Outline for Today's ABA-ALI Presentation on IP ADR
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.
