Texas Jury Clears AT&T In Cellular Suit From Atlantic IP's Daingean Technologies

An Eastern District of Texas jury has returned a noninfringement verdict for AT&T in a case from Atlantic IP Services plaintiff Daingean Technologies Limited, in which Nokia and Ericsson had intervened as the manufacturers of the accused cellular base stations. The verdict follows another trial that went for the plaintiff in July, a different East Texas jury awarding $2M against Deutsche Telekom (T-Mobile) in a suit where Nokia and Ericsson also intervened.

Daingean sued AT&T in March 2023, followed by T-Mobile that July. The original complaints in both cases asserted six patents (8,576,803; 10,484,976; 10,841,958; 10,932,207; 11,134,400; 11,196,509) received from two sources: Mitsubishi Electric (MELCO), which assigned five patents to Daingean in August 2022; and FG Innovation Company Ltd. (f/k/a FG IP Innovation Company Ltd.) (FGI), which later added seven to Daingean's holdings. In August 2023, the plaintiff also sued Apple; that case ended in November 2023 as part of the resolution of a wider set of disputes between Atlantic IP and Apple. The '207, '400, and '509 patents were dropped from both wireless carrier cases in 2023, well before trial, with the '958 patent dropped in June 2024 and the '976 patent in August 2024. With that narrowing, the jury would ultimately consider just claim 12 of the '803 patent, one of those sourced from MELCO.

As indicated by the court in various pretrial orders, MELCO agreed to assign the '803 patent (as part of a larger portfolio) to Daingean as part of the resolution of an earlier dispute between Arigna Technology Limited, another Atlantic IP plaintiff, and MELCO: "Due to an unrelated dispute between Mitsubishi and Arigna, the parties there agreed to a settlement wherein Mitsubishi would assign, inter alia, the '803 Patent to Daingean".

The parties sparred over the impact of the MELCO-Arigna settlement in briefing on multiple dispositive motions addressed during the course of litigation. In October 2024, intervenor Nokia filed a motion for summary judgment that asserted it had a license to the '803 patent under a separate 2017 agreement between it and MELCO, contending that the patent is an "Essential Patent" covered by the license; and in the alternative that the '803 patent was covered by an option for certain "Non-Essential Patents" that Nokia alleged it still held and had subsequently executed as to that patent. As a result, Nokia contended that the license protects both Nokia and the wireless network provider defendants.

However, Magistrate Judge Roy S. Payne recommended that the motion be denied on May 27, 2025, determining that MELCO's transfer of the '803 patent to Daingean extinguished Nokia's option, rendering unenforceable its subsequent selection of the '803 patent under that option. That said, the court found that there remained a dispute of material fact as to whether the '803 patent is an "Essential Patent" under that agreement, which defined "Essential Patent" in a broader sense that "technical essentiality" is defined by the European Telecommunications Standards Institute (ETSI), the standard-setting organization.

Nokia's motion further alleged that in the event its license did not run with the '803 patent, the transfer of the '803 patent from MELCO to Daingean was void under two anti-assignment clauses of the Nokia-MELCO agreement that allegedly voided any transfers of the covered patents that failed to preserve Nokia's rights, such that Daingean lacked standing. Judge Gilstrap declined to accept that argument, instead interpreting the relevant provisions as applying only to licensed patents—and, having already ruled that Nokia lacked a license under the agreement, rejected the standing argument as a result.

As detailed further in prior RPX coverage, other prior agreements gave rise to a motion to transfer based on a forum selection clause: In an October 2024 motion to transfer, AT&T Mobility pointed to agreements between Atlantic IP (a Dublin-based patent monetization firm) and Samsung, "licensing several patent families to the latter"; between AIP LLC (Atlantic IP's US counterpart) and Samsung; and between Arigna and Samsung, all signed in 2022. Samsung, like Ericsson and Nokia, apparently supplies accused based stations, and the parties disagreed as to whether this set of agreements covers the '803 patent—and covers the defendants/intervenors.

After hearing the motion in December 2024, subsequently allowing related discovery, and receiving a supplemental motion based on what was uncovered, Judge Payne ultimately ruled that the motions to transfer per the forum selection clause in all three Samsung agreements were "legally frivolous"—rejecting arguments based on the allegation that Daingean was an "affiliate" of Atlantic IP under the agreement between it and Samsung, finding that this was not possible since Daingean was formed two days after the agreement. The court also rebuffed arguments based on the assertion that Arigna had control over the '803 patent because "all material terms" of the agreement were in place in May 2022, prior to the contract's August 2022 effective date, because MELCO was allegedly "aware that it would ultimately assign the '803 Patent to Daingean since as early as March of 2022".

The MELCO-Arigna settlement also played a role in a dispute over damages expert testimony leading up to trial. In October 2024, Daingean filed a motion to exclude the report of AT&T's damages expert, Melissa A. Bennis, in part challenging certain assumptions that she made about certain comparable licenses—among them the MELCO-Arigna agreement. The motion argued in part that Bennis was wrong to assume that in a hypothetical negotiation the parties would "meet in the middle", decrying that approach as a "rule of thumb" valuation practice barred by the Federal Circuit in Uniloc v. Microsoft (2011). In laying out that argument, Daingean revealed further details on an underlying disagreement between Arigna and MELCO over the value of the patent infringement dispute apparently resolved by that settlement: Arigna, per Daingean, valued that dispute at $22.17M, an amount MELCO apparently considered an "outlandish and baseless amount of alleged damages". Bennis assumed a "meet in the middle negotiated value" of $11.085M.

In an August 25, 2025 order, issued in the weeks prior to trial, Judge Gilstrap denied Daingean's motion, finding instead that Bennis's opinion on that point had been sufficiently tied to the facts of the case. The court cited the defendants' argument that there was evidence suggesting that MELCO in fact did consider the value to be de minimis—in particular, that the "underlying claim for $22 million stemmed from a 2021 patent transfer agreement where [MELCO] transferred 35 patent families for $670,000 in total (about $19,000 per patent family)", and that the agreement limited total damages for a breach of warranty to $100K. Moreover, given the defendants' assertion that MELCO's view that the claim was "baseless" should be given more weight as the position of the party hypothetically seeking a license, the $11.085M midpoint amount suggested by Bennis actually favored the plaintiff.

In the leadup to the AT&T trial, the parties also sparred over the impact of the July 11 verdict in the T-Mobile case, in which the jury found no infringement as to accused base stations from Nokia, but did find infringement for those from Ericsson. On July 29, AT&T sought leave to amend its answers to assert issue preclusion and filed a corresponding motion for summary judgment on that issue (both apparently filed only under seal), arguing that Daingean is precluded from relitigating its infringement claims for the Nokia and Ericsson base stations at issue as a result of the T-Mobile verdict. AT&T asserted in part that because the T-Mobile verdict addressed the same accused functionality from the same base stations, those claims have already been adjudicated—and contended that there were "essentially no significant differences between the accused base stations" (as summarized by the court). Daingean also sought leave to file its own summary judgment motion on that issue, but that request was denied by Judge Payne.

On August 19, Judge Payne recommended that the court allow AT&T to amend its answers, and that its summary judgment motion be granted as to the Nokia base stations but not for the Ericsson ones. Judge Payne observed that both AT&T and T-Mobile had previously approached the cases as if there were "numerous differences" between the base stations, questioning the "propriety" of now arguing the opposite for purposes of issue preclusion. Regardless, he held that AT&T had not carried its "high burden" of showing "that the jury necessarily found that there were no differences between the Nokia and Ericsson base stations" (emphasis in original), determining that the evidence instead reasonably supports a finding of noninfringement for the Nokia base stations, but not the Ericsson ones, "on the basis of differences such as in the MIMO features found on each". Judge Gilstrap subsequently adopted that report and recommendation, along with a slew of others (as is his usual practice), including the aforementioned one from Judge Payne on the license and standing issue, shortly before trial.

Trial then began on September 5. The jury returned a verdict on September 11, the fifth day of trial—finding that AT&T had not infringed claim 12 of the '803 patent, and thus not reaching the other two questions, respectively addressing validity and damages.

For further details on the AT&T and T-Mobile cases, and for additional background on Daingean and Atlantic IP, see "East Texas Jury Returns Split Verdict in Daingean's Case Against T-Mobile" (July 2025).