Amazon owes Plano, Texas-based audio technology firm Vocalife $5 million in royalties for infringing on the company’s intellectual property, according to an East Texas jury. The six-day trial ended with the jury agreeing with Vocalife that Amazon had copied and sold Echo smart speakers using Vocalife’s technology without arranging and paying to license. Whether Amazon will have to cut the check remains unknown. The jury’s verdict is another skirmish in Amazon’s IP legal war with Vocalife and other companies suing on similar ground.
Royalty Ruling
The lawsuit stems from a meeting in 2011 between Amazon and Vocalife owner Dr. Qi “Peter” Li, who co-invented Vocalife’s speech-detection tech with Dr. Manli Zhu. Li claims demonstrated the microphone array he had designed at the meeting, thinking it would lead to a licensing or acquisition deal. According to Li, Amazon then stopped responding to his messages, but Vocalife asserts the Echo smart speakers that arrived on the scene in 2014 are using tech patented by Vocalife, the same tech used for Vocalife’s CrispMic II, multi-microphone array module, and related software for smart speakers and other devices that need speech recognition and voice control from a distance. Vocalife filed the lawsuit last fall, seeking $30 million as what the company’s lawyers called a “reasonable royalty” for the tech, back-dated to when Amazon started selling the devices.
Lawyers for Amazon and Vocalife argued over several of the contradictory claims by their clients. The only thing both sides agreed on is that the technology under discussion is important. But, the closing statements on both sides came down to two main elements. One is whether Vocalife’s patent invalidates Amazon’s claim to the technology. Amazon argued they were far apart technologically when the Echo debuted, and that there’s no infringement happening, while Vocalife claimed its technology is integral to Alexa’s functioning in the smart speaker. Amazon’s lawyers said if the company wanted the technology, the executives would have acquired the patent or Vocalife as a whole, as Amazon has done many times before. The lack of follow-up after the meeting Amazon ascribed to a lack of interest in the tech, which Vocalife’s lawyers countered by pointing to internal memos obtained from Amazon that they said showed genuine interest in what Li had demonstrated.
Texas Troll?
The jury agreed with Vocalife, albeit with a number somewhat smaller than $30 million. Still, the $5 million represents what could be a much bigger problem for Amazon if other companies started trying to claim its creations violated their patents. Amazon hasn’t said what it plans to do next, it wouldn’t be surprising to see an appeal coming. The fact that Amazon lost in the district court isn’t too surprising. Vocalife appears to be an actual company, but the Eastern District of Texas is notorious in the tech world for the number of patent trolls who sue giant companies there to try and win a cash settlement or more from the juries there. The judge in the Amazon case, Judge Rodney Gilstrap, once oversaw a quarter of patent cases in the U.S., while the district as a whole saw 40% of all national patent cases. Though things have improved following some court cases in 2017, about 10% of the nation’s patent cases still go through the Eastern District of Texas. The district is where Mycroft AI is facing a legal battle over its open-source voice assistant. Mycroft has repeatedly asserted that the company going after them is a patent troll, highlighting their abrupt incorporation in a place convenient to the Eastern District and their lack of actual products.
Not that the district is the only place Amazon is faced with patent lawsuits. Last summer, VB Assets filed a complaint in Delaware claiming that Amazon was violating several patents. Then in June, Flexiworld Technologies filed suit in the Western District of Texas over ten different patents. And of course, there is a suit and counter-suit in play in the heated dispute between Sonos and Google over patents. But, considering the circumstances of this particular lawsuit, not to mention concerns about the floodgates opening, Amazon and its fellow tech giants aren’t likely to walk away from these court cases without a vigorous fight at every step.
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