Meta hit with $175m patent infringement verdict
Former special forces communications sergeant developed patented tech | Talks with tech giant over walkie-talkie app broke down | Significant implications for Big Tech.
Meta Platforms was hit with a $175 million damages verdict after a Texas jury found that its Facebook and Instagram platforms had infringed patents developed by a US army veteran.
The decision was handed down on Wednesday, September 21, at the US District Court for the Western District of Texas.
Background
Back in January 2020, the former special forces communications sergeant, Tom Katis, filed a complaint in a federal court in Texas claiming that Meta has used technology patented by his company, Voxer.
Voxer alleged that US patent number 8,180,030; 9,634,969; 10,109,028; 10,142,270; and 10,511,557 had all been infringed by the tech company.
The filing outlined how Katis enlisted in the army following the September 11 attacks in New York and went on to serve in Afghanistan.
According to the lawsuit, he discovered that the systems for coordinating reinforcements, medical evacuations and more “were ill-suited for time-sensitive communications with multiple groups in a highly disruptive environment," after his unit was ambushed. In 2003.
He then began to develop a communications solution in 2006 to remedy these shortcomings.
Katis said that the tech company (then known as Facebook) had approached him about potential partnership after Voxer launched a Walkie Talkie app in 2011, but the companies had failed to reach an agreement.
Voxer holds that this app enables the “transmission of voice and video communications with the immediacy of live communication and the reliability and convenience of messaging” even “under poor and varying network conditions and regardless of recipient availability.”
Failed discussions
The tech firm then proceeded to launch Facebook Live and Instagram Live, incorporating Voxer technology into the features, according to the complaint. A trial in Texas federal court concluded with jurors finding in favour of Katis’ arguments.
Commenting on the verdict, Brian Bianco, partner at Akerman viewed it as potentially having “significant implications” for Big Tech companies and disputes involving smartphone apps.
“The verdict is significant in not only the dollar amount involved, but also the technology. The patents relate to a walkie-talkie smartphone app. This case, and the amount of the verdict, may spur more litigation based upon smartphone app patents,” he said.
Implications for Big Tech
Bianco predicted that given the technology involved, big tech may have to reevaluate how it deals with smartphone apps.
“Companies such as Apple or Google may have to change the manner in which they review apps that are allowed on their phones or as part of their platforms. For Meta, the verdict includes a running royalty, which may cause Meta to change how Facebook Live operates or to discontinue the product.”
Given that the judgment concerns a 'running royalty' and that the patents do not expire until 2028, he added that “the total amount of damages against Meta is likely to increase over time".
Also commenting, Courtland Merill, partner at Saul Ewing Arnstein & Lehr, said that the verdict indicates that the Western District of Texas remains a potentially patent-friendly venue despite cases being reassigned away from Judge Albright.
“Previously, any case filed in Waco was automatically assigned to Albright, who had encouraged patent plaintiffs to flock to his court,” he explained. “Big tech is likely going to want to continue its efforts to get cases filed in the Western District of Texas transferred to perceived friendly venues, for example, the Northern District of California”
In response to the verdict, Meta issued the following statement: “We believe the evidence at trial demonstrated that Meta did not infringe Voxer's patents. We intend to seek further relief, including filing an appeal.”
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