In the courts: Firm dismayed as jury rejects phone patent lawsuit

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The Independent Online
A British company is to appeal against the rejection by a US jury of a $180m lawsuit over mobile phone technology. Steve Boggan reports on a case that highlights the vagaries of a legal system.

In 1976, a British inventor, Leonard Murray, devised a way of "locking" mobile phones so no one but their owners could use them. It was a brilliant piece of microchip technology at a time when few could have envisaged the now ubiquitous use of personal phones.

Mr Murray, an engineer, patented his design but died before he could exploit it. After his death, the patent lay dormant until a group of young men discovered it and opened up a gold mine that has made them, and Mr Murray's family, multi-millionaires.

They learnt that all the major mobile phone manufacturers had been using Murray-style designs without paying licensing fees - and they set about pursuing their rights through the United States courts.

"We approached his family and agreed to pay them a percentage if they gave us the right to pursue claims," said Mark Hurley, 40, managing director of Leicester-based Pendawell Ltd. "Because it was a valid patent, companies like NEC, Nokia, Mitsubishi and Panasonic took out licences. Only Motorola held out."

Over the past two years, the company has quietly raked in $20m (pounds 12.6m) but last month they faced Motorola in a Delaware courtroom. Pendawell - known as Security and Access (Electronic Media) Ltd in the US - was claiming $180m (pounds 113m) for unauthorised use of the technology.

However, the eight-man jury came down against the British company, a verdict that has highlighted the arbitrary nature of jury decisions in civil cases. To the annoyance of the British team, a "shadow jury" employed by lawyers, came down unanimously in favour of Pendawell.

"In Britain, the case would have been heard before a specially qualified judge - not eight people who know absolutely nothing about microchip technology," said Mr Hurley. "We are going to appeal, but how can we know what a jury is likely to think when all the experts came down on our side? By the end of the case, even the Motorola team were expecting us to win.

"If two equivalent [juries] can meet diametrically opposing views on the basis of the same presentation of facts, how can a business or its advisers make a sensible commercial decision about the enforcement of valuable intellectual property rights?"

However, Motorola said: "After two weeks of trial, including expert testimony presented by Security and Access, a jury concluded that Motorola did not in any way infringe Security and Access's patent rights. Motorola believes the jury reached the right conclusion."