How a tight jury strategy helped win $67.5m FRAND case against Samsung

Winning counsel says potential licensees need to take offers from licensors more seriously in the future | Careful groundwork put in place for persuasive strategy before jury | Latest victory follows the trial team’s success in securing a $303 million verdict for Netlist against Samsung.

Samsung has been hit with a $67.5million damages verdict, after a US jury ruled that the South Korean tech giant infringed a pair of wireless network patents that were essential to the 5G network standard.

The verdict, announced on Friday, January 26, 2024, followed a 6-day jury trial before US District Judge Rodney Gilstrap at the US District Court for the Eastern District of Texas.

The jury declined to find that non-practising entity G+Communications had failed its obligation to fairly licence its patents. Strikingly, it further ordered Samsung to pay a running royalty of $1.50 per phone—more than the amount requested by the plaintiff.

McKool Smith together with Irell Mandela acted on behalf on G+ Communications, with the former’s trial team including Jennifer Truelove and Sam Baxter.

This is the second  significant patent infringement verdict McKool Smith has secured alongside Irell & Manella against Samsung in recent times.

In April 2023, a jury awarded $303 million to firm client Netlist, finding Samsung willfully infringed three patents related to computer memory technology.

Fresh from her success, Truelove sat down with WIPR to outline the significance of the verdict and how they laid the groundwork for her team’s winning strategy.

WIPR:  What are the major implications of this decision for litigation concerning fair, reasonable and non-discriminatory terms (FRAND)?  

Truelove: I think the jury choosing a running royalty amounting to $1.50 per unit will have a significant impact on FRAND going forward. G+’s offers prior to the jury trial were all much lower than the $1.50 the jury found.

That, coupled with the fact that the jury found G+ negotiated in good faith and did not breach its FRAND obligation, means that potential licensees will need to take the offers from licensors more seriously.

What was your strategy?

Securing a favourable verdict always starts with the jury. We spent a great deal of time analysing what kind of jury we needed to put in the box and, in the end, that strategy paid off.

Because we were dealing with an NPE who had acquired the FRAND obligated patents we wanted to first make sure the jurors were comfortable with the law as it relates to patent rights and were willing to award damages if they found the patents were valid and infringed.

Next, it was very important to understand which jurors believed that the gloves came off in business negotiations and which jurors believed it was important to follow the rules.

Finally, we talked with the jurors about how each negotiation is different in the FRAND context and FRAND does not mean you pay the same rate as someone else.

What was interesting about this case? And what was challenging?

One of the more challenging aspects of the case was the fact that G+ is an NPE and was asserting patents acquired from ZTE.

The patent purchase agreement between ZTE and G+ also included a 20% net royalty clause which required careful explanation on our part.

We addressed that up-front during the voir dire process—a mini-hearing within a trial during which it is determined whether evidence is admissible and can potentially be entered into evidence in the trial.

By doing this we ensured that the prospective jurors didn’t have a problem with ZTE maintaining a financial interest by comparing it to individuals who maintain mineral rights to real property they no longer own.

We also put forward damages expert Stephen Dell and survey expert Rebecca Reed-Arthurs.

Jurors found Samsung infringed two G+ patents but not a third after the trial. Were you disappointed?

I find that juries usually get it right and this case was no different. These folks worked really hard to weigh the evidence, understand the importance and value of this technology, and come up with what I view to be a very just verdict. We are pleased with the jury's decision to award $67.5 million plus royalties in our client's favour.

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