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Complete Defense Victory in ITC Surveillance Camera Dispute

July 17, 2023
Business Litigation Reports

We recently achieved a complete defense victory for client Verkada Inc. before the U.S. International Trade Commission in a case that threatened to exclude the entirety of Verkada’s core product offerings from importation into the United States. 

Verkada is a unicorn startup founded in Silicon Valley in 2016 to develop comprehensive AI-enabled and computer vision-powered video surveillance and security solutions.  By 2019, Verkada had grown to a $3.2 billion valuation.  Its rapid growth caught the attention of major, well-established players in the industry – specifically, complainants Motorola Solutions, Inc. (MSI) and Avigilon Corporation (a subsidiary of MSI).  Seeking to knock an up-and-coming competitor out of the market, MSI and Avigilon filed a complaint at the ITC asserting three broad patents purportedly directed to fundamental features of video surveillance cameras, including basic aspects of event detection and facial recognition and standard techniques for securely upgrading the software and firmware on the cameras.  The complaint accused virtually all Verkada video surveillance products of infringement and sought a broad exclusion order that would have barred their importation into the United States, substantially eliminating Verkada’s U.S. business operations. 

Quinn Emanuel hit the ground running to build a multi-faceted defense strategy, working with both in-house technical experts at Verkada and some of the leading experts in the field to develop several alternative non-infringing designs for each patent, identify critical gaps in the complainants’ infringement theories, and locate key prior art that bolstered Verkada’s defense.  The firm’s defense strategy forced the complainants to walk a tightrope to even attempt to maintain consistency between their infringement and validity positions across the myriad non-infringing design alternatives and prior art references presented in Verkada’s defense – but ultimately their efforts were in vain.  Following a five-day evidentiary hearing before then-newly appointed Administrative Law Judge, Bryan F. Moore, Quinn Emanuel achieved the first step on the path to a complete victory: the ALJ issued an initial determination finding two of the three asserted patents were not infringed by any Verkada product, and that only a single feature in a deprecated Verkada product design had infringed a handful of the asserted claims of the third patent.  Critically, all of Verkada’s operative designs being imported into the United States and shipped to customers were cleared of MSI and Avigilon’s infringement allegations.

The ALJ’s initial determination then went up to the full Commission for review.  MSI and Avigilon challenged all of the ALJ’s unfavorable findings—including all of his non-infringement findings, as well as his decision to consider and clear Verkada’s alternative non-infringing designs.  In response, Quinn Emanuel marshalled factual and legal support for the ALJ’s non-infringement determinations and asked the Commission to re-evaluate only the ALJ’s narrow finding of infringement directed to Verkada’s old product design as well as the ALJ’s validity finding with respect to the handful of claims found to have been infringed by that old design.  The Commission adopted the firm’s recommendations nearly in their entirety: the Commission declined to review any of the ALJ’s non-infringement determinations—in essence, affirming those findings and definitively clearing all of Verkada’s operative designs—but determined to review and reconsider the infringement and validity findings relating to the limited violation based on Verkada’s old design. 

Several months later, the Commission issued a final determination invalidating the patents claims that had been found infringed, handing the firm’s client Verkada a complete defense victory—a rare outcome for a respondent at the ITC.  Verkada’s complete defense victory was further cemented by MSI and Avigilon’s decision not to appeal any aspect of the Commission’s findings and final determination—another rare outcome in an ITC investigation.  The threat to Verkada’s core business was therefore stopped in its tracks, and Verkada is now free to continue to grow and develop without the looming threat of exclusion of its products from the United States.