The IP ADR Blog : Intellectual Property Alternative Dispute Resolution Lawyer & Attorney : IP ADR : The IP ADR Blog

From today's Best Mode Blog, an innovative way to avoid begging the federal government for more money:  patent it!

When you own 30% of a global financial services company, like you and I now do, it’s a good idea to take a look under the hood, kick the tires and check-out what’s in the trunk.  And look what Citigroup has here, a patent on a “synthetic currency transaction network“, US Patent 7,020,626 Inside Money.

“Synthetic currency is created by pooling and dividing into shares a portfolio of highly liquid assets and frequent evaluation and disbursements of dividends on those assets so as to hold the value of the synthetic currency share at unity with the underlying currency….The IM (Inside Money) transaction agent system in conjunction with the IM synthetic currency act like a “super” virtual central bank to allow users around the world to make near real-time final transactions.“

“Super Virtual Central Bank?“  I guess my Second Life alter ego will also take a hit in a “Virtual Recession“, grovel before a “Virtual Senate Committee” and be criticized for traveling by private “Hyper Shuttle” instead of commercial.

CONTINUE READING HERE

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Here's the good news fair IP client -- your legal problem is Rocket Science!

From Anne Reed's indispensable Deliberations this morning (If it's difficult it must be important) we learn

“Perception of high effort arising from subjective difficulty of processing the means makes it appear highly instrumental for goal achievement.”

That feels right, when you think about it.  When we’ve had to really work at something, we naturally think it was important to our success, if only because we’d hate to have to explain why we worked so hard to get it if it wasn’t important.

Yes, your clients want to win, but they also want inspired leaders.  And if you're having trouble convincing them to sit down and negotiate a settlement with the other side (with or without my own quite brilliant help/1) tempt them with the lure of challenge.  Involve them.  Bring them back into the incredibly difficult but hardly insurmountable problem that requires their best critical and innovative thinking.  

Try it just once no matter how much of a wild man winning trial lawyer you know you can be.

____________________

1/  Hard economic times are no time for modesty.

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It's ALL ADR because those of us over 50 are already living in our own future.  How to keep up?  Here's a good place to start - How to Seed Your Own Stimulus from Harvard Business Publishing  by Umair Haque, Director of the Havas Media Lab, a new kind of strategic advisor that helps investors, entrepreneurs, and firms experiment with, craft, and drive radical management, business model, and strategic innovation. Excerpt below.  For full article, click here.

Are you redefining the economics of ownership? Ownership has its own costs and benefits. Here's an example of costly ownership: companies building patent thickets purely for the purposes of deterring competition. Here's a better one: the media industry eviscerating itself through brain-dead "rights management". Who can develop better kinds of ownership that create value for everyone? Advantage will flow inexorably to those economies - and companies - who can. Just ask Radiohead - giving people the right to pay what they wanted for music unlocked more value than demanding their submission to fixed prices.

Are you redefining the economics of contracts and standards? How do we know today's contracts are inefficient? The sheer size and growth of the legal industry is an existence proof that contracting is becoming more and more costly. Ever read an absurdly heavy-handed Microsoftian shrinkwrap license? Of course not - and that's exactly why contracting today is often costly, cumbersome, and inefficient. Whoever can invent better kinds of contracts for the 21st century will realize a tremendous advantage. Just ask Google - who redefined advertising by tying payment to action, redefining the terms of a stale contract which still based payment on sheer volume.

Are you redefining the economics of governance? Today, governance of economic organizations has devolved to cronyism, back-slapping, and glad-handing. Boards are happy to look the other way when CEOs line their pockets. CEOs are happy to look the other way when board members invite their bffs to join the board. Toxic governance has poisoned industries as disparate as autos, pharma, apparel, finance, and housing. New rules for the structure, composition, roles, and tasks of senior managers and boards will redefine the economics of governance. Advantage depends on doing so - when we can reinvent more efficient ways to manage managers, new value is created: just ask any open-source community, where everyone's simultaneously a worker, manager, and de facto board member.

Are you redefining the economics of management? Today's financial crisis isn't about money: it's about management. Bankers mismanaged our money catastrophically - because they were too busy managing their bonuses. Advantage will flow unstoppably to those who can redefine the economics of management - for the simple reason that, unlike bankers, they will be able to create greater amounts of more durable, lasting value. Responsibility, accountability, and transparency aren't just buzzwords - they're the keys to radically altering the costs and benefits of management. Just ask Threadless - whose radical vision of 21st century management is creating a global clothing revolution.

How do you score on the scorecard? If you're redefining even a single one of the activities above, you're hitting the ball out of the park. Most companies fail to even register a score, because they're focused on seeking advantage through better products, services, business models, or strategies - instead of building responsiveness through better institutions.

Here's another lens through which to view institutions. For now, let's discuss. Fire away in the comments with questions, examples, or criticisms.

Thanks to New York City corporate lawyer Mary Abraham (follow her here) of the Above and Beyond KM Blog in my Twitter network for the head's up.

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How to choose between litigation and ADR

The most successful strategies for guiding your dispute into the best ADR forum at the most productive time.

•    Case management order
•    Settlement counsel (inside or outside)
•    Full time mediator consultant with IP specialty

The five basic rules of “distributive” or “fixed sum” bargaining that will give you the “edge” in all future settlement negotiations.

Anchor:  make the first offer

• Sets the bargaining range
• Exerts a significant pull in direction of the first number throughout the negotiation
• Social science research has demonstrated that ANY number entering the negotiation environment will affect it:  zip code
• Set aspirations high and keep them high throughout

Frame losses as gains; use positive language for your offers and counters; negative language for theirs

• Social science research:  framing not only affects estimates in the face of uncertainty, but memory of events as well
• How tall vs. how short
• How much vs. how little
• 3 to 5 or 1 to 3
• concede; you win on this point; I’m making you an offer greater than a million (rather than less than 2 million)

Trade items of unequal value to the parties

• Distribution networks (valuable to you) for technology (valuable to them)
• Sliding scale of royalty payments:  rich in early years (valuable to you); rich in later years (valuable to them)

Break deal down into parts; negotiate easiest points first

• Bargaining partner will begin to experience having the deal done
• Personal investment in deal points already agreed upon

Present each offer with a reason & an express statement that you’ve made a concession & expect it to be reciprocated

The five ways to “expand the fixed sum pie” by exploring and exploiting the client interests underlying your own and your opponents’ legal positions.
 

• Ask diagnostic questions
  • Only 7% of negotiators ask diagnostic questions that would significantly improve the deal
  • Diagnostic questions elicit information about where the pie can be expanded (i.e., what are your expectations? Profit margins? Business health? Distribution channels? Technology needs? Forecasts for the future?
• Make multiple offers of equal value simultaneously
  • The negotiator provides two or more packages of offers, where each offer is of equal value to the negotiator proposing them
• Build contingencies into agreement where the future is uncertain
  • Common in infringement cases resolved with royalty payments; royalties will be “x” in the event of “y” and “q” in the event of “m”
  • Tie royalties to profitability sales
  •  Most favored nation royalty rates
• Link offers or concessions together
• Break negotiation into parts:  the more parts to deal with the better the deal
  • What items
  •  What terms

The Ten Mediation/Settlement Conference Traps for the Unwary

1.    Leave stakeholders at home
2.    Leaving too soon
3.    Failing to take clues from the mediator/settlement conference judge
a.     mediator will always know more about your opponent's bargaining position and ability to settle the lawsuit than you do.
4.    Failing to strategically use joint and separate caucuses
5.    Letting the Judge or Mediator Act the Bully
6.    Believing that any competent judge or mediator can help you achieve the best settlement."
7.    Sidelining Your Client on the Day of Mediation
8.    Failing to use the Mediator to Help You Bring Reality to Your Client
9.    Failing to Maximize the Mediator's Strategic Skills
10.  Negotiating in the Nano- and strato- spheres.

 

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Thanks to @IPStrategist (Jackie Hutter of the IP Asset Maximizer Blog) for calling our attention to Duncan Bucknell's intriguing post at the IP Think Tank, Certainty or fairness - what would you choose? 

If you had to choose between business certainty and fairness, what would you choose? 

If the intellectual property laws could be codified so that the result in intellectual property disputes is always certain - even though it might not be fair - would that be ok?  Or would you prefer that the legislative guidelines remain broad and the fine details in each circumstance be worked out in context - in litigation?  (As happens today?)

Link on the title above to continue reading.  And while you're on Jackie's blog, check on this post on the micro-firm model of providing client service in the downturn.  In fact, just SLEEP with Jackie's blog.  If you could read only a single blog; or were permitted to take just one to a desert island, hers is the one, particularly during hard times calling for innovation and efficiency.

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Live Telephone Seminar

ADR in IP Litigation from ALI-ABA

Wednesday February 18, 2009 from 1:00-2:00 pm EST

Why Attend?

In a difficult economy, intellectual property protection and assertion is more important than ever. The combined stressors of a poor fiscal climate and shrinking legal budgets place a significant strain on any business dependent upon IP assets. as companies face difficult economic decisions, it is increasingly difficult to fit the expense and extended uncertainty of copyright, patent and trademark litigation into a forward looking business plan. This one-hour seminar explores the use of alternative dispute resolution as a means of protecting intellectual property and business activity, while minimizing the expense and devotion of time related to traditional IP litigation.

What You Will Learn

This program examines how to move an IP dispute toward alternative dispute resolution; best practices for controlling the expense and length of the process; and best practices for successful alternative dispute resolution. Whether you are an experienced IP practitioner or simply one grappling with IP issues in your general commercial practice, knowing how to offer your clients a wide array of ADR options might make the difference between a practice that survives and one that thrives. The seminar will cover the following topics:

How to choose between litigation and ADR.

• The most successful strategies for guiding your dispute into the best ADR forum at the most productive time.
• The five basic rules of “distributive” or “fixed sum” bargaining that will give you the “edge” in all future settlement negotiations.
• The five ways to “expand the fixed sum pie” by exploring and exploiting the client interests underlying your own and your opponents’ legal positions.
• The Ten Mediation/Settlement Conference Traps for the Unwary.
  

Invest just 60 minutes at your home or office to learn about alternative dispute resolution in the IP field from this duo of experts. This audio program comes to you live on Wednesday, February 18, 2009, 1:00-2:00 pm EST, via your phone or your computer. Materials corresponding to the course may be downloaded or viewed online.

Planning Chair

R. David Donoghue, Esquire, Holland & Knight LLP, Chicago, IL

Faculty

Victoria Pynchon, Esquire, Settle It Now Dispute Resolution Services, Beverly Hills, CA

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The more goods and services you have to "trade" to negotiate a deal, the more likely you will achieve the most optimal settlement possible.  Remember, litigation is simply a business negotiation being conducted in the courts (Google's Eric Schmidt).  Though the facts relevant to the litigation are narrow, the facts relevant to the negotiated settlement are unconstrained.  Therefore, we're starting this morning a new series on Negotiation Bargaining Chips.  Here, for instance, is an except on the topic from the PRI radio program Marketplace.  Click on the highlighted headline for full story and podcast.

(peanut butter:  an item that has recently lost much of its goodwill value)

Decoder: The value of 'goodwill' from the Marketplace website.

Let's say you bought [a] company. Its goodwill is now considered one of your assets. It appears on your balance sheet just like office equipment or company cars. And your accountants can calculate whether that goodwill value is increasing or decreasing. If the value decreases, you can put that down as an expense. And if an agency like Moody's suspects the value might decrease? They can downgrade your credit rating.

At which point you might find yourself shopping at that other Goodwill.

Goodwill.  Don't forget its value when negotiating with your adversary. 

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Softening Up Opposing Counsel in the midst of the recession from the brilliant Charles Fincher (who kindly permits me to post his work so long as I link and attribute. 

Thanks Charles!  You're a model of 21st Century collaborative and reciprocal IP sharing!)

For more laugh out loud funny lawyer cartoons, go immediately to LawComix.com.

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From the Wall Street Journal's Market Watch, Famed patent firm backs study on touchy subject; Myhrvold, Lemley's study aim for academic neutrality, but some are skeptical

 

By John Letzing, MarketWatch

 

SAN FRANCISCO (MarketWatch) -- Nathan Myhrvold, a former high-ranking Microsoft Corp. executive turned intellectual property mogul, is sponsoring a forthcoming study that aims to resolve a thorny legal issue: Who's responsible for flooding U.S. courts with a torrent of patent litigation over the past decade?

It's an ambitious project, but one also likely to elicit a good deal of cynicism.

That's because while Myhrvold's firm Intellectual Ventures anticipates fostering companies that turn its intellectual property into products, it hasn't yet. Instead, it's focused on amassing tens of thousands of valuable patents through invention, acquisition and partnering with businesses and universities.

That approach generally defines a firm as a so-called "non-practicing entity," though within the technology industry a more derisive term is often used -- "patent troll."

Big technology companies such as Myhrvold's former employer Microsoft Corporation have long complained that many non-practicing entities not only trade in patents without developing products, but also increasingly use them to target deep-pocketed companies with infringement lawsuits. . . . . .

 

If the study finds that non-practicing entities have played a relatively minor role in the rise of litigation, it is likely to raise questions, given the involvement of Intellectual Ventures.

"I'm excited to hear what the results are, but when they come out I'll be sure to take them with a grain of salt," said Kelly Hyndman, an intellectual property attorney with Sughrue Mion PLLC.

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Because this is how most intellectual property disputes will end, the only question is:  how much mutual warfare do the parties actually need to endure before they're ready to come to the peace summit.  Though the collateral damage of litigation does not cause actual bodily injury, the corporate "body" and its members will suffer in lost productivity, translating into fewer revenues, causing lower profits.

In upcoming posts, how to get to the negotiation table sooner rather than later.

Seoul Semiconductor and Nichia Settle Litigation and Enter Into a Cross-License

In accordance with the settlement terms, all Litigations will be terminated as promptly as possible by mutual withdrawals, with the exception of litigation in Germany involving patent DE 691-07-630 T2 of EP 0-437-385 B1, which will be resolved following a February 2009 hearing.

SEOUL, KOREA--(Marketwire - February 2, 2009) - Seoul Semiconductor Co., Ltd. and Nichia Corporation announced that they have settled all litigations on patent and other issues as well as other legal disputes ("Litigations") currently pending between them in the United States, Germany, Japan, United Kingdom, and Korea. The settlement includes a cross license agreement covering LED and laser diode technologies, which will permit the companies to access all of each other's patented technologies.

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I found the IP Strategist on Twitter, justification alone for the time I spend there getting to know people inside and out of my market whose experience, wisdom, education and training expand my understanding of my clients' concerns on a daily basis.

(post card from Hugh McLeod's Gaping Void post on Buggy Whip thinking)

I talked to IP attorney Jackie Hutter this morning, author of the IP Asset Maximizer Blog and found that we shared a passion for focusing on business solutions to commercial problems rather than adversarial answers to justice issues. If you want to know what the GC who's hiring you is worried about, check out Jackie's post today on the future prospects of IP law firms (Destined to Meet Same Fate as Buggy Whip Manufacturers).  "As an in-house counsel spending several $100K's per year for legal services at a number of respected IP firms," writes Jackie: 

I consistently felt that when I called outside counsel for assistance the first thought that popped into the lawyer's mind was "So glad she called--I wonder how much work this call is going to lead to?" More often than not, I got the sense that my outside IP lawyers viewed my legal concerns as problems for them to solve on a per hour basis, not as issues that might affect the profits of the company for which I worked. The difference is subtle, but critical: the context of the former is lawyer as a service provider, whereas the latter is lawyer as a business partner.

Using the well-known picture of obsolescence presented by buggy whip manufacturers more than 100 years ago, I believe that IP lawyers who recognize that they must embrace innovation in the way they provide IP legal services to clients will be poised for success when their clients decide that the time for change has arrived. On the other hand, lawyers who believe they are in the IP law firm business will invariably be left behind when innovations in client service enter the marketplace that render the law firm business model obsolete.

IP lawyers should not expect that they will be able to predict when their clients will demand change. As with the customers of buggy whip manufacturers, law firm clients will not serve their IP counsel with notice warning prior to taking their business to lawyers who provide them with innovative, and more client-centric, service models. To the contrary, when clients are finally presented with acceptable alternatives, they will naturally migrate to the innovation that best meets their business needs. The result will be that one day, these currently successful IP lawyers will likely wake up to realize that they are losing their clients in droves to lawyers who succeeded in developing and introducing an innovative client service model to the world. And, as most lawyers will tell you, once a client is gone, they are likely gone forever.

Though Jackie's focus is on the billable hour, if you read her entire post you'll see that she's yearning for a more thoroughgoing revision of the current strictly legal response to IP disputes.  I like the way she thinks and hope that we'll be collaborating on articles or workshops in the future to address the buggy-whip aspects of IP practice that don't have a chance of keeping up with the speed with which technology moves.

I just wanted to introduce my readers to Jackie for now.  We'll be back.

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