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Big Blue Veteran Leads Apple-Samsung Patent Verdict Jury

Apple Inc. (APPL) and Samsung Electronics Co. (005930) both trusted a retired IBM executive with patent litigation experience to give them a fair trial.

When jury foreman Thomas Dunham handed over the verdict in court May 2, it wasn’t a sweeping victory for either company. Apple got just $120 million of the $2 billion it sought for infringement of its smartphone patents, while Samsung won one of its two claims against the iPhone maker.

The trial, involving 10 Samsung devices and five of Apple’s, demanded the jury weigh complexities of Apple’s iOS operating system and Google Inc. (GOOG)’s Android system used in the Galaxy and other Samsung models. The verdict will guide the judge as she decides probable requests by both companies to ban U.S. sales of the other’s products found to violate patents.

Dunham, who retired from International Business Machines Corp. (IBM) four years ago to pursue a hobby of restoring classic cars, stood out among the eight jurors, three of whom had master’s degrees, for experience with patented software.

That both companies agreed to let Dunham serve is “a message that each party believed in its case,” said Michael Risch, a professor at Villanova University’s law school. He also said it’s a good bet Dunham had outsize influence on his fellow panelists.

“When you pick someone with that kind of experience, the chances are good that you’ll get someone who will look closely at the details,” Risch said. “And if that’s true, you have to believe that the details support your case.”

Outsize Influence

It isn’t surprising that this jury foreman would help lead to “a mixed bag result,” said David Shlansky, an intellectual property litigator who has followed the case

“The nominal award on one patent to Samsung implies a careful reckoning with each claim, and a deliberate, compartmented treatment -- similar to a Last Will leaving a nominal amount to deliberately avoided beneficiaries, saying effectively, ‘I did not forget you, I just didn’t think you deserved much,’” he said in an e-mail.

The Apple-Samsung jury included a Spanish-born, retired teacher with master’s degrees in linguistics and Spanish literature, a retired contractor, a county government business services specialist and a community service officer at a police department in a suburb of San Jose, California.

The four-week trial in the heart of Silicon Valley was held in the same federal courtroom in San Jose where the world’s top two smartphone makers had their first U.S. trial two years ago. The cases were part of the companies’ patent battles across four continents as each tries to dominate a market valued at $338.2 billion last year, according to data compiled by Bloomberg.

While the litigation has posed a threat to Android, Google has continued to aggressively pursue a bigger piece of the market, with new features and updates to attract more users. The efforts helped the search engine company claim more than 75 percent of the smartphone industry at the end of last year, according to Gartner Inc. (IT)

Jury Recalculation

Jurors reconvened today to review their verdict and left the $120 million award to Apple intact. Before they were discharged late this morning, the four men and four women weren’t allowed to discuss their deliberations or Dunham’s role.

The jury foreman at Apple and Samsung’s 2012 trial, another Silicon Valley resident, was an engineer with a patent to his name and 35 years’ experience in the computer hard-drive industry. He said in an interview after the trial that his fellow panelists selected him to be foreman based partly on his experience.

Vetting Jurors

During jury selection for the second trial, lawyers for the companies took extra time vetting prospective jurors with technology industry backgrounds for any possible bias.

A LinkedIn Corp. software engineer in the jury pool who said his company provides products for both Apple and Samsung was excused after he told the court both companies are “bullies with their patent libraries.” Another who didn’t make the cut was a woman who worked for Tessera Technologies (TSRA) Inc. in the early 2000s and recalled that the company had been involved in litigation with Samsung.

“Selecting a jury in this case was extremely difficult,” said Brian Love, an assistant professor of law at Santa Clara University. “This jury is far from a random selection.”

Lawyers often seek jurors who can be “molded by general themes and broad stories rather than nitty gritty facts,” Risch said.

After three days of deliberations, Dunham and the other jurors came to a unanimous agreement on about 250 decisions involving seven patents after hearing some 50 hours of evidence, including testimony from company executives, engineers and business school professors. One of the Apple patents covered by the case was found by the judge before the trial to have been infringed by Suwon, South Korea-based Samsung.

Split Verdict

While the 2012 trial was a clear victory for Cupertino, California-based Apple, ending with an award of $930 million in damages against Samsung, jurors this time around sided with Apple on two out of four patents they considered and with Samsung on one out of two.

Dunham, who was questioned more extensively by lawyers during jury selection than most others in the pool, displayed a knowledge for the kinds of details the case would present when he explained that he had responsibility at IBM for “$2 billion worth” of income statements while directing large systems software projects.

Dunham was also quizzed by U.S. District Judge Lucy H. Koh, who is presiding over the case, about serving as a witness in a lawsuit accusing Compuware Corp. of copying IBM’s code that settled before trial. He told the judge he gave a deposition, a response to questions from lawyers, in that case, and that he wasn’t involved in other cases in which IBM sought, “on a regular basis,” to enforce its patents.

Potential Ally

Mark Lemley, a professor at Stanford Law School who specializes in intellectual property, said before the trial that for someone with Dunham’s background, “both sides might see him as a potential ally.”

During jury selection on March 31, it was revealed that four of the jurors were born outside the U.S. and at least four owned iPhones. One is an accounting assistant at a local college, while another is an executive assistant at Seagate Technology. (STX)

It was the gray-haired Dunham who drew special attention. Born in Oklahoma City and now living in San Martin, California, Dunham said in court that he provided the direction for Armonk, New York-based IBM’s patented software at his division.

“As you know, IBM has quite a patent portfolio, and I had responsibility for developers that created patents,” he told the court on March 31, according to a transcript.

“And did you think those patents were important to IBM?” Bill Lee, a lawyer for Apple. asked Dunham.

“Yes, I did,” Dunham said.

IBM Portfolio

“And did IBM think they were important to IBM?” Lee asked.

“Yes, they did,” Dunham said.

Dunham told the court that he lives with a woman, a marketing representative for a financial services company, and that he has two sons. He said he hadn’t served on a jury before.

He also disclosed that his interests extend beyond the rarefied world of software patents.

The website for On the Road Classics, the Morgan Hill, California-based shop where Dunham restores classic cars, shows more than a dozen before-and-after photos of an award-winning 1958 MG MGA sports car that he worked on.

“My current job is my lifelong hobby, which is restoring classic automobiles,” he told the court.

The case is Apple Inc. (AAPL) v. Samsung Electronics Co., 12-cv-00630, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in federal court in San Jose, California, at

jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg

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