$156 M verdict against ATT in patent suit

Marilyn Tennissen Sep. 17, 2007, 6:26am

Doug Cawley of McKool Smith

A federal jury delivered a $156 million verdict against AT&T Friday in a patent infringement lawsuit brought by a Dallas-based communications company.

Jurors reached the verdict in favor of plaintiff TGIP Inc. on Sept. 14 after two weeks of testimony before U.S. District Judge Ron Clark in the Eastern District of Texas-Beaumont Division.

Dallas-based TGIP claimed it held rights to two patents covering point-of-sale activation of telephone calling cards and that AT&T and other communications companies were infringing on the patents.

Co-defendant MCI/Verizon reached a confidential settlement with TGIP on the second day of trial. Other defendants reached similar confidential settlements prior to trial.

In the lawsuit filed in March 2006, TGIP asserted that AT&T had infringed two patents, U.S. Patent Nos. 5,511,114 and 5,721,768, which allow customers to purchase calling time and to "recharge" previously-used calling cards at retail outlets.

TGIP was represented by Douglas Cawley and other attorneys from the Dallas firm of McKool Smith PC and the Tyler firm of Parker Bunt & Ainsworth PC.

Cawley is a member of the American Intellectual Property Law Association and has successfully represented both plaintiffs and defendants in large patent suits, including cases involving Intel and Ericsson.

AT&T was represented by Sidley Austin LLP in Dallas. MCI/Verizon was represented by Baker Botts LLP in Dallas.

The jury award of $156 million was based on a 4 percent royalty rate multiplied against AT&T's sales of approximately $3.5 billion, and equaled the full amount of damages requested by TGIP.

As a result of the jury's finding of willful infringement against AT&T, the district court, at its discretion, could increase the final award to $468 million, or three times the original verdict.

Attorneys for TGIP are requesting that the court also award attorneys' fees and related compulsory future royalties from AT&T.

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Sidley Austin LLP
1 S Dearborn St
Chicago, IL 60603

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