Ken Cloke in his book Mediating Dangerously asks: how can we transform conflict so other options emerge that do not require winners and losers? As mediators, we are asked to guide people through conflicts, shedding light so they can see and as a result move towards more creative and productive ways to conduct their personal and business affairs. As I blog on another litigation scheme designed to “save” a right’s based culture by monetizing infringement, what appears is just another version of lawyers fomenting schemes, and an industry grasping for rescue rather than creating new ways of serving its consumer.

Infringement => $$$

Here’s the newest copyright scheme to monetize infringement. David Kravets’ July 22 blog post over at Wired.com reports that Righthaven LLC, a Las Vegas company associated with Review-Journal owner Stephens Media LLC, as represented by lawyer-entrepreneur Steve Gibson, has executed a new litigation strategy designed to save “ the media world’s financial crisis.” Gibson, predicting that millions of additional infringements will yield revenue as his business plan expands in scope to capture the massive online infringements of media clients’ rights in their content, is optimistic:

Gibson’s vision is to monetize news content on the back-end, by scouring the internet for infringing copies of his client’s articles, then suing and relying on the harsh penalties in the Copyright Act — up to $150,000 for a single infringement — to compel quick settlements. Since Righthaven’s formation in March, the company has filed at least 80 federal lawsuits against website operators and individual bloggers who’ve re-posted articles from the Las Vegas Review-Journal, his first client. Borrowing a page from patent trolls, the CEO of fledgling Las Vegas-based Righthaven has begun buying out the copyrights to newspaper content for the sole purpose of suing blogs and websites that re-post those articles without permission. And he says he’s making money. We believe it’s the best solution out there,” Gibson says. “Media companies’ assets are very much their copyrights. These companies need to understand and appreciate that those assets have value more than merely the present advertising revenues.”

It appears that the scheme is in service to online-media owners against those who re-post or excerpt their content – websites and bloggers, not wholesale aggregators. Because the law with respect to online excerpting of media content is based mainly on Fair Use which is explicated on a case-by-case basis, uncertainty in the strength of the claims exists. There is no clear admission in these cases of copyright infringement (as may arguably exist with illegal filesharing of entertainment media) even though there may be use of another’s content without permission. The law is not entirely in the content owner’s favor.  The Copyright Office website cautions:

The distinction between fair use and infringement may be unclear and not easily defined. There is no specific number of words, lines, or notes that may safely be taken without permission. Acknowledging the source of the copyrighted material does not substitute for obtaining permission. The 1961 Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law cites examples of activities that courts have regarded as fair use: “quotation of excerpts in a review or criticism for purposes of illustration or comment; quotation of short passages in a scholarly or technical work, for illustration or clarification of the author’s observations; use in a parody of some of the content of the work parodied; summary of an address or article, with brief quotations, in a news report; reproduction by a library of a portion of a work to replace part of a damaged copy; reproduction by a teacher or student of a small part of a work to illustrate a lesson; reproduction of a work in legislative or judicial proceedings or reports; incidental and fortuitous reproduction, in a newsreel or broadcast, of a work located in the scene of an event being reported.” 

Instead of asking what are users’ expectations in the digital culture and how might publishers and authors meet them and adapt, content owners are asserting rights rather than interests, ignoring that the very business model from which these content owners derive their rights is based on two pillars of constitutional dimension, free speech and copyright, both equally designed to serve the consumer market and also anchored in democratic ideals.  In commodifying its copyrights to monetize infringement, media owners and their attorneys seem to overlook the vitality of digital content and the fact that digital content also acts as a vehicle through which individuals “speak” – communicate – in exercise of their 1st Amendment rights.

Can this strategy lead to Self-Censorship? 

Unlike a song or film copied and distributed online through filesharing, Righthaven brings complaints for posting in many cases excerpts of articles even though linked to the complete article with attribution - news content shared on sites not to consume as entertainment, but as information, not for its expression, but rather its currency. The chilling effect of this new litigation strategy is that it is designed to impose self-censorship, sending a message to potential infringers unable to bear the costs of litigation, that they dare not exercise their rights to repost excerpts of content, which in many cases would otherwise be fair use, one of the copyright safeguards to preservation of free speech.

Copyright and 1st Amendment coexist because, as our Supreme Court articulated in Eldred v. Ashcroft, “copyright’s built-in free speech safeguards are generally adequate to address any conflict with free speech rights.” If linking to and reposting excerpts of online content is our cultural currency –and linking and attribution the tool which allows the flow of information and communication - what might an industry which is itself built on free speech and fair use do to address copyright infringement? Is the result of a litigation strategy designed to lock up online content the preservation of a market monopoly, or is it that plus a monopoly over our cultural currency?

Media owners have an exalted status with respect to content (e.g. “hot news” as reported by Mike Masnick and Kevin Smith), and are treated more deferentially than other speakers. First Amendment and free speech are the driving force of media law. To assert as Gibson does that copyright is a media company’s core asset is to see 1st Amendment and copyright as separate rather than as twin pillars supporting the industry. When it sues its own consumer, and will even sue its content’s interviewee who has reposted, a dysfunction arises.

Copyright, a limited monopoly, cannot and does not lock up facts, opinions, ideas, or unprotectible content, and media companies’ attempt to monetize online infringement risks disrupting the twin pillars on which it bases its own survival. Online content cannot be treated as a static commodity - the digitization of information and its use on the web is not static but rather like search engines, a pointer to a flow of ever changing content transforming its static nature to process, movement creating more content, educating more consumers, transforming yesterday’s news to today’s pointer.

Freedom of speech depends on a vast public domain. Most consumers see excerpting and linking as essential to dialog in today’s marketplace. A new Facebook Page "stop the LVRJ/RIGHTHAVEN witch hunt! (may have to be logged in to FB to see it) is an online dialog about Righthaven, resulting in a black list of its media clients. Is this the way to save media from its financial crisis? Where is the bigger view which sees the creativity in mutually beneficial indexes and roadmaps?

The internet has completely changed the outcome of a copyright holders’ right to prohibit and restrict copying and distribution of copyrighted works for essentially non-commercial purposes. Assertion of these rights is based on the assumption that the use of copyrighted content is static. Robert Chender’s July 11 Contemplative Law post asks: what if the legal framework under which we assert legal rights is based on an incorrect assumption and yet is constitutionally permissible? Media owners might ask themselves this same question. The digital “free” culture has proven that a right’s based assumption no longer serves the consumer who uses content to communicate, dialog, connect, and create new uses of content. If an industry fails to serve its consumer, how can that be a means out of a financial crisis? Rather than using new technology to entrap users, technology could be used to discover ways to enhance the uses, capture new value and generate a more vital marketplace – actually, the goal of both copyright and the 1st Amendment. Wouldn’t that be cool?

Citizen’s Media law project has posted a copy of one of the complaints here. Additional links to complaints offered here.

How can we learn more about this?

Here are two great articles by Steve Green with the Las Vegas Sun, updating issues involved in this strategy to save the media, from August 9 and August 4.  

As these articles suggest, one of the issues to emerge in this dispute is the implication of the DMCA take down provisions with respect to third party content and the

essential step some websites and bloggers may have skipped in order to fall under the safe-harbor provisions (e.g., registering designated agent with the Copyright Office). Note also that Professor Eric Johnson at Blog Law Blog is tracking this story and provides good updates as well as the back-story on the Righthaven cases. There is also an interesting podcast here by Robert Ambrogli on the extent that a blogger can use content of a news story without attribution.

-MZ

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Whether a commercial case can be settled or not often depends upon the existence of insurance coverage.  This opinion - answering the question "yes" for a trademark infringement action - was sent down by the California Court of Appeal today.

Caveat reader:  I haven't read the case yet and am only providing the summary provided by a local legal rag below (I'll come back to this).

Where insurance policy defined covered "advertising injury" as "injury arising out of one or more of the following offenses: a) oral or written publication of material that slanders or libels... b) oral or written publication of material that violates a person’s right of privacy; c) misappropriation of advertising ideas or style of doing business; or d) infringement of copyright, title or slogan," such policy included trademark infringement actions. Prior publication exclusion applies to trademark infringement claims where the claimed offending words in underlying action both before and during the policy period are identical. Kim Seng Company v. Great American Insurance Co. of New York - filed November 13, 2009, Second District, Div. Five.

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The following from Carolyn Elefant at My Shingle:

[T]his recent article from NPR . . .  reports on Rock Art, a local Vermont brewery that successfully fended off a copyright challenge by the national company that makes Monster energy drink.  Rock Art didn't win as a result of a clever legal team. In fact, after Rock Art received a cease & desist from Monster, demanding that the company stop using the name Vermonster in connection with its drink, Rock Art's lawyers told the company that fighting a national corporation would be too pricey and that the company was better off registering a less controversial trademark.  After Rock Art's lawyers backed down, Rock Art launched a social media campaign, enlisting customers to help with the effort.  The campaign went viral and ultimately, the bad publicity lead Monster to back down.

Now that's alternative dispute resolution.

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If this tremendous article on legal blogging (and in particular ADR blogging) from this summer's ABA Dispute Resolution Magazine Only Connect the Impact of Blogging on the Field of ADR  by Diane Levin doesn't make you want to immediately run to blogger.com and begin posting missives to the legal world, well . . . legal blogging isn't right for you.  Excerpt below and full article at link above.

In his 2006 book Conversation: A History of a Declining Art, author Stephen Miller evoked a golden age of discourse that England enjoyed in the 18th century. The seat of that renaissance of conversation was the coffeehouse, where wit and aphorism flourished. Men gathered to warm themselves with a dish of coffee, transact business, gather news, enjoy the latest gossip, and of course converse.

Although the British coffeehouse has largely faded from public memory, a spiritual descendant has emerged possessing many of its ancestor's most distinctive attributes: the blog. Like its 18th century predecessor, the blog is simultaneously marketplace, library, and public square, with a wealth of views and ideas clamoring for consideration, attracting businesspeople, scholars, thinkers, writers, celebrities, and ordinary citizens.

ADR professionals and scholars perhaps would have felt at home in the 18th-century coffeehouse. We and the coffeehouse share similar virtues: ours is a field that promotes and pursues the exchange of ideas and information. It is fundamentally about conversation. And, like England in the 18th century, the ADR field is enjoying its own renaissance in discourse, one that flowers lushly online, thanks to the phenomenon of blogging, drawn to its capacity for bringing people and fresh thinking together.

For four years as a blogger, I have chronicled the impact that blogging has had on ADR. I began blogging at MediationChannel.com [FN1] when I was one of only a handful of men and women blogging about dispute resolution. During that time I have also served as the ADR blogosphere's taxonomist, tracking blogs worldwide at ADRblogs.com, [FN2] a blog catalog that today lists almost 200 blogs from 29 countries.

During those four years--a long time on the Internet, where change happens rapidly and yesterday is old news--I have witnessed firsthand the changes blogging has brought to our profession and to the work that many of us do. For ADR bloggers and our readers, the phenomenon of blogging has dramatically affected us and the way we practice in three key areas: the business of ADR, the dissemination and discussion of information and ideas, and professional networking. I invite you to explore them with me, following a brief introduction to blogs.

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In Search of Lower Cost Resolution: Using Arbitration to Resolve Patent Disputes

By David A. Allgeyer

Patents and other forms of intellectual property are extremely important to most businesses. Companies have come to realize that their intellectual property often represents their most important asset. Having adequate intellectual property protection can be crucial to startup companies attempting to find the financing they need. In contrast, a developed intellectual property portfolio is often the key to maintaining a favorable competitive position for established business enterprises. In addition, licensing IP to others can provide much needed income flow, while licensing from others is often the most efficient way for a company to enhance its product or service offerings.

Read on here and check out Allgeyer's LinkedIn question & answer thread on this topic here.

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Here's a great post on the mediation of a software licensing dispute from Disputing by Peter S. Vogel.

After receiving a Temporary Restraining Order (”TRO”) the Judge ordered a mediation conference between the plaintiff software licensor and their customer in Alabama. The software in dispute was a specialized tax website that the plaintiff had spent many years developing, and after defendant abruptly terminated the license the plaintiff was shocked that the defendant had a competing website providing specialized tax services somewhat a kin to the plaintiff. So the trial judge had no trouble issuing a TRO. As oftentimes happens the Judge ordered me to mediate the case since I was a programmer and have a masters in computer science. My law practice of more than 30 years has always been limited to representing buyers and sellers of IT and Internet services.

Step One – In Depth Review of Plaintiff’s Technology

Since the defendant was in Alabama I arranged a meeting with the plaintiff licensor’s technical staff at my offices a few days before the mediation conference. Plaintiff’s IT staff demonstrated the construction and schema for their data base, and how the website processed data. This exercise lasted a couple of hours, but provided good insight about their IT solution and web business.

Continue reading here.

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I was just alerted to a new Start Up Company Blog -- The High-touch Legal Services Blog - which recently provided a little good advice for licensees entering into nonexclusive patent license agreements  below.

So, if you enter into a nonexclusive patent license agreement as licensee, make sure the licensor is obligated to stop third-party infringement. The relevant provision should:

• Take effect if you notify the licensor, or the licensor otherwise learns, of infringement;

• Obligate the licensor to bring suit to stop the infringement; and

• If the licensor fails to stop the infringement, give you the right to (a) stop paying royalties or (b) bring suit in the licensor’s name ( in which case the agreement needs to include the licensor’s consent to be named as a party and obligation to cooperate in the litigation).

For full article, click here.

a business-savvy licensing and intellectual property attorney with in-depth knowledge of law, business and technology.  Dana provides high-touch legal services for startup and early-stage companies - thus the name of this blog.

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(left, the T-shirt at issue)

We talk a lot about the resolution of IP litigation here, but not a lot about IP conflict prevention.  I've long said that the best insurance against liability is good relationships.  The New York Times Magazine today (in its terrific "Consumed" column by writer Rob Walker - author of Buying In) demonstrates the way in which responsible and respectful action following a trademark infringement claim can lead to a happy collaborative resolution.

In Boxers, Not Briefs, Walker tells the story of journalist and entrepreneur Chris Isenberg's No Mas brand T-shirts -- T-shirts of the type that

visually remix intellectual property that belongs to somebody else - tweaking or parodying recognizable logos and the like . . . [which often] draw cease-and-desist letters from trademark owners.

CKX, Inc., "the company that . . . oversees the rights to commercial uses" of Mohammed Ali's name and likeness, sent Isenberg an e-mail of the type with which we lawyers are familiar, one that Walker describes as usually ending unhappily "with the small-brand creator stymied, the rights owner accused of bullying or both."

This story, however, had a happy ending because everyone - not just the big company so often accused of bullying - but Isenberg too - acted honorably.  Walker explains:

[Isenberg's] response was unusual:  Not only would he pull the shirts off the shelves; he would also give an accounting of what he already sold over the years and offer a retroactive royalty payment.

The response of CKX was equally admirable - its CEO noting that Isenberg "seemed like an honorable guy" and that his product was high quality.  The upshot?

The Cassius Clay shirt returns to Bloomingdale's, the No Mas site and other venues, in the new officially sanctioned version, this month.

Note CKX's caution that it is "not in the habit of going into business with license violators."  Why the exception?  I think Walker's readers can connect the dots themselves.  For readers of the IP ADR Blog, the lesson goes a little deeper. 

Conflict, you'll recall, is a neutral state of affairs existing in a world of scarce resources.  Conflict does not erupt into a dispute until someone suffers an injury that appears to be someone else's fault, i.e., the injured party names a perpetrator, blames him for losses suffered, and makes a claim for redress. Here, CKX, which describes itself has having a "vibrant policing organization," named No Mas as an infringer of its rights, "blamed" it for the losses typically suffered when trademarks are infringed and claimed a right to redress.

This, of course, is how all disputes and all lawsuits begin.  No surprises here.  What makes the CKX-No Mas story one worth telling is the surprising choice Isenberg made when the dispute erupted.

The parties to a dispute have three major paths to resolution:  yielding or avoiding; contending (ingratiation and gamesmanship; threats, promises and arguments; and coercive commitments or violence); or, problem solving.  Litigation, of course, is all contending and contending is worrisome, expensive, lengthy, and uncertain.  Though businesses choose contending and legal action when the fish is too small to fry  (we don't do business with license violators) or the opposition intractable, the best businesses choose problem solving whenever they have a reputable and wiling bargaining partner.

Below, the short course on the way conflict erupts into disputes (actionable or not) and the pro's and con's of available responses.

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Once, a long, long time ago in a legal practice far, far away, I represented, for a brief time, the interests of Guess? in litigation against Jordache.  Many years after I'd left the firm for which I was an associate at the time, I learned that both companies had "gone behind their lawyers backs" and settled the long-running, acrimonious litigation, and proceeded to sue their attorneys for malpractice.

One such lawsuit for legal malpractice against former Jordache counsel -- the now defunct firm of Brobeck, Phleger & Harrison -- was based upon Brobeck's years-long failure to tender the defense of the Guess (or Marciano) action to Jordache's insurance carriers.

Although Brobeck prevailed in its statute of limitations defense, the damage to Brobeck's reputation at the time, not to mention the cost of litigation up to the Supreme Court and back to the trial court again, cannot be calculated. 

I practiced commercial litigation for a decade before I began representing insurance carriers against so-called long-tail claims for environmental liabilities in the 1990s and early 2000's.  As soon as I learned enough to know my way around a coverage action, I realized I'd never truly understood coverage in the way I should have for the benefit of my (largely) corporate clients.

It is for this reason that the first thing I want to know as a mediator of an IP dispute is whether there's coverage.  It's also the reason I'm excepting here and giving you a link to an article discussing the Jordache case and emphasizing the importance to IP litigators of a thorough understanding of the law of insurance coverage.  The article, entitled Insurance Coverage for Lawsuits: Allocate Responsibility and Avoid Malpractice Claims, was written by Deidra D. Gold and Kenneth S. Ulrich in  ACCA Docket 21, no. 4 (April 2003): 58–68.

Recent years have seen a proliferation of lawsuits involving intellectual property and other issues for which it is uncertain whether insurance coverage will be available. Because the possibility for insurance coverage, which may provide for a defense and indemnification of a portion or all of a settlement or judgment, is not obvious, it is often overlooked at the early stages of litigation. If the possibility for coverage is identified later, it may be too late to successfully tender defense to the insurance carrier. In several instances when this situation has happened, finger-pointing unfortunately has ensued, in some cases resulting in malpractice claims against outside counsel.

Indeed, in several recent reported decisions, courts have wrestled with the issue of whether, in the absence of a clear agreement regarding who should be responsible for seeking insurance coverage, it is malpractice for outside counsel to fail to do so. Likely many other such claims have not resulted in reported decisions. It is not a coincidence that many of these cases arise out of intellectual property lawsuits.

Copyright and trademark lawsuits often are defended by general commercial litigators or by intellectual property specialists who may be unaware of the existence of insurance coverage under the advertising injury sections of general liability policies. See the sidebar on page 62 regarding personal and advertising injury coverage.

The purpose of this article is not to debate the merits of such malpractice claims. Rather, we suggest ways to avoid having to consider a malpractice claim in the first place.

Continue reading here (.pdf)  Thanks to the law firm of Goldberg Kohn for featuring this useful article on its Policyholder Insurance Practice Group page here.

And if you're looking for dynamite policy holder insurance coverage advice from one of the best insurance recovery lawyers in the country, check out Dickstein Shapriro partner Stephen N. Goldberg's new Catastrophic Insurance Coverage blog here.  Yes, he is my husband but he was my incredibly difficult opponent first so I know full well whereof I speak when I say he's best in policy holder coverage counsel breed.  Put his new blog in your newsreader.  It's an easy way to stay up to date on insurance matters that perplex even the most sophisticated litigators.

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From the files of the World Intellectual Property Organization

Set out below are examples of mediations conducted under the WIPO Rules. The Center also makes available a summary overview of its caseload. These examples have been prepared while respecting the confidentiality of WIPO proceedings.

M1. A WIPO Patent Mediation

A technology consulting company holding patents on three continents disclosed a patented invention to a major manufacturer in the context of a consulting contract. The contract neither transferred nor licensed any rights to the manufacturer. When the manufacturer started selling products which the consulting company alleged included the patented invention, the consulting company threatened to file patent infringement court proceedings in all jurisdictions in which the consulting company was holding patents.

The parties started negotiating a patent license with the help of external experts but failed to agree on the royalty as the multimillion dollar damages sought by the consulting company significantly exceeded the amount the manufacturer was willing to offer.

Continue reading here.

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Seasoned mediators say that the negotiation does not really commence until the parties reach impasse.  The eight impediments to settlement of patent cases on appeal listed by Chief Circuit Mediator Amend in Patent Mediation on Your Horizon? are impasse creators, not settlement preventers.  It is helpful to anticipate and guard against some of these impediments (party representatives with full authority not being present for instance) but some of these (contingency fee cases for instance) simply provide a challenge to the mediator.  They are not arguments against mediation.

Chief Circuit Mediator Amend identified at the Conference eight impediments to settlement of patent cases on appeal. The impediments are:

1.  the case involves a "troll" (which might be defined as a non-inventive entity with no commercial product that acquires and asserts overbroad patents in an attempt to extort a toll from others) and the defendant company wishes to avoid a "bulls-eye" inviting further litigation;

2.  party representatives with settlement authority are not present for the mediation session;

3. the party having lost the judgment appealed is reluctant to mediate (although perhaps counterintuitive, because the winning party might seem more reluctant, the cost of rolling the die on appeal may appear small relative to the cost already sunk into the case);

4. the patent was held invalid (one solution might be to ask the district court to vacate its invalidity holding as part of a settlement award);

5. counsel is representing the appellant on a contingent fee basis;

6. an emotional, entrepreneur patent owner appeals a loss and seeks "justice";

7. a summary judgment of non-infringement is appealed and the plaintiff seeks millions (the "lottery" case); and

8. a party believes it is entitled to attorney fees or enhanced damages.

 

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(right, Amy Poehler as the Dollar takes a beating from the Euro on SNL)

Because people often ask me about the wisdom of making aggressive opening offers, I'm summarizing one of my favorite articles on anchoring by a Kellogg Graduate School of Management Professor. His conclusion is that negotiators are not aggressive enough in their opening offers. 

Although we are often told that only "reasonable" first offers influence negotiation outcomes, I am unaware of the existence of any research to support this dictum. Unfortunately, I suspect that the "reasonable first offer" theory is from the Graduate School of Feeling Good About Ourselves at Kumbya University.

The research discussed below is typical of all of the research and statistical studies I've recently read. If you've got contrary authority, please do pass it along.

1. Research shows that how we respond to an offer is highly influenced by any number that enters the negotiation environment. (one study used zip codes to influence numeric estimates).

2. The greater the parties' uncertainty about the value of the item/s being bargained for the stronger the anchoring effect of the first offer.

3. That anchoring effect will continue to exert a strong pull throughout the rest of the negotiation THE SUPPORTING RESEARCH

The Supporting Research

Researchers had real estate agents inspect a house and estimate its appraisal value as well as its purchase price. they manipulated the house's list price, providing high and low anchors. All of the agents' estimates were influenced by the list price even though they denied factoring the list price into their decisions. When challenged, the agents cited features of the property that would justify their estimates.

In another study, researchers sent customers to mechanics to obtain estimates on the value of a car. The customers asked the mechanics for their opinions only after suggesting a value of their own. Half the mechanics were given a low anchor and half were given a high anchor. The mechanics estimated the car to be worth a thousand dollars (actually they were Deutsche Marks) more when they were given the high-anchor value.

 WHY ANCHORS AFFECT US THE WAY THEY DO

The author (see link below) explained the phenomenon this way: items being negotiated have both positive and negative qualities—qualities that suggest a higher price and qualities that suggest a lower price. High anchors selectively direct our attention toward an item's positive attributes; low anchors direct our attention to its flaws. A high list price directed real estate agents' attention to the house's positive features (such as spacious rooms or a new roof) while pushing negative features (such as a small yard or an old furnace) to the back recesses of their minds. Similarly, a low anchor led mechanics to focus on a car's worn belts and ailing clutch rather than its low mileage and pristine interior.

MAKING THE FIRST OFFER

The author found that when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer. The amount of the first offer affects the outcome, with more aggressive or extreme first offers leading to a better outcome for the person who made the offer. Initial offers better predict final settlement prices than subsequent concessionary behaviors do.

HOW EXTREME CAN IT BE?

The author's research suggests that first offers should be quite aggressive but not absurdly so. The fear that an aggressive first offer will scare or annoy the other side and perhaps even cause him to walk away in disgust is typically exaggerated. Most negotiators make first offers that are not aggressive enough.

A nonaggressive first offer requires small concessions or a decision to stand by the original demand. Because one of the best predictors of negotiator satisfaction is the number and size of the concessions extracted from an opponent, aggressive first offers give your opponent the satisfaction of extracting significant concessions from you. In that case, you'll not only get a better outcome, but you'll also increase the other side's satisfaction.

For the full text of this article, see "When to Make the First Offer in Negotiations" from Negotiation, July 2004, by Adam D. Galinsky, an assistant professor at Northwestern University's Kellogg Graduate School of Management, in Evanston, Illinois.

For exceptions to the high anchor = high ending price, see Starting Low But Ending High: A Reversal of the Anchoring Effect in Auctionsby Ku, Galinksy and Murnighan.

We'll talk about ways to avoid these anchoring effects in later posts.

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Our good friend John DeGroote talks with Law.com about Making Sense of Corporate Warfare.  Excerpt below.  Full must-read article at the link.

Creative litigation executives are adopting a new frame of reference resembling a business accounting program. Legalistic measures of progress are replaced with borrowed and hybridized concepts from the accountants, such as relative cash flow (managing two or more suits to push fee and cost investments from the nonpaying dead ends into the paying winners), mark-to-market values (discounting stated claim amounts by screening a claim's merits against case law) and income statement (organizing a number of suits toward cash settlements, the lawyer's equivalent of "sales," by month or quarter).

According to Settlement Perspectives, a blog covering corporate dispute resolution, considerations like these can be even more valuable when they are systematized through decision-tree analysis, which is a long-standing, graphically oriented decision-aiding exercise, using line and box shapes to resembles the trunk, branches and leaves of a tree. It proceeds somewhat like the creation of a flow chart. The person undertaking the exercise is forced to break down his or her expectation about a process into a sequence of actions and probable outcomes of those actions.

According to John DeGroote, the blog's author and himself a general counsel, managers who sit down with outside counsel to discuss the branches of a decision tree and answer the questions presented bring focus to one critical question: What is this litigation really worth?

In litigation management, suddenly the idea of cash flow is gaining a new and enthusiastic following. Business managers have long tracked a company unit's cash flow separately from its net income or the distribution of its working capital to snuff out incipient managerial problems within the unit. Unlike an income analysis, a cash flow statement illustrates when money is spent and collected and exposes any long periods of cash outflow not offset by cash influx. Litigation managers are finding that using cash flow analysis to study their lawsuits helps enable effective management of litigation.

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(image from Lift Think)

On this Independence Day celebrating U.S. freedom from the tyranny of foreign rule, I'd like us to consider whether a new day might be added to our holiday calendar -- Global Inter-dependence Day.  This thought is spurred by the New York Times' Green, Inc. Blog post Climate Change and Intellectual Property.

In his Monday post here at Green Inc., James Kanter wondered what it would take to get the developing world to sign a climate change deal. Besides cash, some suggest that any accord must ensure developing countries have access to the proprietary mitigation technologies — that is, the intellectual property that companies in the developed world are creating to fight global warming — at bargain basement prices.

For instance, Nicholas Stern’s proposed “global deal” includes the following quid pro quo: “In return for increased R.&D. funding or extended developed-world I.P. protection, obligations could be imposed on developed-world technology providers that new technology be made available to the developing world on a marginal cost basis, or for some reduced license fee.”

For both the pro's and the con's, read on here.

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Though the recent Ninth Circuit opinion of Nutraceuticals v. Mucos Pharma (.pdf) is notable for setting the standard for preliminary injunctive product recall relief in a trademark infringement action, IP ADR's interest is stimulated by the settlement agreement that failed to head-off this expensive and protracted litigation (after the preliminary injunctive relief hearings; the appeal; and, the return of the case to the trial court, what further litigation damage do the parties have the stomach and budget to sustain?)  (with apologies for the hopelessly run-on sentence to Strunk & White & my 8th grade English teacher who first introduced me to The Elements of Style).

Leaving the holding of this case to Likelihood of Confusion, we weigh in on the Settlement Agreement that failed to settle the parties' dispute, which ominously provided that

[w]ithin 30 days after the Effective Date, MUCOS and Marlyn shall use their good faith efforts to enter into a formal distributorship agreement containing the following terms and such other terms as may be mutually agreed to or are customary in the industry.”

Though the impossible to define "good faith" provision saves this clause from being an illusory "agreement to agree," the parties - already having been at odds - cannot have realistically hoped a "formal distributorship agreement" would follow.

What are the parties to do when they are ready to settle their past disputes but not ready to craft the agreement that will govern their future relations?  Here are a few suggestions from someone who helps IP attorneys close deals the principals are not prepared to cast in stone:

• give the parties more than thirty days to conclude any deal that likely requires lengthy negotiations and strategic planning on both sides
• create consequences (or at a minimum, options) in the event the parties' "good faith efforts" fail to produce an agreement -- consequences could include grant or withdrawal of benefits likely traded to get the deal done in the first place
• include in the settlement agreement a detailed list of provisions both parties are required to negotiate in "good faith."  Such a list:
  • should anticipate those deal points the parties would have to agree upon (or concede) so that unexpected post-settlement demands would not prematurely scuttle negotiations over items left open; and,
  • should provide a structure for the parties to follow which should help keep paranoia about the other side's intent to over-reach or engage in bad faith somewhat at bay.
• Consider whether a neutral third party should be included in negotiating the future relationship, either as a facilitator of agreement or as a neutral decision-maker on terms the parties are willing to submit to third party decision.

There are dozens more ways future agreements premised upon "good faith" obligations to negotiate can be enhanced.  The parties to the dispute are always in the best position to brainstorm what those provisions might be.  Based on twenty-five years of litigation and five years of neutral practice, I give any skeletal "good faith" negotiation provision a 10% chance of success.  My pessimism is, of course, based on the fact that all I ever see is conflict and never the happily successful agreement crafted by a first-rate transactional lawyer.  That being the case, I ask friend Ken Adams -- he of Adams Drafting -- to chime in here if he has the time and inclination.

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(image from the Digital Standards Organization)

Thanks to Law is Cool (An Extraordinary About Face on Copyright Reform) we learn that Canadian Ministers Finally Embrace Canada's Digital Future.  Below, an excerpt from the LawBytes column of TheStar.com.

[Industry Minister] Clement went first, noting how much has changed in the year since Bill C-61, the much-criticized copyright bill, was introduced. He said it was ``at least a somewhat different'' public policy environment and committed to a broad copyright consultation this summer. Canada last consulted on copyright in 2001, so the promise of open consultation alone represents an important shift in approach.

[Canadian Heritage Minister] Moore was even more forceful with remarks . . .  emphasiz[ing] the power of new technologies, saying that standing in the way of digital developments is akin to "trying to lasso a locomotive with cobwebs."

Moore continued, acknowledging "the old way of doing things is over. These things are all now one. And it's great. And it's never been better. And we need to be enthusiastic and embrace these things."

Read on here.

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I'm sharing today a power point presentation that was the basis of an ALI-ABA IP Mediation seminar conducted by me and David Donoghue of Holland + Knight.  The course outline with bios is here.  The course itself can be found here.  This presentation is modified from one I presented with the Hon. John Leo Wagner of Judicate West at an ABA conference.  Many thanks to Judge Wagner for his insights, many of which are captured here.

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What can be done to . . . . to stop the international “IP war”?

Read the full-on analysis of the problem to appreciate this excerpt of the solution at Duncan Bucknell's IP Think Tank here. (or download a .pdf here)

The lengthy article by by Dr. Roya Ghafele, Lecturer, University of Oxford is more than worth your time.  I'm hoping that Duncan's posting -- and ours -- will begin a new conversation in the IP blogosphere about our continuing struggle to come to terms with the tensions created by the new global connected culture and the old law of intellectual property.  Below, an excerpt of some proposals for resolution.

Both, business and civil society have an “incentive” to move from a stage of war to a constructive, solution driven approach. For business the increasingly negative publicity that IP is giving it, may actually translate into serious bottom line profit losses due to loss of reputation and image. For civil society again, the stage of continuous critique can not be maintained either. At some point in time donors do want to see solutions and constructive output. Thus, there are good chances to move from a “win” to a “win-win” situation.

So far, IP has been largely looked upon from a legal perspective, which comes as no surprise since current educational systems worldwide only train lawyers in IP. Economists, political scientists, sociologists, historians or even engineers know most of the times very little about intellectual property.  A pity, since it is exactly this multidisciplinary perspective that is needed to turn IP into a tool for economic, social and cultural prosperity and leverage it as a means for wealth and welfare creation.

A different perspective on IP, one that looks at it as a strategic asset more than a legal framework gives way to new managerial perspectives on intellectual property.  While so far, the readjustment of the IP system has primarily been looked upon through the perspective of compulsory licensing (again a very legal approach to IP management), few have taken a more pragmatic approach and asked what types of management choices may work towards obtaining inclusion and an equitable distribution of research and development findings within the existing intellectual property framework.

Public interest IP management seeks to offer strategic choices on how to reconcile the existing contradiction between the exercise of exclusive rights and the universal right to equitable access. Innovation functions as a public private partnership; according to current research by Ashley Stevens at Boston University the vast majority of FDA (Food and Drug Administration) approved pharmaceuticals were developed with public sector support. While the public sector is asked to thoroughly negotiate agreements in the public interest, business can explore opportunities to leverage IP for the wider public interest. 

Public interest IP management comprises different approaches to ownership and access of IP and makes use of market and non-market incentives. It includes defensive publication, the pre-emptive creation of a public domain (including waiving of IP rights) and a deliberate deployment of legal exclusions. The application of the right to exclude can further be used to safeguard the open quality of a shared innovative domain. 

A good example is “humanitarian licensing” where IP is being licensed to market participants on the condition of several tied in arrangements.  In this case the licensor tends to reserve the right to license the technology also out to developing country producers or allow for parallel trading. It is further common practice to assure in licensing agreements “public interest” clauses that aim not only to assure commercial, but also public welfare gains. In practice, “humanitarian licensing” works if regulatory frameworks are in place clarifying ownership over IP developed in the public domain as well as sufficient practice in managing IP. 

A comprehensive, strategic IP approach furthermore represents the public interest as early as the selection phase of a research topic and plays a decisive role in the interaction between the public and the private sector. An ex-ante IP strategy is different from an ex-post intervention. The latter are only public interest remedies treating IP as a commodity, where negotiation is only possible over price. 

Read on here.

I'm most interested in what Dennis Crouch at Patently O, Jackie Hutter at the IP Asset Maximizer Blog, David Donoghue at Chicago IP Litigation Blog and Jeremy Phillips at IP Kat have to say on this topic.

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Thanks to Geoff Sharp for posting this video at Mediator Blah Blah after a lawyer told him he "didn't believe in email.

What does it all mean?  It means that our ability to adapt, to think critically, and to innovate is critical to our survival as an economic power on the planet.

What does it mean to you?

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From National Public Radio with thanks to Don Philbin, mediator and arbitrator in San Antonio, Texas for posting it to the Commercial and Industry Arbitration and Mediation Group on LinkedIn.

People Make Irrational Choices

Kahneman was surprised by the pure visceral power of his own certainty. He eventually coined a phrase for it: "illusion of validity."

It's a problem that afflicts us all, says Kahneman, who won the 2002 Nobel Prize in economics for his work on this subject. From stockbrokers to baseball scouts, people have a huge amount of confidence in their own judgment, even in the face of evidence that their judgment is wrong.

But that mistake is just one of many cognitive errors identified by Kahneman and his frequent collaborator, psychologist Amos Tversky. For more than a decade, the two worked together cataloging the ways the human mind systematically misjudges the world around it.

For instance, Kahneman and Tversky identified "anchoring bias." It turns out that whenever you are exposed to a number, you are influenced by that number whether you intend to be influenced or not.

This is why, for example, the minimum payments suggested on your credit card bill tend to be low. That number frames your expectation, so you pay less of the bill than you might otherwise, your interest continues to grow, and your credit card company makes more money than if you had not had your expectations influenced by the low number.

Through their research, Kahneman and Tversky identified dozens of these biases and errors in judgment, which together painted a certain picture of the human animal. Human beings, it turns out, don't always make good decisions, and frequently the choices they do make aren't in their best interest.

Continue reading (or listen to the broadcast) here.

Want to avoid the cognitive errors that result in sub-optimal negotiated resolutions?  Check out my power point presentations on cognitive biases here.

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Doll Dispute Edges Toward a Deal from the Los Angeles Daily Journal (for subscribers only; excerpt below)

RIVERSIDE - The Bratz doll copyright fight appears to be edging closer to a settlement, with lawyers for two dueling toy manufacturers reviewing a mediator's proposal with their clients in attempts to resolve their differences.

By Jason W. Armstrong
Daily Journal Staff Writer

The jurist overseeing the case, U.S. District Judge Stephen G. Larson, said in a case filing late Tuesday that "progress was made" at a court-ordered settlement conference Monday. He didn't go into specifics.

Last month, the court-appointed mediator, Pierre-Richard Prosper, told the judge in a hearing that while he felt the parties still had a lot of work to do to reach a settlement, they were "closer than ever" to resolving the five-year-old case, in which Mattel is fighting for control of rival MGA Entertainment's popular Bratz line. Larson then postponed discovery for a second phase of the trial to give the lawyers a chance to discuss a possible settlement with Prosper.

Although the lawyers aren't discussing the settlement talks, some intellectual property experts have speculated that resolution options for the case could include a licensing agreement in which MGA would continue making the dolls and pay Mattel a chunk of the proceeds.

The case is Bryant v. Mattel, CV04-9049 (C.D. Cal, filed 2004).

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Put the power of Web 2.0 to work for you while you're sleeping!

Internet defamation attorney Adrianos Fachetti; entertainment attorney Gordon Firemark; class action attorney H. Scott Leviant;  Barger & Wolen Marketing Director Heather Milligan and I will be presenting Social Networking for Lawyers: A Roadmap to Success Session 1 (9:15-10:30) at the Second Annual LACBA Solo and Small Firm Convention on June 25, 2009.

In this interactive session we will explore the buzz surrounding social networking and social media tools and how solo and small firms practitioners can effectively employ them to communicate with current clients; control your messaging as you reach out to new clients and the media; and to meet, network and collaborate with colleagues.

Our panel of solo and small firm attorneys will discuss their experiences with blogging as a social media tool, and we will spotlight several social networking applications, including Twitter, Facebook and LinkedIn. By calling upon their personal experiences, our panel will highlight best practices for how you can incorporate these and other Web 2.0 applications into your business development, PR and networking activities.

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mbhb
we know the drill

When a law firm takes the time and trouble to at least be clever, it tends to make potential clients believe in its claims to be creative and innovative.  That's why we're awarding the IP ADR Blog 2009 IP Law Firm Marketing Slogan Award to the firm of McDonnell Boehnen Hulbert & Berghoff LLP.

The marketing people tell us that brand consistency is one of the most important elements in a successful marketing program.  See e.g. Marketing 101:  Brand Consistency at the BlueFur Blog here.  Excerpt below:

When you decide on a marketing campaign for your company, it’s important that you maintain a certain level of consistency across the entire campaign. Even if it’s not an outright advertisement, everything associated with your business should have a common theme or feeling to it. When you look at marketing for BlueFur, the color blue always features prominently and there’s a good chance that you’ll see an image of the furry blue monster.

Be consistent not only in the look and style of your various marketing materials, but also in your ad message. What is it about your company that you want to emphasize? What is it that you want people to know you for? To remember you for? This consistency should be maintained across everything, including business cards, letterhead, envelopes, invoices, signage, banners, newspaper ads… everything.

From mbhb's "About Us" page below.

We provide creative, pragmatic business solutions through a variety of intellectual property services, including litigation, prosecution, and general client counseling.

With offices in Chicago and Washington state, MBHB provides comprehensive legal services to obtain and enforce our clients' intellectual property rights, from navigating patent office procedures to litigating complex infringement actions. We prosecute patent and trademark applications in both the U.S. and abroad, handle intellectual property litigation matters in trial and appellate courts across the country, and counsel clients nationwide and worldwide on the enforcement and defense of their intellectual property rights.

The more colorful "real" ad can be seen at Patently O.

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Thanks to Dan Harris in my twitter network (twitter.com/danharris) for leading me to Aimee Barnes' blog and in particular her recent post, U.S.-China Business -- Check Your Stereotypes at the Door.

Building a multi-lingual and multi-cultural team with a wide array of professional experiences will fuel innovation, foster understanding and promote synergy with your global clients. I once read that entrepreneurs bring their best ideas to light following entry into a new environment. Maybe that’s why “35 percent of Microsoft’s 2008 patent applications in the US came from new inventions by visa and green card holders.” On the other hand, if you’re working in an environment where everyone looks like you, talks like you, thinks like you, and rivaled your  college alma mater at one time or another, then you’re at an automatic disadvantage in today’s international playing field.

Aimee Barnes is a "professional business strategist [who] build[s] bridges between the US and China with effective communications, cross-cultural guidance, demographic analysis and market entry strategies."

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See yesterday's opinion Internet Specialties West, Inc. v. Milon-DiGirgio Enterprises, Inc.

There's a vigorous dissent from Justice Kleinfeld culminating in this prediction of the majority opinion's affect on trademark law, particularly as it effects internet marks:

The majority’s evisceration of laches means that a big company can lurk in the tall grass while its little prey gradually fattens itself by dint of great effort and expense. Then, when the small competitor has succeeded, the big company can shake it down for a cut of its hard-won success, or destroy the name under which it innocently did business for years. That is trademark law as protection racket, rather than trademark law as prevention of consumer confusion.

The ADR lesson?  There's a story of fierce business competition here fought out between two internet providers (living in the 21st century) and decided by the narrowest margin based on rules (laches) forged before the industrial revolution. 

Only the parties know whether the Plaintiff was aiming to "shake down" its competitor or had other motives to take the considerable risk of exposing its commercial future to the decision, first, of a federal court judge and then to a three-justice federal appeals court panel. 

Though commercial enterprises badly need clear rules of law to guide their present activities and chart a profitable future, they should never forget Google exec Eric Schmidt's observation that litigation is just a "business negotiation being conducted in the Courts" -- the litigation simply one bargaining chip of many to be used in negotiating a commercial solution to a justice problem - one that will avoid - if possible - zero sum outcomes on technical legal issues of no genuine interest to business people.

Dissenters from that view?

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We talk a lot here at IP ADR about ascertaining and fulfilling party interests to help you settle your patent, trademark, copyright or trade name and trade dress litigation.  As Entrepreneurship Magazine recently reported in getting into the mind of your negotiating counterpart, knowing your negotiating partner's desires, aims, goals, needs and fears (its interests) will go a long way to getting you the best deal available.

Getting a solid grasp on the other party's interests will help you:

* Determine what you have or can do that might be of value to them, which can make it easier to figure out how best to get what you want;

* Craft deals that acceptably satisfy the other party's interests, which will increase the likelihood that the deal will be sustainable (since the other party will be motivated by their own self-interest to successfully implement the deal);

* Uncover potential sources of value that might otherwise have been missed, which will increase your ability to invent creative, value-maximizing solutions.

Now, thanks to Las Vegas Trademark Attorney's recent post welcoming Michael Hall to the Trademark Blogosphere [Registration Ruminations]we learn how to Help[] Yourself by Helping Examining Attorneys.  In other words, by satisfying examining attorneys' "earned point" interests.

Back in December 1997, Fordham University School of Law hosted a discussion at which Judge Quinn of the TTAB and other panelists spoke about PTO practice.  Richard Friedman, a former examining attorney who had moved on to the NBA (as counsel, not a player!) explained how it works:

[I]f an examining attorney pulls an application that is in perfect order and can be passed right to publication, that is two points for the attorney.  The examining attorneys love that.  They are already thinking ahead to their bonus at the end of the year when they do something like that.

So your job should be to concentrate on making an application two-points perfect. . . .

Let’s say some kind of substantive refusal area comes up, but it is a gray area — not the easy section 2(d) case or the easy descriptiveness refusal.  Let’s say the examining attorney pulls an application that is in a gray area, but everything else is okay.  The examining attorney is apt to say, “All right, I am going to take my chance and not send the refusal so I can get those two points for that first-action publication.”

If, however, there are other things wrong in the application papers, little stuff, and they are going to have to send you a letter anyway, then they might as well put in the substantive refusal to cover themselves.  That is the way things work, whether we on the outside like it or not.

Discussion, Trademark Prosecution in the Patent and Trademark Office and Litigation in the Trademark Trial and Appeal Board, 8 Fordham Intell. Prop. Media & Ent. L.J. 451, 461 (Winter 1998).

In 2005, The Trademark Reporter published an article on the registration of product configuration trade dress with respect to three product types.  For one, the authors specifically observed:

To the extent one central theme existed, those who submitted their evidence of acquired distinctiveness at the time of filing the application, or before USPTO examination, appeared to avoid any challenges to the sufficiency of the evidence provided.

Karen Feisthamel, Amy Kelly, & Johanna Sistek, Trade Dress 101: Best Practices for the Registration of Product Configuration Trade Dress With the USPTO, 95 Trademark Rep. 1374, 1383 (November - December 2005).

This particular study involved a narrow field, but the authors’ observation makes perfect sense if you’re looking at it from an examining attorney’s perspective.  As Richard Friedman said, “The way to make your life easier when prosecuting trademarks at the PTO is to make the examining attorneys’ lives easier.”  Needless to say, following this strategy does not remotely guarantee that you won’t receive a refusal, and obviously there will sometimes be good reason to file an application that you know will result in an office action.  However, it puts you in a position where the examining attorney might be inclined to resolve a close question in your favor.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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From Wired:

The Recording Industry Association of America is objecting to the webcasting of pretrial arguments in an upcoming file-sharing trial.

The RIAA claims that the re-runs "will be readily subject to editing and manipulation by any reasonably tech-savvy individual."

That is among the arguments the RIAA is making in urging a federal appeals court to reverse a Massachusetts federal judge's order that would allow the pretrial broadcast this Thursday. The broadcast, assuming it goes forward, will include a Boston University student and his attorney challenging the RIAA's copyright infringement case. It is believed to be the first time a U.S. federal trial court has allowed a live internet stream from the courtroom.

"Petitioners are concerned that, unlike a trial transcript, the broadcast of a court proceeding through the internet will take on a life of its own in that forum," the RIAA wrote (.pdf) the U.S. 1st Circuit Court of Appeals. "The broadcast will be readily subject to editing and manipulation by any reasonably tech-savvy individual. Even without improper modification, statements may be taken out of context, spliced together with other statements and broadcast (sic) rebroadcast as if it were an accurate transcript.

Such an outcome can only do damage to Petitioner's case."

For full article, click here.  Thanks to Gwynne Monahan tweeting as @econwriter5.

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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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From Likelihood of Confusion -- a must read about the foolish-ness-esses of applying too much knee-jerk law to the business of business.

A reader writes to New York Times Q&A guy Stuart Elliot with a question that’s on a lot minds:  What’s with this “Mastercard card” stuff you hear on the commercials?  There are, evidently, two answers, the second of which was LIKELIHOOD OF CONFUSION®’s guess and the first of which is… well, here, read it for yourself:

“Essentially, many times it’s because we’re driving consumers to use their physical payment card,” says Jon Schwartz, a spokesman for MasterCard Worldwide in Purchase, N.Y., “so we must distinguish between our brand and the MasterCard-branded credit or debit cards that consumers utilize to make purchases.”

You must, eh?  Well, in this humble marketing-and-branding-savvy-law-blogger’s opinion, you’re not.  We can barely follow what you’re talking about, and that’s because what you’re talking about, Jon — can we call you Jon?, thanks — is incoherent. 

You must read it all.  Now.  Here.

Ah.  Sanity.  I feel all restored and reasonable again.  Thanks Ron! (@RonColeman)

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I recently advised a client that his IP dispute with a virtual world was just the type of cutting edge, paradigm busting, sophisticated legal problem that people go to law school to resolve.

Good for litigators.  Bad for client.

I'll return with business advice for resolving legal problems with business savvy but pause here to share with you Drinker Biddle's recent parade of horribles on IP challenges facing virtual worlds and their entrepreneurs.

Generating and Protecting Intellectual Property in Virtual Worlds (.pdf)

By: Gary J. Rinkerman, Philip J. Cardinale & Janet Fries

The rapid growth of online “virtual worlds,” or computer-based interactive electronic environments, such as Second Life® and There.com, has created new opportunities for creating custom, virtual content, and for advertising and selling “real world” and virtual products and services. Along with those opportunities come a number of unique and potentially complex legal issues that arise in establishing and enforcing intellectual property rights – including trademark, trade dress, copyright, rights of publicity and other rights – in the context of “virtual realities.” Conversely, owners of such rights need to be cautious in deciding whether to create their own presence in such virtual worlds, especially if the virtual world’s Terms of Use contain restrictions on how IP rights must be allocated or licensed, or how IP disputes must be resolved. Some companies may elect to create a presence in virtual worlds, but others may be “dragged in” to virtual environments by the need to monitor usage and enforce IP rights, since IP usage in these virtual environments can have significant real-world impacts.

The solution to sophisticated commercial/legal problems arising in virtual worlds requires both IP lawyers and business/negotiation advisors to resolve.

H/t to Professor Michael Scott @CopyrightLaw who is a must-follow for lawyers with IP issues on twitter; find him @InternetLaw @PrivacyLaw and @LawProf as well.  And don't forget to subscribe to his excellent Singularity Law Blog as well.

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Remember those days - largely before you went to law school - when you believed all lawyers with whom you were going to practice would evidence the benefits of a classical education?    I believed.  As did two ex-husbands until they first attended law firm holiday parties.  No mariner ever pulled them away from the hors d'oeuvres table to arrest them with the power of a seafaring tale. 

Alas, we divorced years and years before I could give them Blawg Review #189 as Exhibit A to restore their pre-law belief in the well-educated and sophisticated legal practitioner.  In #189, Colin Samuels restores the image of the legal profession by following the tale of the Ancient Mariner -- he of the "long grey beard and glittering eye" -- who weaves an irresistible narrative for the transfixed wedding guest, a story seared into the memories of those of us who happily squandered our University years studying literature.  ("what are you going to do with a literature degree, honey?")

Audaciously comparing those of us who blog to the mighty Coleridge, Colin Samuels writes:

As writers, many of us have struggled to find our voices online. Do we write as we would speak to friends and colleagues or as we would write for professional publication? Do we censor ourselves or seek controversy? Do we write on non-legal topics or maintain a strictly professional image online? Will our writing be an end in itself or a means to another end? Each new legal blogger has asked these and many other questions of himself or herself, only to find them being asked again and again as his or her blogging continues. As highly-educated professionals, we are often the severest and most persistent critics of our own writing.
 

Like the Mariner, Samuels' most recent Blawg Review (see his previous brilliant efforts based upon Dante's  Hell, Purgatory, and Heaven) so arrested my attention that I didn't even do what I must admit I always do with Blawg Review -- skim down to see whether one of my weekly posts was included (not).

I can only say to you:  Read it.  Now.  And if you're looking to justify your IP time, here are the IP links you will find woven into one of the great narrative poems of English Literature.

Venkat Balasubramani wrote that the government's use of the Computer Fraud and Abuse Act has led to a muddled discussion which confuses two separate issues: "Somehow the discussion has shifted from whether it's appropriate to use Ms. Drew's commission of a tort to support a CFAA conviction to whether the CFAA should cover access in excess of a website's terms of use. Two conceptually distinct issues that people tend to conflate."

The Media Bloggers Association legal blog explained the import of the verdict for bloggers: "There is understandable concern among many online commentators about the implications of the particular legal theories that formed the basis of the convictions, based fundamentally on the violation of various levels of online terms of service that are seldom more than glanced at and clicked through by experienced Internet users. The MBA encourages responsible use of the online resources via its Statement of Principles...."

Shortly after the verdict, Orin Kerr posted a tongue-in-cheek revised Terms of Service for The Volokh Conspiracy blog. These revised terms, which required such user promises as "Your middle name is not 'Ralph'," "You're super nice," and "You have never visited Alaska," were meant to illustrate how easily (and routinely) we can violate the use terms of many sites, resulting in potential criminal liability after the Drew decision. Scott Greenfield commented that "As terms of service go, Orin's are relatively reasonable." Greenfield noted that his blog has only one rule ("No assholes"), but that he has and will apply it arbitrarily and ruthlessly.

Frank Pasquale considered whether Google, which has become a gatekeeper for much of the world's online information, should have the right to censor that information: "Bottom line: someone in government has to have the right to determine "if the search algorithm [has become] biased." Without that basic assurance, black box search engines now are about as big a menace as the black box economy was five years ago. We trust the math wizards at Google now as much as we used to admire the financial innovators at Bear Sterns and Goldman. Only time will tell if our faith in the mathematicians was misplaced yet again." Meanwhile, Google's weak sister, Yahoo!, has apparently thrown in the towel on its internet radio project, ceding the project to CBS. David Oxenford discussed whether the move would affect the decisions recently made by the Copyright Royalty Board, which relied at least in part on arguments about internet radio's economic power which have not been borne out.

Maya Richard suggested four tactics to preemptively protect patent assets from patent trolls: monitoring patent filings for applications related to your portfolio; hedging risk with patent infringement insurance; retaining skilled IP counsel to build a case for major patent assets; and joining an industry protection group. Also writing on a patent-related topic was R. David Donaghue, who noted that despite the Twombly decision, "many district courts are requiring that patent defendants plead affirmative defenses and, in some cases, counterclaims to the higher plausibility standard." He suggests remedies for this uneven application of the Twombly standards.

id you think road kill would be the most unlikely legal topic addressed in this Blawg Review? Hah! Ron Coleman explained that "tackiness is not grounds for refusal to register" a trademark. The owners of the Chippendale's male striptease concern are hoping to register their distinctive collar-and-cuffs costume as a trademark and Coleman pointed out that they've lined-up some considerable legal and expert support for their efforts. John Welch noted that the PTO has already "conceded that the Chippendale 'outfit' is product packaging rather than product shape" and Ryan Gile added that, faced with "400 pages of evidence [presented by Chippendale's, the] PTO had no problem recognizing that the Chippendales trade dress had acquired distinctiveness." Rebecca Tushnet suggested that the claims were limited in the application, but confused rather than clarified matters: "If the fact that the torso wearing the collar and bow tie is unclothed is not part of the mark, then any man in an outfit with cuffs and a bow tie is copying the Chippendale's mark."

Blawg Review sails on next week when Marc Randazza and his Satyriconistas at The Legal Satyricon host.

Blawg Review has information about next week's host and instructions how to get your blawg posts reviewed in upcoming issues.

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Check out the ever-exhaustive Settlement Perspectives blog this week for a walk down the organized aisle of mind-mapping for your mediator.  As in-house counsel John DeGroote explains:

 

A sample Mediation Mind Map, available in .pdf format here.

You’ve been there before. You’ve done your homework to prepare for the mediation, ready to engage over the issues in the case. A trial bag filled with critical notes, important documents, and detailed spreadsheets sits within arm’s reach. But the other side speaks first, and offers something insightful like: “My client’s Widgetmaster doesn’t work; since you made it, you owe us money.” Now it’s your turn.

Sometimes it takes a little more effort to untell a story than to tell it. In most disputes negotiation success depends on a command of the details, and in your next mediation the outcome may hinge on your mediator’s ability to remember those details on the fly. Do you have a way to get them across to your mediator before she meets alone with the other side?

What Is a Mind Map Anyway?

After years of 3-ring binders, graphics and white boards, I have learned that a mind map is often the best way to organize and communicate the complex, critical information you — and your mediator — will need to convey before the case can settle.

Read the full post here!

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An ounce of prevention . . . . with thanks to Patent Baristas for the following:

Book Review Monday: Intellectual Property Culture

cul·ture (n.) the set of shared attitudes, values, goals, and practices that characterizes an institution or organization (Merriam-Webster’s Dictionary Online).

The book “Intellectual Property Culture: Strategies to Foster Successful Patent and Trade Secret Practices in Everyday Business” by Eric Dobrusin and Ronald Krasnow is. . . . not just about the management of intellectual property assets, it is about creating a culture within an organization that recognizes that intellectual property is essential to the very livelihood of the business and knowing how to proactively protect IP assets.

  The guiding principal is that any organization that wishes to survive in the knowledge economy must develop an IP culture:

To thrive in the knowledge economy, organizations must cultivate attitudes and behaviors that recognize IP, respect IP, and trade upon the value of IP.  This needs to be done organically, within each individual organization, and to meet the specific needs and characteristics of each such organization.

The trick, of course, is to develop a “healthy IP culture.”

For full review, click here.

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Jaw dropping from Techdirt:

RIAA Agrees To Settlement, Then Asks For Twice As Much

from the anything-they-can-get-away-with dept

Ray Beckermann is, once again, highlighting some highly questionable activities by the RIAA, noting that after getting defendants to agree to a settlement amount, the RIAA sometimes immediately asks for double the agreed upon amount, and submits that proposal to the court. It's unclear how widely this is happening, but at least in one case, it's good to hear that a judge has prevented the RIAA from getting away with this practice by denying the agreement, noting the different sum than the one agreed to by the parties:

Judge Nancy Gertner: ELECTRONIC ORDER entered re Stipulation To Judgment and Permanent Injunction filed by All Plaintiffs as to defendant LaShaana Straw. "The parties' Stipulation to Judgment is DENIED. Plaintiffs request that the Court approve a Stipulation requiring the Defendant to pay $10,700, yet state in their Response that they have agreed to accept half that amount, $5,350, in full satisfaction of the monetary portion of the proposed judgment. The Plaintiffs do not provide any reason for this highly unusual arrangement, and the Court will not approve a stipulation which fails reflect the actual terms of the agreement.

Click here to read on.

image from PickYourTarget.com

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Students Dropping Out Of School To Pay RIAA Settlement Fees?

from the educational-campaign,-huh? dept

You may recall a couple years ago that an RIAA representative suggested that an MIT student should drop out of school and get a job in order to pay the fine it was demanding she pay for sharing some music. Now, according to the associate dean of student development at the University of Wisconsin, some students are doing exactly that: "Some students have had to drop out of school in order to pay for their legal fees." No examples or proof is given, so I'm wondering if this is just a throw-away line.

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I'm not certain whether all of my IP ADR colleagues think business method patents are . . . well . . . ridiculous like I do, not to mention yet another way to stifle innovation,  ingenuity and the collaborative commercial spirit that made our economy great, but they'll have to weigh in now if they don't agree that this is very good news American business  . . . . 

Tech Crunch tells us today that Your Business Method Patent Has Just Been Invalidated, and not a moment too soon for an ailing economy, say I.  Snippet below.  Click above for full article.

If you are one of the recipients of the 1,300 business method patents issued in the U.S. last year, or the thousands more that have been issued rampantly and indiscriminately over the past decade, you are probably out of luck. The U.S. Court of Appeals in Washington, D.C. ruled today that business methods are not patentable unless they meet fairly narrow rules. What this means for Internet companies and patent trolls alike is that many of their existing patents may be invalid—at least until the case is heard by the Supreme Court, assuming it is appealed.

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Turns out the term "Hollywood Contract" is not an oxymoron after all.  Not if you follow the three-part series Why Every Writing Team Should Have a Written Collaboration Agreement over at Theater and Entertainment Law.  And don't think you don't need one of these if you are part of a young writing team just starting in business with a friend.  I recently mediated a litigated dispute between two life-long friends with the loss of the friendship being the highest cost of the parties' failure to spell out the terms of their agreement.

An ounce of IP Prevention is worth a pound of litigation cure. 

As blogger and entertainment attorney Gordon P. Firemark explains:

In the absence of a collaboration agreement, the parties may or may not be considered partners. The work they create may or may not be considered a “joint work”, and thus ownership and control of the disposition of the work called into question. While it is true that these issues tend only to arise in situations where the team has broken up, or is in the process of doing so, the existence of a collaboration agreement can be useful in managing the parties’ separation. In some respects, a collaboration agreement is the creative team’s equivalent of a prenuptial agreement. But in many cases the collaboration agreement can be much much more.

By negotiating the terms of the collaboration agreement at the outset of the work, the parties can uncover differences in their expectations, and avoid problems that might otherwise arise later. In the absence of a collaboration agreement, the parties’ efforts may be lost if there’s no meeting of the minds, and the project may simply wind up being abandoned… or mired in litigation. Obviously, it is important to work with a lawyer to craft a workable contract that’s tailored to your team’s specific circumstances.

Continue reading here.

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A truly excellent post over at IP Asset Maximizer Blog on reducing legal expenses while still protecting your inventions.  To give you a taste before you speed on over there, blogger and self-described "Intellectual Property and Patent Business Strategist and 'Recovering Patent Lawyer'" Jackie Hutter suggests that the "disciplined" entrepreneur will

obtain[] patent rights that are adequate, but are not so broad as to fully protect the upside opportunity associated with the innovation. The risk to such an approach is that if the innovation is a runaway success, the patent rights may not be broad enough to fully exclude competition. Few product or technology innovations are truly runaway hits, however, so the organization that decided that not all patents must be gold-plated would probably come out significantly ahead in patent legal spends.

To business people, we attorneys can seem like overly anxious mother (and father) hens in the provision of both transactional and litigation services.  I learned this early as a paralegal (back when New York City was bankrupt and Times Square truly frightening to the 23-year old who took her lunch breaks prowling mid-town Manhattan).  Though I worked for the head of the litigation department, my desk was outside the door of the attorney who advised Uniroyal about the potential problems posed by their advertising.  He made the litigators look like pussy-cats, shouting on a daily basis at whoever it was in the ad department who just wanted a little room to create, man, and the "suits" were always worrying about liability for goodness sakes when it didn't much matter if someone sued you if you weren't selling any $%#@^% tires!! (or Sperry Top-Siders).

So remember, everything in moderation.  As Jerry McGuire's infamous mission statement exhorted:  fewer clients; less money. 

(by the way, that's my good friend Russel asking "do you know your name?")

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Apparently I was in a coma in March of this year when "the press went crazy for Martin A. Nowak’s study on the value of punishment."  As Scientific American recently reminded us

A Harvard University mathematician and biologist, Nowak had signed up some 100 students to play a computer game in which they used dimes to punish and reward one another. The popular belief was that costly punishment would promote cooperation between two equals, but Nowak and his colleagues proved the theory wrong. Instead they found that punishment often triggers a spiral of retaliation, making it detrimental and destructive rather than beneficial. Far from gaining, people who punish tend to escalate conflict, worsen their fortunes and eventually lose out. “Nice guys finish first,” headlines cheered.

See Using Math to Explain How Life on Earth Began here.

What does this have to to with IP ADR?  Plenty!

When negotiating the settlement of an IP dispute, framing your proposals as rewards rather than threatening further punitive litigation strategies and tactics will  make the other guy far more likely to engage in collaborative problem solving and your client far more likely to praise your extraordinary litigation skills.

Special note to mediators and settlement judges:  this should put the last nail in the coffin of the "litigation is risky and expensive" settlement strategy.

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See what IPKAT's talking about when it notes its fascination with the music industry's efforts to "develop new business models" in its post  on the formation of the Featured Artists Coalition. IPKAT comment below.  What excites the KAT at the link above.

The IPKat is fascinated by the continued efforts made on all sides of the music industry to develop new business models and feels that it's clearly apparent that there are almost as many potential business models as there are business interests -- this seems to herald the end of any "one size fits all" model. Yet there's safety in numbers, which means that even big name artists need to organise within groupings such as the FCA.

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... and agrees to donate it to the charity of your choice.

It's GOOD!

h/t Freakonomics here.

Sharing Paris iPhone photos - this at Le Cimetière du Père-Lachaise

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The Lawyers' Guide to Collaboration Tools and Technologies

Say goodby to quill pens and obstreperous adversarial posturing.  Join authors Dennis Kennedy and Tom Mighell in learning "Smart Ways to Work Together" in their Lawyer's Guide to Collaboration Tools and Technologies.

If you're practicing intellectual property law (why else would you be reading this blog) you know that technology is moving faster than the speed of the law and that your own practice is often moving faster than any human being possibly could.  What can Dennis Kennedy and Tom Mighell help you do about it?  Here's what their new book's ABA blurb says it has in store for all of us:

This first-of-its-kind guide for the legal profession shows you how to use standard technology you already have and the latest "Web 2.0" resources and other tech tools, like Google Docs, Microsoft Office and SharePoint, and Adobe Acrobat, to work more effectively on projects with colleagues, clients, co-counsel and even opposing counsel. In The Lawyer's Guide to Collaboration Tools and Technologies: Smart Ways to Work Together, well-known legal technology authorities Dennis Kennedy and Tom Mighell provides a wealth of information useful to lawyers who are just beginning to try these tools, as well as tips and techniques for those lawyers with intermediate and advanced collaboration experience.

Collaboration technologies and tools are the most important current developments in legal technology and are likely to remain so for the foreseeable future. Explained with minimal technical jargon, the book focuses on highly practical and usable ideas that you can put to work straight away.

With practical advice on how to use specific tools and concrete action steps to take, lawyers and law firms at all levels will benefit from working together better.

You'll learn:

* The basics of collaboration and collaboration tools

* How to select and implement tools and strategies

* The best ways to collaborate on documents, cases, transactions, and projects

* How to collaborate inside and outside the office

* How to collaborate using tools you already have or own

Technology now makes it easier than ever to work with others -- this is the first guide dedicated to the special requirements of the legal world with the practical steps it takes to do it right.

Far too often attorneys come to mediations and settlement conferences meeting one another for the very first time.  They have demonized one another, transmitted the satanic nature of the adversary to their clients -- who had already branded the opposition as cousin to the Bin Ladens -- and hope to work out a "deal" sufficiently satisfying to the parties that the clients are happy with the lawyers.

You'll litigate and settle all of your complex IP litigation far more quickly and efficiently with an attitude of collaboration and tools of cooperation.  The litigation will be less acrimonious and less expensive, making it far less likely that your clients will choose you as the next target of the lingering sense of injustice they have after some dimwit mediator splits the baby in half and hammers them to reluctantly accept a bad deal as the only alternative to an expensive and risky trial.

I can't express the value of Kennedy's and Mighell's book any better than did Patrick J. McKenna, author of Herding Cats, First Among Equals, and First 100 Days: Transitioning A New Managing Partner.

There is an old adage that one can either work hard or work smart . . . you have a choice. And we would all choose working smart, but once having made that obvious decision, you then have to figure out how.

The good news is that Kennedy and Mighell have now produced the most comprehensive playbook, whether you are a solo, large law firm practitioner or working within a legal department, for how to choose and use the right technology tools to 'smartly' collaborate.

And for those who know that collaboration is a profoundly human endeavor, the authors identify all kinds of practical and cultural issues to watch for. This is one of those few texts that will be dog-eared throughout, for continued reference."

If you're still not convinced, here's the first chapter courtesy of the Kennedy, Mighell and the ABA.

Buy it.  Read it.  Catch your practice and your life up with the 21st Century.  Thrive.

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Why LegalTED?  Because we're using 18th Century dispute resolution technology to solve 21st Century conflicts.  Because we're all scratching our heads over items like the one below from SlashDot  -- IBM Wants a Patent on Finding Areas Lacking Patents posting them, and then going on with our business days as if there weren't anything we could do about it -- waiting for Congress, for instance, to solve a problem that rests in our own hands.

"It sounds like a goof — especially coming from a company that pledged to raise the bar on patent quality — but the USPTO last week disclosed that IBM is seeking a patent for Methodologies and Analytics Tools for Identifying White Space Opportunities in a Given Industry, which Big Blue explains allows one 'to maximize the value of its IP by investigating and identifying areas of relevant patent 'white space' in an industry, where white space is a term generally used to designate one or more technical fields in which little or no IP may exist,' and filling those voids with the creation of additional IP."

I'm back from the State Bar Convention, in Monterey, no less, and not a single lawyer I spoke to had ever even heard of the TED Conference (except my good friend Lilys McCoy for whom I imagine I've now irrevocably disqualified myself as her mediator). 

And this just in from How Appealing, a link to the New York Times article on copyrighting the law, except below and link to the NYT article, Who Owns the Law? Arguments May Ensue

IN a time when scientists are trying to patent the very genetic code that creates life, it may not be too surprising to learn that a variety of organizations — from trade groups and legal publishers to the government itself — claim copyright to the basic code that governs our society.

Carl Malamud runs PublicResource.org, which provides the text of statutes, court decisions and construction codes at no charge.

Well, it is still a bit of a head-scratcher. Let me try to explain.

To be clear, it has been established by the United States Supreme Court (no less) that the law and judicial decisions cannot be copyrighted. They are in the public domain and can be used and reused in any way possible, even resold.

Yet, in the real world, judicial decisions and laws and regulations can be exceedingly hard to find without paying for them, either in book form or online. And that doesn’t even include quasi-official material like the numeric codes doctors are required to use when filing for Medicaid or Medicare payments or the fire safety codes that builders are required to follow.

“The law is pretty clear that laws and judicial opinions and regulations are not protected by copyright laws,” said Pamela Samuelson, a professor at Boalt Hall School of Law at the University of California, Berkeley. “That isn’t to say that people aren’t going to try.”

And this (copyrighting tatoos) from AvvoBlog today (another NYT article here).

So what do I mean when I say LegalTED? 

This is the kind of thinking I'm talking about -- Howard Rheingold on Collaboration.

So the first question (other than who will be on the Steering Committee besides the few passionate advocates of transformation I've already spoken to) is this:  WHAT IS THE QUESTION?

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When I celebrate the fact that the means of production are now in the hands of the people, I'm not talking about the ten-fingers of your 13-year-old daughter (great as her uploaded videos of the family cat might be).

If you're longing for quality documentary content on the internet, check out the KobreGuide, which has a LAW CHANNEL channel here.

The Guide takes its name from its publisher and editor  Ken Kobré whose textbook (below, right) has been the widest-selling text on photojournalism in the world for nearly thirty years.  

I'd be excited about this new way to find quality moving journalism on the 'net whether or not my good friend journalist-mediator Jerry Lazar wasn't serving as Editorial Director -- a guy with some of the best instincts for quality journalism in the country.  Here's how the Kobre Guide describes itself:

This project is an antidote to comprehensive Web video portals, such as YouTube and MetaCafe... We're focusing instead on handpicked, high-quality documentary-style journalism that is being produced primarily by major media outlets -- and frustratingly difficult for consumers to find...

We're a "curated" site (to use the latest buzzword, now that "edited" seems to have lost favor), which means that we're relying on discerning eyes and ears of people like YOU (and not search engines or web bots) to help alert and point us to the creme de la creme ...

We've already located scores of prizeworthy multimedia gems to showcase at launch, and now we're soliciting input from smart folks like you, who are in a position to know about and share the good stuff out there...

Criteria? ... Think "60 Minutes" TV newsmagazine-style journalism (NOT daily news or event coverage) -- but geared for the Web... Mainly video, but also compelling audio-slideshows, or a hybrid thereof...

In short: True (nonfiction) journalism Web multimedia stories of the highest professional quality...

And thanks for the shout out Professor!

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Blogger arrested, accused of posting 9 unreleased Guns N' Roses songs

Those of you old enough to remember Woodstock in "real time" or to have attended yourself, you'll no doubt recall the magic moment when the concert producers decided to tear down the fences and make the concert free.

Then they made a lot of money on the documentary.

I suppose they could have called the local, state or national authorities to arrest the trespassers, but would that have made good business sense?  I don't think so.  When the culture is changing faster than the law, it makes far better business sense to co-opt the movement than to arrest it.   

Still, some people just don't get it.  

I'm linking you to the Los Angeles Times story on the arrest of a local blogger for streaming Guns 'N Roses.  Since I'm printing the Times article in its entirety, you may consider this a teeny tiny act of civil disobedience in the tradition of Thoreau (his Civil Disobedience here).    

But listen, guys.  Send the firemen instead of the FBI.  They're always much better looking.  

Need I say there's got to be bigger story here?  Like, selective prosecution?  Any criminal lawyer readers out there.

Below, the L.A. Times story.  Complete.

("Yes, Officer.  I did pay for the cartoon over at istockphoto.com.  I've got the receipt here somewhere")
 

Kevin Cogill, 27, of Culver City, who admitted to allowing public access to the songs on the Antiquiet blog, was arrested today on suspicion of violating federal copyright laws.

By Scott Glover, Los Angeles Times Staff Writer 

A man accused of posting nine previously unreleased songs by the rock band Guns N' Roses on a website where they could be accessed by the public was arrested at his home early today on suspicion of violating federal copyright laws, authorities said.

Kevin Cogill, 27, is accused of posting the songs, which were being prepared for commercial release, on the Internet blog Antiquiet in June, according to an arrest affidavit. The site received so much traffic after the songs were posted that it crashed, the affidavit states.

Cogill admitted to posting the songs when he was questioned by an FBI agent, according to the affidavit. He was arrested at his home in Culver City this morning and is expected to appear in U.S. District Court in Los Angeles later today, said Assistant U.S. Atty. Craig Missakian.

I'll be very interested to see what the U.S. District Court Judge does with this.  We have a very serious federal court bench here who do not like playing games with their extremely limited and extraordinarily valuable time.

For a genuine legal analysis see Citizen Media Law Project's coverage for which I'm providing a link and an excerpt:  

Update: Cogill has in fact been charged under 17 U.S.C. § 506(a)(1)(C), which implements the copyright amendments included in the Family Entertainment and Copyright Act of 2005. I've been able to locate the criminal complaint filed against him, and it charges that he "knowingly and willfully distributed a copyrighted work being prepared for commercial distribution, namely nine previously unreleased songs by the band Guns n' Roses, by making the songs available on a computer network accessible to members of the public."

(You can follow further developments in the case by going to our legal threats database entry, United States v. Cogill.)

Speaking of Woodstock . . . Jimi Hendrix' Star Spangled Banner below.

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Thanks, first, to Google Reader for offering me feeds to blogs it knows I'd like but don't have (like Peter Zura's 271 Patent Blog) and then making it easy for me to add them to my Reader, which I can now read on my iPhone thanks to Apple.  Really.  I'm grateful (but could someone now please replace Outlook with a program that doesn't move at a glacial pace?)

On to the real purpose of this post with a hat tip to Peter Zura's 271 Patent Blog for this item out of Denver.   

Lofgren, D-Calif., told a crowd in Denver on Tuesday that it is crucial for Congress to pass legislation to update the U.S. patent system next year -- . . . 

Lofgren, who represents the Bay Area and is a key member of the House Judiciary Committee, said a new effort should begin with "things we know we can agree on." A proposal that would curb judicial "venue-shopping" for favorable courts is critical as is language to address patent abuses, she said. "How do you legally set a framework that prevents abuses and allows for a vigorous system that protects intellectual property?" Lofgren asked aloud. "It's not easy to come up with solutions."
 

Is talking about the things we agree upon first always the best negotiation tactic?  It's certainly helpful when you're brainstorming solutions to intractable disputes -- here -- "set[ting] up a framework that prevents abuses and . . . . a vigorous system that protects intellectual property."

When the debate is particularly rancorous, as is often the case in patent infringement litigation, dove-tailing the parties' differences -- an issue upon which they invariably agree -- is one of the best ways to locate and maximize value to both parties.  Lax and Sebenius in their must-read 3-D Negotiation remind us that "complementary differences -- pairs of high benefit-low cost items" in which one side values the point highly and the other can provide it at relatively low cost is a good place to begin.

Small talk at the commencement of negotiations -- which itself increases the likelihood of a deal -- is one way the parties can locate these high-benefit-low cost items, particularly where they haven't identified them before the negotiation begins.  What kinds of items are easily dove-tailed?  Lax and Sebenius provide us with the categories as follows:

Dovetailing Differences in Forecasts or Beliefs about the Future.

Because the settlement of patent infringement litigation invariably requires one party (or both!) to license the other, the parties' differing expectations of market success or likely technological changes that could make the IP less valuable or even obsolete, are a good place to look for the high benefit-low cost synergies mentioned by Lax and Sebenius. 

If party A firmly believes that sales are going to increase over the next five years and party B is "certain" that they will decrease, their differences in future projections can be dove-tailed by a graduated schedule of fees.  Party B -- who believes there will be minimal to no sales in year five -- can offer higher royalties in year 5+ and lesser in the earlier years.  The attempt to dove-tail these differences is also a good way to call your bargaining partner's bluff.  You'd be amazed how quickly  certainty drains from party predictions when they're asked to put their own money on the gamble.

Dovetailing Differences in Attitudes Toward Risk

I recently negotiated the settlement of a patent infringement case in which Party A and B were considering a merger of the two companies as a means of settling their disputes.  Both parties held multiple patents, a few of which were being litigated in other proceedings. Both parties' valuation of the risk of loss if the event of adverse judgments was approximately the same, i.e., there were no material differences in the parties' forecasts about the future outcome of the lawsuits.

The parties did, however, have substantially different  attitudes toward risk and differing abilities to sustain losses.  Party A, by far the richer player, was much less averse to the outside risks of the pending litigations.  Party B was concerned that the the value of the merged company -- his only real asset -- could be destroyed in the event all of the lawsuits were successful.  The parties had reached impasse on the value of B's shares and of the merged enterprise primarily because of these uncertainties.  Because Party A could weather the outside risk, it agreed to assume it (wagering not only on his ability to satisfy potential judgments but his insurance carrier's willingness to settle existing disputes over coverage).  When these uncertainties were removed from B's plate, he was willing to assign far more value to the merged company, enabling the detailed negotiations for the merger to commence.  /*

For more hypothetical examples, see the following 3-D Negotiation Risk Attitude Dovetailing sub-sections -- Selling a Restaurant; A Joint Venture of Opposites, A Public-Private Real Estate Deal and Assessment Ambiguities.

Dovetailing Differences in Attitudes Toward Time

This category of dovetailing is very like my first hypothetical.  Here, however, the differences in expectations (and desires)  concern the mere passage of time coupled with party shares in a joint venture.  Here, Party A is impatient for immediate returns on his investment, which he needs to fund a new enterprise.  Party B, who is older than A and looking forward to retirement, is more interested in creating a stream of income in the future.

In this scenario, Lax and Sebenius suggest a structure in which Party A earns a smaller share of the early profits and Party B earns a larger share of the later profits.

All of these potential solutions to intractable litigation involve high level financial planning and business forecasting that are far beyond the scope of most "pure money" disputes.  There are few patent infringement disputes, however, that couldn't be more easily resolved by dovetailing party differences.  The law firm's settlement team should be devoting as much time, thought and energy to negotiation planning as its litigation and trial team is devoting to just winning the darn thing.   

______________________

*/   Facts greatly simplified to protect the confidentiality of the mediation and to avoid discussion of unnecessarily complex financial transactions.

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I recently posed the following question to the IP ADR Blog's readers and to my LinkedIn network:  

Which patent infringement litigation parties (if any) benefit from the inefficiencies in the process? 

As usual, my LinkedIn Network delivers.  

The really terrific, thoughtful answers to the question below. 

Thanks to each one who answered.  I'll be following this up with an article or lengthy post soon.

Unless the litigants are disproportional in size there are no winners from these inefficiencies. One can even say that the biggest losers in this process are not even a party to the case. I'm referring to the consumer or the true bearer of the inefficiencies and related cost.

The speed of innovation, the product development, and the marketing efforts will continue to evolve into quicker and more efficient cycles. At some point the legal process will be forced to adapt. A good example of this is the Federal Rules of Civil Procedure on Electronic Discovery.

Change is good, and depending on how business is conducted, it may also be a necessity.

Francis Bueb CPA, CITP of Ueltzen & Co. 

Unless a preliminary injunction is granted, the defendant in a patent infringement case will likely benefit from a longer and less efficient process. Defendants usually want the plaintiff to have to keep shelling out money to keep the litigation furnace burning.

On the other hand, sometimes a plaintiff who is granted a preliminary injunction just wants to keep the defendant out of the market as long as possible. In such a case, the parties are likely competitors and the longer the defendant's competing product is off market the better for that plaintiff. Sometimes, even a litigation loss is a win for such a plaintiff if, say, the plaintiff's product is replaced by a newer version that is accepted by the consumers before the end of the litigation over the product that is replaced. 

Ryan H. Flax, IP Attorney, Dickstein Shapiro, LLP 

The one with more money.

Ed Green, Patent Lawyer, Coats + Bennett
 

The sad truth is that only the defense attorneys benefit from inefficiencies in litigation because they are charging by the hour. As for the litigants, the Plaintiff usually wants a trial as soon as possible. So, inefficiencies and delay benefit the Defendant, i.e. the accused infringer.

Scott C. Kinsel, Partner, Moore Landrey LLP

In fact the Plaintiff would be at lose because he/she may not get justice immediately. There is a proverb, “justice delayed, justice denied” and if the process is inefficient there would be delay and in such a situation the Plaintiff may not get quick justice. Also, if the plaintiff(s) do not succeed in getting an injunction order against the defendant(s), specifically in case of IPR matters, the Plaintiff may not be able to enforce his/her monopoly IP Right granted by the concerned IPR Office.

Ram Prakash Yadav, Manager - IPR at ACME Tele Power Ltd. Gurgaon

I'd agree with Ed on this one, deeper pockets benefit from inefficiencies.

Inefficiencies result in increased expenses. The increased expenses become a point of leverage in the dispute. I have had clients avoid exercising some of their rights in litigation because exercising their rights would have delayed the trial, which would have added expenses.

Generally, the Defendant has the deeper pockets - which I would suggest is part of the reason others have suggested the Defendant benefits.

Additionally, you do not have the number of frivolous law suits in patent litigation that you have in other civil litigation because it is so expensive to litigate patent infringement. Most patent owners cannot afford to file a complaint unless they are absolutely convinced they have a winning case.

The big loser in the process is the independent inventor or small company, who do not seek patent protection for their new ideas because they do not believe (perhaps correctly) that they will ever be able to enforce their patent, so why seek it. Ultimately, any novel products they develop that have a market will be stolen without any need for litigation.

Todd Sullivan, Managing Partner, Hayes Soloway, P.C.

Apart form the lawyers, I would say that alternative dispute arbitrators (such as the asker of this question) benefit - the inefficiencies of the legal process will drive more on both sides to use these alternative solutions. 

Between the two sides, I think either could benefit, it depends on circumstance - sometimes the patent holder benefits as a potential infringer may continue infringing while awaiting a resolution, and end up paying more when the case is settled - sometimes the infringer will benefit as they can continue profiting from their work while the case is argued, whereas if it was sorted earlier they might effectively be stopped in their tracks - I can easily see a case where both the above could be true.

Finally, the customers may benefit. New products may get developed which would never get launched if their weren't the delays and uncertainties that exist in the system.

Bernard Gore, Facilitation, Project & Programme Management

I don't think there's a simple answer to this, I'm sorry.

It depends on the country - some countries allow an ex parte interim injunction to be granted with no ability for the defendant to add evidence in an appeal. (Highly efficient or inefficient, depending on your point of view.) Either way, the inability to add evidence on appeal is inefficent, if justice is your aim.

It depends on the industry - in the pharmaceutical context, say in the US - the whole litigation procedure is skewed by the Hatch-Waxman regime. So here it even depends on the context of the particular dispute. So, if the 30 month stay is rapidly approaching with no prospect of a trial, then then innovator company will benefit from inefficiencies because they will keep the generic off the market longer, or have a good shot at an injunction in the mean time (depending, again on the patent, etc).

There are others, but this gives the general gist.

Duncan Bucknell, IP Strategist, Lawyer & Patent Attorney
 

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Now that my step-son is no longer my legal assistant (sniff) but an IP litigator with one of the best IP firms in the country (Irell & Manella) he's a source!!

Yesterday I asked him this question:  which patent infringement litigants benefit from the inefficiencies of the patent litigation process -- particularly those who are involved in protracted litigation like those lawsuits recently settled by Nokia and Qualcomm.

"Other than parties with frivolous lawsuits," I said, thinking that only marginal (but well-heeled) players might benefit from a system that was procedurally encrusted; unpredictable; costly; and, time consuming.

I've asked Adam to just allow the question to bounce around in his head for awhile as he litigates one of those infringement monsters that the Big Kids litigate.  Though he's new to the profession, it's often the young attorneys who see the process in unconventional and innovative ways because they haven't been doing the exact same thing for 25 years.  At least that's how it felt to me coming into the profession nearly 30 years ago.

Now I'm asking the same question of my readers -- how do the inefficiencies of patent infringment litigation benefit the parties?

To help prime the pump, I'm passing along without comment this article on the use of litigation to extract license monies from companies making products by one that doesn't as reported by the Communications and Technology Blog on Rates Technology Inc.   Excerpt below.

Rates Technologies has sued Nortel, Sharp Electronics and others. Apparently in 1998 the Wall Street Journal quoted Mr. Weinberger in an article titled "Payoff Pending," on December 7, 1998:

In the end, Mr. Marshall might have to sue some company for patent infringement -- and do so successfully -- before the industry takes his rights seriously. Mr. Marshall "had better be prepared to spend more than $1 million on prosecution, because that's what would be required," says Gerald J. Weinberger, president of Rates technology Inc., a Hauppauge, N.Y., company that says it has gone to court six times to prosecute patents in the telecommunications field. Mr. Weinberger says an aggressive stance in court is crucial to any enterprise based on patent licensing. "You don't get any licensees unless the parties become convinced that you will litigate," he says

Jerry Weinberger [of RTI told]  . . . . me that [h]e has agreements in place with 76 large companies such as Huawei Technologies, Lucent, and Cisco at this time. He says the larger companies understand how intellectual property rights work in the US while the smaller ones usually don't.

The following are statements from an e-mail from Jerry Weinburger:

When an infringer will not discuss their alleged patent infringement with RTI, there is little else that RTI can do except to pursue its remedies for the (willful) infringements in a court of competent jurisdiction. The remedies which RTI then seeks include damages, treble damages, a permanent injunction against further making, using, selling, offering for sale, and importing of the infringing products and services for the remaining lives of the Patents, payment of RTI's legal fees, and a product recall of all examples of those infringing items.

Although infringement is based upon a specific evaluation of a company's product(s) the '085 and '769 patents generally apply to hybrid cellphones, gateways, IP Phones, IP PBX's, edge routers, core routers, PC computers, ITSPs, and VoIP products, services and technologies, among several other telecommunications products, services and technologies.

Companies who decide to be covered under RTI Covenant Not Sue ("CNS") agreements are making a combined business and patent determination. The larger companies are easier to deal with, because they have many in house patent attorneys, and they do not feel that they are being roughed- they are making an informed business decision. Smaller companies tend to not respect the intellectual property of others. All makers, users, sellers, and importers are responsible for an infringement, and infringement is determined based upon direct, induced and contributory infringement; all allowing for interpretation of the Patents claims under the Doctrine of Equivalents. 

In total [RTI has] agreements in place with 700-800 companies and have litigated 25 times in 15 years.  . . . . Occasionally [says Weinberger] smaller companies want to negotiate and/or sue. Litigation he says costs about 2 million dollars.

 So how does it work? Generally his company contacts your company and shows you their patents. Your company then checks with its patent attorneys to see what infringes and what doesn't. If you want to be covered, you pay a one-time fee based on five tiers -- according to highest parent companies' worldwide sales... They do not deviate from these tiers. In exchange you get a covenant protecting you from a lawsuit.

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I've lived long enough to remember the Empire of the American Car Industry, 25 cent a gallon gas and 35 cent packs of cigarettes (I should have quit when prices reached the half dollar mark).

In the mid-80's Pulitzer Prize winner David Halberstam wrote a scorching indictment of the way the Detroit Auto Giants all but handed over the keys to their market dominance to the Japanese for whom the battle of Detroit and Toykyo looked more like taking candy from the hands of oblivious monster-car babies.  The Reckoning remains must-reading for anyone who does not wish to see Ozymandias /** written on the feet of a torso-less Statute of Liberty by the end of the 21st Century.  

I'm certain we're not the only civilization to cling to what we know; and, who, in the face of the almost certain market loss simply continue to do things the way we have always done them.

Which brings us to the recording industry, which has intimidated, bullied and sued its own market on its way into almost certain commercial oblivion now that capitalism has made possible that which Marxism failed to accomplish -- putting the means of production (and distribution) into the hands of the people. 

This morning, however, the New York Times Business section brings us Now Playing on YouTube:  Clips with Ads on the Side  -- the first indication we've seen of a Media Mogul Epiphany.  

After years of regarding pirated video on YouTube as a threat, some major media companies are having a change of heart, treating it instead as an advertising opportunity.

n the last few months, CBS, Universal Music, Lionsgate, Electronic Arts and other companies have stopped prodding YouTube to remove unauthorized clips of their movies, music videos and other content and started selling advertising against them.

CBS may be the most surprising new business partner in that its sister company, Viacom, is still pursuing its acrimonious billion-dollar copyright lawsuit against YouTube’s owner, Google.

So far, the money is minimal — ads appear on only a fraction of YouTube’s millions of videos — but the move suggests a possible thaw in the chilly standoff between the online video giant and media companies. Getting into the good graces of media entities is seen as critical to the future of YouTube, which has struggled to show appreciable revenue for video ads.

To read the full article, click here.

Quite the time for the members of the RIAA to rethink their market strategy in light of this development in its campaign to bully grandmothers, teenagers and disabled single mothers. 

From Slashdot:

 Phase I of the RIAA's misguided pursuit of an innocent, disabled Oregon woman, Atlantic v. Andersen, has finally drawn to a close, as the RIAA was forced to pay Ms. Andersen $107,951, representing the amount of her attorneys fee judgment plus interest. But as some have pointed out, reimbursement for legal fees doesn't compensate Ms. Andersen for the other damages she's sustained. And that's where Phase II comes in, Andersen v. Atlantic. There the shoe is on the other foot, and Tanya is one doing the hunting, as she pursues the record companies and their running dogs for malicious prosecution."

(empahsis mine)

Merrily, merrily, merrily, merrily life is but a dream . . . . . 

_________________________

**/  For non-Lit majors, Ozymandias by Percy Bysshe Shelley below.

I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shatter'd visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamp'd on these lifeless things,
The hand that mock'd them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away

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Item:  China, one of the world's largest and most promising markets, has seen a 20 percent annual increase in patent application filings over the last fifteen years.

Item:  In 2007, the State Intellectual Property Office (SIPO) of China received 694,153 patent applications, an increase of 21.1 percent over the previous year

Item:  As of May 2008, China is currently third in the world for the generation of invention patents behind the United States and Japan.

Item:  If patent filings in China continue to grow at the current rate, the SIPO will overtake the USPTO (United States Patent and Trademark Office) by 2012.

Item:  More than four million patent applications were filed with SIPO from early 1985 to December 2007.

Item:  In 2005, 2,947 patent-related cases were filed in Chinese courts, representing an increase of 15.6 percent from 2004.

Item:  Patent-related lawsuits involving international companies such as Pfizer, Honda, Philips, and 3M have increased by 77.5 percent over the past year.

Get the picture?  Yes, we see.  To be among the leaders of the IP pack, companies with substantial patent portfolios need to know how to negotiate with the Chinese. 

Here are some resources: 

Negotiating in China:  Trust is Just the Beginning (h/t China Law Blog's post which adds the following advice to that provided in Trust):

Go into your negotiations prepared. Far too often my firm has had Western clients who insist on a particular term from their Chinese counterparts that no Chinese company can give or ever gives. If every manufacturer of widgets in China requires at least a 60 day turnaround time, you are wasting your own time and money by insisting on 10 days for you.

[Use] an already tested contract to gage the bona fides or good faith of a Chinese company. For instance, my firm has been using a non-disclosure agreement for so long in China that we can in large measure gage the legitimacy of Chinese manufacturers just by how they react to it. Legitimate Chinese companies always eventually agree to it (usually rather quickly, but sometimes with reasonable modifications). The illegitimate company refuses to sign, usually claiming such agreements are "never" signed in China or are "illegal."

Further negotiation advice from the China Law Blog

Negotiating in China
quoting an article of the same name from Harvard Business School Working Knowledge on the eight important elements underpinning "the Chinese negotiation style:"

Guanxi (Personal Connections)
While Americans put a premium on networking, information, and institutions, the Chinese place a premium on individuals social capital within their group of friends, relatives, and close associates.

Zhongjian Ren (The Intermediary)
Business deals for Americans in China don't have a chance without the zhongjian ren, the intermediary. In the United States, we tend to trust others until or unless we're given reason not to. In China, suspicion and distrust characterize all meetings with strangers.

Shehui Dengji (Social Status)
American-style, "just call me Mary" casualness does not play well in a country where the Confucian values of obedience and deference to one's superiors remain strong. The formality goes much deeper, however unfathomably so, to many Westerners.

Renji Hexie (Interpersonal Harmony)
The Chinese sayings, "A man without a smile should not open a shop." and "Sweet temper and friendliness produce money." speak volumes about the importance of harmonious relations between business partners.

Zhengti Guannian (Holistic Thinking)
The Chinese think in terms of the whole while Americans think sequentially and individualistically, breaking up complex negotiation tasks into a series of smaller issues: price, quantity, warranty, delivery, and so forth. Chinese negotiators tend to talk about those issues all at once, skipping among them, and, from the Americans' point of view, seemingly never settling anything.

Jiejian (Thrift)
China's long history of economic and political instability has taught its people to save their money, a practice known as jiejian. The focus on savings results, in business negotiations, in a lot of bargaining over price - usually through haggling. Chinese negotiators will pad their offers with more room to maneuver than most Americans are used to, and they will make concessions on price with great reluctance and only after lengthy discussions.

Mianzi ("Face" or Social Capital)
In Chinese business culture, a person's reputation and social standing rest on saving face. If Westerners cause the Chinese embarrassment or loss of composure, even unintentionally, it can be disastrous for business negotiations.

Chiku Nailao (Endurance, Relentlessness, or Eating Bitterness and Enduring Labor)
The Chinese are famous for their work ethic. But they take diligence one step further - to endurance. Where Americans place high value on talent as a key to success, the Chinese see chiku nailao as much more important and honorable.  

And if you're looking for a China-knowledgeable IP litigation team, you couldn't go wrong by hiring Irell & Manella and asking them to include on that team new IP attorney and Mandarin-fluent Adam Goldberg   (who does not  "share my DNA" but is my step-son).

And if you're doing business everywhere in the world, What About Clients says of When Cultures Collide:  Leading, Teamworking and Managing Across the Globe buy it, read it, refer to it and link to the blog.

Done. 

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So how about reverse engineering the litigation?  What steps were actually necessary to achieve the settlement?  Was it something more than just wearing one another out?  Were early summary judgment or adjudication motions needed before the situation could be clearly sized up?  Were the legal issues or the business issues more prominent?  Where were the carrots and where were the sticks? 

     This lawsuit was filed five years ago.

Does someone in-house rigorously analyze the data in the wake of a settlement like this?  Because this is how most patent infringement lawsuits will end.  Cross-licenses.  Dismissals.  Licensing fees.  A rise in share price.

Was this a business problem burdened by legal issues or a legal problem burdening commercial interests?

Settlement details below from Veeco Settles Patent Suit with Asylum Research (h/t to the AmLaw Daily -- Settlement Reached in Teeny-Tiny Technology Case)

Veeco Instruments Inc. said Monday it has settled a patent infringement lawsuit that it filed in 2003 against Asylum Research Corp., a private company founded by former Veeco employees. Under the terms of the settlement, Asylum will pay Veeco an initial license fee as well as ongoing royalties under a five-year cross-license agreement of the two companies' patents. Financial terms were not disclosed. . . .

Veeco . . . makes metrology tools used to measure at the nanoscale level and process equipment tools used to create nanoscale devices. . . . . In the suit, Veeco alleged that Santa Barbara, Calif.-based Asylum's MFP-3D atomic force microscopes infringed on Veeco's patents.

Veeco's shares rose 47 cents, or 2.7 percent, to $17.75 in morning trading

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Get ready for a radical new idea.  One that:

• suggests the search for accuracy should trump a fully adversarial process;
• would wrest some control of the litigation and trial process from the hands of the attorneys; and into the care of the experts; and,
• just might focus IP litigants on the fact that they have a business problem burdened with justice issues rather than a legal problem that frustrates business operations.

(image from Wikimedia Commons)

Not surprisingly, a litigation process that threatens or promises these results does sound like litigation at all -- you know -- battle, war, fight.  Rather, it sounds like a summer spent in Big Sur among the redwoods, sitting on the edge of the Pacific Ocean with the parties, the judge, the jury and the attorneys in a . . . . HOT TUB!?!?!?!

My (fabulous) new iPhone New York Times app this morning delivered the following paradigm busting proposal -- a "preferred a new way of hearing expert testimony that Australian lawyers call hot tubbing."  In American Exception -- In U.S., Experts are [gasp!] Partisan, Adam Liptak explains:

In [a] procedure . . . called concurrent evidence, experts are still chosen by the parties, but they testify together at trial — discussing the case, asking each other questions, responding to inquiries from the judge and the lawyers, finding common ground and sharpening the open issues. In the Wilkins case, by contrast, the two experts “did not exchange information,” the Court of Appeals for Iowa noted in its decision last year.

Australian judges have embraced hot tubbing. “You can feel the release of the tension which normally infects the evidence-gathering process,” Justice Peter McClellan of the Land and Environmental Court of New South Wales said in a speech on the practice. “Not confined to answering the question of the advocates,” he added, experts “are able to more effectively respond to the views of the other expert or experts.”

What kind of cases has this process been used for?

In a dispute over the boundary of an Australian wine region, for instance, “there were lots of hot tubs — marketers, historians, viniculturalists,” said Gary Edmond, a law professor at the University of New South Wales in Sydney.
 

The Drawbacks? 

Professor Edmond said hot tubbing in Australia had drawbacks and was “based on a simplistic model of expertise.”  Judges think that if we could just have a place in the adversarial trial that was a little less adversarial and a little more scientific, everything would be fine,” Professor Edmond said. “But science can be very acrimonious.”

The Systemic Response Elsewhere?

Though no one expects this process to be imposed upon the American legal process, experts in the Mother Land are calling for "radical measures" to

to address “the culture of confrontation that permeated the use of experts in litigation.”

The measures included placing experts under the complete control of the court, requiring a single expert in many cases and encouraging cooperation among experts when the parties retain more than one. Experts are required to sign a statement saying their duty is to the court and not to the party paying their bills.

Just as you were saying "American lawyers wouldn't allow it," Liptak reports that

[t]here are no signs of similar changes in the United States. “The American tendency is strictly the party-appointed expert,” said James Maxeiner, a professor of comparative law at the University of Baltimore. “There is this proprietary interest lawyers here have over lawsuits.”

But we're fooling no one, particularly not ourselves.  It was Melvin Belli, after all, who once said “[i]f I got myself an impartial [expert] witness I’d think I was wasting my money.”

It's no surprise to us that

Judges and lawyers agreed, in separate surveys conducted by the center in 1998 and 1999, that the biggest problem with expert testimony was that “experts abandon objectivity and become advocates for the side that hires them.”

The Academic View from My Own Backyard?

Jennifer L. Mnookin, a law professor at the University of California, Los Angeles, who recently wrote about expert testimony in the Brooklyn Law Review, [said] “neutrals risk being a sort of false cure” because “there are often cases where there are genuine disagreements.”

The future, Professor Mnookin said, may belong to Australia. “Hot tubbing,” she said, “is much more interesting than neutral experts.”

Interesting to a law professor perhaps, but interesting is not what litigators and trial attorneys are looking for.

For further coverage and comment by the usual suspects over at the Wall Street Journal Law Blog read Experts in Hot Tubs?  Not Here in the U.S. of A.

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In his recent New Yorker article, The Permission Problem, financial reporter James Surowiecki reviews Columbia law professor Michael Heller's new book, “The Gridlock Economy.”

TGE decries the development of an "anti-commons" in a business climate possessed by the demon of possession.  As Surowiecki explains:

Property rights (including patents) are essential to economic growth, providing incentives to innovate and invest. But property rights need to be limited to be effective. The more we divide common resources like science and culture into small, fenced-off lots, Heller shows, the more difficult we make it for people to do business and to build something new. Innovation, investment, and growth end up being stifled. 

. . .  The effects of overuse are generally unmistakable—you can’t miss the empty nets of fishing boats working overfished oceans, or the scrub that covers an overgrazed field. But the effects of underuse created by too much ownership are often invisible. They’re mainly things that don’t happen: inventions that don’t get made, useful drugs that never get to market.

In theory, one should be able to break a gridlock by striking a deal that would leave all sides better off. Sometimes that happens. Just the other week, for instance, Nokia and Qualcomm settled a three-year-long patent battle, which could accelerate the spread of third-generation cell-phone technology here and in Europe. . .  

One reason deals founder is that there are simply too many interested parties. If, in order to create a new drug, you have to strike bargains with thirty or forty other companies, it’s easy to decide that the price is too high. But often things go awry because owners won’t make a deal at a reasonable price. . . .

Why are deals with so many potential patent holders difficult to impossible?  Surowiecki explains:

Recent experimental work by the psychologist Sven Vanneste and the legal scholar Ben Depoorter [demonstrate that] [w]hen something you own is necessary to the success of a venture, even if its contribution is small, you’ll tend to ask for an amount close to the full value of the venture. And since everyone in your position also thinks he deserves a huge sum, the venture quickly becomes unviable.

So the next time we start handing out new ownership rights—whether via patents or copyright or privatization schemes—we’d better try to weigh all the good things that won’t happen as a result. Otherwise, we won’t know what we’ve been missing. 

For the full article, click here (emphasis added).  For further coverage on Heller's book, check out Tim Wu's review at Slate and the WSJ Law Blog's coverage here. 

 

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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.  

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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Mr. Thrifty and I tried Scrabulous for the first time this week because we assumed it would be our last chance.  Last night, we were playing Word Scraper (first game above).  We haven't figured out the rules but we think we like it. (exciting household, right?)

I'd post my own thoughts on Hasbro's lawsuit but the AmLaw Daily says it better than I could:

LITIGATORS OF THE WEEK
Kim Landsman and John Knapp of Patterson Belknap

Doug Masters, you have a future in fortune-telling. Last week, the IP chair at Loeb & Loeb told the Am Law Daily that suing the makers of Scrabulous, the online Scrabble knockoff, might not be the best move for Hasbro, which owns North American rights to the game.

"There seems to be a good amount of enthusiasm towards Scrabulous that has revived interest in Scrabble," Masters said. "You certain don't want to dampen that enthusiasm in the name of trademark infringement."

No you don't. You don't want Facebook users creating groups called "Down with Hasbro." You don't want potential customers to say your client is "technologically in the dark," "short-sighted," and "despicable." You certainly don't want angry hackers shutting down Hasbro's Web site, justifying the vandalism with an explanation that goes like this: "You didn't have the smarts or initiative to come up with as good a product as [Scrabulous], so your alternative is to mess with the superior product?" But according to The New York Times, that's what happened after Hasbro's suit forced Scrabulous off of Facebook earlier this week.

As we've said before, Litigator of the Week honors don't necessarily go to those who had the biggest win. Sometimes, it's just about who created the biggest stir. And this week that distinction belongs to the lawyers who filed Hasbro's suit: Patterson Belknap Webb & Tyler partner Kim Landsman and associate John Knapp. They wrote a well-reasoned complaint, achieved quick results, and succeeded in protecting Hasbro's intellectual property. But was it worth the backlash?

Find out here!

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See Patent Mediation on Your Horizon? by Kevin R. Casey at Stradley Ronon Stevens & Young, LLP, over at Metropolitan Corporate Counsel.  Here's an excerpt to wet your appetitie.

In efforts to enhance the success that the mediation program of the Federal Circuit has already enjoyed in its short existence, Chief Circuit Mediator Amend identified at the Conference eight impediments to settlement of patent cases on appeal.

The impediments are:

1. the case involves a "troll" (which might be defined as a non-inventive entity with no commercial product that acquires and asserts overbroad patents in an attempt to extort a toll from others) and the defendant company wishes to avoid a "bulls-eye" inviting further litigation;
2. party representatives with settlement authority are not present for the mediation session;
3. the party having lost the judgment appealed is reluctant to mediate (although perhaps counterintuitive, because the winning party might seem more reluctant, the cost of rolling the die on appeal may appear small relative to the cost already sunk into the case);
4. the patent was held invalid (one solution might be to ask the district court to vacate its invalidity holding as part of a settlement award);
5. counsel is representing the appellant on a contingent fee basis;
6. an emotional, entrepreneur patent owner appeals a loss and seeks "justice";
7. a summary judgment of non-infringement is appealed and the plaintiff seeks millions (the "lottery" case); and
8. a party believes it is entitled to attorney fees or enhanced damages. The court is in the process of refining the selection criteria for, and the techniques used in, its mediation program to take these impediments into account and improve the program.

Let me just say this -- justice -- is not an impediment to a successful mediation, it is a means of insuring a successful mediation.

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. . . it's the smell of rubber hitting the road.

(right:  the scientific representation of rubber hitting the road -- I thought our attorney-engineer readers would appreciate this one -- image from the University of Hamburg)

I have a confession to make.  I am poised to become embroiled in a dispute about money and I've hired a litigator to explain to me my rights and possibly to pursue my remedies.

This is one of those moments when you have to decide whether you believe your own B.S. or not.  One of those times when you follow your own advice or fall victim to the almost irresistible pull of the way you've always done things.

Let me recount a conversation I had after my first year of mediation practice with a seasoned  mediator of commercial cases.  This is the conversation that marks my true transition from litigator to conflict resolution specialist.  The subject at hand was whether I would co-mediate a will contest with a mediator I'll call Joe.

Joe:  The family doesn't want to hire a lawyer.  Neither side has a lawyer.  They just want to mediate. 

Vickie:  But I know absolutely nothing about wills, trusts and estates.  The parties need to talk to a lawyer first to learn their rights and remedies.

Joe:  You still don't get it, do you?

Vickie:  What?

Joe:  It's not about rights and remedies, it's about interests.  

Vickie:  But how can they evaluate their interests without knowing their rights and remedies?

Joe:  Because they're not interested in what the law says -- they want to do what they believe is right for them as a family under the circumstances.

It took a while for this conversation to sink in.  I immediately re-visited one of the more painful periods of my life when I divorced my first husband in 1983.  I refused legal advice from my attorney colleagues because, I said, I was going to handle it myself ("a fool for a client").  Why?  Because community property laws didn't govern our relationship.  (gasps from colleagues)

I didn't need legal representation, I explained, because my husband of 7 years and I had long ago agreed that he would use his funds to put himself through graduate school and I would use my funds to put myself through law school.  We'd keep our finances separate until some time in the future when we decided to "marry" our financial affairs.  We never did and I wanted to keep my end of the bargain whether the law required me to do so or not (nope, no pre-nup). 

And that's what we did.  We had interests in looking ourselves in the mirror in the morning -- in honoring our wholly personal and idiosyncratic obligations to one another.  We had interests in having a resentment-free future relationship, no matter what form it took -- friends, distant acquaintances or even estranged former spouses.  We had interests in making peace with one another because we had mutual friends and we didn't want to divide them up between us like so much material property.  

I walked out of that marriage with nothing but my self respect and his last name, under which I'd gotten my law degree and become known in the legal community.  He got the house because he could afford to pay the mortgage and his mother had given us --not him -- the down payment.  Though I'd contributed to the house payments, he'd kept detailed records of monies he'd loaned me during law school and what I owed him was pretty much what my share of the value of the house was.  And though his mother had given the money to "us" and not "him," I knew she'd done so because she believed the marriage would last.  It wasn't her intent to give the money to "me."  And I loved her. She loved me.  I didn't want to burn that bridge. 

So, I rented furniture and moved to a one-bedroom apartment in a low-income community in South Sacramento.  I was poor again, for a time.  And emotionally bereft.  But I hadn't added a legal dispute to my troubles.  I felt as clean as I could in severing a relationship that had contributed so much to the emotional strength I needed to prepare for, commence and finish law school at the top of my class.  I couldn't have done it without my husband.  He contributed the love, the emotional stability and the undeviating belief in my potential that were necessary to my success in law school and in the first couple of years of my legal practice.

Those are interests.

I know, I know.  You're saying -- but those are personal interests and you're writing a blog about commercial interests between corporate entities and they have no feelings.

No.?  Taken your own emotional temperature lately?  Or that of your clients?  Stick around.  You're in the conflict resolution business no matter how sophisticated it is legally or complex it is financially.  And conflict only happens between people.  

If the insights from the social psychology of conflict could help you manage your clients, your staff and your case load more effectively and efficiently; if you were in better control of the escalation and de-escalation of conflict in your practice; if you were happier when you went to the firm or to court or to a deposition or to a settlement conference or to trial than you are now, would you want to learn something about a body of knowledge that could help you do that? 

I think you would.  I have been paying attention to these matters as my central occupation for four years now and the rubber is about to hit the road.  

You're in the right place.  Keep coming back.

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(photo:  from Mediation from Darkness to Light)

In the Qualcomm-Nokia battle of the giants, settlement took a dedicated negotiation team, trial counsel who believed the case would not settle, and a string of pre-trial motion victories.  Trial counsel is so immersed in pursuing victory -- as well he should be -- that he calls the settlement a "multi-billion dollar award." 

Before giving you an excerpt from the AmLaw story on the settlement -- Nokia-Qualcomm Agree to Play Nice -- I must make at least a few glancing references to the settlement issues.

• First, how about that 18% rise in Qualcomm's share value in the immediate wake of the settlement -- how much of the "multi-billion dollar award" will be off-set by external market benefits.
• Second, it's no surprise for Qualcomm to have a string of pre-trial motion victories on the eve of trial -- it was being represented by Cravath for goodness sakes!  The KING of the pure legal issue.  Quinn, as recent trial victories demonstrate, dominates the courtroom when the jury is seated.  Still, if my spotty Civil War history doesn't mislead me, it was the number of victories in a row, not the number of total victories for each side, that resulted in a "win" for the Union.
• Third, if the "negotiation team" is keeping the trial team in the dark -- as I'm now told by Fortune 500 GC -- "to keep the trial team focused" -- for goodness sakes, don't send the trial team to the mandatory settlement conference or high level (think Tony Piazza) mediation.  Send the negotiation team.  It won't be a surprise to either player that the trial attorneys are the equivalent of foot soldiers, deployed to serve purposes of which they are often blissfully unaware.  
• And finally, was the end result worth the direct and ancillary costs of the litigation -- not simply those appearing on the legal bill -- but the market cost.  I'm assuming both sides have high-level financial teams analyzing the cost and benefit of this series of litigations, regulatory battles and at least one arbitration proceeding, to determine when settlement could have resulted in the maximum benefit to both sides. 

That's why god created consultants, right?  

Settlement talks began in earnest on Monday between Steven Altman, Qualcomm's president, and Tero Ojanper, executive vice president of Nokia, after a pretrial hearing July 18 in which Qualcomm won all its motions, according to Cooley's Steven Strauss. "That seemed to change the settlement dynamic," he says.

Strauss says he was in the Delaware courtroom Wednesday morning, ready to start the trial, when the negotiators called to ask for a short delay. On learning that the case had been settled, Strauss said he was disappointed--because he had prepared to try the case for so long--but ultimately satisfied that his client's best interests had been served. He declined to discuss the financial details of the settlement, except to say that it is a "multibillion-dollar award that includes a large cash payment and an ongoing royalty."

Under the terms of the settlement, Qualcomm will give Nokia access to its chip technology as Nokia develops the next generation of its cell phones. Nokia in return has agreed not to use any of its patents directly against Qualcomm.

Nokia also will make an up-front payment to Qualcomm and will continue to pay royalties as part of the deal. Financial terms of the settlement were not disclosed.

Qualcomm's stock soared 18 percent as investors expressed relief that Qualcomm's licensing money won't run out anytime soon. The company still faces similar litigation brought by Broadcom Corp.

If you have a subscription (it's free) to the IP Law and Business website, here's an article on the best IP mediators in the business.

No, it doesn't mention any of the great mediators or arbitrators here at the IP ADR Blog.  But we'll be recognized soon.  Count on it!

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(above:  a conspiracy theory caught in the act)

From today's Wall Street Journal Market Watch We Learn that Microsoft says 'weird' Yahoo response killed deal 

 Microsoft Corp. executives told Wall Street analysts Thursday that the company ultimately failed to reach a merger agreement with Yahoo Inc. due to the Internet company's "weird" hesitance to negotiate in a timely way.

"It is a little weird," Microsoft Chief Executive Steve Ballmer said during the company's annual analyst day, "We had an offer out that was a 100% premium on the operating business of the company, and there wasn't a serious price negotiation ... until three months later."

Chief Financial Officer Chris Liddell added that Microsoft had been looking at late April as a "drop-dead stage" for negotiating a deal. "March would've been great," Liddell said.
"The deadline passed," Ballmer added.

In the absence of information we make stuff up.  And the stories we're telling ourselves do not include the one where our bargaining partner is laboring to find a way to fulfill our every little wish, satisfy our desires and meet our needs.  No, in the absence of information we develop massive conspiracy theories and attribute scheming, if not downright evil motives, to our deal maker counterparts when our offers or trial baloons encounter silence and delay.  

For anyone who hasn't gone to the dentist lately or suffered a painful or embarassing medical procedure, you know what you want.  You want your health care provider to give you the full pre-game tour. 

"First I'll put some of this numbing stuff on your gum, so the shot of novocaine won't hurt too much.  Then there will be some drilling."  (holds up the drill and switches it on).  "It will sound louder in your mouth than here in my hand, but I'll only have to drill for five minutes and it won't get any louder or more painful during that period of time."  Etc., etc. etc.

This is what you need to do for your bargaining partners, remembering that for many people negotiations are something we look forward to with the same degree of happy anticipation as we do for a root canal.

So, here's the game plan.

If you're not "at the table" with your bargaining partner but instead are negotiating over time, over the telephone, or, using correspondence or email: 

• say how long you believe it will take you to respond to the outstanding offer
• if you can do so without giving away your game plan entirely, say why it's going to take that long, i.e., "we have to loop the lawyers in and have a quick meeting with Bill, whose been notoriously hard to reach ever since he decided to tackle the May Mt. Everest climb.  But if we can't reach him, we'll see if Sam feels he can conduct the negotiation without Bill's authority," etc., etc., etc.
• "your proposed licensing scheme is interesting and novel; we'll have to run it by our lawyers and financial gurus.  It will likely take them . . . two weeks, a month, until the end of time . . . to give us their full analysis but whatever happens we'll give you an update or status report by [date certain]."
• "please, by all means feel free to call with questions without feeling that it will send a signal that you're too desperate for the deal." (this is dating 101 in high school; we should have outgrown it by this time but most of us haven't)

There are a trillion variations of these matters.  The point is -- whatever they are -- let your negotiation partner understand why you're taking so long and what it is that you're doing with the time other than planning a strategic nuclear strike on their primary manufacturing facility in Minsk.

Here's the academic explanation for what happens when negotiating parties fail to stay in contact with one another.  From Book Summary of Social Conflict: Escalation, Stalemate and Settlement by Dean G. Pruitt and Jeffrey Z. Rubin at CRInfo. 

Negative attitudes toward the other party tend to be perpetuated by three psychological mechanisms: selective perception, self-fulfilling prophecy, and autistic hostility.

First, people tend to select those perceptions that tend to confirm their existing attitudes, and ignore or discount information that would disconfirm their existing attitudes. People also tend to see negative behavior as stemming from an adversary's basic character.

Self-fulfilling prophecies arise when a party's expectations about their adversary cause them to act in ways that actually provoke the adversary's "expected" response. The adversaries (provoked) response is then taken as confirmation of the party's original expectation, and a vicious cycle ensues.

Vicious cycles can also occur when the other party, who is unaware of our expectations, does nothing to disconfirm them, and so implicitly confirms our worst expectations. People tend to break off interaction and communication with those they dislike.

When this happens people become stuck in autistic hostility, that is, their hostility is perpetuated by their refusal to communicate.

Get it?  Yes we see.

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(image from Engadget Mobile post Qualcomm suit kindly asks Nokia to halt U.S. GSM sales)

From the American Lawyer Daily:

Nokia and Qualcomm To Start Trial Wednesday

The rivalry between Nokia and Qualcomm is the IP-geek equivalent of Yankees versus Red Sox or Lakers v. Celtics. The largest phone maker (Nokia) and the largest wireless chip provider (Qualcomm) have been at each others' throats in courts around the world, trying to resolve a licensing dispute with potentially billions of dollars at stake. The next battlefield is Delaware Chancery Court, where on Wednesday the two will head to trial. Steven Strauss of Cooley Godward and Evan Chesler of Cravath, Swaine & Moore will represent Qualcomm; Nokia will field Charles Verhoeven and A. William Urquhart of the recently ubiquitous Quinn Emanuel Urquhart Oliver & Hedges. (A broadcast of the trial will be available to subscribers of Courtroom Live.)

The ADR angle here: 

In Qualcomm Incorporated v. Nokia Corporation (06-1317), the Court of Appeals for the Federal Circuit considered the propriety of a district court's denial of a motion to stay litigation pending arbitration, which the district court based on it being “not satisfied under [the Federal Arbitration Act] that the issues involved...are referable to arbitration.” (citation omitted).

A licensing agreement between the parties includes a broad arbitration clause. While the technology involved in the patent infringement lawsuit, following amendment of Qualcomm's complaint to provide a more definite statement, did not appear to relate to the technology encompassed by the license agreement, Nokia asserted that one specific assertion made in the complaint involved technology that it “...believes is licensed under the...Agreement.”

Accordingly, Nokia attempted to steer the issue to arbitration via the arbitration clause in the agreement and the filing of the motion to stay litigation.

Continue reading here from FedCirc.us.

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We LOVE the law here at the IP ADR Blog.  And we're huge supporters of the Rule of Law as society's Great Leveller.  We're not, however, all that enamoured of lawsuits as a means to create business opportunity or to stem business losses.

Take a look, for instance, at Bill Gates recent comment about the use of Microsoft Windows in China -- the system is used on 90% of Chinese PC's but most of those OS's are pirated.  

Officially, the software giant has taken a firm line against piracy. But unofficially, it admits that tolerating piracy of its products has given it huge market share and will boost revenues in the long term, because users stick with Microsoft’s products when they go legit. Clamping down too hard on pirates may also encourage people to switch to free, open-source alternatives. “It’s easier for our software to compete with Linux when there’s piracy than when there’s not,” Microsoft’s chairman, Bill Gates, told Fortune magazine last year.

For the full article from the Economist -- Piracy -- Look for the silver lining Piracy is a bad thing. But sometimes companies can turn it to their advantage, click here.

h/t to slashdot

And to show you how deeply our commitment to the Rule of Law runs and why watching television when I was a kid wasn't a completely losing proposition . . . here's Andy Griffith (and Opie aka Director Ron Howard) on eavesdropping . . . . "the law can't use this kind of help"

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When I was practicing, I'd tell my clients that litigators and trial lawyers were the profession's surgeons.  We were the people they wanted to avoid because surgery is costly and potentially life-threatening.  

Transactional lawyers, I stressed, were the Internists of the profession and they should be consulted early and often.

Because we can't prevent litigation any more than we can prevent strokes and heart attacks, we have INSURANCE.  If your business has protectable trade secrets, a patent portfolio, valuable copyrights, coveted trademarks/names or any other type of intellectual property (and all businesses do) mosey on over to the Gauntlett on Insurance Blog's recent post Restoring Balance to the IP/Insurance Interface.

Most major corporations have procedures, either through existing personnel or through the aid of consultants, that:

• Identify and evaluate the full range of IP;
• Determine the level of patent, copyright or trademark infringement by the company or others;
• Reduce exposure to legal action by managing risk;
• Protect residual risk through insurance.

The challenge comes in the last component through identifying products in the marketplace that can create similar opportunities for reimbursement and designing protocols to assure that the maximum policy benefits available to the company are properly secured.

How challenging is it to "assure that the maximum policy benefits available to the company are properly secured"?  Allow me to share my experience.

Though I have pursued coverage claims and bad faith actions against insurance carriers, by far the vast percentage of my coverage litigation practice was on behalf of insurance carriers providing excess CGL or D&O insurance to Fortune 50 companies.  Occasionally (not often) I'd also take a look at smaller claims to determine in the first instance whether coverage was available.  Some of those claims were from companies seeking coverage for patent or copyright infringement litigation.  

Here's my advice.  If you believe yourself vulnerable to suit, don't rely solely on your risk management department.  Get an annual insurance check-up by a specialist in IP insurance coverage issues.  Then get a second opinion from an insurance litigator.  I know that sounds expensive.  But it's a drop in the bucket compared to the first six months of IP litigation.  Think:

• electronic discovery
• complex procedural manuevering
• depositions of your key personnel
• media coverage

Get the picture?  Not only do you not want to hire insurance coverage litigators, you never ever want to see a mediator or settlement officer with insurance company experience.  Why not?  Because by the time you're willing to sit down with the opposition to settle a case with the aid of a third-party neutral, you've already lost no matter how great a deal you cut to terminate the litigation.

So if you can't save yourself from having a coronary, at least buy yourself a policy of insurance that will cover the likely (and unlikely) claims that put your company's life at risk.

(and, yes, insurance companies do look for ways to deny you coverage; make it improbable or very very risky for a carrier to do so)

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From the AmLaw Daily, we learn that Kirkland & Ellis on the Sidelines as Alcatel-Lucent Seeks To Reinstate $1.52 Billion Verdict

Last year Kirkland & Ellis IP partner John Desmarais won some serious bragging rights when a California jury awarded his client Alcatel-Lucent $1.52 billion in a patent infringement trial against Microsoft. For a little while there, it was the largest verdict of its kind in history. But the bigger they are, the harder they fall: Last August San Diego federal district court judge Rudi Brewster threw out the verdict. Desmarais promised an appeal.

And sure enough, Desmarais's dream verdict is now in the hands of a three-judge panel at the Court of Appeals for the D.C. Circuit, which heard oral arguments on Alcatel-Lucent's appeal on Monday.

Click here for remainder of article.

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EXPERIENCED INTELLECTUAL PROPERTY MEDIATORS: INCREASINGLY ATTRACTIVE IN TIMES OF PATENT UNPREDICTABILITY  Winter 2008  (Westlaw Link Here)

Thanks to Ms. Tran for citing to the IP ADR Blog's Interview with Jay Taylor:  Interview by Victoria Pynchon with Jay Taylor, Partner in IP Practice, Ice Miller LLP (July 13, 2007).

13 HVNLR 313 Student Note by Sarah Tran

Expert IP Mediators Can Give Attorneys the Gift of a Reality Dose 

 One of the beauties of an expert IP mediator is her ability to give parties the dose of reality they need when litigation is unpredictable and the stakes are high. A mediator well versed in the industry and uncertainties of patent litigation can provide the parties with a neutral assessment of the facts that challenges their unrealistic assumptions. [FN33] In particular, an IP mediator “can give the parties a good idea what the court is thinking: he understands what issues are hot, how the court has decided previous cases.” [FN34] If the mediator's opinion is respected by the parties, which it likely will be if the mediator has experience as a patent law practitioner or judge, [FN35] the opinion will help the parties converge their estimates of the value of the case. [FN36]

The ability of expert IP mediators to neutrally assess a case carries substantial value for even the largest players in the technology market. In a recent case, a jury demanded that Microsoft Corp. pay Alcatel-Lucent $1.52 billion for alleged infringement of Alcatel-Lucent's patents for the MP3 format. [FN37] The jury deadlocked, however, on the question of whether Microsoft willfully infringed on the patents. [FN38] If the jury had found that it did, Microsoft would have had to pay Alcatel-Lucent an additional $3 billion as treble damages. [FN39] Given the high stakes at risk and the ease with which the jury could have come out with a much more drastic verdict against Microsoft, Microsoft's decision to litigate seems ill-informed. By providing a neutral assessment of how the law and the inadequacies of decision makers combine to affect the facts of the case, expert IP mediators could have helped Microsoft realistically assess its litigation risks. Perhaps Microsoft would have still considered litigation to be in its best interests, but at least it would have done so with a better appreciation for the risks involved. [FN40]

*321 B. Expert IP Mediators Cut Costs, Quickly

In addition to assisting parties in gaining a more neutral understanding of the risks of litigation, expert IP mediators can also help parties resolve their disputes more quickly and cheaply. While it is well known that mediation in general produces time and cost savings for parties due to the absence of formalistic procedures, the savings can be even greater when the parties use an expert IP mediator. The learning curve for an IP mediator is simply much flatter than for jurors and district court judges. This can be especially valuable when a high-level understanding of a certain technology is required, such as in cases involving electrical or biotech patents. Unlike in court, where the lawyers must break down intensely complex facts to digestible portions, the expert IP mediator can delve straight into the issues. This translates into less time and fewer lawyer bills needed to resolve a patent dispute before the relevant invention becomes obsolete. [FN41]

C. Clients Get Better Remedies

In addition to receiving benefits on the bottom line, disputants can use expert IP mediators to achieve remedies that address more of their needs. Instead of receiving an arbitrary interpretation of the law from a jury or district court judge who may not understand the technology at issue, parties using an IP mediator can expose and resolve an array of complex legal and non-legal issues. [FN42]

*322 Experienced IP mediators can unearth more issues because they understand the distinct interests of patent disputants. For one, people generally attribute higher values to things they possess. [FN43] Inventors are no different. They invest substantial time and effort creating what they hope will be an innovative and substantially beneficial product: “Accused infringers are, after all, not merely casual observers of the patent system. They are putatively putting the patented invention to some use themselves. They may well have developed [the] product on their own, unaware of the patent they are accused of infringing . . . .” [FN44] Inventors not only have an interest in achieving some kind of recognition for their efforts, but they also fear that they could completely lose their entitlement to use their invented product. An IP mediator further understands that the IP community is small; reputations and relationships matter and even disputing parties may share an interest in developing a business relationship with each other. For instance, after protracted litigation between Microsoft Corp. and Stac Electronics produced first a $13.6 million verdict against Stac and then a $120 million verdict against Microsoft, the two parties signed a broad cross-licensing agreement, which gave Microsoft a 15% share in Stac. [FN45] As Michael Brown, Microsoft's vice president of finance, expressed, “This [collaboration] is a lot more fun than disagreeing.” [FN46]

After recognizing the parties' interests, the IP mediator can assist the parties in satisfying them. Unlike in litigation, where emotional interests are less recognized, a mediator has the insight to understand how these interests affect patent disputants and could ensure that interests are addressed either through the mediation process or in a resolution. If one party needs to stop using an invention for the parties to come to any agreement, the IP mediator could frame settlement as a gain instead of as a loss of entitlement. If parties indicate a desire to work together in the future, the mediator could use his familiarity with the industry to suggest ways for the parties to work together, like entering a cross-licensing agreement. In addition, the expert IP mediator could help the parties craft a creative remedy. [FN47] Take for example, a typical controversy between the *323 brand name manufacturer of drug X (“brand company”), which possesses a patent for X, and the manufacturer of a generic version of drug X (“generic company”). An IP mediator would understand that the parties probably have plans to invest in a new product at some point, motivating them to prefer a sliding payment scheme. After probing this issue, the mediator could help the parties choose a payment scheme that maximizes their money in the bank when they want to make a purchase. Such a remedy could include a lump sum payment, running royalties (periodic payments), and/or payments on a sliding scale.

D. Society Benefits

Trials, especially in the common-law tradition, are in many respects ‘wasteful’: they produce a victor, but at great cost to both sides and to the public . . . . ‘[A] trial is a failure.’ [FN48]
Besides the various benefits patent disputants derive from mediations with IP experts, the IP mediators create positive externalities for society at large. When district court rulings carry little meaning to the parties due to their high reversal rate, taxpayers pay too high a price to keep the court system going. [FN49] Mediation encourages settlement, which in turn reduces this needless litigation. [FN50] Although some critics of mediation and other forms of alternative dispute resolution (ADR) argue that ADR robs society of valuable precedent, [FN51] “the situations where a party should not agree to ADR . . . are not likely to be involved in a patent infringement dispute.” [FN52] Patent disputes usually do not involve important statutory interpretations or constitutional questions. [FN53] In the exceptional case that involves a *324 highly valuable patent, the parties will likely litigate. [FN54] Although some extol the benefits of revoking “bad” patents through increased patent litigation, [FN55] an increase in patent suits will likely not help jurors and district courts gain enough of an appreciation for the technologies involved to start returning verdicts that consistently revoke only “bad” patents. The USPTO, the gatekeeper of patents, has the requisite technical competence to weed out “bad” patents, not the courts. [FN56] Moreover, a strong argument can be made that by freeing a patent from controversy earlier, as occurs in mediation with IP experts, parties can bring more innovative products to the market sooner and can focus their resources on pioneering new products that carry great benefits for society, like new drugs to treat cancer:

Unpredictability or uncertainty in the boundaries of the patent holder's property right and its enforceability will . . . divert resources from innovative efforts (research and development) to enforcement (transaction or litigation costs) . . . . [FN57]

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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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What follows is a Press Release from the National Arbitration Forum

MINNEAPOLIS, June 24, 2008—The National Arbitration Forum issued decisions on the rights to YouTube.net, CTV.com, and AmericanGirl.net. Conflicts over domain names are on the rise. The dispute resolution provider handled 1,658 domain disputes in 2006, a 21 percent increase from the prior year, and 1,805 disputes in 2007.

The following decisions were made in accordance with the Uniform Domain Name Dispute Resolution Policy (UDRP) of the Internet Corporation for Assigned Names and Numbers (ICANN) by independent and neutral arbitrators on the National Arbitration Forum Panel.


YouTube.net

Complainant Google Inc., owner of the popular video sharing site YouTube.com, filed a complaint on March 11, 2008 against YiWuShi Shuangfeng Jixie Youxian Gongsi of China, the registered owner of YouTube.net.

The National Arbitration Forum Panelist followed traditional UDRP principles in disregarding the functional “.net” generic top-level domain (gTLD) when determining the “YouTube” domain name was identical to Complainant’s YOUTUBE trademark. The arbitrator also found that the website at the domain name advertises and displays adult-oriented content. The owner of YouTube.net registered and used the domain name in bad faith based on the fact that it was using Complainant’s well-known mark to provide such content. For these reasons, the National Arbitration Forum granted transfer of YouTube.net to Google Inc. on May 5, 2008.

CTV.com

Complainant CTV Inc., a Canadian English language television network, brought a complaint against CTV.com owner Murat Yikilmaz of Turkey, on April 11, 2008.

Complainant has used the CTV mark since 1961 to identify its goods and services, and registered the CTV mark in 1974 with the Canadian Intellectual Property Office. A three member Panel found that the domain name was identical to the CTV trademark. The Panel determined that the three letters which constitute the essence of the disputed domain name are generic initials used by many parties to identify many goods and services. The Panel found Respondent to be in the domain name warehousing business, specializing in three character domains. Respondent’s use of CTV.com to attract Internet traffic is a legitimate business interest, especially in this case where none of the advertisements are related to Complainant’s television operations. Additionally the Panel found CTV Inc. had not proven the domain name was registered or used in bad faith. The majority of the Panel denied Complainant’s requested relief on June 10, 2008. Panelist Kerans dissented in the decision, inferring that Respondent likely was aware of CTV Inc.’s business and mark in Canada and the U.S.

AmericanGirl.net

American Girl, LLC, a subsidiary of Mattel that manufactures dolls and books for young girls, submitted a complaint against The Tidewinds Group, Inc on February 25, 2008 seeking transfer of AmericanGirl.net.

The National Arbitration Forum arbitrator found that the domain name was identical to the AMERICAN GIRL trademark, which Complainant had submitted into the record. Further, Respondent used the site to display links to commercial websites, proving no legitimate interest in the disputed domain name. Finally, the Panelist looked at the registration and use of the disputed domain name. It was found that Respondent registered the domain name in 2002, three years before the application filing date for the AMERICAN GIRL mark that Complainant provided. While noting that Complainant provided no evidence that it possessed common law rights or any other trademarks previous to 2005, the National Arbitration Forum Panelist found no bad faith registration or use and denied transfer of AmericanGirl.net to American Girl, LLC on April 16, 2008.

To file a claim see www.domains.adrforum.com. Contact domaindispute[at]adrforum.com with questions. Media please contact Christina Doucet at 952-516-6486 or cdoucet@forthrightsolutions.com.

About the National Arbitration Forum
Based in Minneapolis, Minnesota, United States, the National Arbitration Forum is an international leader in arbitration and mediation services. An innovator in the industry, the National Arbitration Forum was appointed an approved provider of the Uniform Dispute Resolution Policy (UDRP) by the Internet Corporation of Assigned Names and Numbers (ICANN) in 1999. Since then, over 10,000 domain name disputes worldwide have been filed through the National Arbitration Forum’s state-of-the-art case management system, now optimized by Forthright. For more information, visit www.domains.adrforum.com.

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If your company's business revenue depends to any degree upon its valuable patent portfolio head on over to the Harvard Business Review website and read "Patent Sharks" by Joachim Henkel and Markus Reitzig.

Henkel and Reitzig make the following recommendations to help companies avoid patent shark attacks:

1. Move away from amassing huge patent portfolios for cross-licensing with competitors
2. Simplify standards and create more-modular designs
3. cooperate with competitors early in the R&D process
4. Foster interdepartmental and intercompany cooperation
5. Stop flooding patent offices with insignificant inventions.

For the full article, click here.

Both videos -- JAWS in 60, 30 and 15 seconds are for your summer viewing enjoyment.

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(right:  Blackberry design patent from Patently-O article on the RIM settlement)

Though the term "patent terrorist" is hyperbolic, the points made in How to fight against patent terrorism by Richard Wilder, a partner  with Sidley Austin and IP counsel for the Association for Competitive Technology provides valuable advice about ways to protect your company from the expense of patent infringement litigation when the process server knocks on your company door.

As Wilder explains:

Patent terrorists are companies whose business models are based on patent litigation as a threat and licensing as a revenue source. With no interest in selling a product or winning new customers, these companies are not bound by the norms of customer relationship building. They would not think twice about suing large software customers if it fit into their legal strategy.

The result is competitive jockeying between companies offering their own indemnification policies in response to the liability risks faced by corporations deploying IT solutions. When it comes to indemnification policies, companies that create open-source and proprietary software are continuously evolving their thinking. Novell, Hewlett-Packard and Red Hat offer varying levels of legal protection to customers for their Linux products. Rather than offering traditional patent infringement indemnification, however, Novell promises to countersue with its own patent portfolio--presumably with the intention of settling on the basis of a cross-license.

Patent terrorists are companies whose business models are based on patent litigation as a threat and licensing as a revenue source. If the litigant is a patent terrorist, however, the countersuit would have little deterrent effect. Microsoft has taken indemnification to a new level by protecting its customers against all patent and copyright claims, and promising to pay for any legal fees or damages resulting from those claims.

The burden is on CIOs to seriously consider the indemnification policies of their vendors before concluding big software purchases. Indemnification should not be the primary factor driving purchasing decisions but rather a key factor in calculating the total cost of ownership for any solution.

For those interested in purchasing open-source solutions but unhappy with the indemnification policy of their vendors, new companies are emerging to provide additional insurance against the threat of intellectual-property litigation. This is really the continuation of a trend of insurers providing coverage against intellectual-property infringement suits.

CIOs have traditionally viewed indemnification provisions as standard boilerplate portions of agreements--and often not as something that can even be negotiated. It's time to rethink that assumption. Indemnification policies and insurance can be important tools to reduce or eliminate long-term risk and maximize the present value of the products purchased.

CIOs may increasingly face the very real threat of patent terrorism. But they can only benefit from the growing competition among software providers to better protect customers from intellectual-property lawsuits.

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(Socrates image links to a fine article on "Intellectual Cheerfulness" here)

As Dr. Leigh Thompson of the Kellogg School of Management at Northwestern University has informed us, only seven percent of negotiators seek information that would reveal the other parties' true goals and aspirations when it would be dramatically helpful to do so.

That should make every negotiator stop in their tracks.  It means that 93% of us are not doing what we need to do to dramatically improve our own or our client's negotiation position.  93%.  And it's not like we're failing to do so because we also haven't yet discovered the cure for cancer.  No.  This is easy.  It just needs to be learned and then practiced.  

The Negotiation Guru in a post from last year on How Socrates Would Negotiate, leads with the spot-on observation that we're not asking strategic questions in a way calculated to obtain the information Dr. Thompson tells us we need to get the best deal.  (On a similar topic, see my recent post on How to Negotiate with Irrational People).  For now, an excerpt from the Guru's post and a link to the article itself.

The problem with many negotiators is that they do not direct their questions towards a certain purpose. The art of questioning has to be strategic. To be truly prepared, you need to put some thoughts and time into the type of questions you direct to the other party. Work out the questions with a strategic plan in mind.

Many negotiators believe that by proving inconsistency in the other party is strategic and tactical. They cannot be further from being strategic. When you show that you are trying to provoke them in your questions, you turn on the defensive mode of the other party. You put them on guard and that is not something you want to achieve during a negotiation. As the other party starts to get defensive and closes up to any form of conversation, the negotiation will go nowhere.

The true art is to make the other party open up to you.

Continue reading here.

Upcoming will be ways to integrate these negotiation techniques with your IP settlement negotiations.  Stay tuned!

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Qwest Communications is Corporate Counsel's Best Legal Department of 2008.  And it's not because Qwest is the fiercest fighter in the litigation jungle.  It's partially because Qwest used its in-house negotiation talent to settle a $40 billion lawsuit for $400 million.  

As the cover story Vision Qwest recounts, Qwest's General Counsel, Richard Baer, said his department, not outside counsel, would "take primary responsibility for handling the difficult, often tense, negotiations with the investors" after CEO Joseph Naccio "resigned  amid rumors of fraud and insider trading."

"It was very important that plaintiffs lawyers understood that the company is made up of people, good people," Baer says.  "We tried to humanize the company the best we could."

One of the ways Baer accomplished not only the settlement of life-threatening litigation but the revival of a company on the rocks was to bring far more work in-house and to remain closely involved in those cases being handled by outside counsel.  Last year, for instance, Qwest,

resolved 61 percent of litigation matters and 76 percent of employment matters without using outside counsel.

When Qwest lawyers do hire outside attorneys, they remain closely involved in the cases, says Brian Roche, a partner at Reed Smith, which handled recent trademark litigation for the company. "When you combine their deep knowledge of the company with the trial skills of an outside firm, you get the absolute best for your client," Roche says. "You'd think it would be more common. But it isn't."

This is a must-read article for anyone who wants to be next's year's best legal department or who wants to know how to work best with it as outside counsel.

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This treatise assumes you've reached agreement in principle or won a judgment or verdict in a patent infringement dispute.  Looks like an invaluable resource.  Patent Infringement Compensation and Damages.  Link here.  Publisher's description below.

When a patent has been infringed, there's usually a price to pay, whether it's the result of a trial verdict or a negotiated settlement. Even when compensation for patent infringement is a certainty, determining the right amount is a complex matter involving the interplay of many legal and financial variables.

Patent Infringement: Compensation and Damages is a complete, concise and detailed guide. Beginning with the assumption that a patent has been infringed, it explains the seven steps of determining patent infringement damages. In each, it shows you the method used, the possible variations, the unique patent law doctrines that may apply and the strategies to consider. It also examines how awards of damages are treated under accounting rules, helping you seek terms that will be most advantageous to your client from an accounting standpoint.

From estimating lost profits to introducing the testimony of expert witnesses, Patent Infringement: Compensation and Damages equips you with legal and practical insights that will keep you one step ahead of opposing counsel. Don't try or settle another case without it

This book is updated as needed, generally two times each year.

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A little slow on the uptake here in alerting U.S. readers to the official launch of the Anti Copying in Design organization's U.K. Mediate to Resolve service.  Illustration and excerpt direct from IPKat.  Mediate to Resolve's list of Mediators here.  For full IPKat post, click here. 

Not a side issue but an event in its own right, the official launch for ACID's Mediate to Resolve scheme was one of the reasons for the cork-popping at that organisation's 10th birthday party in London last week.

Right: handled properly, a good mediation can produce amicable, workable arrangements even between even potential foes

For the uninitiated:

"ACID’s (Anti Copying in Design) national Mediate to Resolve service for dispute resolution is based on the organisation’s extensive experience handling mediations. Just under 2,000 ACID mediations have taken place, of which less than 30% have required further legal intervention. ACID’S national network of Accredited Mediators offers a wealth of intellectual property dispute resolution experience. Their mix of negotiation style and skill provides a comprehensive service to those seeking mediation as a real alternative to litigation.

Many organisations are not familiar with the stages of the mediation process – and there is no reason why they should be – until they need it! We hope this booklet will clarify the use and process of mediation and help to explain the route to dispute resolution. At ACID, we are frequently asked “What mediation is and how does it work?” Mediation is a confidential meeting between two parties who are in dispute which enables them to retain control over the outcome. They are guided through the process by a skilled mediator who will use his or her expertise to restore or rebuild a harmonious relationship, but has no authority to impose an outcome.

These days the demands on businesses to succeed and grow are severely hampered by the increase in intellectual property infringement. Taking action against those who seek the fast track to market through IP theft places huge fiscal and time restrictions on the day-to-day running of organisations. ACID has spent the last decade encouraging parties in disputes to seek mediation sooner rather than later and Government is now sending a strong message to judges to look more favourably on disputing companies who seek mediation prior to any court applications". . . .

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

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

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

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

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

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

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

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

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

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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.

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How important is insurance coverage to your clients' decision to bring or defend or negotiate the resolution of a commercial dispute?  It's usually the difference between having options and being entirely out of luck.

And when that decision concerns catastrophic losses?  Unless you are an insurance coverage specialist, you make coverage decisions at your peril.

Where do you go?  To Dickstein Shapiro of course! 

Daily Journal article announcing that Steve Goldberg, insurance recovery attorney extraordinaire -- and my main squeeze -- has left Heller Ehrman and joined Dickstein Shapiro below.

LOS ANGELES - Longtime Heller Ehrman attorney Stephen N. Goldberg has left the firm for Dickstein Shapiro in Los Angeles, the latest in a string of departures from San Francisco-based Heller Ehrman. . . . . Goldberg  . . . . had been with Heller since 1973 and was a partner in its Los Angeles office.  . . . .

Goldberg, who practices insurance recovery and complex commercial litigation, was part of Heller Los Angeles managing partner Nancy Cohen's successful insurance practice, an area of focus for the firm, according to firmwide managing partner Robert Hubbell. . . . .

Goldberg has handled insurance coverage in areas such as product liability claims, asbestos liability, environmental damage, first-party property and business interruption losses, director and officer liability and insurer bad-faith claims. His clients have included Texaco, Johns-Manville Corp., Atlantic Richfield Corp., Millennium Hotels and GMAC Commercial Mortgage Corp., according to Heller's Web site.

Goldberg's practice is well-suited to fit with Dickstein Shapiro's strong insurance coverage practice. Dickstein opened its Los Angeles office in 2005, when it acquired insurance recovery firm Pasich & Kornfeld. Linda D. Kornfeld is now managing partner of Dickstein Shapiro's Los Angeles office, and Kirk A. Pasich serves on the firm's executive committee.

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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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(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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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'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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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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Ontario-based mediator Colm Brannigan * has passed along a valuable article on the mediation of Information Technology disputes from a June '07 Ontario Bar Journal publication.  The article, Resolving I.T. Disputes through ADR -- Part I Mediation was written by Colm with his co-author Michael Erdle. **

Link above with a tempting excerpt below:

[A] common obstacle to settlement in technology cases is differing interpretations of technical terms in a contract or specification. This may prevent the parties from addressing more substantial issues. One possible solution is to mediate a common standard against which the more substantial issue will be measured. A mediator can work with the parties to bring about agreement on a common technical expert whose opinion will be acceptable to everyone.

Another common cause of IT disputes is a misunderstanding between the parties of their respective obligations on a large project. This is especially true where there are multiple parties. The work inevitably takes longer and costs more and each of the parties, often all in good faith, blames the others for the problem. This is a situation that is very difficult to resolve through a series of one-on-one negotiations and can almost always benefit from mediation.

The mediator can facilitate a session that brings all of the parties together, to explain their own understanding of their roles and responsibilities. This assists all parties to understand the gaps that have arisen and helps them to find ways to bridge those gaps in ways that can benefit everyone. These kinds of results are simply impossible to achieve through arbitration or litigation.

In many situations, the parties will have devoted resources to developing a technology or an application upon which they become mutually dependent. Often, other parties, who are not directly involved in the conflict, also rely on these technologies. In a traditional litigation approach, an injunction is often viewed as the remedy of choice.

But the extremely disruptive results of this action on business partners and third parties must be taken into consideration. While the legal rights may support an injunction, the consequences will likely disrupt the business relationships to such a degree that no subsequent effort to restore them would be successful.

Most business people agree that a major part of a company’s cost in delivering services is the expense incurred to develop and maintain customer relationships. The investment in this area is put at risk by traditional litigation methods. By using mediation the parties can meet and with the assistance of the mediator develop creative ways to preserve their investment and/or rights while they work to resolve the substantive issues in their dispute. This can avoid disruptions to a third party that could have the unintended result of additional legal proceedings by the third parties against the disputants.

No dispute is completely binary (win-lose) and business people usually do not think in such simplistic terms. Why should their advisors? Mediation tries to achieve a positive sum result – “I win, you win”. While not always possible, mediated results tend to be creative and sustainable, simply because they are mutually-beneficial. In an industry where entrepreneurship, speedy decision-making and action are highly valued, the management “distraction factor” is an even greater litigation cost than in traditional industries. This cost is significantly reduced by the use of mediation as an affirmative business strategy.

For the full article, click here.

_________________

* Colm Brannigan, LL.B., LL.M. (ADR), C. Med. is a full-time mediator and arbitrator. He can be contacted by e-mail at colm@mediate.ca or (905) 840-9882.

** Michael Erdle is Managing Partner of Deeth Williams Wall LLP. He is a mediator and arbitrator and has advised technology clients in alternative dispute resolution. He can be reached at merdle@dww.com or (416) 941-9201.

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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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($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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UPDATE:  See Likelihood of Confusion (the Nutty Ninth) citing Seattle Trademark Lawyer on this opinion.

(image links to washington post article on combating the importation of  Chinese counterfeit goods)

In K&N Engineering, Inc. v Bulat, the Ninth Circuit ruled yesterday that "an award of statutory damages for trademark counterfeiting under 15 U.S.C. § 1117(c) precludes an award of attorney’s fees under 15 U.S.C. § 1117(b)." 

Why is this important to remember when attempting to settle your counterfeiting action? 

Because the more items of value you have to bargain over (particularly attorneys fees which only get worse over time) the more likely you are to maximize your bargaining position.

As Professor Leigh Thompson of the Kellogg School of Management at Northwestern University has instructed us:

One reason negotiations fail is because negotiators haggle over a single issue, such as price.  By definition, if negotiations contain only one issue (e.g., price), they are purely distributive (i.e., fixed pie).  Skilled negotiators are adept at expanding the set of negotiable issues.

Adding issues, unbundling issues, and creating new issues can transform a single-issue, fixed-pie negotiation into an integrative, multi-issue negotiation with win-win potential.

Integrative agreements require at least two issues and, in the case of negotiation issues (not parties) the more the merrier.

Why is this so?

As Roger Fisher, of Getting to Yes fame, notes, often the key to getting past impasse is understanding and then asking questions to ascertain what underlying needs that are not monetary your negotiation partner wants.  He tells this story to explain:

[A corporate CEO wanted to sell a building because he] was retiring and wanted $2 million, which he considered a fair price.  He had a buyer, but the buyer wouldn't pay that price.  I asked the seller, 'What's the worst thing about selling this building?'  And he said, 'All of my papers for 25 years are mixed up in my corner office.  When I sell the building, I can't throw everything away.  I've got to go through that stuff.  That's the nightmare I have.

Thompson continues:

Then Fisher asked the buyer why he wanted the building.  The buyer explained he hoped to sell it for hoteling.  This knowledge gave Fisher the idea of suggesting that the seller offer the buyer a lease with an option to buy with one contingency:  that the president's name be on the corner office for three years.  The buyer agreed.  In this example, Fisher notes that the key underlying needs are not about money, but more about convenience. 

Thompson, The Heart and Mind of the Negotiator, 3rd Ed. at 80-81.

This example is as much about asking diagnostic questions as it is about having multiple items for which to bargain. 

They key, of course, is to consider the probability in every case that there are undisclosed needs, fears and desires that would assist the parties in achieving a resolution that is of greater benefit to all parties than what appears to be the sum of the parts.

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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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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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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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(photo: Long Conversation by renatela)

Thanks for the head's up from Ron Coleman at Likelihood of Confusion about the new Securing Innovation Blog from IP.com.

Here's what S.I. has to say about its "mission" -- one with that distinctive Kevin O'Keefe LexBlog flavor that we intuited before we saw his name in the Why We Believe In Business Blogs post (excerpts below)  

We hope you'll read our corporate blog, Securing Innovation, and join with us discussing patents, trademarks, trade secrets, law and policy, and the latest and greatest tools to strengthen your intellectual property assets and manage your IP portfolios more effectively.

What Is IP.com and why read our blog?

In our little corner of the online world, there's a lot happening with patents, trademarks, and trade secrets, and a lot of relevant stuff is being said on interesting blogs by people who really know what they're talking about. So we're joining the conversation, and blogging about how innovation is managed by corporations with a vested interest in their Intellectual Property.

Find the conversation. Join it. Contribute to it. "Conversing is how we learn. It's how we network. It's how we grow as professionals," says Kevin O'Keefe, CEO of LexBlog, whose team of experts guided us in the development of our corporate blog, "Blogging is a conversation. Not only do you learn and grow your reputation by joining in, you will not be conspicuous by your absence." 

Why We Believe in Business Blogs

The IP ADR Blog and IP ADR Services welcomes IP.com and Securing Innovation to the IP Blawgosphere -- it's collaborative, reciprocal and abundant.  It doesn't get much better than that.   

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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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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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(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. /*