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October 9, 2007

Trial Lawyers' Nightmare

19 attorneys that represented Qualcomm in its debauched video compression patent suit against Broadcom are fighting to defend themselves against accusation of hiding evidence, hobbled by sacrosanct attorney-client privilege.

Brimming with hubris, Qualcomm sued competitor Broadcomm for infringing video compression patents 5,452,104 & 5,576,767. Broadcom, just practicing the industry standard for that technology, alleged that Qualcomm had participated in setting the standard, but had failed to disclose its patents, as it was obliged to. Qualcomm repeatedly denied the allegation. On the last day of trial, during cross-examination, Qualcomm engineer Viji Raveendran referred to emails that she thought had been disclosed. There were 300,000 such emails and documents that clearly demonstrated that Qualcomm had participated in JVT, the Joint Video Team, which defined the standard in 2003.

Presiding district court Judge Brewster, in San Diego, Qualcomm home court, stripped Qualcomm of those patents; granted Broadcom its attorneys' fees for having to fend off Qualcomm; and began an investigation into whether Qualcomm's attorneys should be sanctioned - 19 attorneys from Heller Ehrman and Day Casebeer Madrid & Batchelder.

U.S. Magistrate Barbara Major is reviewing attorney participation in non-disclosure. Day Casebeer lawyers had argued through court papers that they initially concluded that they weren't obliged to share the documents, because Broadcom's evidence requests had been narrowed by Qualcomm objections.

Four Qualcomm employees filed declarations last week with varying accounts that the non-disclosure lapses were inadvertent. The attorneys in the barrel being shot at are begging to disclose confidential client communications to get themselves off the hook, but Qualcomm won't allow it, letting the lawyers twist in the wind. The attorneys declare that factual omissions in the declarations, once disclosed, would exonerate them. From last Friday's Day Casebeer objection to being railroaded in silence:

The inability to share with the Court information in defense of the Order to Show Cause, standing alone, raises serious due process considerations, given the attorney's inability to present exculporatory (sic) evidence barred by the privilege. But forcing the individual Day Casebeer lawyers to confront the statements in these Declaration, while they are simultaneously prohibited from responding by the submitting party's assertion of attorney-client privilege, would even more clearly deprive these Responding Attorneys of their right to due process and fundamental fairness.

Qualcomm's submission of these four Declarations after refusing to waive its privilege puts the individual Day Casebeer lawyers in an untenable position, not of the own making. While these attorneys are fully prepared to submit, in camera, specific responses to the statements made in the Qualcomm declarations, to do so would breach the attorney-client privilege that remains applicable after this Court's ruling last week. The individual Day Casebeer lawyers therefore submit, based on the principle identified at last week's hearing, that no sanctions of any kind can or should be imposed on the attorneys when, due to their compliance with legally mandated duties, they cannot defend themselves fully.

Earlier Patent Prospector coverage: September 19, 2007, August 13, 2007, August 7, 2007, June 4, 2007.

Posted by Patent Hawk at October 9, 2007 1:25 AM | Inequitable Conduct

Comments

Qualcomm thinks they are above the law, and this is just yet one additional example of the BS their legal department pulls on a regular basis. I have experienced it first hand, and am happy to see that they are finally being roasted for their inquitable conduct.

They deserve everything they get -- they leveraged a couple of fundamental patents and an understanding of how to abuse standard setting bodies into what they are today. Unfortunately, for them, their fundamental patents have either expired or are on the verge of expiring. Once licensees assess the true state of Q's patent portfolio, Q's licensing fees will drop dramatically and their business model will be a bust.

Posted by: Patent Head at October 9, 2007 10:50 AM

I can't help myself from reveling in a bit of shadenfreud, despite my sympathies to the contrary. Lawyers who find themselves in a legal briar patch of their own construction don't get much love from the general public, I would imagine. Let's see how this one plays out. Shame on Qualcomm for bringing the frivolous lawsuit in the first place, and also for leaving their legal team twisting in the wind. I cross-posted on your piece to http://blog.innovators-network.org The Innovators Network is a non-profit dedicated to bringing technology to startups, small businesses, non-profits, venture capitalists and intellectual property experts. Please visit us and help grown our community!

Best wishes for continued success,

Anthony Kuhn
Innovators Network

Posted by: Anthony Kuhn at October 9, 2007 1:46 PM

"they leveraged a couple of fundamental patents and an understanding of how to abuse standard setting bodies into what they are today"

Yes I believe it took Irwin Jacobs around 12 years to do so. Qualcomm took on an entrenched industry and beat them at their own game. He couldn't give CDMA away in the early and mid 90's. Let's not forget how certain rivals paid Stanford professors to claim "spread spectrum" technology defied the laws of physics. These are the same rivals that have hired new professors to suggest that counting patents is a proper way to access patent value in a standard. This is sour grapes over a legally gained monopoly and a group of competitors who will stop at nothing to break it, including running to the antitrust officials.

Funny no one complains at the cost of silicon, copper, plastic, or software or any of the other components that go into cell phones, just Qualcomm's IP.

Posted by: IP Investor at October 9, 2007 4:19 PM

PatentHawk wrote

"Broadcom, just practicing the industry standard for that technology, alleged that Qualcomm had participated in setting the standard, but had failed to disclose its patents, as it was obliged to."

I have yet to read anywhere in the record of this case that the JVT IPR policy "required" members to disclose their IP.

"Similar to Rambus, the JVT IPR Policy and Guidelines provide no express requirement to disclose patents unless a member submits a technical proposal.(JVT ToR at 9.) Instead, members/experts are encouraged to disclose as soon as possible IPR information (of their own or of anyone else’s) associated with any standardization proposal (of their own or anyone else’s). Such information should be provided on a best effort basis.

I read the policy as saying "no express requirement" and "encouraged". The judge then goes on to assume a duty based on the Rambus case in the Federal Circuit. He then goes a step further and declares the patent "unenforcable" even though he states "The Court is unable to find case guidance for an equitable remedy to a finding of waiver by a patentee or assignee."

Posted by: IP Investor at October 9, 2007 5:17 PM

IP Investor has a point. JVT may not have had "express requirement to disclose patents unless a member submits a technical proposal;" the record is not clear to this reader. But it exceedingly likely that Qualcomm knew the H.264 standard embraced their patented technology before the fact, as Qualcomm monitored JVT's progress closely. Qualcomm then hid its participation, fearing the outcome which transpired: being stripped of its patents owing to inequitable conduct, though perhaps not as statutorily defined. The issue is perhaps more one of ethics and case law than statute, and ultimately of negligence in origination: that JVT, IEEE, and other standards setting organizations have not required patent disclosure.

Posted by: Patent Hawk at October 9, 2007 8:51 PM

This is another issue and I do not know all of the facts on this point. Was Qualcomm a member of JVT? Did they join? On what date? Did they pay dues? According to a friend of mine who attended the trial the judge gave a lot of weight to a t-shirt from a JVT cruise sponsored by Qualcomm when the group was in San Diego. Simply monitoring a standards group would legally impose less of a duty than if one were an actual member.

The bottom line is this. The law is the law. Laws are made and if you break the law you are heald accountable. Once people and judges start assuming duties and judging behavior that does not violate the letter of the law then we are all in trouble. Driving drunk, speeding, there are objective measures to determine such violations. Smelling alcohol or eye balling a car passing by are not enough for an officer to charge one with such offenses, a line must be passed. Likewise, stripping a company of their legally granted and titled property should not be taken lightly and only exercised when a company violates a clear, objective measure.

From RAMBUS @ CAFC

If evidence of Rambus violating its duty to disclose exists, Infineon did not place it in the record or provide it to this court. Infineon bore the burden of proving the existence of a disclosure duty and a breach of that duty by clear and convincing evidence. Infineon did not meet that burden.

In this case there is a staggering lack of defining details in the EIA/JEDEC patent policy. When direct competitors participate in an open standards committee, their work necessitates a written patent policy with clear guidance on the committee’s intellectual property position. A policy that does not define clearly what, when, how, and to whom the members must disclose does not provide a firm basis for the disclosure duty necessary for a fraud verdict. Without a clear policy, members form vaguely defined expectations as to what they believe the policy requires -- whether the policy in fact so requires or not.

Just as lack of compliance with a well-defined patent policy would chill participation in open standard-setting bodies, after-the-fact morphing of a vague, loosely defined policy to capture actions not within the actual scope of that policy likewise would chill participation in open standard-setting bodies.

Posted by: IP Investor at October 10, 2007 9:27 AM