Law School IP Essay Question: Are Defensive Football Signals Trade Secrets?

Below is the hypothetical from Eric Sinrod's CNet News Perspective Column, from Watergate to Videogate

And though we don't think it necessary to answer the question, our U.K. readers may use Football for Dummies in responding.  

A [New England] Patriots' assistant was apprehended for operating a video camera on the sidelines of the opposing team, the New York Jets, during the first game of this season. The camera contained footage of the Jets' defensive signals.

NFL rules prohibit video-recording devices in the coaches' possession both on the field or in a locker room during the course of any game. The rules also state that video for coaching reasons must emanate from places enclosed on all sides with an overhead roof.

The NFL's executive vice president for football operations has since sent a memorandum to head coaches and general managers to clarify the rules. The message was unambiguous: videotaping of any kind, including taping of an opposing team's offensive or defensive signals, is not permitted on the sidelines, in a coaches' booth, in a locker room or from any other place available to a team's staff during a game. . . 

The National Football League fined Coach Bill Belichick $500,000 while the Patriots were ordered to pay $250,000. The league also ruled that the Patriots must forfeit a first-round draft choice next year if the team reaches the playoffs (which is highly likely) or second- and third-round selections if it fails to make the playoffs.

"Did justice prevail?" asks Eric.  "Even more, does the result hold up as a matter of law?"

You have one hour.  This is a closed book exam.  Do not read Eric's trade secret analysis until you have closed your blue book or shut down your laptop. 

You may begin. 

Outsourcing Legal Work to India and Trying Cases on the Internet

Avoiding jury duty?  Would it be more convenient to serve from a laptop in your own home?

The disputes iCourthouse is apparently set up to handle appear to be of the Judge Judy variety.

Still, as law firms outsource patent applications and  legal research to India and litigants settle their disputes online (see posts on CyberSettle here and here)  can net jury trials be far behind?

Please do let us hear from anyone who's used either Indian legal outsourcing services or iCourthouse before.

Wrapping it Up in the Flag: J&J's Losing PR Battle with the Red Cross

Thanks once again to Liklihood of Confusion for its post The Red Cross Fights Back.  The links provided by Confusion's Ron Coleman bring you this nugget from the PR war that we cannot imagine anyone other than the Red Cross winning.

It is particularly regrettable that J&J's lawsuit would seek to interfere with the preparedness mission of the Red Cross – increasingly important post 9-11 – during National Preparedness Month when everyone should be working together to get prepared.

Research shows only 7 percent of Americans have taken the necessary steps to prepare for disasters, but that 82 percent would get prepared if it was easier to do. Red Cross items such as those that are the subject of the amended complaint help families take the necessary steps to Be Red Cross Ready: to get a kit, make a plan and be informed.

The basis for many of J&J's claims focuses on an alleged agreement between Clara Barton and J&J in 1895 . . . 

The Red Cross will aggressively protect its longstanding right to use the Red Cross emblem in support of its humanitarian mission.

Post-9/11 humanitarian relief and protecting American families from terrorism.  Got anything to top that J&J?

See our previous post on interest-based potential negotiated resolutions to this dispute here.

IP Camp Lawsuit: Virgin/Creative Commons/Flickr Dispute

(newly famous teen camper, Alison Chang, flashing the peace sign at her camp counselor)

Oh what a tangled web the internet can be. 

As reported yesterday by the Sydney Morning Hearld, a teenager whose photo was taken by a camp counselor who posted it under a Creative Commons license on flickr and which eventually showed up on a Virgin Mobile televsision ad, has sued everyone in sight, including (mysteriously) Creative Commons itself.  See Virgin Sued for Using Teen's Photo here.

We have to clean up the kitchen after a delicious Sunday brunch, after which we will return to this post with reasons why an early mediation of this dispute could solve all of the parties (not to mention society's interests better than litigation ever could.

I'll just leave you with this thought:  if you had the choice between making your own rules and letting the Courts make them up for you, which do you think you'd choose?

_____________________________________________________________________________

California is one of the few states where you can study for the bar at home. A guide to online law schools can be found here.

Patent Reform Act of 2007 LawFlash from Morgan Lewis

(pictured, Kell M. Damsgaard, leader of the Morgan Lewis Intellectual Property Practice)

I want to recommend the September 13, 2007 publication of the “Morgan Lewis Intellectual Property LawFlash.” It does an excellent job in summarizing the main provisions of the Bill that is to become the Patent Reform Act of 2007 after the House vote on this Bill (as amended). The Senate Judiciary Committee started out with an identical version, but the House has since adopted a number of amendments. It is unclear when the Senate will vote on its version of the bill.

As most of our readers know, the Patent Reform Act of 2007, if adopted, will make substantial changes in the way one applies for, manages and exploits, and challenges patents.

Rather than summarize here what those changes are, let me refer you to the Morgan Lewis intellectual property lawflash, which tells it like it is.

This “lawflash” was reproduced in the Lexology newsletter, which I find to be a very informative if sometimes repetitive newsletter. You can subscribe to it free of charge here.   

Possessed by Possession: Patenting Legal Strategies

(right, "Denny Crane!!")

I expect to see stuff like this on Boston Legal, not on the ABA Law Journal.  And how in the world did I miss this anyway -- from BLAWG's May 15 '07 post

The ABA Law Journal recently published an article about patenting legal strategies. The article, by Steve Seidenberg, was published in the May edition and it titled Crisis Pending: Can a Patent on Legal Strategy Prevent a Client From Taking Your Advice? The Courts May Soon Decide.

Based on what the article reports (which is well worth the read, by the way), not only are tax strategies already being patented, but there are innumerable rumors regarding lawyers seeking patents on real estate and corporate law strategies.

Since issuing its first patent for a tax strategy in 2003, the Patent and Trademark Office has issued at least 52 patents covering specific tax strategies. Another 84 published applications for tax strategy patents are pending. But more than just tax strategies could be involved.

Because parties applying for patents may keep their applications secret if they certify to the PTO that they are not seeking similar patents overseas, the legal grapevine is buzzing with rumors that legal strategy patents are pending in other practice areas, like real estate and corporate law.

They're kidding, right?  This was an April Fool's article in May?

More on the drive for possession in our on-going series on the social psychology of conflict tomorrow.

Beer Before Bed? Specialty Arbitration Provisions for Unique Disputes

by Eric van Ginkel

You can probably guess that  most of us here at the IP ADR Blog think it's a good idea to  include in your ADR clauses specialty requirements for the arbitration or mediation of your  commercial or IP disputes. 

Not to mention a bad idea to serve your infant beer before bed! 

The need for an ADR neutral with specialized legal or industry knowledge is particularly true for patent litigation but also important for the other "soft" forms of IP disputes.  

Let's not go overboard however, by requiring that the arbitrator have at least twenty-five years experience in trademark litigation, an office in Santa Barbara County, belong to a lawfirm with at least five offices and no fewer than 1,000 attorneys, and . . . . serve his clients beer before bed!

Riduculous you say?  Don’t be surprised, I have seen weirder clauses.

The Beer Before Bed Amendment to the Business and Professions Code

I was reminded of this problem today when I came across a proposed amendment to the Business and Professions Code introduced by Gloria Negrete McLeod, California State Senator for the 32nd District (San Bernardino County) back in February of this year. It is currently on Governor Schwarzenegger’s desk awaiting his signature.


This is a good example of legislators going overboard.  

The proposed legislation requires the arbitration of disputes concerning the termination of an existing wholesaler by a company aquiring a beer brewery.  If the terminated wholesaler believes the new brewer has not paid him the fair market value of his distribution rights, the dispute over compensation must be submitted to arbitration. So far so good.  But here's where the legislation goes astray.

The proposed amendment requires that the arbitration of the dispute must be held

through a private arbitration services provider with at least three offices in California and a statewide roster of at least 70 neutral arbitrators, of which at least 30 have prior experience as a sole arbitrator in franchise, distribution, or related business litigation.

We don't even want to go tothe "additional amendments" that will govern the "arbitration process."

So, as in all things, moderation is key.


Quote of the Day from U.C. Irvine

“Every relationship has bumps.”  U.C. Irvine Chancellor Michael V. Drake reported yesterday by  Adam Liptak in his New York Times "Sidebar" column Furor Ends in Deanship for Liberal Scholar. 

For our thoughts on potential sources of the "several areas of miscommunication and misunderstanding" that gave rise to the "furor," see our post on the issue here.

Drake's and Chemerinsky's Joint Statement announcing that Chemerinsky accepted U.S. Irvine's offer of its new law school's deanship here.  

 

The European Microsoft Judgment, Crackpot Ideas and Innovative Compatability Solutions

(why do these guys look so happy?)

(for a thorough analysis of the ruling and comments pro and con, see the New York Times article, Microsoft Ruling May Bode Ill for Other Companies

The comment of greatest interest to us here at the IP ADR Blog is the note that "antitrust enforcement [is] too slow to grapple with fast-moving high-technology markets," so that market forces, rather than the rule of law, prevail.  For full NYT article click here.

If those market forces are controlled by a monopoly, we may have to begin looking for other ways to balance the forces of competition, innovation, and consumer interests).

Yesterday's Post on Tension Between Consumer Protection and a "Free" Market

I think most creatively on the freeway.  Well, on the freeway and in the shower. And on an elliptical trainer.  These are all places I'm not supposed to be thinking so I park my brain in neutral and it performs wonderful tricks for me. 

It's pretty damn creative, actually.  It grabs odd trails of thought, puts them together and then taps me on the shoulder and asks How about this?

It's particularly helpful to have Mr. Thrifty in the car for a long drive because I'm a chatterer.  A world class stream of consciousness natter-er.  This should make you happy not to be married to someone like me.

Anyway, as I was nattering on the 405 between Sunset and the 118 on Sunday, driving to my Dad's house in Northridge, I said this:  Why doesn't someone load a laptop with the best programs available, make them COMPATIBLE and then sell the loaded laptop?

My brain gave me that nugget as I was complaining about the new Vista Operating system.  Since I know nothing whatsoever about software or hardware, I have no clue whether it's a good idea or not.  I only know this:  I purchased a new laptop with a Vista Operating System on it and NOTHING is compatible with anything else and it really $%#^%$'es me off.

So I must report that I'm happy with the Judgment of the European Court of First Instance in Case T-201/04 Microsoft v Commission.

Since I'm a devotee of Sun Microsystems CEO Jonathan Schwartz's rallying cry Innovate Don't Litigate, I wish the software industry would spend its money innovating around Microsoft rather than litigating against it.  (and yes, Jonathan, we'll forgive you for partnering up with Microsoft here because we think you might help make its products better -- at least we're counting on you so please don't disappoint us). 

Nevertheless, I'm happy to see good work being done for the consumer on all fronts, including the European Court of First Instance which just held as follows:

  • Microsoft abused its dominant position by refusing to supply interoperability information to competitors for work group server operating systems. 
  • Microsoft abused its dominant position by bundling the Windows media player with its Windows PC operating system. 
  • The Commission did not err in assessing the gravity and duration of the infringement and did not err in setting the amount of the fine. The €497 million fine imposed on Microsoft stands.

Still, I'd really like to see someone launch that compatible laptop.  I'm first in line and will pay a very good price for it.

The U.C. Irvine Mess, Forecasting Ethicality and Negotiating an IP Settlement

(photo, left, Duke University Constitutional Law Professor Erwin Chemerinsky)

(courtesy of the Wall Street Journal Law Blog, we Interrupt this Post to Bring You the Breaking News that Chemerinsky has Accepted Irvine's New Offer).  

If you've been following the news about the U.C. Irvine Law School Brouhaha this week, you'll know what it feels like to hear a story out-of-sequence, over time and from different sources the same way arbitrators, mediators and juries do.  

I heard the astonishing news that U.C.I. had hired, then fired, one of the most highly respected Constitutional Law professors in the country -- for the expression of his political opinions in the Los Angeles Times -- over coffee and orange juice.  I didn't read the story; my husband just casually mentioned it from behind his newspaper. 

His summary was pretty much like that of the Orange County Register's:  

U.C. Law Dean Hired, Fired:   

UC Irvine officials hired and then promptly fired the founding dean for their fledgling law school, because he was "too controversial," according to Erwin Chemerinsky, the Duke University law professor who had already signed a contract to take the job.

Next thing I heard was that U. C. Irvine Chancellor Michael V. Drake -- the guy who fired Chemerinsky -- denied that politics had anything to do with his decision, stating that he had: 

made the very difficult decision that Professor Chemerinsky was not the right fit for the dean’s position at UC Irvine. I informed him on Sept. 11 that we were rescinding our offer and continuing the recruitment process. /**

The Story Plays Out

Chemerinsky says Drake found him "too controversial" and Drake says "I made a management decision -- not an ideological or political one -- to rescind the job offer." 

Though I still hadn't read the full story anywhere, I concluded that Drake must be  . . . well . . . dissembling.  The temporal connection between the appearance of a Chemerinsky Op-Ed piece on the death penalty -- and his nearly simultaneous termination made the connection between ideology and firing appear incontrovertible. 

When I finally had the time to read an L.A. Times article on the controversy, I was surprised to hear that Dean Edley of U.C. Berkeley's Boalt Hall School of Law, said Drake consulted him before withdrawing the offer.  I was even more surprised to hear that he didn't think Drake's decision was based on the content of Chemerinsky's public opinion, but rather upon the fact that Chemerinsky opined at all.  Most surprising was Edley's opinion that asking Law School Deans to stop writing politically polarizing op-ed pieces was normal and reasonable.    

Such is the power of expert opinion.  This made me re-think my position. 

"Judged too soon," I said, reading my husband the news article that evening.  

But there was more to come.   

By the time I'd heard that Chemerinsky here and Drake here had each published his own editorial in the Times, the Times was reporting that UCI [Was] Working on a Deal to Re-hire Chemerinsky

That was no suprise.  But this was.  Despite Drake's denial that he'd been "pressured" to terminate Chemerinsky by un-identified "conservatives," the Times learned that U.C.I. had received:  

criticism of Chemerinsky . . . [shortly before] Drake rescinded the job offer from . . .  California Chief Justice Ronald M. George, who criticized Chemerinsky's grasp of death penalty appeals [as well as] a group of prominent Orange County Republicans and Los Angeles County Supervisor Mike Antonovich [who] wanted to derail the appointment. 

Drake's colleagues are scratching their heads ("it's not like him") and UCI is doing some serious damage-control while Chemerinsky punts ("I'm not really thinking about it.").    

I should've checked the Wall Street Journal Law Blog first (the model of concise legal reporting) which I just now see reports Anthonvoich saying that "making Chemerinsky the head of UC Irvine’s new law school 'would be like appointing al-Qaida in charge of homeland security.'"  This is just embarassing for Antonovich and one wonders who would want to teach at a new law school in such an environment.  

Still, with feelings running into thermoneuclear  hyperbole, you can imagine the pressures Drake must have been feeling.

We're Deep Into the Social Psychology of Conflict Here

Early yesterday, I was pretty much believing Drake's explanation.  Chemerinsky acknowledged the pre-employment discussion they'd had about a Dean needing to focus on less controversial issues.  I assumed Drake knew Chemerinsky's appointment might be unpopular in Orange County. That's why Drake tried to ensure that Chemerinsky understood he'd have to tone down his public advocacy of liberal causes. 

Drake thought Chemerinsky got it, but he didn't. 

The same day the offer went out, Chemerinsky's op-ed piece appeared in the Los Angeles Times, raising just the type of problem that Drake had imagined might arise.  

Oh %$^#@!!!

If Drake's not now in a state of fear (which interferes with cognitive function) I'll eat my old Con Law textbook.  He must have felt the need to make a decision fast (which also interferes with reasoned and ethical decision-making -- time pressure).  If he rescinded the contract before the Regents approved it, he wouldn't have to "fire" Chemerinsky.  He could just withdraw the offer.  

I'm assuming that Drake wasn't feeling very good about having to "fire" Chemerinsky in response to pressure.  I'm also assuming he was irritated to be dealing with this problem after his little chat with Chemerinsky about op-ed pieces.   It may well have been against his own principles to be rescinding the offer.  

He doesn't want to tell Chemerinsky that he's changed his mind because of the op-ed piece. It just feels wrong.  So he does what anyone in a bind under time and outside pressure might do.  He blames somebody else, some unidentified "conservatives."  Chemerinsky won't think badly of Drake for that.  He'll understand. 

But That's Not What Happened

In the absence of information, people make stuff up.  And that's precisely what I had done.  

Drake had been pressured by conservatives and he'd folded like a lawn chair.  He'd told Chemerinsky the truth, not simply provided an excuse or shifted the blame.  But when the news cameras were rolling and the reporters were biting pencils hovering over news pads, Drake blinked.  The reporters would want to know who had pressured him and that would be messy.  So Drake said he hadn't been pressured.  It was a management decision.

Here's the Social Psychology of Conflict -- FINALLY!!

I was just talking about Bazerman et al.'s new working paper Why We Aren’t as Ethical as We Think We Are: A Temporal Explanation earlier this week.  Bazerman and his colleagues report that we believe we'll be more ethical in the future than we really will be and that we rearrange our recollection of past events to recall that we acted more ethically than we actually did.    

No one is immune from "errors" in prediction -- "forecasting errors" -- and we are most likely to make them in the heat and stress of conflict.  As Bazerman, et al. report, in controlled negotiation experiments,

individuals who imagined facing a very competitive opponent predicted they would be much more competitive and more likely to stand firm than those who imagined facing a less competitive opponent . . . [When confronted with a competitive negotiator, however]  participants gave in and agreed to worse outcomes than they predicted they would.

The findings are not much different for "mis-remembering" the past.  As Bazerman, et al. explain:

There is substantial evidence that people selectively remember past events in a manner that supports their preferred self-image. It is widely assumed that memory for affectively potent information about oneself is highly selective (i.e., distorted) . . . 

While convenient for our self-esteem (and even our happiness), the selective memory mechanism represents a barrier to an accurate understanding of our ethical selves and thus impedes our ability to strive for higher levels of ethics in our everyday lives.

But what does this have to do with the U.C. Irvine mess or negotiation for that matter?

A lot. After all, the U.C. Irvine "mess" is really just a negotiation gone extremely bad, as too many negotiations do, resulting in the disruption of plans, strained or severed business relationships and, too often, litigation.  At U.C. Irvine, it means plans to open the school in 2008 have been stalled.

Bazerman again:

Effective decision-making requires accurate planning and reflection on one’s decision  . . .  The contextual inconsistencies that exist in the prediction, action, and evaluation phases, however, circumvent these critical feedback loops.

Here are a few suggested solutions to making as reasonable and ethical a decision when under pressure as we hope to make when in a state of rest, any one of which might have helped Drake do the right thing -- or at least the most prudent one -- in this instance.  

  • Recognize our multiple selves

[T]o make more ethical decisions, people first need to recognize their own susceptibility to unconscious biases. This entails recognizing that our behavioral forecasts are incorrect, that our recollections of our past behavior are subject to cognitive distortions, and that the roles of the want and should selves are misaligned.

  • During action, increase the influence of the should self

No matter what we do during the prediction phase, the "should" self needs to be able to flourish during the action phase if we are to improve our ethical behavior. This entails increasing the power of the should self during this phase while controlling that of the want self.

[A]n effective way to overcome an immediate temptation (i.e., eating a tasty pretzel) is to refocus one’s attention from the concrete qualities of the temptation (how yummy and tasty the pretzel is) to its abstract qualities (thinking of the pretzel as if it were a picture of a pretzel).

  • Increase the prominence of the should choice by changing the temporal distance between the decision and its consequences

[I]mplementing long-term ethical action might require acceptance that we cannot get agreement if we try to implement decisions now (e.g., in Congress), but that our chances will go up if we accept a delay in implementation. . . . . [I]t is far easier [for example] to get employees to start saving for retirement if you ask them to agree now to implement the decision later than if you seek an immediate take-home-pay reduction now. .

  • Ensur[e] that the ethical infrastructure promotes ethical versus unethical decisions, reducing uncertainty surrounding the decision, and addressing the euphemisms that disguise the ethical implications of the decision should also allow the should self to be a more dominant force during the action phase.
  • During action, decrease the influence of the want self

In an ethical dilemma, when people understand that their want selves will drive their decisions, they may be able to use self-control strategies directed at that self . . . Part of this strategy may involve pre-commitment devices. Rather than focusing on the should
self, these devices seek to suppress the rearing of the want self.   

We'll apply these principles to IP Disputes in our next post on the Social Psychology of Conflict.

_____________________

**/  Any first year law students reading this post will find the reason why this is not a breach of contract in Drake's short statement.  The offer, though accepted, was "contingent" upon approval by the Board of Regents.  The offer was withdrawn before that contingency occurred.  

Doug Noll and Robert Creo Fix Conflict on Talk Radio

 

O.K., I never listen to Talk Radio because it's all about conflict and I get enough conflict in my day job.

Here's a relief, some talk radio exists to FIX YOUR CONFLICTS.

Upcoming Doug Noll and Robert Creo, both masters in the field, talk about making felicitous that which is already necessary -- dealing with conflict.  

CHECK IT OUT HERE 

Fool for Love? Negotiation, Neuroscience and Joint Sessions

(photo -- Friendster or Foe -- and comment here

We learn this morning (via StumbleUpon kismet) that Love Deactivates Brain Areas for Fear, Planning and Critical Social Assessment.   

Briefly, it appears that

love [not only] turns down activity in some areas of the brain in part so that we will not see flaws in the object of our affections [but also that]  particular locations are deactivated . . . 

Among other areas, parts of the pre-frontal cortex – a bit of the brain towards the front and implicated in social judgment – seems to get switched off when we are in love and when we love our children, as do areas linked with the experience of negative emotions such as aggression and fear as well as planning. The parts of the brain deactivated form a network which are implicated in the evaluation of trustworthiness of others and basically critical social assessment. (Future Pundit's full post here).

What does this have to do with negotiated settlements?  A lot.

The parties to litigation often enter the mediation room or settlement conference chambers in a state of "autistic hostility," i.e., the litigants have each maintained a hostile relationship with one another without any opportunity for adjustment of their attitudes based upon the other's post-dispute conduct.   

We also know from Professor Thompson at Northwestern that "in controlled experiments, only seven percent of negotiators sought information from their bargaining partner that would have revealed [his/her] true goals when it would have been dramatically helpful to do so."  Thompson, The Mind and Heart of the Negotiator.

Why?

Because the parties not only withhold information from one anotheer, but often fail to even ask questions because the level of distrust is so high. 

Should they trust one another more?  Well, maybe a little.  They might, for instance:

  • trust that their bargaining partner isn't so self-destructive that s/he would forgo the opportunity to negotiate a resolution to satisfies the greatest number of her interests just to deprive her opponent of similar benefits;
  • trust their bargaining partner to behave with a sufficient degree of civility and candor  to justify a joint session in which genuine low levels of trust may begin to develop and grow so that the parties can begin exchanging the information that is so often critical to an optimal  negotiated resolution.

Certainly there are times when all of our defenses must be activated to avoid harmful admissions and prevent your opponent from gaining an unfair litigation advantage.  I find, however, that in joint session, business people are able to guage these matters with a great deal of intuition and insight.  The mediator can also be used in break-out sessions to raise issues about which the parties are feeling vulnerable.

Bottom line?  You needn't love your adversary to negotiate a dynamite deal.  Nevertheless, the strategic use of joint mediation or settlement conference sessions may well give rise to a sufficient degree of fellow feeling to "deactivate" some of your brain's "danger-here" defenses, permitting a deal-expanding exchange of critical information between the parties.  

Try it.  You don't have a lot to lose but you do have a great deal to gain.

John Leo Wagner, Federal Magistrate (Ret.) Joins the IP ADR Blog

The IP ADR Blog is pleased to announce that we are being joined in our IP blogging venture by John Leo Wagner, Federal Magistrate (Ret.).

Judge Wagner is a colleague of Mike Young's and mine at the Southern California ADR firm Judicate West.  His impressive credentials will soon be posted in the "About" section of the blog (up at the top there).  We provide only the highlights of his judicial and private practice career below.

Welcome John!!  We know that our IP ADR Blog readers will greatly enjoy hearing your thoughts on the negotiated resolution of IP disputes.

ABOUT JUDGE WAGNER

Judge Wagner has been engaged in the settlement and trial of intellectual property disputes for over 20 years. He is currently a full-time neutral with Judicate West Alternative Dispute Resolution, where he mediates and arbitrates all manner of patent, copyright, trademark, trade dress and trade secret disputes.

John was formerly Of Counsel with the Los Angeles-based law firm of Irell & Manella LLP, where he was the head of the firm’s ADR practice group and Director of the firm’s Alternative Dispute Resolution Center. He worked for over seven years as one of the ADR Center’s primary neutrals, settling a myriad of difficult intellectual property disputes.

Before joining Irell & Manella, John served for over twelve years as a United States Magistrate Judge in the Northern District of Oklahoma, where he founded and administered the Court’s mediation program, and served as the resident expert in settling IP disputes.

John has mediated and arbitrated thousands of cases and was recognized as a Southern California Super Lawyer in the field of Alternative Dispute Resolution in 2007. He has also been selected for inclusion in he 2007 edition of The Best Lawyers in America in the specialty of Alternative Dispute Resolution.

John is the President-Elect of the International Academy of Mediators, a Fellow of the American College of Civil Trial Mediators, a Member of the CPR International Institute for Conflict Prevention and Resolution’s Panel of Distinguished Neutrals and a Diplomate Member of the California Academy of Distinguished Neutrals.   John is also a member of the Board of Directors of the Federal Bar Association's ADR Section.

John has been active in guiding national ADR policies and practice for over two decades. He was appointed by Chief Justice Rehnquist to serve on the Court Administration and Case Management Committee of the U.S. Judicial Conference, where he helped to formulate rules and policies governing ADR programs in the Federal Courts. He also served on the CPR Advisory Committee dealing with Mediation Procedures and the CPR/Georgetown Commission on Ethics and Standards in ADR.

Judge Wagner frequently teaches and lectures on ADR topics.  

We're happy and proud to have him join us here.

 

A Call to (ADR) Arms: The tail end of the Martha Stewart story.

by Eric Van Ginkel

Remember Martha’s conviction for perjury that sent her off to jail a few years back? She served a 5-month prison term and 5 months in home detention (not so bad, I guess, if your home sits on 153 acres!). Her conviction, if you recall, arose from allegations concerning insider trading of ImClone stock.

Jail was also the fate for ImClone founder Sam Waksal, after he pleaded guilty to charges of securities fraud and other charges relating to insider trading, as well as wire fraud and other charges in connection with evading sales tax on some significant art purchases. Sam is still serving a seven years and three months sentence (about three more years to go).

Here is the news: ImClone just announced it has settled the patent suit that Repligen and MIT initiated against it.

The suit involved ImClone’s cancer treatment drug, Erbitux.

The connection?  Erbitux was the drug at the center of Sam and Martha’s insider trading debacle.

So, in a way, this is the end of the Martha/Erbitux saga.

Why do I write about this case?

Because it settled only one week before trial. 

That means, of course,  that all discovery was completed, briefs written and trial preparation done. Imagine the millions of dollars wasted before the parties came to the bargaining table ready and willing to finally negotiate a settlement that constituted a better alternative to the cost and uncertainties of trial. 

For ImClone, not all the misery is behind it. It is still facing the lawsuit Abbott lodged against it earlier this year.

Could this be a wake-up call to ImClone and Abbott?

It's not just about "trying mediation" anymore.  It's about having the skill-set necessary to make the mediation or settlement process as important as the litigation process.   It's about "thinking like a negotiator" as often as you "think like a lawyer."

How does a negotiator think? 

S/he thinks like a lawyer about interests instead of about legal positions.  

More on the negotiation mind-set in future posts.

Innovation of Week: Fuel from Seawater

(photo, Dancing in the Flames by Tunde Pecsvari)

And God said, Let the waters under the heaven be gathered together unto one place, and let the dry land appear: and it was so. And God called the dry land Earth; and the gathering together of the waters called he Seas: and God saw that it was good. Genesis, King James Version

We take the title of this new category of posts -- Innovate, Don't Litigate, from the blog of Sun Microsystems CEO Jonathan Schwartz

It's a good motto as far as it goes.  Sometimes, however, you need to bring suit to get their attention and you cannot always innovate around infringement.  That being said, we bring you the innovation of the week -- using saltwater as fuel.

Courtesy of Live Science we learn of "Remarkable" Discovery:  Scientists Burn Saltwater.  Excerpt follows.  Click on title for full article.

An Erie cancer researcher has found a way to burn salt water, a novel invention that is being touted by one chemist as the "most remarkable" water science discovery in a century.

John Kanzius happened upon the discovery accidentally when he tried to desalinate seawater with a radio-frequency generator he developed to treat cancer. He discovered that as long as the salt water was exposed to the radio frequencies, it would burn.

The discovery has scientists excited by the prospect of using salt water, the most abundant resource on earth, as a fuel.

IP Apologies in the News

Thanks to IPKAT for noting this newsworthy IP settlement, especially since we're getting too old (and busy!) to keep up with pop music. 

Right, the settlor -- Amy Winehouse

Click on the image to be transported to her "official site" where you too can be introduced to her music for the first time if you're similarly generationally impaired.

If you're considering offering an apology as at least part of the "compensation" for a wrong you or your client has been accused of committing, take a look at Stanford University Professor Frederic Luskin's Nine Steps to Forgiveness here.

Contentious Litigation Tactics Can Hurt You: the Social Psychology of Conflict

 (photo left BOOH by Mohammed)

 When we say "contenious tactics can hurt you" we don't mean the kind of "hurt" imposed by Courts when they ever so reluctantly and after years of bad faith litigation behavior impose monetary sanctions on the parties &/or their attorneys.

No, we mean hurt, as in Patently O's recent observation that the Federal Circuit (here) justified the lower court's 29.2% royalty rate as damages based in part on the parties "contentious history."  See Damages:  Contentious History Between Parties Justifies High Royalty RateOUCH!!

ELEMENTARY BUILDING BLOCKS:  WHY WE'RE SO CONTENTIOUS 

As promised, we're going to lay a little social psychology of conflict on you for the next several weeks to help you understand not only how and why we use contentious tactics in litigation, but also how to strategically escalate or de-escalate litigation's contentious nature.      

First, a definition.  Conflict occurs when the parties believe their needs or desires cannot be achieved simultaneously.  (see Law Professor Richard Reuben's great power-point presenation on this topic here). Conflict emerges into a "dispute" when one (or more) of the parties suffer an "injurious event."  (See Conflict Map here).

Remember that active verb "believe."  The perception that the parties cannot simultaneously achieve their needs or desires ain't necessarily so. 

Whenever one person sues another for patent infringement, s/he alleges that the defendant is interfering with her ability to achieve her needs (income) or desires (wealth) based upon what she perceives to be hers.  The defendant, more or less predictably, responds by contending that the plaintiff is interfering with his ability to achieve his needs and desires based upon what he believes to be his. 

One of the ways to resolve the resulting conflict is to use a contentious tactic, which is what litigation is.  For the defendant the "perceived injurious event" that triggers the dispute is the litigation itself.  For the Plaintiff it was something else -- something that often becomes so lost in time to the litigators that only the Plaintiff continues to carry the "injury" with him.

CONTENTIOUS TACTICS for resolving conflict include Ingratiation and Gamesmanship; Shaming, Threats, Promises & Arguments, and,Coercive Commitments or Violence. 

The goal of all these tactics is to induce your opponent to yield to your clients' desires.   

Active litigation is, of course, both a coercive commitment -- "I will pursue you and this lawsuit until . . . trial .. . appeal . . . re-trial (etc.)" and a form of economic violence (imposing legal fees, lost time from productive business activities, potential loss of reputation in the business community or decreased value of actively traded securities, etc. upon your opponent).

So back to the question why litigation is always so contentious. 

IT'S CONTENTIOUS BECAUSE ITS A CONTENTIOUS TACTIC TO BEGIN WITH AND CAN ONLY BE PURSUED CONTENTIOUSLY.  It need not, however, be pursued in such a way that it will inflame your opponent.  Any litigation (as opposed to settlement) strategy or tactic, however, will invariably escalate conflict. 

How and why you might wish to de-escalate the conflict between the parties to litigation for your clients' strategic or tactical advantage tomorrow.

Accountability + Education = Settlement

(photo right i hate da flea by ms. oddgers)

If you don't yet know New Zealand mediator Geoff Sharp's blog Mediator blah blah . . . you're missing an opportunity to see one of the best facilitative negotiation coaches on the planet work what some may call "magic" but is really just drawing out the best in the litigants. 

Today's post on business accountability (Eat Toast in Bed -- Go to Sleep with Crumbs) exemplifies why I vastly prefer to mediate the type of commercial and IP cases I litigated -- the litigants are business people who will choose the pragmatic future over the vengeful past any day of the week.  

Here's an excerpt of Geoff's post.  For the unedited version, click here.

I [recently] ever so gently broached the subject of responsibility. . .

In [a joint venture] case [I asked the litigants] what . . . they [would] factor in for their own decision to partner with someone who was perfectly honest and competent, but just ended up not to be a good fit for them?

The response[ was] were interesting. 

[T]he JV people were, it turned out, angry at themselves for a rare lapse in judgement and happy to learn (and pay for) a lesson that would stand them in good stead for the future.

As they said, a little harshly I felt - 'if you lie down with dogs - you get up with fleas'.

And thanks, as always, Geoff, for reminding me that the well-placed question in a settlement negotiation can do more work than a thousand persuasive arguments.

If you live or work in New Zealand, we here at the IP ADR Blog of course encourage you to hire this man if he can fit you into his busy schedule.

On the Internet, Nobody Knows You're a Dog: Negotiating the Settlement of Your IP Dispute

HOW IT STARTS

"They cheated me," said the C.E.O. of a Fortune 500 company. 

"They stole my invention [or process, design, employees, product, market, or, customers]."

"They copied, knocked off, lied, misled, withheld, and, denied."

This is how the litigation begins.  You can recite it in your sleep because you drafted the complaint, the counter-claim, and, the interrogatories.  You prepared the examination, the cross-examination, and the jury instructions.

HOW IT ESCALATES

With each passing day, their wrongful, outrageous behavior and the injustice done to your client grows. 

Why? 

Because they prove their essential bad character and malicious intent with each litigation thrust and parry.  Your conduct is righteous, avenging, and, pure, while theirs only confirms their bad faith.  They destroy documents, alter evidence, mislead the Judge, and file pleadings at 5 p.m. the day before three-day weekends.

HOW IT COMES INTO THE JUDGE'S SETTLEMENT CHAMBER OR THE MEDIATION CONFERENCE ROOM

Although no one "takes it personally," by the time you bring your clients to a settlement conference or mediation, they cannot bear the sight of one another. 

I have not only been instructed that joint caucuses will not be tolerated, I've been asked to assure that the parties will not lay eyes on one another because the other side's very corporeal existence might so inflame the disputants that the negotiation session will melt down before it has had the chance to begin.

If you are a litigator with at least five or six years of experience representing clients in hotly contested intellectual property litigation of any stripe, you know that I am not exaggerating.

I want you to keep this litigation posture and emotional climate in mind for the next few weeks because all of my posts are going to be based it.

WITH A LITTLE HELP FROM OUR FRIENDS -- ENSURING THE BEST POSSIBLE NEGOTIATION   

In the coming weeks, we will be discussing some concepts in the social psychology of conflict that will help you de-esclate the conflict, which will, in turn, help everyone brainstorm and negotiate a deal as effectively and efficiently as possible.  

Toward that end, we'll talk about cognitive biases, with a little help from our friend Michael Webster, whose Psychology of Compliance and Due Diligence Law Blog was just last week named one of the ten best legal blogs on the internet. 

We'll also rely upon Harvard Business School's Working Knowledge, an invaluable, free resource that will improve every commercial litigator's ability to "cut to the chase" of the business interests that lie at the heart of every great settlement. 

Today's post, for instance, in fact the entire series of posts, was inspired by the HBS Working Knowledge Newsletter article -- Why We Aren't as Ethical as We Think - A Temporal Explanation by Max Bazerman (author of the great new negotiation text Negotiation Genuis) and his colleagues Ann E. Tenbrunsel, Kristina A. Diekmann, and Kimberly A. Wade-Benzoni. 

Other on-line resources we'll be using to explore this topic include:

Beyond Intractability (this link, for instance, is to our friend Ken Cloke's article on Mediators without Borders, which describes several great techniques for de-escalating conflict). 

The Freakonomics Blog, covering, among other things, marketing strategy that often overlaps with negotiation strategy, see e.g. Should Apple Burn its Economics Textbooks here and monetizing the value of spending more time with a loved one here

Brains on Purpose, our friend Stephanie West Allen's Neuroscience and Conflict Resolution Blog, see e.g. this recent article -- Conflict, Is it All In Your Head?, which appears, along with another cool dozen-plus conflict resolution blogs at Mediate.com's "Featured Blogs" page and Geoff Sharp's 40 Sites in 40 Minutes  including Gini Nelson's Engaging Conflicts on such topics as The Ethics of Compromise here and Diane Levin's Online Guide to Mediation on such topics as Is Your Negotiating Style Leaving Value on the Table? here.

Roger Dooley's brilliant Neuromarketing Blog, see e.g. our Negotiation Blog post on Small Talk and the Value of Joint Sessions here.

The Legal Theory Blog, see e.g. Negotiation and Time Perspective.

The Trial Lawyer Resource Center, whenever we need reminding that trial may well be the better alternative to a negotiated resolution, and to avail ourselves of the settlement insights posted there such as Listening During Settlement Negotiations

Malcolm Gladwell's Blog (the Tipping Point and Blink), see, e.g., this post on why journalists failed to detect the Enron debacle.  

The texts on which we usually rely will also be cited to assist you, including 

Professor Leigh Thompson's introductory-intermediate guide to negotiation, The Mind and Heart of the Negotiator (2d ed) -- the first chapter is online here.

Lax & Sebenius' essential 3D Negotiation -- excerpt online here.

Bazerman and Malhotra's newest compilation of negotiation advice, with which to earn your own post-graduate negotiation degree, Negotiation Genius.

The American Bar Association's massive compendium of negotiation strategic and tactical advice, The Negotiator's Fieldbook (online chapters include Analyzing Risk by Jeffrey Senger)

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Money, Possessions, Virtual Reality, Knockoffs, Patents, Friends, and the Wages of Conflict Avoidance: A Day with the Sunday New York Times

(right:  1915 New York Times logo from the Project Gutenberg eBook)

It's one of those days when nearly everything in the massive Sunday New York Times seems laser-directed at my interests, which also happen to be those of the IP ADR Blog.  So in case you didn't have my relaxing reading day, here are the good reads from today's NYT.

  1. how and why we deal with money and possessions the way we do (Even in a Virtual World, Stuff Matters);
  2. new ways to value the intangibles driving the post-industrial economy (Re:Framing - When Balance Sheets Collide with the New Economy);
  3. the painful personal results of conflict avoidance (much more about this soon) (How to Avoid, Well, You);
  4. poker strategy and tactics (yes, law/busines/IP is more poker than Clue) (When to Hold 'Em, and When to Go to Poker School);
  5. patent reform (of course) (House Passes Bill to Curb Suits by Patent Owners
  6. wait for a final ruling, negotiate settlement or pursue an at-risk launch -- Teva weighs its options after federal court refuses to enjoin its release of a copycat generic (Wyeth Loses Bout in Fight on a Generic);
  7. a challenge to negotiation orthodoxy raised by San Diego, California real estate "range pricing" to encourge the parties to negotiate in the ZOPA (A Pricing System with Wiggle Room); and, finally,
  8. the history of knockoffs (The Knockoff Won't Be Knocked Off) (more on this later as well).

That's it.  It's one of those rare Sundays when, as a result of our interior painting project and the kindness of neighbors whose new pool was finally ready to be christened, I could read the entire Sunday New York Times.

IP ADR DICTIONARY: B IS FOR BATNA

(photo "or not" by Tal Bright)

O.K., I'm adding B's to the IP ADR Dictionary. First, B was first for Bonobo (coupled with a racy moment of Bonobo physical intimacy).  But really, in any ABC's of negotiation, B must be for BATNA -- the Better Alternative to a Negotiated Agreement.  Lax and Sebenius in their brilliant 3-D Negotiation, call BATNA your "no-deal option."

Whatever you call it, before you knock on the door of any mediation or settlement conference meant to resolve your IP litigation (or pre-litigation dispute) you must know whether the litigation is a better alternative to the range of potential settlement offers that might be presented to you.     

In IP litigation, your BATNA begins with your projection of what the litigation will cost you; what your chances are of prevailing (at trial, on appeal, or on re-trial); and, how much you stand to gain (in dollars, competitive advantage, business opportunities, etc.).  Your opponents' ability to bear the cost is also a critical consideration as well as anticipated changes in the law like the Patent Reform Act recently passed by the House here in the U.S.  The possibility of market changes and alterations of competitors' strategies must also be researched and considered (who, for instance, expected Apple to drop the iPhone's cost by $200 sixty days after its release?)

I have lots and lots and lots to say about your BATNA.  I could, actually, write an entire BOOK on BATNA if someone could find a sexier name for it.  How about Paris Hilton's Sex-Slave BATNA Videotape?  

Today, however, we focus on the expense of patent infringement litigation care of Law.com's Dispute Between Broadcom and Qualcomm Provides Window into World of Big IP Fees, an excerpt of which follows:

If you ever wanted to know how big-name clients negotiate with big-name law firms about work on massive patent lawsuits, Wilmer Cutler Pickering Hale and Dorr has given us all an instructive look.

The Boston-based firm has filed an extensive motion in San Diego federal court detailing its $8.5 million-plus price tag for work on behalf of Broadcom Corp. in a nasty patent dispute with rival Qualcomm Inc.

Some of the highlights include an $850-an-hour rate from the top Boston-based partner assigned to the case, and significantly higher hourlies across the board than another firm charged on the case.

Broadcom did negotiate a significant discount from WilmerHale at one point in the case, and the firm said its rates were fair.

"The rates WilmerHale charges are the same as, or even lower than, the rates it charges to other commercial clients," the motion read. . . .

The motion reveals that Boston-based WilmerHale patent litigator William Lee charged $790 to $850 an hour, hundreds more than local litigators from the San Diego office of McKenna Long & Aldridge. McKenna charged up to $475 per hour for litigation partner Robert Brewer Jr., who manages its San Diego office. WilmerHale associates charged from $275 to $490 an hour.

In the motion and in an interview, the firm said its costs were entirely acceptable.

"We think it's fair and reasonable," said WilmerHale Boston partner John Regan, who, according to the motion, charges $640 an hour. "We think the rates we charge are market rates. Certainly one can't quarrel with the result."

I'm Shocked, Shocked, That Gambling is Going On Here

Anyone shocked by these fees hasn't been practicing in the Southern California legal market for the past ten years.

I too worked on cases in which there was so much money at stake that attorneys' fees of this scale were a drop in the bucket.  You try telling Exxon that the cost of litigation is high.  Its counsel's first response to me was this:  "my client spends hundreds of millions of dollars a year drilling dry holes.  Exxon does not worry about the size of my bills."  

Touche!

You, your opponent and your mediator all know which cases these are.  In these cases, the little lecture about the cost and uncertainty of trial tends to offend the lawyers and clients who do not need schooling in this.

Still, even Exxon might better spend its money drilling for oil than sending its attorneys' children to private schools and Ivy League Universities.  But hey! transferring large sums of money from one player who could afford it to another is how I spent most of my legal practice. 

IP ADR Dictionary: E is for Empathy: Bringing Your Clients in from the Cold

(photo, right, E and F by ednothing)

We were about to move on to "F" is for the Future in the IP ADR Dictionary, having already said that "E" is for Entrepreneurial Integrative Bargaining and, more simply, "E" is for Emotion.

But then we saw yesterday's Lawsagna post Three Kinds of Empathy and couldn't resist applying it to your IP disputes.  

Lawsagna not only defines the three types of empathy (according to Paul Ekman) but also has a bunch of great links on its uses, so please do check it out there. 

The bare bones are:

  1. “Cognitive empathy” is “knowing how the other person feels and what they might be thinking. . . . 
  2. “Emotional empathy” is . . . a state [of] “feel[ing] physically along with the other person, as though their emotions were contagious.”
  3. “Compassionate empathy” [is] understand[ing] a person’s predicament and feel[ing] with them [in a way that] spontaneously move[s you] to help, if needed.”

THIS IS WHY YOU NEED TO BRING THE BUSINESS PEOPLE TOGETHER AT SOME POINT IN THE MEDIATION OR SETTLEMENT NEGOTIATION TO BREAK THE IMPASSE

I have a million stories about the parties more or less spontaneously settling litigation after hours and hours of impasse in shuttle negotiation.  See e.g., Conspiracy Theories and Granfalloons.

Impasse-busting joint caucuses are particularly useful in IP negotiations because the parties are so often in the same business or industry and the lawyers, for all of their industry experience, are not.  

Listen, the clients have so much in common that you don't even need to search for the semi-meaningless-empathy-building-"granfalloon" of shared experience (same nationality, same language, same military service, same college, same hometown,etc.) to get the three empathy principles working in your favor.  Shared experience is in your clients' genetic structure.

I never commence a mediation in joint session because at that stage of the settlement negotiation, all the parties want to talk about is why they're going to win -- not a terrifically useful way to start a productive business negotiation. 

But I never let the parties leave the mediation without putting them together, with or without attorneys and mediator, in a last ditch effort to make a deal.

YEAH, LIKE WHAT, YOU ASK

In one case -- a lawsuit over the design of an Hawaiian shirt -- I was the second mediator to attempt settlement of copyright litigation that had been extremely contentious.  We were moving in such small increments toward a potential settlement (in the nano- and stratospheres) that we were essentially at impasse all day long. 

When I suggested a joint session, counsel said, "why do you think Party A will be able to explain to Party B better than you why he should pay us what we want?"

My response?  You can predict it, I'm certain. 

"These guys negotiate more deals in a day," I said, "than we litigators negotiate in a month or a year.  Let them try to do what they're best at doing."

I then coached both of the parties before their meeting (without counsel or mediator) but I don't think I needed to.  They emerged 20 minutes later with a business deal. 

When I asked how they had accomplished it (they were both smiling and proud of the result), one of them recounted, to the other's evident pleasure, "well, we talked about baseball for a couple of minutes and I said 'how about $X?'  He mentioned his son joining a LIttle League team and I told him my son had just been made Captain of his high school football team.  He responded to my demand by saying, 'I really don't want to pay more than $Y.'  I asked 'how about Q' and we shook hands on the deal."

"We didn't want the lawyers to look bad," he concluded, looking around to see that the attorneys weren't within hearing range, "so we decided to stay in the room and talk a little bit ab