After a one week trial before the Honorable Marilyn Huff in the Southern District of California, the San Diego jury took just over two hours to return its verdict of no infringement on all seven Asserted Claims from four Asserted Patents in favor of Quinn Emanuel’s clients.
In 2015, the firm was retained by Novatel Wireless, Verizon and AT&T, against claims that Novatel’s MiFi wireless hotspots, made by Novatel and distributed by Verizon and AT&T, infringed six patents owned by Carucel Investments, LP. The MiFi wireless hotspot is a small portable device that creates a local WiFi network through which users can connect to the Internet wherever a connection to the cellular network is available. Novatel, who created the mobile wireless hotspot category of products, was initially sued with Verizon and AT&T in the Southern District of Florida by Florida-based Carucel, a patent assertion entity whose only assets were the asserted patents. The patents disclosed a cellular network infrastructure in which cellular base stations were constructed to move along the highway at a speed comparable to the speed of traffic so as to reduce the number of handoffs experienced by cell phone users in fast moving cars.
Carucel’s principal, the son of the deceased inventor, was a patent attorney who, through a series of continuation patents, secured a number of claims that, on their face, appeared broad enough to cover any mobile repeater, including the accused MiFi devices. The scope of this case was significant for Verizon and AT&T because the accused mobile hotspot functionality is now present in most smartphones sold by AT&T and Verizon. Carucel’s damages case was also a significant concern because the Court permitted Carucel to present a damages theory to the jury that relied heavily on revenue earned by Verizon and AT&T from the sales of their wireless data plans.
The firm’s first move was to get the case transferred from Miami to San Diego, where Novatel would have a home court advantage. Next the firm sought a claim construction that would limit even the broadest claims to the disclosed system, convincing Judge Huff that the common specification contained a disclaimer limiting all claims to an apparatus that was “constructed to move with traffic at a rate of speed which is comparable to the speed of traffic.” Carucel nevertheless embraced this construction and convinced Judge Huff that issues of fact related to Novatel’s testing of the MiFi devices in cars precluded summary judgment of non-infringement.
At trial, Carucel knew it had to distance itself from the actual disclosure of its patents, so it presented a story crediting the inventor with a number of more significant innovations such as the soft-handoff functionality that is fundamental to CDMA. Unfortunately for Carucel, credit for most of those innovations, including soft-handoff , belong to local favorite Qualcomm. Carucel nevertheless doubled down against Qualcomm by arguing that Carucel had invented the entire mobile hotspot product while Qualcomm had merely invented the underlying CDMA signal processing technology. The Quinn team implored the jury to resist any comparison of Qualcomm and its legendary founders to patent assertion entity Carucel, its four now-expired patents, and the two law firms responsible for instigating this case. Throughout trial, the Quinn team was able to discredit the Carucel story while tying the asserted claims to the infrastructure system actually disclosed in the patents. In the end the jury was presented with a single non-infringement argument that applied to all seven asserted claims – the claims required a device constructed to move with traffic at a speed comparable to the speed of traffic, and this was not satisfied simply because the MiFi devices could operate in a moving car. The jurors were told that if they found no infringement, they should not find the patents invalid because the disclosed infrastructure system was not in the prior art. But, if they found the claims infringed, they should find them invalid based on a number of prior art references. The jury made the correct call with its unanimous verdict of no infringement.
Carucel sought to overturn that jury verdict in a post-trial motion for a judgment of infringement or, in the alternative, a new trial, arguing that Defendants’ expert had mislead the jury into applying an incorrect claim construction. The Court rejected that motion, finding that “the jury’s non-infringement verdict was supported by substantial evidence.”