Monday May 18, 2009

Coming up for air

I've had a number of people inquire when I will write about this. At this point, all I can say is that it has been a fascinating experience (and an exhausting number of months). For those of you who want to know more, here's where you can find the preliminary proxy. I will write more as we get further along in the process, but for now....

Lost in all the excitement about the Oracle announcement was some wonderful news relating to a litigation against Sun.

Almost three years ago, a company named Trilogy (now Versata Software) filed suit against Sun in the Eastern District of Texas. For a number of years, Sun had licensed from Trilogy what is known as configurator software - a program that enables a company to track components and build hardware configurations. (I own a Mini. If you go to the Mini website you can assemble online the type of vehicle you want, including all components and options. This is an example of configurator software.)

Sun paid many millions of dollar to Trilogy for the use of the software and additional support, but it never worked to our satisfaction. In 2002, we made the decision to look for an alternative and adopted an Oracle platform with additional features created by Sun. Needless to say, Trilogy was not happy with the loss of business and chose to sue Sun alleging patent infringement, copyright misappropriation and breach of contract, among other claims. As we proceeded with discovery, it was clear that Trilogy was extremely confident in their position as reflected in their unwillingness to engage in any meaningful settlement discussions.

For us, the case was a difficult one to assess. Although we were certain we should prevail, we knew that it would be challenging for a jury to understand the complex technology and intellectual property laws presented in the case. And, the jury would be one located in Marshall, Texas, which has the reputation of being very favorable for plaintiffs.

On April 16th, we started trial confident in our position, but concerned about our ability to communicate it in a very short period to a jury with almost no technical experience. Facing us was Trilogy's damage claim of $49m - with the possibility of treble damages, attorneys fees and interest.

After six days of testimony and evidence, the jury returned its verdict - finding completely in favor of Sun on all claims. The jury even determined that Trilogy's patents were invalid, which should be wonderful news to others facing suit by Trilogy.

I've been asked how we were able to achieve such a overwhelming result. In short, the answer is "talent". This isn't meant as braggadocio, but rather a reflection of a team of skilled and focused attorneys led by Sun's Chief IP Counsel, Noreen Krall, and Jeff Randall of Skadden, Arps. Throughout the litigation, they continued to adapt to the challenges of new issues and facts, but always maintained conviction in their view that Sun should prevail. To both of them and the rest of the team - a big "thanks".

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