We live in a complex world in which the technology we rely upon is changing every day. In this environment, technology disputes are inevitable. Our team can assist you in a variety of areas beyond what may come to mind with “traditional” IP litigation. For example, serious business harm may result if suppliers, distributors, or other business partners do not live up to their contractual obligations. Our litigators have handled a wide range of such disputes involving breach of commercial contracts. Our science and engineering backgrounds, which span a wide range of technologies, and our deep-rooted experience in IP give us a strategic advantage when handling these and other types of commercial disputes. Whether you are faced with a business or contract dispute relating to proprietary technology, misuse of your confidential information, or breach or loss of your data, we can bring an integrated team with a deep and diverse knowledge base to the table to serve your needs.
Client: Alexsam, Inc.
Problem: Alexsam owns U.S. Patent Nos. 6,000,608 and 6,189,787, which relate to systems for activating and reloading of prepaid debit cards, phone cards, gift cards, and other stored value cards at retail locations using standard retail point-of-sale terminals. Alexsam extended a patent license to NetSpend Corporation, a leading issuer of prepaid debit cards. But NetSpend later took the position that it had avoided the license by using systems that did not employ standard point-of-sale devices or use the banking network in the activation of its prepaid cards. The two companies could not resolve their dispute when NetSpend refused to pay royalties.
Solution: Fitch Even pursued Alexsam’s rights in a state court breach of license lawsuit filed in Austin, Texas. Our team maneuvered the case through discovery, including extensive discovery directed to the various systems used by NetSpend and by the third-party transaction networks and retail sales agents that make up its national card distribution and reload network. After prevailing over summary judgment challenges, our trial team conducted a two-week jury trial on the contested issues, opposed by NetSpend’s team of preeminent trial lawyers from a large national IP firm.
Result: The jury found that NetSpend had breached the license agreement and awarded $18 million in past-due royalties. NetSpend challenged the verdict in a subsequent bench trial, in which it argued that it was entitled to a reduction in royalties owed by reason of a “most favored nations” provision in the license. Following the court’s ruling rejecting NetSpend’s “most favored nations” defense, the case was settled for $24 million for a fully paid-up license under the Alexsam patents. The parties resolved their dispute, with our client receiving reasonable compensation and NetSpend able to fully deploy the patented technology as it grows its already highly successful prepaid card business.