes, BASF contends. Kirkland partner John O'Quinn will present BASF's argument on Friday.
Hughes Hubbard & Reed partner James Dabney will defend the summary judgment ruling.
Meanwhile, SNF's Georgia subsidiary, Chemtall, is suing BASF under the Georgia statutes, contending that BASF knew all along about the Celanese technology after acquiring it in 1999. Judge Baker has put that suit on hold pending the Federal Circuit appeal. If the Federal Circuit reverses, he wrote last year, "then the tactical posture and strength of Plaintiff's case here would be turned on its head."
➤ National Veterans Legal Services Program v. U.S.: It's not an IP case, but as a legal journalist I'd be remiss if I didn't mention that the Federal Circuit will hear a challenge Monday to the 10-cent per page fee the judiciary charges for PACER documents.
The National Veterans Legal Services Program, the National Consumer Law Center and Alliance for Justice brought a Little Tucker Act suit in D.C. district court, arguing that Congress authorized the judiciary to charge fees "only to the extent necessary." To the nonprofits, that means fees should cover only PACER expenses, not additional court-related technology.
U.S. District Judge Ellen Huvelle ruled that the E-Government Act of 2002 doesn't explicitly limit PACER fees to PACER. It can be fairly read to include information access services such as CM/ECF and bankruptcy notices, though not more general courtroom tech expenses, she ruled.
Gupta Wessler's Deepak Gupta will argue for the nonprofits that high user fees harm low-income and pro se litigants and discourage academic research and journalism that improve public understanding of the courts. Alisa Klein of DOJ's civil division appellate staff will argue that if Congress had meant to restrict PACER fees to PACER expenses, it would have said so explicitly. Nor would it have continued approving judicial budgets that allocate the fees more broadly, DOJ argues.
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Federal Circuit Cuts to the Chase on Damages
The Federal Circuit has taken up an interlocutory appeal that has the potential to address some sticky damages issues. U.S. District Judge Susan Illston certified MLC Intellectual Property v. Micron Technology after shutting down MLC's damages theories a month before trial.
Illston ruled that licenses MLC had negotiated with Hynix and Toshiba for its patent on multi-level non-volatile memory were not reliable, and even if they were, MLC had failed to apportion damages for the smallest saleable unit of the technology. Polsinelli partner Fabio Marino argued in his petition to the Federal Circuit that Illston improperly blocked MLC's expert from explaining how he translated the lump sum licenses into a reasonable royalty rate that could be applied to Micron.
As for apportionment, MLC argued that was already "baked into" the comparable license analysis. But even if it weren't, MLC argued that the bare die of the accused semiconductor chip is the smallest salable patent-practicing unit.
Fish & Richardson represents Micron and partner Adam Shartzer signed its response. He argues that the Hynix and Toshiba licenses aren't comparable because, for example, Hynix paid $21 million to license MLC's entire 40-plus patent portfolio, whereas Micron is accused of infringing only a single patent over a shorter period of time.
As for apportionment, Micron argues that a single memory die now incorporates a variety of non-patented technologies such as micro-fabrication lithography techniques, wear-leveling, copy-back and error correction. Those technologies are "clearly outside the footprint of the invention," Shartzer argues.
That's all from Skilled in the Art this week. I'll see you all again on Tuesday.
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