There may be only one place in America where Yahoo is outperforming Google: the Tyler, Texas, courtroom of federal district court judge Leonard Davis, where a patent holding company called Bedrock accused both companies of infringing a Linux software patent.
On Tuesday Yahoo and its lawyers from McDermott Will & Emery won a jury verdict that Yahoo does not infringe Bedrock's patent, which involves code for removing expired records while the operating system performs other operations. On April 15, a separate Tyler jury reached a contrary conclusion in Bedrock's case against Google, finding that Google infringed the same patent and awarding Bedrock $5 million in damages.
To be fair, the Google verdict was hardly the windfall Bedrock and its lawyers at McKool Smith were hoping for. McKool lead trial counsel Douglas Cawley told jurors that Google had saved half a billion dollars as a result of its infringement of Bedrock's patent. He asked for an award of $183 million and got only $5 million. But given the success Quinn Emanuel Urquhart & Sullivan has had in East Texas litigation for Google, it's worth taking a look at why Yahoo got a flat-out defense win and Google didn't -- especially because McKool put on the same three Bedrock witnesses (the patent inventor, a damages expert, and a technical expert) in both trials.
First off, Bedrock had a stronger case against Google. Cawley put on evidence that Google used Bedrock's Linux code on its servers (although Google got rid of the code before trial). Yahoo, on the other hand, used a different form of Linux, and its lead trial lawyer, Yar Chaikovsky and Fay Morisseau of McDermott Will, were able to argue that Yahoo never executed the Bedrock code.
Yahoo also benefited mightily from going to trial second. Chaikovsky and local counsel Jennifer Doan of Haltom and Doan were in the teeming throng of defense lawyers who sat through the Google trial in April, along with lawyers for co-defendants Amazon, AOL, MySpace, and SoftLayer. They got to preview Bedrock's case and watch how Cawley of McKool Smith handled Google's experts and its corporate witness, software engineer Lucas Pereira. That undoubtedly helped Chaikovsky prepare his witnesses. (McDermott was also smart to call Yahoo co-founder David Filo as his corporate witness -- East Texas juries love hearing from top-level execs.)
Bedrock's witnesses, meanwhile, couldn't change their testimony between trials. Otherwise, Chaikovsky would highlight the contradiction. The technical expert, for instance, was stuck with an admission that merely possessing the code wasn't the same as using it, which he had said under cross-examination by Google lead counsel Claude Stern of Quinn Emanuel.
Bedrock ended up asking the jury for $32 million in damages against Yahoo -- a fraction of what it wanted from Google. But give Yahoo and McDermott credit for toughing out a trial after the Google verdict. Yahoo's four co-defendants all settled the weekend before the trial started; the docket indicates that both Amazon and SoftLayer agreed to licensing deals as well as confidential settlements.
Yahoo's win is the first outright defense verdict in Judge Davis's courtroom since 2007, according to Michael Smith of Siebman, Reynolds, Burg, Phillips & Smith, who writes the Eastern District of Texas Federal Court Practice blog.
Yahoo counsel Chaikovsky said the verdict is "a fantastic result" and declined additional comment. Google counsel Stern of Quinn Emanuel declined comment, and a Google in-house lawyer didn't return a call. Bedrock's lead lawyer, Cawley of McKool, didn't respond to an e-mail and phone message.
(Reporting by Alison Frankel)