Cloud-based storage infringement nets $240 million verdict

Intellectual Property

Jason G. Sheasby, Lisa S. Glasser, Rebecca L. Carson and Stephen M. Payne, Irell & Manella LLP

An inventor's compelling story and a credible damages claim are often the keys when successful plaintiffs' lawyers take patent infringement cases before juries.

Law partners Jason G. Sheasby and Lisa S. Glasser co-led an Irell & Manella LLP team that had both elements going for it in a significant patent case over data storage -- but there were two substantial drawbacks. The inventor in question was unable to testify and the team's damages litigator had to withdraw two days before trial due to a family tragedy.

Even so, Sheasby and Glasser's plaintiff team won a $240 million judgment from a Texas federal jury in a case that was noteworthy not only for the verdict's size but because the technology at issue underpins modern cloud computing. StreamScale Inc. v. Cloudera Inc., 2:21-cv-00198 (W.D. Texas, filed March 2, 2021).

The verdict was No. 5 on one legal authority's list of the top patent damages awards of 2023.

Sheasby called the litigation setbacks part of the challenge. "If you choose to do this job, it's fun if you treat it as an adventure and you are open to impermanence," he said. "If you accept you really have no control you can be at peace. Make a plan, God laughs."

The inventor of StreamScale's technology at issue, known as accelerated erasure coding, significantly reduces data storage costs and boosts the performance of data storage systems. "This software is some of the most expensive, rarest and complex software in the world," Sheasby said.

But inventor Michael Hamilton Anderson lives in Thailand and has a heart condition that prevented him from traveling or even testifying by video. "So we put on the patent prosecutor, which no one ever does, as the face of the company," Sheasby said.

For her part, Glasser started work on the case only three weeks before trial but may have turned the case in her client's favor with her powerful direct examination of StreamScale's technical expert. "She was large and in charge," Sheasby said. "She had an aura of command."

"In complex technology case like this, it might seem tempting to gloss over the details in the name of simplification for the jury," Glasser said. "But both the inventor and the jury deserve the full story. In this case, we used a combination of the inventor's own testimony, testimony from a professor of electrical engineering who is accustomed to teaching technology in understandable terms, and admissions from the defendant's documents about the invention's importance."

Just before trial, a serious crisis back home forced the team's damages litigator to leave abruptly. "He had to go be with his family," Sheasby said. "It was an emotional time." The team flew in Irell partners Rebecca L. Carson and Stephen M. Payne to get up to speed fast.

After two hours of deliberation the jury voted for twice the amount of damages StreamScale requested, finding that Cloudera infringed all of the asserted claims of the three patents at issue and failed to show any were invalid.

Cloudera, represented at trial by Pillsbury Winthrop Shaw Pittman LLP, said in a statement that it disagreed and was disappointed in the verdict. It vowed to challenge the judgment.

"It felt good," said Sheasby of the win. He also credited local counsel Max Ciccarelli of Dallas' Ciccarelli Law Firm for the win.

--John Roemer