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Patent settlement largest reported outcome

Quarles & Brady lawyers from left, Dave Cross, Ray Jamieson, Patrick Murphy and Johanna Wilbert gather at the firm's Milwaukee office Wednesday, Jan 12. The team was responsible for a $25 million settlement in 2010. (WLJ photo by Kevin Harnack)

Quarles & Brady lawyers from left, Dave Cross, Ray Jamieson, Patrick Murphy and Johanna Wilbert gather at the firm

Milwaukee attorney David R. Cross has become a better intellectual property litigator by being a patent holder himself.

A recent client, Metso Minerals Industries Inc., was the beneficiary of that expertise, with Cross leading a team of lawyers that successfully prosecuted a patent infringement and trade secrets case on its behalf.

Just how successful? In June, the Quarles & Brady attorneys secured a $25 million settlement from the defendants (See below).

It was the highest-dollar outcome reported to the Wisconsin Law Journal in 2010 – and it was the largest settlement Cross has ever garnered in his 30-year career litigating intellectual property and technology cases.

Just about every case he handles requires multiple lawyers and involve exhaustive discovery, most often dealing with experts on complex topics from across the globe. All that held true in Metso. Also, like most civil litigation, most of his cases conclude just short of trial, either via dispositive motions or settlement. In Metso, both took place.

Getting that particular successful outcome was very gratifying to him because “Metso was a terrific client,” he said.

“In my line of work, you work so closely with your clients, and you get to understand their business so well, that it becomes a very personal fight for us as well.”

The case was scheduled for a jury trial in July.

Jury trials have become the norm in intellectual property generally and patent infringement specifically over the past few decades, said Cross, compared to when he began his career and bench trials were standard.

“In front of a jury, a patent issued by the U.S. Patent and Trademark Office looks very official, and it is very official. And to ask a regular jury off the street to invalidate a document that’s been issued by the Patent Office is asking them to do a lot,” Cross said. “Judges, on the other hand, were more likely to find that a patent is invalid, at least back in that era. So patent cases gradually shifted from bench trials to predominantly jury trials, and that’s when the skills of trial lawyers became particularly important in handling patent cases.”

It worked to his benefit because one of his strengths as a lawyer is “translating” -taking the complex and putting it into terms that everyone can understand.

It’s also very helpful to be at a firm with some of the country’s most highly-regarded patent lawyers, who draft patent applications every day. Just one of their accomplishments was to apply for and obtain the stem-cell patents that resulted in University of Wisconsin researcher Jamie Thomson’s photo on the cover of Time magazine a few years ago.

As for Cross’ own experience as a patent holder, he said it “triggered a fair amount of litigation and fun for me, back in 90s.”

He holds a patent on an inflatable version of the cheesehead hat. It’s vinyl and pocket-sized, and when inflated resembles a child’s pool toy.

In the early 1990s, when the foam version started popping up at Packers games and elsewhere, not too surprisingly to Cross, a fair amount of litigation arose about people wearing headgear resembling slabs of cheese, in the copyright, trademark and patent arenas.

“I was tracking those cases because they were fascinating. And it occurred to me that people should have available to them a travel version,” he said. “It spawned a fair amount of lawsuits, which I handled myself and they all turned out well.

“It gave me an interesting insight. I’d handled plenty of these types of cases in the past, but until it was my invention at stake, I never quite understood the intense passion that an inventor feels when he sees someone infringe his rights. It really is a personal attack on almost a member of your family.”

He has since started a company called Blowhard Industries Inc. and he ultimately licensed the rights to the inflatable cheesehead to a company that previously infringed his rights, which now sells them at retail outlets and online.

Cross considers himself a lawyer first and inventor second. He doesn’t have any other inventions in the works – and really, could the inflatable cheesehead be topped?

Jane Pribek can be reached at [email protected].

Mining equipment manufacturer pays $25 million on patent case

Case: Metso Minerals Industries, Inc. v. FLSmidth-Excel LLC, et al.

Number: 07-CV-00926

Court: U.S. District Court, Eastern District of Wisconsin

Injuries alleged: Profits lost from sales of mining crushers sold by the defendants in competition with Metso’s crushers.

Outcome: Settlement

Amount: $25 Million

Disposition date: June 10, 2010.

Plaintiff’s attorneys: David R. Cross, Raymond D. Jamieson, Johanna M. Wilbert, Patrick J. Murphy, Quarles & Brady, Milwaukee

Defendant’s attorneys: John V. Picone III, Hopkins & Carley, San Jose, Calif.; David G. Hanson, Reinhart Boerner Van Deuren, Milwaukee

Plaintiff counsel’s fact summary: Metso Minerals Industries Inc. makes and sells high performance conical rock crushers that are used in the mining and construction industries. Defendant FLSmidth-Excel (“Excel”) also makes and sells high performance conical rock crushers that are used in the mining and construction industries. Defendant Excel Foundry & Machine Inc. (“Foundry”) makes spare parts for the crushers that were at issue in this case.

Three defendants formerly employed by Metso or its business partners were accused of stealing detailed design drawings, technical data sheets and computer aided design files related to the design and manufacture of certain models of Metso’s conical crushers. The defendants denied those claims.

Metso alleged that defendant Excel and defendant Foundry used Metso’s trade-secret information to design and build Excel’s conical crushers. Defendant Excel and defendant Foundry denied those claims.

Metso claimed that two defendants knew of, or had reason to know of, and actively encouraged the acquisition and use of Metso’s trade-secrets. Those defendants denied Metso’s claims.

Metso also alleged that some early sales of defendant Excel’s crushers and defendant Foundry’s crusher parts infringed a Metso patent. That patent expired on Feb. 24, 2006. Defendant Excel and defendant Foundry admit they infringed Metso’s patent, but they contended that the patent is invalid.

Finally, Metso alleged that a former Metso employee accessed without authorization Metso’s password-protected dealer website in 2004 while working at defendant Foundry. The defendant refused to respond to Metso’s allegations, instead asserting her 5th Amendment Constitutional right.

Pre-trial motions: Judge J.P. Stadtmueller issued several important summary judgment decisions in favor of Metso in May 2010. The court’s decisions eliminated the grounds for several defenses that had been asserted by the defendants. Among other things, Judge Stadtmueller made clear that Metso had standing to sue for theft of trade secrets related to one of its crushers, even though it did not hold legal title to the trade secret information. Judge Stadtmueller’s decisions also made clear that Metso was entitled to proceed with both its patent infringement claims and trade secret theft claims, and did not have to choose between these theories of IP protection.

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