A Dallas company’s patent-infringement suit against Twitter, on hold since 2016, got a reboot last month when U.S. District Judge David C. Godbey reversed himself and said the case should proceed.
The judge ordered lawyers for the two sides to confer and report back on the status of the case. Barring a settlement, the dispute appears headed toward a jury trial in his court.
An attorney for the plaintiff, a company called VidStream, said he believes Twitter owes his client at least $600 million in unpaid licensing royalties.
Lawyers for Twitter did not respond to a request for comment. In court filings, they said Twitter couldn’t have infringed on the two patents in question because they’re not valid: they do not describe a truly novel idea for an invention, Twitter’s lawyers argued, but merely an “abstract idea” about a way to do something – namely, gather, process and distribute videos – that’s already done using existing “generic computer components.”
Originally, Godbey dismissed the suit against Twitter, agreeing with the defendant that “the patents were addressed to unpatentable subject matter.”
But in 2019, in a separate administrative proceeding brought by Twitter before the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board, a three-judge panel declined to invalidate the VidStream patents. After that decision was upheld by the U.S. Court of Appeals for the Federal Circuit, VidStream amended its infringement lawsuit and Godbey reversed himself, ruling on April 1 that the suit should proceed.
The VidStream patents involve a digital system that allows users to quickly create and upload videos that are automatically formatted for viewing on various platforms – television, websites, and mobile applications. The system was invented by Youtoo Technologies, an Irving company that in 2011 launched Youtoo TV, a “social television” site audiences could access both online and on TV.
Youtoo went bankrupt in 2017, and VidStream purchased the patents at an asset sale the next year.
The year before it went under, Youtoo initiated the suit against Twitter that would come up before Godbey, claiming the technology that drives the social-media giant’s video-sharing system was copied from Youtoo’s. When VidStream bought Youtoo’s patents, it became the suit’s new plaintiff.
VidStream is represented by Caldwell Cassady Curry of Dallas, a litigation boutique specializing in patent-infringement cases. Since its launch nine years ago by founding partners Bradley W. Caldwell, Jason D. Cassady and J. Austin Curry, who worked together at McKool Smith, the firm has piled up $2 billion in verdicts and settlements for its clients, suing, among others, Google, Apple Inc. (repeatedly), Microsoft Corp., Intel Corp., Samsung Electronics Co., Oracle Corp., AT&T Inc. and Nintendo of America Inc.
“The amount Twitter owes purely from unpaid royalties is beyond $600 million at this point,” Curry said.
In addition to Curry, Cassady and Caldwell, the VidStream team includes Brian D. Johnston, Daniel R. Pearson, Seth Reich and Warren J. McCarty from Caldwell Cassady Curry and Brent Bumgardner and Chris Granaghan from Nelson Bumgardner Conroy of Fort Worth.
Twitter is represented by David L. McCombs, a partner in the Dallas and Washington, D.C., offices of Haynes and Boone, and Charles M. Jones II, a partner in the firm’s Dallas office, as well as lawyers from Durie Tangri of San Francisco and from WilmerHale in Palo Alto, Calif.