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East Texas Jury Finds Google Infringed, $125 MM at Stake


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: January 23, 2014 @ 3:19 pm
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SimpleAir, an inventor-owned technology licensing company, holds eight issued U.S. Patents and several pending patent applications in the areas of wireless content delivery, mobile applications, and push notifications. SimpleAir has licensed its inventions to many leading technology companies, including Apple. See also Apple, others settle with patent troll SimpleAirGoogle decided not take a license and/or otherwise settle a patent infringement litigation brought by SimpleAir and now has been found to infringed one of SimpleAir’s patents.

A federal jury in the Eastern District of Texas returned a verdict on Saturday, January 18, 2014, following a week-long trial presided over by the Judge Rodney Gilstrap, finding that Google infringed SimpleAir’s U.S. Patent No. 7,035,914.  The ’914 patent covers a system and method for connecting on-line networks with on-line and off-line computers. The system provides for broadcast of up to the minute notification, which thereby provides an instant call to action for users who are provided with the ability to instantaneously retrieve further detailed information. The notification is wirelessly broadcast to wireless receiving devices attached to computing devices. The services accused of infringing the ’914 patent were the Google Cloud Messaging (GCM) and Android Cloud to Device Messaging (C2DM) services. Those services are used by Google to process and send instant notifications for Android applications, such as Facebook, Twitter, and Gmail.

The jury was unable to reach a unanimous decision on the amount of damages to award for Google’s infringement. The damages issue will be decided by a separate jury in a second trial limited to the issue of damages.  SimpleAir has announced that they will seek damages in excess of $125 million for Google’s infringement in the damages retrial.

“We are grateful for the jury’s hard work in this case and pleased with their verdict,” said John Payne, who is the lead inventor and majority owner of SimpleAir. “There was a lot of information presented to the jury and they did an exceptional job figuring out what mattered and what didn’t. We look forward to addressing the issue of damages in the second trial and hope the jury in that trial will be as dedicated as this one was.”

SimpleAir had alleged that Google’s push notification services for the Android smartphones and tablets infringed five claims of the ‘914 patent. The jury agreed unanimously on all counts of infringement and also found unanimously confirmed that each claim was valid, or more accurately that Google did not prove invalidity by clear and convincing evidence as is required to invalidate a patent claim, which is presumed valid. The jury verdict confirming validity of the patent claims is in line with the February 2013 determination of validity during a Reexamination proceeding at the United States Patent and Trademark Office, which resulted in no amendments to the claims. Of course, the fact that the USPTO finds a claim to be valid after one or more redundant reexaminations has not stopped the Federal Circuit from invalidating the claims as they start from scratch as they engage in a de novo review, essentially ignoring all the work, analysis and factual determinations reached by previous decision makers.

For example, recently in Soverain Software v. Newegg, the Federal Circuit found a claim that had been previously upheld in two reexaminations and separate patent litigation to be invalid. The case was quite remarkable because in the initial decision by the Federal Circuit claim 34 of U.S. Patent No. 5,715,314 was invalid. The problem with this determination was that the plaintiff never asserted claim 34 at trial. Newegg had been found to infringe claim 35, which was not addressed by the original Federal Circuit decision because Newegg apparently never appealed the claim on which they lost, instead appealing a decision never made on a claim never asserted. This promoted Soverain to seek clarification and upon clarification the Federal Circuit determined that claim 35, which was not appealed, was invalid because it depended from a claim that was invalidated (i.e., claim 34). This bizarre ruling essentially meant Soverain Software was deprived of due process and the burden was impermissibly shifted to them to prove that claim 35 was valid.

The moral of the story here is that no patent owner is safe until the Federal Circuit has spoken, and the Federal Circuit seems to increasingly be interested in playing the part of primary decision maker with no deference provided. The Federal Circuit also at times seems to engage in procedural machinations aimed at insuring that a patent owner loses, which is a disturbing but discernible trend. So while it no doubt feels good for SimpleAir to have prevailed at trial, recent history demonstrates that the battle is far from over and the outcome anything but certain. Of course, all things being considered, prevailing at trial is still far better than losing.

On another note, many are calling SimpleAir a patent troll. In the CNET article (linked above) SimpleAir is labeled a patent troll right in the title. The article goes on to explain:

Formally, SimpleAir is called a nonpracticing entity, or NPE, which means a company that licenses patents but doesn’t actually have any other business. Informally, such companies are known as patent trolls.

But is SimpleAir a patent troll? Obviously this CNET definition of a patent troll is woefully inadequate, if not just blatantly incorrect. Based on this definition CNET must believe that Thomas Edison was a patent troll because all he did was invent and license without any other business aside from inventing and licensing. Of course, that is ridiculous. It would similarly be ridiculous to conclude that Research & Development companies are patent trolls because all they do is invent and license. Indeed, those who claim that inventing and licensing is a sign of a patent troll show just how little they know about innovation. Innovation is almost exclusively the province of smaller, more nibble companies. These companies focus on innovation because that is their business. By design it is their business to innovate, protect and license. If this makes one a patent troll then a very large percentage of the world’s leading and most successful innovators are all trolls, including a large percentage of biotechnology companies that continue to search for cures and treatments to diseases such as cancer, for example.

The term patent troll is thrown around with reckless abandon by the media and those who infringe patents. The term patent troll has devolved into meaning nothing more than this: “someone who sues me or someone I support.” It is more convenient to simply ignore the important nuances involved and paint everyone who licenses as a bad actor. Painting with such a broad brush is simply irresponsible.

There are bad actors involved in patent litigation. They abuse the process and prey on individuals by exploiting judicial inefficiencies. Those who abuse patent litigation and the federal court process to extract what the Federal Circuit calls “extortion-like” payments are the real patent trolls. Innovators are not patent trolls. Frankly, it is sickening and saddening that it even needs to be pointed out that innovators are not and cannot be patent trolls. For more on this see Who is a Patent Troll?

It is time for everyone to wake up! We say we celebrate innovation, we want new technologies, we know that entrepreneurs who innovate create jobs, which we claim to want. But despite knowing all the public at large, lead by large corporate interests and media that really doesn’t understand the issues, vilify innovators. To call this hypocritical doesn’t being to scratch the surface.

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Posted in: Companies We Follow, Gene Quinn, Google, IP News, IPWatchdog.com Articles, Patent Litigation, Patent Trolls, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

6 comments
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  1. Great article, Gene. Is filing suit in east Texas a strategy typical of NPEs, or do practicing companies do this too?

  2. Dan-

    Yes. For many years there has been a perception that the Eastern District of Texas is a favorable venue for patent owners. I’m not sure that is still the case the way it once was, or that it was ever as favorable as the reputation. Over time with more and more cases filed in the Eastern District of Texas the docket has slowed substantially. But the judges are not afraid to treat patent owners of all varieties equally, so it probably is a good place if you are an NPE.

    -Gene

  3. As a follow up, it appears that the jury returned from deliberations with a damages award of $1, as reported in the EDTexWeblog.

    http://mcsmith.blogs.com/eastern_district_of_texas/2014/01/what-is-it-with-google-and-nominal-damages.html

  4. Mark-

    Curious. I’m not sure exactly what that post means. It says that they returned the verdict requested of $1, but I thought SimpleAir was asking for $125 million.

    Either way this is heading to the Federal Circuit, but a verdict of $1 doesn’t seem to make any sense on any level.

    -Gene

  5. Gene,

    I’m not sure myself. Maybe Google requested a damages award of $1.

    In any event, I agree. This is headed to appeal regardless.

    There will likely be some interesting post-trial briefing to look for as well.

    Some interesting question should come up: Does SimpleAir ask for a permanent injunction? (MercExchange) What about post-judgment royalties? (or is the patent already expired?).

    Just a strange result if true.

    -mark

  6. Mark-

    It is a strange result. If there is infringement I can’t see how $1 is appropriate. Apparently there are other licenses that were entered into to settle patent litigation. I’m not sure under the circumstances how $1 could be considered a reasonable royalty.

    -Gene