A federal court jury in Dallas on Tuesday evening began deliberating in a patent-infringement suit brought by a Dallas technology company seeking $632.6 million from X, formerly known as Twitter.
The suit by VidStream Inc. alleges that Twitter infringed two patents the company holds for a technology that quickly standardizes user-generated videos, which come in myriad formats, and converts or “transcodes” them to make them uniformly usable over a variety of networks, including social media platforms, smartphone apps and traditional television.
Twitter, the suit alleges, used VidStream’s patented technology to develop a product for distribution of videos on its site, through two video apps it owns, Vine and Periscope, and on other platforms, including traditional television.
“It was the policy at Twitter not to take into account or respect another company’s patents,” VidStream’s lead attorney, Bradley Caldwell of Caldwell, Cassady Curry in Dallas, told the eight-member jury in closing arguments Tuesday.
Sonal N. Mehta of WilmerHale, representing Twitter, countered that her client “did not infringe any claim in this case.” Twitter’s engineers, she said, independently developed a comparable way to facilitate “from-anywhere-to-anywhere technology,” but one that did not rely on VidStream’s patents.
Furthermore, she told the jury, VidStream’s patents are invalid because the company’s invention replicates “prior art,” publicly known information about an invention that predates the filing date of a patent application, in ways that are not “novel and non-obvious,” key requirements for patentability.
In addition to Caldwell, court records list VidStream’s lawyers as, among others, Austin Curry, Brian Johnston, Daniel R. Pearson, Hamad Hamad, Jason D. Cassady, John Summers, Seth Reich and Warren McCarty, all principals with Caldwell Cassady Curry.
In addition to Mehta, who is from WilmerHale’s Palo Alto, California, office, court records list Twitter’s lawyers as, among others, David L. McCombs, a partner in the Dallas and Washington offices of Haynes Boone, and Charles M. Jones II, a partner in the firm’s Dallas office, as well as WilmerHale lawyers from San Francisco, Washington, D.C., Denver, Boston, and New York.
Trial of the suit, originally filed in 2016, began April 7 in Dallas before Chief Judge David C. Godbey of the Northern District of Texas.
At trial and in court filings, both sides and Judge Godbey referred to X by its former, well-known name.
VidStream is the successor-in-interest to Youtoo Technologies, which secured the two patents in question on Jan. 25, 2015.
Youtoo, the original plaintiff in the lawsuit, filed for Chapter 7 bankruptcy on Nov. 30, 2017. In the liquidation of its assets, VidStream acquired the patents.
The technology at issue involves a server system that sends users’ devices instructions that impose on videos “predetermined constraints” — governing, for example, a video’s frame rate, length, and resolution — that meet the often-restrictive requirements of platforms that distribute user-generated videos. This in turn simplifies the transcoding of those videos into the different formats used by distributing platforms.
Mehta, the Twitter lawyer, said the chief purpose of Youtoo’s invention was to ready user-generated videos for broadcast on television, a medium in which Twitter has no interest. “Twitter wants eyeballs on Twitter, not on television,” she told the jury.
Caldwell, VidStream’s attorney, said, “Youtoo was not a TV company,” and its anywhere-to-anywhere technology was designed to work just as well on other platforms, including smartphone apps and social media sites such as Twitter.
At one time, both lawyers said, the companies were in talks to form a partnership, but the deal never came to fruition.
Instead, Caldwell said, Twitter just stole Youtoo’s patented invention.
“Twitter wanted to put Youtoo in its place,” he said.
Mehta said that was nonsense. Twitter, she said, backed out of a partnership because its executives determined that Youtoo was not a good fit for the social media giant. “Youtoo was all about TV,” she said.
Besides, she added, “Twitter already had the technology” needed to distribute videos through its apps.
The case is VidStream LLC v. Twitter Inc, Case No. 3:16-cv-00764.