Victory: April 2016: Complete Patent Defense Jury Trial Victory in the Eastern District of Texas

On behalf of defendants Alcatel Lucent, AT&T, Verizon, and Sprint, the firm recently won a complete victory before a jury in a patent infringement lawsuit in the Eastern District of Texas. Although the case included three network carrier customers of the client, Alcatel Lucent, the firm handled all aspects of the presentation during trial. The case involved allegations of infringement against use of Alcatel Lucent’s LTE base stations in each of the networks.

Plaintiff, Adaptix, Inc., is a subsidiary of Acacia Research Corporation and the predecessor of a company called Broadstorm Telecommunications, Inc., which was founded in 2000 by a former professor at the University of Washington. Although Broadstorm had not been successful in the marketplace, the company developed a patent portfolio, which has grown to include over 130 patents worldwide. Acacia acquired Adaptix in 2012 for $160 million, and has since filed approximately sixty lawsuits against numerous LTE base station manufacturers, handset manufacturers, and network providers. Acacia had previously obtained over $100 million in licensing revenue from the Adaptix portfolio.

Adaptix originally asserted five patents in this case, but after development of strong non-infringement and invalidity defenses, Adaptix narrowed down its case to three claims from one patent for trial. Adaptix sought $100 million in damages for the remaining patent, which Adaptix claimed was “front and center” in prior negotiations with its licensees and was the most valuable patent in its portfolio. At trial, the firm presented focused non-infringement theories, as well as strong invalidity theories based on anticipation, obviousness, and lack of written description.

Ultimately, the jury found for the defendants on all claims, finding that the patent was not infringed and was invalid on all of the bases the firm asserted at trial. Shortly after the verdict on a Friday afternoon, Acacia’s stock fell 20%, which was followed by the resignation of Acacia’s CEO the following Monday and withdrawal of Adaptix’s trial counsel in the following weeks.