Lucent Technologies, Inc. v. Gateway, Inc.

580 F.3d 1301 (2009)

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Nature of the Case

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Facts

In December 1986, three computer engineers at AT&T filed a patent application, which eventually issued as the Day patent. The invention is a method of entering information into fields on a computer screen without using a keyboard. A user fills in the displayed fields by choosing concurrently displayed, predefined tools adapted to facilitate the inputting of the information in a particular field, wherein the predefined tools include an on-screen graphical keyboard, a menu, and a calculator. In 2002, P sued D and Microsoft subsequently intervened. P alleged indirect infringement of claim 19 based on the sales and use of Microsoft Money, Microsoft Outlook, and Windows Mobile. Microsoft challenged P's infringement contentions, contending among other defenses that the Day patent was invalid for being anticipated or obvious and, even if valid, Microsoft's sales of its products did not infringe the Day patent. The jury found Microsoft liable on claim 19 as to all three products and on claim 21 as to Windows Mobile. Based on the evidence of record, Microsoft sold approximately 110 million units of the three software products capable of practicing the methods of the asserted claims. Based on the evidence of record, Microsoft sold approximately 110 million units of the three software products capable of practicing the methods of the asserted claims. The total dollar value of the sales was approximately $8 billion. P's theory of damages was based on 8% of sales revenue for the accused software products, and it asked the jury to award $561.9 million based on Microsoft's infringing sales. Microsoft countered that a lump-sum payment of $ 6.5 million would have been the correct amount for licensing the protected technology. The jury awarded a single lump-sum against Microsoft for all products involved. The jury awarded $357,693,056.18 to P. Microsoft’s motions for JMOL were denied. Microsoft, in part, appealed the damages award. Microsoft argues that the jury should not have applied the entire market value rule to the value of its three software products. Microsoft contends that P had to tie its damages claim to demonstrated instances of direct infringement. The jury found indirect infringement by Microsoft.