Cornell wins $184 Million in Damages for Past Infringement by HP

Federal Circuit Judge Randall Rader has been sitting by designation as a district court judge in the Northern District of New York.  His case is an epic patent battle between Cornell University and Hewlett-Packard (HP), and the jury trial recently concluded with an $184 million calculated as 0.8% of HP’s $23 Billion in sales.

The patent — No. 4,807,115 — issued in 1989 and expired during the seven years of litigation. It is directed toward an internal computer messaging mechanism that boosts the function of multi-processor computers.

Interestingly, Cornell and HP had discussed a licensing agreement as early as 1988 (even before the patent issued). In 1997, Intel licensed the ‘115 patent for use in its Pentium Pro chips.

Unpublished Thesis: In a pre-trial decision, Judge Rader denied Cornell’s motion in limine and allowed HP to show the jury an unpublished masters degree thesis as 102(b) prior art.  The court found the thesis publicly accessible because the thesis had been cited in a later article that was in the same area of technology as the issued patent (analogous art.).

“After weighing all the circumstances of accessibility, this court views as vitally important the citation of this scholarly work in the Tjaden-Flynn article.”

Inventor Rewards: Unlike most companies, universities generally offer a percentage royalty cut for its employee-inventors. Professor Torng, the inventor of the ‘115 patent, will reportedly receive 25% of the award (if it is ever paid). Torng has announced that he’ll only keep a few million and donate the rest (perhaps over $30 million) to charity.

The post-trial decisions and eventual appeal should be interesting.

13 thoughts on “Cornell wins $184 Million in Damages for Past Infringement by HP

  1. Also:
    Judge Dyk in United States ex rel. Metric Elec., Inc. v. Enviroserve, Inc., 301 F. Supp. 2d 56; and
    Judge Bennett in Joy Technologies v. Manbeck, 751 F. Supp. 225 and Joy Technologies v. Quigg, 732 F. Supp. 227.

  2. Judge Rader sat by designation in Loral Fairchild Corp. v. Sony Corp. The first decision on appeal is at 181 F.3d 1313 (Fed. Cir. 1999). A later appeal was Loral Fairchild Corp. v. Matsushita Elec., 266 F.3d 1358 (2001).

  3. Judge Rader is one of the better judges on the CAFC (see e.g. his recent dissent in the inequitable conduct case), so it wouldn’t be surprising if some of the duller minds on the court overturn him when this comes up on appeal. (And how sad that we already know it will be appealed, b/c claim construction will be reviewed de novo.)

  4. Andrew,

    Judge Rader has sat by designation in at least one other district court patent case. He was reversed in part by his colleagues in the first appeal. while I can’t recall the name now, the first appeal was decided about 10 years ago, and Phillips was one of the parties.

  5. It WOULD be pretty funny if the CAFC overturned his claim construction, now wouldn’t it?

  6. I suspect that his colleagues will hold Judge Rader to an even higher standard than they do district court judges.

    This case has been ongoing for over seven years, so I suspect that there are many potential points of appeal.

  7. Indeed, Dennis, this appeal will be very interesting. Is this the first time a CAFC judge has sat by designation as a trial judge in a patent case? (I’m not interested in the answer enough to research the question.)

    I wonder if the CAFC judges will feel any awkwardness over reviewing their colleague’s work at the district court. This is a little different than a regional circuit court reviewing one of its member’s trial work. Judge Rader is an esteemed expert on matters of patent law. Saying that he erred in claim construction, 102, 103, etc., would be… Well, I don’t know how that would go over, but it would sure seem awkward to those involved.

  8. How did they manage to get damages awarded if there is 102b art that was allowed to be shown? Was it perhaps not 102b art?

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