Kramer Levin Secures Another Win in the Eastern District of Texas

On February 10, 2009, the Eastern District of Texas dismissed plaintiff Keystone Autonics, Inc.’s claims with prejudice after Keystone stipulated to dismissal of their claims against Kramer Levin client Sirius XM Radio Inc., ending a bitter two-year battle. Keystone’s patent infringement case became untenable after Judge T. John Ward of the Eastern District of Texas agreed with the Kramer Levin team that the disputed claim terms should be narrowly construed. Keystone Autonics Inc. v. Sirius Satellite Radio Inc., No. 2:07-CV-61, 2009 WL 185420 (E.D. Tex. Jan. 16, 2009).

Keystone filed suit against Sirius and XM (now Sirius XM) in February 2007, accusing their satellite radio receivers of infringing two patents associated with mobile computing technology. The Kramer Levin team vigorously pursued traditional defenses, including non-infringement, invalidity and inequitable conduct and also uncovered additional equitable defenses, including judicial estoppel and unclean hands, through its aggressive pursuit of discovery. After Judge Ward ordered Keystone to produce previously withheld documents relating to the equitable defenses, Sirius XM filed a motion for summary judgment on those defenses. Just days before responding to that motion, Keystone jettisoned one of the two patents asserted by providing Sirius XM with a covenant not to sue on that patent. Keystone then agreed to dismiss the remaining infringement claims based on its second patent after Judge Ward narrowly construed those claims. With a thorough analysis of the file history (the record of a patent’s progress through the U.S. Patent & Trademark Office), Judge Ward agreed with Kramer Levin that the inventor had limited the scope of his invention despite the broad language in the claims. For example, in construing the term “computer system,” the Court limited the claims to flexible, general purpose computers capable of performing a variety of functions which did not cover the accused products.

The Eastern District of Texas has become known as a patent-friendly forum, drawing two to three hundred patent infringement suits each year in the district. Many of these lawsuits have been filed by entities (such as Keystone) that do not make or sell goods covered by their patents, but rather seek to generate revenues from bringing patent infringement actions – so-called patent trolls. According to statistics, only about seven percent of patent cases filed in this court ends in a win for defendants on the merits of the case. In fact, from 2004 through 2006, plaintiffs won eighteen consecutive jury trials, many of which resulted in significant damage awards.

This is the latest in a series of favorable outcomes in recent months for Kramer Levin’s clients sued in this district. In a case that will likely impact significantly the number of patent cases that are filed in and transferred from the Eastern District of Texas, the U.S. Court of Appeals for the Federal Circuit granted Kramer Levin’s client the unusual relief sought by a Petition for Writ of Mandamus. The Federal Circuit ordered the Eastern District of Texas to transfer a patent infringement case to the Southern District of Ohio because there was little to no connection between the subject matter of the lawsuit and the Eastern District of Texas Texas. In re TS Tech USA, 551 F.3d 1315 (Fed. Cir. 2008), reh'g denied, No. 2009-M888 (Fed. Cir. Feb. 6, 2009). Kramer Levin also obtained an indefinite stay of another patent infringement suit brought against Sirius XM in the Eastern District of Texas after the Federal Circuit construed claims in a related case consistently with the claim constructions advanced by Sirius XM. Finisar v. XM Satellite Radio Holdings, Inc., No. 9:07-CV-00099 (E.D. Tex. May 1, 2008). Finally, Kramer Levin obtained a favorable outcome for its client Weber Knap Co. in a patent infringement action brought by Humanscale Corp. – a manufacturer of ergonomic products – in this court.