The 2021 International Roofing Expo has been quite a learning experience. I have been visiting with people I have not seen since Covid struck and when they start updating me on various matters and issues, I confess that I have learned a lot. One of those matters I learned about for the first time was the huge judgment that EagleView obtained from Xactware for patent infringement.
The discussion about the patent infringement only came up after I mentioned how large the EagleView presence was at the Expo. Given that the size of the judgment must be well over $400m with interest and attorney fees, EagleView must be able to afford it.
Researching the matter, I came across this EagleView message to customers before the trial:1
We write to update you on the status of our patent lawsuit against Verisk and Xactware. The case, which has been pending since 2015, is now scheduled to go to trial on June 10th in Camden, NJ. As we have previously reported, EagleView has won numerous significant victories during the past two years as Xactware and Verisk have attempted to invalidate EagleView’s patents or delay the proceedings. EagleView’s repeated successes have confirmed the strength of its patents while eliminating the final roadblocks to a jury trial regarding Xactware and Verisk’s unlawful use of EagleView’s patented technologies.
. . . .Xactware and Verisk are flooding social media with attempts to downplay these significant events, making a variety of statements that are incorrect. For example, Xactware and Verisk assert that EagleView ‘abandoned three patents and 142 claims’ in the case. In reality, EagleView has consistently contended for years that Verisk and Xactware infringe each of the 153 claims that were originally asserted in this case. Although it is true that EagleView withdrew some claims, Verisk and Xactware agreed in a court filing that this withdrawal by EagleView was an administrative step ‘to present a more streamlined version of the case,’ and not a reflection on the strength of the withdrawn claims. Xactware and Verisk didn’t win anything; the two sides simply agreed to reduce the number of claims in order to make the presentation of evidence more manageable for the jury.
Verisk also states that, prior to the lawsuit, ‘EagleView affirmed that Verisk was not infringing its intellectual property.’ That is factually incorrect; in reality, EagleView has repeatedly informed Verisk and Xactware of its ongoing infringement and was forced to bring the present lawsuit when Verisk and Xactware refused to stop. Critically, Verisk and Xactware recently presented this very same position to the Court on a motion for summary judgment. The Court denied Verisk and Xactware’s motion and noted its ‘astonishment’ that Verisk and Xactware could have held such a belief.
Lastly, Verisk asserts that it ‘was doing 3-dimensional modeling of buildings nearly 20 years ago and began imagery analytics in 2004 to bring innovation to our customers.’ To the extent Verisk is attempting to imply that it independently developed EagleView’s patented technologies, that is incorrect; quite the opposite, when Verisk and Xactware first saw EagleView’s patented technologies, they repeatedly and very publicly praised EagleView for its innovations which led to Verisk making an attempt to acquire EagleView in 2014.
A press release at the time of the expected 2014 merger painted a much rosier picture:
Based in Rochester, New York, and Bothell, Washington, EVT was formed in January 2013 as a result of a combination of Pictometry International Corp., and Eagle View Technologies, Inc. The combined company maintains one of the most comprehensive image libraries, covering more than 85 percent of the U.S. population, more than one million square miles, and approximately 90 percent of total U.S. structures. EVT leverages this image library to provide proprietary solutions to property and casualty insurance, government, and a variety of other commercial markets. EVT has developed unique technology for image capture and processing, enabling understanding of physical property characteristics that can be used for valuation and risk management. With more than 24 petabytes of imagery-related data, EVT has established itself at the forefront of the market.
‘The acquisition of EVT advances our position in the imagery analytics market, adding new municipal and commercial customers. The transaction supports the aerial imagery solution development that has been under way at our Xactware unit,’ said Scott Stephenson, president and chief executive officer of Verisk Analytics. ‘We believe we can build on the comprehensive coverage of EVT’s library to expand solutions to our customers, including underwriting and, over time, international solutions as well. We look forward to combining the strong business built by the EVT team with Verisk’s analytical capabilities and unparalleled customer relationships in the property/casualty insurance market.’
Jim Loveland, president and chief executive officer of Verisk’s Xactware business, added, ‘We’re excited to welcome our new colleagues to the Verisk family and look forward to integrating their substantial knowledge and experience in imagery with our own. This acquisition will allow us to enhance our existing claims and underwriting software tools and expand the solutions we can offer to our existing property/casualty customers. We also intend to enhance solutions that EVT is currently providing to the municipal, government, and other commercial markets.’
‘This combination is a natural culmination of the businesses we’ve built over the years and a win for our customers and employees,’ said Chris Barrow, CEO of EVT. ‘Our teams stand ready to build on the strength of our existing solutions with the benefit of Verisk’s analytic expertise, customer relationships, and financial resources.’
Some may suggest that Verisk made a big mistake not purchasing EagleView based on dollar amount of the patent case. The trial resulted in a $125m jury verdict for EagleView. But the case did not end there because the judge had to determine if the verdict should be trebled. Researching the case, the court made the judgement a whopping $375m finding in part:
Given the totality of the circumstances and a review of the Read factors, the Court enhances damages to the maximum extent allowable. The Court is of course mindful of the damages in this action, but its analysis is largely guided by the scope and severity of Defendants’ misconduct. Thus, the Court finds that all the Read factors, as well as other considerations, favor enhancement, and treble damages will be awarded.2
Xactware and EagleView are huge players in the property insurance estimating claims industry. The case has huge implications and has resulted in Xactware from being able to use some enhancements which infringed on EagleView’s patents. The case is on appeal.
Thought For The Day
Of all of our inventions for mass communication, pictures still speak the most universally understood language.
2 EagleView Tech. v. Xactware Solutions, No. 1:15-CV-07025, — F.Supp.3d —, 2021 WL 568045 (D.N.J. Feb. 16, 2021).