Context: Patent litigation funding will be a major topic at this week’s first European edition of the LF & IP Dealmakers Forum event (April 12, 2024 ip fray article). The ability of small companies with valuable patents to defeat even the tech industry’s behemoths in court is a major driver of IP litigation finance.
What’s new: In the Northern District of Illinois (i.e., Chicago), a jury found for a local company named Kove IO and entered a $525 million damages verdict over three patents. Fortunately for defendant Amazon Web Services, the infringement was not deemed willful, which could otherwise have resulted in damages enhancements.
Direct impact: Amazon will obviously appeal this judgment to the Federal Circuit, and historically it has been very difficult to defend verdicts of this amount in full. But the patentee has different options. Maybe AWS would now be prepared to settle for an amount that would fairly reflect what Kove achieved as well as the remaining uncertainty. Maybe Kove will obtain a (typically partial) verdict insurance. Or maybe Kove will sell some of the upside to a litigation funder at this point, if there still is room for one, which would enable the company to see this litigation through while ensuring a minimum return for its owners.
Wider ramifications: U.S. patent cases of this kind typically settle before trial, and the verdict in this cased may now increase the willingness of other defendants to work out agreements rather than roll the dice. This case also has a diversity dimension. It may be the biggest ever patent trial win for a law firm that is “majority women-owned” (quote): Reichman Jorgensen Lehman & Feldberg. Kove’s lead trial counsel, name partner Courtland Reichman, was male, but there was no shortage of women on his team.
The verdict came down on Wednesday. On Friday (April 12, 2024), Judge Matthew F. Kennelly entered a corrected judgment in case no. 1:18-cv-08175, which states the following outcome:
“The Clerk is directed to enter judgment in favor of plaintiff Kove IO, Inc. and against defendant Amazon Web Services, Inc., as follows: (a) On Count 1 of plaintiff’s complaint, finding infringement by defendant of U.S. Patent No. 7,814,170; (b) On Count 2 of plaintiff’s complaint, finding infringement by defendant of U.S. Patent No. 7,233,978; (c) On Count 3 of plaintiff’s complaint, finding infringement by defendant of U.S. Patent No. 7,103,640. (d) The infringement was not willful. (e) Defendant’s counterclaims 1 through 13, asserting non-infringement; invalidity; unpatentability; and unenforceability of the three patents in suit, as well as double patenting, are all dismissed with prejudice. (f) Damages are awarded in favor of the plaintiff and against the defendant in the amount of $525,000,000.”
All three patents-in-suit were originally filed in the name of Econnectix LLC and have expired.
U.S. Patent Nos. 7,814,170 and 7,103,640 share the same title (“Network distributed tracking wire transfer protocol”). U.S. Patent No. 7,233,978 covers a “method and apparatus for managing location information in a network separate from the data to which the location information pertains.”
The Reichman Jorgensen firm issued a press release on Thurday on this achievement.
This outcome, albeit non-final, is encouraging for other small patent holders represented by litigation boutiques against tech giants, a pattern that also describes the set of patent enforcement actions for which ip fray‘s founder is presently helping to raise funds (April 3, 2024 ip fray article).