Context: Patent licensing firms continue to get 9-figure U.S. jury verdicts. Last month, a non-practicing entity named Kove was awarded $525 million against Amazon Web Services in the Northern District of Illinois (April 15, 2024 ip fray article). That same month, G+ Communications saw its damages figure against Samsung double as a result of a retrial in the Eastern District of Texas, but one of the two patents-in-suit has since been invalidated by the PTAB (May 2, 2024 ip fray article).
What’s new: Yesterday (Friday, May 10, 2024), a jury rendered a $242 million damages verdict for WiLAN subsidiary IPA Technologies against Microsoft over voice recognition technology used in the Cortana assistant. The case was the first one to be filed in the District of Delaware in 2018 and started with six patents, of which only a single one went to trial.
Direct impact: Microsoft has announced an appeal. The prevailing plaintiff may consider a judgment preservation insurance policy and might try to cross-appeal adverse pretrial decisions.
Wider ramifications: Microsoft was not the only company to be sued by IPA. Amazon defended itself successfully. A Google case is still pending. It was stayed in 2020, and a February 2024 letter indicates that neither party will ask for it to be resumed while there is a Federal Circuit appeal of certain PTAB decisions pending.
The patent-in-suit, US7069560 (title: “highly scalable software-based architecture for communication and cooperation among distributed electronic agents”), is old and storied. In 1999, SRI International applied for it. SRI was founded in 1946 as the Stanford Research Institute (thus the acronym), and formally separated from the famous Silicon Valley university in 1970. It’s a nonprofit research institute, but with an annual budget in the hundreds of millions of dollars and approximately 2,000 employees at this stage.
One of the technology creations that SRI is particularly proud of is Apple’s Siri. The institute tells the story on a dedicated webpage:
Siri, the first virtual personal assistant, arose from decades of research in artificial intelligence (AI) at SRI International. The technology was developed through the SRI-led Cognitive Assistant that Learns and Organizes (CALO) project within DARPA’s Personalized Assistant that Learns (PAL) program – the largest-known AI project in U.S. history – and joint work with EPFL, the Swiss institute of technology.
SRI spun off Siri, Inc. in 2007 to bring the technology to consumers, raising $24 million in two rounds of financing. In April 2010, Apple acquired Siri, and in October 2011, Siri was unveiled as an integrated feature of the Apple iPhone 4S.
The year that Siri launched (2011) was also a year in which Canadian patent licensing firm WiLAN and Microsoft had a “clash” of a different kind: WiLAN was trying a hostile takeover of another patent licensing firm, Mosaid (later known as Conversant, and now again named Mosaid), but Microsoft engaged as a patent litigation funder (possibly for the only time in its history), enabling a three-way deal with Nokia and Mosaid under which Mosaid obtained a bunch of Nokia patents and went out to sue particularly Android device makers. That deal enabled Mosaid to fend off WiLAN’s hostile takeover bid.
This is a walk down memory lane: ip fray‘s founder publicly disclosed a working relationship with Microsoft (in connection with standard-essential patents) that same year. Last month, ai fray disclosed Microsoft’s support for its tracking of certain AI-related developments, but that working relationship does not extend to patent topics. In fact, Fray Media is presently helping to raise funds for a set of U.S. patent enforcement actions and Microsoft is a defendant to two of those cases.
In 2016, the patent-in-suit was sold to WiLAN subsidiaries IPA Technologies, with then went out to sell licenses. In early 2018, an agreement with Kyocera was announced. And on the very first day of that year, IPA filed suit against Microsoft. The last part of the case number (1:18-cv-00001) indicates that it was the first-filed suit of that calendar year in the District of Delaware.
A motion to dismiss succeeded in part, and PTAB IPR petitions did their part, too, though in April 2022 the Federal Circuit upheld (PDF) parts of two patents, including parts of the patent underlying the Microsoft verdict.
The jury trial then took five days and the jury wanted to get this done over the weekend so as to get their normal lives back starting this weekend.
Here’s the post-trial judgment by Judge Richard Andrews of the United States District Court for the District of Delaware:
At this stage, ip fray cannot offer a prediction of what the outcome of Microsoft’s appeal (and a potential cross-appeal by IPA Technologies) may be.