Billion-dollar verdicts in patent circumstances are uncommon. Two-billion-dollar verdicts — just like the one secured by a Fortress-backed entity referred to as VLSI towards Intel within the Western District of Texas — are rarer nonetheless. When they occur, nonetheless, they require quick commentary. Even although there may be apparently no document of a $1 billion-plus verdict getting sustained on appeal in toto or in any other case ending up in a settlement for lower than the awarded verdict. Still, as I wrote in a column concerning the $1 billion-plus Caltech v. Apple/Broadcom verdict final February, a billion-dollar verdict in a patent case is a patent occasion that can “really command broad media attention.” Indeed, the VLSI/Intel verdict was shortly reported out by a wide range of media retailers, from the standard IP-focused media to Bloomberg to the Washington Post.
All the eye on the worth of patents — not less than in Texas courtrooms — is often hailed as a welcome change within the pro-patent group from the mainstream media’s allegedly antipatent bias. Indeed, enormous verdicts are maybe the perfect alternative for the pro-patent crowd to have a good time. As I wrote when discussing the Caltech verdict, expansive verdicts “give a boost to the entire patent ecosystem, if only because they remind everyone that certain patents can actually be considered very valuable, at least by a jury.” And there is no such thing as a doubt that the most recent verdict may also give a type of increase to the patent ecosystem, not less than for the following 12 months and a half or so till the appeal is determined (assuming there may be not some form of expedited appeal course of.) At minimal, enthusiasm for attending to trial towards well-heeled defendants can be excessive.
In the brief time period, my sense is that there are not less than three quick takeaways that come up out of the awarding of this megaverdict. First, I feel this verdict will embolden nonpracticing entities that maintain patents from pedigreed sources to take extra circumstances to trial if their settlement calls for should not met. Second, litigation funders curious about investing in patent circumstances will profit from this verdict in a wide range of methods. Third, patentee demand for — and defendant desperation to keep away from — transferring ahead within the Western District of Texas will reach feverish ranges. Let’s take every level in flip.
To begin, this verdict reveals that juries are ready to award expansive verdicts even when the present patent holder is a nonpracticing entity. Moreover, they’re ready to take action even when the protection does an excellent job of portray the asserted patents as “zombie patents” held by a nonpracticing entity, as reporting from the trial by observers confirmed that Intel convincingly argued. In my view, the primary counterbalance to that argument is that the jury will typically persuade themselves that the patents have to be useful if the nonpracticing entity bought them within the first place, particularly if these patents come from a pedigreed supply corresponding to one other massive expertise firm. Add in that the patentee was clearly ready to have interaction in a protracted and costly litigation course of, as well as the large damages demand being made primarily based on the patents — and all of it contributes to an underlying sense by the jury that these have to be unusually useful belongings. Combating that could be a exhausting factor for a defendant to do, as Intel’s game, however unavailing, try demonstrates.
Next, even in the event you don’t take into account Fortress a typical litigation funder, there is no such thing as a doubt that litigation funders profit in numerous methods from these $1-billion-plus headline verdicts. For one, massive verdicts and the potential for a corresponding windfall return assist appeal to investor interest into parking cash with litigation funders. Likewise, demand for litigation funding to take circumstances to trial would even be anticipated to rise, giving funders a broader and deeper pool of funding possibilities to diligence.
Moreover, expansive verdicts like this one encourage events which have circumstances already funded to persevere towards trial relatively than settle. Which signifies that they use extra of the funder’s capital and thereby improve the funder’s potential return. Conversely, defendants in funded circumstances — and it’s now greater than ever super-important for defendants to find out as EARLY AS POSSIBLE in a case whether or not the patentee has entry to the sources to get to trial — come under became greater strain to settle, which is able to enable funders to get a few of their funded circumstances resolved earlier. On all fronts, this verdict must be a boon for funders.
Finally, it’s already well-known that the Western District of Texas is already a hotbed for venue-related litigation, with plaintiffs determined to remain and defendants equally determined to say goodbye for greener pastures. As I couched it a couple of weeks in the past, the Federal Circuit has already referred to as for Judge Albright to make disposition of switch motions a “top priority.” There is little doubt the VLSI/Intel verdict will improve scrutiny on his dealing with of switch motions, as all sides now have headline-grabbing proof of the potential penalties for a patent defendant getting in entrance of a West Texas jury. At the identical time, it is usually clear that these penalties will proceed driving submitting of patent circumstances in that court docket, with much more frenzied makes an attempt by defendants to keep away from having these circumstances keep there. Just one other instance of how the billions increase will play out in patent circumstances going ahead.
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Gaston Kroub lives in Brooklyn and is a founding accomplice of Kroub, Silbersher & Kolmykov PLLC, an mental property litigation boutique, and Markman Advisors LLC, a number one consultancy on patent points for the funding group. Gaston’s apply focuses on mental property litigation and related counseling, with a robust concentrate on patent issues. You can reach him at firstname.lastname@example.org or comply with him on Twitter: @gkroub.