Do You Roku? Watch This – Ep. 25 [Podcast]

Summary

In this week’s episode of Stuff You Should Know About IP, Thomas Colson and Raymond Guarnieri discuss a patent infringement lawsuit that MV3 Partners brought against Roku. The case was filed in the Western District of Texas, and Roku claimed that there was no infringement. Judge Alan Albright, who presided over the case, is a former patent litigator. A candy store named Hey Sugar sits across from the Waco courthouse, and after Judge Albright was appointed in 2018, he went on a speaking tour entitled Why You Should File Your Next Patent Case Across From Hey Sugar to encourage would-be litigants to file in his district. At the time of the case, MV3 Partners also had pending litigation against companies like Best Buy, Kohl’s, Google, Microsoft, Sony, Samsung, LG, Apple, Philips, and Amazon. Judge Albright moved the trial along rapidly: the litigants were arguing in court within two years, and a panel of seven jurors heard the case over five days. There is no legal requirement that jurors in a patent infringement case be technically-savvy. This jury ruled that Roku did not infringe the patent rights of MV3 Partners. A litigator often wants to provide a jury with the simplest instructions possible.

Transcripts

Raymond Guarnieri:

Did you buy one of those awesome Roku devices as a Christmas gift this year? So, would you be okay if seven total strangers had a vote as to whether or not it stayed awesome, or maybe you just ended up on that pile of VCRs in your basement? Well, that almost happened this year and you probably didn’t even know, but that’s why we’re here. It’s time for Stuff We Should Know About IP. So Tom –

Thomas Colson:

You should know this, right? You’ve got to know this.

Raymond Guarnieri:

I was shocked when you told me this, that a jury decided this case, but I want to hear your summary of it. What’s the deal here?

Thomas Colson:

So, there’s a company called MV3 Partners that has this patent, which we’ll just call the 223 patents. Typically, just as something totally on the side, when you’re referring to patents, in the U.S. at least, and really all over the world, but in the U.S., we refer a patent by the last three numbers of the patent number. So, I mean, we’re probably into the 10 million’s or so, but the last three numbers, and in this case, the 223 patent. So MV3 Partners has this 223 patent, and it is on something called streaming media devices technology.

Thomas Colson:

And I’m not an expert at this, but let me say I use Roku, okay. So, I’m an expert at looking at it, because unlike you, Ray, who have no TVs in your house, I have three girls, 20, 20, and 21. So I’m in a room right now at home where I can see one TV to my right, and one TV in front of me, both have Roku devices. And essentially Roku devices enable you to put together all your content sources like Netflix, Prime, Hulu, and others, and then you can kind of click which ones you want to watch all in one place. So if I want to watch a show on Prime, I click prime, bam, I watched that show. Then if I’m feeling particularly lazy and I don’t want to do anything, I could watch a show on Netflix just by clicking over to Netflix and going, bam, now I got Netflix. All because of my Roku device.

Raymond Guarnieri:

Sounds pretty awesome.

Thomas Colson:

Yeah, its pretty awesome, and it’s pretty terrifying, but we’ll talk about why it’s terrifying in a second. But essentially, so MV3 Partners is going after them, and that’s what this case is all about, is because Roku’s making a ton of money, MV3 Partners has a patent, and they want to get in the game. Because as I’ve always told you, Ray, we’ve talked about this, that if you are failing in business, no one cares about you. But when you’re winning, when you’re making money, suddenly you’re like a red hot beacon for people who want to get a piece of you. And MV3 Partners took a whack at Roku in 2018. And before we get to the case, let’s just talk about on demand stuff and how awesome it is, okay.

Raymond Guarnieri:

Yeah. It’s our life now

Thomas Colson:

It’s our life. I mean, I can remember, I’m old enough to remember being in a hotel room in the ’90s and seeing on demand TV, and it was so awesome. I called my brother and I said, “Dude, we have got to start selling on demand TV because this is going to take the world by storm.” And that was just on demand movies, that was just not regular TV. Click through a list of movies you want to watch, it was the early stages of these highly addictive things. So anyway, then along comes the Netflix, the Prime, the Hulu, and all these things, which by the way, are highly addictive. I often find it funny that in New York state marijuana is illegal, but Netflix is legal, right? I mean, Netflix has destroyed way more lives than weed ever could.

Raymond Guarnieri:

Probably. Yeah, especially once they got The Office.

Thomas Colson:

Yeah, that’s right. I mean, it is Netflix, Prime, and Hulu, are probably 90% at cause for people not pursuing their dreams in the evenings. In the olden days when I was younger, you go home, there’s nothing to watch because you get two, four, and seven, and maybe UHF, which you don’t even know what that is because you’re so young.

Raymond Guarnieri:

Yeah, it’s just static, but for some reason it’s entertaining.

Thomas Colson:

Yeah. And also there’s the little black line going down the TV every once in a while. So, what did we do? We pursued all kinds of personal passions in the evening. Well, I mean, I was only a kid, so I wasn’t working, but the point is, I’ve written a bunch of books, right? And it’s just a hobby of mine, I’m a closet writer. If I sat and watched Netflix, Hulu, and Prime every night, I’d never write a book. And remember the other day when you asked me what I’m doing on Christmas and Christmas Eve and I said, “I think I’m going to start planning my next book.” But I’ve been held up for the last two years because I’m watching these damn addictive content delivery sources, right?

Raymond Guarnieri:

Yeah, it’s Roku.

Thomas Colson:

Roku in some ways is the distribution system, the delivery system for these drugs, okay?

Raymond Guarnieri:

Yeah.

Thomas Colson:

And it’s winning big time. So anyway, in 2018 MV3 Partners sues Roku for patent infringement, right? And it’s on this 223 patent. Now, Roku defends themselves with non-infringement, which is typical, right? There’s always two defenses. Number one, I don’t infringe, number two, even if I do your patent should have never been issued, which means it’s invalid, right? And by the way, they also have some equitable defenses as well. But let’s just focus that non-infringement for the moment, because that’s ultimately what it came down to.

Thomas Colson:

So, the case is filed in the Western district of Texas. And there’s a judge, judge Alan Albright. Now, judge Alan Albright is an interesting character because he’s put on the district court by Donald Trump in 2018. He’s a former patent litigator, which is important because there’s more and more patent cases, right? I mean, I’ve litigated patent cases in front of judges that don’t know anything about intellectual property. Because back in he late ’90s, early 2000s, they didn’t know a lot, it was very new. It’s becoming more common to have more IP savvy judges, but Alan Albright is definitely one of those. So, he goes to Trinity College, he has a Poli. Sci. Degree, which means he’s not a patent lawyer, he’s a patent litigator, but he’s not a patent lawyer.

Raymond Guarnieri:

Wait, how can you be a patent litigator, but not a patent lawyer? I don’t know understand.

Thomas Colson:

Yeah. Great question. So, one of my favorite people on earth, Jen Friedman, who is also one of the litigators for my Coloson Law Group Law Firm, and she’s brilliant, she is a patent litigator, but she’s not a patent lawyer. Which means, that to be a patent lawyer, you need to have a patent registration number, which I have, which you’re going to have in the next four years. But you can’t get that unless you have a science degree. So, you have to have an undergraduate degree in computers, or biology, or chemistry, or engineering, or some hard science. And I don’t mean soft sciences like political science.

Thomas Colson:

Now, by the way, I have a political science degree. And after law school, I had to go back to school at night for four years to get my chemistry degree because you have to have a hard science. Judge Alan Albright does not have a hard science degree, he’s a poly psy major, so he’s not a patent lawyer with the registration number. However, being a registered patent lawyer gives you the right to prosecute patent applications at the U.S. patent and trademark office, okay. But, any lawyer that’s admitted to the bar and then could practice before the federal courts can litigate any case in federal court. So, you can litigate patent cases in court, even though you’re not a registered patent lawyer.

Raymond Guarnieri:

So, when you refer to someone as a patent litigator, that just kind of means it’s by nature of their experience, that they’ve been mostly focused on that in their career.

Thomas Colson:

It could be both. I mean, I was a patent litigator, right? For most of my career I’ve been a patent litigator, and I’m also a patent lawyer, I’m a registered patent lawyer. But, you don’t have to be registered to try patent cases in federal court, you don’t have to be a registered paddler. And Jen Friedman, again, she is a crack star litigator for us and she’s not a registered patent lawer, but she knows a ton about patents because she’s been involved in patent litigation for two decades. So, Trump appoints Alan Albright to the court, to the Western district of Texas in 2018. He’s a patent litigator, So he knows a ton about intellectual property litigation. And he’s a good guy to have on the bench.

Thomas Colson:

Now, here’s the unique thing about Alan Albright. I’m sure there’s a lot of unique things about the guy, right? But one thing that’s unique is, he gets appointed in 2018, he goes on a road show selling the fact that people should file cases in the Western district of Texas, right. He actually goes out on a speaking tour before the pandemic, in fact, he calls his tour… Wait, I wrote it down. Let me see if I can find it here. Okay. He calls his tour, Why You Should File Your Next Patent Case Across From Hey Sugar, okay. Hey Sugar is a candy store across from the Waco courthouse, right? So he goes on tour on his, Why You Should File Your Next Patent Case Across From Hey Sugar.

Raymond Guarnieri:

Okay, what?

Thomas Colson:

Yeah, because he wants to get people to file there. It’s federal courts, so if you can get jurisdiction in his court, he wants your case. And guess what, it works. Right now he’s got pending, let’s see, 545 cases are pending. Wait a second, I have it written down.

Raymond Guarnieri:

What is he getting commission?

Thomas Colson:

Yeah, exactly. It’s really cool. 545 patent cases are pending in the Western district of Texas in front of judge Allen Albright. So get a load of this, this patent case is his first patent trial as a judge. Okay. So, he’s a patent litigator… I don’t know why my screen is getting dark, but anyway… He’s a patent litigator, but this is his first case as a federal court judge dealing with the patent infringement trial.

Thomas Colson:

So, there’s standing room only in the courthouse because people who are going to decide whether to file cases in the Western district of taxes, in hopes of getting judge Alan Albright as there judge. Well I don’t know what he’s like, right? So there’s blogs doing a day to day on this case because not only do people have to decide where they want to file, but also keep in mind, this is a big case, right, because it’s not just about Roku.

Thomas Colson:

So, MV3 Partners also have pending actions at the time against Best Buy and Kohl’s for selling Roku’s, because remember, if you’re a patent owner, you have the right to prevent others from making, using, selling, or offering for sale, right? So, Roku’s making this device. I mean, arguably they’re selling it too, but Best Buy and Kohl’s are selling it. I bought my Roku from Best Buy, right. So, they’re also being sued, but their cases were put on hold pending the outcome of this case. So then, let me just go through a list here.

Thomas Colson:

So it’s not just Roku, it’s not just Best Buy, it’s not just Kohl’s, it’s also other key streaming device players including Google, Microsoft, Sony, Samsung, LG, Apple, Philips, Amazon, High Media. I mean, this is MV3 Partners day in the sun, right? I mean, they’re a company that the 223 patents and they are ready to go to town. They’re ready to start bringing their case over just like judge Albright went on a road show to sell the court, they’re going over on the road show to.

Raymond Guarnieri:

I feel like that’s a topic for an entire episode.

Thomas Colson:

I know, I wish I knew more about it. I just read about it this morning. I thought –

Raymond Guarnieri:

It’s not even… Is that like a thing?

Thomas Colson:

I don’t know. I mean, I guess. He wants to get busy, right? He doesn’t want to be sitting in his court just waiting to go play racquetball at noon. He wants to work.

Raymond Guarnieri:

I guess.

Thomas Colson:

Oh, and by the way, he did a great job. So, this trial, it sued in I think December of 2018 it sued. The trial starts beginning of October, 2020, so less than two years later. Discovery is complete, we are on trial for the biggest patent infringement case of the decade, right? I mean, I shouldn’t say… Wait, what decade does 2020 count in? ’11 to ’20? Let’s say it’s ’11 to ’20, okay? Probably the most exciting, biggest outcome case of the decade, particularly because, again, these services are dominating our lives, right? This is everything to humanity. We’re going to just become a bunch of people who sit there in our chairs watching videos and not even working in the future, right?

Raymond Guarnieri:

Just plug Roku into the back of your brain like the matrix.

Thomas Colson:

We’re going to have absolutely no muscle on our body, we’re going to have absolutely no athletic skills, no communication skills –

Raymond Guarnieri:

Like that movie Wall-E.

Thomas Colson:

Yes. I didn’t see Wall-E, but I heard it’s good.

Raymond Guarnieri:

It’s good, it’s good. Yeah.

Thomas Colson:

Yeah. So anyway, so judge Albright gets through a discovery, pretrial stuff, and into the courtroom in front of a jury within less than two years. So, I read about the trial, I didn’t watch it of course, but I read about kind of a little bit of a play-by-play, and apparently this guy, judge Allen Albright, was great at moving things along. It was a five day patent trial and he wouldn’t take… There’s one thing that jumped out at me is, when lawyers make objections, a lot of times they object, and then they go up and do a sidebar. And the court reporters are there and they got this little device that makes a little tiny bit of buzzing noise so the jury can’t hear what you’re talking about. And all this stuff happens kind of outside of the jury’s ears, he did everything in front of the jury.

Thomas Colson:

You got an objection? Make it from your chair, argue your objection. And he moved expert witnesses along and he would interrupt and start asking questions, because remember, this guy’s a seasoned litigator, right? So he was on the lawyer side of this for his whole career. So anyway, he moves the trial along very rapidly and it’s a seven jury panel. So, seven jurors, right. Now, you have never been on a jury, right?

Raymond Guarnieri:

Mm-mm (negative).

Thomas Colson:

I was in the jury box once where they call you in, they put you in the box, and then the lawyers ask you questions. And you have to keep one thing in mind about this and that is, juries in my experience of trying a lot of cases in front of juries, I’m not saying they’re not bright, but they’re typically not savvy about legal things, particularly technology, right? Because imagine the people that get on the jury, people don’t want to be on juries, right, because you’ve got a life. You don’t have five days to disappear from your job and go on a jury.

Thomas Colson:

So you get retirees, you get people who don’t have important careers to them. Or, 80 people are curious and they just want to be on it, but ultimately the lawyers are trying to get rid of anyone that’s biased at all. If you’ve got a strong opinion one way or the other, bam, you’re out. I was on a jury and it was a criminal jury and because I’m a former criminal prosecutor, I got bounced by the defense. Which by the way, I think was a mistake because even though I was a former prosecutor, I became very liberal minded and I probably would have been better for the defense by then. But, that’s different, that’s a discussion for a different day.

Thomas Colson:

The point is people want to get off juries and usually if they’re clever enough, they do. So, what does that leave you with? That leaves you with people who had time to be on a jury, we’re not clever enough to get off the jury, they couldn’t think of an extreme position to get them off. So who do you end up with, you don’t end up with necessarily the sharpest people. I mean, you’d think that for a patent case there’d be some rules about jurors having to have science degrees perhaps, so they could understand what’s going on. But there aren’t those rules. You can get people with just high school educations, two year associate’s degree, poly psy majors. You get whoever you end up with, is who you get. And they’re not necessarily technically savvy.

Thomas Colson:

Now having said that, I did read that there were a couple of jurors who were tech savvy on this case, which was probably a good thing. But anyway, you’ve got this case of the decade, where all kinds of stuff is going to be decided, MV3 Partners is ready to go out and start attacking all these big players. All these big players are waiting to see the outcome, and it rides on the opinions of seven regular people who are not trained in intellectual property, who are not trained in technology, right?

Raymond Guarnieri:

Yeah.

Thomas Colson:

That’s kind of an interesting situation, right?

Raymond Guarnieri:

Yeah, because in a sense you don’t want anyone with bias…

Thomas Colson:

Right.

Raymond Guarnieri:

… But at the same time, you want people to at least understand what they’re deciding and whether or not anyone’s breaking the law.

Thomas Colson:

You want people that can decide whether or not there’s patent infringement. Now think about that, Ray, part of our life is creating training videos on intellectual property fundamentals, right? We’re trying to educate engineers, people with science degrees, on intellectual property fundamentals. And even after they’ve watched our program, still, sometimes they have questions that are fairly general. They’re not really subtle questions, but before they watch our videos, it’s stunning how little they know, right? And these are engineers. Sometimes they’re patented engineers, right?

Raymond Guarnieri:

Right, you could be an inventor and still not know what that means really.

Thomas Colson:

Yeah. I’ve gone out and met with a bunch of my clients, I’ll go out and meet with a bunch of engineers to see what they’re working on, to see if there’s any patent applications that need to be prepared and filed. And I’m always stunned that people with 6, 8, 10, 12, 20 patents in their name as inventors, don’t even really understand what a claim is. You’ll read the claim that you’ve drafted and they’ll say, “That’s not my invention.” Because they don’t see their invention in the claim, they don’t understand that broad claims are better than narrow claims, you don’t want all your elements in the claim. They don’t understand a lot about claims and these are patented inventors.

Thomas Colson:

Now take seven people, literally off the street, right? Actually off the street, anybody from any walk of life, and they’re on that jury deciding whether MV3 Partners gets $41 million and then a clear path toward Google, Microsoft, Sony, LG, Apple, Philips Huawei, Amazon. I mean, seven people are deciding this. Now luckily, you’ve got judge Alan Albright who is a patent litigator who’s probably keeping them on track and reading them instructions that are simple. And you’ve got really bright lawyers on both sides that are probably trying to simplify it for the jury. Well, if they want the jury to understand it, sometimes they don’t want the jury to understand it. But, that to me especially, at the end of it all the punchline to this is, the seven jurors come back, rule against MV3 Partners in favor of Roku. And they say that there is no infringement of the 223 patent.

Raymond Guarnieri:

They were just sitting there thinking, I don’t want my Roku going away, or for it to be twice as expensive.

Thomas Colson:

That’s right. I mean, you have a jury pool of –

Raymond Guarnieri:

No, juries would never act out of their own self-interest.

Thomas Colson:

Of course not.

Raymond Guarnieri:

People don’t do that.

Thomas Colson:

Yeah, because these are highly sophisticated, highly ethical people on this jury. And they’re not going to do that, but imagine how many of them went home every day after trial and watched used the Roku to watch Netflix, or Prime, or Hulu.

Raymond Guarnieri:

They’re watching Law and Order or some other courtroom show because they didn’t get enough of it for 12 hours.

Thomas Colson:

Right. One other quick thing which I found interesting when reading about this was how careful the lawyers on the defense were, to make sure the jury understood. They kept it so simple. When I’m trying a case, when I’m on trial and I go in and think of the jury, I don’t want to send them into the jury box with eight things they have to think about. I want to send them with three things to think about, and I want to hit them with three things over and over so that at the end of it all, they’re thinking about those three things and they thoroughly understand them. And that sounds like what the defense did. They wanted them to clearly make an easy path to see that the product Roku had was different than the patent claims in that 223 patent.

Thomas Colson:

As you remember, when you’re deciding infringement, you have to look at the claim elements and determine whether the product has all the claim elements. If there’s five claim elements and the product only has four of them, they’re not infringing. So, I’m sure that there were charts, and visuals, and graphics, and all kinds of high tech stuff. I mean, we’re talking about millions spent in that 18 to 20 months on this trial. So I guarantee you, it was a great show that was put on by these lawyers, and they made it very simple to see what the product is, what it has, and what it doesn’t have in connection with those claims.

Raymond Guarnieri:

It’s really interesting. I wish I could have been a fly on the wall for that

Thomas Colson:

Better yet, not even a fly on the wall, a seat in the pew. I mean there are people watching that trial, and you can do that. You can actually do that. Not today, I don’t know what’s going on with the pandemic with watching these trials, but that’s something to think about is, find out when there’s a jury trial. And the patent cases don’t go to jury trial that often, but if you find a jury trial near you, you should go to watch it. Particularly a few of us should go and watch a jury trial when this pandemic is over, we should find a good jury trial someplace within driving distance and go and spend a few days watching it. Because I’m sure they’re not going to be as exciting as MV3 Partners versus Roku, but who knows, right? Who knows?

Raymond Guarnieri:

Yeah. I mean, you don’t know, right? I mean, we didn’t know that this case even existed. We didn’t know that the lives of our Roku devices were hanging in the balance of seven –

Thomas Colson:

Everything we hold sacred. Yeah, there’s the first amendment free speech rights, right, there’s trial by jury, and there’s Roku, the top three most important things in the American system, right?

Raymond Guarnieri:

Yeah, in addition to the bill of rights.

Thomas Colson:

That’s right, we almost lost one of them. And I bet ya a good percentage of Americans would give up that first amendment.

Raymond Guarnieri:

Oh, I’m laughing because it’s sad and true.

Thomas Colson:

Oh yeah. I’m telling you, Ray, and any one of our tens of millions of people who are watching, you want to be productive? So there’s this guy you might’ve heard of I think… By the way, I’m probably going to get this wrong, so forgive me if I get it totally wrong. But there’s this guy named Albert Einstein that you might’ve heard of?

Raymond Guarnieri:

Oh yeah, relatively.

Thomas Colson:

Yeah. He said, “There’s value in being underemployed.” And I think his mentality was, you have evenings and weekends where you could explore things and do great things, and I’ve always believed in that. I mean, I spent eight months once, every night, every weekend, creating a series of children’s books called A Girl Named Pants. I think we did a video on one of those once, but I couldn’t have done that. It took me four hours a night, five nights a week for eight months to create seven books. Five picture books for kindergartners, two chapter books, because I wanted my daughters to be empowered to believe that they could accomplish anything. And they needed a strong female character to show them that.

Thomas Colson:

But the point is, we sold 10,000 books. I’ve gotten all kinds of phone calls and emails from people who say, “Oh my God, my daughter’s life was changed by this.” And even to this day, I’ll have people come up to me sometimes and say, “Wait, did you do those Girl Named Pants books?” All because I didn’t have Netflix, right? There was no Netflix. I’m not saying this to bash Netflix because they are brilliant, but if you want to accomplish things after work in your evening hours, especially when so many people, particularly Americans, are struggling with one or two jobs in there and like they can’t get out of debt. You got to do stuff in your evenings to build something great. Whether it’s a hobby, or a business, empire, or whatever, these content providers are seriously taking away our enthusiasm for doing that. but having said that, I love prime, I love Hulu, I love Netflix, and Roku.

Raymond Guarnieri:

I can’t deny it. Even though I don’t have a TV, I do occasionally watch on a laptop, so.

Thomas Colson:

Yes, of course that’s their thing.

Raymond Guarnieri:

And it could get into your eyeballs no matter what device you have, that’s the brilliance of it, so.

Thomas Colson:

That’s the invention, right? It’s being able to stream with with your phones. I mean, yeah. You just carry your phone around and you’re hooked. We are hook Ray.

Raymond Guarnieri:

We are hooked, I’m not going to lie. So I think this was a really great discussion. I’m glad that you brought this up, and I hope that you all agree. If you found this entertaining, this little tidbit of stuff you should know about IP, please comment, share your thoughts. Let us know if you bought a Roku as a Christmas gift, and please share the podcast. And of course, happy holidays, Merry Christmas.