Gordon Bremer didn't invent Bluetooth 2.0. In fact, as he admitted on the stand last week in an East Texas federal court, he hadn't even read the specification for it until 2007—three years after it was on the market.
Despite that, Bremer may be getting paid a hefty royalty by Samsung, after a jury ruled that the Korean electronics company infringed Bremer's patents. He stands to get 2.5 percent of the $15.7 million verdict [PDF] won by his employer, Rembrandt IP, one of the oldest and most successful "patent trolls."
The jury found in Rembrandt's favor on Friday after a week-long trial, finding that Samsung's Bluetooth-enabled products, including its most popular cell phones, tablets, and televisions, infringe Bremer's patents, numbered 8,023,580 and 8,457,228. The patents relate to compatibility between different types of modems, and connect to a string of applications going back to 1997. The first version of Bluetooth was invented by Swedish cell phone company Ericsson in 1994.
Last week's award to Rembrandt is the second jury verdict in two weeks giving money to a patent troll, a term used for companies, like Rembrandt, that make their money from filing patent lawsuits. While the trial was only against Samsung, the same complaint [PDF] names Blackberry as an infringer. (Court records show no indication Blackberry settled, so it may have an upcoming trial date.)
Meanwhile, Rembrandt's lawyers have made clear they believe the Bremer patents apply to all products using Bluetooth 2.0 and later—a huge swath of products. This win against Samsung may ultimately be one small piece of Rembrandt's plan to collect from Bluetooth.
"Justice was done here," said Rembrandt lawyer Demetrios Anaipakos, in a statement published yesterday celebrating the victory. "The Rembrandt inventions are at the heart of Samsung Bluetooth capabilities."
An “Aha” Moment
Most patent verdicts don't come with a whole lot of information, but trial reports published by a local newspaper, the Marshall News-Messenger, reveal some key details from the case.
Bremer, who has been working as a consultant at Rembrandt since 2004, took the stand on the first day of trial. When he read the Bluetooth specification, he told Rembrandt higher-ups that his patents, originally applied to work he did on modems back in 1997, could be applied to Bluetooth products.
“I had a kind of ‘aha’ moment," Bremer told the jury, according to the newspaper report. "I came up with an (eloquent) solution... I realized if I put an indicator at the beginning of each communication that said change the modulation, this communication could happen instantly."
Over the course of nine years consulting for Rembrandt, Bremer said he's been paid $670,000. He gets 2.5 percent of all settlements extracted using his patents.
Bremer continues to create more patents for Rembrandt. He has more than 100 to his name, according to Rembrandt's lawyer. It's a symbiotic relationship—he creates the patents, testifies and gets deposed, while Rembrandt provides the legal muscle. From the Marshall News-Messenger:
When asked how he felt about his relationship with Rembrandt, Bremer said he’s very proud to work with them.
“Even though I’m not the owner of the patents, I invented these patents. I’m very proud of the patents,” he said.
He said he appreciates the fact that Rembrandt has made the effort to get the patents enforced.
“I never could do that,” he said.
On cross-examination, he acknowledged that it was the Bluetooth Special Interest Group, or BSIG, that came up with the 2.0 version, including the Enhanced Data Rate or EDR technology.
"I made no contributions to the standards body," Bremer said.
In cross-exam, Samsung's lawyer asked if Bluetooth and EDR infringed on his patents.
"I’m not an attorney to answer that,” Bremer responded.
“Time for the smoke to vanish”
Statements made during closing arguments, some of which were preserved by reports in the Marshall News-Messenger, suggest that the court battle really came down to the specific wording used in the patents—and perhaps to which expert the jury found more convincing.
"I told you in opening statement, the invention in this case is at the heart of EDR and EDR would not work without multiple modulation systems," Rembrandt lawyer Anaipakos said. "[The defense expert] said the payload modulation scheme is ‘indicated. That’s our infringement case — straight from the horse’s mouth."
Bremer was conspicuously absent at some key moments in the development of Bluetooth, but Anaipakos said his large trove of patents proved how skilled he was.
"He wasn’t a member of the SIG (Bluetooth Special Interest Group), but he has 100 patents," Anaipakos said in closing arguments. "No, he’s not going to win [on] popularity, but he’s a smart guy... It’s time for all the smoke to vanish and for justice to be done."
Samsung lawyer Jeff Sherwood handled closings, focusing on the non-infringement argument.
“Everyone of thee claims require a heading in the packet to notify a change in the modulation packet,” he said.
Bremer had never created a product based on his patents, Sherwood noted. He tried to sell his patents to other parties, but "no one wanted them," according to the news report. Finally, Rembrandt swooped in to buy them up.
Bremer admitted he had no part in creating EDR. Meanwhile, Samsung hired as its expert a man who was deeply involved in the technology—Steven Hall, now a technical director of Broadcom, who was vice-chair of the Bluetooth SIG "Core Specification Working Group."
"When it comes to EDR, he is the man,” Sherwood assured the jury. “He never heard of Mr. Bremer."
The jury deliberated for less than an hour before returning a verdict that Samsung should pay Rembrandt.
Charity abounds in a tough venue
Marshall is a small town that has been a hotspot for patent lawsuits for more than a decade now. US District Judge Rodney Gilstrap, who presided over this trial, oversees far more patent lawsuits than any other federal judge.
The Eastern District of Texas has stayed popular with patent holders, even as the docket has clogged with cases. Some factors cited include relatively fast-moving litigation, judges reluctant to make early summary judgment rulings, and a perception that juries are more likely to grant large awards.
Samsung has been sued in East Texas dozens of times. That's not unusual for a large technology company. More than its rivals, though, Samsung has taken some unusual steps in recent years to try to keep up its reputation in Marshall and nearby towns. There's no mistaking who sponsors Marshall's winter festival—Samsung has its corporate logo plastered all over the town's ice-skating rink, which gets set up each year in the same downtown square as the federal courthouse.
The company also makes a habit of granting scholarships to high school students in Marshall and nearby Tyler, giving a total of $50,000 last year. Winners receive photograph-worthy giant checks with a Samsung logo on them, and those images are often published in the local newspaper. The same check was on display in the News-Messenger when Samsung made a donation to Habitat for Humanity.
No Samsung donation seems to be too small for the company's public relations team to promote. The Samsung Holiday Celebration Show, an $8,000 donation of monitors to Marshall High School, and a field trip to an Austin semiconductor plant all made the News-Messenger. A 2012 op-ed referred to Samsung as "the South Korean company that has fortunately become Marshall’s benefactor."
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