Texas Jury Told Roku Infringed Interactive TV Patents

By Michelle Casady
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Law360 (April 5, 2021, 5:12 PM EDT) -- A Western District of Texas jury heard Monday in opening arguments that Roku Inc. has infringed two interactive television technology patents and must pay a software developer for the years it has used the protected tech to boost its own bottom line.

The in-person trial, presided over by U.S. District Judge Alan D. Albright, pits Roku against software development company ESW Holdings Inc. over ESW's claims 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.

Conor M. Civins of Bracewell LLP, who represents ESW, told jurors the tech startup that patented the technology had trouble managing the business side of its operations, and had to declare bankruptcy before it was acquired and merged with ESW in 2018.

But that means nothing about the value of the technology, he told the jury, because the case isn't about a business plan, "it is about property rights."

Civins said ESW would show that Roku infringed two 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."

"The name of the game for Roku is [having] as many people streaming as much as possible, and that means they want as many channels as they can get. Because the more channels, the more money, it's as simple as that," he said. "That's what this case is really about. The evidence is going to show that Roku is using our patents to provide authoring tools to channel developers to make it quick and easy to put channels on the Roku platform so they can make more money."

Civins told the jury they would need to award damages if they find Roku had infringed, but didn't specify a dollar amount, telling them instead to expect to hear from a damages expert who would detail that information later in the trial.  

Roku counsel Leisa Talbert Peschel of Jackson Walker LLP zeroed in on the business failure of the startup that created the technology and was later acquired by ESW.

"This case is about technology that people want versus technology they didn't want," she said in opening statements.

She told the panel that the patents ESW alleges have been infringed relate to interactive television, such as polls that would allow viewers to cast a vote during a program. The public, she said, never bought in.

"They went all in on that interactive TV technology and they simply lost that bet," she said. "There was no market for that."

She told jurors the evidence will show there's a "big difference between the streaming technology of Roku" and what the tech startup bought by ESW "was trying to sell."

Judge Albright seated six jurors for the trial and has given each side 12 hours to present their case. It is expected to last about a week, he told jurors as proceedings got underway Monday morning, and they can expect to begin deliberating by Friday.

Unlike the patent trial that Judge Albright presided over in March — which ended with a $2.18 billion verdict against Intel — he is not requiring participants in this trial to get COVID-19 tests before entering the courtroom.

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 Michael Watanabe.

For a reprint of this article, please contact reprints@law360.com.

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