Represented by Hunton & Williams, Herndon-based ePlus contended that Ariba infringed on the patents for ePlus' electronic procurement system. Ariba denied any infringement, sending the case to trial in federal court in Alexandria.

After the trial, the jury found that Ariba had willfully infringed ePlus' patents. That, however, was just the tip of the iceberg.

"Under the patent statute, the judge has discretion to award up to three times the actual damages and the successful party's attorneys' fees," said Jennifer A. Albert, a Hunton & Williams partner who joined partners Thomas J. Cawley and Scott L. Robertson at trial.

Robertson added that the judge could have issued an injunction to stop Ariba from using the patented procurement system.

"This product line represented 60 percent of Ariba's revenues," he said. "A permanent injunction would have significantly impaired their ability to conduct ongoing business operations."

David Beats Goliath, Again

ePlus' patented procurement system allows company buyers to search electronic catalogues online when searching for goods. With the system, buyers can comparison-shop to find the best vendor and best price. In addition, the buyer can also check to see if the product is available. The system allows for efficient compliance with company requisition policies.

"This system builds electronic requisitions and routes them to the right people for approval," said Albert. "It then generates electronic purchase orders and transmits them to the suppliers."

ePlus applied for the patents in 1994, in the infancy of the Internet. Two of the patents were issued in 2000; the third was issued in 2001.

ePlus contended that Ariba, a competitor, infringed all 79 claims in its three patents and brought suit against the California company. ePlus had less than one percent of the e-procurement market, while Ariba had approximately 20 percent.

U.S. District Judge Leonie M. Brinkema streamlined the trial by asking the plaintiff to bring just eight of the claims to the jury's attention.

The liability phase of the trial, which began January 24, 2005, lasted two weeks. The jury came back with its verdict on February 7, 2005. Just five days later, the parties agreed to their settlement.

Under the settlement, Ariba will pay the award and ePlus will allow Ariba to continue using the electronic procurement system that prompted the controversy.

"We've settled all claims in the lawsuit, and we've given them a license allowing them to continue to serve their customers," Robertson said.

In at least one respect, the case closely resembled another high-profile case in which a small company, also represented by Hunton & Williams, rolled the dice at trial and prevailed against a much larger adversary.

In 2003, Albert and Robertson, joined by Gregory N. Stillman, represented MercExchange, a small northern Virginia company that claimed that online auction giant eBay had stolen its payment system. A Norfolk jury agreed, finding willful infringement and awarding $35 million to MercExchange.

Robertson noted, "Those are two significant e-commerce verdicts by the same trial team."

How Did They Do It?

At trial, the Hunton & Williams team used testimony from Ariba officials to show willful infringement. Ariba's chief technology officer, for example, said he was aware of the infringement claim but never bothered to read the patent.

"They failed to take any measures to examine the scope of the patent or whether they were infringing it," Albert said.

Under cross-examination, other Ariba officials conceded that they had failed to consult with the company's technology experts.

"So here we have an affirmative testimony that they never reviewed the patents; they moved ahead with willful disregard of the patents," said Albert. "Their technical expert at trial never even bothered to talk with the chief technical officer of the company. That evidence was enough to prove willfulness."

In addition, the Hunton & Williams team used Ariba's own documents to great effect.

"Their own technical manuals and engineering documents showed they were doing everything the patent said," Robertson said. "The Ariba team, in contrast, did not offer into evidence a single Ariba document to support their position. They had nothing to offer in opposition."