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December 2020: Complete Defense Jury Trial Victory of No Infringement Across Four Patents in a $183 Million Patent Case in Marshall, Texas

December 2020

On November 6, 2020, Quinn Emanuel won a complete defense verdict in Marshall, Texas, for its client Google in the PMC v. Google case.  PMC went to trial against Google on four patents asserted against YouTube and Google’s Content Delivery Network.  PMC chose patents to read on four broad technological areas (delivery and display of multimedia presentations, signals for controlling transmissions through a content delivery network, Digital Rights Management software, and Media Source Extensions software).  PMC sought a running royalty that worked out to a claim of $185 million up to trial, and an uncertain amount into the future. 

The jury got the case at around 6:00 pm on November 6.  They deliberated for less than an hour before Quinn Emanuel got the note that there was a verdict.  The jury came back with a complete defense verdict—no infringement of any of the asserted patents.  (This stands in contrast to the previous trial Judge Gilstrap conducted last month—where Apple lost a $500 million verdict in the same courtroom.)  

PMC is an infamous “licensing company.”  It filed over 300 applications just before the GAAT cutoff in 1995.  The law currently gives a patent holder a monopoly for 20 years from filing the patent.  Before 1995, however, there was no 20-year limit—just 17 years after issuance.  Thus, by filing over 300 continuation patent applications, PMC was able to continue the practice that was directly contrary to the GAAT reform law.  PMC worked its 300 applications through the system and still has approximately 100 issued patents that claim 1981 or 1987 as the “invention” date but that have terms continuing well into the 2020s!  PMC’s litigation efforts over the years have resulted in licenses with the TV, cable, and satellite broadcast industries.  This case was important not just to Google, but to an entire market segment, because PMC was now trying to stretch its inventions to cover the internet streaming and content delivery marketplace (Netflix, Prime, Disney+, Hulu, YouTube, Apple+, etc.) for yet another cycle of litigation/licensing.

Quinn Emanuel elected to go to trial on just the issues of non-infringement and a license defense.  Quinn Emanuel’s trial theme was that the inventions from the 1980s were for old, obsolete technology that is not used anymore.  Quinn Emanuel showed the jury that, back in this 1980 time period, consumers used old fashioned TVs with “rabbit ear” antennas.  The most advanced personal computer in 1981 was the IBM PC machine, which had 5.25-inch floppy disks and a green, cathode-ray screen.  Quinn Emanuel then contrasted that with the technology that was accused from the 2010s—smartphones, laptops, the internet, etc.  Quinn Emanuel showed that the detailed specifications of the 1980s inventions did not mention the internet, streaming, HTML, the internet’s TCP/IP protocol, DRM [Digital Rights Management], or any of the modern technology that PMC was now accusing of infringement.  

Quinn Emanuel then wove these themes into a technical non-infringement case.  For instance, three of the four asserted patents required “television programming” as part of the claims.  Quinn Emanuel argued that the broadcast TV that existed at the time was passive.  Users could not chose what they wanted to watch.  A user would have to schedule their time to be available when shows were broadcast, or else they would miss the show.  Quinn Emanuel showed that the internet, in contrast, was a user initiated experience (i.e., TV is push, the internet is pull).  In modern technology, the user is in control.  The user can choose what content to watch, when to watch it, and they can pause, fast forward, and save for later.  They can use “search” on YouTube to explore YouTube’s vast library of video content, and then peruse a results page to select exactly what content they want to watch.  In doing so, the user of YouTube has a bevy of information provided by YouTube to help the user make a choice—for example, the length of the video, how long ago it was posted, the running time, the number of thumbs-up and thumbs-down, a moving pre-view thumbnail so a user can watch an excerpt in deciding, etc.  

Another example of such a technical argument for one of the patents—the ‘344 patent—was that the claims required two types of operating instructions, one of which was “permanently stored in the receiver station” (i.e., the phone/laptop).  Quinn Emanuel showed that this claim limitation made sense in 1981 because computers of that day always had a Read Only Memory (ROM) that was physically hard-coded so as to be permanent and read only.  Quinn Emanuel showed that, in contrast, modern computers no longer have ROM.  The “BIOS” boot program in modern computers is stored in “flash memory.”  It is designed to be updated periodically.  On update, some of the code is deleted, some code is added, and some code is changed.  Plaintiff failed to point to any operating system code on modern phones/computers that is permanent.  Accordingly, the old invention set forth in the ’344 patent was not practiced by any modern computers, much less Google’s.

This strategy worked.  The jury deliberated for less than an hour before finding non-infringement on all four patents.  This may be a record for the shortest deliberation time for a defense verdict in Marshall.