Tyler Jury Renders $22 Million Verdict Against Apple on Patent by Nokia Engineer; Apple Trial Outcomes Analysis

Originally published by Michael C. Smith.

Yesterday a Tyler jury in Magistrate Judge K. Nicole Mitchell's court found that Apple willfully infringed a patent by a Nokia engineer on wireless communication technology.  The patent, which was acquired and asserted in the case by plaintiff Cellular Communication Technology, a subsidiary of Acacia Research, dealt with managing the resources used to send data over a communications network, and the accused devices were Apple's iPads and iPhones.

The jury found all five asserted claims infringed, that none of the five had been shown to be obvious, and rejected a claim of improper inventorship.  The jury further found that the infringement was willful and awarded $22.11 million in damages.

The suit had previous included claims against the mobile carriers that sell Apple's devices (AT&T, Verizon, Sprint, Boost and T-Mobile) but Judge Mitchell severed and stayed the claims against the resellers, noting that the plaintiff couldn't get damages from both Apple and the resellers anyway.

"What about post-grant proceedings?" I hear you asking.  Yes, Apple filed a petition for IPR under the AIA, and the PTAB declined to institute review, finding that Apple hadn't established a reasonable likelihood of prevailing.  The PTAB had also denied IPR reviews by HTC, Dell, Amazon and other companies on the patent.

Apple at Trial in the Eastern District

For a little context on Apple's recent trials in the district, my notes show that a prior verdict against Apple in Tyler this year (VirnetX II and damages trial on VirnetX I) was set aside by Judge Schroeder, and the retrial in that case starts later this month.  Going back a little further, last year Apple tried three patent cases in the EDTX, all before Judge Gilstrap.  It won two and lost the third, but Judge Gilstrap later set aside that verdict.  Incidentally, the CCC case was originally assigned to Judge Gilstrap, but the parties agreed to trial before Magistrate Judge Mitchell, so Apple's immaculate record at trial with Judge Gilstrap continues.

To find a patent verdict against Apple that wasn't later set aside by the EDTX trial judge you have to go back to Mirror Worlds, which … no, wait, Judge Davis set that one aside as well.  Hmm.  Okay, here we go – there is one for $9 million in 2011, and another for $19 million in 2009.  To my knowledge neither resulted in a change on appeal (appeals may have been filed, but didn't result in a decision as best I can tell).   There was also the original VirnetX verdict in 2012, which the Federal Circuit affirmed on liability and reversed on damages, and that is the Sisyphean ball that is going up and down the stairs on the old side of the Tyler courthouse again this year.  

Running the numbers on those results, and assuming CCC doesn't change at trial or on appeal, it looks like Apple has won two at trial, lost three (totalling $42 million), and gotten three (for $208 million, $532 million and $624 million respectively) set aside by EDTX judges at the JMOL stage, and a fourth for $368 million set aside at the Federal Circuit (subject to the aforementioned retrial on damages).  That's a 62% win rate at the district court, rising to 66% counting the appeal.

But I really don't think that takes fully into account Apple's success in getting $1.36 billion in verdicts set aside at the JMOL stage.  To better evaluate this, perhaps a useful way to look at that is this.  Apple has been successful in setting aside 98.5% of the damages assessed against it by Eastern District of Texas juries at the district court level.  Including the appellate success, its set-aside rate rises to 98.8%.  Even assuming Judge Mitchell denies any JMOLs in the CCC case (Apple has only lost three of eight JMOL rulings, but let's assume they lose this one), the success rate would only drop to 97%. 

(A note on Mirror Worlds: For calculation purposes, I am – as always – using the number $208 million for the jury's verdict because it gave the same damages number for each of the patents.  However, since the accused products were the same, the damages were duplicative and had Judge Davis not set aside the entire verdict on other grounds, the judgment would have been for $208 million plus interest, costs, etc. It would not have been $624 million, as it is often reported in the media.  The jury was asked separate damages questions on each patent to avoid the need for a retrial if the judge set aside some, but not all, of the three asserted patents, since there would be damages awards based on each patent on which a judgment could be based. Since he set aside all three, the issue became moot, but it was an example of verdict form craftsmanship since it would have avoided an unnecessary retrial on damages if only one or two of the three patents had been set aside.)

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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