- A six-person jury returned a verdict of no infringement on the two patents-in-suit, invalidated the sole asserted claim in one of those patents, and awarded no damages against Roku in the $228 million trial.
After a four-day in-person trial, Jackson Walker delivered a complete defense jury verdict for Roku, Inc. in what started as a five-patent infringement case brought by ESW Holdings, Inc. The trial, which began on Monday, April 5, 2021, was held in the Western District of Texas – Waco Division before U.S. District Judge Alan D. Albright.
In February 2019, ESW Holdings, Inc., a subsidiary of Austin-based private equity company ESW Capital, LLC, filed suit against Roku. In its complaint, ESW alleged infringement of U.S. Patent Nos. 7,260,782, 7,430,718, 8,682,945, 9,451,294, and 9,420,349. ESW acquired the patents from Ensequence Inc., which spent nearly 20 years developing and selling interactive TV technologies.
Pre-Trial Summary Judgment Granted
Shortly before the April 2021 jury trial began, Roku was successful in obtaining an order from the Court granting summary judgment of no infringement as to the ’294 and ’349 patents, which are directed to Automatic Content Recognition (ACR) technologies.
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Roku also in pre-trial obtained a dismissal with prejudice as to the ’945 patent.
Jury Trial Victory
Trial began on the remaining two patents – the ’782 and ’718 patents – on April 5, 2021. The jury was picked a few days earlier on April 1.
In trial, at issue was the Roku Developer Environment, which is a software ecosystem Roku makes available to channel developers and content providers to build channels and deliver content on the Roku platform. ESW argued that the Roku Developer Environment enables third-party developers “to create streaming channels, create advertisements associated with streaming channels, and lay out visual aspects of a streaming channel.” ESW’s technical expert opined that certain software tools that could be used by developers to create channels to run on the Roku platform infringed the ’782 patent (“Method and system for generating flexible time-based control of application appearance and behavior”) and ’718 patent (“Configurable interface for template completion”).
ESW’s damages expert claimed that the ’782 and ’718 patents were fundamental to Roku’s ability to avail thousands of channels on its platform, which led to increased viewership and in turn increased Roku’s revenues due to higher advertising and channel/program subscription fees. ESW asked the jury to award a total of $228 million in damages.
Roku countered that it did not infringe the ’782 and ’718 patents because Roku’s Internet-based streaming services and offerings are not interactive TV as described in the ’782 and ’718 patents. More specifically, Roku’s technical expert opined that Roku did not provide all the software tools implicated by ESW’s infringement allegations and that the accused tools could not be used to create “episodes,” one of the key features of the sole asserted claim of the ’718 patent. Roku also contended that that asserted ’718 patent claim was invalid based on a single prior art reference. Roku chose not to assert at trial invalidity of the two asserted ’782 patent claims.
After five hours of deliberation, the six-person jury returned its verdict on Friday, April 9, finding that four sets of software tools accused by ESW did not infringe the three asserted claims of the ’782 and ’718 patents. The jury also found by clear and convincing evidence that the asserted claim of the ’718 patent was invalid. Having found no infringement, the jury did not need to reach the damages questions.
“This was not your typical patent trial. We started trial expecting to defend against a $10 million claim based on a certain damages model, but had to quickly recalibrate during trial as ESW without any pre-trial notice changed its damages model altogether and turned this into a nearly quarter billion dollar case,” said Wasif Qureshi, who first-chaired the trial and led the Jackson Walker trial team. “That, among other things, was a significant challenge. We are thus undoubtedly thrilled to have weathered and refuted ESW’s strategies and deliver this jury verdict for Roku, which expended significant resources defending itself against five patents for over two years.”
“We are thus undoubtedly thrilled to have weathered and refuted ESW’s strategies and deliver this jury verdict for Roku, which expended significant resources defending itself against five patents for over two years.”
Since the COVID-19 pandemic shut down courts in March 2020, more than $3.7 billion has been awarded to patent holders in seven Texas trials. Fellow Jackson Walker attorney Leisa Talbert Peschel added, “In the Waco patent trial immediately preceding ours, the jury awarded the plaintiff over $2 billion, so we were naturally concerned about whether that was indicative of how a Waco jury might resolve our case. We thus worked tirelessly to ensure that the jury in our case received a clear and credible presentation of Roku’s evidence.”
In addition to Wasif Qureshi and Leisa Talbert Peschel, the Jackson Walker team included Blake T. Dietrich, Chris Cravey, and Harris Huguenard.
The case is ESW Holdings, Inc. v. Roku, Inc., Case No. 6:19-CV-00044, in the U.S. District Court for the Western District of Texas – Waco Division.
For additional information, visit the Law360 articles “Texas Jury Told Roku Infringed Interactive TV Patents” and “Roku Cleared Of Infringement In $228M Interactive TV IP Trial,” and the Texas Lawyer article “Jackson Walker Saves Roku From $10M—No, Make That $228M—Patent Hit” (subscription required).
Founded in 1887, Jackson Walker continues to advance the world of business by helping companies of all sizes navigate today’s increasingly complex, interconnected legal landscape. With more than 400 attorneys across seven offices, we are the fourth-largest law firm in the state and have been recognized by Law360 as a “Texas Powerhouse” and an “elite law firm” that regularly provides counsel to industry-leading clients on highly complex transactions. To explore the Firm’s experience enforcing and defending intellectual property rights in federal and state courts, arbitrations, alternative dispute forums, and proceedings before the International Trade Commission and the Patent Trial and Appeal Board, visit our Intellectual Property Litigation practice page.
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