Juries nearly tripled patent awards in 2006

BUSINESS DIGEST

January 04, 2007|By Bloomberg News

WASHINGTON -- Juries in the U.S. awarded $1 billion in patent damages last year, almost triple the 2005 amount, as technology companies including Rambus Inc. and TiVo Inc. stepped up their use of the courts to fend off competition.

The number of patent verdicts ranking in the top 50 jury awards rose to 10 from three in 2005, according to data compiled by Bloomberg. Total awards, counting just those of more than $1 million each, rose from $379 million the year before.

Companies are more willing to go to court to protect patents because the stakes are higher as computer and communications technology spreads, said Gregory P. Stone, the Los Angeles patent attorney who won a $307 million award, last year's largest, for Rambus, a designer of computer-memory chips in Los Altos, Calif.

"These are extraordinarily invaluable inventions," Stone said.

Rambus won the verdict in April against Hynix Semiconductor Inc., of Inchon, South Korea, over patents covering dynamic random access memory. The trial judge reduced the award to $133.4 million.

The $1 billion in patent awards last year excludes the $612.5 million Research in Motion Ltd. agreed to pay patent licenser NTP Inc. in an out-of-court settlement of a dispute over RIM's Blackberry e-mail phones.

The payment was the fourth-largest legal settlement of the year.

While patent awards rose, the value of the largest 50 jury verdicts declined to $6.3 billion from $8 billion in 2005 and $37 billion in 2004. The jump in patent payouts may spur more suits and trials this year, said Larry R. Laycock, a patent attorney with Workman Nydegger in Salt Lake City, Utah.

"To commit the resources, you've got to know there's a chance of the system working," he said. "These verdicts show the system works."

Laycock's client, Finisar Corp., won a $79.9 million verdict covering royalties due from DirecTV Group Inc., whose satellite broadcast system used the disputed information-transmission technology.

DirecTV denied any infringement and has appealed, said Victor G. Savikas, the Los Angeles lawyer who represents the company.

Patent infringement lawsuits have more than doubled since 1990, when 1,236 were initiated. The number peaked at 3,075 filings in 2004 before dropping back to 2,720 in 2005, according to the Administrative Office of the U.S. Courts in Washington. Filings for last year aren't yet available.

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