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

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

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

CCP 2019.210 Review

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

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

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

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

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

So what can go wrong with this? Plenty.

Does 2019.210 Apply to Federal Cases?

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

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

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

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

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

Fairness

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

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

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

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

-MY

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

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

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

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

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

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

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

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

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

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

....

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

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

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

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

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

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

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

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

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

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

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

So, what is Power in the IP world?

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

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

-MZ

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Cultivating Qualities of Being

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

In my experience, they are all connected...

Mediation

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

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

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

Meditation

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

Integration into a Contemplative Practice

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

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

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

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

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

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

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

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

-MZ

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

Why?

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

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

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

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

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

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

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

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

-EvG

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

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

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

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

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

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

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

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

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

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

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

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

6. What is the Mediator's Availability Like?

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

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

We will discuss “ripeness” in a future post.

-EvG

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

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

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

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

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

1. What Training has this Mediator Received?

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

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

2. How Much Experience Does the Mediator Have?

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

3. How is the Mediator's Reputation?

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

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

To be continued… 

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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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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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This just in from Weil Gotshal's Summer 2009 Antitrust Update:  DOJ Allies with FTC in Antitrust Attack on Reverse Payment Settlements; While FTC Also Seeks Legislative Solution by WG attorneys Ausra O Pumputis and Alan R. Kusinitz.

The term “reverse payment” in the context of pharmaceutical settlements encompasses agreements reached between patent holders and an alleged infringing manufacturer of a generic version of the patent holder’s branded drug in which monetary or other consideration flows from the patentholder to the alleged infringer. 

On July 6, 2009, the Department of Justice (“DOJ”) ended an apparent policy split with the Federal Trade Commission (“FTC”) regarding the legality of such settlements by filing an amicus brief in the United States Court of Appeals for the Second Circuit1 that supports the FTC’s view that such  settlements are presumptively unlawful.2

The brief advances President Obama’s goal of banning reverse payments3 and Assistant Attorney General Varney’s confirmation hearing promise earlier this year that she would “align the Federal Trade Commission and the DOJ on the issue.”4

Continue reading this important article here.  And thanks to @WeilGotshal on twitter for calling it to our attention!

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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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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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by Robert J. Rose of Sheldon, Mak, Rose & Anderson

The arbitration of all patent disputes, including patent validity, is governed by 35 USC § 294 and the Federal Arbitration Act, Title 9 of the U.S. Code.  Of special note, and likely to be overlooked, is the statutory obligation to give notice of any award by an arbitrator to the USPTO.  A copy of the award is then made a part of the file history for the patent in issue.  While the award is final and binding between the parties to the arbitration, it has no force or effect on any other person, and is unenforceable until the required notice is received by the USPTO.

The Rules for Non-Administered Arbitration of Patent & Trade Secret Disputes available on-line and published by the (known simply as CPR) are crafted specifically with patent disputes in mind.  The rules are non-administered, and can be tailored for use with any appointing authority.  The notice of arbitration requires a list of the patents, patent claims and/or the general area of alleged trade secrets involved.  Within the first six weeks the parties must make early disclosure, including a computation of damages.  An initial pre-hearing conference is spelled out, including each party’s proposed construction of terms in the asserted patent claims, plaintiff’s claim charts and defendant’s responsive claim charts, and the defendant’s identification of prior art, if any.  The scheduling contemplates six months from commencement to submission, including a discovery period.  Interrogatories are limited to 10 per party, and depositions are limited to 8 hours, 5 per party.  A confidentiality order is built into the rules.

The rules also allow for interim relief by a court in urgent circumstances, and provide that such requests are compatible with the agreement to arbitrate, and do not act as a waiver of that agreement.
 

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by Robert J. Rose * of Sheldon Mak Rose & Anderson
 
Both sides seem to be progressing to resolution, but have hit a wall.  Is it time for the mediator to make a proposal for settlement?  If so, should the mediator use the value that the case is worth (which one side or the other likely won’t accept), or the value that the mediator thinks will settle the case?

The typical “mediator’s proposal” is given to both sides as a take-it-or-leave-it proposition to resolve the case.  Each party can confidentially accept or reject the proposal without compromising their negotiating position.  The problem is that the mediator knows who accepted, and who didn’t, and it usually means the exit of the mediator from the matter.  In other words, the mediator only gets one bite at the apple.
 
The technique can have dramatic results.  A reluctant plaintiff will make a large jump if the money is really “on the table.”  Defendants will come up with money they otherwise deny having, if it means that the case is really over.  It also eliminates reactive devaluation.
 
Generally, the mediator should choose a number that both sides could agree to, rather than a number that the mediator thinks they should agree to.  If the parties think that the mediator might make an evaluative proposal, they will approach the mediation like a mini arbitration right from the start.
 
The mediator should not discuss a proposal until the parties ask for it, or at least until the mediation seems to be over.  It is best to set a cut-off time for a simple “yes” or “no” response, allow no negotiating with the mediator about the proposal, and unless there is a deal, don’t end the time period early.  Someone could change their mind at the eleventh hour.

____________________

*  Robert J. Rose is a registered patent attorney and practices patent prosecution and patent, copyright, trademark and antitrust litigation. Currently serving as Sheldon Mak's Managing Director, Mr. Rose has written, lectured and testified extensively as an expert in the areas of patents and antitrust.

Mr. Rose has authored patent litigation opinions in the fields of image compression, digital imaging, printer ink cartridges, industrial control of high-speed food processing machines, industrial lighting, geometric optics and remote control devices.  He has been chair of the Board of Advisors to the Physics Department of the University of Arizona since 2000. He is also a member of the Dean’s Board of Advisors for the College of Science at the UA. He is also Adjunct Professor of Law at the University of La Verne College of Law in intellectual property. He was also awarded the UA Alumni Association Professional Achievement Award in 2004, nominated by the College of Science. Mr. Rose was recently profiled in the American Physical Society newsletter, APS News, click here.  Rose is Chambers rated.

Previously employed as Senior Litigation & Antitrust Counsel and Assistant Secretary of Twentieth Century Fox Film Corporation, he has valuable insight into the needs and problems of in-house counsel.

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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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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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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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In today's Los Angeles Times, columnist Michael Hiltzik rightly worries that Investor Funded Research Could Bring the March of Science to a Standstill.  The story used to highlight the problem goes like this:

Dr. Philip H. Schwartz spent six years providing university researchers with neural stem cells cultured by a method he had helped invent at the Salk Institute in La Jolla.

. . . . His technique provided biomedical scientists with live tissue, an improvement over the dead cells, harvested from the brains of deceased patients, that had been the standard fare. . . .

Then his employer, Children’s Hospital of Orange County, got a letter from Palo Alto-based StemCells Inc. [warning] that Schwartz's program infringed its patents in the neural stem cell field and it wished to, er, discuss a licensing arrangement.

The hospital's lawyers advised Schwartz to stop sending out cells until they could make a deal with the company.

That was two years ago. There's still no licensing deal, and there haven't even been talks for more than a year.

Here's the part where one could rail against lawyers and litigation and the use of patent portfolios as revenue-generation tools impeding the progress of science.  But that's an argument destined for failure (read:  years of litigation; the potential for trial; and, an unhappy settlement by everyone involved).

When reading a story like this, the mediator in me looks for the human or institutional problem burdened by a legal issue of interest primarily to lawyers and academics.  Here it is:

As it happens, StemCells has good reason to support the needs of academic researchers. For one thing, progress in fundamental stem cell research is likely to "improve the value of their [patent] portfolio," Schwartz observes.

For another, the company's founders include three leading academic stem cell scientists: Irving L. Weissman of Stanford University, David J. Anderson of Caltech and Fred Gage of Salk -- in whose very lab Schwartz developed his method.

None of the three appears to have gotten directly involved in the discussions, although one might think they would be especially sensitive to the need to balance the interests of private enterprise and academia. (None answered my requests for comment.)

So there has been no progress. The company says it did not explicitly threaten a lawsuit or even demand that CHOC cease distributing neural stem cells. But considering the firm's access to litigation firepower -- it's been waging a patent battle in court with another firm, Neuralstem Inc., since 2006 -- Dethlefs is probably wise to see its letter as a "veiled threat" and CHOC's lawyers prudent in suspending Schwartz's program.

Each side says it's waiting for the other to make an offer, but things may be moving backward. On Jan. 23, Dethlefs sent out a memo explaining to researchers that because of the "unresolved legal issue," it wouldn't be distributing cell lines that might come under the StemCells patents for the foreseeable future.

The people most vitally interested -- the scientists whose interests overlap -- haven't gotten involved in the discussions and "[e]ach side says it's waiting for the other to make an offer."

In other words, the dispute resolution mechanism chosen by the parties to a commercial problem that is impeding the progress of science and which could result in an economic benefit to one, all or none of the parties in the hundreds of millions if not billions of dollars, is to avoid addressing the problem at all.

Though stem cell research might be akin to rocket science, conflict resolution is not.  I have personally seen the "parties with the problem" -- the inventors on either side of a patent infringement action -- walk into a joint session as if the other were the spawn of Satan, only to emerge less than an hour later talking about their shared engineering or design or scientific problems, slapping one another on the back and, in at least one instance, calling their evil adversary "bro."

To unstick the sticky legal problems impeding the progress of scientific inquiry, the parties with the problem -- who are invariably also the parties with the solution -- need to get together.  Now.  Period.  With or without the assistance of someone trained in the art of dispute resolution.

The big policy issues can be left to the big policy guys while the stem cell researchers figure out how to keep the next huge elderly generation from the suffering and expense of Alzheimers and Parkinsons.

Get it together.  Please.

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Read about recent disputes and issues looming over them.

Topics include:

is a convenient way to stay abreast of the latest developments in cross-border disputes.

Should you have questions about international arbitration, please contact Mark Baker at mbaker@fulbright.com or David Howell at dhowell@fulbright.com.

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Thanks to Jackie Hutter of the IP Asset Maximizer for her unique perspective on the Ninth Circuit's recent laches decision

"Perhaps I am uniquely qualified to respond to this post," writes Jackie.  

I wrote the (losing) brief in the case that established laches in Lanham Act in the 11th Cir.  The case is Kason v. Component Hardware Group.

Laches is no doubt a real legal argument, but if someone has to argue that it is not too late to bring a Lanham Act suit in this day and age, I would tend to agree that the suit is at its core likely an attempt to use the courts to inflict commercial pain on a competitor.  That is, there is no reason in today's information age that a business should not know what their competitors are up to in the market place.  And, if they fail to keep tabs on their competitors, the courts should not serve as a vehicle to do to a competitor what the plaintiff could not itself do to the competitor in the free market. 
.

In my laches experience, the plaintiff was mad that my client was selling replacement parts at a lower price than its "authorized" parts.  The plaintiff could not have protected the parts with patents because the parts were not unique enough to be patentable.  Instead, the plaintiff used the federal courts to try to get my competitor's lower priced goods off of the market.  Put simply, the plaintiff wasn't willing to let competition prevail but, instead, wanted the courts to put my client out of business so the plaintiff could reap a higher price.  Laches came in because my client had been selling the replacement parts for 10 or more years, but the plaintiff did not see them as a threat until the plaintiff started losing market share to my client.  The lawsuit was the plaintiff's way of holding onto its market share in the face of increasing competition.

The net result of the lawsuit was several years of expensive litigation.  The plaintiff did prevail on some of its Lanham Act claims (the law allowed broader trade dress rights at that time), but neither company was happy in the end.  Indeed, the only happy parties were the lawyers because we made lots of money on the case.

At the end of the day, this lawsuit was, as Eric Schmidt of Google indicates, a way to have the courts do what the parties would not be able to do in the free marketplace.  Laches is a real legal concept, but it is not rational today. 

See Jackie's recent thoughts about IP management in the economic downturn in Business Week: "Readers at the Whiteboard" here.

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

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

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

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

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

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

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

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

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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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I'll never forget watching an ABTL mock trial with two juries equipped with focus group dials.  The mock trial concerned an allegation of copyright infringement and the two juries were comprised of the people likely to be hearing the evidence (regular people) and the people likely to be presenting it (lawyers).

Each mock juror in a focus group jury holds a dial.  If the attorney questioning or the witness answering is making a favorable impression, the juror dials UP; if making an unfavorable impression, the juror dials DOWN (and you thought Coliseum days were over); and, if making NO impression, keeps the dial in the middle.

The audience watched a screen over the trial scene carrying two live graphs:  one charting the lay jury's reaction and one charting the attorneys'.

Here's what happened -- the entire day.  Whenever the lawyer or witness scored a "relevant" point -- established an essential element of his cause of action or undermined witness testimony that had been legally unfavorable, the attorney jury dialed up.  The lay jury flat-lined.  Whenever a lawyer or witness had a "relevant" point scored against them, the lawyer jury dialed down.  And the lay jury flat-lined.

The lay jury dialed up when the witness seemed to be telling the truth of his or her experience (the story had narrative coherence) and dialed down when the witness appeared to be evasive.

Then we watched the lay jury deliberate and they did what juries do everywhere -- they cherry-picked the evidence that supported the party they believed and made facts up when challenged by jurors who contradicted them. 

"She just made that up out of whole cloth" I remember saying to a fellow audience member.

And then every single juror who wanted that party to win accepted the new "fact" and incorporated it into their "story" of the case.

Got it?  The jury doesn't care about your legal cause of action.  Now Stanford Law School tells us that most patent infringement cases don't involve copying while trial consultants instruct that juries only care if inventions are copied.  That's big (and unexpected) trouble for patent infringement plaintiffs and prosecutors.  See How Juror Misconceptions Affect Patent Trials at Law.com here.  Excerpt below.

[P]atent trials get played out on an emotional playing field, as well as a legal and technical one. Veteran trial lawyers and jury consultants say that most Americans think that infringement means inventors claiming they've been copied, their ideas "ripped off" or stolen. "Jurors will almost always talk about copying," says jury consultant Doug Green, even when copying has not been alleged. The idea that copying is at least unethical, if not illegal, is wired into Americans from grade school. Besides, juries don't like the idea of a plaintiff demanding money from a competitor who developed a product independently but simply lost a race to the patent office -- even though that's exactly what the law provides.

New research done using Stanford Law School's new IP Litigation Clearing House -- a searchable database of 78,000 intellectual property cases filed since 2000 -- demonstrates that formal allegations and findings of copying are actually quite rare in patent disputes. "No one seemed to know whether patent infringement defendants are in fact unscrupulous copyists or independent developers," says Stanford Law School professor Mark Lemley. Co-authored by Christopher Cotropia of University of Richmond Law School, the new research, which is published online by Stanford, attempts to answer that question, and does: It's overwhelmingly independent developers that are getting hit with patent lawsuits.

And if you want some seriously and steadily good advice about persuading your jury to do the right thing (or settling your case short of trial in light of the jury's probable pre-dispositions) put Anne Reed's fabulous ABA Top 100 Legal Blog Deliberations on your news reader.

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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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Larry Lessig on The Colbert Report Deeplink by Tim Jones from Electronic Frontier Foundation.

Last night, Larry Lessig, a close ally and former board member of EFF, chatted with Stephen Colbert about Lessig's new book Remix, and how America's broken copyright laws are criminalizing our kids:

 

 

 

Colbert:  Isn't that like saying that arson laws are turning our kids into pyromaniacs?? They're breaking the law! You can't just throw the law out the window!

Lessig: "Totally failed war." Is that familiar to you?

 

Of course, remixes on YouTube promptly followed! 

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Check out Chicago IP Litigation this morning on patent litigation wisdom from the bench.

Chief Judge Michel: The State of Patent Law

by R. David Donoghue

Making good on his promise to turn his IP Colloquium into National Public Radio for IP law, Doug Lichtman's newest offering is an extended interview with Federal Circuit Chief Judge Michel.  Click here to listen to Licthman's interview, you can even apply for New York or California CLE credit after listening. 

Mosey on over to David's blog for a summary of Lichtman's most compelling advice.

Follow David on Twitter here.  H/t to @kdtalcott.

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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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We're proud to announce that our friend and colleague, Judicate West hearing officer (mediator and arbitrator) John Leo Wagner, Federal Magistrate (ret.) has been named one of 40 Top California Neutrals by the Los Angeles Daily Journal

Daily Journal Bio from the Top 40 List Below

Affiliation: Judicate West
Rate: $6,600 a day
Location: Los Angeles

Specialty: Mediation and arbitration. Intellectual property, construction defect, environmental, mass torts and securities and consumer class actions
Cases: During the past year, Wagner settled thousands of lawsuits that had been filed over a six-year period by depositors who lost their savings when a noninsured bank collapsed. He also mediated to settlement a high-stakes, multistate electrical power contract between utilities and contractors; facilitated a global settlement involving four lawsuits by dairy farmers over contaminated cattle feed; settled a construction defect case involving a $400 million power plant and 160 contract claims; and helped facilitate a settlement in a Voting Rights Act disenfranchisement case involving two large counties, the governor, Legislature, attorney general, state and county bar associations and the NAACP Legal Defense Fund.

Background: Director, Irell & Manella ADR Center Los Angeles; U.S. magistrate judge, Northern District of Oklahoma; litigation partner, Kornfeld & Franklin, Oklahoma City

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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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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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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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Heddy Lamar invented wireless tech?  Well . . . . it's not quite what happened, but not too far from the truth according to Duncan Bucknell's IP Think Tank Blawg Review #185.  If that doesn't send my Hollywood lawyer friends over to Duncan's pad for a read I don't know what would.

Next week’s Blawg Review will be hosted at Res Ipsa Blog. 

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

If you wish, send me a tiny url of posts you think are blawg review-worthy to @vpynchon on your Twitter network.

$#@^%& (that's husband cursing Twitter in background)

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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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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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Which Presidential administration do you think might be smart enough to do that?

Go to Wired to Vote:  Who Should Be the First U.S. Copyright Czar, then vote for the team with sufficient wisdom to appoint the right person.  Excerpt from Wired post below; full post at link above:

On Monday, Bush signed the "Enforcement of Intellectual Property Rights Act" creating the new position — an official on equal footing with the U.S. drug czar. The copyright czar is charged with implementing a nationwide plan to combat piracy and "report directly to the president and Congress regarding domestic international intellectual property enforcement programs."

We've started the list with a few of the usual suspects on both sides of the copyright debate. Make your own nomination below, and vote up or down on others as you see fit.

To cast your Czar Vote, click here.

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Can a law professor be a lawyer's hero?  I have just two words for you: Larry Lessig.

See Peter Black's Freedom to Differ post today on Lessig's WSJ editorial on changing copyright law for the better and for the good.

Just one of several suggestions below.

Deregulate "the copy": Copyright law is triggered every time there is a copy. In the digital age, where every use of a creative work produces a "copy," that makes as much sense as regulating breathing. The law should also give up its obsession with "the copy," and focus instead on uses -- like public distributions of copyrighted work -- that connect directly to the economic incentive copyright law was intended to foster.

Speaking of change .... what was the prevailing dispute resolution technology when Columbus sailed the ocean blue in 1492?

In England, trial by jury!

What's the prevailing dispute resolution technology today when we celebrate Columbus Day* more than 500 years later?

Trial by jury!

So I was just wondering ....... whether we might be able to convince Lessig to head up the LegalTED Conference Steering Committee for 2009.  I'd like to sign Bruce McEwen of Adam Smith, Esq. for the Steering Committee as well, for his unbelievably great analysis of the Heller collapse (which I observed up close and personal) and for this:

Are, then, the 19th-Century notions of "conflicts" a barrier to globalizing and consolidating law firms? If you want my view, it's that clients seek concentrated--not dispersed--expertise, and that deep and long-standing industry knowledge is precisely where competitive advantage comes from. This stands "conflicts" on its head, and says that clients seek depth, not shallowness.

As well as for noting that, um, clients are adults!

From Clients are Extraordinarily Understanding (h/t to Diane Levin's brilliant and comprehensive Blawg Review # 181 here)

_________________

*  Click here for the counter-narrative.

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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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I remember the first time I laid my hands on a BIC pen.  I was in junior high school and the kids down the street seemed to have stumbled over a treasure trove of them.  They were . . . well . . . simply beautiful . . . as was the way they glided across the Windex-blue lined paper populating my denim-covered school binder.  (yes, I stole "Windex-blue" from the L.A. Times article on Paul Newman's recent lamented death).

Who knew I was just beginning to develop an actual aesthetic (see MOMA collection here).

Today, Securing Innovation celebrates the invention of the ballpoint pen in Blawg Review #179 here.

SI is one of the best IP blogs to appear on the scene in some time and I don't link to it nearly enough.  With Blawg Review #179 I'm hoping that S.I. will begin to get the readership it deserves -- like -- a MILLION unique hits a year -- that's how essential it is to the IP practitioner.

Today, check out the great links SI organized under the following topics:  Intellectual Property News and Opinion; Patents; Trade Secrets; Trademarks; Cyberlaw and the all important miscellaneous, entitled appropriately to the ballpoint pen topic, P.S.

Finally, the all-important reminder:

Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues. Of particular interest to everyone interested in Intellectual Property law and policy might be the November 10th presentation of Blawg Review #185 by Global Intellectual Property Strategist Duncan Bucknell at his indispensible IP Think Tank weblog.

Of course, all those neat papers purchased in September were torn and crammed into my Pee Chee folder by the end of the term.  Someday, an ode to the Pee Chee. 

This one from Studionebula.com.

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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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Great way to start your IP week -- check out Blawg Review #179 at Securing Innovation tomorrow morning.  Preview here.

Looking forward to it!

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Run, don't walk to what may well be the Best BlawgReview of the Year at Freedom to Differ with these tasty IP and technology morsels. 

Law, blogs and technology

At one of my favourite blawgs, The UTube Blog, Edward Lee blogged that NBC praises YouTube technology in keeping unauthorized Olympics videos off the Internet — is Viacom’s case against YouTube now toast?

At PrawfsBlawg Marc Blitz pondered the privacy implications of a video game that you control with your mind.  Meanwhile Sam Bayard from The Citizen Media Law Projectblogged that YouTube announced changes to its community guidelines last week, prohibiting the upload of videos inciting others to commit violent acts, giving Senator Lieberman a partial victory on terrorist videos.   

On Pointwondered whether the 11th US Circuit Court of Appeals tried to cover up a particularly deplorable decision in a civil-rights case by not publishing it, only to have the videotape of a Florida police officer repeatedly tasering a handcuffed motorist showing up on YouTube - with the apparent support of the dissenting judge.

The Greatest American Lawyer observed that Cell Phones Can Distract ... And Kill: Metrolink Engineer May Have Been Texting In Deadly Train Crash.  While on that tragic accident, Traverse Legalreported that it appears that cybersquatters immediately prey upon the publicity that surrounds a mass accident.

Adam Frucci noted that an anti-consumer 8,000 words update to AT&T's 2,500 pages-long customer agreement (called a "guidebook" by the company) probably won't be read by many of its customers, but it is attracting attention from regulators who may require the telecom giant to rein it in. 

Mike Masnick doubted that peer review is sufficient to help the somewhat dysfunctional American patent system.  Gene Quinn wrote that patent trolling has subverted the system from one protecting innovation to one simply redistributing wealth.

And with a shrink-wrap license on a bag of grapes in a supermarket, Mike Madison suggests that contracts have finally "jumped the shark" while Timothy Zick looked at Meatspaces, Cyberspaces, and (Relative) Expressive Freedom and Michael Dorf chanted Spam, oneSpam Spam Spam Spam Spam, Glorious Spam,

Susan Crawford, the founder of One Web Day, urged us to contribute to the e-Democracy Time Capsule at timecapsule.onewebday.org:

Anyone across the country and the world can contribute by adding text, images, and video that celebrates e-Democracy to an open blog. We invite you to add the following entries:

Best of the e-Democracy Web: Your favorite tools, citizen journalist site, etc.  What empowers you to act online?

E-democracy heroes: Brag about your friends and colleagues- who is behind the best political technology, content, and critical policy fights today?

Legislation and Policy: What are the issues we face in delivering the best possible future for e-Democracy?

Letters to the future:  How do you see the e-Democracy Web growing (or failing) in the future?

However, one law blogger is in a little bit of trouble with the Recording Industry Association of America seeking to have  attorney-blogger Ray Beckerman declared a "vexatious" litigator.  According to Wired'sThreat Level blog the RIAA alleges that Beckerman, one of the nation's few attorneys who defends accused file sharers, "has maintained an anti-recording industry blog during the course of this case and has consistently posted virtually every one of his baseless motions on his blog seeking to bolster his public relations campaign and embarrass plaintiffs ... Such vexatious conduct demeans the integrity of these judicial proceedings and warrants this imposition of sanctions."  Read more here and visit Beckerman's blog, Recording Industry vs The People.

Submission guidelines for next week's issue here and if you're brave enough to follow Aussie Peter Black's lead, there are a lot of free dates open for next year's hosts for Blawgreview in the right-hand sidebar.

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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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From the No Comment Department:

(h/t Slashdot)

California claims copyright to its laws, and warns people not to share them. And that's not sitting right with Internet gadfly, and open-access hero, Carl Malamud. He has spent the last couple months scanning tens of thousands of pages containing city, county and state laws — think building codes, banking laws, etc. Malamud wants California to sue him,

For full post click here.

The closing scene from And Justice for All irresistible . . .

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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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This is a brief interview with Lawrence Lessig at this year's Personal Democracy Forum in New York City. Lessig answers questions about Change-Congress.org: an online, participatory tagging tool to encourage reform and transparency in the US Congress.

Click here for an audio interview with Lessig.

Here is the description of the tool from the Change-Congress.org web site:

Change Congress is a movement to build support for basic reform in how our government functions. Using our tools, both candidates and citizens can pledge their support for basic changes to reduce the distorting influence of money in Washington. Our community will link candidates committed to a reform with volunteers and contributors who support it.

Here's part of the interview where Lessig addresses internet issues and the upcoming election:

I think there's a fundamental decision that will be made in this Election about the philosophy that will guide the next generation of the internet. John McCain has signaled very clearly that he's going to continue the philosophy of what I refer to as a kind of Neanderthal philosophy that the government has no essential role in this essential infrastructure. And that means basically privatizing the infrastructure to the interest of a increasingly small number of infrastructure providers. And the Obama platform is fundamentally committed not to displacing private interest but to complimenting private interest with other interests which are also essential to the internet's future.

So social interest and public interest and cultural interest that compliment the commercial interest; and so I think that an Obama Administration will appoint people and drive for regulation that guarantees this wider range of objectives that's achieved by this infrastructure. So just like we didn't build the high--the national highway system simply to serve GM's cars or to serve Ford-cars but to build it to support a wide range of uses, some commercial, some non-commercial and the same thing with the electricity grid and the same thing with every single infrastructure we've built. That's the way I think we'll think about the internet--that it serves many different objectives--some private, some not, and the government needs to make sure it can serve all of them well.

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This lawsuit falls into the category of deterrence.  Because I live in a part of the world where "creatives" regularly refer to Disney as Maushwitz, I don't tend to think of it as the happiest place on earth.  

The question here, however, is business strategy and tactics; public image vs. strict compliance with one's demands.

Does Dumbo's mom act the bully in the marketplace to scare off all the other fleas?  Or does she cease and desist when her C&D letters obtain compliance in all but the most minute details?

Question open.  Excerpt from IP Infringement:  The Unwelcome Guest at Kiddie Parties below.  

With its $1 million trademark infringement lawsuit against the Florida couple who happened to use costumes looking like its trademarked Tigger and Eyeore characters for their party business, the company that bills Disneyland as the happiest place on earth is now possibly being perceived in some quarters as the usual big business bully. But does Disney have a point? Is the legal action justified? 

According to an article by David Wallace on disneyorama.com, David and Marisol Chaveco of Clermont, Florida, owners of a small party business, bought two costumes resembling Tigger and Eyeore from a Pervian company on eBay and promptly advertised their availability for parties on their Web site. Like other brand owners of children’s characters, Disney regularly searches the Internet for commercial use of their characters. And spotting this particular site, Disney, known for its tough approach on potential infringers of their trademarks, sent the couple three letters demanding seven items, including sending the costumes to Disney to be destroyed. 

While the Chavecos complied with six of the requests, instead of sending the costumes to Disney, they instead sent it back to the Peruvian company, pleading the need to recoups their $500 investment. Disney’s response was the $1 million lawsuit.

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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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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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The IP ADR Blog will be hosting the Blawg Review this coming Monday.  If you've never participated in a Blawg Review before, check out the guidelines for submission here.

Though we've been reading Blawg Review since we put up our first tentative post on blogger (here!)  in June of 2006, as hosts, we're Blawg Review virgins.  So send your best posts this week to Blawg Review (follow those guidelines above) for possible inclusion in possibly one of the best BR's ever (we like to set our own bar high!)

And if you're a true Blawg Review virgin, here's how Blawg Review explains itself:

The Carnival of Law Bloggers

Blawg Review is the blog carnival for everyone interested in law. A peer-reviewed blog carnival, the host of each Blawg Review decides which of the submissions and recommended posts are suitable for inclusion in the presentation. And the host is encouraged to source another dozen or so interesting posts to fit with any special theme of that issue of Blawg Review. The host's personal selections usually include several that reflect the character and subject interests of the host blawg, recognizing that the regular readership of the blog should find some of the usual content, and new readers of the blog via Blawg Review ought to get some sense of the unique perspective and subject specialties of the host. Thanks to all the law bloggers who collaborate to make Blawg Review one of the very best blog carnivals of any genre.

Because I'm being sexually harassed by anonymous Ed., Diane Levin and Stephanie West Allen about my maiden Blawg Review voyage, I am retaliating with "Like a Virgin" from Moulin Rouge (welcome to Baz Luhrmann's stream of consciousness). 

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Because the introduction of the movie Magnolia narrates the best criminal law bar exam question in the history of film, period, I posted it for you over at the Settle It Now Negotiation Law Blog here.  Below, the haunting last scene of that dark comedy -- Aimee Mann's Wise Up -- below.

If you want to access the mind of criminal attorneys (who have all the fun!) then run, don't walk, over to Simple Justice for a satisfyingly meaty Blawg Review.  What?  No IP crimes?  Mediating sunglass and handbag counterfeiting disputes is as close as I ever get to criminal law and then the question is always an ethical one -- can you imply that charges will be dropped if a civil settlement is entered into.  I believe the answer is "no" but I see it done all the time.

Stay tuned here for next week's Blawg Review which will be penned by the members of the IP ADR Blog. 

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Bratz update from the WSJ Law Blog:  the Defendant was quoted as saying:

The verdict that was put against us was only based on racism.  I am saddened that today, in this day and age when for the first time in the history of America an African American is running for president, that there is still racism in this country.”

Mattel, on the other hand, believes Mr. Larian's behavior was wrongful based on the facts, not on racism.  As the WSJ notes:

Mattel said that it “finds this development to be very unfortunate. This trial, however, has been, and will continue to be, about Mr. Larian’s and MGA’s wrongful behavior.”

A few little local birds have hinted that settlement is unlikely in this case based upon the degree of zealous advocacy being practiced.  Still, MGA might take note of Qualcomm's increased stock value following its settlement with Nokia and ask itself how many trials and mistrials and how many appeals are in its future.  Are the market effects of this ongoing litigation worth keeping it alive or is it time to get together the financial geniuses of the type who put the Qualcomm/Nokia deal together. 

The weekend's WSJ story on the juror misconduct at issue, along with the Court's minute order below.

Thanks to the Wall Street Journal Law Blog for posting this Order in the Bratz/Mattel Litigation (Barbie-Bratz Juror Booted for Ethnic Slurs). 

Juror No. 8 made grossly inappropriate remarks concerning defendant Isaac Larian based on his ethnicity during jury deliberations. Specifically, Juror No. 8 indicated that her husband, an attorney, has told her about client or clients who are Iranian and who are stubborn, rude, stingy, are thieves, and have stolen other person’s ideas.

Although Juror No. 8 minimized her remarks and insisted that she did not mean to do
anything wrong, the relative consistency and degree of detail of the other jurors who
heard her make the remarks, combined with other factors that lend credibility to the
other jurors’ account of the remarks and not to Juror No. 8, leads the Court to
conclude that Juror No. 8 made the remarks, or something close to the remarks, set
forth above.

The good news in this sorry story is the immediate negative response of the other jurors to these statements.  

As the Court noted:

The juror foreperson immediately admonished Juror No. 8 for making the remarks
and strongly instructed that there was no room in the jury deliberation process for such remarks. Contemporaneously, several other jurors also registered their disapproval with Juror No. 8’s comments, some very emotionally.

One juror indicated that she was afraid that, if Juror No. 8 remained on the jury, she would overcompensate for Juror No. 8's apparent bias and not be fair to Mattel. Another juror indicated she felt uncomfortable continuing to serve with Juror No. 8 after the remarks were made.

Though the Court concluded that Juror 8's comments did not "effect or influence the decision made by the jury," MGA has understandably asked for a new trial. 

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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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From the Los Angeles Daily Journal:  Qualcomm, Nokia Settle Licensing Dispute

By Craig Anderson
Daily Journal Staff Writer

San Diego-based Qualcomm Inc. will get a big payout from Nokia Corp. to settle a long-running dispute over how much money it should receive to allow the Finland-based cell phone maker to license its patents.

The settlement was announced shortly after a trial between the two companies, set to begin Wednesday in the Delaware Court of Chancery, was abruptly postponed.

News of the 15-year licensing agreement sent Qualcomm stock soaring more than 18 percent in after-hours trading on Wednesday afternoon. Specific financial terms were not disclosed, but the deal includes an upfront payment and ongoing royalties.

As part of the settlement, Nokia will drop an antitrust complaint it had filed against Qualcomm before the European Commission.

The major sticking point between the companies were the royalties charged by Qualcomm to use its patented technology in Nokia cell phones and other devices. Nokia argued that the rates were too high.

"I'm very pleased that we have come to this important agreement," said Dr. Paul E. Jacobs, CEO of Qualcomm in a prepared statement.

"The terms of the new license agreement, including the financial and other value provided to Qualcomm, reflect our strong intellectual property position across many current and future generation technologies. This agreement paves the way for enhanced opportunities between the companies in a number of areas."

As part of the deal, Nokia has been granted a license under all Qualcomm's patents for use in Nokia mobile devices and Nokia Siemens Networks infrastructure equipment, according to the announcement. Nokia will not use any of its patents "directly" against Qualcomm.

To read remainder of story, click here (subscription required)

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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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Sometimes lawsuits, demand letters and take down notices have a larger purpose than simply making a claim against a single individual.  Whether or not AP intended to engage the entire blogging community in a public conversation about fair use of copyrighted news content content, engage them it did. 

Now AP has settled with the original target, the Drudge Retort, while engaging in one of our most highly recommended dispute resolution activities -- talking to the stakeholders about ways in which all parties can mutually benefit one another.  

See abbreviated AP announcement below. 

AP, blogger resolve dispute over copyright
By SETH SUTEL – Jun 20, 2008

An AP statement Thursday night said the company had provided additional information to Cadenhead about posting its material online, and both sides considered the matter closed. It also said the AP was having a "constructive exchange" with a "number of interested parties in the blogging community" about the relationship between bloggers and news providers, and intended to continue the dialogue.

Earlier this month the AP sent a legal notice ordering Cadenhead to take down seven entries on the Drudge Retort, his takeoff on the Drudge Report. The news agency said the postings were violating the AP's copyright. . . .

Cadenhead said in his blog post that he wouldn't reveal details of his discussion with AP attorneys about their specific objections to the blog entries until the AP releases guidance for online use of its content.

Duchene said he expected disputes between news organizations and bloggers over permissible use of copyright material online to continue, but he also said he was "hopeful that future disagreements can be handled in a less confrontational manner." 

Here's the Drudge Retort post about the settlement.

 

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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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Thanks to LexMonitor for sending us to Rebecca Tushnet's 43(B)log  alerting us to Harvard's  Right To Teach: an Educational Fair Use Project.  We've often said that the best alternative to litigation is prevention -- here the attempt to create a "Statement of Best Practices" that will

help draw to the surface and articulate a consensus in the academic community about the scope and limitations of user rights in a contemporary culture that is, on the one hand, increasingly participatory and technologically innovative and, on the other hand, increasingly marked by the expansion and tightening of traditional copyright.

Read the full project proposal here (.pdf)

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Thanks to the Amlaw Daily (courtesy of writer Nate Raymond) for bringing us this shocking news -- Kasowitz Benson: Former IP Head Harassed 12 Women

The former head of intellectual property at Kasowitz, Benson, Torres & Friedman sexually harassed at least 12 female employees at the firm--including making advances on seven of them in one night--before he was fired in December, according to a lawsuit filed Monday by the firm.

The complaint, filed in New York state court, is the first detailed account explaining why Kasowitz Benson says it fired Jeremy Pitcock, an IP litigator who joined from Simpson Thacher & Bartlett in 2006. Pitcock denies sexually harassing anyone, let alone having engaged in a pattern of sexual harassment.

When you have a dozen women willing to jeopardize their careers (more on that later) to bring down a powerful law firm partner, my innocent-until-proven-guilty default flags.

(pictured:  Bill Clinton, our former Sex-Addict-in-Chief, with the lovely Sheryl Crow -- think he didn't hit on her?)

What does this have to do with IP ADR?  A lot.  These are the human frailties -- some enlarged to actionable claims leading to disgraced departures -- for which the appropriate alternative dispute resolution technique is prevention.  Counseling.  Apology.  Forgiveness.  Reconciliation.

As a woman who was an early entry into the profession, I haven't had a lot of sympathy for my younger cohorts.  I should do better in this regard but my own attitudes remind me that some old ideas are really really hard to change.  Like the idea that women can take care of themselves.   The idea that ridicule is the strongest antidote to unwanted attention (I have a great story about this but can't "print" it in a "family" blog).  The recollection, from an era of Queen-Bee-Syndrome, of the solidarity and sisterhood we shared around the issue of our male superiors' unwanted carnal attentions.  

And I have been known to say that the power balance between a 25 year old woman and a 45 year old man is heavily weighted in favor of the woman. 

Unfortunately, senior men "hitting" on younger women will always be with us.  It's the degree of ineptitude that generates the type of news you see here.  Twelve women?  That's not only a management problem (HR is asleep at the wheel).  It's an addiction problem.  If caught early enough, the offender can be channeled into a treatment program rather than ejected from the firm.  In the case of a senior IP litigator, that ejection can cost the firm millions to tens of millions of dollars.

So here are some resources that everyone -- including those who are most protected against their own bad behavior -- senior IP litigation or transactional rainmakers -- can use to nip this sort of thing in the bud.

For a quick all-firm tune-up, call Julie Yanow at EquiLaw. 

It's not just that Julie is one of my best friends.  It's that her common sensical training courses are fun and hilarious because that's just who she is. 

Even I'd pay to see her speak! 

And she most assuredly does not share my pull-yourself-up-by-your-bootstraps, buck-up, take it like a . . . . man? attitude toward sexual harassment. 

See her Training page here. 

Here are 12 Questions from Sex Addicts Anonymous for self-diagnosis in the privacy of your room.  Your attendance at SAA meetings is something you're allowed to keep secret until you decide (if ever) that you want to share this life-transforming experience with others.  (though not a member, I have seen thousands of happy people transformed by the principles used in SAA, all of which are borrowed from the original 12-step AA program). 

See also the Sex and Love Addicts Home Page -- an unusually well-designed site for a 12-step program)

For further reading, check out:

Sex Addiction Treatment and Recovery from the Dual Diagnosis Blog

What I Wish I'd Know About Sex Addiction Twenty Years Ago 

Definition of Sexual Harassment from the About.com Human Resources Blog.

This dated but still relevant article from Fortune Magazine - Addicted to Sex A PRIMAL PROBLEM EMERGES FROM THE SHADOWS IN A NEW--AND DANGEROUS--CORPORATE ENVIRONMENT

Addicted to Love:  Sex, Love and Compulsion here.

Sexual Compulsivity:  The Secret Addiction (this is an link to the book with an interview with an nationally recognized expert at the Missouri State Bar site)

Here's a recommended reading list provided by SexHelp.com

The SLAA Journal (if you read this and "hear" your own story being told, it's time to venture out of your secret space to meet up with others who share your challenges and are successfully meeting them).

Finally, a little humor from the HR Legal Source (those offended by stuff that's funny, please skip this video) : 

Original Link : GE Sexual Harassment video Uploaded by: xRacer

HR people?  Any additional resources you'd suggest?

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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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There's a lot of meat to put on these bones but this set of suggestions for pre-negotiation preparation is a good start.  It's applicability to IP negotiations next.

PRE-NEGOTIATION TIPS – MEMORY JOGGERS 2  (summary)

• document each party’s goals, attitudes, limitations and the known or likely opening stance of each side… 
• develop a negotiation strategy by
  • Listing possible solutions for your negotiating partner
  • Listing likely repercussions for both parties
  • defining possible areas of agreement
  • brainstorming underlying mutual needs or common ground.
  • Preparing a list of fair procedures including how we deal with each other’ i.e. values, ethics, use of experts, standards in the industry, etc. 
  • determining the impact of limitations, i.e., what your bargaining partner may realistically be able to accept
  • setting or becoming aware of and sharing deadlines
  • assessing the ability of the negotiating team to make decisions
  • assessing probable internal political impediments and possible fallout for both side
  • seeing the negotiation from your negotiating partner's perspective i.e.
    • what is their real problem
    • how do they view our position and attitude.
  • Listing alternative actions that may provide some basis for continuation of the negotiation
    • suggest strict deadlines and "homework" for both sides
    • suggest a partial agreement
    • have an ‘if all else fails option’ (sometimes referred to as a lifeboat)
  • Planning ways to neutralise existing biases such as customera are greedy, unionists are troublemakers, management is anti-worker, etc. that could hinder eithr side's willingness to listen and problem-solve.
  • Scheduling a pre-negotiation role-play (split team into "our side" and "their side" to sharpen understanding of weaknesses in your arguments or approach.
    

Thanks to OrgLearn for this "Management Thought for the Week."

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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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Check out this week's Harvard Business School Working Knowledge article:  Monetizing IP:  The Executive's Challenge here. 

As patent protection becomes more and more costly and less and less certain, innovators are pursuing collaborative agreements to prevent disputes from arising in the first instance.  None of the suggestions contained in this article is a cure-all, but many are enterprising solutions to help companies avoid litigation in the first instance. 

In a patent pool, firms blend their patents with those of other firms. These pools allow users to access a number of firms' patents simultaneously, thereby avoiding the "patent thicket." In many cases, the pooling agreements also specify the pricing schedule in the agreement that establishes the pool, assuring that no party attempts to extract very high fees or to increase its fees after users are locked in.

Patent pools date back as far as the 1850s but have proliferated in recent years. Goods covered by patent pools totaled at least $100 billion in the United States in 2000, while multiple standard-setting bodies today cover virtually every high-technology product. Moreover, the scope of these activities is likely to grow in future years. In many industries, leaders have expressed frustration about the proliferation of patent thickets—the large number of overlapping awards—and the ensuing rise of costly and time-consuming litigation. In many cases, technology sharing has been proposed as a remedy.

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Hap tip to Corner of Lex and Biz for Drawing that Explains Copyright Law with link to Eric J. Heels' Copyright rights, unregulated uses, and fair use whose drawing appears below. 

This is a plea from your mediator.  Yes, I love the well-wrought narrative and yes I am a sucker for persuasive prose. 

But after I read your brief, I DIAGRAM your argument, connect the party relationships with different colored pens, make charts of the legal issues, rights, obligations, damages, business interests and the like.  

Guess what?  You could do this for me. 

And if you do it for me first (or if you are the ONLY one to do it) you will have a greatest influence on the way in which I visualize the case.  You will frame the issues and set the stage.  And though I will struggle -- as always -- to be impeccably neutral, you will have the upper hand in persuading me of anything I need to be persuaded of to depress the other side's expectations of success on the merits. 

Help me help you.

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Mediating a fairly run-of-the-mill commercial case – a fight over the sale of an import business --  a federal settlement officer slowly begins to conclude that the parties are bargaining over the value of a business that trades in counterfeit Louis Vuitton and Gucci handbags.

Is this the moment when the mediator asks herself, if I’m carrying a pricey Prada, should I push the parties out of my pad?

But that’s the Carrie Bradshaw question.

The mediator’s questions go more like this: as a neutral mediator, do I have a duty to: (a) chastise the parties for engaging in illegal conduct; (b) recuse myself to avoid participating in the creation of an illegal agreement; or (c) inform the parties that any settlement reached might not be enforced?

Before answering these difficult questions, consider the recent case of Hye Young Yoo v. Sue Jho (Calif. Court of Appeal, 2nd Dist).

Yoo, the purchaser of a counterfeit handbag business, sued the seller after investigators confiscated the counterfeit goods, which naturally caused the business to fail. Yoo wanted some or all of her money back and the trial Court (wearing black polyester) agreed -- to the tune of $103,250.

Not surprisingly, the appellate court, slightly more Manolo Blahnik but nevertheless also sporting black polyester robes, held that when it comes to illegal contracts “the law will leave the parties as it finds them.” Id. In Yoo, leaving the parties the way the Court found them meant some pretty good times for the defendant. She stole Gucci and LV designs, sold them to (unsuspecting?) customers and made a cool $400K at a time when she was likely looking over her shoulder for the law to close in.

So, what’s a neutral mediator to do?


For the tentative resolution, click here.

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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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Take a look at the new LexisNexis Copyright Law Center where we're pleased to be featured along with our friends at IPKat, the first Blog to welcome us to the IP Blogosphere.  Here's what LexisNexis has to say about its new Copyright Law Center:

We take pride in associating with the best talent in the legal world, so we are thrilled to include you as part of this dynamic new platform that features commentary from experts and gives visitors to the site the ability to interact with the content and one another. Also featured on the site is real-time copyright news, blogs from internal teams at LexisNexis and outside contributors, and news about attorneys, firms, and corporations, plus delivery options, including RSS feeds, podcasts and email alerts.

The selection of your blog was made by the Copyright Team responsible for the Matthew Bender Copyright publications as one of those most often visited, referred to and relied upon. . . .

Thanks LexisNexis!  We'll be nosing around the Copyright Law Center ourselves in the coming weeks.  Appreciate your including us.

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

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

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

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

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

Continue reading here.

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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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Too busy to comment, but couldn't resist posting this one.  Comments from the IP crowd?  Ideas for interest-based solutions from the ADR posse?  Mike Young?

ATHENS, Greece - A Greek court has been asked to draw the line between the natives of the Aegean Sea island of Lesbos and the world's gay women.

Three islanders from Lesbos — home of the ancient poet Sappho, who praised love between women — have taken a gay rights group to court for using the word lesbian in its name.

One of the plaintiffs said Wednesday that the name of the association, Homosexual and Lesbian Community of Greece, "insults the identity" of the people of Lesbos, who are also known as Lesbians.

"My sister can't say she is a Lesbian," said Dimitris Lambrou. "Our geographical designation has been usurped by certain ladies who have no connection whatsoever with Lesbos," he said.

The three plaintiffs are seeking to have the group barred from using "lesbian" in its name and filed a lawsuit on April 10. The other two plaintiffs are women.

And below -- a T.V. lesbian "mediator" gives warring parents a hologram of custody battles.   Funny.

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Check out Cumulative and Overlapping Innovation by Adam B. Jaffe and Josh Lerner over at  Harvard Business School Working Knowledge here as well as Jaffe and Lerner's book Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It, one of the Economist's Best Books of 2004, Economics and Business Category.  Excerpt from HBSWK below: 

A classic example of the tradeoff between rewarding pioneering inventions and allowing improvements is the Edison electric light bulb. Edison was granted the basic patent on incandescent lighting in 1880. For the next dozen years or so, there was much dispute about the validity and breadth of this patent. Many companies offered competing products. A number of these contained important improvements in the design of the filament and the bulb itself, and the cost of the bulb trended steadily downward.

Then, in 1891, Edison General Electric Company won an infringement suit against its competitor, United States Electric Lighting,and subsequently won injunctions against a number of competitors. The flow of improvements then slowed, until the expiration of the patent allowed competitors to re-enter and resume their efforts to improve Edison's design.

Now, surely Edison's invention was about as novel as they get. And Edison and his assistants put a lot of time and money into testing different materials until they succeeded with the carbon filament, justifying a patent to allow significant profits to be earned on the invention. But acknowledging the legitimacy of Edison's patent and his efforts to enforce it is not inconsistent with recognizing that the monopoly thereby created temporarily inhibited the subsequent improvement of the invention and the development of the industry more broadly.

In principle, subsequent inventors with good ideas about improving an important invention ought to be able to negotiate an agreement with the owner of the original patent that allows the improvement to be implemented.

This could be done by granting the improver a license to use the original patent, or by selling or licensing the improvement back to the holder of the original invention.

After all, if the improvement is really a good one, both the original inventor and the improver have an incentive to see it implemented. In practice, however, such agreements often are difficult to work out. After the Wright brothers patented their basic design for an aircraft stabilization and steering system, there were many others who wanted to work on a wide variety of different ideas for aircraft. But the Wright brothers refused to license anyone, and engaged in protracted litigation with a number of designers.

With the entry of the United States into World War I, the U.S. government in fact pushed the major aircraft manufacturers, including the Wrights' firm, to license their patents as a package, in order to ensure the rapid manufacture of planes and the development of new designs. The rapid development of numerous different aircraft concepts in the years after the establishment of this "patent pool" suggests that the pioneering patent—combined with the unwillingness or inability of the inventors to cooperate with their technological followers—temporarily retarded the development of technology.

Continue reading here

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The significant problems we face cannot be solvedby the same level of thinking that created them.--Albert Einstein

Lawyers, philosophers and scientists are all trained to question first principles.  The right of one individual to the absolute and exclusive right of dominion over property by virtue of creation or payment (by money or barter) is one of the first principles of capitalism and is rarely questioned. /**

The ownership of ideas, however, and one's entitlement to preclude others from interfering with another's dominion over them, is more slippery today than ever.  In this month's Harvard Business School Working Knowledge journal, for instance, Professor James Heskett kicks off a reader's forum -- Who Owns Intellectual Property -- (open until April 24) with the following:

I [recently] visited the website of the branding consultancy Wolff Olins, responsible for creating the branding for (RED), which raises money for The Global Fund being promoted by Bono and Bobby Shriver. (RED) is a brand, a piece of intellectual property that was designed purposely to be co-opted by others wishing to incorporate it into their advertising. Organizations such as Apple, Gap, and American Express have promoted their products and services using (RED) while raising money for The Global Fund.

Wolff Olins' homepage presents a provocative redefinition of brands as practical platforms that enable people to do things. In its words, "As brands become less the property of an organisation and more the banner of a movement, ownership will become even looser. Logos will be things other organisations, and individuals, can borrow and adapt." That belief, they maintain, will require that some companies, in their own best interests, relinquish control over brands and "be more generous" with consumers. In other words, they take the risk of transferring ownership and quality control of what used to be called their brand to others. In this case, who owns the intellectual property?

More generally, are views of ownership of intellectual property changing? If so, how will it affect the way intellectual property is valued for financial purposes? Are laws worldwide regarding intellectual property out of date? What do you think?

To add your own thoughts, click here.

____________________

/**  Though possibly apocryphal, in responding to the question "what proof need I present to demonstrate my ownership of this slave," a trial judge sitting in a non-slave state in 1840's America is said to have answered, “a bill of sale from God Almighty.” 

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See The Unlucky Troll at Forbes.com, excerpt below:.

[Chicago lawyer Anthony] Brown first noticed the JPEG patent after quitting his corporate law practice in 1996 and raising just under $1 million from friends and family to fund his new patent-licensing firm. After several months of trolling the national patent database, he found what he'd been looking for. The brainchild of two Philadelphia-area engineers, the JPEG patent lay dormant after being issued. Brown cold-called one patent holder, then 70, and the widow of the other, and persuaded them to assign him control in exchange for a chunk of any licensing fees recovered.

Then came Brown's first roadblock: A petition filed in 2000 by parties unknown asked the U.S. Patent & Trademark Office to reexamine whether the processes the patent described were novel enough to deserve a patent. The feds agreed to the review, a common practice if the questions raised seem substantial. The catch is that during the review the holder of the patent can't demand licensing fees, and the patent's life doesn't get extended accordingly. The reexam of the JPEG patent lasted seven years (the average takes less than two). In the end some fancy wordsmithery allowed Brown to retain control of the patent's pertinent provision.

Brown then launched a wave of lawsuits last summer, demanding anywhere from $25,000 to $15 million, depending on a company's revenues and reliance on the Web. One licensee, court records show, was Kraft Foods (nyse: KFT - news - people ), which was subject to a $5 million fee under Brown's "royalty schedule." Kraft agreed to an undisclosed fee.

But last year saw yet another anonymous challenge. This one was filed by Chicago patent attorney Vernon Francissen, who declines to identify his client. Francissen suggested the JPEG patent's current version had slipped through an overburdened system and was being applied too broadly. In March the Patent Office agreed to a second reexam, again putting up a roadblock to Brown's licensing campaign. . . . .

In late 2010 the patent expires--and there's no limit on the number of times "anonymous" parties can ask for a reexam.

See also TechDirt's February '08 article JPG Patent Holder Goes for the Sympathy Vote here; for more on patent trolling in general, see law.com's "Meet the Original Patent Troll" here.

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There are dozens of reasons why a negotiated settlement of a patent infringement case is superior to continued litigation, but only one reason why it's even better than winning.  As law.com recently reported, "over the last decade, 38 percent of the cases had at least one term found on appeal to have been wrongly construed [and] . . . 30 percent of the cases had to be reversed or vacated because of an erroneous claim construction." 

As usual, we have Dennis Crouch at Patently-O to thank for the statistics, which were gathered by David Schwartz, an assistant professor at The John Marshall Law School.  

"For some lawyers, the high reversal rate is worrisome," according to law.com's article Federal Circuit Tosses Out $104 Million Patent Verdict in DirecTV Case here. 

"It's higher than everyone would like," said Michael Barclay, an IP lawyer at Wilson Sonsini Goodrich & Rosati. "You can't advise your clients on what's going to happen."

One fix for the issue was proposed in the patent reform bill that is currently stalled in the Senate. It would change the rules to permit an interlocutory appeal to the Federal Circuit after the hearing on claims construction instead of waiting until the trial is finished.

Proponents said the change would cut out all the time wasted on trials that ultimately get overturned by the appeals court. But opponents, including Federal Circuit Chief Judge Paul Michel, said that the change would clog up the appeals court and cause even more delays in patent cases.

In the Finisar case, a Texas jury originally awarded the tech company $78.9 million in damages after it found that DirecTV willfully infringed on a patent involving methods for transmitting and broadcasting digital information. U.S. District Judge Ron Clark denied Finisar's request for an injunction but awarded $25 million in enhanced damages. DirecTV was also on the hook for prejudgment interest, post-judgment interest and a compulsory license.

The appellate panel vacated the verdict, ruled that the alleged infringement wasn't willful, and invalidated one of the seven patent claims in question.

DirecTV's appeal had challenged the construction of two terms in the district court's claim construction as too broad. The appeals court agreed, though it ruled that only one of the misinterpretations was harmful.

For the full article, click here.

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Harry Potter and Copyright Fair Use junkies know this already -- there is a firestorm brewing between the not insignificant powers (and financial resources) of JK Rowling and her Harry Potter franchise (which includes Warner Brothers) on the one hand and RDR, the wanna-be publisher of a fan's "Lexicon" or reference guide, on the other.

And the battleground is copyright's amorphous fair use doctrine.

Potter fan and Michigan middle-school librarian Steven Vander Ark has a very popular and comprehensive website that is considered to be the most authoritative reference to the Harry Potter series. 

Among other things, the Lexicon collects in alphabetical order information on the series' characters, places, spells, potions, and more, quoting liberally from the original language in the Potter books. The Lexicon was so popular, and so comprehensive, that JK Rowling herself frequented it as a reference guide and awarded it a "fan site award" in 2004.

Rowling's views changed, however, when she learned that Vander Ark had cut a deal with book publisher RDR to create the Lexicon in hard copy and sell the book in stores.  Before it could be published, Rowling brought suit in New York, claiming copyright infringement.

Her legal position is that the Lexicon merely reorganized, but otherwise copied, her words and ideas -- a blatant infringement of her most basic copyright in her creations.

As Rowling notes, she has the exclusive right to create derivative works which is what the Lexicon is.  Rowling further asserts that she intends to write her own Harry Potter encyclopedia of sorts in the next decade, with proceeds to be donated to charity.

RDR is screaming fair use, arguing that the Lexicon is transformative of the original work -- that is,  taking the original and creating a wholly new and different work of authorship. RDR points to reference guides that have been published for innumerable other works of fiction, including ones for The Lord of the Rings and The Chronicles of Narnia.

So which is it, an infringing derivative work, or a transformative fair use? My fellow panelist on last month's USC IP Institute Fair Use Panel, Tony Falzone has an opinion -- Fair Use.

Indeed, Tony and the Fair Use Project are representing RDR books in the trial currently pending before New York Federal Court Judge Robert Patterson Jr. while Dale Cendali of O'Melveny and Myers' New York office leads the charge for Rowling's camp, and not surprisingly sees nothing transformative at all about the Lexicon. 

For details on the trial, take a look at the WSJ blog here the gothamist blog here.   Both are providing terrific day to day coverage of the trial.

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In the epic Harry Potter copyright fair use battle now under way in a District Court in New York, the mortal judge is wondering out loud -- from the bench -- why these parties can't just settle their dispute.

For background on this fascinating Copyright dispute, click here.

U.S. District Court Judge Robert Patterson Jr., after referencing Bleak House -- Charles' Dickens tale of endless litigation -- noted that it was “a very sad story. Litigation isn’t always the best way to solve things."

He went on to ask the parties: "Can it be resolved another way? I feel that this case could be settled and should be settled."  "I think this case, with imagination, could be settled."

Despite the invitation, even Rowling's apparently boundless imagination could not be tapped to think creatively about a global settlement.  As reported by the WSJ Law Blog here, the parties have reached a settlement of the relatively inconsequential false advertising and deceptive trade practices claims, but the copyright/fair use dispute -- the meat of the case -- continues.

Is the judge wrong to think that a high profile copyright case that makes a star of the fair use doctrine could be settled?  Or as one of the participant's asked, how do you settle with a billionaire?

Answer:  To settle with a billionaire, you need to offer something that the billionaire wants more than money.

The first task, then, is to figure out what that is. Why is Rowling fighting in the first place? What is her motivation?

We get some indication of what propels her from her own testimony at trial: protection of her characters, her "17 years of . . . hard work," her desire to write a Potter encyclopedia of her own one of these days, proceeds of which she says she will donate to charity.   Indeed, in the preliminary injunction papers filed by Rowling, she made a point of saying that she has already donated $30 million to charities.

This gives any good mediator plenty of things to work with in trying to explore settlement possibilities.  Rowling may want good press; she may want to build an image as a philanthropist; she may want to be seen as a protector of authors' rights. 

What about exploring a settlement where the Lexicon is published but some of the proceeds are donated in  Rowling's name to a charity of her choice.  If she is interested in giving young writers a leg up, the publisher could offer to open doors for young writers, one of whom could co-write or co-edit the Lexicon.

To protect Rowling's characters, RDR could agree to a licensing arrangement, thereby ensuring that no precedent is set.

A little imagination, as Judge Patterson so aptly noted, can go a long way towards finding ways to satisfy the underlying interests and motivations of all parties.

The conflict resolution side of me would love to explore ways to end the Rowling/RDR dispute in a way that satisfies all interested parties.  I am convinced there is a settlement out there to be had, if only the parties would explore it with an open mind.

On the other hand, the fair use junkie in me is avidly interested in how this monumental battle will shake out.  Fair use is an amorphous concept at best, as was made clear at the USC IP Institute Fair Use Panel last month.

Further judicial guidance -- and this one is definitely headed to the appellate courts -- would be a welcome contribution so long as it helps to clarify, and not further muggle, er, muddle, what constitutes fair use.

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Check out this book -- Patent Mediation, Better Solutions for Business -- and other resources at the International Institute for Conflict Prevention and Resolution here today!

Provides a five-step roadmap for helping in-house counsel and corporate leaders utilize mediation, when appropriate, a strategy proven to substantially reduce the cost of patent disputes.

By CPR International Commission on Patent Disputes, chaired by Robert Copple. Edited by Kathleen M. Scanlon, Heller Ehrman LLP and Helena Tavares Erickson, International Institute for Conflict Prevention & Resolution

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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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Check out Federal Judges Speak Out On Intellectual Property Litigation at the Guiding Rights Blog.
by Mark VB Partridge.

Mark conveys the advice of three federal court judges:  Virginia Kendall, Rebecca Pallmeyer, and Matthew Kennelly as follows:  

1. Too many exhibits. Focus on what you need to prove your case.

2. Useless discovery. You can get by with less.

3. Lack of focus. Make judgments about what is truly significant. Be cost effective.

4. Assuming that questions mean the judge doesn't understand. Visit court and observe the judge.

5. Missing the forest for the trees. Look at jury instructions to know what you need to prove to win. Draft jury instructions early.

6. Too much hyperbole. Give the facts and the law.

Except for "too many exhibits" (as a federal settlement officer I never get enough) I second all these failures as failures in the settlement conference as well as in the courtroom.

Listen, come at least as prepared to a settlement conference as you do to a motion hearing.  You might actually settle the thing.  The only day that's more important is the one set for trial.

And while I'm at it, here is a list of items your settlement officer could use to assist him/her in diminishing your opponent's expectations of victory.  After that's done (quickly) everyone can move into the necessary distributive bargaining session or to brain-storming interest-based solutions to your IP dispute.  

• charts
• graphs
• statistics
• photographs
• drawings
• schematics
• demonstrative exhibits
•  and your three to six best killer trial exhibits.

If you need discovery, tell your settlement officer what you need during the pre-mediation telephone conference and she/he can attempt to get it for you before the session convenes.

Here's the beauty part of settlement conferences -- there are no rules.  You can ask the settlement officer to help you play it anyway you want.  

Go for it! 

And please. 

Help me help you.  (see my federal settlement officer profile here!)

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by the incomparable Charles Fincher of LawComix!

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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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“Never before in history has innovation offered promise of so much to so many in so short a time.”

"Intellectual property has the shelf life of a banana."

These two quotes from world-class innovator and IP rights owner, Bill Gates, say it all about the state of intellectual property today. While most people are aware of the intellectual property concept - of copyright, patents, industrial designs and trademarks - many still view them as business or legal concepts with little relevance to their own lives. To address this gap, WIPO’s Member States decided in 2000 to designate an annual World Intellectual Property Day. They chose April 26, the date on which the Convention establishing WIPO originally entered into force in 1970.

Continue reading here.

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

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

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

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

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

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

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

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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.

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Hmmmmmmmm, wonder if this could have been accomplished sooner?

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