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McKool Smith Announces $156 Million Verdict In Patent Infringement Lawsuit against AT&T

A federal court jury verdict for Dallas-based TGIP Inc.

September 17, 2007

BEAUMONT, Texas – Attorneys from Dallas’ McKool Smith P.C. won a federal court jury verdict of $156 million for Dallas-based TGIP Inc. against AT&T Corp. in a patent infringement lawsuit over two patents covering point-of-sale activation of telephone calling cards.

The verdict was delivered late Friday in the United States District Court for the Eastern District of Texas, Beaumont Division.  Jurors reached their decision following two weeks of testimony in a trial before the Honorable Ron Clark.

Co-defendant MCI/Verizon reached a confidential settlement with TGIP on the second day of trial.  Other defendants reached similar confidential settlements prior to trial.

“We are thankful that the jury considered all the evidence before handing down its verdict,” says attorney Douglas A. Cawley, a McKool Smith principal who led a team of attorneys representing TGIP.

In addition to Mr. Cawley, TGIP also was represented by McKool Smith principals Theodore Stevenson, III and David Sochia, and firm associate Christopher Bovenkamp.  TGIP also was represented by Robert M. Parker, Charles L. Ainsworth and Robert C. Bunt of Parker Bunt & Ainsworth, P.C., in Tyler, Texas.

In the lawsuit filed in March 2006, TGIP asserted that AT&T had infringed two patents, United States Patent No. 5,511,114 and United States Patent No. 5,721,768.  The patents allow customers to purchase calling time and to “recharge” previously-used calling cards at retail outlets.

The jury award of $156 million is based on a 4% royalty rate multiplied against AT&T’s infringing sales of approximately $3.5 billion, and equaled the full amount of damages requested by TGIP.  As a result of the jury’s finding of willful infringement against AT&T, the district court, at its discretion, could increase the final award to $468 million, or three times the original verdict.  Attorneys for TGIP are requesting that the court also award attorneys' fees and related compulsory future royalties from AT&T.

AT&T was represented by Sidley Austin LLP in Dallas.  MCI/Verizon was represented by Baker Botts, L.L.P., in Dallas.

The case settled favorably to TGIP while on appeal to the Federal Circuit Court of Appeals.

          For more information, please contact Douglas Cawley at 214-978-4000 or Mike Androvett at 800-559-4534 or mike@legalpr.com.