Newegg Does Not Infringe the ’730 Patent After All

Look at that S car go.

Wait for it…

In the Eastern District of Texas, Judge Rodney Gilstrap issued a ruling over turning the jury’s verdict in the TQP v Newegg case that came before him in November 2013. In that case the jury found that Newegg did infringe the asserted patent ( U.S. Patent No. 5,412,730) and that the patent was valid. It was a disappointing loss after a long, bumpy road for Newegg. Though TQP had already collected over $45 Million in settlements from other companies, Newegg’s policy is not to settle with companies it deems to be patent trolls. Although the jury awarded TQP less than half of what they asked for, the jury still awarded them $2.3 Million in damages.

Then came a nearly two year gap (due to a clerical error) between the jury’s verdict and the Judge’s ruling on Newegg’s post-trial motion for summary judgement, which prevented Newegg from appealing the verdict. But in a surprising turn, Judge Gilstrap granted Newegg’s motion, reversing the jury’s decision on infringement. From the decision:

The Court finds no substantial evidence that this action of the RC4 cipher is directly coupled to (or directly depends on) when, if, or the manner in which enciphered blocks are transmitted or received. In other words, regardless of whether the claim is viewed from the perspective of the transmitter or the receiver, the Court finds no substantial evidence that “a new key value . . . is used each time a predetermined number of blocks have been sent from the transmitter over the communication link.”

Overturning a jury’s verdict and granting a motion for judgment as a matter of law requires a strong belief that reasonable jurors could not reach a different conclusion. That is a bold position, and should be noted by defendants who might be reluctant to go to trial East Texas. Though we strongly believe that East Texas juries are fair to all parties, on the rare occasion when they may miss key evidence (or miss that key evidence is missing)  East Texas judges will step in and correct the error. 

photo credit: PWK_20120524-1040611_DMC-LX5 via photopin (license)

Tranxition Patents Found To Be Invalid

Judge Marco Hernandez in the District of Oregon has ruled that Tranxition’s U.S. Patents 6,728,877 and 7,346,766 are invalid under Section 101 of the Patent Act. In the case Transition v. Lenovo, the defendant filed a Motion for Summary Judgement under Section 101, and the court found that the claims were ineligible for a patent because they present an abstract idea without sufficient inventiveness.

Innovation Act of 2015 – Venue

Welcome to Marshall Texas
Welcome to Marshall Texas

The Eastern District of Texas may fade back into obscurity if the House Judiciary Committee passes the current language on venue. As of June 15, 2015, the language reads as follows:


Notwithstanding subsections (b) and (c) of section 1391 of this title, any civil action for patent infringement or any action for a declaratory judgment that a patent is invalid or not infringed may be brought only in a judicial district—

(1) where the defendant has its principal place of business or is incorporated;

(2) where the defendant has committed an act of infringement of a patent in suit and has a regular and established physical facility that gives rise to the act of infringement;

(3) where the defendant has agreed or consented to be sued in the instant action;

(4) where an inventor named on the patent in suit conducted research or development that led to the application for the patent in suit;

(5) where a party has a regular and established physical facility that such party controls and operates, not primarily for the purpose of creating venue, and has—
(A) engaged in management of significant research and development of an invention claimed in a patent in suit prior to the effective filing date of the patent;

(B) manufactured a tangible product that is alleged to embodyan invention claimed in a patent in suit; or

(C) implemented manufacturing process for a tangible good in which the process is alleged to embody an invention claimed in a patent in suit; or

(6) for foreign defendants that do not meet the requirements of paragraphs (1) or (2), according to section 1391(d) of this title.

Turning Timelines Into Plot Lines: Trial Graphics as Storytelling

Consider the humble timeline. A trial graphic staple, it is often the first demonstrative on your list. There are many computer applications devoted to the automatic creation of timelines. However, in spite of the widely held opinion that storytelling is the most powerful means of communication, we often fail to tell our story in the one demonstrative especially suited for that purpose.

Properly conceived and executed, a timeline might more accurately be called a Plotline. Whereas a timeline simply arranges discrete events in chronological order, a Plotline weaves each event into a single, logical flow of information. A Plotline does not limit itself to the who, what and when. Rather, it adds the why and the how; the cause and effect; the motive, means and opportunity. In other words, it tells the story.

In the best stories, writers, directors and editors are careful to link one event to the next in a seamless progression. They work to provide the characters’ context, motivation and actions in sufficient detail for the audience to be immersed within the story – to emotionally identify with the characters. While litigators don’t have all of the devices available in the art of novels and movies, with a few slides and some boards, litigators can strengthen their storytelling to great benefit.

To illustrate the issue, I have created two graphics. The first example is typical of what we have all seen in trial and what might be produced by timeline software. With a nod to some great SciFi movies from the ’70s, I made up some facts surrounding an imaginary case between Omega and Soylent which involves claims for breach of a joint venture agreement, employee raiding and theft of trade secrets.


demonstrative timeline

The first timeline has the facts arranged in neat boxes with easily read text and a pleasant color scheme. However, it tells the audience virtually nothing about the story we wish to communicate. It does not provide character motivation or illustrate cause and effect. Its layout does not provide an easy framework for the mental insertion of other details that will be exposed during the trial.

In the second example shown below, the Plotline, I’ve attempted to correct the deficiencies of the timeline shown above.

demonstrative timeline 2

I would like to point out a few features:

  • A Working Title: The title explains the meaning of the Plotline, makes a promise to the viewer that all will be explained, and includes a double entendre using “GREEN” to mean both the product and the profits.
  • Structural Elements: Some elements, such as the timeline and the graph scale lines, provide structure and a frame of reference but are not particularly interesting to the viewer. Like grid lines on a map, they should recede into the background. Here we have colored them in light grey with just enough contrast to be legible, but not so much as to draw the eye away from the important elements.
  • Color Grouping: Color is a good way to organize information thematically. For example, following the double meaning in the title, we have green coding both the stolen trade secrets as well as the revenues derived from that theft. Cause, meet Effect. Similarly, we have placed a large, medium-grey block around the timeline entries detailing the employee raiding and trade secret theft and anchored that with a black bar below the timeline to indicate the period during which this special group of entries took place. Lastly, we have a large red bar that follows from the black bar (with an arrow for good measure) with another cause:effect relationship. If it isn’t obvious, red is the single most powerful color (at least in the Western world). Used judiciously, it is almost impossible to ignore.
  • Summary Statements: Let’s face it. Jurors sometimes have short attention spans (more on that below) so we shouldn’t imagine that they will always read everything. We have tried to alleviate this risk by including some summary statements describing, in broad terms, several entries. You can almost always trust an audience to read the title. Then we have added, twice, the words “EMPLOYEE RAIDING and TRADE SECRET THEFT” and followed that with, “SOYLENT MAKES $2.7B USING STOLEN OMEGA TRADE SECRETS.” Through the title and these summary statements, we ask the question and give the answer. The audience can understand the entire chart without reading another word.
  • Limited Information in plain language: The timeline entries are brief and written plainly. They should be easily understood but need not contain every detail. Remember, an attorney and a witness are available to explain and enrich (with evidence!) each entry.

Admittedly, the Plotline is a more challenging demonstrative for our audience. But, it is orders of magnitude more interesting. We often see complex information graphics such as this Plotline in newspapers and magazines. They are packed with information but require the viewer’s curiosity and time commitment. In trial, by contrast, we cannot wait while the jury figures out how to understand our more complex demonstratives. For this reason, we have been trained to severely limit the amount of information on any one demonstrative. I won’t quibble with that basic premise – it is a good rule of thumb. I would, however, argue that the jury can understand and benefit from more complex graphics if carefully designed and presented.

It would be advisable, therefore, to introduce the information on this Plotline in step-by-step fashion through an on-screen presentation. How many steps and in what order would depend upon the presentation. If presented in opening statement, the information could be revealed chronologically. If presented through a fact witness, it may be that certain elements might come out of time due to limitations of that witness’s knowledge. Either way, the revelation of each element should be supported by some piece of admissible evidence. One possible sequence is shown below:


Regardless of the sequence, after fully constructing the timeline on screen, you may wish to have a trial board for permanent display in the courtroom. Placing a large timeline on an easel provides easy reference for attorney, witness, judge and jury alike. It also provides a framework for discussion of evidence not literally included on the Plotline.  For instance, Soylent emails to Omega employees can be framed into the “Employee Raiding” period shown on our demonstrative.

Neither our lives nor our cases are comprised of a series of discrete, unrelated events as we saw in the first conventional timeline demonstrative. Each event flows naturally from one to another through cause and effect, action and reaction. A good story follows this natural rhythm and so will a good Plotline.