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June 2016: Complete E.D. Texas Jury Trial Victory for Alcatel-Lucent

June 2016

The firm recently won a complete trial victory for its client Alcatel-Lucent in the Eastern District of Texas. Alcatel-Lucent was sued in 2012 along with three of its largest customers—AT&T, Verizon, and Sprint—for allegedly infringing five patents owned by the patent assertion entity Adaptix, Inc. The asserted patents were purchased for more than $150M as part of a portfolio directed to technologies in the LTE standard. Before this trial, Adaptix had been successful in licensing this portfolio, receiving well over $50M in licensing fees from major technology companies such as Microsoft, Samsung, Nokia, Motorola, Sharp, ZTE, Huawei, and Blackberry. Unlike those companies, Alcatel-Lucent rejected Adaptix’s inflated settlement offers.

During discovery, the firm was able to build strong non-infringement and invalidity cases against each of the asserted patents. Based on this work, Adaptix was eventually forced to drop four of its five asserted patents before trial. This not only narrowed the scope of its damages claims, but also the issues that Alcatel-Lucent could present to the jury. But even for infringement of that single patent, Adaptix asked the jury for more than $100M in past and future damages.

At trial, Alcatel-Lucent presented a compelling case that the inventor did not actually invent the allegedly infringing technology. Alcatel-Lucent had secured key admissions in deposition that the inventor understood his invention as something very different from Alcatel- Lucent’s technology and from the claimed invention in the patent. Alcatel-Lucent also presented evidence that a prior patent disclosed the very same invention that was claimed in the Adaptix patent, and that the invention was a simple combination of known techniques and that would have been obvious to a person having ordinary skill in the art to make such a combination. The jury accepted all three invalidity arguments and found the patent invalid.

Alcatel-Lucent also presented evidence that, even if the patent were valid, the claimed technology was significantly different than the technology in the accused products, and therefore that Alcatel-Lucent could not infringe the asserted patent. Because the technology was extremely complex (defying an in depth discussion here), Alcatel-Lucent simplified its presentations to the most basic disputed elements in the case. The jury also agreed with this argument, finding that Alcatel-Lucent did not infringe any of the asserted claims.

Finally, Alcatel-Lucent showed that Adaptix was overreaching with its damages claim and that based on the settlement agreements with other technology companies, Adaptix was entitled to less than 1/50 of its damages claim, if it was entitled to anything at all. Alcatel-Lucent turned Adaptix’s outrageous damages claims against it, portraying Adaptix as a greedy company that was looking to doubly or triply recover on its initial purchase of the patent portfolio.