What does it take to win a patent trial when a jury is likely to identify with your adversary?
Ask Fred Williams, the co-chair of V&E’s Intellectual Property practice, who recently represented Taiwan-based smartphone manufacturer HTC Corp. in a case against Joe Andrew Salazar. Salazar, an 82-year-old inventor, is a former scientist for the United States government with a long record of public service.
“The average juror tends to identify with the little guy and the American dream of coming up with a great idea and retiring on it,” Williams said.
Nonetheless, after a one-week trial, a jury in Eastern District of Texas found in favor of HTC.
The case involved several HTC smartphones that incorporate user interface and infrared universal remote control technology, allowing the phones to be used as remote controls for devices like TVs, cable boxes, or stereo systems. Salazar claimed that millions of HTC smartphones that had been sold between 2013 and 2015 incorporated wireless remote control technology that infringed United States patent No. 5,802,467, which he held.
The jury decided otherwise, finding that all of Salazar’s 12 asserted patent claims were not infringed by HTC smartphones and therefore he was not entitled to the $30.8 million in damages he was seeking when the case went to trial.
The HTC and V&E team achieved victory by developing a series of compelling non-infringement arguments and hiring an expert witness who was able to break down the complexities of the technology and present a simple story to the jury. In addition, they were able to find inconsistencies in Salazar’s testimony that took some chinks out of his armor.
Sizing Up the Challenges
As patent cases go, the HTC matter was unusual in that the plaintiff was an individual inventor, not a company or a patent troll. This set up a David against Goliath dynamic at trial made more challenging by Salazar’s seemingly Hollywood-scripted life story.
According to his trial testimony, Salazar grew up in a small village in New Mexico and earned a degree in math from New Mexico State University, while working at a United States Army military testing area. He went on to become a civilian employee of the Department of Defense where he was responsible for missile testing and analysis.
After retiring from government service, Salazar became an inventor, using some of the concepts he learned while working on missile testing. He developed what he called a communications command control and sensing system, using infrared technology to combine the functions of a cordless phone and a TV remote control.
In addition, Salazar served as mayor of his hometown, received a medal of commendation from the government, and was appointed to a Presidential commission by President Ronald Reagan.
“We realized he was going to have some equity in his favor at trial that the average patent troll or average patent owner doesn’t have,” Williams said.
Finding Holes in the Opponent’s Story
In spite of Salazar’s impressive record, however, the V&E team was able to highlight inconsistencies in his testimony that bolstered their case.
At issue was whether or not Salazar properly “marked” products that he had sold back in the 1990s. Patentees who sell products incorporating their patent may provide notice to the public by fixing a mark to the product. If they do not do so properly, the patentee cannot recover damages in an infringement action, except under certain circumstances.
Early on in the case, Salazar provided sworn testimony saying these gizmos — a cross between a cordless phone and a remote control — included his patent. In addition, he said the products had been properly marked.
Later in the case, however, after V&E alleged that Salazar failed to fully comply with the marking statute, he reversed course and said the products never practiced the patent.
“The marking issue had a beneficial effect for our case,” Williams said. “It gave us a hook of being able to say, ‘we’re not here to cast aspersions on Mr. Salazar’s great life story and his public service. We’re here to talk about the fact that the patent is of suspect value.’”
Spotting Non-Infringement Arguments and Selling Them to the Jury
The V&E team had just four months to master the issues and prepare for trial. Nonetheless, within this limited timeframe, they were able to flesh out six new non-infringement arguments, right before expert reports were due in the case.
One infringement argument concerned memory space on the HTC smartphones. According to the law, for infringement to have occurred, the HTC phones had to infringe the patent the moment a user took them out of the box.
Williams and his team argued that a user would have to take a number of steps before setting aside the memory space needed to activate the remote control feature of the phone. V&E’s expert brought this concept to life through a series of slides that showed the jury these steps one by one.
“This stuff can be mind-numbing for a jury to grasp,” Williams said. “In my experience, the party that wins the trial is generally the party with the simplest story.”