Patent Litigation Weekly — Inside Google's Second Patent Trial

The first counterintuitive thing about the Bright Response lawsuit is that it went forward at all. The asserted patent, No. 6,411,947, contains claims about sorting e-mail. The patent was created by a company called Brightware, which was hired by J.P. Morgan Chase in the 1990s to create a program for sorting incoming e-mails from the bank’s customers. Brightware no longer exists, and the patent came to be owned by Firepond, a Minnesota software company. Court documents from Bright Response v. Google show that Spangenberg picked up the ’947 as part of a batch of 13 patents he purchased from Firepond for $1 million.

The ’947 patent is as controversial as its owner. In 2004, the Electronic Frontier Foundation named it one of 10 patents that had committed “crimes against the public domain” by making obvious claims on already known technology. Gina Steele, a San Francisco solo practitioner who volunteered to help EFF bust the ’947 patent, said the technology described in the ’947 patent has been in use since at least 1996. (EFF was not involved in the Bright Response litigation.)

Nevertheless, in 2007, Spangenberg’s ostensibly Marshall-based holding company Bright Response (formerly Polaris IP) used the ’947 patent to sue Internet companies, alleging that their search engines infringe claims in the patent that refer to sorting “non-interactive electronic messages” but don’t explicitly say “e-mail.” (See independent claim 26.) Bright Response argued that users’ search queries are “non-interactive electronic messages.”

The suit was nothing less than a bold attempt to transform a patent Spangenberg picked up for a fraction of $1 million into a fortune of more than $100 million.

And it could only have succeeded in East Texas, where summary judgment is still a rarity. Magistrate Judge Charles Everingham, who oversaw the case, denied summary judgment motions from both sides and pushed the case to a jury trial. (Although Everingham is technically a magistrate judge working for Judge T. John Ward, he has been overseeing full patent trials from Ward’s overstuffed docket since taking office in 2007.)

Spangenberg’s lawyers made their demand, suggesting that Bright Response should be paid a royalty of .25% to .50% on Google’s AdWords—the system that throws ads up on users’ screen each time a search is performed. That damage demand equated to between $64.2 million and $128.4 million, since Google AdWords pulled in $25.78 billion during the period the plaintiffs alleged infringement, from July 2004 to March 2010.

For Yahoo, the suggested damage range was between $13.7 million and $27.4 million.

• BOTH SIDES CHANGE UP THEIR LAWYERS—AND SPANGENBERG’S TEAM MAKES A SURPRISING HIRE

Google originally hired Fenwick & West to defend the case, but dropped that firm in 2009 in favor of Quinn Emanuel. As AmLaw Litigation Daily (subscribers only) has noted, Quinn Emanuel has successfully defended Google in at least four East Texas patent cases now, including its one other patent trial. Yahoo was represented by Howrey LLP throughout the litigation.

On the plaintiffs’ side, the docket indicates that no fewer than 29 lawyers contributed to Bright Response’s case at some point. The two-person company made a particularly intriguing move right before trial, bringing on Irell & Manella, a Los Angeles law firm with major IP firepower that has won big in East Texas in the past.

Lawyers at large law firms like Irell have generally steered clear of helping Spangenberg, who has claimed that the patents he acquired from Firepond cover basic e-commerce functions. That has led to some patent lawsuits that claim property rights over a big swath of the Internet, which would create conflicts for any large firm.

But by the time Irell partner Hueston joined the case, Bright Response v. Google was down to two defendants. And according to Hueston, Irell was brought into the case in a very limited role. In response to an interview request, Hueston told The Prior Art that he was tied up with another case but sent an e-mail emphasizing his narrow role. “Shortly before trial, Irell was invited by lead counsel to handle the damages case,” Hueston said in the e-mail. “We were disappointed that the jury did not have the opportunity to consider damages.”

• CAN’T CALL ‘EM ‘TROLLS’ IN EAST TEXAS—BUT YOU CAN AT LEAST POINT OUT THAT THEY’RE NOT LOCALS