A recent The Recorder story, “Judges Skeptical of Bid to Boost $4.6M Fee Award,” reports that Universal Remote Control Inc. asked the U.S. Court of Appeals for the Federal Circuit to reconsider posttrial rulings by a Santa Ana judge that might—"in an alternate world," as one of the lawyers put it—result in a modest increase in Universal Remote's hefty award.

Universal Remote and its bitter rival in the television remote industry, Universal Electronics Inc. (UEI), notified the court Monday that they were on the verge of a settlement.  But then came Sidley Austin partner Peter Kang and Jones Day partner Gregory Castanias at a special seating of the Washington, D.C.-based appellate court at Pepperdine University School of Law.

"You still have a live case?" asked a nonplussed Chief Judge Sharon Prost.

Yes, they did.

Market leader UEI got roasted two years ago by a federal jury.  UEI sued over patents on the color-coding and backlighting of TV remote buttons, but jurors found one patent invalid and not infringed, and that UEI deceived the U.S. Patent and Trademark Office about inventorship of a second patent.

U.S. District Judge Andrew Guilford of the Central District of California awarded $4.6 million under Section 285 of the Patent Act.  That was about half the amount Universal Remote requested.  Guilford found UEI improperly brought the case as "payback" after its smaller competitor outbid it for a big contract.  But Guilford also rejected the patent misuse verdict, saying the jury had been acting only in an advisory capacity.  Equitable issues such as patent misuse can be tried to a judge or a jury.

New York-based Universal Remote argued that neither UEI nor Guilford said anything explicit before trial about an advisory verdict.  If the patent misuse verdict had stuck, Universal Remote would have been due a larger fee award, the company argued.

Guilford said he made clear during the trial that he was sitting partly as trier of fact.  "No objection was made, and this was the common understanding," he wrote in a posttrial order.

Sidley's Kang, counsel to Universal Remote, argued Tuesday that Santa Ana-based UEI "never made a peep" about requesting an advisory verdict, because it wanted to have "the hometown jury decide the equitable issues," he said.

But Prost and her colleagues turned the argument back on Kang.  "I think the district court relied at some point on your silence," she said. "You did not say 'I object.'"

She and Judge Raymond Chen also seemed perplexed that the parties were continuing to litigate.  "I'm not sure what getting this case back before Judge Guilford gets you," said Chen, noting that Guilford would be under no obligation to augment the fee award.

Kang said the patent misuse verdict would also have "evidentiary value" in a new round of litigation UEI has filed against his client.

Jones Day's Castanias, who is representing UEI on appeal, disagreed.  "It is an attorneys fees dispute, and that's all it is," he told the court.

Even in "an alternate world" where the jury's verdict was binding, Guilford would still determine fees based on the substantive strength of UEI's litigation position.  And Guilford determined that position was reasonable, Catanias said.

But, Chen asked, if UEI expected the jury verdict to be advisory only, why did it bring a Rule 50(a) motion at the close of trial asking Guilford to decide some equitable issues himself?

Castanias, mentioning repeatedly that his firm wasn't present at trial, said an advisory verdict could still affect how a judge might evaluate the equitable issues. Rule 50(a) provides for bringing "a motion in a jury trial," he said. "It doesn't say 'a motion in a binding jury trial.'"

In the end, the judges sounded likely to rule for UEI, unless the parties manage to settle first.  Guilford is an experienced patent judge, Prost noted, and suggested it's doubtful the court will find that "a well-known, long-standing jurist abused his discretion by calling it as he saw it."