Sonos to Seek Injunction to Stop HEOS Sales of ‘Infringing Technology’


Case May Have Major Impact on Wireless Speaker Business

Exhibit F Sonos MotionAs we recently reported, a federal jury gave Sonos a sweeping victory in the first “bellwether trial” in Sonos Inc. v. D&M Holdings Inc. et al, siding with Sonos on all counts and awarding them nearly $2 million in damages. Furthermore, the jury affirmed the validity of the three Sonos patents at issue, and disagreed with D&M’s assertion that the patents were not valid.

Strata-gee spoke with both sides of this case and, this decision notwithstanding, neither appears ready to back down, even as this is just the first of what will ultimately be three trials in the case – two where Sonos is the plaintiff, and a countersuit by D&M Holdings where they will be the plaintiff. Sonos won round one, but this is a multi-round fight.

Both Sonos and D&M Holdings talk to Strata-gee in wake of trial verdict…

This case, originally filed in 2014, alleges that when the D&M Holdings brand Denon developed their HEOS line, the company simply copied Sonos, thereby infringing on their patents. It has been a pretty vigorous three-year battle, finally coming to a head with this trial.

We have followed the story which has generated a blizzard of paper as each side revised, and added to their claims. As the judge sought to force the parties to reduce their claims in order to make the case more manageable – we finally ended up with eight Sonos patents in dispute, and via a counterclaim, seven Denon patents in dispute.

Then the judge further cut these issues down by deciding to split the Sonos case from one trial to two – with three Sonos patents to be decided at the first trial known as a bellwether trial. The judge was attempting to refine the case and reduce the number of disputes so as to not overwhelm the jury.

A Bellwether Trial

HEOS logoThis is a bellwether trial, a legal concept in which a matter with a high number of claims holds a kind of test case, an initial trial whose results are used as a kind of a precedent for the remaining issues to be determined. Here’s how the website defines it: “…a bellwether trial (or trials, as the case usually is) serves as a reference point for a wider range of claims by setting a precedent. The term was officially added to the American legal lexicon in 1972 by the US Supreme Court.”

At this first trial, according to legal newsletter Law360, Sonos attorney Sean M. Sullivan told the jurors: “They [Denon] couldn’t figure out how to do this [wireless multi-room music systems]. They got desperate. They said the market’s changing. They had to copy something.”

Sonos Attorney: ‘Denon’s Own Documents Reflected Concern’

Sullivan said Denon’s own documents reflected concern that “failure to develop a product to compete with Sonos’ ‘Play’ line of speakers and associated control devices and software would jeopardize Denon’s future position in a fast-growing, fast-changing market.”

But Denon attorney Robert P. Latham told jurors that Denon did nothing wrong and rejected Sonos’ claims the company “pilfered” Sonos patents. Denon, he said, simply “set out to ‘build a better mousetrap.'”

Denon’s lawyer added that the company sank $77 million into developing the HEOS line, using some 80 engineers, the report said. “We’re standing up for those people, for all their effort,” Latham told jurors, adding that Denon’s reputation as a brand is in their hands.

Jury Took Less Than Two Hours

A jury of four men and four women took less than two hours to render their decision. The jury found that, in the matter of the five claims associated with patent numbers 9,195,258 (the ‘258 patent), 7,571,014 (the ‘014 patent), and 8,588,949 (the ‘949 patent), Denon “directly infringed” these patents, “actively induced others” to infringe, and “contributed to another’s infringement.” Furthermore Denon’s infringement, the jury decided, was “willful.”

The jury went on to assess damages at $1,989,818, a figure that some felt was low, given the degree of infringement the jurors found. However, the jurors may have been influenced by the relative disparity in the size of the combatants, with Sonos as the larger player. Most likely, HEOS sales are relatively low as compared to Sonos’ sales.

A Portfolio Second Only to Apple

Sonos’ Sullivan said: “Even if they made a better mousetrap, it’s still a mousetrap, and Sonos invented the mousetrap.” Addressing the thinking that damages were relatively low, Sullivan said, “Sonos is fighting not just for the money. In their case they’re fighting because they’re right. They need to protect their innovation. They need to protect their patent.”

Just how valuable is Sonos’ patent portfolio anyway? According to the Patent Power Scorecard, a ranking of the power of a company’s patent portfolio calculated by IEEE Spectrum, Sonos really has a lot to protect. The Patent Power Scorecard ranks the value of Sonos’ patent portfolio as second only to Apple, Inc.

Sonos' Patent Power rating

IEEE Spectrum’s ranking of the power of the patent portfolio of, in this case, electronics brands. Sonos’ patent portfolio is rated second only to Apple, and higher than LG, Dolby, Sony, Samsung, and more.
[Click to enlarge]

Next Trial: March 5, 2018

So while Round 1 goes to Sonos, this means that the five other Sonos patents remain to be litigated in a trial not yet scheduled. But based on current scheduling, D&M Holdings will get their turn next in their countersuit against Sonos that is back with Judge Richard G. Andrews – the original judge in this case. Judge Andrews had a conflict during the dates of the just-completed trial and turned the case over to Judge William C. Bryson. The next trial, which puts Denon on offense, is scheduled for March 5, 2018.

In a blog post on the Sonos website, Sonos Chief Legal Officer Craig Shelburne said that “the jury’s verdict validates a decision we made back in October 2014 to hold Denon accountable for a blatant copying effort with their HEOS product line. The verdict underscores our belief in genuine innovation and mutual respect for intellectual property as a basis for healthy competition as well as partnership.”

Sonos Tells Strata-gee Verdict ‘Recognizes Sonos’ History of Innovation

In an email exchange with Strata-gee, Sonos Intellectual Property Director Paul Kafadar was reasonably measured in his reaction to their success in the first trial, telling us: “We are pleased with the  jury’s decision. It recognizes Sonos’ history of innovation, acknowledges the value of our patent portfolio, and affirms responsible stewardship of intellectual property.”Photos of Sonos & HEOS productsUnderstandably, when we tried to get a comment from him on their strategy going forward in this case, Kafadar was succinct.

“We’re not going to comment about our litigation strategy, other than to say that we’re confident in our case for all eight patents in the matter,” Kafadar said. “We were preparing for a single trial, and when the presiding judge decided to divide the case into two trials, we prepared for two. The remaining patents will be covered in a second trial still to be scheduled, with a separate jury and new damages at stake.”

Sonos Will ‘Immediately’ File an Injunction to Stop HEOS Sales of Infringing Technology

But with this win, Sonos is now clearly in the driver’s seat. When we asked Kafadar if the result of this decision is simply that Denon must now begin to pay a royalty to Sonos, he surprised us.
“We plan to file immediately for an injunction that would apply only to the infringing technology – which means Denon would have the option of taking out the infringing technology in order to continue to sell HEOS products.”

Of course, the practical reality is that Denon would likely not be able to simply remove the offending technology and therefore, if Sonos is successful with their injunction – HEOS could be forced to be removed from the market.

Denon Tells Strata-gee They Will File Post-Trial Motions ‘Challenging the Decision’

We spoke by phone with Sound United’s Vice President and General Counsel David Meisels about this initial result.

“We respectfully disagree with the verdict,” Meisels told us. “We’re confident that this will not significantly impact our mission of continuing to bring great products to the market and our ultimate mission which is to bring joy to our consumers through great sound and great products.

“We will be intending to file several post-trial motions challenging the decision and we absolutely stand behind our engineering team and their decision to bring great products to market. None of that changes,” Meisels said with determination.

Not Licking Their Wounds…Licking Their Chops

Meisels certainly didn’t seem to be licking his wounds. In fact, at times, he seemed to be licking his chops.

“The offensive case for Denon, for our patents that we are asserting against Sonos, is actually scheduled for March 5th of 2018,” Meisels said. “That case is coming up and we look forward to the opportunity to have our day in court. And to show that Sonos has actually infringed on several of our patents. That’s the only other case that’s been scheduled.”

Photo of Heos by Denon

Denon Product Manager Paul Belanger shows us HEOS by Denon. Note the incredibly large smartphone on the wall showing the HEOS control app.

Meisels noted that their claims are separate from this case, “and we intend to pursue our claims aggressively on March 5th,” he said.

Competition is ‘The Best Way’

Summing up their position, Meisels told us: “I think from our perspective and what our focus is on and what we strive to achieve is to compete in the audio market as we’ve been doing for 100-plus years. That’s where our focus has been traditionally. If you look back at 100-plus years of making products, there’s always innovation, there’s always new technology. We own a large IP portfolio. We’ve always shown respect for others IP…and we also enforce our own IP. Competition is part of the business we’re in and we feel strongly that competition is the best way to bring good and exciting new products to our customers. That’s where we are headed, that’s where we’ve always been focused and I think we will continue to focus on bringing great products to market under our brands that have been out there for decades.”

Sounds to us like neither side is prepared to back down. So on we go to the next round.


Sonos to Seek Injunction to Stop HEOS Sales of ‘Infringing Technology’ — 14 Comments

  1. Thanks Ted for the update about this fascinating series of trials.

    My question is: are the audio multiroom technologies used by others (MusicCast, SoundTouch, SongPal, Play-Fi, etc.) really different from the ones of Sonos and HEOS?

    What’s the future of multiroom audio? Sonos alone on the market? Every others paying royalties to Sonos to have the right to exist?

    • Alban,

      Thank you for your comment!

      You are a smart guy asking smart questions. This is the reason that I have followed this case so closely – I believe it may have far-ranging implications. And that is likely why both sides are fighting so hard!

      I am not an expert in patents, and I have no idea how a jury of non-engineers who have no experience in technology can make the decision of what is a viable patent and what is not. But I think it very logical that if Sonos prevails in their case against D&M, others would be targeted.

      I asked Sonos that question, and they declined to answer.

      I will keep following this story and try to get you and other Strata-gee readers more insight on this.


      • I am not an expert in patents either. But I think that the question was really easy for non-engineers and non-specialists of the multiroom domain:
        – Could I group multiple zones with a single interface from Sonos? From HEOS?
        – Could I control the volume of multiple zones with Sonos? With HEOS?
        – Is the sound logically synchronized in each case?
        Yes, yes and yes. No need to know the products, if the lawyers made sufficient explanations.
        Maybe the technologies are more or less different, but the results are identical. This is why the jury took only two hours to rule. I think this is the point but this is slightly disturbing.
        Knowing everything about multiroom is my work since 2004 as an analyst and a writer. So the consequences of those trials are really important to me!
        PS: sorry for my rough English…

        • Alban,

          Were the jury to benefit from your highly distilled, elegantly simplified explanation…then perhaps it would be easy for the common man to determine the validity of one patent over another – or, rather, if one circuit design did or did not unlawfully take from another. Perhaps this is how litigation works in France…and if so, congratulations. However, I can assure you that I have followed some of the arguments over the issue of these patents and it is incredibly detailed, nuanced, and hard to understand. Oh, by the way, I’ve been in this business something like 40-years. There were literally hundreds if not thousands of pages of briefs and other documents hashing over the most minute detail of the patents…and the circuits embodying them – or not.

          Remember, one side must show that their design did NOT infringe on a patent…while the other side must show that it did.

          I think the two hours the jury took to decide this issue is troubling. Again, I have to reserve judgment, I was not there…I did not hear all of the evidence. I suspect the short deliberations were not becuase the solution was so obvious…but possibly due to the fact that it was unfathomable and they just picked a side. Maybe.

          Thanks for your thoughts…


          • Sorry if I let you believe that the jury was hopeless or something like that. This is not what I meant.

            In France, litigation are the ones that takes the most time in all Europe, months and months to return a verdict!

            Actually, my point meet your conclusion. Like you, I was not there but I think too that it was not obvious from a technological point of view if the jury is composed of non experts people. So the fact that use cases (grouping, volume, synchronisation) are identical could have lead to an “easy” Sonos win at the end of a 2-hour decision.

            Or maybe HEOS have retro-engineered and copied the Sonos technologies for real? The Sonos lawyers managed to present proofs of similarity so understandable, even for non tech people, that the conclusion was obvious for a Sonos win.


          • I was on that jury and am saddened to here that you feel the way you do. Fortunately the Judge in this case as well as both legal teams did an outstanding job. We as a jury were not as ignorant as you assume. Your opinions are yours and I respect that fact. The facts remain that this as a jury we did our due diligence in this case. Engineers maybe we are not but not ignorant for sure. The facts are truth and that is what our judgement was based on. We as a jury were educated throughout the trial. The judge in this case made sure of this. That is all and I will be looking forward to comments.

  2. This has a couple elements that favor both sides:

    First off, this reminds me of the Samsung/Apple trials. At some point, there’s one way to do multiroom like this. And while the systems may appear to operate off the same template, the specifics are very different. Otherwise, there’s this thing called a monopoly…

    Secondly, if Denon spent this much to come up with a system as flawed as HEOS, there’s no way they simply copied what SONOS did — because that works well.

  3. I have been searching for a wireless solution to 5.1 surround and only Denon seems to have a AVR that syncs with their wireless speakers with true Dolby and DTS and many HDMI inputs with one single output to the TV. I don’t believe that Sonos even comes close to that right now, even with their “surround” offering.

    And I’m curious how Sonos is able to say Denon is copying them when Amazon, Google, and Apple all have interconnected speakers. Did Apple sue Microsoft when they came out with Cortana, or Amazon when they came out with Alexa? Just seems rather frivolous to me.

    • In an email exchange with Sonos’ executive in charge of intellectual property, I asked if there were other “infringers” out there and if more lawsuits were coming. They declined to answer that question. So that is still an open question. But that may be what is coming.


  4. In fact this is stopping me from buying heos…
    But it will for sure go on for many years.
    Hope it will not stop either sonos or denon to improve their products.

  5. makes me wonder about my investment, over a couple of years, in populating my home with 5 HEOS speakers: 3 soundbars, 1 HEOS 1 and one HEOS 5-HS2. I would have bought Sonos originally but HEOS support of Bluetooth with a USB bluetooth receiver swung me to the HEOS. I didn’t want to be limited by whatever specific music services or interfaces were natively supported. Bluetooth is a great equalizer. And now with grouping that works, i can link the echo dots placed throughout my house in proximity to the HEOS speakers and connect a dot to a HEOS and then play the music through all the grouped speakers.

  6. Depending upon the final outcome of litigation.. If Denon & HEOS lose this will create a tremendous challenge for the HEOS products already in the field. As then Denon will need to revise and update the firmware for HEOS products already in the market as to avoid continuance conflicts..

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