P—d Off
October 12, 2003
Natural Biologics LLC really knows how to p–s off a federal judge (bad pun intended). Earlier this month, the judge seriously hammered Natural Biologics for misappropriating trade secrets relating to the processing of horse urine. She hit Natural Biologics even harder than usual, essentially putting them out of the business – and for somewhat unusual reasons.
Will Your PPT Slides’ Footer Help Lose a Lawsuit Too?
October 1, 2003
Last week a court poured out * Storage Technology’s corporate-raiding lawsuit against Cisco. One of the nails in the coffin was the way that Storage Tech had protected — or more accurately, failed to protect — the alleged trade secrets that Cisco had supposedly misappropriated. While that alone didn’t lose the case for Storage Tech, it didn’t help, and it likely has triggered some internal recriminations at Storage Tech.
* When a lawsuit is “poured out,” it generally means the lawsuit was dismissed, in this case, by the granting of summary judgment.
Here’s the story:
Taco Bell Learns $42MM Lesson That Idea Sources Can Haunt You
September 15, 2003
The New York Lawyer reports that Taco Bell was hit with a $41.9 million jury verdict for allegedly stealing the idea for the talking-Chihuahua advertising campaign. Thanks to Martin Schwimmer’s Trademark Blog for the pointer to this story.
The Taco Bell case illustrates a harsh fact of life for established companies: If you enter into discussions to use a smaller company’s ideas or concepts, you’d better be really, really careful if you subsequently decide to go it alone — you may find it very difficult to convince a jury that you (re-)developed the ideas or concepts on your own.
For another example of how juries can react in situations like this, see Celeritas Technologies vs. Rockwell International. In that case, Rockwell had engaged in preliminary discussions with Celeritas about some ideas for improving wireless modems that Celeritas’s technology guy had developed. Rockwell decided to go it alone, and Celeritas sued. At trial, the jury simply did not believe that Rockwell had independently created the technology after its discussions with Celeritas. Nor did the jury believe that Celeritas’s technology could not be a trade secret because it was already in the public domain (although the appeals court later held that Celeritas’s patent was invalid because of a prior published article that described similar technology). In all, Rockwell was hit with a damages verdict totalling over $58 million. (Disclosure: I was one of the members of Rockwell’s trial team.)
Deliberate Copying of Patented Technology
Leads to Doubling of Damage Award
August 18, 2003
Last Friday, chipmaker Microtune announced that “On August 12, 2003, a federal judge awarded Microtune double its compensatory damages and all of its attorney’s fees against Broadcom Corporation in Microtune’s patent infringement lawsuit against Broadcom. Microtune estimates that the total judgment against Broadcom will be between $7 and $10 million.” See also CNET news story.
Quotable quote from Microtune press release:
In issuing the order, the Court cited “the existence of a substantial amount of circumstantial evidence that Broadcom deliberately copied Microtune’s technology” in Broadcom’s BCM3415 tuner chipset. Because of the “jury’s unanimous finding by clear and convincing evidence that Broadcom’s infringement of the ‘035 patent was willful,” the Court also took the exceptional step of awarding attorney’s fees to the Company.
A doubling or even trebling of the damage award is not particularly unusual for patent-infringement cases if the judge and jury are persuaded that the defendant intentionally copied the patented technology.
In fact, a defendant can be found to be a “willful” infringer, and subject to an increased damage award, even if all it did was to go about its business after learning of the potential relevance of the patent. The way the courts have interpreted the law, once a company learns about a patent that might affect its business, it has an affirmative duty to use due care — which usually means getting advice from a patent attorney — to make sure it is not infringing. (I’ll save my editorial comment on that interpretation of the law for another day.)