Last November I wrote a column, An Engineering-Software Shootout, commenting on the importance of the then-upcoming lawsuit mentioned in the current release. Despite the muted coverage in the press, I still maintain that the result will have a major influence on any user of engineering or scientific software—that is to say, most ChipCenter readers. Meanwhile, the process has taken a very big step forward. Whether the war is essentially over or whether it's just the first battle in an extended campaign seems to be a matter of interpretation. As you'd expect, both parties in the legal proceedings have a different viewpoint.
Rich Rovner, VP of marketing at The MathWorks, comments that the only substantive thing that resulted from these initial proceedings is that the jury returned a mixed verdict—of the four patents at issue, they found that The MathWorks had infringed on three and there was no infringement on the fourth. Absolutely nothing else has yet happened, he adds. Clearly, The MathWorks is disappointed with the jury's findings, but "we intend to ask the Court to reconsider this jury's verdict before entering a final judgment. If that request is denied, he adds that the company plans to appeal the decision to the Federal Circuit Court of Appeals.
In the meantime, the company plans on running sales and support as normal. "We are respectful of the legal process," adds Rovner, and the company doesn't intend to do anything that would violate the law. From the sounds of what Rovner says, he believes it could be quite a while before the final decision is reached. When I commented that it sounds like it's early in the ball game, Rovner responded, "it's the top of the second inning."
I wanted to see how far along the people at National Instruments think the proceedings have gone, so I had a chat with John Graff, VP of marketing and customer operations. While he agrees that it's only Round One, he sees it as a BIG step. There have been several cases in the past where NI initiated litigation against firms for infringing on its patents, but this is the first time they've ever gone the whole way to trial on a patent issue. And they're quite pleased with the results—they've seen a jury examine the evidence, including an aggressive defense by The MathWorks concerning prior art, but had the jury validate the patents.
Here Graff points out that while the jury determined that only three of the patents had been infringed and one wasn't, the jury also determined that all four patents are valid. And that's a very important point, because speculation among NI's competitors for years has been that the patents' validity wouldn't hold up when somebody with enough resources was finally willing to take NI to court. Well, the patents did stand up.
After ruling on the issues of infringement and validity, the jury tackled the issue of damages. They awarded NI $3.5 million; Graff notes that both sides had agreed to waive any requests for reimbursement of legal fees. He agrees, though, that this decision on damages is also subject to appeal.
Meanwhile, and as the press release states, NI is asking the judge to issue an injunction to halt all sales of Simulink and the other related products that were the subject of the suit. He adds that while The MathWorks may decide to continue selling their products until the legal proceedings have finally reached an end, the damages are awarded for past infringements from the date NI filed the suit until the present. These damages will continue to accrue if the products in question continue to ship until the final determination goes in NI's favor.
As to The MathWorks' plan to ask the judge to review the decision and overturn the jury ruling, Graff looks on that as a routine legal maneuver that almost anyone would make, and he says it's unusual for a judge to overturn a jury verdict. Likewise, NI is "pretty confident" that the judge will grant the motion for the injunction.
Once all this is finished, we might start all over again because, as is also mentioned in the press release, NI has filed a second lawsuit against The MathWorks. From a top-level view, the first dealt basically with dataflow programming, whereas the second suit deals with a broad range of issues covering six different patents for such things as NI's method of working with an embedded target computer and other aspects of its real-time technology. No trial date has yet been set.
So, in baseball terms, are we at the top of the 2nd, or already into the 7th inning stretch? I think it will take somebody with some legal talent to make that determination. But because all motions resulting from the initial jury verdict must be handed in within 30 days, we'll soon have a better idea about where things are headed and how long it might take.
