Patent Trial Ends in Total Loss for MoFo Client
By Julia Love Contact All Articles
August 26, 2013
SAN FRANCISCO — After a two-week trial, Nuance Communications Inc. came up empty Monday when a jury found that a Russian competitor had not infringed any of its patents or trade dress.
Nuance had accused ABBYY Software House of infringing three of its patents and mirroring its packaging. Both companies market software that uses optical character recognition technology, or OCR, to convert scanned images of text so they can be searched and edited digitally.
Represented by a team of lawyers from Morrison & Foerster and Wilson Sonsini Goodrich & Rosati, Nuance argued that ABBYY's FineReader was little more than a copy of its signature product OmniPage. The Burlington, Mass.-based company also sued Lexmark International Inc. for its use of ABBYY's products and sought more than $100 million in total damages from the two companies.
Nuance did not prevail on any claims in Nuance Communications v. ABBYY Software House, 08-0912. MoFo partner Michael Jacobs, who is co-lead counsel for Nuance with fellow MoFo partner James Bennett, declined to comment.
From his opening statement to his closing, ABBYY's lead lawyer, Gerald Ivey of Finnegan, Henderson, Farabow, Garrett & Dunner, urged the jury to honor the American spirit of competition.
"That's what [this verdict] does," he said in an interview Monday. "It allows ABBYY to continue to compete fairly and on equal footing with all the other companies that are interested in the OCR technology that ABBYY is a real leader in developing."
The trial before U.S. District Judge Jeffrey White revolved around Nuance's U.S. Patent No. 6,038,342, which covers a "trainable template" that is updated during the process of converting scanned images into searchable text. The technology was roundly applauded when OmniPage debuted in 1988, Bennett said during his closing argument.
"It's not often in a patent case where you have the kind of widespread, third-party corroboration of the breakthrough, revolutionary... nature of an invention," Bennett told the jury. "And that's what we have here."
Bennett took ABBYY to task not only for infringing Nuance's patents but also for eroding the prices his client could charge for its products with deep discounting.
"OmniPage and Nuance, from the time that ABBYY entered this market, have been targeted," he said.
But Ivey insisted that the technology underlying ABBYY's products bears little resemblance to its competitor's. In contrast with Nuance's trainable template, ABBYY's program relies on a system of weighted guesses to determine word variance in context, he explained in an interview Monday.
"That is a very different philosophical and technological approach," he said.
Nuance also cried foul over ABBYY's packaging, which for a time made use of similar colors and images. During his closing argument, Ivey questioned the distinctiveness of Nuance's package design. He noted that there had been no documented cases of consumers mistaking the two companies' products. . And he took issue with the suggestion that his client was trying to masquerade as another company.
"ABBYY has proudly displayed its name on its packages since it entered the U.S.," he said in an interview.
During his closing argument, Ivey recounted ABBYY's beginnings as a startup, a story reminiscent of many Silicon Valley companies, though it unfolded in Moscow. The company's founder and CEO both testified in English, though it is their second language.
"Jurors had an opportunity to hear from them directly," he said. "I think that mattered."