$85M Infringement Award Against Google Stands Up to Attacks on Expert Testimony

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By Tony Dutra

Dec. 11 — The Eastern District of Texas Dec. 10 denied Google's motion to overturn an $85 million jury award for patent infringement (SimpleAir, Inc. v. Google Inc., 2014 BL 346619, E.D. Tex., No. 2:11-cv-00416-JRG, 12/10/14).

SimpleAir Inc. owns the patent (U.S. Patent No. 7,035,914) at issue. It discloses “A system and method for data communication connecting on-line networks with on-line and off-line computers.”

A jury on March 19 awarded SimpleAir $85 million in damages for infringement by Google's Android-compatible devices. Google's options worsened on May 13 as the Patent Trial and Appeal Board denied its petition for review of the patent as a covered business method under the America Invents Act (Google, Inc. v. SimpleAir, Inc., No. CBM2014-00054 (P.T.A.B. May 13, 2014)).

Google's motion for judgment as a matter of law argued that the jury should not have heard “unreliable testimony” from SimpleAir's expert witnesses on the question of a reasonable royalty for patent infringement.

Judge J. Rodney Gilstrap endorsed two different theories put forth by the experts.

First, SimpleAir used a license it had with Microsoft as comparable, while Google argued that other licenses with Yahoo! and Facebook were more in Google's “neighborhood.” However, Gilstrap noted that the jury award was over $40 million less than SimpleAir's expert calculated, suggesting that the jury's award was “essentially coming out somewhere between the parties' competing ‘neighborhoods.' ”

Google may have also hurt itself by failing to distinguish U.S. versus foreign sales. Lacking that information, the expert made the assumption that Google's split mirrored Microsoft's split, and the court saw no error in that estimation of domestic infringement.

The second SimpleAir damages theory presented to the jury was based on a review of the Georgia-Pacific factors that allow adjustment of a reasonable royalty in a hypothetical negotiation. SimpleAir's estimate under that analysis came to $146 million; Google's estimate was $6 million.

“Ultimately, the jury awarded SimpleAir a lump-sum reasonable royalty that was well within the competing amounts advocated by the opposing parties—as it was entitled to do,” the court said.

Finally, Google argued that its cost to implement a noninfringing alternative should have capped the royalty, which the court said failed as a matter of law. And in any case, the weight to be given to proposed noninfringing alternatives is for the jury to decide, the court said, and Google had ample opportunity to present its relevant evidence.

Google's JMOL motion was denied.

John Jeffrey Eichmann of Dovel & Luner, Santa Monica, Calif., represented SimpleAir. Russell A. Korn of Kilpatrick Townsend & Stockton LLP, Atlanta, represented Google.

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Tom P. Taylor at ttaylor@bna.com

Full text at http://www.bloomberglaw.com/public/document/SIMPLEAIR_INC_Plaintiff_v_GOOGLE_INC_Defendant_No_211CV416JRG_201.