Wi-Lan loses patent suit in under an hour

Canadian patent licensing firm Wi-Lan has lost a US patent suit against several technology and telecommunication companies, with the jury issuing its verdict in 45 minutes.

The company sued Alcatel-Lucent, Ericsson, HTC and Sony Mobile in 2010, alleging that products implementing several mobile telecoms standards infringed its patents.

Three of the patents (‘326, ‘819 and ‘211) cover the processing of wireless data, while the fourth (‘327) is called “controlling interference in a cell of a wireless telecommunications system”.

In a ruling at the US District Court for the Eastern District of Texas on July 15, the jury found that Alcatel-Lucent and Ericsson did not infringe claims in three of the patents (‘326, ‘327 and ‘819). HTC and Sony were cleared of infringing the fourth (‘211).

Two of the patents (‘326 and ‘211) were invalidated on the grounds of anticipation and obviousness, with a third (‘819) wiped out due to obviousness.

In a statement on its website, Wi-Lan said it was disappointed with the jury’s decision and was reviewing its options with trial counsel Vinson & Elkins LLP.

A spokesman for Ericsson said: “This is a great win for Ericsson and for the industry. We are very pleased that the jury quickly recognised that although Ericsson’s base stations comply with mandatory HSDPA and 3G standards, the patents Wi-Lan was asserting do not apply to these standards, nor do Ericsson’s base stations infringe any of those patents.”

The remaining defendants did not respond to a request for comment.

LG, which was originally a defendant in the case, settled with Wi-Lan in 2010. Often non-practising entities offer companies a licensing deal that is cheaper than the cost of litigation, thereby encouraging them to settle a case privately.

The ruling shows that defendants are increasingly willing to challenge patent infringement cases and “go all the way” to trial, said Christine Lehman, partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

“There has been growing public outcry [about NPEs] ... so a lot of corporations are feeling safer in numbers and feel that they have a better shot of winning them.”

“What has made the difference is that the issue is now so high profile in corporate hierarchies,” she added.

In the past the eastern district of Texas was seen as a plaintiff-friendly court, with studies showing that the success for plaintiffs is much higher than the national average: from 1995 to 2011 it was about 56 percent, compared with the national average of 32 percent.

“But it’s not as attractive to plaintiffs as it once was,” said Lehman.

Jeremy Oczek, partner at Bond, Schoeneck & King PLLC who has tried cases in the court in the past few years, said the tide is turning in favour of defendants, mainly because defendants are more willing to take the case to trial and feel that they “will get a fair shake”.

He added: “The case stands out as I think it is the first patent case Wi-Lan has taken to trial”.

While the ruling only covers four of around 3000 Wi-Lan owned patents, Oczek said, it won’t cast the company in a favourable light when trying to negotiate with potential licensees.

The verdict can be appealed to the US Court of Appeals for the Federal Circuit, and Oczek said he expects an appeal “given the money at stake”.