Patent and Intellectual Property Litigation
SIPCO, LLC and IPCO, LLC – lead counsel for more than a decade for SIPCO, IPCO and the famous inventors David Petite and Edwin Brownrigg, who pioneered wireless mesh technology. I handled the licensing and litigation of patent portfolio of nearly 100 patents, negotiating almost 100 licenses and collecting revenues in excess of $100 million.
3COM ETHERNET – lead counsel in representing owner of 3Com’s famous Parallel Tasking Technology patent portfolio, which garnered in excess of $100 million in licensing fees, winning 2 separate jury trials.
FLASHPOINT – counsel to FlashPoint, a spin-off of Apple’s digital camera business, against multiple handset manufacturers. This portfolio recovered hundreds of millions in licensing fees.
PHILLIPS v. AWH – In the landmark U.S. Supreme Court case on claim construction, acted as lead counsel and settled the case for $2.55 million.
BIOSIG INSTRUMENTS v. NAUTILIS — In the landmark case in which the U.S. Supreme Court changed the standard for patent invalidity, represented plaintiff Biosig and settled case in 2018.
ADELOS v. HALLIBURTON, Case No. 9:16-cv-00119-DLC (D. Mont.). Lead counsel for Adelos, owned by the Consolidated Salish & Kootenai Tribes, in a patent infringement and conversion case in the U.S.D.C. for Montana, which settled on undisclosed terms in 2018.
In re Orbital ATK, Inc., et al., Civil Action No. 1:16-cv-01031-TSE (E.D.Va.). One of the lead counsel in a securities class action before Judge Ellis in the U.S.D.C. for the Eastern District of Virginia in a case that was recently settled for $107 million after the close of discovery.
In re Community Health System, Inc. Shareholder Derivative Litigation, No. 3:11-cv-0489 (M.D. Tenn). In a shareholder derivative case in the U.S.D.C. for Middle District of Tennessee, primary counsel in case that was resolved after discovery for a record $60 million in cash.
In re Exxon Mobil Corporation Securities Litigation, Civil Action No. 3:16-cv-03111-K. (Pending in the N.D. Tx.). Securities fund suit against Exxon for climate change accounting fraud, including a multi-billion dollar write-down of oil and gas reserves. We recently defeated a motion to dismiss and the case is in discovery.
In re HOME DEPOT Shareholder Derivative Litigation– in cases pending in Fulton County Superior Court, lead counsel for plaintiffs in shareholder derivative suits arising out of stock options backdating and Robert Nardelli’s termination. The case was eventually settled for landmark corporate governance reforms, as well as attorneys’ fees of $14.5 million.
Landmark Corporate Governance Reforms Achieved In Community Health System
Largest 6thCircuit Shareholder Derivative Recovery and Unprecedented Corporate Governance Reforms
On January 17, 2017, after more than five years of hard-fought litigation, John C. Herman and a team of attorneys obtained unprecedented corporate governance reforms on behalf of Community Health Systems, Inc. in a case against the company’s directors for breaching their fiduciary duties by causing Community Health to develop and implement admissions criteria that systematically steered patients into unnecessary inpatient admissions, in contravention of Medicare and Medicaid regulations.
The governance reforms obtained as part of the settlement include two shareholder-nominated directors, the creation of a Healthcare Law Compliance Coordinator with specified qualifications and duties, a requirement that the Board’s Compensation Committee be composed solely of independent directors, the implementation of a compensation clawback that will automatically recover compensation improperly paid to the company’s CEO or CFO in the event of a restatement, the creation of an insider trading controls committee, and the adoption of a political expenditure disclosure policy. In addition to those reforms, $60 million in financial relief was obtained, which is the largest shareholder derivative recovery ever in Tennessee and the Sixth Circuit.
At the final approval hearing, the Honorable Kevin H. Sharp commended Herman’s firm, noting: “I think y’all have done a great job pulling this [settlement] together. It was complicated. It was drawn out, and a lot of work clearly went into this [case]. . . . I appreciate the work you all did on this.” The judge further lauded the settlement as providing “benefit to the shareholders” that went “above and beyond money.”
In re Community Health Sys., Inc. S’holder Derivative Litig., No. 3:11-cv-00489 (M.D. Tenn.)
U.S. Ethernet Innovations, LLC v. Texas Instruments
Successful Enforcement of Critical Patent Rights
John C. Herman has successfully enforced the intellectual property rights of client U.S. Ethernet Innovations, LLC (“USEI”) with two jury trial victories in federal court. USEI is the successor-in-interest to the famous and wildly successful Parallel Tasking technology developed by 3Com Corporation in the 1990s. 3Com’s Parallel Tasking patent portfolio covers technology related to the manner in which a computer or other similar device transmits data over an Ethernet network. The patented Parallel Tasking technology was critical to 3Com’s multi-billion dollar Ethernet business in the late 1990s and 2000s.
While Herman successfully enforced USEI’s intellectual property rights with a number of companies based on license agreements, one infringer, Texas Instruments Incorporated, refused to acknowledge USEI’s patents rights. Texas Instruments argued that the asserted claims of USEI’s Parallel Tasking patents were invalid because they were both anticipated and obvious in light of two prior art devices that were on sale more than a year before the Parallel Tasking patents were filed.
In April 2014, Texas Instruments presented its arguments with regard to the validity of the asserted claims to a Texas federal jury. Following a week-long trial before the Honorable Michael H. Schneider, the jury returned a verdict for USEI on all 3 asserted patents and all 14 of the asserted claims. The jury found that the asserted claims were neither anticipated nor obvious, moving the case toward a second phase of trial on infringement and damages. As explained by John Herman, who led the litigation team, shortly after the result: “U.S. Ethernet is pleased that the jury recognized the strength and validity of the patented Parallel Tasking technology, which once formed the heart of 3Com’s multi-billion dollar Ethernet controller business. While we are not surprised by the results given the strength of the Parallel Tasking patents, the findings of validity are certainly welcome.”
A second jury trial was held in June 2014 on infringement and damages. Following another week-long trial, the jury once again returned a multi-million dollar verdict for USEI, finding that Texas Instruments directly infringed and actively induced others to infringe on all of the asserted claims.
“U.S. Ethernet is pleased that once again, a jury has confirmed the strength of 3Com’s famous Parallel Tasking technology, this time against Texas Instruments,” said Herman. “While much of the industry is now subject to a license for the widespread infringement that eroded 3Com’s Ethernet market, a few companies remain in suit in the Northern District of California.”
Attorneys John Herman and Peter M. Jones led the team responsible for obtaining this result for USEI. The jury verdict resolves U.S. Ethernet Innovations, LLC v. Texas Instruments Incorporated, No. 6:11-cv-491 (E.D. Tex.). The related cases in Texas were consolidated with U.S. Ethernet Innovations, LLC v. Ricoh Americas Corporation, No. 6:12-cv-235 (E.D. Tex.)
City of Pontiac Employees’ Retirement System v. Langone (Home Depot)
Landmark Corporate Governance Reforms Achieved at Home Depot
Shareholder activism has led to significant new reforms at Home Depot. After a wave of unprecedented shareholder backlash caused in large part by CEO Robert Nardelli’s obscene compensation package and the revelation that Nardelli and others had received “backdated” stock options, six separate shareholder derivative suits were filed in Atlanta, Georgia. The lawsuits address CEO compensation, backdating practices, and an accounting manipulation scheme involving return-to-vendor credits.
John C. Herman, on behalf of the City of Pontiac General Employees’ Retirement System, took over as lead counsel in these cases with the assistance of another 20 plaintiffs’ law firms. After over a year of hard-fought litigation, Herman was able to negotiate a favorable resolution of the litigation, which will result in significant corporate governance reforms at Home Depot.
As a result of the settlement, among other changes, Home Depot’s Board of Directors must: (i) restructure itself; (ii) require that two-thirds of its directors be independent; (iii) adopt enhanced director independence standards; (iv) adopt certain compensation policies and procedural safeguards for officers and directors; (v) implement voting standards requiring that director nominees receive a majority of votes cast to be elected to the board; (vi) impose safeguards on removal procedures for directors; (vii) adopt safeguards and notice requirements on stock option plans to lower the risk of backdating; and (viii) permit large shareholders or groups of shareholders to nominate directors.
On June 10, the Honorable Craig L. Schwall of Georgia’s Fulton County Superior Court granted final approval of the settlement and commended Herman for acting “with substantial skill and professionalism in representing the plaintiffs and the interests of Home Depot and its shareholders in prosecuting [the] case.”
John Herman spearheaded the litigation on behalf of plaintiffs. According to Herman, “The sweeping corporate governance reforms are a substantial step forward for Home Depot and its investors, and are an exceptional settlement of the action.”
City of Pontiac Gen. Emps.’ Ret. Sys. v. Langone, No. 2006-cv-122302, Findings of Fact in Support of Order and Final Judgment (Ga. Super. Ct., Fulton Cty. June 10, 2008).