IP ADR Blog

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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

• Print
• Comments
• Trackbacks

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.” 

• Print
• Comments (2)
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

(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.

• Print
• Comments
• Trackbacks

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.

 

• Print
• Comments
• Trackbacks

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?

• Print
• Comments
• Trackbacks

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.

 

• Print
• Comments (1)
• Trackbacks (1)

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.

• Print
• Comments
• Trackbacks

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.

• Print
• Comments (2)
• Trackbacks (2)

(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.  

• Print
• Comments
• Trackbacks

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.  

• Print
• Comments (1)
• Trackbacks

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 . . . .

• Print
• Comments
• Trackbacks

(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. 

• Print
• Comments
• Trackbacks

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.

• Print
• Comments
• Trackbacks

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.

 

• Print
• Comments
• Trackbacks

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 iss