If you’re an intellectual property lawyer, you might still be thinking of the VLSI v. Intel and the whopping $2.175 billion judgment that the jury rendered for VLSI. Beyond the fact that Waco jurors can get down with giving plaintiffs big bucks, what else did we learn?
The trial was closely-watched by many in part because U.S. District Judge Alan Albright made it easy for the public to do so; the court provided a Zoom dial-in number that allowed people to listen in on the trial.
Since it was only Judge Albright’s second patent infringement jury trial, lawyers in the world of patent litigation were also interested in collecting data points such as how the judge runs his courtroom.
“We learned that to the extent there was doubt about whether juries in Waco could issue a large damages award, that doubt it gone now,” Winston & Strawn partner Mike Tomasulo told The Texas Lawbook. “And because it’s gone, it’s likely plaintiffs’ lawyers will look to bring not only small cases there, but larger ones too.”
The Texas Lawbook asked a group of lawyers from Winston & Strawn, Locke Lord and Sorey, Gilliland & Hull who either attended the trial in person or tuned in by phone, what stood out to them about the six-day trial.
They emailed us their biggest takeaways from the trial. (Editor’s Note: responses may have been edited for brevity and to comply with Texas Lawbook stylistic guidelines).
Texas Lawbook: What is the most important thing you learned from following the trial?
Charles Baker of Locke Lord: Put on a simple case, and make sure your experts are likable and believable.
Derek Gilliland of Sorey, Gilliland & Hull: Jurors are often not seeing things the same way the lawyers are. There were several seemingly persuasive arguments that Intel made, which appear to have had little or no effect on the jury verdict.
Texas Lawbook: Now that we have another jury trial in the books, what do you consider to be the takeaways about the Waco jury pool? What have we learned?
Mike Tomasulo of Winston & Strawn: The Waco jury pool in federal court draws from 19 Texas counties. Three of the jurors were from one county, 20 miles away from the courthouse.
We learned that to the extent there was doubt about whether juries in Waco could issue a large damages award, that doubt is gone now. And because it’s gone, it’s likely plaintiffs’ lawyers will look to bring not only small cases there, but larger ones too. With regard to this jury specifically, it was clear the jurors liked each other. They were interacting in a friendly manner as they were coming and going. They seemed to pay a lot of attention to the testimony, which is not always a given. One juror looked as if he were watching a tennis match. He’d watch the lawyer for the question, then the witness for the answer and just keep going back and forth. It is worth noting that, as to the ‘759 patent, the jurors did not find literal infringement but did find infringement under the doctrine of equivalents. It’s interesting they made that distinction.
Charles Baker: Waco jurors are not afraid to award large damages, but with the first trial ended in a defense verdict it’s too early to tell if they are more like EDTX pool.
Derek Gilliland: The main takeaway to me is that Waco juries are extremely diverse. So general assumptions such as “they are too conservative to award big damages,” are just not true. Waco is a place that can return very large verdicts if the case justifies it.
Texas Lawbook: What are your takeaways about how Judge Albright handled the trial? And how does Judge Albright differ from other federal judges in how he handles big patent trials?
Mike Tomasulo: I would say Judge Albright continued the trends we saw in the Roku trial last year, which I also sat in on. I think what you saw was a level of consistency from the first trial to the second trial. For instance, he continued to be very strict with witnesses in terms of having them answer “yes” or “no” only, on cross. He continued to want witnesses to finish in one day, rather than have them come back in on a second day. And he continued to express enthusiasm for his job and respect for the lawyers appearing before him.
Kathi Vidal of Winston & Strawn: Judge Albright is more hands-on than many other judges. Two practices stand out to me. First, he doesn’t allow witnesses to “carry over” to the next day. I’m a big fan of this practice as the jury is not left considering and weighing partial testimony overnight, but instead has the complete picture. And, though I’ve benefited from carry-over testimony in other trials (as it gave me the evening to reshape cross), it is more equitable not to leave open that opportunity for either side. Second, Judge Albright instructs that witnesses are to answer questions directly on cross and that any explanations or caveats can be brought out in redirect. Though I can envision instances where a yes or no answer could lead the jury to misunderstand the full facts until redirect, one misleads the jury at their own peril.
Charles Baker: I like the way he handled the trial. He did not talk down to the lawyers and he gave both sides a fair amount of latitude in trying their respective cases. He moved the case along at a nice pace. Some judges would not have allowed Intel to put on that many witnesses (namely Intel employees).
Derek Gilliland: He was considerate of the lawyers and the jurors throughout the trial when it came to starting each morning and stopping testimony each afternoon. That is a common trait of Judge Albright. He also allowed the lawyers to give closing arguments late in the day and let the jury recess overnight with deliberations beginning the next morning. That was somewhat unusual in my experience — not having the jury begin deliberating immediately after closing.
Texas Lawbook: Did either side have a Texas-based lawyer in the courtroom who was playing an active role? If so, how do you think that impacted the case? If not, do you think it would have made a difference if either side had a Texas-based attorney playing a large role who had significant experience in being in front of Texas jury pools?
Derek Gilliland: Both sides had qualified local Texas lawyers. I don’t think it had much if any effect on the verdict. I think if you have qualified, professional attorneys on both sides, a local Texas-based lawyer will not matter. However, I think if one side has lawyers who are obviously from out of state and may have a natural inclination to be pushy or abrasive, having someone who understands Texas etiquette — for example, being polite even when disagreeing — can make a very big difference. In this case both sides had Texas-based lawyers and all were polite and respectful. So, I don’t think it had any effect.
Texas Lawbook: What are your thoughts on the amount of damages that were awarded and the damages model VLSI presented at trial?
Mike Tomasulo: It’s an eye-popping number. For starters, it will be very difficult to protect a number such as that through post-trial motions and appeal, especially given the fact the plaintiff’s damages model is novel and untested. Operating companies are likely to be very disturbed by the size of damages award and also by the fact it was for two untested patents and based on this novel damages model.
Charles Baker: I do not know if they will pass muster at the U.S. Court of Appeals for the Federal Circuit, because the regression analysis that VLSI’s expert used was unusual. I can see a new trial just on damages.
Derek Gilliland: One of the points Intel made was that Plaintiffs’ damage model was a creature of litigation and had never been used in “real world” licensing negotiation. While much of the testimony regarding damages was presented under seal, it appears to have been a somewhat creative approach using hedonic regressions to reach a more scientific number. I am certain that given the amount of the verdict, the damage model will be scrutinized closely on appeal.
Texas Lawbook: Credibility was a large theme during closing arguments. What did you think about the credibility of VLSI’s witnesses versus Intel’s? Who did you think was the most important witness?
Derek Gilliland: My general impression was that it was a close call between whose witnesses were more credible. During closing arguments, VLSI’s counsel did a good job of pointing out inconsistencies in Intel’s witness testimony. Based on the verdict, perhaps the jury agreed. I personally thought the inventor’s testimony was very persuasive in establishing the importance of the patents.
Texas Lawbook: For those of you who attended in-person, what are your observations about how smoothly the trial ran day-to-day? Were there any surprises? What did you notice about the jury?
Mike Tomasulo: I thought it ran smoothly. It proceeded like a normal trial, but with certain limitations caused by the Covid-19 measures. Obviously, there were physical restrictions, but I didn’t see that they had an impact on the lawyers or the process. The verdict itself is more than surprising. Like I said, it is an eye-popping number, especially for two apparently untested and forgotten patents. I was also surprised at how many analogies the parties used, and how they were in many instances used against the party or witness that sponsored the analogy. This was especially true for VLSI’s Tom Brady analogy and Intel’s “request the check” analogy.
I was also pleasantly surprised at how uncrowded the courtroom was. The court had restricted the number of people each party could have on site and it made the closed-circuit video feed available for parties and attorneys, as well as audio of the proceedings, by phone line. It reduced the need of many people to be there in person.
Derek Gilliland: I was in the courtroom for opening statements and first witness testimony. I thought everything ran very smoothly, though counsel on both sides had some technical issues displaying exhibits electronically. At different times, for example, each side believed an exhibit was displayed on the jury’s screen when, in fact, it could only be seen on the Court’s, counsel’s, and the witness’s screens. That seemed to be more an issue of counsel getting familiar with the system. I noticed that the jury — 4 men and 3 women — seemed to be paying a lot of attention, even when the discussion involved very detailed patent law and technical issues.
Texas Lawbook: Intel has already voiced its intent to appeal the verdict. What kind of issues do you think. might be raised on appeal?
Derek Gilliland: I have no doubt the damage amount and plaintiffs’ damage model will be raised on appeal. I would also expect there to be claim construction issues on appeal as those are common appellate fodder in patent cases.
Texas Lawbook: Do you have any observations about how Judge Albright has made the transition from trial lawyer to federal district judge? If you knew him before he donned robes, what characteristics or techniques from his days as a trial lawyer do you notice appearing in his courtroom style on the bench?
Charles Baker: I knew him when he was in private practice and he runs his court like he ran his practice of law, very open, wants input, fairly laid back.
Derek Gilliland: I think Judge Albright has made a great transition. I knew him and tried a big case with him while he was in private practice. His respect for lawyers and individuals has carried through in how he presides. He is very slow to anger with lawyers or witnesses and is very polite when he feels he must correct a witness or lawyers. He is also quick to prevent witnesses — especially experts — from launching into long, self-serving answers if a question should just be answered yes or no. I am sure that comes from his experience dealing with those types of witnesses as a trial lawyer.
Texas Lawbook: For those of you who tuned in by phone, how did you like the experience of tuning into a trial by phone? Is there anything you would change about the process? Would you follow a trial this way again?
Charles Baker: I thoroughly enjoyed the experience, I hope all future trials in Waco are handled this way — it provides great access without having to have to be there. But I did miss not seeing the jurors and their reactions and the exhibits. I would like to at least see the exhibits.
Derek Gilliland: Dialing in by phone was outstanding! It made it easy for me to follow along and continue working on my cases. And it was not nearly as big of an inconvenience when the courtroom was sealed for confidential information because the line would just be muted. I didn’t have to go stand in the hallway wondering how long it would be before we would be allowed back inside the courtroom. I would definitely follow a trial this way again.