DataTreasury Gets $27M Jury Verdict on Joint Infringement Theory

On Friday, the first of three infamous DataTreasury patent litigations concluded with the jury returning a verdict in favor of DataTreasury for $27 million dollars.  The jury found that none of the claims of the "Ballard patents" were invalid and that some of the infringement was willful (DataTreasury originally asked the jury for over $200M).

Read/download the jury verdict form here (link)

One of the hotly contested issues in the case was the theory of joint infringement alleged by the plaintiff.  From an earlier order addressing defendant's motion for SJ of non-infringement, the court stated:

“[O]ne unique and compelling aspect of this litigation which sets it apart from all other precedent discussing joint infringement that has been cited to this Court by either [Plaintiff] or the Defendants is that the Defendants at bar are companies that were created by banks for the specific and exclusive purpose of carrying out the elements of infringement alleged by [Plaintiff].” . . . That is, Plaintiff argues, Defendants are “so closely aligned and intertwined as to make them more a single actor than two."

[P]laintiff’s theories of liability include facts that may set this case apart from BMC and Muniauction and justify a finding of joint and several liability, as apparently contemplated in On Demand Machine Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1344-45 (Fed. Cir. 2006) . . . In the case at bar [] Plaintiff contends that TCH and Viewpointe are not innocent servants and are entangled with U.S. Bank to a degree far exceeding mere direction and control . . . On balance, Defendants motion for summary judgment should be DENIED. 

You can read/download the entire order here (link)

Another issue regarded the admissibility of DataTreasury's earlier license agreements, particularly under the Federal Circuit's recent ResQNet decision:

The court previously held that, under ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010), certain license agreements entered to settle litigation would be admissible as probative of a reasonable royalty. The plaintiff’s damages model in this case relies on a running royalty–that is, a royalty rate computed on a per-check basis. The seven agreements at issue, however, were negotiated as lump sums, without consideration of the check volumes processed by the licensees. As such, their probative value is low. When the court considers the fact that the agreements were entered to settle pending litigation, that value is substantially outweighed by the danger of unfair prejudice. See Fed. R. Evid. 403. As such, the defendants’ objections to the Affiliated Computer Services and ACS Image Solutions, NetDeposit, Bank One, J.P. Morgan Chase, Ingenico, NCR, and MagTek license agreements are sustained.

Read/download the order here (link)

See BusinessWeek: "U.S. Bancorp Told by Jury to Pay $27 Million to DataTreasury" (link)