One-Time Adversaries Team Up for $59 Million Patent Win Over Samsung

Lawyers from Morrison & Foerster and McKool Smith get big verdict for Tokyo-based electronics manufacturer Pioneer

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Onetime adversaries in a landmark patent case in East Texas, Morrison & Foerster's Harold McElhinny and McKool Smith's Samuel Baxter decided to team up for a patent suit against Seoul-based Samsung Electronics. On Tuesday, a 10-person jury in Marshall, Texas, returned a $59.3 million verdict in their favor.

MoFo and McKool Smith represented Tokyo-based consumer and commercial electronics manufacturer Pioneer, which filed suit in September 2006 against Samsung for alleged infringements on two patents that enhance the definition of plasma television screens.

"Samsung entered the U.S. plasma TV market in 2001 and yet on the day we sued them they did not have a license to any other plasma TV patents from any other company in the world," says McElhinny, San Francisco-based co-chair of MoFo's IP group. "But Samsung sold over $2 billion worth of [TV's] without paying anyone else for their IP."

"Pioneer's niche is that they make high-end [TV] sets, and they charge the most for them," says Dallas-based Baxter. In order to develop a plasma television good enough to compete with popular LCD models, Baxter says, "You've got to make your [TV] brighter, so Pioneer figured out how to do that and they've got the best contrast in the market today."

Baxter says the trial took eight days before U.S. District Court Judge David Folsom in Marshall. A 10-person jury composed of six women and four men returned their verdict on Tuesday night, determining that Samsung had willfully infringed Pioneer's patents and awarding the Japanese firm nearly $60 million in compensatory damages.

The case was novel for two reasons. First, Baxter and McElhinny had faced off in a patent suit over DVR technology -- TiVo v. Echostar, also before Judge Folsom -- that ended in a nearly $74 million judgment for TiVo in April 2006. (See "Taming Texas," for feature on East Texas patent bar that discusses TiVo.)

"After that case was over, [Harold] called me up and said, 'Let's do one together,'" says Baxter, a former state district court judge and Harrison County district attorney in Texas.

McElhinny says that after the Pioneer verdict came down, he turned to Baxter and said that sitting at his table was much better than being on the other side. (The two are still adverse to one another in EchoStar. The U.S. Supreme Court recently denied EchoStar's appeal and Folsom is expected to rule soon on whether the company owes TiVo more for damages.)

"As far as I know, Sam Baxter may not have ever lost a patent case in Marshall," says McElhinny, noting that the Pioneer jury's foreperson attended the same church as Baxter. But he doesn't chalk the latest win up to hometown advantage. Says McElhinny: "Sam's literally one of the best trial lawyers I have ever seen. A lot of otherwise famous IP litigators have been going to Marshall and taking the credit when Sam's on their team."

The second noteworthy aspect of Pioneer v. Samsung: that a Japanese company turned to U.S. courts for redress. McElhinny says that most of this country's current patent laws were created to protect American companies from low-cost Japanese manufacturers. Because there is a degree of shame in going to court in Japan -- deference to judges means most cases there settle quickly -- McElhinny says more and more Japanese companies are now using U.S. courts to protect themselves from low-cost competitors based in Asia.

Not surprisingly, neither McElhinny nor Baxter believe that the notoriously plaintiff-friendly juries of eastern Texas had anything to do with their win.

"MoFo did most of the heavy lifting getting ready for the case, and Harold and [MoFo partner] Karen Hagberg did an excellent job at trial," says Baxter, who was assisted by McKool shareholder Rosemary Snider and senior counsel Garret Chambers. "The jury took copious notes and really paid attention, even when we had to bring in translators for the Japanese and Koreans."

Besides McElhinny and Hagberg, the MoFo team included partners Andrew Monach, Peter Stern, Taro Isshiki; counsel Sherman Kahn; and associate Kyle Mooney.

On the Samsung side, Edward Poplawski, the Los Angeles-based global co-chair of Sidley Austin's IP litigation practice, replaced Houston-based Baker Botts IP litigator Scott Partridge as counsel to the Korean firm on the eve of trial. Lance Lee of Texarkana, Texas' Young, Pickett & Lee served as Samsung's local counsel. (Sources say the switch to Sidley prior to trial may have been related to the firm's representation of Samsung in a previous settlement with Panasonic that Samsung deemed favorable.)

"Samsung respectfully disagrees with the jury's decision and intends to vigorously pursue post trial motions and any necessary appeal," said Samsung in a statement through Poplawski. "Samsung also intends to continue with its pending patent infringement suit against Pioneer scheduled for trial next year."

For their part, Baxter and McElhinny aren't finished with their partnership. The two are representing Pioneer in a related suit by Samsung that's set to go to trial in March, as well as a patent suit against several auto manufacturers over a mandatory device in all new cars that determines when vehicles have low tire pressure.

"We're a good team," Baxter says.