Texas Hold 'Em

Submitted by patentadmin on Wed, 07/21/2010 - 13:43

“You gotta know when to hold ‘em; know when to fold ‘em.”¹ (LaserDynamics, Inc. v. Quanta Computer, Inc.)

LaserDynamics sued Quanta for patent infringement. An East Texas jury found the patent not invalid and infringed. Being an EAST TEXAS jury, they went on to find the infringement willful and awarded actual damages of $52M. The Court entered Final Judgment in accord with the jury’s verdict, adding $5.456M in prejudgment interest, but not adding increased damages in respect of the willfulness.

Here is where the game got interesting. Quanta checked, moving for a new trial on the issue of damages or, in the alternative, a remittitur (judicial-speak for “screw the jury verdict, the plaintiff should accept less”). LaserDynamics, not taking the hint from the judge’s failure to award increased damages, raised the bet, moving for a permanent injunction. The judge who, being the judge, held all the aces, called LaserDynamics’ bluff, offering it the choice between $6.2M or a new damages trial.

LaserDynamics chose the new trial. The Court then addressed the question of entitlement to a permanent injunction. Citing the four card, uh, four FACTOR rule enunciated in eBay, the Court examined LaserDynamics’ cards, uh, FACTORS.

1. LaserDynamics did not demonstrate irreparable injury as it did not compete with Quanta, nor did it even participate in the market for the patented product.

2. LaserDynamics did not demonstrate the inadequacy of legal remedies. It had licensed the patent-in-suit to “at least twenty-seven different companies for one-time, lump-sum payments demonstrat[ing] that money damages have been and will continue to be sufficient to remedy any infringement.”

3. The balance of hardships favored Quanta, which would face “significant hardships if enjoined and will likely damage its reputation and lose goodwill.”

4. The public interest factor did not weigh heavily in favor of either party. “Although it is generally in the public interest to uphold patent rights, LaserDynamics has failed to show that the public interest would be better served through an injunction under the circumstances of this case.”

So Quanta won with three-of-a-kind. No injunction.

THE LESSONS TO BE LEARNED: (1) When playing poker, watch the other players for “tells”; and (2) don’t overplay your hand.
¹ Quoted from that great legal scholar, Kenny Rogers.

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