4/19/2021
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`Roku Cleared Of Infringement In $228M Interactive TV IP Trial - Law360
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`Roku Cleared Of Infringement In $228M Interactive TV IP
`Trial
`
`By Michelle Casady
`Law360 (April 9, 2021, 6:33 PM EDT) -- A Western District of Texas jury decided on Friday that Roku Inc.
`had not infringed two interactive television technology patents held by software development company ESW
`Holdings Inc. and awarded no damages.
`
`The in-person trial, presided over by U.S. District Judge Alan D. Albright, kicked off with opening
`statements on Monday and the six-person jury began deliberating on Friday around noon, returning its
`unanimous verdict just before 5 p.m. ESW had argued that Roku infringed its patents through Roku's
`"development environment," which allows third-party developers to create streaming channels and
`advertisements that are then made available to customers via Roku's streaming platform.
`
`ESW, which filed suit in February 2019, had presented two damages models to the jury — one that totaled
`$62.4 million and one that totaled $228 million. The larger figure was reached by calculating the value of
`seven original licenses the tech startup that developed the technology, and was later acquired by ESW, was
`able to sell before declaring bankruptcy. The smaller figure was reached through examination of the creation
`of each channel on Roku.
`
`Roku's counsel told jurors on Monday that the evidence would show a clear distinction between the
`streaming technology of Roku and what the bankrupt tech startup was trying to sell. Roku argued that the
`patents ESW alleges were infringed relate to interactive television, such as polls that would allow viewers to
`cast a vote during a program, and the public never bought in, as evidenced by the company's financial
`troubles.
`
`ESW argued that Roku infringed two of its patents that made creating interactive television content easier
`and faster through technology that allowed individuals who aren't skilled programmers to create interactive
`content without excessive coding. Roku makes money by having customers stream content, meaning more
`channels equals more revenue, ESW explained to jurors on Monday.
`
`ESW's attorney, Scott L. Cole of Quinn Emanuel Urquhart & Sullivan LLP, told jurors during closing
`arguments Friday that the case boils down to common sense.
`
`"Roku's witnesses came in here and tried to suggest they're not in the TV business at all, and therefore
`they're different from our patents," he said. "It takes common sense to determine if that's true or if it's a
`litigation position designed to avoid liability. Do you believe Roku isn't interactive TV, or are they just playing
`a word game to avoid liability here?"
`
`Cole also told jurors not to be distracted by Roku's argument that it's not responsible for patent
`infringement while pointing the finger at the channel developers.
`
`"So, if this suit is really about the developers' use of Roku's tools, then this contract says these developers
`should be here in court defending Roku, but they're not here," he said. "And what that tells you, despite
`what [Roku] told you in court, is it's not about the developers' use of the tools, it's about [Roku's] provision
`of the tools."
`
`Wasif Qureshi of Jackson Walker LLP, who represents Roku, attacked the credibility of ESW's experts, noting
`what he described as a wildly fluctuating damages figure throughout trial.
`
`ESW's expert, Michael Ian Shamos, he said, "didn't even bother to download or use any of the accused
`tools."
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`Roku Cleared Of Infringement In $228M Interactive TV IP Trial - Law360
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`"He could have done any of these things and he didn't do it. He didn't review the code … make a channel,
`didn't speak to inventors … didn't even come up with testing protocols," Qureshi said. "Instead, you had Dr.
`Shamos basically give a speech without showing a single demonstration of how the accused tools work."
`
`Qureshi said some of the most important testimony in the trial came from engineers who worked for the
`startup that developed the technology as to whether they believed Roku was infringing the patents.
`
`"All of them said no or they had no opinion," he said.
`
`Even the inventor of one of the patents, Aimee Gariepy-Viles, testified that she didn't think Roku was
`infringing her patent, he said. Qureshi reminded jurors that Gariepy-Viles joined NBC after leaving the
`startup that was acquired by ESW in 2018 and created channels for NBC on Roku's platform, including the
`Bravo channel, "and she never once said it looks like they're using my idea," he said.
`
`During rebuttal, Cole said the damages calculation did change throughout trial because getting at the true
`figure was "complicated here by a lack of information from Roku." And Gariepy-Viles' testimony shouldn't
`sway the jury either, he argued, because all it shows is that she wasn't using that technology in her new job.
`
`"They didn't ask if the software tools met the claim elements of her patent," he said.
`
`Joe Hollinger, Roku's vice president of litigation and intellectual property, said in a statement that the
`company was pleased with the ruling clearing Roku of any liability.
`
`"We also appreciate the efforts of the court and jury, especially during the COVID-19 pandemic," he said.
`
`Counsel for ESW was not immediately available to comment Friday evening.
`
`The patents-in-suit are U.S. Patent Nos. 7,260,782 and 7,430,718.
`
`ESW Holdings Inc. is represented by Conor M. Civins, Jared D. Schuettenhelm, Matthew K. Gates and
`Michael Chibib of Bracewell LLP, Michael Jason Ballard of J. Ballard Law and Scott L. Cole of Quinn Emanuel
`Urquhart & Sullivan LLP.
`
`Roku is represented by Leisa Talbert Peschel, Harris J. Huguenard, Wasif Qureshi, Blake T. Dietrich and Chris
`Cravey of Jackson Walker LLP and David N. Deaconson of Pakis Giotes Page & Burleson.
`
`The case is ESW Holdings Inc. v. Roku Inc., case number 6:19-cv-00044, in the U.S. District Court for the
`Western District of Texas.
`
`--Editing by Orlando Lorenzo.
`
`Update: This story has been updated with comment from Roku.
`Correction: An earlier version of this story misidentified the role of Michael Ian Shamos. The error has been
`corrected.
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