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Greetings IP ADR Blog readers!

Mediator, Arbitrator and Adjunct Professor of Alternative Dispute Resolution at the Straus Institute for Dispute Resolution will be a panelist at the Annual ABA Conference on Friday August 6 from 4-5 p.m. The panel discussion entitled "Maximize Your Success with Court-Connected ADR" will focus on how litigators can settle at the point of maximum benefit for their client!

 

Most IP cases settle--but often it is late in the litigation process after the money runs out.  This panel will help litigators prepare for each type of ADR session and help them settle successfully, discuss pitfalls to avoid and provide advice for choosing the best ADR procedure for a particular case.  The discussion will be moderated by Suzanne Nusbaum of Los Gatos, CA and takes place on the 4th Floor at the Intercontinental, San Francisco at 888 Howard Street, San Francisco, CA.

-RR

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It is not often a case hits upon two of our favorite topics: Trade secrets and pie. But when it does, mmmmmmmm, it’s good to be an attorney.

And for this reason, we are grateful to Justice Rushing who provided us with a little of both in his recent opinion in Silvaco Data Systems v. Intel Corp. (Calif 6th App. Dist., April 29, 2010), Case No. H032895.

Silvaco is a relatively standard trade secret case in the computer software world … with a twist.

It starts with the alleged theft of source code – that’s the computer language that mere humans can understand and write. This human-drafted source code is later fed into a machine (a compiler) to produce “object code” (or “target code”), which is the nearly indecipherable gobbledygook that can be executed by the computer itself. (Yes, I know this is a slight oversimplification, but I’m a lawyer dammit.)

Source Code Theft

Silvaco, the plaintiff in the case, alleged that a competitor (CSI) stole its human-drafted source code and used it to create a competitive software product. Silvaco eventually obtained an injunction against the competitor. But that’s not the interesting part. The good part – the pie – comes next.

After obtaining the injunction, Silvaco sued Intel. Why? Because Intel had purchased and was using the software that CSI had created from Silvaco’s source code. The software did not actually contain the source code, but it was using executable, machine-readable code that had been derived (via the compiler) from the source code. Silvaco claimed that by using the software, Intel was “using” its trade secret source code, and hence was in violation of California’s Uniform Trade Secret Act (CUTSA).

Intel begged to differ and filed for summary judgment. Of the many arguments set out in the briefs, one was simply that Intel hadn’t “misappropriated” Silvaco’s trade secret source code. Under CUTSA, to “misappropriate” a trade secret, one must either “acquire,” “disclose,” or “use” the secret.

Silvaco argued that Intel “used” the source code when it ran the software since even though the software was executing the object code, the object code was based on the stolen source code. This is not a wholly frivolous argument.

The Court and Pie

But the court wouldn’t hear of it. Instead, in granting Intel’s motion, the court decided to talk pies and pie recipes. When one bakes a pie from a recipe, he is clearly “using” the recipe, noted the court (to which most bakers would, I presume, agree). But what about the blogger who eats the pie? Is he “using” the recipe? Or just enjoying the fruits (or chocolate creams) of the end product? Mmmmmm.

The court held that the eater of the pie is simply a happy diner…even if he knows the baker stole the pie recipe in the first place. He is not a “user” of the recipe itself:

“One who bakes a pie from a recipe certainly engages in the 'use' of the latter; but one who eats the pie does not, by virtue of that act alone, make 'use' of the recipe in any ordinary sense, and this is true even if the baker is accused of stealing the recipe from a competitor, and the diner knows of that accusation.”

The court also employed a “stop watch” analogy, though the imagery is much less delectable: the coach who “uses” a stopwatch, according to the court, cannot be said to be “using” the trade secrets that went into manufacturing the stopwatch.

Finally, the court looked to “public policy” to support its conclusion – if a software user (like you, for instance) were considered to be “using” the underlying source code that was used to generate the object code that was running the software, then every software user (like you, for instance) could be liable for trade secret misappropriation if it later turned out that the software manufacturer utilized purloined source code. (Did you follow that?) If software end users like you and me are at risk of trade secret misappropriation for using software based on stolen source code, “this risk,” according to the Court, “could be expected to inhibit software sales and discourage innovation to an extent far beyond the intentions and purpose of CUTSA.”

Is the Court Right?

From a logical perspective, is the court right? Can’t it reasonably be argued that a software user does in fact “use” the underlying source code that allowed the software to be developed? Doesn’t the pie eater “use” the recipe when he or she eats the pie? The court relies on the dictionary definition of “use” to support its interpretation, but doesn’t this definition still beg the question:

“As it appears in the act, the noun 'use' is surely intended in the ordinary sense, i.e., '[t]he act of employing a thing for any (esp. a profitable) purpose; the fact, state, or condition of being so employed; utilization or employment for or with some aim or purpose, application or conversion to some (esp. good or useful) end.' (19 Oxford English Dict. (2d ed. 1989), p. 350, italics added.)"

It seems to me that “use” is more of a continuum than a bright line, like proximate cause. The pie eater is “using” the recipe, but not as much as the baker “used” the recipe. The personal trainer who is getting paid to help the pie eater lose weight is also “using” the recipe, as is the personal trainer’s tanning salon (hey, you’ve got to look good in that business). At some point, though, you’ve got to cut off “use” just as the courts have to cut off proximate cause. The use of “public policy” to help define where that cut-off should be certainly seems to make sense.

Personally, if it means I can bite into that lemon meringue without fear of being sued, I’m all in favor of it. So’s my trainer.

 

-MY

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It's been a little while since I have posted on matters relating to the IP ADR Blog, but perhaps I can start with California’s special take on trade secrets, one of my favorite subjects. In particular, recall the state statute requiring plaintiffs to identify their trade secrets “with reasonable particularity” before discovery can be commenced. (California Code of Civil Procedure Section 2019.210.) I blogged about this earlier when Sylvester Stallone’s low carb chocolate pudding kindly added to our understanding of the parameters of the trade secret designation statute. Well, the statute is in the legal news again.

This time, the question is whether CCP 2019.210 applies to trade secret cases in federal court. One would think this would be a relatively easy issue – pick one, yes or no, and let’s get on with it. But apparently that would take the fun out of it. Instead, California’s district courts have had a tough time making up their minds on this one…and it’s causing we trade secret practitioners some consternation.

The latest to try his hand at this one is Judge Moskowitz in the Southern District of California, who believes he has sorted it all out for us in his recent opinion in Hilderman v. Enea Teksci, Inc. (USDC SD CA 2010) No. 05cv1049, 2010 WL 143440.

CCP 2019.210 Review

A little background first (with apologies to fellow TSGs who know this already).

Recall that CCP 2019.210 requires a plaintiff to describe his trade secrets “with reasonable particularity” before he can commence discovery. The rule certainly seems reasonable enough:

“Before a defendant is compelled to respond to a complaint based upon claimed misappropriation or misuse of a trade secret and to embark on discovery which may be both prolonged and expensive, the complainant should describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons who are skilled in the trade, and to permit the defendant to ascertain at least the boundaries within which the secret lies.”

Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 253, 67 Cal.Rptr. 19.

The purpose of the disclosure rule is also noble enough: (a) help the court shape discovery; and (b) provide the defendant with sufficient notice of what he is alleged to have stolen so he can develop a defense.

So what can go wrong with this? Plenty.

Does 2019.210 Apply to Federal Cases?

In the Hilderman case, the counterclaimant, apparently just assuming that 2019.210 applied in the federal action, served a trade secret disclosure on the counter-defendants identifying the trade secrets at issue as (a) employee contact information; (b) customer information; and (c) some kind of “processes and checklists.” Discovery and litigation thereupon proceeded and the cased steamrolled forward.

However, just before trial, it appears that the counterclaimant may have been trying to pull a fast one – it wanted to present evidence of additional allegedly stolen trade secrets, including pricing information, vendor leads, and employee leads. Naturally enough the counter-defendants cried foul, moving to exclude this evidence on the grounds that it had not been disclosed pursuant to 2019.210. Not a bad argument – since it wasn’t disclosed, the party didn’t know these alleged secrets were part of the case, and hence did not undertake appropriate discovery regarding them. One cannot blame the counter-defendants for feeling sandbagged.

Judge Barry Moskowitz of the Southern District of California surprised everyone by ruling that the counter-defendants' argument lacked merit, not because they weren’t sandbagged, but because Section 2019.210 doesn’t apply to federal court actions to begin with.

The Court first noted that while the 9th Circuit has so far been silent on this issue, “[t]he district courts have reached different conclusions.” Nonetheless, with appropriate “due respect” for its sister courts who obviously got it all wrong, the Hilderman court held that 2019.210 conflicted with FRCP 26. (Rule 26 requires certain initial disclosures by parties in all federal cases, and serves as the gatekeeper for the initiation of discovery.) It would be unseemly, after all, for a little state court rule like 2019.210 to impact the initiation of discovery in big federal court when there is a perfectly good federal rule on the books doing the same thing.

Now this would seem to be a good thing for the counterclaimant who was hoping to have no limits on the alleged trade secrets it could assert at trial as having been misappropriated. On the other hand, is it fair to the counter-defendants, having relied on the now non-mandatory 2019.210 disclosures, to have to defend against new alleged trade secret thefts without having had a chance to prepare a defense? Talk about your surprise at trial.

Fairness

Well, that wasn’t a hat rack sitting behind the bench. Judge Moskowitz was all over the fairness argument, and had that one covered without the need for 2019.210:

"Accordingly, the Court holds that § 2019.210 does not apply to federal actions. The Court's holding does not, however, give [the counter-claimant] free reign to try trade secret claims that were not disclosed in its “Trade Secret Disclosure.” As discussed at the hearing, as a matter of fairness, Counter-Defendants must have been given fair notice of [couner-claimant’s] trade secret claims, whether in the “Trade Secret Disclosure” or other discovery responses. If Counter-Defendants were not given fair warning of certain trade secret claims, [counter-claimant] may be barred from presenting these claims at trial."

In other words, defendants are entitled to notice of the trade secrets at issue, even in federal court. And whether that notice comes by way of a potentially non-mandatory 2019.210 disclosure, or an interrogatory response, it doesn’t really matter. So long as the defense is given “fair warning” of the trade secret claims, all is good. At least in Judge Moskowitz’s court.

What does all this mean? Well, it continues the debate over whether 2019.210 applies to federal trade secret cases. The money now seems to be favoring “inapplicable.” Nonetheless, if you find yourself as a defendant in a federal trade secret claim, cover yourself. Whether there is a 2019.210 disclosure or not, make sure your interrogatories at least ask for an itemized statement of each and every trade secret at issue.

 

-MY

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Jordi Masdevall, Senior Information Technology Attorney at Baker & McKenzie’s Barcelona office reports that the World Intellectual Property Organization’s Arbitration and Mediation Center, in cooperation with the “Format Recognition and Protection Association” (FRAPA), now provides ADR services in disputes relating to television formats.

These disputes may concern allegations of format plagiarism or the unauthorized copying of TV formats, such as those used for game, reality or talent shows and sitcoms. Programs using these formats are often remade in different markets using local parties.

 

The agreement between WIPO and FRAPA provides that WIPO will take on the latter’s existing mediation activity and will administer TV format-related disputes filed under the WIPO Mediation and Expedited Arbitration Rules for Film and Media.

The Film and Media Rules were adopted in December 2009, and are specifically tailored to the specific characteristics of disputes arising in the film and media sectors. They foresee appointment of a specialist from a dedicated international WIPO Panel of film and media mediators, arbitrators and experts. The WIPO Center and FRAPA also envisage providing specialized training and information sessions on format dispute resolution.

The undersigned, though not (yet) a member of this particular panel, is a mediator and arbitrator for WIPO.

 

-EvG

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The Google Book Settlement (GBS) raised the question of whether filing a class action can be an acceptable lever for obtaining IP licensing; that question remains a topic of concern with scholars and Amici continuing the dialog. See, Grimmelmann’s Big View of the GBS here. 

Recently the US Copyright Group under the banner of SAVECINEMA.ORG launched a new IP strategy targeting thousands of unidentified anonymous independent Internet Users who allegedly without authorization downloaded and shared protected film.

All the claims are represented by the same counsel, with the same construct - inconvenient forum, anonymous Does. The most recent, brought by Voltage Pictures for infringement of Best Picture-winner The Hurt Locker, names 5,000 Doe defendants. As of June, 2010, seven suits, against 14,583 Does, have been filed in the District of Columbia. Nat Anderson at Arts Technica Law & Disorder in his March 31, 2010, post figured out how the strategy works (and thanks to him for sharing EFF’s “spam-igation” tag); as he explains:

“The tech comes from GuardaLey, a company registered in England and Wales. According to a declaration from GuardaLey's Director of Data Services, Patrick Achache, the company identifies BitTorrent users sharing Far Cry in two ways. First, it simply searches P2P networks for Far Cry, then connects to the swarms and logs the IP addresses of those sharing the file—not subtle, but it works. Second, it reviews ‘server logs obtained from P2P networks to determine the users who were offering the files of this copyrighted movie.’ Just a second—it does what now? How did GuardaLey get access to P2P server logs? The company doesn't say; perhaps it runs its own honeypot trackers in order to obtain IP addresses. In any event, the company ends up with IP addresses of users with bits of some file called "Far Cry." It then downloads the bits of the picture it can get and logs the file metadata. From the IP address, it figures out which ISP is responsible and e-mails them, asking the ISP to retain all logs on the IP address in question at the time in question. Next, Achache must verify the content in the file. ‘I or one of my assistants have watched a DVD or VHS copy of the motion picture provided by Plaintiff,’ he writes. The team then accesses the downloaded files and confirms ‘that they contain a substantial portion of the motion picture identified in the Complaint.’ That's when the lawyers take over, filing federal cases against Does and seeking the court's permission to send subpoenas to the ISPs. If allowed, the ISPs would then turn over subscriber information belonging to the user who was assigned the IP address at the time in question. Defendants are apparently then given a chance to settle; if not, the case could proceed as a named lawsuit.”

The strategy could not get traction without use of the legal “Doe defendant” fiction, a common and legitimately useful tool in litigation when the true identity of all of the culpable defendants is unknown; when used with online “anonymous” defendants, linked by software identifying their location and identity, and against whom, after filing suit and using court process to identify, a threat is made to settle or else, a whole other picture is presented. These individual defendants, residing all over the country, must either defend civil actions brought in Washington, DC, or pay as demanded to make the case go away. As constructed, use of the “Doe defendant” allegation is the first lever in this new business model because without the sweep of this net, mass litigation against defendants could not proceed – each individual defendant would need to be named and sued in a jurisdiction within which minimum contacts exist.

As reported by Nate Anderson on June 1, 2010:

“The model couldn't be simpler: find an indie filmmaker; convince the production company to let you sue individual ‘John Does’ for no charge; send out subpoenas to reveal each Doe's identity; demand that each person pay $1,500 to $2,500 to make the lawsuit go away; set up a website to accept checks and credit cards; split the revenue with the filmmaker.”

To shed a different light on this issue, consider the June 13, 2010 post at Torrent Freak, a recent interview of independent film director Sam Bozzo, who claims that if you make a good film, having it leaked to BitTorrent can only help. It's only bad if your film isn't very good:

 

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In February 2002, Vincent and Liza Concepcion entered into a cellphone agreement with AT&T Mobility. They had been attracted by AT&T’s promotion of free cellphones when committing to a two-year contract. Then the Concepcions were presented with a bill for $30.22 in sales tax for the two phones.

I remember how surprised I was when this “free” cellphone resulted in a bill for sales tax. Besides thinking it could be an illegal tie-in, I let it go. Sometimes I think that Apple violates antitrust laws as well by compelling iPhone users to take out an AT&T contract. I know, it has become quite the norm these days, to tie a particular model cellphone to a particular carrier. Shouldn’t that be illegal?

Anyway, after some years had passed, the Concepcions did not take this charge for sales tax lying down, arguing that when you promote a “free” cellphone, it should be free, and not be subject to sales tax for the full price of the phone if bought separately. To do otherwise would be “fraudulent”.

Obviously, bringing an individual suit for $30.22 did not seem like the viable thing to do. So in March 2006 they and three other persons (Jennifer Laster et al.), whose claims were consolidated with theirs, decided to bring a class action against AT&T in the Southern District of California. But, under their adhesion contract with AT&T (“take it or leave it”), the plaintiffs were confronted with an arbitration clause that – you guessed it - included a class action waiver clause. 

On a side note, I wonder whether the right to a class action can be waived at all. To my knowledge this question has never been raised in California. The modern class action device was derived from a common law concept called virtual representation, which meant that “a person who was not a party to an action was deemed to have been virtually represented, and thus bound by the judgment, if his or her interests had received adequate representation by a party. See, e.g., Bernhard v. Wall, (1921) 184 Cal. 612, 629.” Arias v. Superior Court, 46 Cal.4th 969, 988-989 (2009). Don’t these origins of the class action sound very much like something parties cannot waive? I found one recent report where a court held that you cannot validly waive the right to bring a class action against a car dealership in South Carolina under its Dealers Act, as it is explicitly against public policy. 

 

Almost five years after the Concepcions had entered into their cellphone contract (but 3 months before they filed suit), AT&T amended the arbitration agreement and added what they called a “premium payment” equal to the maximum claim that may be brought in your county’s small claims court. In California, that maximum claim is $7,500. AT&T would pay this amount if the arbitrator awarded in favor of the consumer an amount greater than AT&T’s last written settlement offer before the arbitrator was selected. 

 

I don’t quite understand how AT&T thought this would change the class action waiver from being substantively unconscionable under California law to one that is substantively “conscionable”. Both the District Court and the Ninth Circuit did not think it changed anything either, when they had to decide on the validity of the clause upon AT&T’s motion to compel arbitration. Laster v. AT&T Mobility LLC, 584 F.3d 849 (9th Cir. 2009).

As the Ninth Circuit explained, AT&T would simply offer to pay the face value of the claim before the arbitrator was selected and thus avoid having to pay the $7,500. “Thus, the maximum gain to a consumer for the hassle of arbitrating a $30.22 dispute is still just $30.22.” Laster, 584 F.3d at 855. 

The validity of an arbitration agreement is decided by the court rather than the arbitrator, in accordance with Section 2 of the Federal Arbitration Act (“FAA”). Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395 (1967); Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440 (2006); Preston v. Ferrer, 552 U.S. 346 (2008). Only when the validity of the entire contract is challenged, is the arbitrator competent to decide the issue. This distinction stems from the wording of Section 2 (as interpreted in Prima Paint), which provides that arbitration clauses “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” In order for a court to be able to decide on a motion to compel arbitration pursuant to Section 3, it needs to decide on the validity of the arbitration clause under Section 2. 

 

Following the California Supreme Court’s decision in Discover Bank v. Superior Court, 36 Cal.4th 148 (2005), the Ninth Circuit Court of Appeals analyzed the validity of the class action waiver. Generally, under California law, in order to be valid, an agreement must be able to withstand both a procedural and a substantive “conscionability” test. Adhesion contracts are held to be procedurally unconscionable.

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On April 6th of this year, the Patent and Trademark Office announced its new Ombudsman Pilot Program for patent examinations. David Kappos, the USPTO’s Director, states in his blog entry of May 12, 2010 that the program was established to assist in meeting the Agency’s priority to improve relations with its stakeholders.

Sounds good, doesn’t it? Admittedly, it is refreshing to see that the PTO is responsive to complaints from patent attorneys. Patent practitioners and applicants alike have often been frustrated with the process. Director Kappos gives examples such as when the examination process has stalled, or where applicants are unsure of the appropriate person to contact for assistance. Or where attorneys need assistance getting connected with the right person to help them resolve a particular issue. In other words, he says, the program is intended as a “pressure relief valve”.

This is all very laudable, but is this really the job for an ombudsman, Mr. Kappos? I always thought an ombudsman was there to resolve disputes you might have with an agency, not just a sophisticated receptionist who can connect you with the right person.

Maybe this person ought to be called a Facilitator rather than an Ombudsman. Yes, I hear you wonder: “Isn’t an ombudsman a facilitator?” Yes, all mediators and ombudsmen are facilitators, but not all facilitators are mediators or ombudsmen. The online Merriam-Webster dictionary defines ombudsman as “a government official (as in Sweden or New Zealand) appointed to receive and investigate complaints made by individuals against abuses or capricious acts of public officials.” That is not, at least not at the moment, what the USPTO’s ombudsman is supposed to do.

The USPTO’s webpage dedicated to the Pilot Program describes its purpose as:

“enhanc[ing] the USPTO’s ability to assist applicants and/or their representatives with issues that arise during patent application prosecution. More specifically, when there is a breakdown in the normal prosecution process, the Ombudsman Pilot Program can assist in getting the process back on track.”

The “official” purpose sounds more meaningful, and even somewhat at odds with what Director Kappos describes. I can see that such an Ombudsman could be useful if the normal prosecution process has stalled or even broken down completely, and nobody seems to know why. But when you read on, the details are pretty much the same as what Director Kappos describes. So, back to “Facilitator”?

According to the aforementioned website, the Ombudsman Pilot Program is not intended to circumvent normal communication between applicants and examiners or Supervisory Patent Examiners (SPEs). Applicants are encouraged to continue to use established customer service offices throughout the USPTO for information on other related topics. But wait, SPEs also function as ombudsman representatives!

The Program is running across all Technology Centers, using TC ombudsman representatives who are Supervisory Patent Examiners (SPEs) and Quality Assurance Specialists (QASs) prepared to field questions and concerns from the public and work with the appropriate PTO employees (SPEs, Directors, Petitions contacts, etc.) to facilitate responses. The ombudsman representative will help ensure that the applicant's issues are addressed quickly – usually within five business days. The ombudsman representative will also ensure confidentiality when requested by the applicant or applicant's representative.

The good news is that this Pilot Program provides an additional tool in helping to move the patent application process along. Presumably, another set of eyes can look at the situation and inquire why the process is stalled. I hope the staff members who are expected to play a role in the Pilot Program will get adequate training to use mediation-derived techniques that they can use in dealing both with the applicant and their colleagues who have been assigned to the matter.

Note, however, that the Ombudsman Program is not designed to deal directly with the merits of the application. An answer to a “FAQ” summarizes it nicely:

“When you have a question about a specific application in prosecution and have been unable to find the correct person to assist you or have been unable to obtain assistance from the examiner or SPE to whom the application is assigned, then the Ombudsman Pilot Program is the venue to use. If your question is a general question and not associated with a particular pending patent application, then the Ombudsman Pilot Program is not the appropriate program to use. The Ombudsman Pilot Program is not meant to be a universal assistance center but rather a place to get prosecution assistance when you have exhausted normal channels in the Technology Center (TC).”

The Pilot Program is scheduled to run for a year. After that, the Notice in the Federal Register indicates that the USPTO may extend it with “appropriate modifications based on feedback from the participants, the effectiveness of the pilot program and the availability of resources.”

To use the program, you need to complete a form on the PTO website, which you will find by scrolling down all the way. This form requests basic information, such as name, e-mail address and telephone number. You submit this information directly from this webpage, whereupon someone will call you within one business day.

So, patent applicants, let the USPTO know how this program is working for you, and whether or not you would like to add certain tasks to the Ombudsman, such as receiving and investigating complaints, and acting as an intermediary to help resolve them. Under the form just described, you will find the e-mail address you can use to give feedback, questions or comments!

 

-EvG

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In reading the NYT this past Sunday, I pondered the article by Brad Stone, targeting Google’s “monopoly” in online search and advertising, posing the question: Sure It’s Big. But is That Bad?

Increasing governmental antitrust scrutiny of search giant Google’s practices, which target Google’s favoring of its own properties, begs the question of whether Big is Evil and can we trust Big – the same issue raised in the Google Book Settlement - is Big itself inherently Evil and what can Big do to be otherwise?

Distinguished trademark lawyer and blogger Paul Reidl in his April 17, 2010, IP Alley post Counterfeiting, Civility, and IP Backlash impliedly asks the same question about Big Law as he ponders the IP Backlash. Paul’s recent description of Big Law bullying in a trademark dispute with allegedly counterfeit goods is an example of the shadow side of power which fuels the IP backwash and disempowers all brand owners who rightfully seek to police their marks and retain consumer confidence as well as respect within their own markets. As Paul confirms, the target of the dispute may be innocent and the dispute itself of Big Law’s own making. Here’s what happened to Paul and his client:

“The demand letter from Big Law was a typical Strum und Drang letter sent on behalf of Big Corporate America. Roberto Duran would have said “no mas” immediately on receipt. And, in fact, the recipient immediately did. He was a trader with several small retail outlets. He had bought the goods from a regular supplier who had been selling them to his competitors; the supplier had bought them from a web site. It sure looked legitimate, which made me wonder: how the heck was he to know if these were counterfeit if, in fact, they were? When he saw competitors and a web site selling the same product the assumption that they were legitimate was certainly a reasonable one. His first inkling that there was a problem occurred several days before he received the letter when someone (presumably the Big Law investigator) bought one of the goods from him, told him that it was counterfeit, and that he was going to jail unless he stopped selling them.”

 As Paul points out, the key issue was never fully investigated by the Big Law accuser:

“… whether in fact the goods were counterfeit or were they simply being sold by an unauthorized retailer? Since I knew that the trademark owner sold only through authorized retailers, this was not a small point because if the goods were genuine then the recipient of the demand letter had a perfect right to sell them. The trademark owner’s gripe would then be with the person who breached their contract and sold the goods outside the authorized channels, not with my retailer.”

 When Paul questioned counsel about this key issue, more bullying ensued. 

“I was told that was not relevant; didn’t I know that the trademark owner was a huge company and that this was a famous brand? Didn’t I know that counterfeiting was criminal and that Big Law could crush my client? Didn’t I know that they were entitled to damages, enhanced damages, attorneys’ fees, and first born children? When I mentioned the investigator’s comments about criminal activity, I was scoffed at: that did not happen, your client is a liar.”

Paul’s experience is noteworthy because in this case, Big Law was meeting true empowerment in a trademark lawyer of Paul’s experience, depth and integrity – coupled with what appears to have been an innocent client. Concluding that the surrender occurred at the outset and the ensuing attack by Big Law pointless, what was Big Law’s objective?

The chilling effects of market power can be reframed when we ask – what is Power? Does Power mean strength and control? Does it mean being forceful, dominant, a winner, a tyrant?

Power has two sides – one which can destroy, and one which can create positive change. The real problem with how we define power is that if we limit our view to seeing it as control, then we must always fight for that control for fear that we will lose Power if we lose control. When we expand our understanding of Power to include the positive, empowered qualities of power, such as knowledge, communication, resources, authenticity, patience, insight, influence, growth and ultimately choice, we can see a larger view and can collaborate without losing anything.  When we power with, rather than power over, we open up our empowerment as a healthy tool for accomplishing collective goals.

So, what is Power in the IP world?

Can we expand its definition to include the positive qualities that empowerment brings to a community, a market place, or in Google’s case, even a universe like the internet? And how can we as attorneys and mediators entrusted with IP matters empower our clients and ourselves as we navigate and lead by example? Puts a new spin on anti-trust, with emphasis on the word “trust.” Lots to contemplate as we view Big and Evil, metaphors which themselves portend a certain mindset before we even investigate the facts to see whether the larger collective goals can be met through a collaborative perspective.

 

Special thanks to Fleet Maull and Kate Crisp for their efforts to empower healthy leadership in all venues through their “Path of Freedom Facilitator Training”, which was the inspiration for the power with concept rather than the narrow and limiting view of power over as in control.

 

-MZ

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Cultivating Qualities of Being

Introduced here in my first post as having a “contemplative law practice,” a few friends politely inquired – what is a “contemplative law practice,” and what does that have to do with IP or mediation? So I have been contemplating and in this post, with the help of a few other contemplative lawyers, try to bring it all together – IP, mediation and meditation.

In my experience, they are all connected...

Mediation

Vicki Pynchon previously blogged here about an article by Danny Ciraco entitled "Forget the Mechanics and Bring in the Gardeners: an Exploration of Mediation in Intellectual Property Disputes". Ciraco’s article, written over a decade ago, blazed the trail for the modern view (recently articulated by Google General Counsel William Patry as quoted in my March post) that IP is all about “relationships.” Juxtaposing the court system as a machine, and mediation as an organism, Ciraco believed in the flexibility of mediation of IP disputes:

“By describing mediation as an organism we will be able to see its potential to effectively deal with IP disputes. In particular, we will look at mediation's flexibility, its cost-effectiveness, its sensitivity to time, its effectiveness in dealing with highly technical and complex issues, its respect for confidentiality, and its effectiveness to deal with internationally complicated disputes -- all of which will illustrate mediation's organic design.”

Comparing mediators to gardeners evokes the cultivation of process rather than contraction by judgment. Viewing IP as interests, not stand-alone rights, is the mediator perspective. Copyright provides a good example. A grant of a limited monopoly, essential safety valves are built into the copyright system which impact the rights holder’s relations with others – limited duration, first sale, idea/expression, fair use, and public domain – relationships with borders and edges which create an interdependent system of interests. Without the safety valves, we could not tolerate copyright at all. So when working with copyright issues, our view is always dependent on seeing the relationships, not just positions. Copyright law is in one sense built on a mediator’s perspective. The expanse of IP itself – copyright, patent, trademark, right of publicity, trade secrets – is interdependent and often must be unbundled as we recognize that one right cannot be co-opted by another.

Meditation

Contemplative practice relates in the same reflective manner, supporting a view which opens up the process to encompass all of the interests awaiting recognition. One of the ways this open view can be cultivated is by a meditation practice. From a meditator’s perspective, contemplative practice follows “bare attention” gained in meditation to engaged attention on values cultivated by a mindfulness practice. If we as an individual can develop a direct relationship with who we are, instead of using conditioned beliefs to feel right and make others wrong, then we can be open, flexible and kind with others without feeling that we’re losing something in the process. Grounding ourselves in self-awareness and self-reflection, we bring this presence to mediation, bringing peace into the room. Basic goodness, compassion, empathy, and equanimity serve as attitudes developed in a mindfulness practice.

Integration into a Contemplative Practice

Mediation, by looking at what is and opening awareness to all of the interests, has a commonality with meditation practice. We see what is, and then work with it. By having many tools to work with, we are not limited to only one view. Flexible, we can be gardeners cultivating peace. If the parties can go back into the system healthier, with a fresh awareness of their role in the system and how to better navigate to avoid future disputes, then we as mediators with a meditator’s perspective have contributed to a community of artists, inventors, creators, consumers, and distributors and in this contribution, have enlarged and enriched the collective as well as our own personal practice. This is how I personally benefit from integrating a legal and mediation practice with my personal meditation practice – resulting in a contemplative law practice. It is the engagement with others and the benefits of serving in a community which lifts my practice off the cushion and into the world in which I have trained and developed legal skills to help others.

Robert Chender, an attorney and meditator in NYC, with his own blog Contemplative Law, serves as an example of how we can integrate what we know with who we are. With a sophisticated legal practice in Manhattan at Seward & Kissel, and as the Director of the New York City Bar Association Contemplative Lawyers Group, as well as offering CLE programs for lawyers, law students and judges, Robert embodies the meditative approach as he balances being a leader in both realms – as a lawyer and meditator. Whether working with lawyers, partners, clients, or training others in meditation, his practice informs and transforms his relationships. Robert recently shared with me how his training with Chogyam Trungpa Rinpoche, helped him in his goal of applying his meditation practice in all aspects of his life: his teacher didn’t just teach him how to meditate, he also taught him how to shift his view, how to contemplate and apply his practice out in the world to serve himself and others. I asked Robert to add his own reflections here to address the busy IP lawyers and mediators who follow this blog. Here is what he said:

“As lawyers we’re continually asked for help, by clients and colleagues, and indeed that’s what we’re paid for. However, it may be best to help in a way that’s quite different than the ostensible request – for example, if a client wants to litigate because he feels personally wronged, it may be possible to examine the situation and work out a solution in which both parties can put aside their grievances and avoid a prolonged and expensive fight. This is of course true for both counsel and mediators. The main question is how we do that – the training that’s required to be skillful in mediation (whether formal or informal) is very different than the training we received in law school, and requires an examination of what our assumptions are about what we’re trying to accomplish. Some attorneys relish a fight, and want to dole out punishment to the other side – but that’s not looking at what I think should be the larger goal of attorneys, which is to create peace and facilitate people’s livelihoods, one client at a time. Training our minds, through meditation or otherwise, is a helpful and perhaps key prerequisite to accomplishing this goal.”

In 2008, I was introduced to two other leaders in the contemplative law movement, Charlie Halpern, founding dean of City University of New York Law School and now teaching contemplative practices at BOALT, and Doug Chermak, a Bay Area environmental lawyer, when I attended an annual retreat in northern California held by the Center for Contemplative Mind in Society, led also by Zen priest Norman Fischer. The Shambhala Sun magazine recently interviewed Robert, Charlie and Doug (May 2010 issue), heralding their contribution to mindfulness for lawyers. Doug described a “meditative perspective” as helping lawyers cultivate insight into the challenges so they are “not cut off from who they are as a core human being.” My experience as a participant at the 2008 retreat, attended by judges, law professors and students, big firm partners and every type of lawyer in between, was that lawyers, young and old, are dedicated to their professional practice and duties to their clients, but also long for a way to navigate within the conflux of emotions and ethical challenges experienced within the profession. Our challenge is to find our seat so we can navigate in the profession amidst the very real challenges of earning a living, supporting partners and employees at the office, and families and communities at home.

Applying Robert’s Shambhala “art of living” approach, we are challenged to shift our view when our conditioned, reactive responses arise – for instance, in an IP dispute where we instinctively see infringement of a client’s legal rights as a battle cry - and instead give attention as well to their relationships. In shifting our view, we can add value to a client’s cause by leading with a mediator’s and meditator’s perspective, adding value to our own life as well. At law schools, law firms, courts and everywhere lawyers and mediators apply their art, this shift in view is happening now.

In addition to Robert Chender’s blog Contemplative Law , you can follow Stephanie West Allen, author of the weblog Idealawg, which is dedicated to all things related to contemplative law and mindfulness and has a wonderful list of resources for your practice.  You can also follow and join Cutting Edge Law, the active internet community for mediators and contemplative practice.

The Contemplative Mind in Society website is also a great resource for contemplative practice and hosts podcasts from past law retreats, and where you can also sign up to receive news on upcoming law retreats, including one expected this fall at BOALT featuring Charlie, Doug and Robert; J. Patton Hyman’s 2007 article on lawyers and mindfulness is a also great introduction to mindfulness and meditation for lawyers.

Finally, we hope you have already added the June 10-12 Pepperdine’s Straus Institute’s Summer Skills Conference to your calendar, where you can learn more about mediation and mindfulness when Len Riskin and Rachel Wohl present Mindfulness for Conflict Resolvers: Lawyers, Mediators, Negotiators, Judges, Arbitrators & Managers.

 

-MZ

 

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Several weeks ago, I came across an exciting article by Frances Murphy and Francesco Liberatore of Jones Day’s London office, that I wanted to blog about, but did not get around to. By pure coincidence, I looked at it again today, and concluded I still want to blog about it!

Why?

Because I believe it is an important subject that every IP mediator and every mediation participant needs to be aware of!

The article alerts us to the fact that recently the European Commission began a process of checking whether patent settlements concluded among a number of pharmaceutical companies infringe EU Antitrust laws.

In this particular case, the Commission had sent an information request in January of this year as a follow-up to its inquiry into the pharmaceutical sector. As Frances and Francesco point out, “The Commission is in particular looking at patent settlements where an originator company pays off a generic competitor in return for delayed market entry of a generic drug (so-called “reverse payments patent settlements”).”

This suggests, the authors write, “that the Commission may be initiating a program to periodically monitor settlement agreements and could launch infringement proceedings against settlements it finds anticompetitive.”

The authors then go into the details of the antitrust rules regarding reverse payments patent deals, and analyze ho they compare to the law in the United States as it is developing between the FTC and the US courts. For a copy of the article, look here.

What interests me for our IP ADR Blog is how the eternal conflict between the antitrust laws and the “carve-out” created by patent protection may affect mediation.

Clearly, the parties, and hopefully also the mediator, need to be on the lookout for how patent laws interact with the antitrust laws of the United States and the European Union. Of course, while the mediator should not ever be tempted to give legal advice, it would be entirely within his province to raise the issue as a question as he/she helps the parties as they explore settlement options.

What should the mediator do if the parties agree on a settlement that he knows will violate antitrust laws? What if he only suspects it may violate antitrust laws? I welcome your input!
 

-EvG

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Update on Google Book Settlement: Second Copyright Infringement Class Action Against Google, Inc., This Time by Visual Artists

The newest dispute in the Author’s Guild Google Book Settlement suit (previous post from 3/12/2010) arrived on April 7 when a coalition of photographers and illustrators led by the American Society of Media Photographers (ASMP), Graphic Artists Guild, the North American Nature Photography Association, the Professional Photographers of America, and represented by Mishcon de Reya New York LLP filed suit against Google, Inc., in the Southern District of NY, claiming that visual artists suffer distinct and separate infringements of their copyrights in their visual works (defined as “original visual works such as photographs, illustrations, graphic art, and other visual art”) embedded in books subject to Google’s Book Search by (1) scanning and creation of a digital copy (2) storing, and (3) distributing and publicly displaying the visual works. This new suit, also in Judge Chin’s courtroom, acting as a de facto intervention in the original settlement, demonstrates again that class actions are becoming the new lever for forcing licenses in IP.

Is there also leverage and efficacy in pre-suit mediation of copyright disputes – would a pre-suit demand for mediation have had any currency when Google’s fair use defense serves as a specter if not a shield from parties’ demands?

And does the earlier Perfect 10 case in which Google dealt with images play any role in this new dispute?

Are tomes of knowledge including visual images different from snippets of pornographic images (this question, already raised by Stephen Dang, Samuelson Law, Technology, and Public Policy Clinic in February, 2006)?

The Complaint by the Visual Artists

The Complaint (full text), which includes as lead plaintiffs, in addition to the Guilds, individual photographers Leif Skoogfors, Al Satterwhite, Morton Beebe, Ed Kashi and illustrators John Schmelzer and Simms Taback, is based on the “massive copyright infringement” of the visual works of the class. As counsel for the coalition stated in its April 7 press release:

The new class action goes beyond Google’s Library Project, and includes Google’s other systematic and pervasive infringements of the rights of photographers, illustrators and other visual artists. This action by ASMP and its sister organizations was taken in order to protect the interests of owners of copyrights in visual works from the massive and organized copying and public display of their images without regard to their contributions and rights to fair compensation.

The Mediator Perspective

What strikes my mediator chord is whether the visual artists had to file suit to get to the negotiating table – was it evil Google which called their bluff, or was it the litigator’s reaction when its claims were defensively challenged?  Could a pre-litigation mediation agreement with these stakeholders allowed collaboration on the Book Search architecture as related to visual artists? Is Google so certain that its fair use defense will withstand this nuanced challenge that it can risk losing its market position?

In his interview with Publishers Weekly on April 7, 2010, NYU Prof. James Grimmelmann observed:

“Maybe they are going to litigate this though to judgment, but my guess is that both sides are more than happy to work out a deal,” concluding that “ What we are seeing is the commencement of the age of filing copyright class actions as a way of creating universal licenses. … But as somebody concerned with the rule of law and the judicial system, this is an awful way to create copyright policy.”

And Eugene Mopsik, President of the ASMP in the same article, admitted to Publishers Weekly:

What we're interested in, in the long run is a place at the table, and an opportunity to be involved in the creation of a system that will ultimately lead to compensation by Google or those others who use our members' images online. By no means are we interested in prohibiting those uses. We're not trying to bury our heads in the sand and say these uses shouldn't be made. What we want is a hand in crafting a system.

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As a mediator reflecting on the label “Evil” attributed to the proposed Google Book Settlement (article by Tom McNichol in California Lawyer, Saving the World from Google: Public and private interests band together to fight a deal that, they say, would destroy competition on the Internet), I wonder under what alpha-tag Google might fall in Vickie Pynchon’s new book, A is for Asshole, the Grownup's ABC's of Conflict Resolution.  Is there an E for Evil?

I am also curious about where this Evil metaphor might fit within Google, Inc.’s Senior Copyright Counsel, William Patry’s new book, Moral Panics and the Copyright Wars, which asks that we look at the moral panic generated by such labels not as aggressors, but rather as mediators in the copyright wars. As Patry describes in his blog, copyright is a system of social relationships, and that “the advantage in regarding copyright as a system of social relationships is that it focuses attention where it belongs: in mediating conflicts within that system… .”

If you would like some background and context use The Public Index, a project of the Public-Interest Book Search Initiative and the Institute for Information Law and Policy at New York Law School.  For audio listen to Pamela Samuelson’s recent lecture, and for balance see the Google Public Policy Blog.

 

Here’s how Google became the Evil villain:

In September, 2005, the Authors Guild, representing about 8,000 US published authors and screenwriters, brought a class action against Google The Authors Guild, Inc. v. Google Inc., No. 05 Civ. 8136 S.D.N.Y Sep. 20, 2005), claiming that Google’s Library Project, launched as the Google Book Search, a project which scanned millions of in-copyright books from the collections of major research libraries, was copyright infringement. Google’s goal at the time was to make indexes of the books’ contents and to provide short snippets of the book contents in response to its users search queries.

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How do I choose the "right" mediator for my IP-related dispute?

Yesterday I discussed the top three questions one should ask in order to select the “right" mediator for your Intellectual Property-related dispute. Briefly, we discussed the importance of a mediator’s training, experience and reputation. I recommended that you select a mediator who has been taught the craft of mediation at an established Institution (such as my Alma Mater, the Straus Institute at Pepperdine), has several years experience in the craft of mediation, and who has a reputation for being able to settle disputes similar to your own.

The last three questions you should ask when choosing your IP mediator are more nuanced and relate to your personal taste and the circumstances of the case you are working on.

4. What is the Mediator's Typical Negotiation Style?

Your mediator must have the style of mediating that the parties like.

Several years ago, Professor Len Riskin defined the various approaches used by mediators into a system he called a “grid” which went from being “facilitative” to “evaluative” and from being “narrow” to being “broad.”

A facilitative mediator would be someone who promotes the communication between the parties with the goal of helping to find an acceptable resolution of their dispute. An evaluative mediator on the other hand would be the person who will express an opinion about the various aspects of the case, - usually including a dollar amount that she believes to represent a fair settlement in a distributive,
zero-sum negotiation.

In my view, the best mediator will in fact consider the “grid” to be a true continuum, in which she can freely use the facilitative and evaluative styles in the same mediation, applying these differing approaches to the various stages or aspects of the process as she sees fit. In either case, the mediator should attempt to refrain from advising a party what to do.

5. Do they have Substantive Legal Knowledge? (Notice that I put this requirement in fifth place!)

If the mediator is unfamiliar with intellectual property laws, it is obvious that she will need more time to understand the issues that arise from that area of the law, and she may require a more detailed briefing. Therefore, if for example the dispute involves a copyright matter, it is highly recommended that the mediator knows something about copyright law. Just as when a dispute involves family law it is highly recommended that the mediator is an experienced family lawyer.

In many ways, the considerations are the same as when you would select an arbitrator.

On the other hand, it should be remembered that the more important skill-set of the mediator is his or her training and experience in the mediation process. If you had to choose between a mediator with lots of experience in copyright law but without adequate training in mediation and a mediator with no experience in copyright law but with extensive training and experience in mediation, be sure to CHOOSE THE TRAINED MEDIATOR!

6. What is the Mediator's Availability Like?

Last but not least is the availability of the mediator. Imagine both parties have settled on the ideal mediator who meets all of the above requirements. As this is a big case, you guesstimate that the mediation will require two days. And now you find out that the mediator doesn’t have two consecutive days available before a date that is almost five months away.

In such a case, I recommend that you check the availability of the next two mediators on your list. The timing of the mediation – and being able to settle it when it is “ripe” – is not to be underestimated.

We will discuss “ripeness” in a future post.

 

-EvG

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How do you select a mediator in an IP-related dispute?

In 2009, better than 96% of federal cases filed never went to trial. Roughly 12% of those were withdrawn or dismissed on motion. Conclusion: some 84% of all federal cases were disposed of by either direct negotiations or mediation.

If the general federal statistics are any guide, it’s safe to say that the vast majority of IP-related disputes are settled either by direct negotiations or mediation. Regrettably, we don’t know which settlements are achieved in mediation. Suffice it to say that mediation plays an important role in the settlement of IP-related disputes.

There are quite a few steps attorneys can take in advance of mediation that will contribute to a successful mediation. While I leave other steps to a future post, clearly one of the most important items is the selection of the “right” mediator. But how do you accomplish that?

When searching for the "right" mediator for your IP-related dispute, you should ask six questions... I will discuss them in descending order of importance and will provide the top three today and follow up with the next three tomorrow:

1. What Training has this Mediator Received?

The mediator must have received formal, preferably extensive, training in dispute resolution. As in most states, anyone can put up a shingle that proclaims that he or she is a mediator, the parties need to investigate what formal training the mediator has received.

I recommend a mediator who has received at least a Certificate in Dispute Resolution, or its equivalent, from a law school that has a reputable dispute resolution institute. A Certificate from the Straus Institute at Pepperdine Law School means the mediator has received at least 14 law school units (14 hours per unit for a total of 196 hours) of instruction and practical training in dispute resolution. A Master’s degree means he/she has received at least double that.

2. How Much Experience Does the Mediator Have?

The mediator needs to have a fair amount of experience as a neutral. Certain mediation skills cannot be taught and really come only from doing it for quite a while.

3. How is the Mediator's Reputation?

The mediator must have a reputation as a good and effective mediator. There are mediators who have had all the training there is to be gotten, have done a lot of mediations and have still not mastered the craft. A good and effective mediator will have certain personality traits, including flexibility, creativity, patience, persistence, knowing how to set the “climate” of a mediation session, and (most importantly) will be able to instinctually guide the parties to a settlement.

These are qualities a mediator either does or does not have. They are hard to define, and practically impossible to learn, but they are vital when it comes to breaking an impasse and achieving a settlement.

 

To be continued… 

 

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PROFESSIONAL BACKGROUND: Mary Zachar is a lawyer and mediator with a contemplative law practice specializing in business and copyright matters. After practicing business litigation in Los Angeles for 25 years and raising two daughters, she returned to her alma mater, Indiana University School of Law in Indianapolis, Indiana, to pursue an LL.M. in Intellectual Property under Kenneth Crews, now Director of Columbia University’s Copyright Advisory Office.

While working on her LL.M., Mary taught employment law to IUPUI undergraduates, and served as a pro bono mediator, assisting Steve Tilden, Director of Mediation with the Indiana Civil Rights Commission. As she finished her thesis, she also served as a juvenile court public defender, witnessing the need for mediation of disputes and conflicts within the criminal justice system at the adjudicative stage, as well as post-conviction restorative justice. Having recently returned to Los Angeles, Mary is delighted to join us at the IP ADR Blog to expand on her LLM training to show how mediation can serve the interests of those operating under the default provisions of the Copyright Act, as well as those whose creative drafting measures may conflict with the intentions of others.

ADR TRAINING: Mary has trained in both Indiana and Los Angeles, and is an advocate of mediation for the resolution of conflict, agreeing with Kenneth Cloke that at the heart of every conflict is a place of reconciliation awaiting skillful resolution.

EDUCATIONAL BACKGROUND: Mary holds a J.D. and LL.M. from Indiana University School of Law- Indianapolis.

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U.S. Statutory Remedies Unavailable to Unregistered Berne Foreign Authors, Making Pre-litigation Mediation a Good Strategy to Resolve Infringement Disputes for All Authors

Whether you are eligible under Section 412 of the U.S. Copyright Act to recover statutory damages plus attorney’s fees and costs depends on timely registration of the work with the U.S. Copyright Office. To obtain the benefits of Section 412 in a copyright infringement action as provided by Sections 504 and 505, you need to register before the infringement occurs, or within the first three (3) months after first publication of the work:

 

§ 412. Registration as prerequisite to certain remedies for infringement

In any action under this title, other than an action brought for a violation of the rights of the author under section 106A(a), an action for infringement of the copyright of a work that has been pre-registered under section 408(f) before the commencement of the infringement and that has an effective date of registration not later than the earlier of 3 months after the first publication of the work or 1 month after the copyright owner has learned of the infringement, or an action instituted under section 411(c), no award of statutory damages or of attorney’s fees, as provided by sections 504 and 505, shall be made for —

(1) any infringement of copyright in an unpublished work commenced before the effective date of its registration; or

(2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work.

Judge William Pauley of the Southern District of New York, in Elsevier B.V, v. UnitedHealth Group, Inc., 2010 U.S. Dist. LEXIS 3261 (S.D.N.Y. January 14, 2010), recently confirmed that owners of foreign Berne member works, while not required to register their works for U.S. copyright protection or as a condition to bringing suit in the U.S., will not benefit from the Act’s statutory damages and attorney’s fees unless registration occurs as described in Chapter 4 of the Act.  National equal treatment requires nothing more – all unregistered works, whether foreign or U.S. authored, receive no statutory litigation benefits unless registered.

 

Elsevier, a publisher, sought a declaratory judgment that the Berne Convention requires equal treatment and that no formalities could be asserted against member countries denying them the full panoply of rights and benefits afforded nationals within any member country.  Despite a good argument that Section 412 violates the Supremacy Clause, Article IV of the U.S. Constitution, the court found that Congress was satisfied that the statutory incentives for registration were not preconditions to enjoyment and exercise of copyright, and that Section 412 did not condition all meaningful relief on registration. 

 

Naomi Jane Gray’s new Blog, Shades of Gray, presents a detailed discussion of the arguments presented in Elsevier, including preemption and treaty interpretation.  Her most compelling comment for how this decision affects ADR and Copyright practice is that:

“Statutory damages are critical in cases where it is difficult to prove actual damages, and provide copyright owners with significant leverage in settlement negotiations.  Thus, Section 412 acts as a powerful incentive for authors and owners to register their works promptly.” 

 

When a foreign author has not registered a work in the U.S. but discovers an alleged infringement which should be addressed in a U.S. court, an Owner of an unregistered foreign copyright may be better off seeking pre-litigation mediation of an infringement dispute, often a more viable and less expensive alternative to litigation. 

 

While we must assume that the alleged infringer will discover that the Owner has not registered, and lacks the leverage of the Act’s remedies for past wrongs, immediate registration upon discovery of the infringement can afford the Owner statutory remedies for prospective infringements should the infringing conduct not be resolved in mediation.

 

Mediation of copyright disputes is a good way to proceed in all copyright infringement disputes. As demonstrated by Elsevier, unless an Owner (whether foreign or domestic) registers the work in the U.S. timely, mediation may be the most reasonable way to proceed, allowing creative prospective solutions to alter the default paradigm of copyright law.

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Today is the first of March, 2010.  As you may have noticed, the Blog has been dormant for a while, as we worked out the details of the transition from Victoria Pynchon’s eminent leadership of this Blog to my role as blogger-in-chief.

We are in the process of putting together a new team of contributors, and you will see their names, bio’s and photo’s appear in the coming weeks. 

Today, I want to introduce you to one of our new contributors, Mary Zachar, an eminent lawyer with extensive experience in both intellectual property issues and alternative dispute resolution.  Her discussion of the recent Elsevier v. UnitedHealth Group case is both timely and thought-provoking.  It once again reminds us that it pays to register one’s copyright and that mediation often is the best solution for both parties.

As for me, in the next few weeks I intend to return to some of the more basic questions that underlie the very nature of this Blog:

• First, why mediate and arbitrate an IP-related dispute instead of filing an infringement action in court?, and

• Second, how do you choose a good mediator to help parties resolve an IP-related dispute?

So, stay tuned!

 

Eric van Ginkel

 

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As I mentioned in my last post, I decided to more or less abandon the IP ADR Blog and pursue a more general blog about Commercial ADR, including arbitration and mediation, focusing on the business of business and the substantive laws with which business people and their lawyers must grapple, recommending litigation in some cases, arbitration occasionally and mediation and settlement (a lot!)

One of the long-standing members of the IP ADR Blog and IPADR.COM, as well as my good friend and Straus Institute colleague Eric Van Ginkel, will be picking up the baton and continuing to write about IP issues, both nationally and internationally, with the assistance of attorney Robert Rose at Sheldon Mak and a few other IP experts.  Even I'll be staying around and contributing a post or two whenever I have IP thought.

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by Michael D. Young

Here we go again.  A California appellate court has judicially created another exception to mediation confidentiality -- this one for alleged attorney malpractice occurring during the mediation but outside the presence of the mediator or opposing parties. Cassel v. Superior Court (.pdf). 

Essentially, the court (in a 2-1 vote) holds that a communication with one's attorneys only -- one that does not involve the mediator or the opposing party -- is not part of the mediation process, does not fall within the policy reasons supporting confidentiality, and hence is not protected by California's mediation confidentiality statutes.

For those who are interested, I go through the case  in a little more detail below.  However, at this point, I have  a question:  

Is there a public policy reason to protect communications  between an attorney and a client (and only between them) during the mediation  process?  In other words, do we need to protect those private  communications in order to reap the benefit of mediation?  Or are the  policies behind confidentiality amply supported if we only protect  communications with the mediator and opposing parties?  I had always  thought of confidentiality as being necessary to encourage frank and candid  discourse between the disputants.  Is it also necessary to encourage frank and candid discourse between a client and his or her own  counsel?

SUMMARY OF OPINION

In this new case, Cassel v. Superior Court, the client alleged that his attorneys bullied and coerced him into signing a settlement agreement in mediation that was for less money than the client wanted.

He wanted to introduce evidence of things his attorneys said and did during the private time in the mediation when neither the mediator nor opposing party were present.

The debate was:  (a) were these communications simply privileged under the attorney-client privilege (and thus waived in a subsequent malpractice claim); or (b) were they also covered by the mediation confidentiality statute (not a privilege), and thus inadmissible even in a subsequent malpractice claim.

The trial court held the communications inadmissible under the mediation confidentiality statutes, and then stayed the proceedings to allow the parties to take a writ.

The appellate court looked at the policy behind confidentiality and decided it did not apply to communications between a party and his or her own counsel:  

Legislative intent and policy behind mediation  confidentiality are to facilitate communication by a party that  otherwise the party would not provide, given the potential for another party  to the mediation to use the information against the revealing party;  they are not to facilitate communication between a party and his own  attorney.

The court quoted language from other cases describing the purpose of confidentiality to encourage frank discussions with "the mediator" and "the opposing party.The court acknowledged the Wimsatt case (familiar to our California brethren) which upheld confidentiality in the face of malpractice claims.

That court reluctantly stated:

[t]he stringent result we reach here means that  when clients ... participate in mediation they are, in effect, relinquishing  all claims for new and independent torts arising from mediation, including  legal malpractice causes of action against their own counsel.

The Cassel court sidestepped this by saying the quoted language was not the Wimsatt court's holding and thus was not binding authority.  Instead, the Cassel court determined that the attorney/client communication, despite being held during a mediation process and addressing issues such as whether the client should settle and for how much, was not "linked" to the mediation:  "there is no readily identifiable link to the mediation in the communications."  ["Huh?" says Mike.]

As another example of why the communications were "tenuous," and were "more related to the civil litigation process as a whole rather than to the mediation:" 

For example, according to the record, Cassel[] expressed in his  deposition that, during the course of Wasserman Comden's conference with  their client that occurred after the mediation process had begun, he was  evaluating the value of the case as he always does when it appears that the case will go to trial.

[Can I say HUH? a third time?  Of course one values a case when it appears it will go to trial.  One values a case before it is filed and at every stage thereafter.  One also values a case in mediation; and indeed, one uses the mediation process to refine and test that valuation.  According to this court, simply because the communication was of a type that occurs as part of the trial process, it is not sufficiently "linked" to the mediation to enjoy confidentiality protection.]

After all this wind-up, the court finally got to what I think is the main point:

That  is, as we previously concluded, they were not  communications between “disputants” and the “mediator,” as required to come within the  definition of a “mediation” or “mediation  consultation” and, therefore, to qualify for  protection under mediation  confidentiality.

In other words, if the communication does not involve the mediator or the opposing party, it is not part of the mediation process, and hence is not covered by the mediation confidentiality statutes.  The attorneys were not part of the class of persons who confidentiality was designed to protect.

 One thought that comes from this -- the discussion between counsel and client during the mediation process regarding the wisdom of settlement will inevitably include an analysis of information and communications from the mediator and opposing party.  If these private attorney/client communications are admissible, won't that necessarily result in the disclosure of the mediator's and opposition's thoughts and actions?  Would this exception swallow the rule?  The Court anticipated this argument, and sidestepped it, with the following:

Neither Cassel nor Wasserman Comden assert that  the communications contained information which the opposing party (or its  representatives) or the mediator provided during mediation or otherwise  contained any information of anything said or done or any admission by a  party made in the course of  the mediation.

The dissent noted that the confidentiality statute covers all communications in mediation, and that the court should not judicially create new exceptions.  That's the legislature's job.

[Ed. note:  I reached the same conclusion over at the Negotiation Law Blog and also raised some questions about the recent Carrie Prejean/Larry King Dustup at the same time here]

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Hands-on Approach Mediator Victoria Pynchon relies heavily on human dynamics in helping parties acknowledge realities they may prefer to avoid.

By Mindy Farabee Daily Journal Staff Writer LOS ANGELES - This past fall, Los Angeles-based mediator Victoria Pynchon set aside her practice for three months to go to camp. As a volunteer during the 2008 presidential election, the former attorney headed over to Nevada for 12 weeks of campaigning at Camp Obama, originally with the intention of monitoring polls during that state's two-week voting period. As a monitor, she had been asked to observe silently and not stray from a specially designated corner of the room. But that's just not Pynchon's style. So, two days into the monitoring, she asked to be turned loose in the field, where she could engage directly with voters and hear their concerns. That's much the same way Pynchon likes to approach conflict resolution. "What the law does is strip someone's story of its texture," she said. As a mediator, "I'm vitally interested in people's subjective experience in the world." Pynchon, 56, spent 17 years practicing law, focusing on intellectual property, consumer class actions and environmental insurance, first as an associate in the 1980s and '90s at Pepper Hamilton and Buchalter Nemer, then as a partner at Hancock Rothert until 2004. That's when she turned professional mediator and said she found her calling. "Being an attorney is a challenge to make yourself a better person," Pynchon said. "But it also can be a channel for your character defects. It trains you to be crafty, to be adversarial, to be competitive. It's a big expensive board game." Mediation, on the other hand, she said, plays to our better angels. "I'm evangelical about this work," Pynchon said. Because as a species, "we're hardwired for reconciliation." Pynchon has handled some 300 disputes thus far. In her quest to reach a settlement, she draws not only on her legal background but also relies heavily on her personal insights. A San Diego native, Pynchon grew up in Southern California and attended UC San Diego, where she received a degree in literature in 1975, before heading off to law school at UC Davis. The early days of studying fiction did much to shape her sense of what makes for a satisfying resolution, she said. "It's all about story," Pynchon said. "There's no such thing as a pure money dispute. We work with narrative, and narrative needs to be coherent. It needs to be felt, it needs to be authentic, and it needs to be multidimensional. "Only lawyers have legal problems. Business people have business problems with justice issues." The art of mediation, as she sees it, centers heavily on finding ways of helping the parties to acknowledge realities they may prefer to avoid. "One thing mediation does is help lawyers accept loss," she said. "People who say there's no emotion involved with business litigation are not business litigators. Or they don't believe anger is an emotion." So far, Pynchon is having a busy 2009. This summer, her book, "A is for Asshole: the ABCs of Conflict Resolution" comes out in Janis publications, while at the beginning of March, Pynchon moved her practice from Judicate West over to ADR Services. Finding a new home was largely about finding a venue in which she could better utilize her experience in complex commercial law, she said. Pynchon laughingly describes her style as a certain "reckless fearlessness," but she said what she finds most effective is her ability to speak the language of business. "I'd recently given a presentation on negotiation as a poker game and in the process learned 'Texas Hold 'Em,'" she said of one of the popular poker variations which relies heavily on strategic thinking. Soon after, a lawyer showed up on her doorstep with a landlord unwilling to settle a construction dispute, despite his weak case. Pynchon began to talk poker, and suddenly, "looking at the case as a game helped him make a rational business decision," she said. Though Pynchon's use of gambling analogies might help her distill facts for her clients, she's respected for refusing to play games herself, according to Richard Wirick, a partner at Fainsbert, Mase & Snyder, who heads up the insurance and reinsurance coverage practice group in litigation. Wirich said Pynchon helped his firm settle what he described as s a "massively complex" real estate case in 2½ mandated sessions. "She made it all go away like magic," Wirick said. "She doesn't suffer fools lightly, but she will listen exhaustively, and she's very good at taking the long view and showing people the weaknesses of their case." That and a little creative thinking, said attorney Michael Cypers, who used Pynchon to settle an employment-related matter, is what makes her unique. "She was very willing to consider out-of-the-box things," said Cypers, a litigation partner at Mayer Brown, who specializes in securities. Faced with a breakdown in negotiations stemming from trust issues, Pynchon took the unusual step of ending a long day by sending the plaintiff and defendant out for a friendly drink. "She was looking for where the human dynamics were," Cypers said. Bio: Victoria Pynchon Mediator Age: 56 Affiliation: ADR Services Location: Century City Areas of Specialty: Complex commercial litigation with emphasis on intellectual property, securities fraud, antitrust, unfair competition, catastrophic insurance coverage, nationwide class actions; executive termination disputes; and partnership and business disputes of all kinds. Rates: $450/HOUR; $4,500 full day; $2,250 half day Here are some of the lawyers who have used Pynchon's services: Richard Wirick Fainsbert, Mase & Snyder, Los Angeles; Nicholas Boylan, Office of Nicholas Boylan, San Diego; Scott Barker, Buddle Findlay, Wellington, New Zealand; Neal Cohen, Vista IP Law Group, Irvine; Tappan Zee, Zee Law Group, Los Angeles; Jeffrey Wruble, Buchalter Nemer, Los Angeles; Michael Cypers, Mayer Brown, Los Angeles; Lilys D. McCoy, McCoy, Turnage & Robertson, San Diego; Scott Leavitt, Daniels, Fine, Israel, Schonbuch, & Lebovits, Los Angeles; Andre J. Cronthall, Sheppard, Mullin, Richter, & Hampton, Los Angeles; John B. Wallace, Rosen & Associates, Los Angeles; Karl P. Schlect, Kimball, Tirey & St. John, Irvine.

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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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If intellectual property had a theme song it would have to be "Like a Virgin." 

Why?

Because IP is all about "the very first time," the "aha" moment, the creative spark that gives rise to previously undreamed imaginings.The restrictions of "how we've always done things" fall away and the numbing repetition of days become vibrant.   The rest, of course, is work.  Trial and error.  Success.  Failure. Rearranging the disaligned.  Completion.  

Then the suits arrive. That's us, the lawyers.

In honor of the moment of creation at the root of every intellectual property dispute, this week's Blawg Review No. 171 gives you the great virgins of history. 

 

To kick off the "virgin" IP ADR Blawg Review, we're linking you to Kate Monro's brilliant  and (in)famous blog The Virginity Project and giving you a tantilizing excerpt:

Touched for the very first time...
It’s all about virginity loss. Or is it? 

 . . . . I love listening to the episodes in people’s lives that are imprinted into our psyches like hot wax into a seal. The moment itself could be as dull as dishwater but it doesn’t matter because the beauty is in the detail and the connective tissue of emotions that frame this unique story.

‘You never fall in love like you do when you’re eighteen. Shot though the heart. I’ll have that again, any day of the week.’ Russell, lost virginity aged 17

Virginity loss is the backdrop to a thousand visceral teenage moments…

‘For me, the first hands-down-the-pants experience was far more significant. That was earth shattering. I mean, there is a hole there. How bizarre is that?’ Tim, lost virginity aged 16

Virginity loss is the swing door between child and adulthood. A door that we all want to push…even if we’re unsure of what we may find on the other side….

‘It was a pivotal moment, not only because I lost my virginity but also because it was a first taste of freedom, of what life could be like out in the big wide world and it was totally thrilling’. Heidi, lost virginity aged 15 

When I asked Kate if she could address the Blawg Review's readers, she graciously and immediately accepted my invitation as follows:    

Bad hair, the contents of a vicar’s cassock and toxic contamination coverage litigation. These are just a few of the subjects turned back and forth between Ms Pynchon and myself this last week. A very good email correspondent she is too. Not only that, but she’s a blogger with heart. I know, tell you something you don’t know…..

O.K.  I will. I’ve spent the past two years travelling Britain and collecting virginity loss stories from an amazing cross section of people. The oldest was 101, the youngest was 17. Yes, it’s been quite the journey. Next up, I plan to come to America and do just the same. If you are game, I would love to hear from you. Anonymity guaranteed, I promise.

Either way, I hope you enjoy stepping onto virgin territory with the lady of the law…

(and while we're speaking with a British accent, take a look at Kate's other law blog friend's new blog category, Irritation to which I can only say this == the exchange rate).

Finally!!  Blawg Review 171 as "told" by Famous Virigins from Wilkiality, the Truthiness Encyclopedia.

Wikiality claims that the The Virgin Mary was "a Republican . . . against abortion, stem cell research, gay marriage and women in the workplace."   We believe she's ecummenical and inter-religious.  Whatever her American political party, in her honor, we give you the best law and religion posts of the week, including the Florida Employment and Immigration Law Blog's announcement that the EEOC has issued new guidelines on religious discrimination and the suggestion by Thoughts in a Haystack that Religious Intolerance is Good for You.  The Legal Theory Blog takes religion head on in its post on negotiating meaning with Islam while MacLeans.CA Blog (So Much Bigger than Ezra) frets about the globalization of anti-blasphemy laws (whose first target could easily be this Blawg Review).   We don't know what the Virgin Mother would think about  Shari-ah and Mediation but you can catch Geoff Sharp riding the far edges of possibility on that topic at Mediator blah blah . . . .   We do believe the Virgin Mary does not like divorce.  But if you really Agree on Everything, you  not only don't need a mediator, we wonder why you're asking for a divorce.  Finally, though Marc Randazza has a pledge of allegiance he could get behind, we're placing no bets on Mary agreeing with him.

Ken ("I am Not Gay") Mehlman is the former Chairman of the Republican National Committee.  Wikiality annointed him the "world's oldest virgin" "[a]s the result of his religious piousness and his not being married."  Pretty flimsy evidence but it gives us an excuse to cover sex and sexuality in an IP ADR Blog.  It doesn't look like the Indiana Law Blog is having any sex whatsoever, pulling out that old "I have a headache" chestnut and blaming it on Conflicting Gay Marriage Laws.  A Florida Court has required one of its state's high schools to permit a Gay-straight alliance on campus ( School Law Blog); the Sexual Orientation and the Law Blog sees the light at the end of the Don't Ask, Don't Tell tunnel; and, the Australian Gay and Lesbian Law Blog reports on legislation that would permit children of gay and lesbian parents to be treated as -- what else? -- their children for purposes of the Family Law Act.  Speaking of bi-sexuality, check out Bob Ambrogi's post at Legal Blog Watch about a bi-"sexual attorney predator" who stalked men and women as well as once trying to convince an employee to "go to the hotel room of a highly paid expert witness who was faring poorly in a deposition [with] instructions . . . to "take care" of him in order to improve his mood."   Finally, we all just say "no" to accusing a Judge of pedophilia while attempting to prove your legal point, noting the the four month contempt sentence covered over at QuizLaw. 

Jesus, far and away the world's most famous virgin, has been imagined as lusting in his heart (cf. the Jimmy Carter Playboy interview), having a wife and family (D.H. Lawrence, The Man Who Died) and, you got it, being gay.  For this last sacrilege, check out the Pink Triangle's post Gutless Grovelers Have Bowed to Religion Again.   WWJD?  Because he hung with an odd assortment of tax collectors, prostitutes, lepers, and the undead (cf. Lazarus) we assume he'd agree with Eugene Volokh that the usual "best interests" analysis would fall short in custody decisions for parents with unusual or nontraditional friends and associates. Volokh's thoughts on the issue as well as those of his readers here.  Finally, Sarah Lawsky considers the outcome of "Mamma Mia!" -- a "division" of a daughter by three putative fathers -- in light of the seminal Summers v. Tice decision concerning injury and probability.  Hint:  it's not any of the members of the troika formerly known as the Blessed Trinity.   

Ralph Nader, consumer advocate and democratic presidential spoiler has not, according to Wikiality, ever even dated, let alone gone 'all the way.' Because Nader is famous with law students for having said that legal scholarship is "mental gymnastics in an iron cage," we dedicate his virginity to legal practice.  We think Ralph would like Dan Hull's post at What About Clients? commenting on Gerry Spence's post that "Law Education is a Fraud" (followed by a spirited debate between Dan and yours truly on the subject -- are we really all crashing bores?). See also f/k/a's Law Blogging and the Cult of Gerry Spence.  For tips on social networking, check out Kevin O'Keefe's LexBlog post and for a more theoretical legal practice post, see Ken Adams' thoughts on whether  Law Firm Contract Drafting Services are a Commodity?  If it really is all about the client, ask your local GC what s/he really wants.  We regularly check in on the  Wired GC who last week posted on Virtual Law Partners.  Big firm practice is always in the news because we're naturally competitive and want to catch a peek of the Masters of the Universe in their underwear.  In Laid Off By Cadwalader?  My Shingle asks Why Not Go Solo by Choice?  The Cadwalader lay-offs give Jordan Furlong at Law 21 the opportunity to give us the year's best post on retaining and training associates, caring for clients and benefiting the law firm while you're at it in Associates and the bad table.  For the small fry among us, Susan Carter Liebel's Build a Solo Practice recommends ways to avoid our personal Brain Drain while The Greatest American Lawyer challenges lawyers to offer Money Back Guarantees!  Holden Oliver advises us to take care of our clients by keeping them informed.  Finally, Madeleine Begun Kane offers an Ode To Judge Ronald Leighton, quoted in full below.    

Attorneys are often verbose,
Penning legal complaints grandiose,
Writing hundreds pages
And setting off rages
From those who find wordiness gross.

But Judge Leighton showed major restraint
When he ruled on an endless complaint.
In a limerick poem
He said, redo this tome
Cuz in 8(a) compliance it ain’t!  

Joan of Arc.  Virgin.  Martyr. Warrior.  We dedicate the week's consumer rights post to a woman who dressed like a man to protect her virginity and died at the stake for saving her country. Before rushing to legal or Ecclesiastical authorities -- both of which are historically and notoriously unreliable (right Joan?) -- take simple steps to protect your own welfare by subscribing to Michael Webster's Bizop News, which this week warns us about our inclination to follow our first instincts.  Drug and Device Law links us to Pharma-Free Doctors for Journalists where you can presumably find that rare physician who is untainted by free drug samples.  From the other side of the consumer/provider aisle we hear from Overlawyered (Drunk Driving for Profit) that an insurance company was sandbagged to the tune of $5.8 million in compensatory and and $10.5 million in punitive damages.  We think that's karmic or at least levelling the playing field.  Meanwhile, the Public Citizen Law and Policy Consumer Blog alerts us to the FDA's decision to finally begin regulating tobacco, which does not remind us of virginity, but of cigarettes, particularly the best ones memorialized by former U.S. Poet Laureate Billy Collins in The Best Cigarette.  (and if you don't like Billy Collins, the IP ADR Bloggers will sentence you to a term of emotional labor at Gerry Spence's Trial Lawyer Camp).    

We devote disability law to The Elephant Man -- who suffered from neurofibromatosis -- and who presumably died a virgin. No, Pain, Depression and Anxiety is not the name of a law firm, but a post on obtaining social security benefits from the Maryland Injury and Disability Law Blog.  Disability Law 2.0 - Tan * Rested and Ready covers the new California appellate decision on aisle space while the New York Disability Law Blog cheers the SSA Commissioner's exhortation that "eliminating the backlog of Social Security Disability claims is a moral imperative."  Randy Chapman's Ability Law Blog gives advice to parents about how to find "related services" for their school-age children. Though not a disability, age itself tends to create the type of obstacles the disabled face.  To prove the truism that its best not to let your children become writers, I offer a conversation with my mother when she was in her early 80's.   

After exchanging the usual telephone pleasantries, mom began to stutter and giggle in a way I'd never heard before.  Finally, she got her question out past the hilarity -- "honey, do you think I need to worry about safe sex?"  Go mom!  But let's talk about what kind of sex is really unsafe for the Greatest Generation -- intimacies that end in the looting of trust assets as described by Estate of Denial in "Dear Candidate." (cf. That's not the sound of one hand clapping . . . . )  Think you'll find sexual safety among the widows in nursing homes?  Think again and read Sex Offenders Living in U.S. Nursing Homes from the Nursing Home Abuse and Neglect blog.   

Emily Dickinson is famous for being a true American virgin.  But as this week's New Yorker reminds us, the "theory that Dickinson was a lesbian shares a Dewey-decimal classification with a raft of other case studies -- Emily the sufferer, performer, healer, seducer, victim, hysteric, dog lover, mystic, feminist paradigm, vestal daughter, consumptive, agoraphobic."  (cf. Vagabond).  Emily's presence here gives us the opportunity to report on law and the arts.  The Art Law Blog discovers yet another Pollack find in It's Not About the Money (cf. Who the $#%$ is Jackson Pollack).  Over at Empowering Thoughts for Dancers there's a short song of praise for Volunteer Lawyers for the Arts and at Stephanie West Allen's Brains on Purpose, there's a post on legal practice and the art of Improvisation.  Why did Emily avoid the great mass of humanity?  Maybe she didn't know what The Divorce Coach knows -- people who blame others for everything can be managed.  See  "It's All Your Fault! (12 Tips for Managing People Who Blame Others for Everything)." .  Speaking of American women poets ( a rose is a rose is a rose is a rose) at least one California lawyer muses on whether a contract is a contract is a contract.  Finally, Counterfeit Chic asks an IP-Art cross-over question -- is it more subversive to create countercultural clothing or to undercut its now-iconic status by flooding the market with fakes? In legal terms, a trademark is a trademark -- but the ingenuous invocation of law to protect Seditionaries is a ironic twist.

Diogenes of Sinope  spent so much time wandering around in search of an honest man that he apparently never got laid.  Michele at the University of Oregon Student Law Blog believes she's found the honest, or at least the greenest law school in the nation while Will Li (2L) at the Situationist has a few caustic words for BigLaw's Summer Camp Sleep Over Programs.  Three years of answering Socratic questions followed by a three day bar exam.  Yup, it's over.  To renew the feeling of relief that once was, read Peanut Butter Burrito's -- Done.  I read a lot of law student blogs for this Blawg Review and can only report that most of them don't seem much interested in the law.  Not true, however, of Nuts and Boalts.  I really enjoyed reading Don't You Ever Get Tired of Being Wrong?  (re Committee on the Judiciary v. Miers). Law students don't always breathe a sigh of relief when the bar exam is over but we think Ouch at Think Like a Woman, Act Like a Man can relax -- it's the people who don't know they missed the hearsay question who are in danger of failing.  Its not only law students who are looking for a few good lawyers -- David Lat is kicking out the jams by letting Ann Althouse, Tom Goldstein, and Dahlia Lithwick choose his new co-blogger by juding six candidates in an "American Idol"-style competition  See update here. Finally, next year's bar examinees should check out May it Please the Court's post on Handwriting.  
 
Virgin Immanuel Kant -- the orignal moral reasoning guy -- prompts us to bring you Moral Grammar and Intuitive Jurisprudence from the Neuroethics & Law Blog; and, to remind everyone that mustangs do not need birth control from this week's Animal Ethics.  Finally, we think Kant might have been intrigued by Why We are Too Rational to Stop Polluting from Amateur Economists.

Isaac Newton.  The Straight Dope thinks the virginity of this octogenerian scientist and mathematician is less surprising that the fact that the math gene somehow keeps perpetuating itself.   We consecrate Newton's virginity to this week's best IP and IT posts.  William ("I am virginal") Patry is asking questions about the government's engagement in copyright infringement  but it is  Patry's final blog post that we celebrate as a true virginal moment.  Pause here.  

My late mother, aleha ha-shalom, told me repeatedly that I had a religious obligation to learn every day, and I have honored her memory by doing exactly that. Learning also involves changing how you think about things; it doesn't only mean reinforcing the existing views you already have. In this respect, Second Circuit Judge Pierre Leval once said that the best way to know you have a mind is to change it, and I have tried to live by that wisdom too. There are positions I have taken in the past I no longer hold, and some that I continue to hold. I have tried to be honest with myself: if you are not genuinely honest with yourself, you can't learn, and if you worry about what others think of you, you will be living their version of your life and not yours.

Other IP bloggers have, of course, reflected on Patry's Final Blog Words here and here. 

Back in the worldly word, Patently O -- which promiscuously shares itself with millions of readers every year -- turns its pen over to David McGowan who discusses why we should not interpret the recent Quanta decision too broadly.  Lou Michels suggests we be the masters of our own domains, using the the recent San Francisco IT fiasco as a cautionary tale -- don't let a single person have control of all the keys to your kingdom.

  

If you're reading this on your iPhone, you've moved from cigarettes to PDA's.  Congratulations.  Brett Trout at BlawgIT suggests that you might soon be watching television from that device in your post-coital bliss.  Protection, protection, protection.  In a software license, boilerplate integration and non-reliance terms might not insulate a firm from claims based upon its salesfolks' "over"promises.   What's this?  Blog content licensing might be dying for lack of buyers?  People buy blog content?  I can hear my mother asking "why buy the cow . . . . "

The IP Dispute of the Week, of course, is Hasbro's suit against Rajat and Jayant Agarwalla for their Facebook hit Scrabulous.  Scrabble itself was invented during the Depression by Alfred Mosher Butts, an out-of-work architect.  How did he do it?  As the New York Times explained in its review of Steve Fastis book, Word Freak (Zo. Qi. Doh. Hoo. Qursh) Scrabble's inventor assumed that the game would work best if the game letters  "appear[ed] in the same frequency as in the language itself."  So he

counted letters in The New York Times, The New York Herald Tribune and The Saturday Evening Post to calculate letter frequencies for various word lengths. Playing the game with his wife, Nina, and experimenting as he went along, Butts carefully worked out the size of the playing grid (225 squares, or 15 by 15), the number of tiles (100), point values for the letters, the placement of double- and triple-score squares, the distribution of vowels and consonants, and so on.

In response to the Hasbro lawsuit Ron Coleman at Likelihood of Confusion asks "How Many Points is Infringement?" -- one of those rare legal questions that actually has an answer rather than 20 more questions.     

If Player 1 opens with "fringe" (double word) for 24 points; Player 2 follows by slapping an "i" on the triple word score followed by an "n" for "infringe" and 33 points; and, Player 1 responds with "ment" for 19 points, the combined score for "infringement" is 75 points. Our readers can do the math and moves on "trademark" and copyright."  On the matter of greater moment --  Will the ax fall on Scrabulous -- Jonathan Zittrain at The Future of the Internet answers his own question in the affirmative based on the name alone, opining that by calling it "rainbows and buttercups” instead of “Scrabulous” there’d be little claim of brand confusion but noting the "residual claim that the Scrabulous game board infringes the copyright held in the Scrabble game board."  More on Scrabulous and its replacement with Word Scraper at the Video Game Law Blog here. (Mr. Thrifty's and my first game of Word Scraper here!) 

Has anyone recently said God bless the best IP aggregator in the universe -- the IP Think Tank's Global Week in Review?  This week IPTT points to the following posts on the Hasbro Scrabble debacle -- (Spicy IP), (Techdirt), (The Trademark Blog), (Out-Law), (Law360).  While we're talking IP aggregation, check out Patent Baristas' regular Friday IP Round-up.  All around aggregators include Anne Reed's (Deliberations) reading list and Kevin O'Keefe's LexMonitor.

Both Geoff Sharp and I picked up 8 impediments to settling patent cases on appeal (a desire for "justice" is not an impediment but a means to settlement).  While we're taking an ADR angle, Virtually Blind's post Second Life Lawsuit Avoided; Law is Cool's Love, Actionable; and,    Slashdot's recommend reading of the week (The Pragmatic CSO) are all well worth a look.  

Slashdot also reminds us that IP prevention is worth a pound of IP litigation with the post WB Took Pains to "Delay" Pirating of the Dark Knight as follows: 

"a new studio tactic [is] not to prevent piracy, but to delay it . . . Warner Bros. executives said [they] prevent[ed] camcorded copies of the reported $180-million [Dark Knight] film from reaching Internet file-sharing sites for about 38 hours. Although that doesn't sound like much progress, it was enough time to keep bootleg DVDs off the streets as the film racked up a record-breaking $158.4 million on opening weekend. .  . The success of an anti-piracy campaign is measured in the number of hours it buys before the digital dam breaks.'"

The Law and Magic Law Blog announces the dismissal of the defamation lawsuit against Magic Mag on the ground that its a protected opinion while Ernie the Attorney has a way to make your iPhone magic here.

Meanwhile, the Legal Talk Network gathers together bloggers and co-hosts, J. Craig Williams and Bob Ambrogi to welcome Attorney Kevin A. Thompson from the firm Davis McGrath LLC, and Lauren Gelman, Executive Director of Stanford Law School's Center for Internet and Society to discuss Viacom's suit against Google's YouTube for the violation of its copyrights in a $1 billion lawsuit.

Because I used to type patent applications for Uniroyal (IBM Selectric - 5 carbon copies) I get a sweet whiff of nostalgia from Wiki Patents -- like this one -- Flexible Row Redundancy System 7404113 -- a row redundancy system is provided for replacing faulty wordlines of a memory array having a plurality of banks. The row redundancy system includes a remote fuse bay storing at least one faulty address corresponding to a faulty wordline of the memory array . . . .  Another available data base for the engineering-attorney crowd is the subject of  Securing Innovations post IBM Technical Disclosures' Prior Art Data Base.  Concurring Opinions covers IP in the News this week, Peter Zura's 271 Patent Blog considers a patent that was a "Colossal Waste of Time" and  IP Kat curls up with Small and Sole.  

J. Edgar (I am not a perv) Hoover is yet another iconic American virgin (cf. Don DeLillo's masterpiece Underworld and the front page that inspired it). In honor of crime fighting, we bring you Religion Clause's post on the RICO action just filed agains the Church of Scientology and Tom (I'll sue if you say I'm gay) Cruise.  Serving the needy prison population might get more economical according to a post over at Amateur Economists -- How Telemedicine Can Actually Work.  What better way to celebrate a Virgin Blawg Review than posting a link to Courtroom Casanova  where Mr. Big(Crime) "hits on" the prosecutor.  Closer to home the L.A. Police Deparment has captured 43,000 counterfeit sunglasses -- you weren't expecting snow shoes -- with a street value of $8.5 million (Blogging Shades, My Authentics.com Counterfeiting News).   After a Portland, Oregon policeman was convicted in traffic court following a citizen's complaint that he used a no parking zone to grab take-out, Scott Greenfield proclaimed a "Cop Love Sunday"; Seth Freilich was somewhat less charitable.  Should misinformation about people's conviction records be placed online?  Check out Concurring Opinion's post The Problems of More Accessible Criminal Conviction Information.  For  more IP Crime news, see Copyright Law and Information Blog's post E-Bay Sofware Pirate Sentenced to 48 Months in Prison.

Lewis Carroll  "Some writers . . . who have fallen short of accepting Dodgson as a paedophile, have tended to concur that he had a passion for small female children and next to no interest in the adult world."  Wikipedia.  'But I don't want to go among mad people,' said Alice. 'Oh, you can't help that,' said the cat. 'We're all mad here."  Alice's Adventures in Wonderland  These two quotes are as good a lead-in as any to the law of Hollywood.  While you're in a fanciful state of mind, check out the Digital Media Law blog's analysis of the current state of the SAG negotiations.  And remember, Sharon Stone left Los Angeles for San Francisco because the daily Hollywood beauty contest at Bristol Farms was "too much competition."  (cf. Last Action Hero)  So it's no surprise that here in botoxed fantasy-land, its not just your enthnicity, but the tone of your skin that can get you booted off camera -- The Entertainment and Media Law Blog.  

Mother Teresa   Hooray!!  There is a Pro Bono Legal Blog.  This week, PB blogger Aaron Hurst is thinking about using google alerts to identify people or communities in need.  See Pro Bono Junkie's Blog post Customer Service is One Blog Away.   Some of the most important pro bono work being done today is off-shore at Guantánamo.  Check out the Show and Tell Trial   over at the American Constitution Society Blog.  Elsewhere, the Attig Law Firm, PLLC rightly touts its own horn for its success in its pro bono efforts to assist a U.S. Veteran in securing disability benefits.  

The Virgin Queen Elizabeth I   Elizabeth is acknowledged by historians as a charismatic performer and a dogged survivor, in an age when government was ramshackle and limited and when monarchs in neighbouring countries faced internal problems that jeopardised their thrones. What did Elizabeth do right?  Neutralize, negotiate and resolve conflict by "uniting the body natural with the body politic" as she proclaimed at 25 years of age when she ascended to the throne:  

And as I am but one body naturally considered, though by His permission a body politic to govern, so shall I desire you all...to be assistant to me, that I with my ruling and you with your service may make a good account to Almighty God and leave some comfort to our posterity on earth. I mean to direct all my actions by good advice and counsel.

In honor of Elizabeth, I give you posts from my own ADR blog posse this week.  First, we honor the newest member, Nancy Hudgins of Civil Negotiation and Mediation who has proven her bargaining cajones by negotiating the price of a bottle of "Old Raj, a distinctive gin . . . distilled with saffron [that has] a slightly orange-ish color and a different subtle but piquant taste."  WWED -- What Would Elizabeth do?  I think she'd negotiate with terrorists but not without first consulting Andrea Schneider at the ADR Prof Blog.  If you read any Blawg Review post this week, let it be Diane Levin's  Mediation Channel post All Gardeners are Optimists:  What Squirrels Reminded Me about Conflict Resolution.  Poetry.  (cf. the summer issue of the r.kv.r.y. quarterly literary journal).  Gini Nelson offers us wisdom on the Myers Briggs Indicator that will tell you everything you need to know about your "type" other than your sexual preferences.  (cf. her ABA article on the same topic here).  Are you a Virtual Virgin?  Then run right over to Mediation Mensch's post on "Getting Virtual."    Though Stephanie West Allen hails from the Renaissance rather then the Elizebethean era, anyone worried about the well-being of their parents should check out her Idealawg post Mediation Can Work in Many Elder Care Situations.  We hope Justin Patten won't mind our making him an honorary ADR British Queen by linking to Human Law's post from last week:  As we head into recession and a wave of redundancies does the Human Resources profession have some flair and imagination?  We do have an American ADR "Queen"  -- Chris Annunziata -- who will hopefully forgive me for giving him honorary ADR Queen status.  Our academic readers could benefit themselves and our "on the ground" professionals by reading this week's CKA post Why Nobody Really Reads Law Review Notes here.  My high school French is bad, but it looks like French mediator Dominique Lopez-Eyechenie is reporting that mediators have been deployed to the Metro to referee disputes there -- is that right Dominique?  Finally, the Health Care Neutral (our last honorary male ADR Queen) talks about immunity and couldn't we all use just a little of that?

Below:  Madonna and Friends -- Like a Virgin for your listening pleasure while reading this week's Blawg Review. 

Next week, the Blawg Review will be hosted by the Ohio Employer's Law Blog which we expect will be far more respectful of BR's readers' political, religious and sexual sensitivities than this one was.  Thanks for letting us play.  And a very, very, very good night!

Thanks to the following law blogs sending link love our way:

Legal Blog Watch

Patent Baristas

Patently O

Pharmaceutical News and Resources

Likelihood of Confusion

Idealawg

Thanks to CKA Mediation and Arbitration Blog for the honorary NoDoz Award (here's the ADR Executive Summary of #171, Chris)

 

 

Chicago IP Litigation Blog

Above the Law

What About Clients?

The Mediation Channel

f/k/a

Quiz Law

Law is Cool

LexBlog

Amateur Economists

Build a Solo Practice

a fool in the forest (with special thanks for brightwhiteandsparklinglyvirginal)

Engaging Conflicts

mediator blah blah . . .

The Bizop News

And Google News no less . . .

(Blush) many thanks to Infamy or Praise for suggesting #171 "is a strong contender for Blawg Review of the Year."

The New York Personal Injury Law Blog (Linkworthy) which apparently thinks the title is more interesting than the post itself.  

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 MATTEL WINS FIRST PHASE OF TRIAL, BUT SO WHAT?

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Generally, we mediators like to consider mediation as a safe process, one where the parties can be candid with one another, where they can say what they think, where they can develop and explore options, where they can even apologize if necessary, all without fear that their statements will be used against them later in court.  After all, if they know their statements might be admissible in court, who would say something like:  “I’m sorry I took out your spleen rather than your liver.  But seriously, once you are in there, all those organs begin to look the same.  Especially after a few beers.”?  And yet, an apology like this (o.k., maybe not quite exactly like this) may be just what is needed to help the parties begin to heal, and break a settlement impasse. 

 

Hence, many of us in the mediation world (affectionately and respectfully known as Mediation Geeks, according to IP attorney Casondra Ruga) believe that mediation confidentiality is not just an aspiration, but an absolutely critical component to the effective use of mediation for conflict resolution.  Not just settlement of litigated disputes, but true resolution of conflict.

 

Which is why it was so unusual for a party in Florida to find himself in jail based on what he had to say in a confidential mediation.

 

Of course, the fact that this party was the king of parties himself, Joe Francis, founder and auteur of the soft porn Girls Gone Wild video franchise, may have played a role in the whole affair.

 

I wrote an article last year (Mediation Gone Wild: How Three Minutes Put An ADR Party Behind Bars) chronicling the bizarre twists and turns that led Mr. Francis from the warm and fuzzy confines of a private and confidential mediation room to the slightly more austere federal penitentiary in northern Florida.  And in the article, I questioned some of the decisions and rationale of the federal judge, Richard Smoak of the Northern District of Florida.  (For an audio discussion of the case, click here.)

 

I thought that would be the end of things.  An unusual amalgamation of events leading to an unusual result, leaving MG’s like me with something to talk about at those wild and crazy MG parties (where we keep our tops on, and don’t invite the cameras). 

 

But it wasn’t.

 

I had forgotten that judges have blogs of their own.  Only they don’t call them blogs.  They prefer the terms “Order” and “Opinion.”

 

It seems that Judge Smoak obtained a copy of the article questioning the propriety of some of his decisions, and he used his own blog – I mean he issued an opinion in a different case (Pitts v. Francis) in which he sought to rebut some of the criticism.  (In Pitts, Francis had sought to have the judge recuse himself for bias, an effort the judge rebuffed, leading to the new opinion.)

 

Was his rebuttal convincing?  Has he better justified his decision to jail Mr. Francis for statements and conduct at a confidential mediation?  I think you should decide for yourself.

 

Here you will find the original article in Alternatives chronicling and questioning the judge’s decision to jail Mr. Francis for his mediation conduct.

 

Here you will find Judge Smoak’s opinion in Pitts v. Francis in which the judge defends his decision to pierce mediation confidentiality and, ultimately, jail Mr. Francis.  (See page 24 of the opinion.)

 

And here you will find an article in CPR’s Alternatives magazine summarizing the opinion and responding to the judge’s comments.

 

In the end, I would ask that you let us all here at the IP ADR blog know what you think.  Was the judge right in what he did?  Was he convincing?  Or does it seem like he may have been trying just a little too hard to justify his actions and espouse his neutrality?

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I've always said that the biggest lie in any business is "I don't take it personally."

It seems that some personal-offense-taking may be one of the reasons the lawsuit between billionaire J.K. Rowling and Fan-Lexicon-Site-Builder Steve Vander Ark has not settled (covered by our own Mike Young here and here). 

See Tim Yu's Talk of the Town piece Fan Feud in this week's New Yorker for the slight that may account for taking this spat to the bitter end.  Excerpt and link to full column below.

Last summer, at a “Harry Potter” convention in Toronto, a fan named Steve Vander Ark made a similar mistake when he dared to compare himself to Joanne (J. K.) Rowling. “It is amazing where we have taken ‘Harry Potter,’ ” he said to a crowd of dedicated “Potter” fans. Many readers dislike the epilogue in the final book; Vander Ark urged them to disregard it entirely, and even invented his own spell to do so (“expelliepilogus”). “Jo’s quit, she’s done,” he told the audience. “We’re taking over now.”

Comparing yourself to a living god can be risky, and Vander Ark has suffered cruel fates, in court and in the world of “Potter” fandom . . .

Continue reading here.

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R. David Donoghue over at the Chicago IP Litigation Blog is hosting a "Carnival" of Blogs that is new to me -- The Carnival of Trust.  

As David explains:

The Carnival of Trust is a monthly, traveling review of ten of the last month's best posts related to various aspects of trust in the business world. It is much like the weekly Blawg Reviews that I post links to and have hosted, but those generally contain far more than ten links. My job this month was to pick those ten posts for you and provide an introduction to each post that makes you want to click through and read more.

We're pleased that our sister blog -- Settle It Now -- is included in the category Trust in Leadership and Management along with Charles H. Green's Trust Matters; George Ambler's Practice of Leadership;  and Stephen Albainy-Jenei's Patent Baristas  (if they gave awards for blog template design, PB would win in my book every day of the week).  In this crowd I feel like Zelig!

Here's David's generous mention of the Settle It Now Negotiation Blog and my recent post on convincing your clients to give up more than you (their attorney) predicted while still maintaining your credibility.

On the subject of trust-based leadership, Victoria Pynchon at the Settle It Now, Negotiation Blog has an excellent guide for maintaining your client's trust during a difficult negotiation: How Can I Convince My Client to Lose More than Predicted and Still Maintain My Own Credibility? The answer is complex and multi-faceted, but it boils down to the fact that you have to get the stakeholders and decision makers face-to-face, get their buy in on resolution as a goal (in addition to winning), explore all avenues of resolution, and you have to let them explore all aspects of the dispute, even those that do not matter. The last point is a difficult one for lawyers. As a lawyer you generally want to remain focused on the settlement inputs -- money, confidentiality provisions, sale of existing product if something about the product is being changed, etc. -- but from a trust perspective it is important that the stakeholders resolve not just those issues that go into a final agreement, but any problems or concerns they have related to the dispute or the parties to the dispute.

And let me just add here -- though I'll sound like a broken record to my regular readers -- that business people seek out lawyers because they believe themselves to be victims of injustice. (see my short-short video on this topic here)

Though I, as a mediator, am always seeking business solutions to legal problems, the client's injustice problem must be addressed to maintain your credibility (and retain your client's trust.).  Every great mediator I know will address this issue with your client unbidden.  If you're using less than great mediators --  raise the issue yourself -- all competent mediators should be prepared to address the issues foremost on your client's mind right including -- Will I lose?  How much more is this going to cost me? and Am I Being Extorted or Low-Balled?

Thanks for the mention, David!  We're happy to see Settle It Now mentioned by an IP Blog as influential as yours.  Every IP dispute involves the same issues as every other commercial dispute, requiring the parties to go beyond their legal positions; explore all of both parties' commercial interests; create value from potential business synergies; claim as much of that value as possible; craft business solutions to legal problems; and, frankly address the injustice issues that led your client to seek you out in the first place. 

They'll be yours for life.

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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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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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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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From Concurring opinions here

As the folks at Recording Industry v. The People note, the 109-page complaint begins by invoking the RIAA's statement that it sometimes catches dolphins when fishing.

It is a bold way to show the possible callousness of the RIAA and MediaSentry . . . but seems a bit reliant on the "see they are evil" idea rather than solid causes of action.

I have only scanned the complaint but the other claims could pose problems for the RIAA.

The RICO claims and the trespass to chattels claim offer chatter fodder. If nothing else the chattels doctrine which has been questioned if not mocked may end up protecting individuals in these cases.

Furthermore, the privacy claims seem to go to property ideas in that once the plaintiff thought something was on her computer (based on alleged acts by the defendants) she spent money to protect her property. With 109 pages there is more to think on but those alone catch attention.

For remainder of post click here.

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Mike Young writes to tell us that the USC IP Institute is coming up on March 17 and 18. See brochure below. 

Mike is moderating a panel on fair use with a a group of experts, including Tony Falzone. Tony is with Stanford's Fair Use Project, and is currently in hot litigation with J.K Rowling over a publisher's right to publish a "reference guide." The case is set for trial on March 25th in New York. 

At the special interactive in-house counsel forum on March 17, the panelists will ask -- while in-house counsel have led the charge for ADR and mediation in other fields, why are they reluctant to take their IP disputes to an ADR forum, mediation in particular?

The Rowling litigation may also be worth a mention at this forum.

Mike asks why not mediation?

Don't know what to offer a world famous billionaire author? How about an enhanced reputation or donating some of the boooks' proceeds to charity? How about establishing a Rowling Fellowship for an aspiring author with a disadvantaged childhood, similar to Rowling's.  Just because someone is not motivated by money doesn't mean she is not motivated. Mediation allows the parties to explore just what that motivation might be.

The Rowling docket sheet is here.  

The Rowling motion for injunction is here. 

The RDR Books opposition is here.   

The Court decided to turn the injunction hearing into a trial on the merits.

IP Forum - Get more free documents

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From ALTERNATIVES TO THE HIGH COST OF LITIGATION, INTERNATIONAL INSTITUTE FOR CONFLICT PREVENTION & RESOLUTION VOL. 26 NO. 3 MARCH 2008

UPDATE: DESPITE MEDIATION RELATED INCARCERATION, GIRLS GONE WILD FOUNDER IS HEADED FOR MORE ADR

A federal judge has rejected a recusal motion from the maker of the Girls Gone Wild videos, who challenged the judge’s impartiality for first ordering mediation, and then sending the producer to jail for contempt based on his ADR conduct. That means the civil case against still incarcerated Joseph Francis will proceed. And, surprisingly, the case will go back to mediation.

In an order accompanying the . . . . opinion . . . U.S. District Court Judge Richard Smoak . . . told the parties to try mediation again. Smoak ordered . . . . mediation by June 27, with a “mediation report” deadline six days later.

In his 22-page opinion, Smoak strongly defends his record as a mediation supporter, and rejects claims that he tried to force Francis to settle before sending Francis to jail for contempt.  The defense charges stem from a suit brought by Francis’ video subjects.  . . . .  

The support for the defense motion included Los Angeles attorney Michael Young’s 2007 Alternatives article, “Mediation Gone Wild: How Three Minutes Put an ADR Party Behind Bars,” 25 Alternatives 97 (June 2007) (available at WileyInterscience. com). Young wrote that Smoak’s moves intruded into the mediation process and hurt ADR.

Court's opinion below:

 

Court Opinion re Girls Gone Wild Producer Joe Francis - Get more free documents

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We mediators long for the day when we can no longer use the expense, delay and uncertainty of trial as a good reason to settle your patent litigation.  Why?  Because mediation, as Diane Levin recently wrote, is simply an alternative -- not necessarily the "appropriate" -- means of resolving your clients' dispute.  (See the Mediation Channel's post Debating the Meaning of "A" in ADR here)

It gives mediators no pleasure, and does our profession no good, for litigants to walk away from meritorious lawsuits because the chance to obtain justice through the justice system is not a genuine option anymore.    

So we're pleased to bring you the good news that the Northern District of California is making a serious effort to get your patent case to trial with fewer delays (and less cost) than has been the rule of late.

  Excerpt of a recent Duane Morris Client Update on the new Northern District Rules with a link to the full article below.

New Rules in the N.D. of California Seek to Accomplish More Efficient Patent Trials, with the Help of KSR

Patent litigants, patent rocket dockets, and entities seeking a more streamlined patent litigation should take notice of the U.S. District Court for the Northern District of California’s recent modification of its patent trial rules. Much is at stake in choosing where to file a multimillion-dollar patent litigation. Salient factors in selecting a forum include the court's docket backlog and its perception of patents. Now, the local rules are playing a much more prominent role and should be analyzed lest a patent party be beset with frustration and major setbacks. Here, the Northern District of California's recent actions in revising its local rules demand scrutiny by in-house and outside counsel in formulating a patent litigation strategy.

To read the full text of this Alert, please click here.

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This is the sort of statement I simply cannot resist.  Thanks to TechDirt!

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. . . . He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.

-- Thomas Jefferson, courtesy of TechDirt's post On the Constitutional Reasons Behind Copyright and Patents -- click here for the full post.

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See No do-overs, no take-backs over at Likelihood of Confusion, excerpt below:

Hypothetical: We are negotiating a trademark dispute. During those negotiations — which we both agree are being undertaken for purposes of settling our dispute — I, trademark user, promise not to object to (i.e., not to sue for) a certain use by you, other user, but we never actually incorporate that into any kind of agreement.

Five years later I sue you for making just that use. You try to introduce proof of that promise as evidence that I acquiesced to your use, and should be estopped (barred) from suing because of that acquiescence.

And I get down from my pony and scream: “You can’t use that! Those are settlement communications protected under Federal Rule of Evidence 408 — not admissible!”

Click here for the solution to the not-so-hypothetical problem in PRL U.S.A. Holdings vs. U.S. Polo Association.

Until the California Supreme Court decides Simmons v. Ghaderi, the result in PRL would not be the same here if the parties were mediating under the California Rules of Evidence.  See here, here and here.

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(image from the U.K. Trademark Application Blog)

What's the difference between an IP arbitrator or mediator and a general commercial arbitrator and mediator?  Some of us -- like Les Weinstein and Michael Young -- have devoted substantial parts of their careers to patent (Les) and trademark (Michael) litigation.

The rest of us -- the Hon. John Leo Wagner (Fed. Magistrate, Ret.), Eric van Ginkel, the soon-to-be-added Jay McCauley and I -- have litigated patent, trademark, copyright and other IP cases in the course of our more general commercial litigation careers.

What unites us is an avidity for the topic and an interest in keeping up with the law.  So in addition to being the quick studies that all general commercial litigators are, we're already all the way (Les, Mike) or half way there when you lay your fabulously instructive briefs on us.   

To help our clients and ourselves, we print tutorials from time to time by law firms who our statistics page tells us are reading our blog.  Today we excerpt and link to Lindquist and Vennum's terrific Trademark tutorial -- The Trademark Dilution Act of 2006 -- A Summary of Changes Affecting Trademark Owners

When is a mark famous?

A mark is famous if the general consuming public of the United States widely recognizes it as a designation of a source of goods or services.

In determining whether a mark is famous enough to merit protection under the Trademark Dilution Revision Act, a court may consider all relevant factors, including:

1. The duration, extent, and geographic reach of advertising and publicity of the mark, including whether the mark is advertised or publicized by the owner or third parties
2. The amount, volume, and geographic extent of sales of goods or services offered under
   the mark 
3. The extent of actual recognition of the mark 
4. Whether the mark was registered

Because no registry of famous marks exists, determining whether a particular mark is famous requires the court to evaluate these factors on a case-by-case basis.

What constitutes tarnishment and blurring?

Dilution by tarnishment is an association arising from the similarity between the famous mark and the diluting mark that harms the reputation of the famous mark—that is, when the diluting mark is used in connection with undesirable or inferior goods or services that could create a negative association with the use of the famous mark.

Dilution by blurring is an association arising from the similarity between the famous mark and the diluting mark or trade name that impairs the distinctiveness of the famous mark. Dilution by blurring reduces the connection in the minds of consumers between the famous mark and the goods and services for which it is used.

In determining whether a mark is likely to cause dilution by blurring of a famous mark, a court may consider all relevant factors, including:

1. The degree of similarity between the mark or trade name and the famous mark 
2. The degree of inherent or acquired distinctiveness of the famous mark 
3. The extent to which the owner of the famous mark is engaging in substantially
   exclusive use of the mark 
4. The degree of recognition of the famous mark 
5. Whether the user of the mark or trade name intended to create an association with the
   famous mark 
6. Any actual association between the mark or trade name and the famous mark

For the remainder of this excellent article, click here.

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Someone once asked me whether IP ADR was too narrow a topic to justify an entire blog(!!!!)

Any regular reader will chuckle in response.  Check out, for instance, the IP Blogs listed on the ABA Blawg site.  This week's featured blog, Patently O, is one of the best IP blogs in the world.  And it doesn't hurt Dennis Crouch's readership one bit that he hosts Patent Law Job listings here.  

The ABA lists 151, count 'em, 151 separate IP Law Blogs!  Those bloggers read and link to their IP Sister Blogs and are not simply repeating what each has to say but adding the unique perspectives that arise from a decade or more of active IP practice (younger specialty bloggeres are rare).  .

You can pick up our RSS feed at the ABA Blawg site as well.  While there are 150 IP Blogs, there's only one IP ADR Blog and, with all due modesty, it's a valuable one to add to your daily, weekly or monthly reading list.

Why?  Because we search the IP Blawgosphere for you to come up with information useful to the settlement of IP cases.  Below, for instance, is a chart from Patently O (thanks to David Schwartz!) showing the reversal rate of claim construction decisions.  Why is this important to settlement?  You know the answer -- the cost benefit analysis or decision tree process you're preparing to help you and your client find just the right price for the "sale" of your lawsuit to your opponent.

 

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EBay Agrees to Buy Patents From MercExchange, Settling Long-Running Dispute 

EBay Inc. has settled a seven-year patent dispute with MercExchange LLC that prompted an important intellectual property ruling from the U.S. Supreme Court.

The online auction company said in a statement Thursday that it bought the three MercExchange patents it had been accused of violating. The price was not disclosed; eBay said the figure would not materially affect its financial results.

For remainder of story click here.

Hmmmmmmmm, wonder if this could have been accomplished sooner?

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(above, floodgates along the Bitan Dam by Poagao)

The U.S. Supreme Court just denied review of Convolve Inc. v. Seagate Technology.

Why do we care?

Because in Seagate, the Federal Circuit reversed a long established precedent and announced a new and higher standard for obtaining treble damages in patent cases, which could have the impact of making some patent cases more receptive to mediation or other ADR processes.

Prior to Seagate, a patent holder seeking to prove that a defendant willfully infringed (which opens the door for treble damages) had a pretty low burden to satisfy; the court even suggested that it was as low as a negligence standard. Infringers who had actual knowledge of the patent at issue had an affirmative duty to "exercise due care," which most sought to satisfy by way of an opinion of patent counsel.  See Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983). In fact, because of Underwater Devices, a whole new market opened for patent lawyers, the drafting of patent opinions. (This also raised numerous knotty privilege issues during discovery of these opinions, as one might imagine.)

The landscape changed last year with Seagate. There, the Federal Circuit overturned Underwater Devices, and abandoned the defendant's affirmative duty to demonstrate it had exercised "due care." Instead, the Court imposed a more stringent burden on patent holders to demonstrate that the defendant had willfully infringed. Under Seagate, a plaintiff now must show "by clear and convincing evidence" that the infringer acted "despite an objectively high likelihood that its actions constituted infringement of a valid patent," and that this objectively-defined risk was known (or should have been known) to the infringer.

So with the sweep of the pen (a click of the keys?) twenty-four years of precedent was wiped out, along with the need for patent counsel opinion letters (and some of the thorny privilege issues).

Needless to say, patent holders were less than thrilled, and the matter was taken to the U.S. Supreme Court.

To no avail. On Monday, the Supremes allowed the Federal Circuit opinion to stand as-is, without further review by the Court.

So what does this have to do with ADR?

Plenty. Assuming courts apply the new standard properly, the ability to trigger treble damages has just been significantly curtailed in patent cases. There is less of an upside to taking a flyer at trial. Which should meant that there is more of an upside in trying to work out a resolution that is based on the actual value of the dispute in question.

The dispute can be settled by the application of objective standards of value or other measures without having the settlement process derailed by the wish to achieve (or avoid) the home run treble damage award.

This cries out for a more cost effective resolution process, be that mediation or arbitration. Or some hybrid of the two.

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Recently I re-posted Five Ways to Minimize Risk of Copyright Liability from Citizen Media here. 

Today, IP attorney extraordinaire Tamera Bennett (left) dropped by to remind us of our own ADR "core values," i.e., self-determination and respect for the rights of others.  

Instead of simply approving Tamera's comment, I decided to bring it up here for everyone to see. 

The easiest way to get along with our fellow artists?  

Get a license! 

If you have genuine affection for the work of another, drop them a line, pick up a phone, send a carrier pigeon.  

"I really love your work." 

Then ask for permission to use it. 

Just do what your mother taught you.  Ask nicely.  Say please.  Then thank the nice copyright owner for being so generous with his/her work.  You'd be amazed at people's generosity, especially when you couple it with a (true) statement such as "I'm a young artist and don't have a lot of money but would really like to . . . . . " 

If you can't say that, i.e., if you have the money to pay the license fee, for heaven's sake support your fellow artists.

Tamera's comment below.  See her blog, Current Trends in Copyright, Trademark and Entertainment Law here. 

I have several concerns with the listing of ways to avoid copyright infringement.

1. "Use only as much of the copyrighted work as is necessary to accomplish your purpose or convey your message" ---- Clients come to me and want to know how much of the song can I use or can I reprint a portion of this chapter of the book, or can I use this poster in something else. I advise the client to get a license. Fair Use is a defense which is very difficult to win. There is no cut-and-dry rule that you can use three bars from the song before liability attaches.

2. Add something new or beneficial (don't just copy it -- improve it!) --- This trips folks up all the time. Adding something new does not protect you from copyright infringement. You need a license to create a derivative work. Adding something new to someone else's copyright is a violation of the copyright owner's exclusive right to allow for the creation of derivative works.

Remember, if you did not create it, you probably need a license to use it.

In line with Tamera's advice, see No copyright for derivative works without permission over at the Chicago IP Litigation Blog.  Excerpt below. 

Photo my own -- a surprising street scene outside my front door. 

Plaintiff took a series of photographs of defendants’ Thomas & Friend toy trains, each pursuant to a provision that defendants could only use the photographs for two years. Plaintiff argued that defendants infringed plaintiff’s copyrights by using the photographs after the two years were up.

But the Court held that plaintiff had no copyright. The photographs were derivative works based upon defendant’s copyrighted Thomas & Friends train engines and cars. The party making a derivative work must have the copyright holder’s permission to copyright the derivative work. While plaintiff had the right to make the derivative works, plaintiff was not granted the right to copyright them. Plaintiff, therefore, had no copyright.

 

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Patent infringement settlements sometimes include the drastic remedy of selling your company.  It is the exception, but by no means any longer surprising, when the parties to a patent infringment mediation inform me that the co-defendants have been exploring the option of a buy-out while I was in separate caucus with the plaintiff.

That being the case, it is wise to come to a mediation prepared to explore valuation issues.  In that regard, I direct your attention to an article by Dennis L. Monroe of Krass Monroe entitled All Company Valuations are Not Created Equal.  Below is an excerpt.  For the full article, click here. 

“What is the value of my company?” is a question I am frequently asked. In the franchisor world (whether it be franchisors or franchisees), we usually focus on a multiple of earnings. In recent times the multiple of earnings have been going up; and there has been a feeding frenzy as it relates to the purchase of franchise companies.

What determines the value of a company? We normally look at the valuation in terms of a third-party sale. However, there are other times when we look at valuations for purpose of financing, estate planning, management compensation and other events that may necessitate a valuation.

There are a number of valuation firms in the country. I wanted to go to someone who is known for valuing businesses of all kinds and for various purposes, not just someone who values franchise businesses, because they can be formulaic in their approach. I had the honor of recently speaking with Mike Bochert, a [former?] Managing Director of Cherry Tree Companies, a 25 year old investment banking and investment management firm. Mike is a long-time investment banker and valuation expert of private companies, whether very small or very large.

Dennis Monroe question: How are company valuations not alike?

Mike Bochert response: To understand why all company valuations are not alike, think “P-C-A.” In other words, valuations vary in Purpose, occur under differing company Circumstances and each is directed to a specific Audience. Each of those variables has an effect on the judgments and considerations which are appropriate for any valuation.

Without trying to be exhaustive, the Purpose of the valuation could be:

• Determining value pursuant to a buy-sell agreement
• An estate valuation
• Obtaining growth financing
• Acquiring another multi-unit business
• Considering being acquired
• Strategic decision making
  

The company’s Circumstances might be:

• Profitable company with substantial growth opportunities
• Franchisee with multiple concepts, one performing well and one performing poorly
• An economically strong operation which is considering the acquisition of another operator
• Troubled operation considering an acquisition by another operator

The Audience for the valuation could be:

• Private equity firm
• Mezzanine financing firm
• Internal Revenue Service
• Litigation attorneys
• Management or Board of Directors

To continue reading, click here.

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We've said this before:  prevention beats every dispute resolution mechanism available so long as you do not limit your own freedom out of fear of liability.  

That said, here are the top five tips for using copyrighted material fearlessly from the extraordinarily concise and helpful "Primer on Copyright Liability and Fair Use" from  the Citizen Media Law Project Blog.

While there is no definitive test for determining whether your use of another's copyrighted work is a fair use, there are several things you can do to minimize your risk of copyright liability:

• Use only as much of the copyrighted work as is necessary to accomplish your purpose or convey your message;
• Use the work in such a way that it is clear that your purpose is commentary, news reporting, or criticism;
• Add something new or beneficial (don't just copy it -- improve it!);
• If your source is nonfiction, limit your copying to the facts and data; and
• Seek out Creative Commons or other freely licensed works when such substitutions can be made and respect the attribution requests in those works.

Read the entire Primer here.

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(if you want to see other photos of heart stents -- the product at issue here -- go to commercial photographer Rick Lee's Blog -- On Location with Rick Lee)  

Why would we be talking settlement on the heels of the jury verdict Dickstein Shapiro attorney Gary Hoffman just brought home for his physician-inventor client as reported in law.com's article Boston Scientific Ordered to Pay $432 Million for Patent Infringement?

Boston Scientific blames the venue -- the Eastern District of Texas -- which Bryan Cave IP litigator Larry Kurland ** describes as a "patent-friendly jurisdiction."   (for all patent infringement cases pending in the Eastern District, take a look at the Eastern District of Texas Weblog here)

We're not, however, talking runaway juries here -- as Hoffman's co-counsel  Eric Albritton explained it, the award reflects an 8 percent royalty on U.S. sales and a 6 percent royalty on foreign sales.  As someone who mediates patent infringement cases, I know that these percentages are subject to differences of expert opinion, but are likely within a reasonable range for products of this type. 

Hoffman low-keyed the verdict -- among the largest jury awards ever in a U.S. patent infringement case -- stressing the justice issues. 

Plaintiff -- Dr. Bruce Saffran -- said Hoffman,  "is an independent inventor, and his contributions to the advancement of medical technology needed to be recognized and rewarded . . . " .

A Bird in the Hand

Why would anyone consider settlement at a time like this? 

• Well, there's Kurland's report that the patent infringement verdict returned against his client was recently overturned -- a crushing blow for the Plaintiff-inventor.  
• A Plaintiff's bargaining strength doesn't get much better than this.  So while the champagne flows, a strategic plan should be forming to maximize the the power of a verdict that can cause your opponent's stock prices to fluctuate.
• Whatever the defeated party may say -- "we're not changing the fourth-quarter $365 million loss to $432 million because we're going to win on appeal" -- they've got to be hunkered down in a very high-level  pow-wow to find a way to stop the bleeding.
• Boston Scientific isn't the only fish Dr. Saffran has to fry -- he has a similar patent lawsuit against against Johnson & Johnson's Cordis Corp. unit in the same court. 
• All good things must eventually  come to an end -- Dr. Saffran's patent expires in 2013
• Corporations live forever -- physician inventors do not. 

As Google CEO Eric Schmidt has been reported saying -- litigation is a business negotiation being conducted in the courts.  

Advantage Saffran. 

Let the games begin.

_______________________

** Law.com reports that Kurland prevailed on appeal from an E.D. Texas patent infringement verdict against his client just last year.  

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Apparently, you can outsource IP work, along with your document management tasks, to India. 

At least that's what Howrey is counting while eschewing the term "outsourcing."  Here's an excerpt from Law.com's article, Howrey Opens Office in India, Gives Clients Lower-Cost Option, 

"It's not outsourcing," insists Robert Ruyak, managing partner and CEO of Howrey, describing his firm's new office in India.

Of course, it's not lawyering, either, since an American firm practicing in India would violate Indian law. Instead, it's a new attempt by an American law firm to cut costs by creating an office in India that will handle document management in litigation, IP and arbitration matters pending around the world.

Like many U.S. businesses, Howrey hopes to take advantage of the growing class of well-trained -- and comparatively low-paid -- young Indian professionals.

And Ruyak believes he can persuade reluctant clients, who will choose where their work is done, to embrace the venture. The question is whether they will do so.

See Howrey's [non-outsourcing] Trial and Litigation Support Services Brochure here.

The recession/mid-life career-change angle?  We've long said that litigation -- conflict -- is recession-proof.  Apparently, however, it is not outsource-proof. 

What is? 

Mediation my friends. 

Until someone actually develops that Star Trek instantaneous "beam me up, Scottie" people-mover, you won't be able to outsource us.  

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I was once contacted by one of the writers for the hit series House who wanted to know what the parties may do doing a mediation.  After explaining several current mediation "processes" to him, I said this. 

The beauty part is that you can actually do anything you want during a mediation.  There are no rules.

Then we had a great conversation about what Dr. House might do in a mediation, none of which made it to the screen because it was too wild to appear there  But we had a lot of fun. 

Mediation advocacy is not too much different from trial advocacy except that the page is blank.  The stage is empty.  The computer hasn't yet booted up.  The first word hasn't been penned.  None of the characters has spoken.  The sun is not yet up.  

As our former national poet laureate Billy Collins has written in his great poem Aristotle,

This is the beginning.
Almost anything can happen.
This is where you find
the creation of light, a fish wriggling onto land,
the first word of Paradise Lost on an empty page.
Think of an egg, the letter A,
a woman ironing on a bare stage as the heavy curtain rises.
This is the very beginning.
The first-person narrator introduces himself,
tells us about his lineage.
The mezzo-soprano stands in the wings.
Here the climbers are studying a map
or pulling on their long woolen socks.
This is early on, years before the Ark, dawn.
The profile of an animal is being smeared
on the wall of a cave,
and you have not yet learned to crawl.
This is the opening, the gambit,
a pawn moving forward an inch.
This is your first night with her, your first night without her.
This is the first part
where the wheels begin to turn,
where the elevator begins its ascent,
before the doors lurch apart.

Mediation is a writers' blank page.

Writing is easy. All you do is stare at a blank sheet of paper until drops of blood form on your forehead. - Gene Fowler

Aside from writers' block, I have no answer to the question why there isn't more great mediation advocacy.  But I can steer you in its direction.  Take a look at Stephanie West Allen's interview with Diane F. Wyzga -- an attorney, nurse, and a professionally trained storyteller, who helps lawyers tell their clients' stories to juries.  Read the entire interview.  I provide only a tantalizing excerpt below.  Then we'll talk more about mediation advocacy next week.  As attorney Wyzga explains:

What could I teach a lawyer about storytelling? Robert McKee had the answer:

Storytelling is the art of expressing meaningful change in the life situation of a character in terms of values to which the listener reacts with emotion.

This is what lawyers do all the time! I just needed to overcome law school’s linear analytical training that says he who dies with the most facts, wins. And show lawyers how we listen to stories.

In the grip of a heartfelt story artfully told, the factfinder listener’s mind is fully engaged creating a parallel world of social judgment based on their world views and experiences. Now the attorney and factfinder are one: working in concert in a cooperative enterprise considering options, possibilities and outcomes.

As of a recent verdict in June, I have 11.11 million reasons why I continue to believe that a heartfelt story artfully told using language with power, passion and precision will engage your jury every single time.

Read on here . . . .

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(right:  my attorney)

Yesterday I suggested that by reading Professor Marc Randazza's post Copyright vs. Free Speech (etc.) you could learn how to "respond to legal bullying without hiring a lawyer."  

When Paul Levy of the Public Citizen Litigation Group asked me what part of the Legal Satyricon's advice I was referring to, I pointed him to Randazza's citation of the Streisand Effect, the story of which reads as follows:

A few years ago, Kenneth Adelman posted aerial photos of Barbara Streisand’s home on the intertubes. Streisand got all Barbara on him and sued him for $50 Million. Before the suit, almost nobody had seen Adelman’s website. The lawsuit generated so much attention that millions of people hit his site and the photo was picked up by the AP as newsworthy. Barbara’s tantrum caused the exact opposite effect that she had hoped for.

Defending yourself from even a completely baseless defamation suit can be expensive. Accordingly, often the only defense that a citizen can afford is to rely upon the Streisand Effect, and hope that it turns into a Bickle Rain. (So named after Travis Bickle from Taxi Driver “Someday a real rain will come and wash all this scum off the streets”). Usually, when the victim of the overreaching lawyer brings the dispute to light, and the victim is in the right, the negative publicity can generate a “real rain” that will wash the scum off the streets — or at least convince the bully to be a bit more reasonable. 

Maybe it's because I'm nursing a low-level winter flu, but it didn't occur to me until early this evening that Mr. Levy might have been troubled by my suggestion that a blogger respond to a cease and desist letter without seeking legal advice.  

What I meant to suggest was that people who can't afford to retain legal counsel remain at liberty to resort to Streisand Effect Self-Help.  If there is any way for you to obtain legal advice, however, you should make every reasonable effort to do so if you are served with a cease and desist letter.  

For those who are wondering whether they should seek legal counsel, a great place to start is the  Public Citizen's Litigation site, which has a very informative Internet Free Speech webpage  and Levy's excellent outline on the Legal Perils and Legal Rights of Internet Speakers.

Although I've added bullets to an excerpt of Levy's list for clarity, it is only an outline meant to point its readers to available legal resources as well as to stress the serious nature of any legal tangle involving alleged copyright infringement.  When seeking legal advice from friends and relatives, please understand that even Uncle Joe's niece's husband who just graduated from Harvard Law School and is working for a fancy New York law firm, is not likely to know the answers to these questions.  This is a specialized area of law and only attorneys (or public interest groups) who specialize in copyright, free speech and the like are qualified to advise you.

Below, the excerpt from Levy's outline.  Download it in its entirety and print it out so you can read it in small bits from time to time.  For a non-lawyer, it's not easy to read and comprehend the entire outline.  If you take it a few paragraphs at a time, however, you shouldn't have any trouble getting the general idea.   At least you'll know what you don't know, which is the beginning of understanding.  Also see Levy's Post from the Consumer Law and Policy Blog on the issue here.

Demand letters

• Normally you get a demand letter first (but no guarantees)
• Don’t panic
  • most threats never lead to litigation
  • sometimes they are sent to make the client feel better, or to be able to say that suits was threatened
  • don’t give up your right to criticize just because you are threatened
  • But take threats seriously
  • Sometimes suit can be avoided without giving up your rights
  • Need to think through chances of success or loss and consider cost of defense worth paying for that sort of advice (without hiring lawyer for case)
  • think carefully about the demand letter though
  • if it does not make sense to defend case, consider giving in now, while it’s cheap
• Need to respond
  • Failure to respond in domain name case may be factor allowing plaintiff to file . . . [a law]suit in [a state] . . . located (far from defendant’s home)
  • [a] response can accomplish several things
    • Response is the first stage of litigation; must be drafted with litigation in mind anything you say can be used against you
    • judge and jury will see your response
    • Hence, legal advice is a good idea at this stage
    • Response might persuade the challenger that you are within your rights
    • If the challenger knows you will not just roll over, it may be more
      amenable to compromise
    • Response is also aimed at wider public
    • often, a good response can head off litigation by reminding the plaintiff how much the lawsuit will cost, not just in legal fees, but in bad publicity
    • do a press release; communicate with the Internet community
    • Good collection of documents on the Chilling Effects web site
      
• Getting Legal Help
  • Tempting to try to represent yourself, but it’s risky
  • easy to make devastating procedural mistakes, miss good legal arguments
  • in theory, courts should treat pro se defendants and their procedural mistakes more leniently. Haines v. Kerner, 404 U.S. 519 (1972) but they often do not
  • some courts are much better than others in helping pro se defendants cope
  • Second Circuit [federal court on the east coast] is particularly careful 
  • Hard to find a lawyer at an affordable price
  • unlike plaintiffs, hard to finance these cases through contingent fees or attorney fee awards
  • cases are time consuming and expensive; and you have to pay your lawyer even if you win
  • some states have SLAPP statutes [California does!] that provide for attorney fee awards when a suit against free speech is dismissed [so long as you meet all the criteria]
  • there are a handful of public interest groups [see linked .pdf] but they have very limited resources
  • if they can help, though, they will often represent clients all over the nation
    there are a few law school clinics interested in this area
  • some clinics help only in courts that are close enough for students to appear [see linked .pdf for list]

Thanks for dropping me an email Paul!  Much appreciated. 

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Thanks to Les Weinstein for hipping us to Mark Lacter's Daily Dragon -- this item on Jay Leno's federal copyright infringement action. 

It's always been a pretty gray area, but don't tell that to Jay Leno and Rita Rudner who have settled a federal copyright lawsuit against author Judy Brown and several book publishers. The comedians sued Brown in 2006, claiming that she reproduced their jokes, many of which were told on "The Tonight Show," without permission. Brown has collected and repackaged thousands of jokes by various comedians. The settlement also includes monetary compensation, which Leno, Rudner and NBC Studios will donate to charity.

For remainder of post, click here.

We've covered this issue before in Disputing Humor:  Comedy, Folkways and the Internet here.

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Mr. Thrifty and I have been known to walk to the IMPROV (Jerry Seinfeld, Sarah Silverman, and before Mr. T., even Rosanne Barr before she was Rosanne).  The club is right around the corner from our little neighborhood -- the one that's recently been renamed "Beverly Grove" in honor of the two shopping centers that anchor it firmly in L.A.'s march of progress to complete gentrification.   

The presence of the IMPROV in my own personal geography is strong -- I took my comedy-driving- school-class there from the now pretty famous Kathy Griffin back in the day when I used to power my cherry red RX-7 up and down PCH at speeds local law enforcement couldn't ignore.       

But I digress before I lede, a perilous practice when reporting not quite so exciting arbitration clause interpretation cases. 

So here it is:  Comedy Club, Inc. v. IMPROV West Associates, etc., the Ninth Circuit construing trademark licensing arbitration and non-compete clauses between an IMPROV licensee, the Comedy Club, and the IMPROV as follows:   

1. the arbitrator properly arbitrated the equitable claims where the "scope of arbitration" clause could reasonably be interpreted to embrace such claims;
2. the arbitrator’s award enforcing an exclusivity clause containing a restrictive covenant by terminating the Comedy Club's right to open other clubs could not be set aside as "completely irrational" since that's what the contract provided for;
3. the arbitrator exceeded the scope of his authority by enjoining non-party "affiliate" family members; and,
4. because enforcement of the agreement's covenant not to compete barred the Comedy Club from operating in a substantial portion of its market, that portion of the award violated California Business and Professions Code § 16600, was therefore entered in manifest disregard of the law and had to be vacated.   

The Ninth Circuit therefore,

vacat[ed] the district court’s order confirming the arbitration award and remand[ed the case back] to the district court  with instructions to vacate the Partial Final Arbitration Award in so far as it enjoin[ed the Comedy Store's] Affiliates, unless they [were] agents or otherwise acting for [it] and to the extent it prevent[ed the Comedy Store] from opening or operating non-Improv clubs in counties in which [the Comedy Store] does not now operate or own an Improv club.  

So who said arbitration awards can't be appealed?

With all due respect to those of us here at the IP ADR Blog who arbitrate IP disputes, these lengthly and complex proceedings make me want to mediate the darn thing.

 

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I don't purport to be an expert in the field of internet monitoring for the prevention of copyright infringement -- though the word "prevention" does suggest prior restraints on free speech.   Because we are here at the commencement of the development of the law in regard to internet freedom, all lawyers, not just IP lawyers, should take an interest and let themselves be heard.

That said, I am providing our readers with links to the conversation taking place at the Concurring Opinions Blog and New York Times "Bits" Blog on internet neutrality.

Concurring Opinions alerted us to this Bits debate between Rick Cotton, the general counsel of NBC Universal, and Tim Wu, a professor at Columbia Law School. Full debate here and highlights here.  Further insight on this issue from Concurring Opinions here.

The issue in more detail as described by Bits' January 8 post, AT&T and Other I.S.P.’s May Be Getting Ready to Filter below.

For the last 15 years, Internet service providers have acted - to use an old cliche - as wide-open information super-highways, letting data flow uninterrupted and unimpeded between users and the Internet.

But I.S.P.’s may be about to embrace a new metaphor: traffic cop.

At a small panel discussion about digital piracy at NBC’s booth on the Consumer

Electronics Show floor, representatives from NBC, Microsoft, several digital filtering companies and the telecom giant AT&T said discussed whether the time was right to start filtering for copyrighted content at the network level.

Such filtering for pirated material already occurs on sites like YouTube and Microsoft’s Soapbox, and on some university networks.

Network-level filtering means your Internet service provider – Comcast, AT&T, EarthLink, or whoever you send that monthly check to – could soon start sniffing your digital packets, looking for material that infringes on someone’s copyright.

“What we are already doing to address piracy hasn’t been working. There’s no secret there,” said James Cicconi, senior vice president, external & legal affairs for AT&T.

Mr. Cicconi said that AT&T has been talking to technology companies, and members of the M.P.A.A. and R.I.A.A., for the last six months about carrying out digital fingerprinting techniques on the network level.

“We are very interested in a technology based solution and we think a network-based solution is the optimal way to approach this,” he said. “We recognize we are not there yet but there are a lot of promising technologies. But we are having an open discussion with a number of content companies, including NBC Universal, to try to explore various technologies that are out there.”

Internet civil rights organizations oppose network-level filtering, arguing that it amounts to Big Brother monitoring of free speech, and that such filtering could block the use of material that may fall under fair-use legal provisions — uses like parody, which enrich our culture.

For full article click here.

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I'm posting a photo of a 1956 Chevy instead of the 1956 Ford I remember being my family's first new car because Ford apparently doesn't want anyone to promote their vehicles.  Image from Military.com's "Ride of the Week."

Read on below:

Thanks again to Plagiarism Today's Weekend Linkroll for continuing to follow companies in self-destruct mode down their own garden paths. 

This item via PT from Boing Boing:  Ford Calls its Fans Pirates for Distributing Pictures of their Own Cars.

Why do we post this in an ADR Blog?  Because the first alternative to litigation is common business sense and we are waiting patiently for companies like Ford to awake from the same type of somnabulence that allowed Japanese car companies to run them off the road in the 1970's.

Excerpt from the Boing Boing post below:  

Josh sez, "The folks at BMC (Black Mustang Club) automotive forum wanted to put together a calendar featuring members' cars, and print it through CafePress. Photos were submitted, the layout was set, and... CafePress notifies the site admin that pictures of Ford cars cannot be printed. Not just Ford logos, not just Mustang logos, the car -as a whole- is a Ford trademark and its image can't be reproduced without permission. So even though Ford has a lineup of enthusiasts who want to show off their Ford cars, the company is bent on alienating them. 'Them' being some of the most loyal owners and future buyers that they have. Or rather, that they had, because many have decided that they will not be doing business with Ford again if this matter isn't resolved."

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Recently, I've noticed Yahoo telling me the number of seconds I've been waiting to get my hands on my email when it doesn't appear instantaneously.  I'm  a little abashed when I realize I'm already getting annoyed by the time Yahoo  informs me I've been waiting for only 22.546 seconds.  

Now Be Specific debunks the myth of a google generation of computer scholars who search the  technological Library of Alexandria with grace and ease.  (pictured here:  the new Alexandrian library)

Not only are our children impatient with the internet's search and navigation functions, so are those who used to spend their time in dusty archives after laboriously flipping through the tattered index cards of the Dewey Decimal System -- University Professors.

We are all, says a recent report from the Brits, not only lacking the "critical and analytical skills [necessary] to assess the information that [we] find on the web" but so impatient that we demonstrate "zero tolerance for any delay in satisfying [our] information needs.  Click here for the full short report (wait time:  3.5 seconds).

This is not good news for IP negotiators.  Our impatience to "get on with it" is probably the primary reason for the breakdown of negotiations for the settlement of IP litigation. 

This is not surprising because no one likes to sit for long in the uncomfortable (but creatively generative) process of exploring the business interests of our bargaining partners when we are pretty certain of the righteousness of our cause and the demonic nature of our opposition.

In survey after survey, lawyers report that the best mediators are patient and persistent.  This is reason alone to bring your IP opponents over to your favorite mediator for whom patience is a central daily practice. 

Thanks to Les Weinstein for passing Be Specific along to us.  We'll be adding it to our Favorite Blogs Link this weekend.

Off to work!

 

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Here's a law school ranking list for that small but elite group of aspirants to the legal trade -- engineers who want to be lawyers (my brain burns at the cognitive dissonance)  -- Dennis Crouch's Top Thirty [Law School] Patent Programs (Ranked by Patently-O Hits!)

Here are the top ten -- George Washington; University of Texas at Austin; DePaul; Columbia; U. of  Virginia; Boalt; Harvard University; U. of Tennessee; Cornell; and, Boston.  

The cognitive dissonance. 

Two reasons.  Reason One

I tutored 1-L's in Torts when I was a 2-L.  I was good at torts because I was good at story and fairness -- which is what torts is all about.  Students trained in engineering -- which is all about precision and accuracy -- were totally confounded by this subject.  

Having nearly failed high school geometry, its central frustrations remained particularly vivid at the time. 

"Work it like a geometry proof," I recall saying to my tormented first-year engineering law students.  "Just pick an answer and then rationalize it backwards."  That, at any rate, is how I recall being asked to work a proof.  And it seemed to help my most drastically perplexed first-years.

Reason Two

In practice, I litigated the right of oil and chemical companies to obtain insurance coverage for the environmental damage caused by the production, storage and transport of petroleum products and toxic chemicals.  Because the central question in this type of litigation is "what did the policyholders know about the damage they were causing and when did they know it" I took the depositions of dozens of engineers.

Engineers!  The most honest, forthright and helpful deponents alive; nearly incapable of the cautious "coached" deposition answer; congenitally adverse to saying "I don't know" or "I don't remember;" and, deeply committed to telling the absolute and entire truth.

Why?

Because their entire training and practice focuses on precision and accuracy.  They are zero tolerance men and women.  Listen, you get the lunar explorer to the moon or you don't.  There is no middle ground.

So, engineer-lawyers, particularly engineer-litigators and trial attorneys have always amazed me.  To be capable of radical precision and creative truth-telling at the same time requires the kind of intelligence that F. Scott Fitzgerald called "first rate." 

The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function. 

There you have it.   An entire post that is nothing but a digression.  It had to happen at some point. 

I'm greatly looking forward to Dennis' next promised list -- the ten (or more) top law firm procrastinators measured by their Patently-O hits. 

We call this productive procrastination here at the IP ADR Blog Dennis.  Thanks for the enabling lists!

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The Wall Street Journal Law Blog reports Domain-Name Disputes at an All-Time High. 

What interests me is not the number of complaints filed by trademark owners against cybersquatters under the “Uniform Domain Name Dispute Resolution Policy” (UDRP) -- 1 in 1999 and 2,156 in 2007 -- but WIPO's report that "[a]bout 85% of trademark owners prevail when they bring these complaints."

When someone who asks me for a mediation "evaluation" is being over-confident of their chances of success, I always tell them that I would never tell a client that he had a better than 70% chance of prevailing even when I thought every single fact and legal principle lined up in my "victory" column.

I have to tell you that when I say this, lawyers generally blanch and turn to their clients saying something along the lines of "you know I never promised you victory." 

Now the WSJ Law Blog gives me a figure I would never use -- 85% victory. 

It makes me wonder what's behind that figure -- limited resources of cyber-squatters?  Trademark owner bias? 

Anyone have any ideas other than suggesting that trademark owners are almost always right?

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Thanks to Colm Brannigan for posing this question to the LinkedIn Legal Community:  What Qualities Do Counsel Look for in a Mediator? 

We've already posted -- here -- the answer of L.A. Sheppard Mullin attorney Jim Burgess.

 

Below, we give you the thorough and insightful answer of Vermont attorney, mediator and arbitrator Richard Cassidy of Hoff Curtis. 

From Richard's response you can tell that he understands mediation theory and practice from every angle you want a mediator to know. 

So if you practice in Vermont and are looking to settle a commercial case (he also does labor and personal injury) you probably couldn't do much better than to give Richard a call. 

So herewith and all that, we give you Ricahrd Cassidy's thoughts on what qualities lawyers are looking for in mediators:

From my perspective, it’s important to analyze what you want from the mediation and attune your selection to your needs and goals.

Choice of Mediator -- "Someone Who Will Have Credibility with my Opponents"

In selecting a mediator, I am often most in need of someone who will have credibility with my opponents. I do my best to understand the strengths and weaknesses of my case before I get to mediation. Hopefully, there is little a third party can teach me about my own case. Of course, it is human to be imperfect and so sometimes there is more to learn at mediation than I would prefer. So good judgment is important.

Case Assessment

But assuming that enough work has been done to properly assess the case before mediation, I am often hoping to use the mediator’s knowledge and credibility to help persuade my opponents to see things more my way. In such cases, I am happy to agree on whomever my opponent wants, so long as they have the basic skills.

A Mediator My Client Will Respect:  "Seeing a Neutral Learn About the Case and Then Point Out Important Weaknesses Can Be Very Powerful"

Sometimes, however, client control is a real issue. You wonder why some clients hire you and ignore your advice, but it happens. Seeing a neutral learn about the case and then point out important weaknesses can be very powerful for clients who do easily accept a realistic evaluation of their prospects. So, on such occasions I am looking for a mediator my client will respect.

The Basics:  Interpersonal Skill, Patience, Persistence, Stamina and Optimism

Of course, there are basics that one almost always wants. Good interpersonal skills are essential. An understanding of the mediation process and technique is critical. I look for lots of patience, persistence, stamina and optimism. (I have seen many a mediator throw away a real chance of settlement by trying to move too fast or quitting too early. As a mediator, I do not quit until at least one party insists that I do so). Timing is often important. In most of my cases, knowledge of the litigation process is very important because it gives the mediator the ability to point out the problems of the “best” alternative to a negotiated settlement.

Substantive Knowledge

Knowledge of the substance and dynamics of the particular subject area is very important. For example, I do lots of work as an advocate and as a mediator in employment litigation. Many plaintiffs and many plaintiffs’ lawyers don’t understand up front how hard the process is going to be for them, and how bad the statistics are for the employee. A mediator who can genuinely show empathy for the plaintiff’s plight and deliver the bad news when it’s called for is what is needed.

Co-Mediating with Experts

Sometimes, in more esoteric subject areas, substantive knowledge can be hard to find. As a mediator I have successfully occasionally co-mediated with experts (not necessarily mediators) in fields that are outside of my usual range, such as in patent cases.

Evaluator or Facilitator?

On the facilitative/evaluative question, I usually want a mix. It is almost always a mistake for the mediator to try to impose his or her view of the right the resolution on the parties. But for cases in litigation or headed there, I find that a mediator who is unwilling to express any view of the case is usually not very helpful. I understand that, particularly in domestic relations matters, many mediators are unwilling to do any evaluation at all. I understand that if the real goal of the process is not to resolve the specific issues then holding the parties attention but to transform their communication so that they can resolve things themselves in the future, evaluation can be a road block. Ordinarily, however, in my cases (civil litigation, mostly employment, commercial, construction, or personal injury disputes) someone usually needs the kind of reality check that a few well timed evaluative comments can provide.

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Plagiarism Today continues to provide us with the best aggregation of IP news every week in its  Saturday Linkroll.  Today we're linked to Corante's post "Even Fools Don't Invest in the Music Business," noting the Motley Fool's warning (We're All Thieves to the RIAA) that

a good sign of a dying industry that investors might want to avoid is when it would rather litigate than innovate, signaling a potential destroyer of value. If it starts to pursue paying customers -- which doesn't seem that outlandish at this point -- then I guess we'll all know the extent of the desperation. Investor, beware.

While you're at it, take a look at the Los Angeles Times article, CD Sales Fall Again; DVDs See First Drop,

The [falling] figures underscore the industry's failure to combat music piracy with a campaign of lawsuits and threats. 

We like the music industry.  We really do.  Some of our best friends are musicians and composers and they're suffering some pretty hard times here.  

We just think -- as the RIAA's conduct is proving -- that BigMusic, like the American automobile industry in the 1970s, needs to start listening to at least one of the weathermen who knows which way the wind is blowing.   

Get the picture?  Yes we see . . . . (check out those hair-dos!)

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Direct from NPR to Engadget to our readers:

Speaking to NPR, RIAA president Cary Sherman . . . said . . . that the RIAA hasn't ever prosecuted anyone for ripping or copying for personal use, and that the only issue in the Jeffrey Howell case was -- as always -- sharing files on Kazaa. Perhaps most interestingly, Sherman directly addressed the "ripping is just a nice way of saying 'steals one copy'" comment made by Sony BMG's anti-piracy counsel in the Jammie Thomas case, saying that the attorney "misspoke," and that neither Sony BMG or the RIAA agreed with that position.

Why do we continue to follow this multi-strand narrative on an IP ADR blog? 

Because this is why IP is worth doing.  The law hasn't caught up with today's technology, let alone that lurking around tomorrow's corner.  We're at the very beginning.  Dawn.  And we're excited to begin the year as part of the conversation about the law the culture is in the process of creating to give artists their due; cut the producers and distributors in for their fair share; promote artistic collaboration and the solo effort; and, maybe rearrange a little bit of society, history and politics at the same time.

We're all in!

 

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Take a look at this excellent article -- Pirates Stealing Content from Rival Website -- by Florida Gunster Yoakley lawyers David Bates and Meenu  Sasser.

This one-page article is well-worth reading if you or your clients possess anything of value on the internet that can be "scraped" by pirates.

The good news?

According to Bates, "[a]bout 95% of the cases are resolved by a cease-and-desist letter."

With that kind of track record, Gunster ought to be thinking about value rather than hourly billing.  Maybe they already have.

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Duane Morris reports today on the Third Circuit Decision Clarif[ying] Proper Use of Lapp Factors in Trade Dress Infringement Actions.

I leave the strictly legal analysis to my fellow IP legal bloggers.  See e.g. the 43(B)log's treatment of the denial of the preliminary injunction by the District Court here.  

My comment pertains to the last paragraph's modest conclusion that the new decision "provides brand owners with important guidance" in ordering their affairs.

That guidance?

1. store brands can 'get away' with a little more similarity than other defendants' products when they prominently display a well-known store-specific signature on their packages
2. but store-brands may not merely affix a tiny differentiating label to a copied national brand
3. "health-related" products such as the artificial sweeteners at issue can err on the side of similarity because customers "are assumed to exercise more care in their purchasing decisions than they otherwise might for low-priced products"
4. evidence of actual confusion from a "surgical strike" shopper was not representative of the typical shopper in light of of their brand indifference and the fast pace of their shopping.

Is This Guidance Sufficiently Certain to Recommend Litigation?

From a practical standpoint -- is there any other? -- any legal issue that requires fact-finding will likely be settled later (and far more expensively) than those that don't. 

Why? 

Because litigation makes sense only if:

1. you have far more resources than your opponent; or,
2. the matter is actually resolved at the preliminary injunction stage because the resulting commercial losses are too great to bear until trial; or,
3. the matter can truly be resolved by way of summary judgment motion, i.e., there are genuinely no  material facts nor any immaterial facts that pull at equity's heart-strings.  

Judges have hearts? 

Yes, indeedy.  In fact, if you look back over your long or short litigation career, you'll get the gestalt -- the cases you should have won on summary judgment but which you (unjustly) lost invariably contained some set of facts that:

1. made the requested judgment feel inequitable even though it would have been legally appropriate
2. made the trial court worry about reversal -- usually because the law or the facts were just too darn complicated
   • ever so brief aside:  at the close of one summary judgment argument in a nine-figure case, I asked the Judge denying my motion to provide the parties with his ruling on our evidentiary objections.  His response?  The wave of a hand at the wire cart containing several red welds of pleading files coupled with this remark -- "you can't expect me to rule on those objections."  Beat.  "There are just too many of them."  Voila -- justice! 
3. required more work to understand than the particular Judge before whom it was pending was prepared to do (cf. "too darn complicated")

But They Infringed My Trade Dress!!!!

Let's stick with artificial sweeteners here. 

The reason the "store brands" cost so much less than the national brands is, of course, promotion.  Advertising.  Print.  Television.  Internet.  Billboards.  Slogans. Jingles.  The whole Adman Magilla (plug here for Madmen from Nancy Franklin's ecstatic New Yorker review -- "it hits a deep place in you, like a straight-up Martini made of memory and desire.")

So really!  No one should feel sorry for a store brand trying to hitch a free ride on the back of the national brand's gazillion dollar ad campaign.  Shoot!  That's the kind of advantage taking that makes everyone's mouth go a little sour, right?

Trouble is, as far as jurors and judges go, there is no innocent and, more importantly, no flesh and blood person who's done any equity-sweating or competitor abusing.  Just the cold record; some high-paid expert witnesses; and, the usual line-up of corporate representatives.

There's simply no way to predict what a Court or jury or appellate tribunal is apt to do.  It's all so loosey goosey really.  This is not only not science -- it's not even social science.  It's a game of chance no matter how skilled and sophisticated the players.

Isn't this Just Another Commercial for Your Mediation Services, Ms. Pynchon?

Well, not entirely.  My friend and mentor Ken Cloke likes to say that mediation is a profession in search of its own suicide because we're always trying to teach people to just do this resolution thing -- strategic planning and negotiation -- by themselves.

Have I, for instance, said read 3-D Negotiation yet this year?  No?  Here's the amazon.com link.  Buy it today.  You don't even have to read the whole thing.  You can skim it.  Really!  It will be the best investment of your legal career since you first subscribed to Lexis or Westlaw.  

The recommendation below, for instance is a little harder than it sounds, but it's a whole lot easier and less risky than high-stakes IP litigation.  What is that recommendation?  

Learn the "art of letting them have your way."

At its best, letting them have your way means finding an agreement that meets your counterpart's real interests, as a way of meeting yours.  It means shaping how the other side sees the basic choice -- between yes and no -- so that the "yes" they choose for their reasons yields the deal you want for yours.

3-D Negotiation at 37.

Try it.  You'll like it!

 

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Bloggers with no visual artistic talent -- like me -- are perennially searching for free images to emphasize or draw attention to the central theme of their prose.  As powerful as words can be, they cannot deliver the multi-layered messages contained in a single image  with the same degree of immediacy or power.

So it is with pleasure that we announce our own recent find of the wikimedia commons collection of rights-free visual imagery.

I quote liberally from a recent wikimedia plea for assistance below: 

Where Wikipedia’s trade is in encyclopedia articles and Wikibooks is in textbooks, Wikimedia Commons is devoted to free content photographs, diagrams, illustrations, animations, videos and audio. . . . 

We understand that written literacy is important for allowing citizens to fully participate in society. . . Media literacy is becoming just as vital. . . .

A written tradition is often about connecting people to their history, but increasingly our history is not being recorded in words on a page. Does the name Phan Th? Kim Phúc mean anything to you? Probably not. What if I showed you a black and white photograph of a little girl running down the road naked, screaming and crying? Probably you would recognise that photo, and instantly understand all of the issues it is short-hand for.

I can’t show you that photograph. It dates to 8 June, 1972, and is short-hand for the influence of the media’s reporting of the Vietnam War on the American public’s opinion of and support for that war. From this example it is clear that the media plays an active role in democracy. Free press, free people.

But not free content. That photograph won’t pass into the public domain until at least seventy years after the photographer’s death, and that’s only if the United States government doesn’t extend the term of copyright yet again (you can find the details on Wikisource, but Lawrence Lessig’s book Free Culture is a rather more readable introduction).

Social movement cyclists Critical Mass are fond of the saying, “We’re not blocking traffic — we are the traffic”. There is a similar rallying cry behind citizen journalism — “We are the media”. And while the cyclists’ refrain seems more hopeful than accurate, it’s hard to deny the reality of participatory media today. . . . 


Wikimedia Commons comes in here because it provides the basic building blocks for people who take part in media creation, commentary and criticism — that is, anyone who wants to. If you need images, video or sound that you want to be able to use without fear of being nabbed for infringing someone else’s copyright, then Wikimedia Commons is for you. And because it’s a wiki, you’re invited to give back, too.

Wikimedia Commons also takes existing free content or public domain collections and cannibalises the useful parts. By re-describing and re-cataloguing we essentially make these things that are already free, more accessible. After all, something that’s free but very hard to find is not all that useful, is it? . . .  

Wikimedia Commons is a project that merely collects media files that are in the public domain or are free content. That project doesn’t have any position about what copyright laws should be, it only cares about what currently qualifies for inclusion. That project needs your help for very boring things: to pay for more servers, more bandwidth, and more software developers. Servers and bandwidth are obvious needs, I suppose. We have many 3MB images that are regularly used in dozens of Wikipedias, but there are not too many (if any!) Wikipedia text articles that are 3MB in size. We have to put a low cap of 20MB on uploaded files because we just aren’t confident that we could handle an explosion in larger content (video files, for example, could regularly pass that limit). Media is inherently bandwidth-greedy.

As for the software developers: If you have a browse around Wikimedia Commons you might notice the interface is not that great. It’s not shiny like…well…any Web 2.0 website. It may feel like the website is wearing hand-me-down shoes which don’t quite fit right. That’s true - the website uses the MediaWiki wiki engine designed for an encyclopedia. It still needs some more tinkering to adjust to the basic unit of Wikimedia Commons, which is a file (usually an image), not an article. And while MediaWiki is open source software which means anyone who has enough time and patience can contribute, it’s enough of a complex beast that few do.

So, servers, bandwidth and software developers — that’s why I want to ask you to please dip into your pocket and donate for Wikimedia Commons. But from me personally, I hope a New Year’s resolution may make its way into your mind, to resolve to fight against copyright expansion, enjoy the availability of the commons and give back to it, too.

Happy New Year.

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($5700 by Andrew Magill)

I just ran across this terrific resource for IP practitioners -- Insurance Coverage for IP Assets. Were I still in practice today, I wouldn't make a move without this great source of IP settlement wisdom. 

Here's the thing about the law of insurance coverage (a sub-specialty of mine for the last ten or so years of my practice) -- you cannot simply read your clients' insurance policies nor simply read the pertinent case law in deciding whether to make -- or more importantly to press -- a claim for coverage. 

There are no easy coverage answers and the difficult questions raised by every coverage dispute vary from state to state.

I live with policy-holder counsel and he can't answer my questions unless I look up the answers and give them to him, at which point he'll tell me why I'm wrong (I usually am) unless I've asked six or seven additional questions.  (thanks honey!)

So add this valuable book to your research library in 2008.  

Publisher's description of contents below; link to publisher's web page featuring the book above. 

Insurance Coverage of Intellectual Property Assets is the first resource to comprehensively analyze the insurance protection issues that must be considered when an intellectual property dispute arises. From determining the scope of coverage under a policy, to tendering of a claim, to seeking remedies when coverage has been denied, this essential guidebook details the interactions among policyholders, insurers and the courts.

You'll find comprehensive and timely analysis of federal and state case law and major commercial insurance policy provisions that address:

• The extent of insurance coverage under the "advertising injury" and "personal injury" provisions
• Language in policies that limits or excludes coverage for intellectual property claims
• Public policy exclusions to coverage for claims of an infringement undertaken with intent to harm
• Interpreting ambiguous language in insurance policies
• Defending a claim under a "reservation of rights" and potential conflicts of interest triggered thereby
• Forum selection and choice of law

And more.

In addition, there's detailed discussion and comparison of the actual language used in most commercial insurance policies and the 1976 and 1986 Insurance Services (ISO) policies.

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(image links to Amazon's page for the Norton Anthology of English Literature)

Low tide here at the IP ADR Blog.  We seem to have entered a time in which America follows Europe and the U.K. by simply shutting operations down between Christmas and the New Year. 

And high time too!  No one gets any work done other than the poor store clerks anyway.  So say!  Have a little patience with them this holiday season and carry a few lagniappes in your pocket to bestow true holiday cheer upon the hard working temps, two of whom were completely flustered yesterday when their cash registers broke down over at the Grove shopping center (yeah, that's me -- bad cash register karma).

Anyone Read Beowulf Lately

But there is something relevant to intellectual property this morning -- a good article over at Concurring Opinions by Frank Pasquale, Humanities Hobbled by Copyright Law.  "While scientists are pioneering exciting new modes of cooperation," writes Pasquale,

 humanities scholars are increasingly tripped up by an archaic copyright system. Great schools of the recent past may be doomed to an ownership pattern fractionated enough to frustrate even the most persistent assembler.

May I suggest that the problem described in much greater detail in Pasquale's post be resolved neither by the compromised process of legislation nor by the adversarial mode of dispute resolution, but by a grass-roots coalition of publishers and academics working toward a solution that satisfies the greatest number of the true needs of all stakeholders.

Collaboration.  The by-word of 2008.

Cheers!

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(image from toothpaste for dinner)

We're sorry we missed this report from MacUser News when it appeared under the headline UPDATED: Music boss: we were wrong to go to war with consumers in November, but thanks to Plagiarism Today's Saturday Linkroll which led us to these items in Mashable (The RIAA Tries Truthiness and EMI to Cut RIAA Funding; Death of RIAA Near?) we're able to report that Warners Music Chief Ed Bronfman is singing the Innovate, Don't Litigate song. 

Speaking at the GSMA Mobile Asia Congress in Macau, Edgar Bronfman told mobile operators that they must not make the same mistake that the music industry made.

"We used to fool ourselves,' he said. "We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find and as a result of course, consumers won."

Mobile operators risk the same, he said. Fewer than 10% of mobile owners buy music on their handset, the vast majority of which is ringtones.

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In Fans:  Friend or Foe, the IP lawyers at Sheppard Mullin, citing this BBC article on a fan-made video-game Warhammer movie, throw this question out to the blawgosphere: 

At what point does a work of fan fiction pose a threat to the intellectual property rights of the owner?

The Sheppard Mullin post -- covering gaming-fan-generated content and German law on le droit moral -- is meaty and thought-provoking, raising the type of questions addressed by the Lessig video posted here yesterday.

Check it out!  And if you're inclined to answer the question in your own blog, please do let us know!

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Thanks again to Plagiarism Today for yet another great Lawrence Lessig video.  

Forgive us our fandom for a law school professor, but this guy is the smartest, most forward-thinking, creative individual thinking and talking about art, copyright, culture and the internet today. 

Some of this is pulled from the earlier presentation we posted but this is much more thorough and all-encompassing. 

Check it out.

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O.K., we admit it.  We were a little bummed that no ADR Blawgs made the ABA Journals' Blawg 100 List.  But, as always, our spirits were lifted by our fellow bloggers who are, after all, our community, our posse, our homes, our peeps.

So thanks to Tom Mighell over at Inter Alia for making the IP ADR Blog Blawg of the Day yesterday. 

And while we're giving thanks, a big IP ADR bear hug to the folks at Mediate.com who featured Michael Young's post on . . . . yes . . . copyrighting flatulence . . . . this week. 

That's the first appearance of our blog in the Featured Blogs section of the Mediate.com site and we're happy to have finally made it there.

Finally, we're happy to announce that IP ADR Blogger Victoria Pynchon's Settle It Now Negotiation Blog has become part of the Forbes.com Business and Financial Blog Network.

While you're clicking on links, you might consider subscribing to Tom Mighell's great Internet Legal Research Weekly here!

 

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Sometimes you've got to wonder whether anyone really cares about intellectual property at all. Or class and culture for that matter.

Take the case of the Pull-My-Finger Fred doll versus Fartman, the epic battle of the farting plush dolls. Now I'm not that far removed from teaching my boys about the incredible magical powers of the pulled finger not to understand how a Pull-My-Finger Fred doll could enjoy a certain amount of commercial success. (In fact I have a brother who probably rushed out to buy the first one.)

But is a "white, middle-aged, overweight man with black hair and a receding hairline, sitting in an armchair wearing a white tank top and blue pants" who farts "when one squeezes [his] extended finger on his right hand," and "makes somewhat crude, somewhat funny statements about the bodily noises he emits, such as 'Did somebody step on a duck?' or 'Silent but deadly'" really worthy of emulation?

Our thanks for this bit of IP whimsy to Judge Diane P. Wood of the Seventh Circuit Court of Appeals for the fine description in her March 2007 opinion.) 

Apparently Novelty Inc. thought so. It created Fartman, described by the Court as (and this may sound familiar to you):

a white, middle-aged, overweight man with black hair and a receding hairline, sitting in an armchair wearing a white tank top and blue pants. Fartman (as his name suggests) also farts when one squeezes his extended finger; he too cracks jokes about the bodily function. Two of Fartman's seven jokes are the same as two of the 10 spoken by Fred.

Does the world really need two white, middle-aged, overweight, balding, flatulating, wise-cracking male plush dolls? But that's not the point.

The point is, what was Novelty Inc. thinking? Why blatantly infringe on someone else's copyright? If you really must have a gas passing plush doll to fill out your product line, why not create one with a full head of blond hair, or standing with a green shirt, or ... a woman! (You women know you do it. Don't deny it. I think Judge Diane Wood might have been feigning innocence when she wrote:

Somewhat to our surprise, it turns out that there is a niche market for farting dolls, and it is quite lucrative.

O.k., that's not the point either. Nor is it to critique the legal issues raised by this case, including the ever fascinating and difficult idea/expression distinction. That has been done admirably and more timely by others, including William Patry in his post Fartman Appeal Fizzles.

Rather, my point is this:

Dispute resolution in the IP field comes in all shapes and sizes.

One of the best means of dispute resolution is to avoid the dispute in the first place.

Call it pre-dispute resolution.

In this case, Novelty Inc., is now liable for nearly a million dollars in infringement damages, more than half of which were the plaintiff's attorneys fees.  Clearly, Novelty could have used a little pre-dispute IP counseling.   With professional guidance, it could have avoided a case that stunk from the start. (Come on, you knew it was coming eventually.)

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As you can tell from our IP ADR Dictionary here, we're word and definition freaks at the IP ADR Blog.

So we're pleased to pass along IP ADR Blogger Les Weinstein's recent note to take a look at the latest Intellectual Property Dictionary.

This book brings together articles by leading international scholars from diverse disciplinary perspectives who focus on the legal, social and cultural dimensions of intellectual properties - including patents, copyrights, trademarks, trade secrets and rights of publicity.

These articles employ a creatively eclectic approach to the study of intellectual property law and policy viewed through the lenses of traditional doctrinal analysis, historical perspectives, critical cultural study, and empirical examinations of intellectual property in action.

The volume also directs critical attention to the significance of intellectual property in contemporary processes of globalization and political economy.

The author and board of editors on this one form a pretty impressive group.

Author Rachel Gader-Shafran has a BA in Political Science from UCSB, an MA in applied linguistics from UCLA and a JD from American University, Washington College of Law, cum laude. The author has taught as an Adjunct Professor at American University, Washington College of Law and has published The Intellectual Property Law Dictionary with Law Journal Press and The International Students' Survival Guide to Law School in the United States . . .  continue here.

Board of Editors

Christine Haight Farley is an Associate Professor of Law at American University, Washington College of Law. Professor Farley teaches courses in Intellectual Property Law, U.S. Trademark Law, International and Comparative Trademark Law, and Law and the Visual Arts . . . continue here. 

Peter Jaszi teaches at the Washington College of Law of American University in Washington, D.C., where he also directs the Glushko-Samuelson Intellectual Property Law Clinic. He specializes in domestic and international copyright law. Prof. Jaszi is an experienced copyright litigator and a frequent speaker to professional audiences in the United States and abroad. . . continue here.

Leonard Klein is Legal Research Librarian and Intellectual Property Subject Specialist at the Jacob Burns Law Library of George Washington University Law School. In addition to providing research support to faculty, students, alumni and visiting scholars, he selects new resources for the Library's extensive intellectual property collection. . . . continue here. 

Eliav Korakh is a partner at Borochov, Korakh, Eliezri & Co. He specializes in Patent Law and deals with the USPTO and international agencies in his practice. He has particular experience in the areas of computer hardware and software, telecommunications, optics, applied mathematics and physics, electronics and medical devices, and business and commercial Law. . . . continue here.

Here's the link to purchase the book if you'd like to add a hard copy IP Dictionary to your bookshelf.

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. . AND THEN SETTLE YOUR COPYRIGHT CASE.   

 

(right, IP ADR attorney, mediator and blogger Michael D. Young of Weston Benshoof and Judicate West; case link courtesy of Thelen Reid)

$27 million will buy you a whole lot of cake. And you can eat it too. That’s one of the lessons from the Tennessee Court’s unprecedented sanctions award against an apparent copyright infringer who just refused to stop copying. 

In MGE UPS Systems v. Titan Specialized Services  (OPINION HERE), the copyright owner not only obtained a sanctions order worth $27 million against one of its primary competitors (and apparent copyright infringer), but was still entitled to pursue its claim for copyright damages. 

How is that for protecting your intellectual property while also setting the stage for a pretty advantageous settlement negotiation?

Using the lingo of ADR/negotiations, MGE UPS Systems showed how a copyright owner could effectively utilize the litigation process to change the parties’ respective leverage, and then set itself up for the perfect negotiated outcome.

Here’s the short set-up: MGE UPS Systems, Inc. sells, and then services, “Uninterruptible Power Supply” equipment, equiqment  systems customers (such as hospitals) install to ensure a constant supply of power in the event of an outage. 

Because this equipment must be regularly serviced and maintained, not surprisingly, there are a number of competitors who provide such services to UPS users -- and who compete head to head with MGE for that business.

Things were pretty competitive…until MGE built a better mousetrap. It developed new software that was so good it allowed UPS to service its equipment 2-4 times faster than its competitors, and with greater accuracy and efficiency. The software was, of course, proprietary and copyrighted. The competitors were starting to feel the pinch.

Beware the Mobile Employee

One competitor apparently pinched back. If you’ve worked in any technology-based business, you know how prevalent employee mobility is – and how easy it is to download secrets onto a simple pen drive that fits in your pocket.  According to complaint's allegations, defendant JTP solicited one of MGE’s former employees who just happened to have a pirated copy of the MGE proprietary software. JTP obtained the software, distributed it to its service personnel, and began competing against MGE with MGE’s own copyrighted product.

Why JTP thought it could get away with this thievery is never explained.  Why it believed it could then go out in the market place and start miraculously servicing UPS equipment in 1/6^th the time without raising suspicion is also never explained. 

What needs no explanation is what happened next. As soon as MGE learned of the theft and infringing use of its software, it filed suit. 

The Leverage of Time

With the suit filed, is it time to call in fellow blogger Vickie Pynchon to mediate the dispute? JTP probably would have loved this. Settlement takes time, and every day that passed setting up and conducting the mediation would have been another day JTP could have been in the field utilizing MGE’s own copyrighted software to steal business from MGE. JTP would have been incentivized to drag the process out for as long as it could. 

But for MGE, this would have been a mistake. The leverage of time was working against it. With MGE bleeding every day, what it needed was litigation triage. So MGE sought to staunch the blood flow by applying for – and obtaining – an emergency restraining order against JTP prohibiting it from using the MGE software at all for any purpose whatsoever. 

Now who was in a hurry to settle? Not MGE, certainly. The leverage had flipped. Back in sole control of its proprietary software, it could now regain control of the Service market as well. It was JTP who should have been in a hurry to settle before it became locked out of the market altogether. Maybe it could cut a licensing deal?

Time to Call the Mediator

This is the time JTP should have called Vickie to seek out a mediated solution. But it didn’t. Instead, it took a seriously wrong turn. According to the opinion, rather than comply with the Court order, JTP ignored the thing altogether and continued utilizing the copyrighted software in competition with MGE. 

The Leverage of Sanctions

When MGE learned about JTP's contumacious conduct, it returned to court and sought sanctions. And what sanctions they were.  After a two day evidentiary hearing, the court, noting that a third of JTP’s income was based on its service of MGE equipment, awarded MGE “a monetary sanction of thirty (30%) of JTP's gross revenues from July 21, 2004 to date.” 

Thirty percent!  $27 million! 

(The court also ordered an inspection of JTP’s computers – at JTP’s expense of course – and awarded MGE its attorney’s fees.) 

And this doesn’t include MGE’s infringement damages!

An entire blog could be dedicated to litigation sanctions.  (I looked, but couldn’t find one -- readers should feel free to start one.)

Unless JTP had a rabbit up its sleeve, this would have been a good time to call Vickie to get this one settled or at least to read the chapter on negotiating from a position of weakness in Malhotra's and Bazerman's Negotiation Genuis.   

$27 million and damages? 

That’s what I call having one’s cake and eating it too. 

(Though I’m a pie guy myself.)

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Here's the thing about bullying.  When you do it in public, champions will arrive on the scene to do battle.  According to the recent ABA article Oregon ‘Ground Zero’ in RIAA Battle Against File-Sharing,

in filings this week, Attorney General Hardy Myers' office said the Recording Industry Association of America's litigation tactics may violate his state's data-mining laws . . . [and] called for an investigation of the recording industry's tactics.

In response to the RIAA's muted characterization of the AG's attempts to protect its citizens as  "misguided," New York lawyer, Ray Beckerman (The Recording Industry vs. the People) . . . says that the "the Oregon AG's move to question the RIAA's tactics is long overdue."

 "The RIAA has been bringing fake copyright infringement lawsuits, the sole purpose of which is to get the names and addresses of John Does. . . . The strategy is then to drop the case and pressure individuals to settle, he added.

For those who missed our first post on this issue here, we once again provide an explanation of bullying from the social scientists.  

Bullying, they tell us, is the repeated and deliberate abuse of power by one person or group over another person or group.

The social context in which bullies flourish?  Relatively stable social groups with a clear hierarchy and low supervision.

Why?  Because hierarchy – a system that ranks people one above the other -- makes low-status individuals visible, easy to get at and less likely to receive protection by their peers. 

When you bully a State's citizens in full view of that State's arm of justice, however, you can't expect that you -- the sixth grade bully -- can continue to shake down the third graders for their lunch money.

Kudos to the State of Oregon for riding to the rescue!

For college students targeted by the RIAA -- and those who might be -- attorney Beckerman provides his practical and legal advice here.

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L.A. Times reporter Dawn Chmielewski wins the tech-legal lede of the day contest by reporting that

the U.S. 9th Circuit Court of Appeals on Monday reaffirmed its earlier support for the socially redeeming value of searching the Internet for nudie pictures.

The San Francisco court, in reviewing a case it initially considered in May, reiterated its finding that Google could display tiny versions of photographs by Perfect 10 Inc., a Beverly Hills-based adult publisher, in search results, even when those images were copyrighted.

That opinion affirming in part, reversing in part, and remanding to the District court is here.

And that report, by the Los Angeles Times, is almost right. 

The Ninth Circuit instructed the District Court to make further factual inquiries to determine whether Google and Amazon are contributorily liable for infringing uses by other websites.  As the Court held:

Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10's copyrighted works,and failed to take such steps.

The best analysis of the opinion on the web right now is Eric Goldman's Technology and Marketing Law Blog post Perfect 10 v. Amazon Opinion Amendment--Ninth Circuit Does 180 on Fair Use Burden for Preliminary Injunction here.

Quotes that form the meat of the opinion below:    

HOLDING ON DIRECT INFRINGEMENT (GOOGLE)

In this case, Google has put Perfect 10’s thumbnail images . . . to a use fundamentally different than the use intended by Perfect 10. In doing so, Google has provided a significant benefit to the public. Weighing this significant transformative use against the unproven use of Google’s thumbnails for cell phone downloads, and considering the other fair use factors, all in light of the purpose of copyright, we conclude that Google’s use of Perfect 10’s thumbnails is a fair use. . . . . We conclude that Google is likely to succeed in proving its fair use defense and, accordingly, we vacate the preliminary injunction regarding Google’s use of thumbnail images.

Continue Reading...

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UPDATE:  For a discussion of the reasons why this video so powerful presents the WGA's case, click here.

Thanks to the National Law Journal's Los Angeles Legal Pad for posting this short video "Why We Strike."

A post explaining the reason the reasons given here feel pretty darn persuasive next.

And, by the way, we're really happy to see the L.A. Legal Pad becoming much more substantive a legal news source than it originally was. 

We're pretty certain we have Jason Siegel to thank for this improvement in content and thank him we do!

We're looking forward to watching it grow!

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I've been shopping puppies this holiday season.  Still, I shouldn't have given Mr. Thrifty sticker shock this morning when I told him the puppy in the window over at puppies & babies on the corner of Third and Kings  retailed at $2K.

I don't know what makes one puppy garner two grand and another win a trip to the gas chamber at the local ASPCA, but I have located an expert who can value the patent in the window.

Coats and Bennett patent attorney Ed Green has a lot more letters after his name than "my" pedigreed  puppy does and a lot to say about valuation that I know Mr. Thrifty would respect.  

Because patent mediation -- which is a lot of what we do at IP ADR -- is all about valuing one's intellectual property rights and because Ed's an experienced and careful practitioner of the art,  we'll be posting an interview with him on negotiating the resolution of patent infringement litigation really soon -- before Festivus. 

To whet your appetite for more, we give you a bit of his wisdom on the topic culled from LinkedIn here.

[If you already have] a working knowledge of patents. . . so you know about the scope of the claims, perusing the prosecution history for the strength of the claims, how crowded the art is, the cost of designing around, etc.

The other side of the issue is the market: how many products or industries does the patent reach, what are their sales, who are the players, what are the consequence of an injunction, etc.?

It is impossible to value a patent the way one can, say, real estate. You have to put a patent lawyer and CPA together, both of whom know the technology and the market, and study the business issues on a case by case basis, and even then you'll only get an educated guess -- something to open negotiations with.

Other factors are whether the patent stands alone or is part of a family; the likelihood of litigation and the relative strength of the parties; whether the patent's validity has been tested by licensing or litigation; whether the technology it covers is in a standard or regulation; whether the deep pockets are direct or contributory infringers; how easily infringing activity can be moved offshore; and many more that don't come to mind right now...

As others mentioned, entire books have been written on this question. Having said all that, it is my firm conviction that most patents are ultimately worthless. The relatively few that are not, however, are waaaay not!

Look for the full development of Green's thoughts on patent valuation and our joint thoughts on negotiating the resolution of patent litigation before everyone leaves for the winter holidays. 

In the meantime, thanks to LinkedIn member Vinod Kumar Singh's blog Competitive & Technical Intelligence Toolbox, we give you this basic article on valuing patent rights -- Patent Valuation:  is Fair Market Fair by David E. MARTIN and Jason O. WATSON at M•CAM, Inc in Virginia. 

 Voice over Internet Protocol allows you place long-distance phone calls on your computer at very low cost.  There are many options in the showcase from which to choose when you need to decide what kind of voip is best for you.  One of those options is voip com -- a leading provider of internet phone service. If you are considering using the skype download, make sure the technology is up to date. Alternatives to skype are vonage and handheld ip phones, both of which can place voip calls.

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On the very same day that the Volokh Conspiracy was worrying about the potential for contributory infringement resulting from its posting a YouTube video to his highly respected blog, Google, YouTube's owner, was saying the following to its eighty gazillion bloggers:

Blogging from YouTube

November 26, 2007

As you videobloggers already know, you can upload your videos directly to Blogger. But for the rest of the video watchers out there, did you know you can just as easily post YouTube videos to your blog?

All you need to do is set up your YouTube account to post videos to your blog using the "Share" button. You'll enter your Blogger information once, and from then on it's one-click sharing from any YouTube video page!

If there were liability for contributory infringement, you'd think this encouragement by YouTube's owner to post YouTube videos to its owners' blog sites would fit the bill. 

So we're now resting even easier about posting YouTube videos.  We're relying on Google not to be steering its blog customers into acts of infringment when posting its subsidiary's videos on its Blogger blog sites.

At some point we imagine (as Howard Beale in Network was asked to) the existence of a single corporate entity, unable to sue itself, sounding litigation's death knell.  

 

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(photo:  The Kreation of Adam by Krystian Schneidewind)

Culture and consumers precede the law.  They rarely, if ever, conform themselves to the needs, interests and desires of business.  Culture and consumers govern business.  Business does not govern them. 

The law follows culture.  As we noted in Disputing Humor:  Comedy, Folkways and the Internet, "the law" is not just a set of rules, but a life condition "in which [people] are carriers of rights and duties, privileges and immunities."

No formal structure supporting the system of law need be visible. . . Law can be found any place and any time that a group gathers together to pursue an objective. The rules, open or covert, by which they govern themselves, and the methods and techniques by which these rules are enforced is the law of the group. Judged by this broad standard, most law-making is too ephemeral to be even noticed. /*

In other words, we govern ourselves more or less naturally, until a conflict within the group arises. When that happens, the group is "forced to decide between conflicting claims [and the] law arises in an overt and relatively conspicuous fashion. The challenge forces decision, and decisions make law." Id.  

There are 87 comments over at the Volokh Conspiracy -- many of them pretty heated -- about the practice of posting (or linking to) YouTube videos.  When there's this much dissent and passion, what the law will be is anybody's guess.

We also recently noted that the RIAA is waging a computer-sleuthing and intimidation campaign against its own customers in an effort to stop illegal downloading (apparently going so far as to notice the deposition of a ten year old girl).  When Goliath is going after Davy as if Davy were carrying a tactical nuclear weapon instead of a sling shot, cooler heads are not prevailing.

Enforce Your Rights by Suing Your Market or Adjust Your Business Practices to Changing Times?

Taking on just one of the legal issues raised by the 87 Volokh commenters is good only for people who like to tinker with the law (lawyers).  It is always bad for people who want to make a profit from selling stuff to the public.  

Take YouTube.  One of the commenters over at Volokh made this small but important point -- a "point of law" that could consume the energy of teams of well-paid lawyers for years if not decades.

You "link" to the YouTube clip, but the clip itself is stored on some YouTube server. The "link," however, plays directly from this blog. Is this different than (1) a link that opens a new YouTube window (requiring the additional step of the user clicking "play" from YouTube's website)? If so, why?

I think we'll all agree that it is different than, for example, (2) a blogger providing the following instructions:

"If you'd like to watch the video, google these terms: "Herbie Hancock" and "One Night with Blue Note." Then click on "I'm Feeling Lucky" and watch the video."

So ... is the embedded YouTube link more similar to (1), or is it more similar to (2)? Does copyright law have anything to say about this?

When you post a YouTube video to your blog what you are really doing is cutting a rectangular window in your blog template, letting the YouTube video shine through.  If YouTube "takes down" the video, it will no longer "show" through the window you've cut for it. 

Question.  Is this infringement or contributory infringement?  You have an hour.  You may begin writing your answer . . . . . NOW.  

Listen, lawyers love questions like this.  They allow us to ply our trade at its most creative -- to push the envelope or even to break the mold.  There's nothing we like more than asking ourselves and our colleagues whether the laws enacted, interpreted and enforced when copying machines were the primary means of reproduction should apply to the practice of virtually cutting holes in blog templates for videos to play through.  

Do Columbia and Warner Brothers want to spend their creative talent, business acumen and cold hard cash trying to maintain the past when the present and the future are so full of opportunity?  

Listen.  The producers and distributors will find a way to make a living in the new Millennium.  They're very very good at that.  They will, however, do so much more quickly if they focus on serving their customers by delivering a superior product.  Serving customers with a summons and complaint is applying a quill pen to a problem that requires a laser gun.        

UPDATE FROM CITIZEN MEDIA LAW PROJECT Embedded Video and Copyright Infringement answers most the questions raised here and over at Volokh in favor of the poster. 

*/  See, Weyrauch and Bell, Autonomous Lawmaking:  The Case of the "Gypsies" (1993) 103 Yale L.J. 323 (1993) quoting Thomas A. Cowan & Donald A. Strickland, The Legal Structure of a Confined Microsociety (University of California, Berkeley Working Paper No. 34, 1965).  The Weyrauch book on Gypsy Law can be found here.

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Lawrence Lessig.  You know who we mean.  We just posted his pitch-perfect power point presentation here just the other day.

But who could have predicted at any time before this very moment, a day on which an Austrian art-technology-philosophy group working at the "proto-aesthetic fringe [with] pop attitude, subcultural science, context hacking and political activism" (Monochrom) would make a video recording of a love song to an internet & society law school professor.  Who knew law schools would ever offer a course on the internet?  Who could have foreseen . . . oh, never mind . . . 

Thanks to Boing Boing (first) and Concurring Opinions (second) for allowing us to mark this staggering milestone in international-legal-cultural history. 

Skip the Mr. Wizard science experiment and go straight to the Monochrome Melody at 2 minutes and 30 seconds.

Take it away boys!

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(right: author and IP litigator and mediator Michael D. Young, an IP practitioner at Weston Benshoof and mediator with Southern California's Judicate West)

Is the IP world ready to mediate its disputes yet?

While many of us believe IP practitioners are late in coming to the mediation party, at least one prominent mediator is banking that the right time is now.

London's Mark Jackson-Stops, founder of In Place of Strife and a fellow Fellow with the International Academy of Mediators has recently established a specialty mediation panel for  disputes "in the UK and jurisdictions around the world in unfair competition and passing off, patents, trade marks and copyright and competition and anti-trust law, as well as franchise, music, media and domain name disputes."

Jackson-Stops noted "this is an excellent fit with the often cross-border nature of disputes in intellectual property and technology."

Obviously, I support the efforts of any mediators who band together in a specialty mediation practice or joint venture (or even simply a cross-pollination site like this one).

Mark's efforts do, however, raise a question that has been nagging me for some time.

Why has it taken IP attorneys and disputants so long to hear the siren call of negotiated resolution?

I have heard some disputants say that sophisticated high-stakes patent infringement disputes are so significant that the parties simply can't afford to "compromise."

Aside from the fact that negotiated resolutions needn't result in compromise, no one specializing in the field could give this explanation much credence.  

Almost all of these disputes end up settling -- sometimes before and sometimes after Markman hearings -- so compromise is a fact of life unless you're able, with the help of a great mediator, to expand the parties' opportunities to obtain better benefits from a negotiated agreement than they could obtain by victory at trial.  

Given the opportunties created by interest-based negotiation and the inevitability of compromise if the parties wait to settle on the courtroom steps, why does the mediated or negotiated resolution continue to be a "last step" and one of "giving up" and "giving in" rather than "finessing impasse by transforming it into an opportunity to make a deal" (as our friend Lou Meisinger so often counsels).

Are IP litigators pessimists who just don't believe that mediators are up to the intellectual challenge of mediating complex technology and business disputes?  Or are they overly optimistic, believing that they can win by turning over their own and their client's decision-making to a judge or a jury?

Whatever the reasons, reluctance seems to be the rule.  

Case in point.

In the Oracle v. SAP lawsuit concerning claims that SAP employees stole Oracle's copyrighted software by hacking into a website to steal software codes, the parties are preparing for a February 2009 trial. Despite the looming trial date (and the misery of the holidays caused by a February trial) the parties apparently had no intention of attempting to mediate their way into a happy holiday season with their families.  Rather, the Court took matters in hand and ordered counsel and litigants to proceed to mediation.  

Still, the parties resist.

Granted, there are often legitimate means to postpone a mediation -- particularly when information gathering is incomplete and necessary to asses the risks of trial.  But is seems to me that more arm-twisting is necessary to bring IP litigants to the negotiation table than required in most other civil disputes.  

Another case in point.

A few days ago, LeapFrog Enterprises settled an East Texas patent dispute involving devices that allow children to use blocks or other objects to control their computers. The details of the dispute (claims of patent trolling, forum shopping, etc.) can be found on any number of blog sites, including The Prior Art here.  

It was just reported yesterday that the plaintiffs in LeapFrog -- two attorney/inventors -- will share the $7.5 million settlement.  A very good day for plaintiffs.

For present purposes, I note that the settlement occurred, "literally on the courthouse steps in Marshall, Texas, with jury selection 15 minutes away." (quote from the Los Angeles Daily Journal which, unfortunately, requires a subscription to read). 

Again, why the wait? Wouldn't an earlier negotiation with a bang-up IP mediator have made more logical sense, not to mention far greater financial cents.

After all, preparing a patent litigation case for trial in East Texas is not for the feint of heart, or shallow of pocketbook.

Some say the attorneys are to blame -- that they are reluctant to bring a significant IP matter to mediation any earlier because it's "bad for business."  But I'm not that cynical.  And my colleague Victoria Pynchon has to be positively restrained when someone suggests that attorneys, by and large, settle late to maximize the dollar value of litigation.

"That strategy," she says, "is a recipe for client-retention failure and a cynical, not to mention, unsupported libel of some of the most ethical people I have ever had the pleasure to know -- litigators -- particularly those engaged in IP and other sophisticated commercial litigation."

I refuse to believe this explanation as well.

So I'd like to open the floor to our IP litigators to weigh in on this issue:

Why the hesitation to use mediation for complex IP disputes?

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Don't Miss This Talk:  it's Not Long and It's More than Well Worth Watching.

He says:  "let's make  being young legal again."

Here's the description:

Larry Lessig gets TEDsters to their feet, whooping and whistling, following this elegant presentation of "three stories and an argument." The Net's most adored lawyer brings together John Philip Sousa, celestial copyrights, and the "ASCAP cartel" to build a case for creative freedom. He pins down the key shortcomings of our dusty, pre-digital intellectual property laws, and reveals how bad laws beget bad code. Then, in an homage to cutting-edge artistry, he throws in some of the most hilarious remixes you've ever seen.

About Larry Lessig

Stanford professor Larry Lessig is one of our foremost authorities on copyright issues. In a time when “content” is not confined to a film canister, Lessig has a vision for reconciling creative freedom with marketplace competition.

Thanks to Stephanie West Allen of Idealawg and Brains on Purpose for hipping me to this video.

By the way, Larry exemplfies all of the great speaking techniques that I learned from Faith Pincus and Sandy Linville in their "must attend" Public Speaking seminar for WLALA yesterday.

If you don't do anything else for your legal career in 2008, find out where Faith and Sandy are speaking about public speaking -- Faith's site is SpeechAdvice.com -- easy url to remember -- as are all her tips for making you the best speaker at your next speaking event, court appearance, CLE seminar or firm picnic..

I've been speaking publicly, first as a college professor in the mid-80's, then as a NITA coach and then as an Adjunct Law Professor at Pepperdine U. School of Law for more than twenty years. 

Sandy and Faith's half-day seminar yesterday changed my speaking life immediately and forever. 

Don't miss it.

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It is hard for an ADR junkie like me to admit this (and don't spread this around please), but sometimes you just need to try the darned case. I am referring to, in particular, the trademark lawsuit between Internet giant eBay and scent seller PerfumeBay.

The lawsuit was fairly simple.

eBay, naturally protective of its distinctive "Bay" web-moniker when it comes to on-line sales, was none too pleased when "Perfume Bay" (aka "Perfumebay" and sometimes "PerfumeBay" sought to register the Perfume Bay trademark for use in on-line perfume sales.

The fact that "PerfumeBay" actually contained the entirety of "eBay's" name did not help matters.

As an eBay trial witness testified, eBay has a "fragrance section" which moved approximately $6 million in cologne and perfume during a 2-1/2 year period.  eBay was concerned that consumers might confuse PerfumeBay as an eBay affiliate of some kind. Or, it might dilute the eBay name.

PerfumeBay, for its part, argued that the "bay" in its name reflected "a bay filled with ships importing perfumes from all parts of the world and this bay would be the place where perfume lovers could go to locate its selection of fragrances . . . .”

Uh, okay.

In any case, the two parties entered into negotiations to resolve this dispute, without success and apparently without a mediator. There's a rant in this but I'll do that later.

PerfumeBay predictably brought a declaratory relief action in federal court, asking for a ruling that it was not infringing the eBay trademark. eBay prevailed at trial with the court finding a likelihood of confusion based upon survey evidence concluding that 70% of consumers, when faced with the word "Bay" and internet shopping, thought of "eBay."

The Court ordered Perfume Bay to un-conjoin the two parts of its name.

The Ninth Circuit affirmed in part and reversed in part, approving the order forcing Perfume Bay to separate the "e" in Perfume from the "B" in Bay.  

So what does this have to do with ADR?

On the one hand, the parties clearly could have settled this case with an equally good, or better, resolution for both sides. 

On the other hand, eBay possesses something it could never have obtained in mediation or arbitration: precedent, glorious, future-designing precedent, contained in a Ninth Circuit opinion suitable not only for framing, but also for demand letters to any other online company slipping little "e"-big-"B" Bay into its tradename.

For the price of a single trial, eBay earned itself a great tool for dominating the online market, one that shoud effectively dissuade other internet marketers who might have been thinking of climbing onto the eBay wagon as a portal to successful online sales.

Maybe that's why the names "WineBay" and "GameBay" are still available in the url market.

By NOT using an ADR process to resolve this dispute, eBay will, in the long run, likely save considerable grief, conflict, and legal fees.

It's difficult for an ADR junkie to admit this, but sometimes -- very rarely, I submit -- when important public policy issues are at stake or when precedent is needed to resolve likely future disputes, the alternative dispute resolution of the future -- litigation -- is often called for.

If you are interested in Perfume Bay's take on all this, the company's owner, Jacquelyn Tran, has a blog of her own at here.  Jacquelyn vows to continue the fight to the Supreme Court, stating:

This battle has been exhausting and expensive, but I refused to give up. Too often, Goliaths are victorious in these types of battles. I am fighting for small businesses everywhere, for our more than 300,000 customers (YOU!), and for my American Dream.

Coverage of this matter along the way has been provided by DomainNews.com here; the IP News Blog here; and a helpful article on How Entrepreneurs Can Survive Trademark Lawsuits here. 

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(photo:  Get Out of Jail Free Card by Mark Strozier)

Because there are criminal penalties for copyright infringement, the question whether the Plaintiff can agree to withdraw criminal charges in exchange for a civil settlement is often raised in an IP mediator's practice.

I am reminded of this issue by today's New York Times article "Insurer Sues Over Mississippi Inquiry."  As the Times reports:

State Farm Insurance is suing Mississippi’s attorney general, accusing him of violating an agreement to end a criminal investigation of the insurer’s handling of claims on the Gulf Coast after Hurricane Katrina, according to court papers unsealed Friday.

State Farm’s lawsuit claims that the attorney general, Jim Hood, reopened a criminal investigation of the company and its employees “for the purpose of harassment” and to coerce the insurer into settling civil litigation spawned by the Aug. 29, 2005, hurricane.

State Farm says Mr. Hood agreed in January to end his office’s criminal inquiry as part of a settlement agreement that called for the company to reopen and possibly pay thousands of policyholder claims.

State Farm suing Mississippi for failing to honor an agreement to drop a criminal inquiry in exchange for the settlement of civil claims?  

I must be missing something because the settlement sounds unethical and the lawsuit without merit because civil claims were settled in exchange for the termination of a criminal investigation.  (the first attempted settlement is reported by the Mass Tort Litigation Blog in Birmbaum, Scruggs and the Katrina Settlement here).

In California, the State Bar Committee on Professional Responsibility and Conduct has expressly opined that "An offer to dismiss a criminal prosecution may not be conditioned on a release from civil liability because that practice constitutes a threat to obtain an advantage in a civil dispute in violation of the Rules of Professional Conduct." (See Formal Opinion 1991-124 here)

Looking into the issue a little more deeply in the context of copyright infringement litigation, I found this excellent Manual -- Prosecuting Intellectual Property Crimes prepared by the U.S. Department of Justice containing this useful Chapter on Ethics and Obligations.

In regard to the question whether it is ethical to drop criminal charges in exchange for a civil settlement, the DOJ advises that the answer is "unclear."

X.B.2.a. Victims Who Seek Advantage by Threats of Criminal Prosecution

It is commonplace for an IP-owner's attorney to send a merchant a letter directing him to cease and desist sales of infringing merchandise. If the merchant continues to infringe, the letter will be solid evidence of the defendant's mens rea during any ensuing criminal case.

Sometimes the IP owner's letter will include an express or implied threat to seek criminal prosecution should the merchant persist. The extent to which a lawyer can ethically threaten to press criminal charges to advance a civil cause of action is not clear.

The lack of clarity stems in part from a patchwork of ethical rules. The ABA's Model Code of Professional Responsibility (1969, amended 1980) explicitly prohibited strategic threats of prosecution: “A lawyer shall not present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter.” Disciplinary Rule 7-105(A). The ABA's Model Rules of Professional Conduct, adopted in 1983, omitted the rule as redundant or overbroad or both.” See ABA Formal Ethics Opinion 92-363 (1992) (allowing a lawyer to use a threat of a criminal referral to obtain advantage if the civil claim and criminal matter are related and well-founded).

Not all states have dropped the old rule, and some have adopted other specific provisions addressing the issue. Compare Office of Disciplinary Counsel v. King, 617 N.E.2d 676, 677 (Ohio 1993) (disciplining a lawyer under the old rule for threatening to seek prosecution unless opponent in property dispute paid disputed rent or vacated the property) with Disciplinary Rule 7-105(A) (Or. 2003) (allowing such threats “if, but only if, the lawyer reasonably believes the charge to be true and if the purpose of the lawyer is to compel or induce the person threatened to take reasonable action to make good the wrong which is the subject of the charge”).

This is a tricky area and one all IP counsel are advised to research prior to negotiating the termination of civil proceedings when criminal charges are also pending.  If you, like me, are fond of "templates," take a look at this negotiated Permanent Injunction settling the civil pretexting case brought agaisnt Hewlett Packard by the State of California. 

Note that the Attorney General's Press Release announcing this $14.5 Million Civil Settlement -- earmarked to help "Law Enforcement Efforts to Fight Identity, Intellectual Property Theft" -- expressly cautions that 

The filing and settlement of the civil complaint have no effect on the criminal case, which remains pending against all five defendants in Santa Clara County Superior Court.  

UPDATE:  Thanks to the Mass Tort Litigation Blog for Professor Erichson's generous and thoughtful post on the civil settlement/criminal prosecution ethical question -- link in comment below-- and for hipping us to David Rossmiller's post (including extensive links to the court documents) on the facts of the matter in his Insurance Coverage Blog  post State Farm Sues Mississippi AG Hood.  

From Rossmiller's post on this issue and many others I have read, I have to tell you that Rossmiller's Blog is the only one anyone concerned with coverage really needs to read.  I must also admit that anyone who says that "work is the curse of the blogging class" has captured my heart as well as my mind.

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(photo:  Victory is Mine! by Rentahamster)

Just a note for the moment when you need to convince your client that it's time to settle the patent litigation.  

No, I'm not suggesting you tell them about the potential for a patent malpractice action (this one in the news to tell us that patent malpractice litigation must be waged in federal, not state, court).

I leave the analysis of the case law to Patently O's coverage here.  My purpose is simply to remind everyone of just how endless patent litigation can be.  

First the patent litigation.  Then the motion to arbitrate some portion of that litigation.  Motion denied.  Appealed.  Reversed.  Litigation stayed.  Arbitration hearing conducted.  Decision made.  Reconsidered.  Rehearing.  Decision.  Litigation re-opened.  Trial.  Appeal.  Reversal.  Remittitur.  Retrial.  Final judgment. 

Then the malicious prosecution action. 

And if we're really really really unlucky, the patent malpractice litigation. 

Breathe in you win, breathe out you lose, breathe in, breathe out . . . . . wouldn't you really rather control your own destiny?

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(photo Quiet Please by Ian Grainger)

Post by Michael Young

Speaking of mediation confidentiality, there's a new horrible "opinion" from New York that is making the rounds in the ADR community. While in the context of a divorce case, the opinion could have ramifications for all New York mediated disputes, including IP cases.

But let's hope not.

In the one paragraph Hauzinger v. Hauzinger "opinion" (and I use that term generously, I'd prefer "mistake"), the Supreme Court of New York, Appellate Division, upheld a trial court order compelling a mediator to testify in court. While facts are sketchy, it appears that the mediator did nothing more than assist a divorcing couple negotiate a separation agreement, all pursuant to a signed confidentiality agreement.

After the mediation was concluded, one of the parties challenged the separation agreement in court.  New York law required the trial judge to determine whether the terms of the separation agreement "were fair and reasonable at the time of the making of the agreement." To prove this, the moving party subpoenaed the mediator to obtain his testimony about the confidential mediation negotiations.  

The appellate court's affirmance of the trial court's order requiring the mediator to testify was bad enough.  More troubling is the absence of any analysis to support this decision.  The "opinion" merely states that the Court rejected the mediator's contention "that the court abused its discretion in refusing to enforce the confidentiality agreement...."

Though providing no rationale to reject the mediator's adherence to the parties' agreement, the Court did state that its decisioon was "a matter of public policy,"  citing another one-paragraph opinion of the New York Supreme Court appellate division in which the court upheld the confidentiality of a mediation report pursuant to the parties confidentiality agreement.

Where is the discussion on the importance of mediation confidentiality to the entire mediation process? Where is the recognition that by simply ignoring mediation confidentiality, despite the parties' clear acknowledgment of confidentiality at the time, the court is undermining all future mediations in the State? How about an explanation for why this unspecified "public policy" is so important that it outweighs another appellate division's recognition that strong "public policy" favors keeping mediations confidential?  How about a citation to a precedent that supports the court's conclusion, rather than to authority that completely contradicts the ruling.

Any New York attorneys out there who can explain this to me? I would welcome your comments, because I just don't get it.

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(right:  Working by Mark Menzies)

Thanks to PHOSITA for introducing us to the Financial Aspects of Intellectual Property Blog whose current post is music to our IP ADR ears -- Business Strategy is Intellectual Property Strategy.

This recent post is right in line with our experience faciliating the negotiation of deals constructed in part to settle IP claims or litigation. 

We say "in part" because negotiated resolutions of IP litigation can serve as a doorway to the negotiation of a business deal that is far broader and further reaching than any result the parties could have achieved in Court.  

We're not alone in thinking this.  the FAIP Blog reports:

• Almost 70% of executives believe IP management is too often treated as a legal, not a strategic issue.
• Over 60% of executives believe current accounting practices understate the value of IP.
• Over 80% of royalty agreements are under reported.
• Over 60% of executives believe their companies could extract significantly more value from existing IP and IP formation if it devoted more assets and attention to relevant processes. 

We're pretty certain that some of the latter statistics arise from the first, i.e., that IP isn't achieving its potential because it is "too often treated as a legal, not a strategic issue." 

The truth is that IP is both a strategic and a legal issue.  It should therefore be treated as such by in-house and outside counsel in collaboration with strategic management personnel.

IP litigation is booming.  That's good news for IP llitigators but bad news for companies whose value lies primarily with their control of their creative property.

Collaboration and reciprocation are the watch-words of the internet.  The 21st Century is as much the century of the internet as the 20th Century was the century of industry.  That means 21st Century business and legal process will be required to move in the direction of collaboration and reciprocation and away from the current adversarial paradigm. 

That's a very very good thing for innovation and the law.

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(photo:  Sun Pavilion in Second Life)

When Law.com writes about open-source software, patent litigation, and blogging, we can't help but weigh in.    See Is Fighting Your Patent Case in Public Really a Good Idea?

The IP ADR's Patent Hero has been Sun Microsystem's CEO Jonathan Schwartz ever since he coined the phrase "innovate, don't litigate" in his famous "Advice for the Litigious" post.  Our esteem grew when he invited the opposition over to dinner -- "I'll cook, you bring the wine."

The only way that dinner invitation might have been more forward-looking would have been to include a mediator who could not only have brought the desert, but also the cloak of confidentiality for mediated conversations which are quite robustly protected in California by Evidence code section 1119 et seq. 

But we digress.

Now people (read:  lawyers) are questioning  the wisdom of blogging major patent litigation.  Those bloggers are pretty high-profile players in the tech market -- Dave Hitz, co-founder of NetApp on the one hand and Sun GC Mike Dillon and CEO Jonathan Schwartz on the other.

The concerns being expressed are the common ones

• CEO and GC comments could be "used as evidence down the road." (Stephen Yu, Macrovision GC).  
• GC comments risk the waiver of the attorney client privilege
• CEO remarks might broaden the scope of a deposition into matters that might not otherwise be "relevant" (these last two concerns raised by Edward Reines, a Weil, Gotshal & Manges partner representing NetApp).

Litigator George Newcomb of Simpson Thacher, however, brings to mind Google CEO Eric Schmidt's comment that patent litigation is just one "chip" in the "negotiation being conducted in the courts."  Although Newcomb would also advise his client not to publicly talk about litigation, he wisely notes that the potential "damage," if any, would be negligible because Sun's and NetApp's blog entries "had very little to do with the litigation -- [having been] directed at the tech community," i.e., the marketplace, which is where business lives.  

Because These New Litigation Players are Not Cautious by Nature and Their Patent Litigation will Likely Be Settled, They are Right to Be More Concerned about Their Market than their Potential Legal Liability

Lawyers are cautious by and large.  Even the best of us are risk-averse, taking jobs  upon the completion of Ivy League Law School educations.  Well-paid jobs, but jobs nonetheless. With a lot to lose if those jobs evaporated because of a misplaced modifier.  Hence the caution.  

Dillon, Jonathan Schwartz and Dave Hitz, on the other hand, are not cautious.  They are, however, savvy.  Hitz, for instance, took time in his blog to assure his customers and his work force that Sun's lawsuit would not leave employees jobless nor customers without support..  In response to Sun's request for a permanent injunction, Hitz wrote, among other things,

Your job is safe. Our products are all still for sale.

Can you ever remember a Fortune 1000 company being shut down by patents? It just doesn’t happen! Even for the RIM/Blackberry case, which is the closest I can think of to a big company being shut down, it took years and years to get to that point, and was still averted in the end. I think it’s safe to say the odds of Sun fulfilling their threat are near zero. 

Will this end up hurting Hitz in the litigation?  I cannot imagine a scenario in which any trial lawyer would stride toward the jury waving the printed blog entry in his hand saying "he assured his employees and customers that NetApp would survive, ladies and gentlemen!"  

The Problems Litigation Brings and Their Potential Solutions

Sun and NetApp have more in common than than they have apart.  Their management also seems committed to avoiding litigation if possible.  Once litigation begins, however, the parties stop communicating in a constructive manner and fall prey to all of the cognitive biases that an active dispute magnifies. 

• they search for and interpret information in a way that confirms their own factual and legal positions ("confirmation bias")
• to preserve their freedom of choice in the face of a coercive threat, they do the opposite of what their "opposition" wants them to do -- whether it's a good idea or not ("reactive devaluation")
• they see patterns of wrong-doing where none exist ("clustering illusion")
• they overestimate their likely chances of success ("overconfidence bias")
• they overestimate the harm they will likely suffer (in duration and effect) if they don't get what they believe they might be entitled to ("impact effect")
• they tend not to compensate for their own cognitive biases ("bias blind spot")

(For an excellent article on how biases such as these interfere with our ability to resolve conflict, see Judgmental Biases in Conflict Resolution and How to Overcome Them by Kellogg School of Business Professor Leigh Thompson and Janice Nadler, summarized at BeyondIntractability.org here.)

The best reason to bring a mediator into a patent dispute at an early stage, especially for companies that have so much at risk in the marketplace, is that the tech market and its products change more rapidly than the legal process can move. 

There are lots of truly gifted patent infringement mediators out there who understand both the law and the market.  Although a few of them appear on this site, there are many, many more who can help attorneys and executives negotiate a better business deal than the blunt instrument of litigation could possibly deliver.  I'm sure Sun, NetApp and their counsel all have short lists of these specialist mediators in hand.

Eventually, after a year or two or five, during which time the parties collectively expend several tens of millions of dollars in attorneys fees, Sun and NetApp will hire a mediator anyway. 

With so much at stake, why not start now?  I'm sure the mediator, whoever s/he is, will be happy to bring the desert.

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(no, the photo is neither Mark nor James, but some stock photo kid celebrating his first birthday, re-published here in full compliance with the terms of use, officer)

I, for one, wouldn't touch the name "Drug and Device" for anything in the world. 

But maybe that's just the kind of place  my mind goes to.

And here's what's truly great about Drug & Device's First Birthday Wish to Itself -- it says everything you need to know about how to blog and why to blog when just the other day you were using an ink-pot and quill pen.

Want to have reporters calling you for your learned opinion?  Admittedly, Mark Herrman of Jones, Day was already as close to being a legal celebrity as you can get without wearing cowboy boots and a ten-gallon hat.  He is, after all, the Curmudgeon whose advice riled up an entire generation of young associates on the Wall Street Journal law blog here, here, here, here, and here.  But you can still take to heart his Happy Birthday post advice that law blogging can get you quoted in places like NPR, the New York Times and the like. 

We "know" Mark -- not in the Biblical but in the blogger-sense, i.e., we've never actually met him or even talked to him but we like him a lot because we've gotten to know him in a writerly kind of way.  Mark's the sort of guy whose mind won't go places where others might when confronted with the words "drug and device."  And yet he's a funny, funny guy, at least to those in my generation from whose sensibility the Curmudgeon's Guide is written and to whose sensibilities it is directed. 

When the kids now making a cool $200K in their first year of law practice (assuming those bonuses flow in) hit Mark's and my age, they'll be curmudgeons too and we'll be in the rest home.  We figure that maybe you all will drop by once in awhile because we were not only early blog adopters, but we let you blog too.       

I don't know Mark's blogger-in-crime James M. Beck, counsel in the Philadelphia office of Dechert LLP.  But he's a published author and witty ranconteur as well (is that redundant?) and likely as learned and pleasurable a read as Mark is.

So just as soon as I start mediating cases involving either drugs or devices, I'll start reading their blog on a regular basis.  

HAPPY BIRTHDAY GUYS!!!

MIGHTY GLAD TO HAVE YOUR COMPANY IN THE BLOGOSPHERE!!

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NEVER LEAVE VALUE ON THE BARGAINING TABLE AGAIN!

Head's up!!  Vonage and Verizon settled their patent dispute using only two settlement techniques well-known to your transactional colleagues but rarely used by litigators.  There are dozens more like this, many of which you may be familiar with but few of which you ever attempt to use.

Let some masterful settlement judges (Complex Court Assistant Supervising Judge Victoria Chaney and full-time Settlement Judge Alexander Williams, III) and highly respected mediators and arbitrators teach you how to use these techniques to get a settlement that's nearly as good as actually winning the case.

We've also added a negotiation and mediation ETHICS section to the course so that those of you who need those credits by year-end can get them.

If you read this blog, you are officially a "friend or colleague of the speakers" and are entitled to a 20% discount on our day-long Winning Settlement Techniques Seminar.  In addition to Judges Chaney and Williams; former Federal Magistrate John Leo Wagner, Patent Arbitrator and Mediator Les Weinstein, and Arbitrator and Law School Professor Jay McCauley will bring you the techniques necessary to settle and make your clients very very happy at one and the same time.  

Your blog-reader coupon code is S3SETL. Enter in the coupon code when you register on-line and receive 20% off the registration price.

Register here now.

The fomal course description below:

Settlement Techniques that Give You the Winning Edge

Novice and seasoned litigators will learn to maximize the value of their litigation positions by learning winning settlement techniques from a panel of seasoned ADR experts.

Experienced mediators and Judges teach the latest settlement techniques, such as distributive (splitting the settlement “pie”) and integrative or interest-based (expanding the settlement “pie”) bargaining. Topics also include the dynamics of conflict resolution, settlement best practices, negotiating techniques, settling complex and patent litigation cases, and international disputes. Don’t miss this chance to hear from those who truly know -- how you can best maximize your client’s settlement opportunities and outcomes.

What You Will Learn if You Attend This Seminar

• The ten social psychological insights that will minimize your own self- defeating negotiation behavior and maximize your opponents’ bargaining weaknesses (preview here)

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

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

• The ten ways to get your case settled to your clients’ best advantage at Mandatory Settlement Conferences for both routine and “bet the company” cases

• The Top Ten Errors Made by Parties When Attempting to Settle Disputes that their Contracts Require Them to Arbitrate

• The Ten Rules of Cross-cultural negotiation in International Arbitration

• The Ten Laws Critical to the Enforcement of Mediated Settlement Agreements

• The Ten Mediation/Settlement Conference Traps for the Unwary (preview here)

Instructors

Hon. Victoria Chaney--Assistant Supervising Judge, Complex Litigation, Los Angeles Superior Court

Hon. John Leo Wagner--ADR Neutral/Hearing Officer, Judicate West

Hon. Alexander Williams, III – Judge, Los Angeles Superior Court, presiding over the full-time Settlement Court

Les J. Weinstein--AAA Arbitrator and Mediator, Patent and Antitrust Attorney

Jay McCauley--Hearing Officer, Dispute Resolution Provider, Judicate West

Victoria Pynchon--Complex Commercial Mediator, Settle it Now


November 13, 2007 - Los Angeles

Check-in: 8:30 - 9:00 a.m.

Seminar: 9:00 a.m. - 4:30 p.m. (Lunch on your own)

Wilshire Grand Hotel

930 Wilshire Blvd.

Los Angeles , CA


Pincus Communications certifies that this seminar has been approved for 6.0 MCLE credits and ethics credits will be given.

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The Washington Post reports today that Patent Deal May be Charitable Agreement.  Excerpt below:

Patent disputes rarely end up helping charities, but two local organizations could get sizable donations from the resolution of a year-long legal battle between Verizon and Vonage.

As part of the settlement reached last week between the two companies, a total of $2.5 million will be given to five educational nonprofit organizations, two of which are based in the District [of Columbia].  . . . .

If Vonage loses its rehearing on either of the patents in question, it will pay $120 million, including $2.5 million for the charities. If it wins, it will pay Verizon $80 million, and nothing will go toward charities.

Both companies said the idea of giving money to charities came up during settlement negotiations.

This settlement takes advantage of two settlement tools that every lawyer, IP or not, should have in his/her negotiation tool box.

The first tool is the use of contingent agreements to hedge against gains or losses that can only flow from future events.  Here the parties made both the charitable contributions and the higher Vonage pay-out contingent upon Verizon defeating Vonage's motion for rehearing on either of the two patents at issue.  

As M.I.T. and Harvard Professor Lawrence Suskind has written in Why Technology Negotiations are Different: 

One novel way to accept uncertainty is through contingent agreements—promises that negotiators add to a contract to reduce risk. An agreement might include a table that accounts for many future scenarios, including different prices, deadlines, and obligations to perform.

Contingencies add complexity and incur the wrath of general counsel; they also make it difficult to book the value of the deal (and allocate bonuses) when the agreement is signed. Nevertheless, when uncertainty is high, parties will be best served by spelling out "who gets what" under a variety of scenarios.

Contingent agreements in the litigation context are also used to control for uncertainty.  Here the parties are wagering on the Court's decision on Vonage's upcoming motion for a rehearing on either of the two patents at issue.  And you thought gambling was illegal in our nation's capital./*

This agreement also builds in whatever tax advantages and benefits to corporate good will that flow from making charitable contributions.  These corporations likely have already planned their charitable giving for the year and may well have "re-purposed" those funds to help them settle the litigation.  

I rely on any tax expert who drops by this post to answer the question about the tax benefits that would flow from this agreement.

There is one thing I can tell you as a full-time mediator. 

The next time you're engaged in litigation with this much at stake, ask Vonage or Verizon who it is that brokered this deal.  It's not rocket science, but it shows a level of creativity and ability to persuade that is frankly rare.  I, for instance, have suggested charitable contributions and contingent agreements on many occasions.  I have not, however, succeeded in convincing the parties that they make good sense. 

So I defer to and tip my hat in praise of the mediator and negotiators who can later tell some great war stories about how this deal ended up on the pages of the Washington Post.

Good work!

___________________

/*  Note:  most states and the District of Columbia outlaw wagering on games of chance, not on games of skill.  

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When Fulbright and Jaworski recently surveyed a broad range of senior corporate counsel on Litigation Trends, the vast majority responded that the "most impressive deed by outside counsel in the past 12 months" was "winning a case."  

The "what have you done for me lately stats" in order of their impressiveness to Fortune 50 GC's and executives are as follows:  :

WON A CASE: U.S. 32%; U.K. 50% 
SETTLED A CASE: U.S. 15%; U.K. 25%
BUSINESS TRANSACTION: U.S. 12% (no U.K. figure available)
HAD CASE DISMISSED (the litigators' holy grail) U.S. 13% (no U.K. figure available)
GOOD SERVICE U.S. 13%; U.K. 25%
GOOD AVICE: U.S. 4% (no U.K. figure available)
OTHER: U.S. 11% (no U.K. figure available)

How to make settling as good (or better!) than winning in tomorrow's post.

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(above, art imitating the truth -- Billy Flynn: Would you please tell the audience... err... the jury what happened? -- Razzle Dazzle from Chicago)

Why are we back to the "B's" and more particularly, why are we back to BATNA?

Because I've been mediating more "pure money" cases lately and recalling for my litigants the central fact of settlement life.

IF YOU'RE NEGOTIATING THE SETTLEMENT OF A LAWSUIT, YOUR "BETTER ALTERNATIVE TO A NEGOTIATED AGREEMENT IS A JURY VERDICT."  PERIOD.  END OF STORY.

This is why we're so happy to have found a new legal blog called Deliberations, which is all about the psychology of jurors; what they like; who they'll hate; what their predilictions and pre-dispositions are and how you and your clients might be able to influence them to decide the case in your favor.

As the Jury Research people teach us (here, by the way are two of the best jury consultants in Southern California, if not the nation, Chris St. Hilaire of M4 Strategies and Tom Bernthal of Jury Insight -- see the recent $15 million verdict largely credited to Bernthal's efforts) the jury is not comprised of your law school class, your university friends or even your high school classmates.   

Who is it composed of and how do they think?  That's the problem.  You and I -- no matter how down to earth we believe ourselves to be -- have NO IDEA. 

This week, however, Deliberations helps us out by telling us just how many jurors will likely be struggling with alcoholism and drug addiction in their families when we voir dire them and by pointing us to this great NPR (must read) quiz on the American Jury System.

The author of Deliberations, Anne Reed, a trial lawyer and jury consultant at Reinhard, Boerner & Deuren in Milwaukee, recently suggested to me that trial lawyers, jury consultants and mediators "might have something in common."  

Oh yes.  YOU -- trial lawyer, jury consultant, jury -- are the other side of my equation.

YOU ARE MY DISPUTANTS' BATNA.

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(right, from car-toon-studio, just in time for halloween, a dementor)

Straight from Slashdot's mouth to IP ADR's ear we get the very truth from IBM about its plan to corner the market in marketplace bullying with its Patented Protection Racket.  

It boggles the imagination. 

So what is ADR about this? 

ADR is soul, man.  And IBM, for reasons known only to someone in legal, wins the monthly IP ADR anti-soul prize.  I.B.Dementor.M.

Read on . . .

Wikipedia defines a protection racket as an extortion scheme whereby a powerful non-governmental organization coerces businesses to pay protection money which allegedly serves to purchase the organization's 'protection' services against various external threats. Compare this to IBM's just-published patent application for 'Extracting Value from a Portfolio of Assets', which describes a process by which 'very large corporations' impress upon smaller businesses that paying for 'the protection of a large defensive patent portfolio' would be 'a prudent business decision' for them to make, 'just like purchasing a fire insurance policy.' Sounds like Fat Tony's been to Law School, eh?

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(right:  Google CEO Eric Schmidt conjuring the 22nd Century)

Thanks to Ron Coleman of Likelihood of Confusion for passing along this gem from the The Trademark Troll on the S&L Vitamins case:

Almost every case involving the sale of unauthorized but genuine goods is a case where a brand owner is asking the courts to become an enforcer for the brand owner - against the brand owner’s own customers!!…

This brings to mind Jonathan Schwartz's brilliant post Free Advice to the Litigious which spawned our blog category Innovate, Don't Litigate.  This short tale from Sun Microsystem's CEO can't be repeated often enough: 

Years back," he writes, "Sun was under pressure in the market."

Although many users loved our core Solaris operating system, others thought it was built for high end computers, not grid systems. Our computer business had failed to keep pace with the rest of the industry . . . . [W]e gave customers one choice - leave Sun. Many did. Those were the dark days.

Where did they go? They went to GNU/Linux, a free and open source operating system built by a growing community, running on x86 systems. Why? Because the pair ("Linux on a whitebox") delivered, then, better grid performance, with more flexibility. We didn't erect barriers to exit, we promoted customer choice. Even when it cut the wrong way, as it did here. And yes, it hurt.

Was litigation a solution? It was suggested as one:

With business down and customers leaving, we had more than a few choices at our disposal. We were invited by one company to sue the beneficiaries of open source. We declined. We could join another and sue our customers. That seemed suicidal. . And we were encouraged to innovate by developers and customers who wanted Sun around, who saw the value we delivered through true systems engineering.

So we took that advice. . . . We redoubled our focus on innovation, in hardware and software, that would differentiate our offerings. Not just as good as the competition, but vastly better. . . . 

In essence, we decided to innovate, not litigate.

If "Our business Models Are melting Down Around Us," Should We Be Attempting to Freeze Them at the Very Moment in History When They Are About to Revolutionize Our Lives?

Schwartz is not alone in singing the innovation song.  Bruce Nussman advised CEO's this summer to Be Designers, Not Just Hire Them with this explanation.

There are moments in history when the pace of change is so fast and the shape of the future so fuzzy that we live in a constant state of beta.

I mean, let’s face it, our business models are melting down around us, our personal careers are morphing—or disappearing-- and there is less certainty about tomorrow than at any other time in our lives.

Innovation is no longer just about new technology per se. It is about new models of organization.

Design is no longer just about form anymore but is a method of thinking that can let you to see around corners. And the high tech breakthroughs that do count today are not about speed and performance but about collaboration, conversation and co-creation.

Could We Kill Internet 2 and 3.0?

All of this makes me wonder how misguided it might be to prevent the consumer-innovators of internet content sharing sites like YouTube from using, sharing, downloading, mixing, ripping, and burning the content that made YouTube what it is in the first place -- one of the most valuable internet sites on the planet in a mere eighteen months.

I am not the only one who has had this thought, of course.  None of this wild proliferation of creativity could exist had it been planned and controlled by a single corporate or governmental entity.  The internet -- and everything on it -- has arisen in relationship to and as a result of everything else.  No one can truly claim authorship.

Will demanding our "rights" to control our creation kill the creator, i.e., the collective consciousness that built the internet?  

Another innovator (brought to us by Coleman in Google Tumult via a Tech Crunch Post about  Attributor) CEO Jim Brock, has an answer -- snippet below:

If you are playing whack-a-mole and remove something from one site, it will appear somewhere else. Web-wide visibility is what publishers want. . . Smart publishers recognize that the blogosphere is the greatest promotional medium ever created.  . . A lot of publishers are holding back . . . they are fighting digitization. We’d like to see it set free.

While We're At It, A Little Propaganda About Net Neutrality Below

Customers seeking new information and innovative solutions to business problems often meet their needs by internet downloading and online file sharing.  Unfortunately, these activities attract viruses that can corrupt computer data.  For this reason, every strong marketing network requires a comprehensive computer backup solution to recover misplaced or lost data. The data recovery group is a complete data recovery package that focuses on recovering data from computer hard disks.  Of course, high-quality recovery hardware is useless without excellent data recovery software. With the help of disaster recovery application or windows backup software, a company can maximize its recovery hardware output to avoid market fallout caused by viruses.

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First Let's Talk About Anger

Please raise your hand if your clients -- corporate clients -- are angry about the burdens of litigation.  Irritated with the document "demands" and interrogatories.  Frustrated about the e-discovery.  Ticked off at the way opposing counsel asks them questions as if they're lying.  Hot under the collar about the mounting attorneys' fees and the distance between the day suit was filed and the probable day on which a trial might eventually be scheduled.  Simmering about the time the litigation consumes, time they'd prefer to be spending doing their actual jobs -- planning for and implementing business strategies for a profitable future instead of fighting about the unprofitable past.    

And we're not even talking about your clients' anger at the defendant who has stolen their intellectual property or that of the company they work for.  And if you believe that powerful people in highly sucessful and profitable businesses do not fear that litigation might hurt their careers, follow the Qualcomm/Broadcom e-discovery story and the fate of its general counsel for a little while, here, here and here.  

Why I'm Talking About Anger

Dealing with anger is my job.  As a negotiation coach, mentor, facilitator, and mediator, I need the parties to intellectual property litigation to be thinking as clearly as they possibly can when challenged to settle an important piece of litigation.  Everyone arrives at the mediation in some degree of anger -- from mild irritation to controlled rage.  Because anger tends to prevent the parties from thinking clearly and from sharing information that would dramatically increase their ability to achieve the best possible negotiated resolution, I'm usually called upon to help the parties move from hostility to collaboration.  

So What's "Fundamental Attribution Error"? 

Social scientists who study the reasons people act the way they do have discovered something fundamental about the way we explain to ourselves the behavior of others.  What researchers have found is that whenever someone else's behavior causes us harm, we tend to assume that person intended to cause us the harm we experience or, at a minimum, caused us harm by virtue of their carelessness in regard to our well-being.       

If our spouse arrives home late on the evening we've scheduled an outing with our friends, we'll  reflexively blame their tardy arrival upon their desire to thwart our plans or their careless planning.  Our spouse, on the other hand, will reflexively ascribe his late arrival to traffic conditions.  Though both spouses might be at least partially right, the injured spouse will almost always ascribe her harm to her husband's intentional or careless conduct and the injury-causing spouse will almost always ascribe her harm to the traffic or the weather or an unexpected but necessary business obligation.

Why do we make this error in our dealings with others?  Because we crave control.  If we attribute the cause of our harm to the intentional or careless conduct of the person who harmed us, there is some chance that we can convince them -- by way of "punishment" for their misdeeds -- not to do it again.  If it's really not their fault, there is no way we can prevent a similar occurrence from taking place in the future.     

So What Does FAE Have to Do With Settling IP Litigation?

First, FAE makes us angry, preventing us from thinking as clearly as possible.  

Secondly, FAE prevents us from seeing "our own part" in the conflict at hand.  This latter effect has been found by researchers to prevent athletes, for instance, from finding and addressing the causes of their substandard performance.  Why?  Because in ascribing their substandard performance to the fault of others, they fail to search for and find those causes over which they have actual control, i.e., the errors they are making that cause them to fail.

When Everyone is Able to Give Everyone Else the Benefit of the Doubt, Tension Eases and the Parties Can Work on Their Mutual Problem Collaboratively and Effectively.

Now that you know about fundamental attribution error, you can never again be quite so perfectly certain that your righteous indignation is justified.  You might just be able to give your opponent the benefit of the doubt.  He is not the malicious, cheating liar you believe him to be.  And you are not the saint upon whom harm has been imposed without any fault of your own.

Most people are so certain that the conflict to be resolved is the other guy's fault that they can't even begin to see that resolving the dispute is a mutual problem that is best resolved by way of collaboration rather than further posturing, hiding evidence and "spinning" one's tale of loss, injury and innocence.

Because I could write an entire book on this subject, I think I'll just stop there and let you and your clients ponder it for a little while.  It may sound ridiculous, but learning about FAE made all of my relationships much better almost immediately. I think understanding it might help my readers out as well.

For other law- and business-related blogs addressing FAE, click here, here, here, here and here.

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This post is brought to you by the letter "I" for Innovation.

Thanks to BlogRiot for the post here with designer's statement and Stumble Upon for taking me places I've never been before!  If you can avoid the StumbleUpon addiction, you may add "stumbling" to your list of "productive procrastination"  techniques.  It could be worse.  You could be watching television or suing someone for patent infringement.

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(right:  Avon Anew, the microdermabrasion product at issue)

Although there are many reasons to read the Ninth Circuit's recently reported opinion in Rhoades v. Avon Products, Inc. (full text here) we limit ourselves to the Court's discussion of the admissibility into evidence of statements made during settlement negotiations to prove facts necessary to demonstrate the existence of a federal "case or controversy."   

Very briefly, the Circuit Court in Avon reversed the District Court's dismissal of its competitor's trademark infringement action based upon defense contentions that:  (1)  no constitutionally sufficient case or controversy arose from threats to bring an infringement action during four years of settlement negotiations;  (2) existing TTAB proceedings justified dismissal of the action based upon the doctrine of primary jurisdiction; and, (3) the court properly exercised its discretion under 28 U.S.C. § 2201 in declining to assert jurisdiction.

Threats Made During Settlement Negotiations Are Admissible to Prove the Plaintiff's "Real and Reasonable Apprehension that It Will Be Subject to Liability if It Continues to Manufacture its Product."

As the Circuit Court explained, although “a simple opposition proceeding in the Patent and Trademark Office generally will not raise a real and reasonable apprehension of [an infringement] suit,” there are circumstances where notices of opposition can "create [such] apprehension . . . " 

In this case, instead of relying upon TTAB proceedings, however, Plaintiff cited "three alleged threats of a trademark infringement action in federal court."

Because these threats were made during the course of settlement negotiations, the defendant claimed they were not admissible in evidence to prove the necessary prerequisite to jurisdiciton in the District Court.

The court disagreed, holding that Federal Rule 408 did not restrict the use of litigation threats made during (and pursuant to) ongoing settlement negotiations.  We quote the Court at length here for the benefit of practitioners for whom the boundaries of the settlement negotiation confidentiality rules are critical. 

The text of the rule is clear: evidence from settlement negotiations may not be considered in court “when offered to prove liability for, invalidity of, or amount of a claim that was disputed
as to validity or amount, or to impeach through a prior inconsistent statement or contradiction.”

Rule 408, however, does not bar such evidence when “offered for [other] purposes
. . . ” [citation omitted] . . . [S]tatements made in settlement negotiations are only excludable under the circumstances protected by the Rule. 

Here, [defendant] does not rely on the threats in an attempt to prove whose trademark is valid, or to impeach Avon. Instead, it uses the threats to satisfy the jurisdictional requirements of an action for declaratory relief. This is perfectly acceptable under Rule 408. . . . .

Avon makes much of the “policy behind” Rule 408, as if any recognition of statements made during settlement will ruin the “freedom of communication with respect to compromise” that the Rule protects. [citation omitted] Yet the Rule, by its own terms, is one of limited applicability. . . . Rule 408 is designed to ensure that parties may make offers during settlement negotiations without fear that those same offers will be used to establish liability should settlement efforts fail. When statements made during settlement are introduced for a purpose unrelated to liability, the policy underlying the Rule is not injured. 

Id. (emphasis supplied).

The Result Would Be the Same if the Threats Had Been Made During a Confidential California Mediation Proceeding.   

If the defendant's threats to bring an infringement action were made during a confidential California mediation proceeding, they would not be admissible in a California court for any purpose.  Unlike rule 408 or its California counterpart, CCP section 1152, the provisions governing the confidentiality of mediation communications are not limited by their own terms.

Under several recent federal decisions, however, they would likely be admissible for the purpose of determining the existence of a "case or controversy" under federal law.

The District Court in ABM Indus., Inc. v. Zurich Am. Ins. Co. (N.D. Cal. 2006) 237 F.R.D. 225, for instance, permitted the plaintiff to amend its complaint to allege bad faith settlement practices based upon the insurance carrier's conduct in the course of a California-based mediation.  Although the Court based its ruling on defendant's waiver of the issue, it suggested that it would not be required to apply the California mediation "privilege" /* in any event.  

We thus need not consider whether a federal mediation privilege exists to bar use of the letter for purposes of demonstrating the removability of the case. Nor need we decide whether it may be appropriate in some cases concerning the amount in controversy for federal jurisdiction purposes, pursuant to Rule 501, to defer to state law evidentiary privileges out of comity and respect for state policies. See Conference Report on Rule 501 of the Federal Rules of Evidence, H.R. Rep. No. 93-1597, at 7-8 (1974) (Conf. Rep.), quoting D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 471 (1942) (Jackson, J., concurring) (“In some cases [federal courts] may see fit for special reasons to give the law of a particular state highly persuasive or even controlling effect . . . .”).  

Thanks to Hamline University School of Law for this case from its Mediation Case Law Project here.

Subsequently, the Ninth Circuit explicitly held that the California mediation "privilege" /* did not apply where the question before the District Court was the amount in controversy necessary for a diversity action to proceed in federal court.  See Babasa v. LensCrafters (thanks to California mediator Phyllis Pollack for the case summary and link here).  As the Circuit Court explained:

Under Federal Rule of Evidence 501, privileges provided by state law apply in civil actions only “with respect to an element of a claim or defense as to which State law supplies
the rule of decision.” FED. R. EVID. 501; [remainder of citation omitted] State law does not supply the rule of decision here. Federal law governs the determination whether a case exceeds the amount in controversy necessary for a diversity action to proceed in federal court. [citation omitted].  Thus, even if the California mediation privilege applied to the Bruinsma letter, which we do not decide, it would not preclude a determination that the Bruinsma letter constituted § 1446(b) notice for purposes of removal to federal court.

/*   The Court's use of the term "mediation privilege" is not simply a harmless misnomer.  Because California mediation confidentiality provisions are not privileges under California law, they are not, for instance, subject to the same exceptions as California's evidentiary privileges such as those protecting attorney-client communications.  Whether this would have (or could) make a difference in the federal court's analyses of the applicability of the confidentiality protections for mediation in California remains an open issue.

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The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.

Anatole France, The Red Lily, 1894, chapter 7 

 AP Minneapolis from the Los Angeles Times

A woman facing a $222,000 music-sharing verdict asked a judge Monday to overturn it.

Jurors in a case that six record companies brought against Jammie Thomas found that she violated the companies' copyrights by offering 24 songs over the Kazaa file-sharing network. They ordered Thomas, a mother of two who makes $36,000 a year, to pay the companies $222,000.

In a motion filed Monday, Thomas' attorney, Brian Toder, did not argue that she hadn't violated the copyrights. Instead, he said that because the songs could have been purchased online for about $24, the $222,000 verdict was disproportionate and amounted to punitive damages. 

for remainder of article, click here.

Jury Instructions

Copyright law allows damages of $750 to $150,000 per song.

What the Jury Awarded 

$9,250.00 per song.

The Music Companies' Actual Damages

The songs could have been purchased online for about $24.00.  Without itemizing, defense counsel pegged the record companies' actual damages at "less than $151.20 in all."

Who Else the Major Record Companies are Pursuing

According to the Times, the Recording Industry Association of America has sued 26,000 of its individual consumers for damages.  In September, it also sent "a new wave of 403 pre-litigation settlement letters to 22 universities nationwide" on behalf of the "major record companies."  See RIAA News Release here.

Why the Jury Likely Made the Thomas Award So High

If you've been following this story, you don't have to do much guess work to believe the jury was likely punishing the defendant for lying to them on the witness stand.  Although the defendant denied file-sharing on direct examination, documents produced at trial pretty well demonstrated that she was not telling the truth. 

This always pisses the jury off.

What the Jury Didn't Know

• Thomas. a single mother of two, makes $36,000 a year.
• 2006 Executive Compensation for One Major Record Company Warner Music Group as reported to the Securities and Exchange Commission as of January 17, 2007
  • Chairman and CEO Edgar Bronfman, Jr. -- $1 million salary;  $6 million bonus
  • Lyor Cohen, CEO U.S. Recorded Music $1.5 million salary: $4.5 million bonus  
    Michael Fleisher, Exec. VP $ 800,000 salary; $ 1.4 million bonus
  • Chief Financial Officer David H. Johnson $700,000 salary; $800,000 bonus
  • Alex Zubillaga, Exec. VP, Digital Strategy $600,000 salary; $1 million bonus
• The U.S. Bureau of Labor Statistics estimates the average yearly earnings of salaried composers and music directors in 2006 at $53,320.
  

Even Primates Won't Tolerate Econimic Inequities on this Scale

Finally, though I've resisted seeing it for more than 25 years, the Les Misérables "power to the people" song . . . .

Little people know
When little people fight
We may look easy pickings
But we've got some bite

So never kick a dog
Because he's just a pup
We'll fight like twenty armies
And we won't give up
So you'd better run for cover
When the pup grows up!

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(right:  Mica Has a Friend by Igor Maminta)

Because I was asked by the brilliantly magical mediator-attorney and USC Adjunct Professor Lisa Klerman to write an article on Mediation Magic for the SCMA Newsletter, and because I sought help from mediator Jerry Lazar, who is a genuine journalist and magician, I learned recently about the existence of this tremendous legal resource -- the Law and Magic Blog.

Now that's an alternative to litigation of a differnt color!  Ridikulus you spell in response to the Bogart of Irrationality?  Check out this post on Intellectual Property in Pre-Literate Societies from  May '07 by Law and Magic blogger Christine Corcos, who is an Associate Professor of Law at Louisiana State University Law Center.

Here's an interesting analysis of the relationship between intellectual property rights and magic in preliterate societies, by Marc C. Suchman, now at the University of Wisconsin Law School. The cite is Marc C. Suchman, Invention and Ritual: Notes on the Interrelation of Magic and Intellectual Property in Pre-Literate Societies, 89 Colum. L. Rev. 1264 (1989). According to the Introduction, "[t]his Article examines one frequently ignored alternative to the Western model. In essence, the following analysis argues that, far from being nonexistent, intellectual property rights actually pervade preliterature societies and figure prominently in the complex of magical beliefs surrounding numerous aspects of daily life."

Think about how many people's creativity it took to bring you this post -- Lisa's suggestion, my first draft, Jerry Lazar's creative journalistic and magical skills, Christine Corcos' academic studies and Kevin O'Keefe's LexBlog blog platform and that's just for starters! 

How about the men and women of the SCMA who formed the organization and decided it should have a newsletter and its president, Jan Schau, who I'm pretty certain is responsible for dragging Lisa Klerman in to serve as co-editor of the newsletter with me.

It's like the Net of Indra, where each jewel at every crossing of every string, reflects the light reflected by the other so that everything arises in response to everything else and no one and everyone is responsible for the whole.

Now, that Jeremy Phillips of IP Kat  -- with whom I'd like to begin an open blog dialogue about mediating IP disputes -- is touchy-feely, but also the rock bottom truth of quantum physics, i.e.,  that all reality is co-created. Yes?

Thanks for the post and the mention Christine!

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The IP ADR Bloggers have just gone "live" with our new web site:  ipadr.com.

Come on by and check us out!  

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(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.   

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(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.

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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.

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“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.  

 

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(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.

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(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.

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