In this week’s edition of Litigation Roundup, a team from Susman Godfrey obtained a patent infringement win against Ericsson, two Kilpatrick Townsend attorneys took another step toward ending a recruiter’s fee lawsuit, the Fifth Circuit affirmed a $3 million award in a trade secrets lawsuit between competing oil industry employment websites and Baylor College of Medicine won a $48 million Covid-19-related jury award.
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Houston Chronicle Report: Houston Jury Awards $48M in Covid-19 Insurance Case
Baylor College of Medicine won a $48.5 million award after a Harris County jury found that losses incurred by the medical school in the early phases of the coronavirus pandemic should have been covered by its property insurance.
The verdict comes as businesses of all kinds battle with insurers to cover losses incurred from lockdowns, social distancing restrictions and other disruptions as COVID-19 rapidly spread in 2020. In the case of the Baylor College of Medicine, that medical school stayed open to treat patients, and develop research around treatments, vaccines and the virus, but incurred losses to buy personal protective equipment, constantly clean and disinfect facilities and equipment, and cover other extraordinary expenses.
Baylor filed an insurance claim in April 2020 to recover its losses, but was denied. The medical school then sued underwriters at Lloyd’s Syndicate, a property insurance marketplace headquartered in London that insures large or unusual risks.
The underwriters argued that the virus can’t cause property damage because it can be wiped off with disinfectant and doesn’t cause any tangible or structural change. The lawyers for the underwriters did not respond to requests for comment.
Baylor’s lawyers made the case to the jury that the physical presence of the virus on Baylor’s property caused the loss of income and the extra expenses incurred during the pandemic, said Robert Corrigan Jr., senior vice president and general counsel at Baylor College of Medicine.
“We were able to do that because the common understanding of what loss or damage means includes more than some structural change to the property — it’s anything that impairs the ability to use the property or impairs the value of the property,” Corrigan said. “The jury certainly believed that the presence of the virus did cause the property to be less functional, less usable, less valuable.”
Companies have filed thousands of claims related to the pandemic under property insurance policies that provide business interruption coverage, but few have succeeded, said Murray Fogler, a trial attorney for Baylor College of Medicine. Baylor’s case was the first of its kind, to Fogler’s knowledge, that made it to a jury trial.
To read the full version of this story please visit the Houston Chronicle.
Eastern District of Texas
Susman Godfrey Secures $31.5M Verdict Against Ericsson
On Aug. 26 a jury returned a verdict in favor of Dutch telecom company Koninklijke KPN in a patent infringement lawsuit it brought against Ericsson. It also found Ericsson’s conduct was “willful.”
KPN filed suit March 31, 2021, and many of the filings in the case regarding telecom network patents remain sealed.
Chief District Judge Rodney Gilstrap presided over the trial that began Aug. 22. KPN told the jury Ericsson knew for years that U.S. carriers already were using the technology but that the telecom giant refused to pay KPN a fair price for the use of its patents.
The jury wholly adopted the damages model presented by the Susman Godfrey team on behalf of KPN, awarding the exact amount requested.
KPN is represented by Lexie G. White, Andres C. Healy, Adam Tisdall, Tamar Lusztig and Russell F. Rennie of Susman Godfrey and T. John Ward Jr. and Claire Henrey of Ward Smith & Hill.
Ericsson is represented by Douglas M. Kubehl, Jeffrey S. Becker, Harrison G. Rich and Melissa L. Muenks of Baker Botts, Theodore Stevenson III of Alston & Bird, Nicholas Mathews, Alexander J. Chern, Carson D. Young and Samuel F. Baxter of McKool Smith.
The cause number is 2:21-cv-00113.
Southern District of Texas
Magistrate Says Early Win Should Be Denied in BMC, Baker Hughes TM Spat
U.S. Magistrate Judge Peter Bray recently recommended that Baker Hughes’ bid for summary judgment on trademark infringement and unfair competition claims brought against it by Houston-based software company BMC be denied.
BMC filed suit in December 2019, alleging its double-helix inspired logo had been “intentionally copied and usurped” by oilfield services company Baker Hughes.
On Aug. 25, Judge Bray ordered the parties to submit a joint pretrial order by Dec. 16 and set trial to take place in January or February 2023.
Baker Hughes is represented by Joseph S. Grinstein, Max Tribble and Michael B. Brightman of Susman Godfrey and Stephen P. Meleen and Tyson D. Smith of Pirkey Barber.
The cause number is 4:19-cv-04810.
First Court of Appeals
Kilpatrick Townsend Attorneys Get Toss of Recruiter’s Fee Claims Affirmed
A three-justice panel Wednesday determined that a trial court got it right when it determined attorneys Patrick Gaas and Daniel Shank were entitled to a summary judgment win in the breach of contract claim brought against them by legal recruiter USPLS.
Gaas and Shank exchanged emails with USPLS indicating it would be their “exclusive agent” in seeking new employment, according to the opinion, and drew this lawsuit after taking a job without using USPLS.
USPLS sued alleging it was entitled to $1.2 million under the contract between the parties.
The appellate panel was unconvinced, writing “the parties’ agreement does not guarantee any compensation to USPLS, much less the maximum amount it might have received.”
USPLS is represented by Ross Spence, Stephen A. Lee and Henry W. Knight of Spence Desenberg & Lee.
The cause number is 01-20-00604-CV.
$13M Fraud Award in Company Valuation Dispute Affirmed
A three-justice panel Aug. 25 affirmed a trial court’s December 2019 judgment in favor of Raed and Ali Abdallah in the lawsuit they brought against Control & Applications Houston, formerly known as vMonitor.
The Abdallahs, who were minority interest owners in vMonitor, sold their stake in the company to Horizon Energy, according to the opinion. Trouble arose when, less than a year later, a company owned by the other vMonitor interest holders struck a deal with Horizon to sell the company for more than four times the value used to calculate the price of the Abdallahs’ interests.
Rejecting nine arguments lodged by vMonitor on appeal, the panel held there was sufficient evidence supporting the trial court’s liability and damage findings.
Control & Applications is represented by Richard G. Wilson of Kerr Wilson.
The Abdallahs are represented by Randy Sorrels, and Robert and Michael Kruckemeyer.
The cause number is 01-20-00239-CV.
$3M Judgment OK’d in Website Trade Secret Spat
On Aug. 30 a panel affirmed a $3 million judgment in favor of an online oil industry employment website, Rigzone, in a case where it alleged a former employee, David Kent, stole its trade secrets to launch a competing website.
According to the opinion, Kent created and founded Rigzone and sold it to DHI Group but then created a competing site, Oilpro. Rigzone and DHI alleged Kent illegally hacked into its database and copied the resumes of hundreds of thousands of users, which were only supposed to be accessible after purchasing a subscription to the database.
On appeal, Kent argued the resumes don’t qualify as a trade secret, but the panel sided with Rigzone, writing that there was sufficient evidence showing that the “comprehensive” nature of the collection of resumes qualifies as a trade secret “even if the individual resumes were not themselves trade secrets.”
“Indeed, Texas courts have recognized ‘customer lists, pricing information, client information, customer preferences, buyer contacts, market strategies, blueprints, and drawings’ as examples of viable trade secrets,” the panel held.
Rigzone and DHI are represented by Walter Lynch, Amir Halevy and Jeb Golinkin of Jordan Lynch & Cancienne.
The cause number is 21-20274.