Hayes’s gamble came up big Wednesday, when a federal jury in Rhode Island awarded his client, a small California-based company called Uniloc USA, the fifth-largest patent verdict in history. The jury, in only a day and a half of deliberation, found that a Uniloc patents for detecting software piracy was valid, that Microsoft Corporation willfully infringed it, and that Microsoft owned Uniloc $388 million in damages. “It was a good day,” said Hayes, whose previous biggest win was a $55.2 million verdict against Conoco on behalf of a small research company.
In an e-mail statement, Microsoft said, “We are very disappointed in the jury verdict. We believe that we do not infringe, that the patent is invalid, and that this award of damages is legally and factually unsupported. We will ask the court to overturn the verdict.” Microsoft was represented by a Fish & Richardson team led by Frank Scherkenbach.
Hayes told us that he won the Uniloc assignment via a beauty contest in which he told the company, which was originally based in Australia, about his long experience trying patent cases. (He declines to reveal details about the contingency arrangement.) In 2003 he filed Uniloc’s infringement suit in Rhode Island, mostly because it was a convenient forum for his six-lawyer, Boston-based team, but also because he thought he’d get a trial date faster there than in Boston. “Plus, they have pretty smart judges here,” he said.
He told us that Microsoft consistently outspent Uniloc and Mintz Levin. “They stayed at the Westin, we stayed at the Marriott,” he said. “They rented out the Civic Center as a war room. We had two rooms at the Marriott.” (A Microsoft spokesperson told us that Fish and Richardson’s Scherkenbach would not comment on the case.)
But at trial, Hayes said, Microsoft was undermined by discrepancies between contemporaneous statements in its technical manuals and the testimony of its witnesses. “The issue was credibility, based on inconsistencies with prior documents,” Hayes told us.
As Bloomberg reported, Uniloc asked the jury for up to $600 million in damages, but Hayes told us the $388 award was about what he expected.
And he’s plenty happy to have gotten it. “It was a big risk on our part,” he said.