Beaumont jury awards Dallas company $18M in patent infringement case

Marilyn Tennissen Jul. 16, 2008, 3:46pm

A Beaumont jury has awarded DeepNines Technology of Dallas $18 million in a federal patent infringement case against McAfee, one of the world's largest Internet security companies.

In a trial before U.S. District Judge Ron Clark for the Eastern District of Texas, jurors unanimously found on July 15 that McAfee's IntruShield line of Internet intrusion protection products directly infringe a patent developed by DeepNines.

Jurors found also that McAfee, based in Santa Clara, Calif., actively induced and contributed to its customers' infringement of DeepNines' technology.

Lead counsel for DeepNines, Tom Melsheimer of Fish & Richardson, called the victory a "classic David versus Goliath case."

"This was revolutionary Internet security technology developed by DeepNines' founder and CEO Sue Dark, and the jury sent a clear message that an industry giant like McAfee cannot utilize its strength and position in the industry to squelch a smaller, innovative competitor like DeepNines," Melsheimer said in a statement.

The case began when DeepNines saw a press release from McAfee announcing a product very similar to DeepNines' intrusion protection system that works with a firewall, for which it had applied for a patent in 2000.

McAfee applied for its patent in 2001, which was issued as U.S. Patent No. 6,513,122 on Jan. 28, 2003.

DeepNines filed an interference with the U.S. Patent and Trademark Office. The USPTO ruled in March 2004 that DeepNines were the first to invent, making McAfee's '122 Patent invalid.

DeepNines' patent for an Intelligent Feedback Loop Process Control System was issued as U.S. Patent No. 7,058,976 on June 6, 2006.

The company filed a patent infringement suit against McAfee on Aug. 16, 2006.

During the trial, McAfee was also found guilty of false marking – or deceiving the public – because they continued to mark 14 of their products (including the IntruShield product line) with a patent that the USPTO had ruled invalid.

Damages for false marking should be calculated by the end of August 2008, with half going to DeepNines and half to the U.S. government.

The court can fine McAfee for $500 per instance of each false marking.

U.S. District Court Judge Ron Clark also ruled on McAfee's claims of inequitable conduct and returned judgment that DeepNines did not commit inequitable conduct in the case.

McAfee also made counterclaims on three patents that were dropped before trial.

Fish & Richardson says on its Web site that the firm was founded in 1878 and handles more patent litigation "than any other law firm in the U.S."

"Fish & Richardson has long represented great innovators and entrepreneurs, including pioneering inventors such as Alexander Graham Bell, Thomas Edison, and the Wright Brothers," the press release states.

Robert Parker of Parker Bunt & Ainsworth PC in Tyler was also among counsel for the plaintiffs.

Martin Edward Rose of Rose Walker in Dallas was lead attorney for McAfee.

Other counsel for the defendant included Thad Heartfield of Beaumont, Eric Albritton of Longview and attorneys from Williams Morgan & Amerson of Houston.

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