Ashurst advised British tech start-up on patent dispute

Global law firm Ashurst represented a British technology start-up that designs and manufactures electronic smart rings and security systems, McLear Limited, on a patent related dispute with ESOS Rings Inc. in Los Angeles, California, the United States.

ESOS Rings Inc., established by McLear's former director Michelle Silverstein, filed for a patent litigation against McLear Limited, its parent company (MTG Limited in Japan), its US subsidiary (McLear & Co), and Joseph Nicoli Prencipe (a director of McLear) in the court of California. Ashurst acted for McLear on the matter and identified various factors in the dispute, and provided McLear strategic legal advice.

McLear owns a patent covering the technologies used on their smart rings called 609 patent. In 2016, McLear, together with its parent company and US subsidiary, was sued by ESOS Rings and its founder Shelly Silverstein in Los Angeles Superior Court CA, USA ("Plaintiffs"). The Plaintiffs claimed that the 609 patent was assigned to ESOS Rings by the ex-CEO of McLear and sought damages as well as the ownership of the patent. The litigation resulted in the bench trial and jury trial in 2022 and 2023 respectively. The ongoing litigation has prevented McLear from launching its smart ring products in the US.

The Ashurst team provided strategic advice to McLear and MTG and worked closely with the US local counsel. McLear won in all aspects of the case and the jury awarded McLear approximately US$16 million in compensatory damages, US$6.6 million in punitive damages and US$2.4 million in prejudgment interest. The plaintiffs did not appeal the judgment covering the jury award and bench trial rulings.

Lead partner Hiro Iwamura commented, "We were very honored to assist our client MTG and McLear on this important case and secure the massive win by providing strategic advice on the litigation and working collaboratively with a US law firm on the ground. Following the victory, I am confident that McLear's electronic smart ring products will successfully launch and become a game-changer in the electronic payment markets in the US."

The transaction was led by partner Hiro Iwamura and supported by Shingo Ito. Partner Crowley Woodford provided counsel on employment aspect of the matter.