MARSHALL — A patent holder that secured a $445.5 million infringement verdict against Samsung Electronics seven months ago urged U.S. District Judge Rodney Gilstrap to enter a permanent injunction that would prohibit continued infringement during a roughly two-hour hearing Monday morning.
Austin Curry of Caldwell Cassady & Curry, who represents Collision Communications, told the court during his hourlong argument that he was asking the court to apply the U.S. Supreme Court’s 2006 holding in eBay v. MercExchange to this case. In that case, the high court determined that permanent injunctive relief is available to the prevailing party in a patent case, subject to applying a four-factor test to prove that relief is warranted.
To obtain permanent injunctive relief, a party must show it has: suffered an irreparable injury; that monetary damages are inadequate compensation for that injury; that when considering a “balance of hardships” between the plaintiff and defendant the relief is warranted; and that the public interest is not harmed by the permanent injunction.
“eBay did not change how principles of equity work in patent cases,” Curry said as he discussed the basis of those principles rooted in the 18th century English High Court of Chancery.
After hearing about four days of testimony, jurors determined Oct. 10 that Samsung had willfully infringed four patents covering technology it did not pay to use that belong to Collision Communications and awarded the exact amount of damages Collision had requested.
The technology covered by the patents-in-suit reduces signal interference in cellular network communications, and the idea was conceived of in the early 2000s by inventors and engineers at defense contractor BAR Systems, which intended to sell the tool to the military.
But when the military decided not to implement the technology and recognizing that its ability to prevent signal interference and make phones on busy networks more reliable had commercial value, BAE partnered with Collision to try and take the product to the civilian market.
Collision, which also hired inventors and engineers from BAE, acquired the patents in 2010 and 2011 and approached major companies such as Nokia, Ericsson and Samsung.
Extensive discussions, which included running several simulations using the technology, took place between Samsung and Collision from 2011 through 2014, but then talks went cold.
During trial, jurors were shown Samsung’s internal email communications where they discussed their desire to use the technology and not pay for it. One email raised the prospect of getting a Korean university to develop a similar technology.
Samsung had argued it hadn’t infringed the technology and that the patents were invalid. The company also argued that if the jury did find infringement, damages should be $10 million or less. The jury rejected those arguments, awarding damages to Collision in the form of a running royalty.
Judge Gilstrap entered final judgment Nov. 12. About a month later, on Dec. 10, Collision filed its motion for a permanent injunction against Samsung, the same day Samsung asked the court for a new trial.
Samsung filed a sealed response to the motion for an injunction Jan. 7.
Curry argued to the court Monday that even a $445 million judgment “does nothing” to address the ongoing patent infringement his clients are subjected to at the hands of Samsung. He said the damages, awarded for past infringement, “destroys” his clients’ rights, gives Samsung the ability to continue infringing “and communicates to the world” that they can do the same.
John Bash, the former U.S. attorney for the Western District of Texas who is now a partner at Quinn Emanuel, argued Monday on behalf of Samsung. He told the court that the injunction Collision Communications seeks would prevent his client from importing “well above 75 percent of products” the electronics giant produces, including all phones and tablets.
Drilling down on the argument that the injunction would present an undue hardship to Samsung, Bash explained that correcting the infringement here isn’t as simple as issuing a software patch to users, because the infringed technology exists in chipsets inside the infringing devices, which are manufactured by third parties.
And as for the public interest factor, Bash told the court Samsung employs 22,000 people in the United States and the impact on their jobs should an injunction be entered is something the court must consider. Samsung’s phone and tablet sales, he said, represents 58 percent of the non-Apple market.
Andrew DeLaney of the Department of Justice’s antitrust division in Washington, D.C., and Nicholas Matich IV of the U.S. Patent and Trademark Office’s Office of General Counsel also spoke during the hearing Monday. Without expressly supporting either party’s views, both expressed the view that case law supports the idea that permanent injunctions are an available remedy to stop patent infringement in certain circumstances.
The government filed a statement of interest in this case Feb. 27.
“The incentive to innovate at the heart of the Patent Act is undermined when the availability of injunctions to block infringement is unduly limited,” the brief reads.
Additionally, the prospect of an injunction blocking further infringement can “lead[] to negotiations between the parties,” the government’s brief continues, quoting In re Mahurkar. “‘A private outcome of these negotiations — whether they end in a license at a particular royalty or in the exclusion of an infringer from the market — is much preferable to a judicial guesstimate about what a royalty should be.’”
At the end of the hearing, which lasted a bit longer than two hours, Judge Gilstrap told the parties he “appreciate[s] the input” he received from both sides and would issue his decision as soon as practicable.
Collision is also represented by Brad Caldwell, Chris Stewart, Justin Nemunaitis, Aisha Mahmood Haley, John Summers, Seth Reich, James Smith, James Yang, Alexander Gras and Xu Zhou of Caldwell Cassady & Curry and Andrea Fair of Miller Fair Henry.
Samsung is also represented by Sean S. Pak, Victoria Maroulis, Patrick Stafford, Olga Slobodyanyuk, Nagendra Setty, Kevin Hardy, Joseph Reed, John McKee, Brice Lynch, Brian E. Mack, Brady Huynh and Austin Buscher of Quinn Emanuel and Melissa Smith of Gillam & Smith.
The case number is 2:23-cv-00587.