Mirror Worlds v. Apple, Inc. Judgment Overturned

Potentially one of the largest judgments ever awarded in a patent infringement case has been overturned on appeal.  In the case of Mirror Worlds v. Apple Inc., a Yale University computer science professor’s closely held corporation sued personal computer giant Apple Inc. for patent infringement based on several different method patents that Mirror Worlds claims Apple used in its electronic devices.

Background of the Case

At trial, Mirror Worlds alleged that Apple infringed on at least three of its patents in its Mac OS X operating system in the form of its Cover Flow, Spotlight, and Time Machine features on its iPods, iPhones, and Macintosh computers. Cover Flow is a feature on the Macintosh operating system that allows a user to cycle through viewing all of the contents of a folder easily. Spotlight is a feature that allows a user to search ones hard drive. Time Machine automatically backs up the users hard drive. All of these features are popular usability selling points for Apple devices.

Following trial in the U.S. District Court for the Eastern District of Texas, the jury agreed with Mirror Worlds— and handed down a verdict for willful patent infringement. The verdict could have been as high as $208.5 million per patent, or $625.5 million total, however District Court Judge Leonard Davis vacated the jury award as to the infringement and as to damages in an opinion handed down April 4, 2011.

Judgment as a Matter of Law as to Infringement: Evidence Insufficient to Prove Direct Infringement

Judge Davis held that Mirror Worlds failed to prove direct infringement by granting Apple’s motion for a judgment as a matter of law (“JMOL”) as to infringement. Essentially, a JMOL motion seeks to have the court enter a judgment against the non-moving party because the non-moving party has no possibility of winning because it has not presented enough evidence to support its claim. Here, the court’s granting of Apple’s motion for JMOL means that Mirror Worlds did not produce sufficient evidence to support its infringement claims.

In order to prove infringement, Mirror Worlds had the burden of proving that Apple actually performed the steps of the patent-protected invention. Judge Davis held that Mirror Worlds did not meet its heavy burden. He wrote, "construing this evidence most favorably to Mirror Worlds, the record does not contain evidence that Apple performed each of the claimed steps in the asserted method claims.  Accordingly, no reasonable jury could have concluded that Apple directly infringed claims 13 and 22 of the ’227 patent and claims 1, 2, 3, 9, and 11 of the ’313 patent." [1]

Instead of showing specifically that Apple performed each of the steps, Mirror Worlds relied on showing sales of Apple computers that contained the software (Mac OS X 10.4-6) that contained the allegedly infringing patent. Judge Davis stated, “The law is clear that the sale or offer for sale is insufficient to prove direct infringement of a method claim. …Not only is it legally insufficient to show direct infringement of the method claims through Apple’s sales, it is insufficient to merely assume that Apple conducted tests that performed the method while the accused features were under development.”

Accordingly, the Court vacated the jury’s verdict as to direct infringement.

Judgment as a Matter of Law as to Damages

In addition to vacating the jury’s verdict on the infringement claim, the jury’s damage award was also against the weight of the evidence. In computing their damages, Mirror Worlds included the sales of Apple products that contain the patented invention. Under applicable case law, “a sale or offer for sale is insufficient to prove direct infringement of a method claim—sale of the apparatus is not the sale of the method—and thereby irrelevant in calculating liability for direct infringement.” [2]

Much has been written about the damage award itself in this high-profile case. There was initially confusion regarding whether the $208.5 million figure written next to each infringed patent on the verdict sheet was meant to be the total award for the case, or whether those figures were meant to be added together to come up with the $625.5 million figure. Interestingly, Mirror Worlds’ contention at trial was that it was entitled to approximately $300 million in damages. Post-verdict, however, Mirror Worlds contends that it is entitled to add the $208.5 million per patent, resulting in a $625.5 million award—a full $325.5 million more than its own estimate of its damages.  

The question of damages is, of course, moot once the Court granted Apple’s motion for JMOL on the infringement claim, however Judge Davis chose to address these concerns in his opinion. The explanation Judge Davis offered is that during trial Apple renewed its motion for JMOL on the infringement claim, and the Court expressed “serious concerns” over whether Mirror Worlds had met its burden regarding two of the three patents, but it reserved its ruling until after the jury verdict. Therefore, the verdict sheet sent to the jury was modified such that the jury could record its findings for each patent, rather than the case as a whole, “in an attempt to provide Mirror Worlds with a basis for a damages award if the Court granted a post-trial motion for judgment as a matter of law dismissing the [two] patents.” [3]

Jury Trial Issues

During the trial in 2010, the jury heard complex legal and technological arguments about several different patents as well as several different technologies in which Apple allegedly used those patents. Judge Davis’ vacating the jury’s hefty award as against the weight of the evidence begs the question: is it possible for a jury to really understand complex patent cases and make awards accordingly?

The basic function of a jury is to determine questions of fact in a trial.  It matters not whether a jury has and understanding of how the law works, it only matters that the members of the jury can determine whether the plaintiff or defendant has met any burden of proof imposed upon them. Yet in patent cases, where the facts to be determined by the jury are complex and technical, a lay jury may have difficulty in making such a determination.

Judge Davis offered some rare insight into his opinion of how a jury operates during a patent infringement trial.  

“The jury often relies on the representations of parties, who bear the burden of being accurate and complete and living up to the representations they make to the jury. No matter how attractive a party paints the facade of its case, it is worthless without the requisite foundational support. It is the Court's job to inspect that foundation, and where it has not been properly laid under the law, to set aside the verdict to protect the reliability of our jury system. In this case, Mirror Worlds may have painted an appealing picture for the jury, but it failed to lay a solid foundation sufficient to support important elements it was required to establish under the law.” [4]

Conclusion

Judge Davis gives the jury credit in that the issues it was required to decide were incredibly complex and technical, and places the burden on the Court to determine whether the proper legal foundation to support a claim has been laid. The jury can only do its job when it is presented with a case that it is legally able to decide. Here, the jury was apparently doomed when it began deliberating, as the evidence it was charged with weighing was not sufficient although it likely appeared as though it were to the jury. Judge Davis offered a word of caution to litigators in cases such as this one in the above-quoted text. The warning is not to attempt to put on a show for the jury in order to receive their verdict, because while you may succeed with the jury, the judge reviewing the case will make sure that the jury’s verdict is in accordance with the applicable legal burdens.