IP ADR Blog

Too busy to comment, but couldn't resist posting this one.  Comments from the IP crowd?  Ideas for interest-based solutions from the ADR posse?  Mike Young?

ATHENS, Greece - A Greek court has been asked to draw the line between the natives of the Aegean Sea island of Lesbos and the world's gay women.

Three islanders from Lesbos — home of the ancient poet Sappho, who praised love between women — have taken a gay rights group to court for using the word lesbian in its name.

One of the plaintiffs said Wednesday that the name of the association, Homosexual and Lesbian Community of Greece, "insults the identity" of the people of Lesbos, who are also known as Lesbians.

"My sister can't say she is a Lesbian," said Dimitris Lambrou. "Our geographical designation has been usurped by certain ladies who have no connection whatsoever with Lesbos," he said.

The three plaintiffs are seeking to have the group barred from using "lesbian" in its name and filed a lawsuit on April 10. The other two plaintiffs are women.

And below -- a T.V. lesbian "mediator" gives warring parents a hologram of custody battles.   Funny.

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Check out Cumulative and Overlapping Innovation by Adam B. Jaffe and Josh Lerner over at  Harvard Business School Working Knowledge here as well as Jaffe and Lerner's book Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It, one of the Economist's Best Books of 2004, Economics and Business Category.  Excerpt from HBSWK below: 

A classic example of the tradeoff between rewarding pioneering inventions and allowing improvements is the Edison electric light bulb. Edison was granted the basic patent on incandescent lighting in 1880. For the next dozen years or so, there was much dispute about the validity and breadth of this patent. Many companies offered competing products. A number of these contained important improvements in the design of the filament and the bulb itself, and the cost of the bulb trended steadily downward.

Then, in 1891, Edison General Electric Company won an infringement suit against its competitor, United States Electric Lighting,and subsequently won injunctions against a number of competitors. The flow of improvements then slowed, until the expiration of the patent allowed competitors to re-enter and resume their efforts to improve Edison's design.

Now, surely Edison's invention was about as novel as they get. And Edison and his assistants put a lot of time and money into testing different materials until they succeeded with the carbon filament, justifying a patent to allow significant profits to be earned on the invention. But acknowledging the legitimacy of Edison's patent and his efforts to enforce it is not inconsistent with recognizing that the monopoly thereby created temporarily inhibited the subsequent improvement of the invention and the development of the industry more broadly.

In principle, subsequent inventors with good ideas about improving an important invention ought to be able to negotiate an agreement with the owner of the original patent that allows the improvement to be implemented.

This could be done by granting the improver a license to use the original patent, or by selling or licensing the improvement back to the holder of the original invention.

After all, if the improvement is really a good one, both the original inventor and the improver have an incentive to see it implemented. In practice, however, such agreements often are difficult to work out. After the Wright brothers patented their basic design for an aircraft stabilization and steering system, there were many others who wanted to work on a wide variety of different ideas for aircraft. But the Wright brothers refused to license anyone, and engaged in protracted litigation with a number of designers.

With the entry of the United States into World War I, the U.S. government in fact pushed the major aircraft manufacturers, including the Wrights' firm, to license their patents as a package, in order to ensure the rapid manufacture of planes and the development of new designs. The rapid development of numerous different aircraft concepts in the years after the establishment of this "patent pool" suggests that the pioneering patent—combined with the unwillingness or inability of the inventors to cooperate with their technological followers—temporarily retarded the development of technology.

Continue reading here

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The significant problems we face cannot be solvedby the same level of thinking that created them.--Albert Einstein

Lawyers, philosophers and scientists are all trained to question first principles.  The right of one individual to the absolute and exclusive right of dominion over property by virtue of creation or payment (by money or barter) is one of the first principles of capitalism and is rarely questioned. /**

The ownership of ideas, however, and one's entitlement to preclude others from interfering with another's dominion over them, is more slippery today than ever.  In this month's Harvard Business School Working Knowledge journal, for instance, Professor James Heskett kicks off a reader's forum -- Who Owns Intellectual Property -- (open until April 24) with the following:

I [recently] visited the website of the branding consultancy Wolff Olins, responsible for creating the branding for (RED), which raises money for The Global Fund being promoted by Bono and Bobby Shriver. (RED) is a brand, a piece of intellectual property that was designed purposely to be co-opted by others wishing to incorporate it into their advertising. Organizations such as Apple, Gap, and American Express have promoted their products and services using (RED) while raising money for The Global Fund.

Wolff Olins' homepage presents a provocative redefinition of brands as practical platforms that enable people to do things. In its words, "As brands become less the property of an organisation and more the banner of a movement, ownership will become even looser. Logos will be things other organisations, and individuals, can borrow and adapt." That belief, they maintain, will require that some companies, in their own best interests, relinquish control over brands and "be more generous" with consumers. In other words, they take the risk of transferring ownership and quality control of what used to be called their brand to others. In this case, who owns the intellectual property?

More generally, are views of ownership of intellectual property changing? If so, how will it affect the way intellectual property is valued for financial purposes? Are laws worldwide regarding intellectual property out of date? What do you think?

To add your own thoughts, click here.

____________________

/**  Though possibly apocryphal, in responding to the question "what proof need I present to demonstrate my ownership of this slave," a trial judge sitting in a non-slave state in 1840's America is said to have answered, “a bill of sale from God Almighty.” 

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See The Unlucky Troll at Forbes.com, excerpt below:.

[Chicago lawyer Anthony] Brown first noticed the JPEG patent after quitting his corporate law practice in 1996 and raising just under $1 million from friends and family to fund his new patent-licensing firm. After several months of trolling the national patent database, he found what he'd been looking for. The brainchild of two Philadelphia-area engineers, the JPEG patent lay dormant after being issued. Brown cold-called one patent holder, then 70, and the widow of the other, and persuaded them to assign him control in exchange for a chunk of any licensing fees recovered.

Then came Brown's first roadblock: A petition filed in 2000 by parties unknown asked the U.S. Patent & Trademark Office to reexamine whether the processes the patent described were novel enough to deserve a patent. The feds agreed to the review, a common practice if the questions raised seem substantial. The catch is that during the review the holder of the patent can't demand licensing fees, and the patent's life doesn't get extended accordingly. The reexam of the JPEG patent lasted seven years (the average takes less than two). In the end some fancy wordsmithery allowed Brown to retain control of the patent's pertinent provision.

Brown then launched a wave of lawsuits last summer, demanding anywhere from $25,000 to $15 million, depending on a company's revenues and reliance on the Web. One licensee, court records show, was Kraft Foods (nyse: KFT - news - people ), which was subject to a $5 million fee under Brown's "royalty schedule." Kraft agreed to an undisclosed fee.

But last year saw yet another anonymous challenge. This one was filed by Chicago patent attorney Vernon Francissen, who declines to identify his client. Francissen suggested the JPEG patent's current version had slipped through an overburdened system and was being applied too broadly. In March the Patent Office agreed to a second reexam, again putting up a roadblock to Brown's licensing campaign. . . . .

In late 2010 the patent expires--and there's no limit on the number of times "anonymous" parties can ask for a reexam.

See also TechDirt's February '08 article JPG Patent Holder Goes for the Sympathy Vote here; for more on patent trolling in general, see law.com's "Meet the Original Patent Troll" here.

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. . . and because this puts everything else into perspective -- including our own ability to know anything other than our (highly flawed) perception of it  . . . .  which has to do with negotiating past impasse  . . . . . I'll let you decide why . . . .

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There are dozens of reasons why a negotiated settlement of a patent infringement case is superior to continued litigation, but only one reason why it's even better than winning.  As law.com recently reported, "over the last decade, 38 percent of the cases had at least one term found on appeal to have been wrongly construed [and] . . . 30 percent of the cases had to be reversed or vacated because of an erroneous claim construction." 

As usual, we have Dennis Crouch at Patently-O to thank for the statistics, which were gathered by David Schwartz, an assistant professor at The John Marshall Law School.  

"For some lawyers, the high reversal rate is worrisome," according to law.com's article Federal Circuit Tosses Out $104 Million Patent Verdict in DirecTV Case here. 

"It's higher than everyone would like," said Michael Barclay, an IP lawyer at Wilson Sonsini Goodrich & Rosati. "You can't advise your clients on what's going to happen."

One fix for the issue was proposed in the patent reform bill that is currently stalled in the Senate. It would change the rules to permit an interlocutory appeal to the Federal Circuit after the hearing on claims construction instead of waiting until the trial is finished.

Proponents said the change would cut out all the time wasted on trials that ultimately get overturned by the appeals court. But opponents, including Federal Circuit Chief Judge Paul Michel, said that the change would clog up the appeals court and cause even more delays in patent cases.

In the Finisar case, a Texas jury originally awarded the tech company $78.9 million in damages after it found that DirecTV willfully infringed on a patent involving methods for transmitting and broadcasting digital information. U.S. District Judge Ron Clark denied Finisar's request for an injunction but awarded $25 million in enhanced damages. DirecTV was also on the hook for prejudgment interest, post-judgment interest and a compulsory license.

The appellate panel vacated the verdict, ruled that the alleged infringement wasn't willful, and invalidated one of the seven patent claims in question.

DirecTV's appeal had challenged the construction of two terms in the district court's claim construction as too broad. The appeals court agreed, though it ruled that only one of the misinterpretations was harmful.

For the full article, click here.

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Harry Potter and Copyright Fair Use junkies know this already -- there is a firestorm brewing between the not insignificant powers (and financial resources) of JK Rowling and her Harry Potter franchise (which includes Warner Brothers) on the one hand and RDR, the wanna-be publisher of a fan's "Lexicon" or reference guide, on the other.

And the battleground is copyright's amorphous fair use doctrine.

Potter fan and Michigan middle-school librarian Steven Vander Ark has a very popular and comprehensive website that is considered to be the most authoritative reference to the Harry Potter series. 

Among other things, the Lexicon collects in alphabetical order information on the series' characters, places, spells, potions, and more, quoting liberally from the original language in the Potter books. The Lexicon was so popular, and so comprehensive, that JK Rowling herself frequented it as a reference guide and awarded it a "fan site award" in 2004.

Rowling's views changed, however, when she learned that Vander Ark had cut a deal with book publisher RDR to create the Lexicon in hard copy and sell the book in stores.  Before it could be published, Rowling brought suit in New York, claiming copyright infringement.

Her legal position is that the Lexicon merely reorganized, but otherwise copied, her words and ideas -- a blatant infringement of her most basic copyright in her creations.

As Rowling notes, she has the exclusive right to create derivative works which is what the Lexicon is.  Rowling further asserts that she intends to write her own Harry Potter encyclopedia of sorts in the next decade, with proceeds to be donated to charity.

RDR is screaming fair use, arguing that the Lexicon is transformative of the original work -- that is,  taking the original and creating a wholly new and different work of authorship. RDR points to reference guides that have been published for innumerable other works of fiction, including ones for The Lord of the Rings and The Chronicles of Narnia.

So which is it, an infringing derivative work, or a transformative fair use? My fellow panelist on last month's USC IP Institute Fair Use Panel, Tony Falzone has an opinion -- Fair Use.

Indeed, Tony and the Fair Use Project are representing RDR books in the trial currently pending before New York Federal Court Judge Robert Patterson Jr. while Dale Cendali of O'Melveny and Myers' New York office leads the charge for Rowling's camp, and not surprisingly sees nothing transformative at all about the Lexicon. 

For details on the trial, take a look at the WSJ blog here the gothamist blog here.   Both are providing terrific day to day coverage of the trial.

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In the epic Harry Potter copyright fair use battle now under way in a District Court in New York, the mortal judge is wondering out loud -- from the bench -- why these parties can't just settle their dispute.

For background on this fascinating Copyright dispute, click here.

U.S. District Court Judge Robert Patterson Jr., after referencing Bleak House -- Charles' Dickens tale of endless litigation -- noted that it was “a very sad story. Litigation isn’t always the best way to solve things."

He went on to ask the parties: "Can it be resolved another way? I feel that this case could be settled and should be settled."  "I think this case, with imagination, could be settled."

Despite the invitation, even Rowling's apparently boundless imagination could not be tapped to think creatively about a global settlement.  As reported by the WSJ Law Blog here, the parties have reached a settlement of the relatively inconsequential false advertising and deceptive trade practices claims, but the copyright/fair use dispute -- the meat of the case -- continues.

Is the judge wrong to think that a high profile copyright case that makes a star of the fair use doctrine could be settled?  Or as one of the participant's asked, how do you settle with a billionaire?

Answer:  To settle with a billionaire, you need to offer something that the billionaire wants more than money.

The first task, then, is to figure out what that is. Why is Rowling fighting in the first place? What is her motivation?

We get some indication of what propels her from her own testimony at trial: protection of her characters, her "17 years of . . . hard work," her desire to write a Potter encyclopedia of her own one of these days, proceeds of which she says she will donate to charity.   Indeed, in the preliminary injunction papers filed by Rowling, she made a point of saying that she has already donated $30 million to charities.

This gives any good mediator plenty of things to work with in trying to explore settlement possibilities.  Rowling may want good press; she may want to build an image as a philanthropist; she may want to be seen as a protector of authors' rights. 

What about exploring a settlement where the Lexicon is published but some of the proceeds are donated in  Rowling's name to a charity of her choice.  If she is interested in giving young writers a leg up, the publisher could offer to open doors for young writers, one of whom could co-write or co-edit the Lexicon.

To protect Rowling's characters, RDR could agree to a licensing arrangement, thereby ensuring that no precedent is set.

A little imagination, as Judge Patterson so aptly noted, can go a long way towards finding ways to satisfy the underlying interests and motivations of all parties.

The conflict resolution side of me would love to explore ways to end the Rowling/RDR dispute in a way that satisfies all interested parties.  I am convinced there is a settlement out there to be had, if only the parties would explore it with an open mind.

On the other hand, the fair use junkie in me is avidly interested in how this monumental battle will shake out.  Fair use is an amorphous concept at best, as was made clear at the USC IP Institute Fair Use Panel last month.

Further judicial guidance -- and this one is definitely headed to the appellate courts -- would be a welcome contribution so long as it helps to clarify, and not further muggle, er, muddle, what constitutes fair use.

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Check out this book -- Patent Mediation, Better Solutions for Business -- and other resources at the International Institute for Conflict Prevention and Resolution here today!

Provides a five-step roadmap for helping in-house counsel and corporate leaders utilize mediation, when appropriate, a strategy proven to substantially reduce the cost of patent disputes.

By CPR International Commission on Patent Disputes, chaired by Robert Copple. Edited by Kathleen M. Scanlon, Heller Ehrman LLP and Helena Tavares Erickson, International Institute for Conflict Prevention & Resolution

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Former Executive Vice-President and General Counsel to The Walt Disney Company, entertainment law heavy-weight Lou Meisinger knows more about driving a hard bargain than anyone I know. 

Yet it is Lou who taught me that the deal you drive too hard is the one that will come back to bite you.

Why?

Because you have to leave enough profit in it for your negotiating partner to survive.

Once, Lou says, his company drove so hard a bargain, leaving so little profit to its bargaining partner, that the contract had to be renegotiated, on terms less favorable than originally offered. Had the stronger party been content with the deal that could have kept its negotiation partner healthy, it would not have had to take a worse deal months later based upon the other's inability to comply with the harsher terms originally imposed.   

You not only have to leave them "face," you also have to leave them with enough money to survive.

You protest that Lou's wisdom doesn't apply to a one-time deal. Maybe. But I'm getting older and it's a small world.  

A fair agreement is a durable agreement.

Hard bargainers love to quote Machiavelli's The Prince on fear and love, though they forget that Machiavelli cautioned only that it is much safer to be feared than loved, when, of the two, either must be dispensed with.

Most people also forget -- or never read -- his final words on the subject:

Nevertheless a prince ought to inspire fear in such a way that, if he does not win love, he avoids hatred; because he can endure very well being feared whilst he is not hated, which will always be as long as he abstains from the property of his citizens and subjects and from their women.

Drive too hard a bargain and you take what belongs to another, engendering ill will in your industry's community that you may never reverse.

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Former Federal Magistrate and IP ADR Blogger, John Leo Wagner and I presented Tactics of the Adept in Modern Mediation Practice today at the ABA ADR Convention in Seattle. 

We had a lively discussion about the ways in which "at the table" tactics can be strategized in advance to assure that the right people are available for deployment at the optimal time to maximize the potential for the most effective and efficient settlement possible.  We also covered end-game strategy; deal points; and bridging techniques.

You can get a taste of the discussions by downloading our power point presentation linked above.   

Though there were a plethora of afternoon programs following our own, I was happy with my choice of the session conducted by Los Angeles complex commercial mediator Jeff Kichaven (JAMS). 

Jeff led a great discussion among mediators and litigators alike concerning settlement conferences in which coverage is an issue.  

The panel, entitled Hobbling through the Three-Legged World of Insurance Mediation:  How to Get More Third Party Liability Cases Settled was masterfully moderated by Kichaven, who drew from both panel and participants thoughtful questions and sophisticated answers.

Jeff was joined on the panel by Michael Wrenn, insurance recovery litigator in Heller Ehrman's Seattle office, who provided the viewpoint of the insured whose carrier is defending, but denying liability for any settlement by or eventual judgment against the insured.  Wrenn stressed the utility of pre-mediation conferences; the potential need for mediator assistance with client expectations; and, those rare but satisfying mediations where the mediator -- based on his ability to "bond" with the client -- sends both litigator and client away settled and satisfied.  

Also joining Jeff was Cozen O'Connor coverage litigator Thomas M. Jones (Seattle).  Jones stressed the need for neutrals to shoulder the burden of assessing and communicating the weak points of his own and his adversary's legal and factual weaknesses in a persuasive and even-handed manner.  Trust in the mediator's neutrality in providing all sides with candid assessments of risk was stressed as perhaps the most important of a mediator's usefulness to Mr. Jones and his carrier clients.

Finally, ACE-USA in house counsel Jonathan Roth added the client's perspective.  Mr. Roth was refreshingly candid and animated, stressing several times that his superiors "don't like to be surprised" and encouraging mediators to be as candid as possible with "bad news" they might think the client representative does not wish to hear.

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