Historic $130m+ Patent Infringement Award In opposition to the US of America


A Sheppard Mullin trial staff led by companions Brad Graveline and Laura Burson obtained one of many largest patent infringement damages awards towards the US of America for consumer SecurityPoint Holdings, Inc (SecurityPoint).  Sheppard Mullin accomplice Don Pelto and associates Kazim Naqvi, Rebecca Mackin, and Tom Carr have been additionally key members of the trial staff.  As well as, the Sheppard Mullin staff included trial specialist Stephanie Limbaugh and authorized assistants Dori Dellisanti and Ann Castro.

On October 22, 2021, the US Courtroom of Federal Claims launched an opinion awarding SecurityPoint greater than $100 million in damages for the US’ unauthorized use of SecurityPoint’s U.S. Patent No. 6,888,460 (the “‘460 Patent”), which claims a technique of shifting and processing trays with carts in safety screening checkpoints in any respect Cat X and Cat I airports in the US. SecurityPoint’s patented methodology is now well-known and ubiquitous in safety screening checkpoints at airports after the tragedy of 9/11.  As well as, the Courtroom held that SecurityPoint is entitled to delay damages in addition to further damages for the US’ persevering with infringement of the patent after the shut of truth discovery.  The events agree that these further damages shall be no less than one other $30 million, making this one of many largest, if not the most important, patent infringement damages awards ever towards the US.

SecurityPoint introduced its declare for patent infringement towards the US below 28 U.S.C. § 1498, through which Congress waived the sovereign immunity of the US towards patent infringement claims in addition to sure copyright claims.  These claims have to be introduced in the US Courtroom of Federal Claims.

Within the SecurityPoint case, the Courtroom of Federal Claims bifurcated the case into two phases:  (1) patent validity; and (2) extent of infringement and damages.

Within the first part of the litigation, the federal government admitted infringement at ten airports, however challenged the validity of the patent, arguing that it was apparent over the prior artwork.  After discovery and a trial, the Courtroom held that the ‘460 patent is legitimate and non-obvious.  The Courtroom discovered that the federal government didn’t meet its burden of proving by clear and convincing proof that the patent would have been apparent below 35 U.S.C. § 103.  As well as, the Courtroom discovered that the target indicia of non-obviousness weighed in SecurityPoint’s favor.  Particularly, the patented methodology (1) resulted in an sudden enhance in effectivity in passenger throughput and a discount in accidents to TSA screeners; (2) met a long-felt, unmet want for improved effectivity at safety checkpoints; (3) solved an issue others had failed to resolve with regard to bettering safety checkpoint effectivity; (4) was copied by the federal government at safety screening checkpoints nationwide; and (5) was praised by TSA and others working within the area  as a breakthrough in bettering checkpoint effectivity.

Within the second part of the case, the Courtroom thought-about the extent of TSA’s infringement and the quantity of damages owed to SecurityPoint at Class X and I airports.[1]

In its opinion, the Courtroom held that SecurityPoint “carried its burden of proving that its patented methodology had turn out to be the default means utilized by TSA for screening passengers at safety checkpoints in any respect Cat X and Cat I airports.”  The Courtroom famous that inner authorities paperwork confirmed and directed use of the patented methodology, and TSA workers testified that they have been unaware of any airports that didn’t use the infringing methodology.  Moreover, the Courtroom famous that, whereas SecurityPoint because the Patent Proprietor bore the burden of proving infringement, the federal government was the occasion in the most effective place to supply proof relating to make use of and non-use of the patented methodology on condition that the federal government “had the benefit of nearly unrestricted entry to TSA lanes and was the occasion finest in a position to protect the related metrics.” The federal government’s failure to return ahead with any proof rebutting infringement was an element that weighed in favor of the Courtroom’s infringement discovering.

The Courtroom additionally thought-about the federal government’s consultants’ opinions concerning the extent of infringement.  One authorities professional performed a survey of sure safety screening checkpoints throughout restricted durations of time in an effort to doc cases of alleged non-use of the patented methodology.  However, the Courtroom discovered that this survey suffered from quite a few flaws, together with the truth that the federal government’s survey professional used declare constructions in his evaluation that differed from the Courtroom’s.

With regard to damages, the Courtroom held that SecurityPoint is entitled to a operating royalty of  $0.02 per passenger.  In reaching this consequence, the Courtroom thought-about every of the components set forth in Georgia Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified and aff’d, 446 F.2nd 295 (2nd Cir. 1971).  Pursuant to the Georgia Pacific assemble, the Courtroom appears to be like on the components the events would have thought-about in a hypothetical negotiation on the time of first infringement, with the belief that the patent is legitimate and infringed.  A few of the components the Courtroom thought-about have been: (1) a earlier license to the ‘460 Patent to an organization that supplied carts and trays to the federal government to be used within the checkpoints; (2) advantages to the federal government within the type of lowered accidents to TSA brokers from carrying trays, in addition to enhanced safety resulting from a extra environment friendly course of, and passenger time financial savings ensuing from shorter safety strains; (3) lowered staffing wants resulting from indisputable fact that TSA brokers now not wanted to hold trays; (4) the extent of the federal government’s use of the invention; and (5) the relative bargaining energy of the events.  After consideration of those components, the Courtroom concluded that the events would have agreed to a royalty of two cents per passenger within the hypothetical negotiation.  The Courtroom has not but entered a ultimate judgment on this case due to remaining problems with infringement and damages at Cat II, III and IV airports.

This historic award towards the US is noteworthy for no less than a number of causes.  First, it demonstrates the significance of sturdy secondary indicia in an obviousness problem.  Second, the place a defendant is uniquely positioned to have in its possession proof of infringement and non-infringement, within the absence of such information, a Courtroom could depend on the most effective accessible proof to find out the extent of infringement.  Third, though patent infringement damages awards towards the federal government will not be normally substantial, important damages could also be acceptable, particularly the place the federal government’s use is widespread and takes place over an extended time frame.

FOOTNOTES

[1] U.S. airports are labeled as Class (“Cat”) X, Cat I, Cat II, Cat III and Cat IV. Cat X airports are the most important and busiest, and Cats I-IV are the following busiest airports in descending order.

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