Morgan Chu had the odds stacked against him last September when he went to trial against Sony Corp. on behalf of a small San Jose high-tech firm.
His client, Immersion Corp., makes technology that provides tactile sensation for keypads so that game players feel vibrations in their fingers when handling a joystick. The company claimed that Sony was illegally using its technology in its PlayStation 2 game consoles.
To prove it, Chu, chairman of the intellectual property and litigation practices of Irell & Manella LLP, set out to slowly teach the jury about Immersion's technology. He brought to the stand several witnesses, including the co-inventor of the technology and the chief executive of Immersion. And he had other witnesses use charts and graphs to hammer home the point.
In the end, the jury awarded $82 million to Immersion, a verdict that Sony is appealing.
"It was not just David versus Goliath, but one tiny David against two enormous Goliaths," said Chu, who initially sued both Sony and Microsoft Corp., which settled similar claims that it was using the technology in its Xbox consoles.
"You're fighting a foe in front of you, but you've got another foe behind you," he said. "They ganged up. That makes it more than twice as challenging."
It was another notch in the belt for Irell & Manella, which is considered one of the leading intellectual property practices in the nation. Two-thirds of the firm's 215 lawyers now represent technology companies or handle intellectual property matters.
That practice has been instrumental in helping the mid-size Los Angeles law firm reach $1.54 million in its profits per partner last year, according to American Lawyer magazine. With those profits, Irell has surpassed the far larger Gibson Dunn & Crutcher LLP for the first time to become the most profitable law firm in Los Angeles.
Such high-profile intellectual property work earned Irell the distinction of being named the top U.S. intellectual property law firm last year, according to Chambers and Partners, a legal publishing and consulting firm.
Many of its recent cases involve clients from television and the movies that are seeking to protect or pursue patents for new, more technological forms of media, such as video games and DVDs.
"The advent of the digital age and the Internet has simply broadened the horizons of all entertainment companies. They now have several brand new mediums within which to exploit their properties," said Jeff Briggs, an intellectual property partner at Alschuler Grossman Stein & Kahan LLP.
Founded in the 1940s as a tax firm, Irell has represented wealthy executives and entertainment studios in corporate deals, while in the past few decades Irell has handled more business and intellectual property litigation matters, which now make up 60 percent of its revenues.
Much of the success has revolved around Chu, former co-managing partner of the firm. In addition to the Immersion case last year, Chu led a group that convinced an appellate panel to affirm a $500 million award for City of Hope National Medical Center in its royalty suit against former research partner Genentech Inc., one of the largest biotechnology companies in the world. An appeal by Genentech is pending in California Supreme Court.
When Chu brought the Immersion case against Sony, the studio's defense lawyers were not surprised to see him. Matthew Powers, the lawyer representing Sony in the Immersion case, said he has worked against and alongside the lawyers at Irell several times in recent years.
"They're one of the players in the patent litigation space," said Powers, a partner at Weil Gotshal & Manges LLP, a 1,000-lawyer New York powerhouse firm.
But while fortunes at Irell have risen along with the growth of technology in Hollywood, its profits last year were particularly striking. The firm saw revenues increase 13 percent, to $199 million from a year earlier, while profits rose almost three times as fast, at 31 percent.
Managing partner David Siegel said the high-profile cases have allowed Irell to bill at higher rates, especially as larger, competing firms in New York hiked rates by more than 10 percent.
The firm will not disclose how much the firm's partners charge, but Siegel noted that rates for high-end business litigation run upwards of $800 per hour. He said the firm is able to charge competitive rates even though, with two offices in Southern California, it is smaller than many New York firms. Corporate clients tend to prefer large firms with multiple offices.
"We're not the most convenient firm, so we have to be the best," said Siegel. "And we've been able to do it without the luxury of throwing bodies at the problem."
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