A Texas nonpracticing entity has scored an unlikely trial victory in the Northern District of California, winning a $6.6 million verdict, plus ongoing royalties, despite the exclusion of its damages expert.
Friedman, Suder & Cooke partner Jonathan Suder, lead attorney for OptiCurrent LLC and inventor James Congdon, said that based on future royalties and additional infringing products, the verdict is likely worth more than $20 million.
“This verdict, from the Northern District of California, shows that all inventors must be respected no matter how big or small they are,” Suder said.
At issue in OptiCurrent v. Power Integrations was U.S. patent 6,958,623, a three-terminal noninverting transistor designed to minimize currency leakage. Congdon, a Stanford-trained electrical engineer, built a prototype on a breadboard and drew a sketch of the invention in 1997. He applied for a patent four years later and obtained it in 2005.
In the meantime, Congdon licensed a similar invention to a company called QBar, but QBar was not a commercial success. Congdon instead partnered with Brad Brunell, a former executive at Microsoft and Acacia Research Corp., to form OptiCurrent in 2012, according to Suder.
The company sued Power Integrations, a supplier of circuits used in power conversion systems, in the Eastern District of Texas in 2016. The case was transferred to Northern California and Judge William Orrick III not long after the U.S. Supreme Court’s 2017 venue decision in TC Heartland.
Orrick ruled in April that Congdon’s sketch was not admissible to establish the 1997 priority date, but he reconsidered after OptiCurrent produced a witness who had signed and dated it. Power Integrations argued it was too late, but Orrick allowed it because he saw no evidence of bad faith.
Orrick was not as forgiving when it came to OptiCurrent expert witness Larry W. Evans, who estimated damages at $18 million. Evans had assumed a hypothetical negotiation between OptiCurrent and Power Integrations in 2006, but OptiCurrent didn’t exist until 2012. Evans also relied on a $140 million verdict Power Integrations won against Fairchild Semiconductor in 2015, but the Federal Circuit had vacated it.
Instead, OptiCurrent had to rely on the QBar license and Power Integrations sales data. Orrick also struck Power Integrations’ expert testimony on patent validity.
“We got a great judge in Judge Orrick,” Suder said Tuesday. “He did real well by us, even though he struck our damages expert.”
Orrick had another case to try, so the matter was reassigned to Judge Edward Chen, whom Suder enthused about as “a real trial judge.”
At trial, OptiCurrent showed the jurors the breadboard prototype, which Congdon still owns. He explained how he’d built it with parts bought from Radio Shack. He told jurors he’d waited four years to apply for the patent because he couldn’t afford to until then.
On Monday, jurors awarded a 3-percent royalty on sales of $222 million. Suder said the patent still has three more years to run, and he anticipates further recovery over accused products that were excluded from this trial.
The reality of a win in territory where nonpracticing entities are often characterized as “patent trolls” was still sinking in Tuesday morning on Suder, whose firm is based in Fort Worth, Texas.
“The fact that we did this in the Northern District of California,” he said. “A non-practicing entity took on a local, large semiconductor company and won. And we did it without an expert.”
Suder was quick to clarify that he got considerable help from his technical expert, Regan Zane. Also with him at trial were Friedman Suder partners Corby Vowell and Dave Gunter.
Power Integrations was represented by Fish & Richardson, which declined to comment. Fish has won several patent infringement verdicts for Power Integrations against rival Fairchild and its successor.