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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 Roughly 12% of those were withdrawn or dismissed on motion.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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U.S. Statutory Remedies Unavailable to Unregistered Berne Foreign Authors, Making Pre-litigation Mediation a Good Strategy to Resolve Infringement Disputes for All Authors

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

§ 412. Registration as prerequisite to certain remedies for infringement

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

(1) any infringement of copyright in an unpublished work commenced before the effective date of its registration; or

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So, stay tuned!

Eric van Ginkel

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by Michael D. Young

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

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

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

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

SUMMARY OF OPINION

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

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

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

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

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

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

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

That court reluctantly stated:

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

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

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

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

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

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

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

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

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

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

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

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

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If you'd like to better understand what's really going on in separate-caucus mediation and, by the way, also in famous "conversation" happening in the blogosphere, do check out the New Yorker's Cass R. Sunstein and Political Rumors on the Internet by Elizabeth Kolbert.  Excerpt below and my own short article on conspiracy theories in the adversarial system here.

There is virtually no opinion an individual can hold that is so outlandish that he will not find other believers on the Web. “Views that would ordinarily dissolve, simply because of an absence of social support, can be found in large numbers on the Internet, even if they are understood to be exotic, indefensible, or bizarre in most communities,” Sunstein observes. Racists used to have to leave home to meet up with other racists (or Democrats with other Democrats, or Republicans with Republicans); now they need not even get dressed in order to “chat” with their ideological soul mates.

“It seems plain that the Internet is serving, for many, as a breeding group for extremism, precisely because like-minded people are deliberating with greater ease and frequency with one another,” Sunstein writes. He refers to this process as “cyberpolarization.”

Put the Web’s filtering tools together with cyberpolarization and what you get, by Sunstein’s account, are the perfect conditions for spreading misinformation.

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This just in from the Ninth Circuit -- In re Bosack -- an opinion affirming the trial court's refusal to vacate an arbitration award totaling nearly $20 million after proceedings that "lasted two years, during which more than sixty days of hearings were held, more than twenty witnesses testified, and over five hundred exhibits were entered into evidence."

The contested award?

The arbitration panel's finding that Respondents Bosack and Lerner "had 'acted with malice and oppression,' and that [Petitioner] Soward was entitled to punitive damages of $10,999,494 against Bosack, and $8,555,162 against Lerner."

Doctrines discussed:  functus officio; manifest disregard of the law; the scope of review ("whether or not the panel’s findings are supported by the evidence in the record is beyond the scope of our review";) and, whether the Court can vacate an award based upon the argument that a punitive damages award is unconstitutional (no).

Not quite an arbitral Bleak House but no cost-efficient proceeding either.

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I've been thinking jurisprudential thoughts for the last couple of weeks because I'm finishing the second draft of the ABC's of Conflict Resolution and because I made the terrible error of trying to cover the history of dispute resolution in Blawg Review # 234 (as Ed. commented:  "war and peace?  best of luck with that!)

Yesterday, I finished J is for Judge and L is for Lawyer (and moved on to the revision of P is for Paranoid).  So I was thinking a lot about the rights, obligations, and remedies business; adversarialism and its discontents; and, competitive-position based negotiation.  Then I had dinner last night with Stephanie West Allen of Idealawg and Brains on Purpose (she is here for a neuroscience conference at UCLA) and we talked about the theory and practice of mediation -- separate caucus position-based facilitated distributive and competitive bargaining vs. client-centered interest-based transformative mediation.

My brain hurts.

And I still have to revise K is for Kin (-selection); T is for Terrorist; and V is for Victim before the week is out.

So I'm just going to provide you with something to think about from a year 2000 article provocatively entitled Forget the Mechanics and Bring in the Gardeners:  an Exploration of Mediation in Intellectual Property Disputes.

Irrespective of the source of the conflict between the parties, it must be formulated in court as a disagreement over norms and/or over factual matters... The verdict of the court has an either/or character; the decision is based upon a single, definite conception of what has actually taken place and upon a single interpretation of the legal norms.

 

Fisher & Ury, supra note 53 at 4-5: "When negotiators bargain over positions, they tend to lock themselves into those positions... As more attention is paid to positions, less attention is devoted to meeting the underlying concerns of the parties... Bargaining over positions creates incentives that stall settlements... Positional bargaining becomes a contest of will" At 4-5.

As Julie Macfarlane reiterated, an emphasis on litigation reflects, ".. .the dominance of a 'rights' culture, seen in both the justice system and public attitudes towards conflict and reconciliation." The court therefore, focuses on rights, and winners and losers, while mediation is designed to focus on parties' interests' and mutual gain.  Julie Macfarlane, "The Mediation Alternative" in Julie Macfalane, ed., Rethinking Disputes: The Mediation Alternative (Toronto, ON: Emond Montgomery, 1997) at 5.

The courts' focus on rights affects the negotiation strategies that parties utilize. As I mentioned, most of the early texts used in law schools to teach negotiations, for example, focused on the "competitive strategy" and at least implicitly endorsed such a strategy. The competitive negotiator tries to maximize the benefits for her client by persuading her opponent to settle for less than the opponent would have settled with at the beginning of the negotiation. The underlying premise of the competitive strategy is that all gains for one's own client are obtained at the expense of the opposing party. In other words, competitive negotiators see the negotiation as a competition over a fixed pie. As such, these negotiators work to convince their opponents that their settlement alternative is not as advantageous as they previously thought, in turn lessening the opponent's confidence in their case and thereby inducing them to settle for less than they originally asked. The competitive negotiator therefore, moves "psychologically against the other person," with behaviour to unnerve the opponent,68 and may employ very strategic tactics:

• arrange to negotiate on their own turf;
• balance or slightly outnumber the other side;
• designate one of their demands as a "precondition";
• make the other side tender the first offer;
• make the first demand very high;
• make the other side make the first compromise;
• invoke law or justice;
• be tough -- especially against a "patsy;"
• appear irrational where it seems helpful;
• claim that they do not have the authority to compromise; and

• will themselves promptly reduce the agreement to writing.⁶⁹

Not surprisingly, competitive negotiators expect similar tactics from their opponents and therefore mistrust them.

It is interesting to note that law, through its legal principles and male's historical domination of the legal profession and the public sphere more generally, may have in fact facilitated these competitive negotiation strategies. These competitive negotiation strategies, lined with deception and mistrust, seem fuelled, or at least reinforced, by certain common law principles like "caveat emptor", which warns, "let the buyer beware."  Although there is no consensus when caveat emptor came into being most agree that it was the case of Lopus, which had been credited as the originator of the doctrine of caveat emptor under English common law. The decision was recognized for the proposition that English courts were not interested in enforcing the fairness of an exchange because they thought contracting parties should handle such matters themselves. Couple legal principles like caveat emptor with how men have been socialized to be competitive and to play a prominent role in the public sphere and we begin to see how this competitive negotiation strategy came to flourish. Put plainly, the courts and the legal system in general seem to facilitate competitive negotiation tactics.

For anyone who's made it this far, hopefully, LexBlog has gotten my comment section working again for you to leave your thoughts.

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ODR WEEK 2009 Web 2.0: Going from OH? To KNOW!

Friday October 30th

2:30pm - 3:30pm est. (it will be archived too!)

Spots limited, see below.

Join Jeff Thompson (www.enjoymediation.com & Centre For Peace & Social Justice) and an all-star lineup of Mediate.com featured bloggers:

Diane Levine (www.mediationchannel.com)
Victoria Pynchon (www.Negotiationlawblog.com)
Tammy Lenski (www.MakingMediationYourDayJob.com)
John Ford (editor, www.mediate.com)

They will be discussing web technology!

Find out how and why they do it (successfully!), the benefits and how it is has helped them. Learn tips and skills that can help your practice too!

***FREE*** But spots are limited: sign up by emailing Jeff @ mediator.jeff@gmail.com

If you are interested in submitting a question prior to the event for the panel, email Jeff at the address above or simply post a comment in this post.

Go to www.EnjoyMediation.com for more info on this event and for more info on ODR Week, go to www.ODR.info

This event is presented by EnjoyMediation & the Centre for Peace and Social Justice, Southern Cross University, Australia.

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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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That person ringing your virtual doorbell is not -- I repeat not -- someone trying to sell you magazine subscriptions or somebody's else's religion.  No!  That's the incredibly bright, accomplished and talented Erica Bristol delivering up-to-the-minute news and analysis on the most important intellectual property issues of the day. 

That's right!  It's Erica!  Who has an extremely cool new website (Erica Bristol, Mediator) and a terrific new blog -- The IP Watchtower.

Here are Erica's creds:

Erica Bristol is an attorney and mediator practicing in Southern California. She received her law degree from the UCLA School of Law in 1999. Her practice areas include intellectual property, contracts, real estate and business transactions. Ms. Bristol completed the Los Angeles County Bar Association/Dispute Resolution Services' Mediation Training Program. She serves as a federal settlement officer for the United States District Court, Central District and a court-appointed mediator for the Los Angeles Superior Court. Ms. Bristol is a member of the Trademark and Licensing Committees of the Intellectual Property Section of the State Bar of California and the Business & Corporations and Corporate Law sections of the Los Angeles County Bar Association.

We promised not to mention that you can find Erica astride her motorcycle most weekends but what are girlfriends for if not to make one another way more interesting than they at first appear?

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 Below, ADR Services colleague Ralph Williams' September 2009 ADR Tip.

High - Low Agreements, also known as "Mini - Maxi" agreements are used to limit or bracket arbitration awards and jury verdicts. They can be made at any time before the award/verdict is rendered. Below we discuss the mechanics of a high - low agreement as it usually occurs in an arbitration.

Prior to commencing the arbitration, the plaintiff agrees to limit its recovery ($500,000). In consideration the defendant agrees to pay a sum certain ($100,000). If the award ($700,000) is more than the high, it is reduced to the high number ($500,000). If the award ($20,000 or a defense verdict) is less than the low, the award is increased to the low number ($100,000). If the award falls between the two numbers ($350,000) that number is the award.

When implementing a high - low agreement, consider whether to tell the arbitrator its parameters. Generally, if the arbitrator knows the parameters of a high - low agreement, you will get a result between the numbers. Therefore, if you are the defendant with the chance at a defense verdict or the plaintiff with the chance of a homerun, you probably do not want to disclose the high - low agreement's numbers.

When using a high - low agreement in an arbitration, where the arbitrator does not know its parameters, request an interim award, because the arbitrator loses jurisdiction on signing the award, except for limited grounds to correct. After receiving the interim award, reveal the high - low agreement's parameters and have the arbitrator enter the final award in accordance with the agreement.

When using a high - low agreement in a bench or jury trial, it is best practice to let the trial judge know the existence of the agreement without revealing its parameters, so as to avoid the perception that you are manipulating the court and/or wasting judicial resources.

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Pertinent to my new series on avoiding ADR malpractice, there's a great (but now dated) law review article entitled "Disputing Irony: a Systematic Look at Litigation Concerning Mediation" (.pdf) ( Harv. Negot. L. Rev, 2006) (summary here) that is a "must read" for anyone who settles many of their lawsuits in mediated negotiation sessions. 

Hamline University has also conducted a survey of litigation about mediation which is best communicated in the following charts appearing on Hamline's Mediation Case Law Project Web Page (hat tip to conflict consultant Debra Healy for the reference).

Nota bene!

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

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

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

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

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

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

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

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

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

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

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

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From the files of the World Intellectual Property Organization

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

M1. A WIPO Patent Mediation

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

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

Continue reading here.

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Courtesy of Charles Fincher at the LawComix Blog. 

My own personal best deposition-settlement story:  our settlement team was in London while I completed the corporate designee deposition.  Condition of settlement:  the designee's deposition would never be transcribed.  My supposition:  our opponents never wanted to see the following questions and answers in writing:

Q:  "So when you used the term 'catastrophic,' in section ___ of the Agreement, it didn't add anything to the meaning of the clause in which it appeared?"   

A:  "That's right."

Q:  "You might just as well have used the word 'tulip'?

A:  "Yes." 

My settlement team told me the following day that the tulips were in bloom at Buckingham Palace.

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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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Read all about it at Pez takes on the museum of Pez. 

Why don't the parties enter into an affordable licensing agreement with the fee reflecting the value to Pez of a Pez Museum.  I hate the term "win-win" but goodness gracious! this does seem to be more of a benefit than a burden for Pez!  And litigation is as yesterday as, well, Pez!! 

Thanks to Grant Griffiths of Blawg Tweets for making it so easy to cruise the blawgosphere and a special thank you to 3C Patent Law (a new IP Law Blog to me) for the great write-up and image which I'm copying here.

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by

of Sheldon Mak Rose & Anderson

 In 2005, following the lead of the other United States Courts of Appeals, the Federal Circuit initiated a pro bono Appellate Mediation Program.  James Amend is the Chief Circuit Mediator, and the program is administered by Wendy Dean, the Circuit Mediation Officer.  An overview of the program is published at “Let's Make a Deal: Negotiating Resolution of Intellectual Property Disputes Through Mandatory Mediation at the Federal Circuit,” 6 J. Marshall Rev. Intell. Prop. L. 365 (2007).  There are 15 outside volunteer mediators on the panel, who are not in active practice before the Federal Circuit.

 Since the panel mediators may still be associated with a law firm, however, the Mediation Guidelines require recusal on any case involving a party which the law firm has represented on appeal in the last five years.  Mediators must disclose all potential conflicts, including “issues” conflicts.

 The Mediation Guidelines require that at the initial mediation session a party representative with actual settlement authority also attend. This does not simply mean sending a person allowed to accept or offer a minimum or maximum dollar amount.  Rather, the party representative has to be a person “who can make independent decisions and has the knowledge necessary to generate and consider creative solutions.” This requirement may be modified or waived by the mediator only if the circuit mediation officers concur and circumstances dictate.

The Federal Circuit posts both quarterly and annual statistics for the program, reported by patent versus non-patent cases.  From 2007 to 2008, the overall success rate, measured as the percentage of cases settled that were selected for mediation, rose from 42% to 52%.  Patent cases make up most of cases in the program, with 84% of the cases in 2007, and 78% in 2008.  The patent case settlement rate rose from 44% in 2007 to 51% in 2008.

For the first half of 2009, however, the overall success rate has dropped back to 42% overall, and patent case settlements have dropped to 31%.  Second quarter 2009 patent results look especially dismal at 21%.  (Chief Circuit Mediator Amend has identified eight impediments to settlement of patent cases on appeal, which the IP ADR Blog lists here.)  Nevertheless, the program’s overall success still compares favorably with other circuits, which report between a 35% and 45% settlement rate.

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

People Make Irrational Choices

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

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

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

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

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

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

Continue reading (or listen to the broadcast) here.

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

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

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

By Jason W. Armstrong
Daily Journal Staff Writer

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

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

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

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

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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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In anticipation of working out Affiliated Organization agreements with SCMA and CDRC, current members of those two organizations (and others in the very near future) will receive special Enrollment Discounts as a benefit of your membership in either of those groups.  Group Discounts are also available for groups of two or more registering together.
 
Please visit AIM's site for more details and additional course listings.
 
The American Institute of Mediation cordially invites you to elevate your mediation practice by joining us for one of our upcoming workshops.  Advance registration is required.

Be sure to read about available discounts, including Bring A Friend, Group Discount and membership in one of AIM's Affiliated Organizations.
 
 
UPCOMING WORKSHOPS:
 
 
Harnessing the Power of the Master Mediator
with Lee Jay Berman & Doug Noll
Wednesday afternoon - Sunday afternoon, May 6-10, 2009
 
Mediating Divorce Agreement
with Jim Melamed
Wednesday - Sunday, May 13-17, 2009
 
 
Mediating Dangerously: The Frontiers of Conflict Resolution
with Ken Cloke
Thursday - Saturday, June 4-6, 2009
 
 
Beyond Yes:  Deeper Wisdom and the Art of Negotiation
with Erica Ariel Fox
Thursday - Saturday, June 4-6, 2009
 
 
Settle More Cases by Mastering the Essence of Mediation
with Lee Jay Berman and Richard Millen
Thursday - Saturday, June 18-20, 2009
 
 
Building a Profitable Mediation / Collaborative Practice
with Forrest (Woody) Mosten
Thursday - Saturday, June 25-27, 2009
 
 
Post-Disaster Mediation Training
with Mel Rubin
Thursday - Friday afternoon, July 9-10, 2009
 
 
Mediating Mortgage Foreclosures
with Mel Rubin
Friday afternoon - Saturday, July 10-11, 2009
 
 
Mediating and Negotiating Commercial Cases
with Lee Jay Berman
Wednesday afternoon - Sunday afternoon, July 15-19, 2009
 
 
The AIM Institute is where leading mediators turn to continue their learning and career development.
 
 
WHERE:
 
Skirball Cultural Center
2701 N. Sepulveda Blvd., Los Angeles, CA, USA 90049
 
 
The American Institute of Mediation delivers “World Class Training for the Complete Mediator”.  Offering a unique and diverse curriculum whose sole purpose is to elevate a mediator's practice, the AIM Institute is where leading mediators turn to continue their learning and career development.  Being free of academic constraints and embracing other disciplines allows the AIM Institute to expand the frontier of this developing profession by offering practical courses designed to make an immediate impact on a mediator’s practice.  Our core faculty includes Lee Jay Berman, Ken Cloke, Erica Ariel Fox, Jim Melamed, Forrest (Woody) Mosten, Doug Noll and Mel Rubin.
 
Join our mailing list to stay apprised of new course offerings.
Join us on Linked In and Facebook.
 
www.AmericanInstituteofMediation.com

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DRAFTING AND NEGOTIATING LICENSING AGREEMENTS
May 24 - 25, 2009
Dubai Sheraton Creek Hotel
Dubai City, UAE

Based on his extensive corporate and law firm licensing experience, Paul Jorgensen of The Jorgensen Law Firm PLLC will present this intensive, two day seminar to licensing executives, administrators and lawyers who want more accurate agreements, better license negotiations, and more efficient license programs.

Hosted by The Licensing Executives Society– Arab Countries (LES-AC) in cooperation with Dubai Chamber of Commerce & Industry, this course will empower attendees to write clearer, to understand license elements and their importance to an entire agreement, to negotiate licenses effectively, and to track license performance efficiently.

Register here!

IP LICENSING: HOW TO AVOID THE TEN MOST FREQUENTLY LITIGATED PROVISIONS
June 4, 2009
ALI-ABA Teleseminar

Building an effective IP license requires recognizing provisions that can plunge clients into expensive disputes.  With licenses too-often overloaded with dense legalese and inapplicable boilerplate provisions, however, finding those dangerous provisions can be difficult for both the attorney and the client.  

Paul will chair a panel that that will zero in on those provisions and the reasons they can cause trouble in this teleseminar, presented by the American Law Institute-American Bar Association.  Drawing on their experiences in drafting, negotiating, administering and litigating IP licenses, the panel members will also provide guidelines to re-write or eliminate these dangerous provisions. 

Registration will open soon here.
 

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If you'd like to learn how WIPO mediation cases have been resolved, WIPO has posted mediation case studies of patent, copyright, telecom, biotech, IT, trademark co-existence, pharma licensing, and telecom patent licensing disputes.

These brief case studies should be of use to corporate executives, General Counsel, outside counsel, mediators and arbitrators alike.

In the current economic downturn, we need all the help we can get in resolving disputes as efficiently and effectively as possible.  Mediation isn't always the answer, of course, and must be timed when the case is "ripe" for settlement.  If you're leery of mediation's ability to resolve your dispute, take a look at the WIPO case study (on the same linked page above) on a copyright mediation followed by an expedited arbitration.

Good stuff.  Check it out!

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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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From today's Best Mode Blog, an innovative way to avoid begging the federal government for more money:  patent it!

When you own 30% of a global financial services company, like you and I now do, it’s a good idea to take a look under the hood, kick the tires and check-out what’s in the trunk.  And look what Citigroup has here, a patent on a “synthetic currency transaction network“, US Patent 7,020,626 Inside Money.

“Synthetic currency is created by pooling and dividing into shares a portfolio of highly liquid assets and frequent evaluation and disbursements of dividends on those assets so as to hold the value of the synthetic currency share at unity with the underlying currency….The IM (Inside Money) transaction agent system in conjunction with the IM synthetic currency act like a “super” virtual central bank to allow users around the world to make near real-time final transactions.“

“Super Virtual Central Bank?“  I guess my Second Life alter ego will also take a hit in a “Virtual Recession“, grovel before a “Virtual Senate Committee” and be criticized for traveling by private “Hyper Shuttle” instead of commercial.

CONTINUE READING HERE

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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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How to choose between litigation and ADR

The most successful strategies for guiding your dispute into the best ADR forum at the most productive time.

•    Case management order
•    Settlement counsel (inside or outside)
•    Full time mediator consultant with IP specialty

The five basic rules of “distributive” or “fixed sum” bargaining that will give you the “edge” in all future settlement negotiations.

Anchor:  make the first offer

• Sets the bargaining range
• Exerts a significant pull in direction of the first number throughout the negotiation
• Social science research has demonstrated that ANY number entering the negotiation environment will affect it:  zip code
• Set aspirations high and keep them high throughout

Frame losses as gains; use positive language for your offers and counters; negative language for theirs

• Social science research:  framing not only affects estimates in the face of uncertainty, but memory of events as well
• How tall vs. how short
• How much vs. how little
• 3 to 5 or 1 to 3
• concede; you win on this point; I’m making you an offer greater than a million (rather than less than 2 million)

Trade items of unequal value to the parties

• Distribution networks (valuable to you) for technology (valuable to them)
• Sliding scale of royalty payments:  rich in early years (valuable to you); rich in later years (valuable to them)

Break deal down into parts; negotiate easiest points first

• Bargaining partner will begin to experience having the deal done
• Personal investment in deal points already agreed upon

Present each offer with a reason & an express statement that you’ve made a concession & expect it to be reciprocated

The five ways to “expand the fixed sum pie” by exploring and exploiting the client interests underlying your own and your opponents’ legal positions.
 

• Ask diagnostic questions
  • Only 7% of negotiators ask diagnostic questions that would significantly improve the deal
  • Diagnostic questions elicit information about where the pie can be expanded (i.e., what are your expectations? Profit margins? Business health? Distribution channels? Technology needs? Forecasts for the future?
• Make multiple offers of equal value simultaneously
  • The negotiator provides two or more packages of offers, where each offer is of equal value to the negotiator proposing them
• Build contingencies into agreement where the future is uncertain
  • Common in infringement cases resolved with royalty payments; royalties will be “x” in the event of “y” and “q” in the event of “m”
  • Tie royalties to profitability sales
  •  Most favored nation royalty rates
• Link offers or concessions together
• Break negotiation into parts:  the more parts to deal with the better the deal
  • What items
  •  What terms

The Ten Mediation/Settlement Conference Traps for the Unwary

1.    Leave stakeholders at home
2.    Leaving too soon
3.    Failing to take clues from the mediator/settlement conference judge
a.     mediator will always know more about your opponent's bargaining position and ability to settle the lawsuit than you do.
4.    Failing to strategically use joint and separate caucuses
5.    Letting the Judge or Mediator Act the Bully
6.    Believing that any competent judge or mediator can help you achieve the best settlement."
7.    Sidelining Your Client on the Day of Mediation
8.    Failing to use the Mediator to Help You Bring Reality to Your Client
9.    Failing to Maximize the Mediator's Strategic Skills
10.  Negotiating in the Nano- and strato- spheres.

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Thanks to the

for this reminder about IP ADR:

Involved in an Intellectual Property Tiff? Consider ADR

In their article Keep a Lid on Costs in IP Disputes (Texas Lawyer, 1/26/2009), Ted D. Lee and Miguel Villarreal Jr. write that an executive whose company is hit with an intellectual property suit or who believes another company is infringing on their company's IP rights should know that IP cases are expensive to litigate. When faced with these challenges, the Texan lawyers propose settling as quickly and with the least expense as possible, with pre-trial settlement and alternative dispute resolution, such as mediation. "Consider alternative dispute resolution" and "keep the door open for settlement" made their list of ten areas to discuss with your IP lawyer.

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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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Mediator blah blah receives Honorable Mention!!  Congratulations to New Zealand's master mediation blogger Geoff Sharp!

NEW YORK, NY, January 16, 2009 – The International Institute for Conflict Prevention & Resolution (CPR Institute), a membership-based, nonprofit alliance of global corporations, law firms, scholars, and public institutions dedicated to the principles of commercial conflict prevention and alternative dispute resolution, announced the winners of the 26th Annual CPR Awards Program at a dinner held at New York’s Barclay InterContinental on January 15.

The CPR Institute’s Awards Program honors outstanding scholarship and practical achievement in the field of alternative dispute resolution (ADR).  Award criteria focused on processes, techniques, systems, commitment, and scholarship which address the resolution, prevention or creative management of major disputes involving public or business institutions between corporations, between government and corporations, or among multiple parties. The judges of the CPR Awards comprise judges and lawyers from leading corporations, top law firms, and academic institutions across the U.S.

According to Kathleen Bryan, President and CEO of the CPR Institute, “As the ADR field grows more sophisticated, the search for effective problem solving approaches and best practices continues to move CPR’s mission forward.  Many times, it is the work of our colleagues and peers that inspires our own activities and motivates us to spearhead innovation and promote excellence. It is for this reason, each year, CPR celebrate advancements and contributions to the field of conflict management.” 

Outstanding Original Professional Article

The award for Outstanding Original Professional Article recognizes an article published by academics and other professionals that advance understanding in the field of ADR. The 2008 CPR Award for Outstanding Original Professional Article was awarded to Christos Ravanides for his work, “Arbitration Clauses in Public Company Charters: An Expansion of the ADR Elysian Fields or a Descent into Hades”,  18(4) Am Rev Int’l Arb (2008).
 
Outstanding Original Student Article

The award for Outstanding Original Student Article recognizes an article or paper focused on events or issues in the field of ADR. The 2008 CPR Award for Outstanding Student Article was awarded to Katherine Dirks for her article, “Note: Ethical Rules of Conduct in the Settlementof Mass Torts: A Proposal to Reverse Rule 1.8 (G).” 83 N.Y.U. Law Rev. 501 (2008).
 
Outstanding Book

The award for Outstanding Book recognizes a published book that advances understanding in the field of ADR. The 2008 CPR Award for Outstanding Book was awarded to two particularly influential publications: Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond, Harvard Business School Press, Bantam Books (2007) by Deepak Malhotra and Max H. Bazerman, and Challenging Conflict: Mediation Through Understanding, ABA Section on Dispute Resolution/PON (2008) by Gary Friedman and Jack Himmelstein. 

Outstanding Short Article and Blog

The award for Outstanding Short Article recognizes a short article published by academics or other professionals that advance understanding in the field of ADR, with an emphasis on advancements of international understanding. The 2008 CPR Award for Outstanding Short Article was awarded to David Hoffman for this work, “Microsoft and Yahoo: Where Were the Mediators? They Help Countries and Couples, Why Not Businesses?”, The Christian Science Monitor (2008).

In addition, Honorable Mention was awarded to Geoff Sharp for his blog, “Mediator Blah … Blah …”, Mediation (2008).  As a result of this submission, CPR is creating a new category for 2009, entitled Outstanding Electronic Media, which will recognize, blogs, websites and other electronic media that have in the subject year made an outstanding contribution to the field of ADR.

About CPR Institute

CPR Institute provides thought leadership and innovation as the global resource for conflict management and resolution of complex business-related disputes.  Its wealth of intellectual property and published material has educated and motivated General Counsel and their law firms around the world toward an increased reliance on alternative forms of dispute resolution rather than litigation. CPR Institute’s membership is comprised of general counsel and senior lawyers of Fortune 1,000 organizations, partners in the top law firms around the world, as well as leading judges, government officials, neutrals, and academics.  Its proprietary panel of esteemed arbitrators and mediators has provided resolutions in thousands of cases, with billions of dollars at issue, worldwide. For more information, please visit www.cpradr.org <http://www.cpradr.org> .

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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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Yesterday I posted excerpts from a Los Angeles Daily Journal article about the ethics (and enforceability) of a mediator-client agreement in which the client waives any right he or she might have to pursue the mediator for malpractice.

Before moving into those waters here, let's brainstorm a little about how mediators might fall "below the standard of care" in a profession that so many claim has no standard of care.

1. divulging party confidences made in separate caucus to other parties (both expressly and implicitly by, for instance, "predicting" the other side's likely "bottom line" or future point of impasse);
2. drafting the "deal memo"
   1. without complying with applicable law concerning it's enforcement while suggesting - explicitly or implicitly - that the "deal" reached during the mediation session will be enforceable
   2. without explaining that conditions precedent orally expressed during the mediation will not be enforceable unless included in that deal memo;
3. incorrectly explaining the applicable law about the parties' ability to use statements made during the mediation for purposes other than litigation;
4. while holding one's self out to be an expert in a niche area of the law (particularly if the attorneys present are not) incorrectly stating the applicable law to the parties and their counsel; and,
5. disclosing to third parties mediation confidences to the detriment of one or more of the parties, i.e., voluntarily testifying in Court without party permission about those confidences.

These are simply the potential malpractice mine-fields that immediately come to mind.  If required, I'm certain I could come up with at least a dozen more.  They come quickly to mind because I am not without self-protective instincts while mediating for people with a demonstrated ability to bring suit when sufficiently motivated.  Perhaps more importantly, whatever I do, I want to do honorably. /*

Which brings us to the question whether a prospective waiver of liability is "honorable" or "ethical" or "enforceable."

Honor and Integrity

Because we define what is honorable for ourselves and ourselves only, my answer to the first question is easy to reach.  I would not consider it honorable to attempt to dodge potential liability for negligently doing my job.  Part of my job is to encourage the parties to be accountable for their part in the dispute being litigated and mediated.  I can honorably do no less.  As an officer of the Court for nearly thirty years, I would also consider it dishonorable to intentionally frustrate the litigant's attempt to seek redress in the Court of law to which I am so deeply committed.  Nor would I include an arbitration clause in my agreement to provide professional services. 

Ethics

To believe there are no profession standards of ethical behavior for mediators is to ignore the contribution of the American Bar Association to the field.  In 2005, the ABA adopted Model Standards of Conduct for Mediators.  The ABA states that its standards "are designed to serve as fundamental ethical guidelines for persons mediating in all practice contexts."

They serve three primary goals: to guide the conduct of mediators; to inform the mediating parties; and to promote public confidence in mediation as a process for resolving disputes.

The ABA notes in its comments section to the Standards that

the fact that these Standards have been adopted by the respective sponsoring entities, should alert mediators to the fact that the Standards might be viewed as establishing a standard of care for mediators.

STANDARD I. SELF-DETERMINATION

STANDARD II. IMPARTIALITY

STANDARD III. CONFLICTS OF INTEREST

STANDARD IV. COMPETENCE

STANDARD V. CONFIDENTIALITY

STANDARD VIII. FEES AND OTHER CHARGES

STANDARD IX. ADVANCEMENT OF MEDIATION PRACTICE

These standards are discussed in detail at the link above.  The violation of many of these standards would provide a mediator malpractice template to any attorney representing a disgruntled litigant seeking to void a mediated agreement or pursue a third party for damages arising from a deal gone bad.

There is nothing contained in these standards that would expressly make a mediator's prospective waiver of liability unethical. Could the following ABA standards do so? 

Is a mediator who presents a prospective liability waiver to participants engaged in an act of subtle coercion, particularly if the proposed waiver is presented on a take-it-or-leave-it basis at the commencement of the mediation?

A mediator shall conduct a mediation based on the principle of party self-determination. Self-determination is the act of coming to a voluntary, uncoerced decision in which each party makes free and informed choices as to process and outcome. .   .   A mediator shall not undermine party self-determination by any party for [any self-serving] reason.

Is a mediator who presents a prospective liability waiver to participants in mediation at the commencement of the proceeding raising a question of impartiality, i.e., if the participant refuses to sign or asks to eliminate the waiver provision, can the mediator be truly impartial as to that party?

A mediator shall avoid a conflict of interest or the appearance of a conflict of interest during and after a mediation. A conflict of interest can arise from involvement by a mediator with the subject matter of the dispute or from any relationship between a mediator and any mediation participant, whether past or present, personal or professional, that reasonably raises a question of a mediator’s impartiality.

Are mediators who ask parties to sign prospective liability waivers for the first time at the mediation being deceptive in soliciting business?

A mediator shall be truthful and not misleading when advertising, soliciting or otherwise communicating the mediator’s qualifications, experience, services and fees.

Enforceability will be the topic of my next post on prospective liability waivers.

_________________

*/  For a useful short discussion of a means of uniting morality, ethics and legality into a single theory using "integrity" as the unifying principle, see A New Model of Integrity: An Actionable Pathway to Trust, Productivity and Value. (anyone alive at the time of the controversial est training can make what they like of the fact that the largely discredited Werner Erhard is one of the authors of this article)

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(CPR, right.  Are mediators like fireman as Straus Institute's Peter Robinson suggests?)

Excellent article on mediator liability waivers in a recent Los Angeles Daily Journal Article (excerpted below).  I have much to say about this topic, particularly as to mediators who hold themselves out as possessing expertise in niche areas, such as the resolution of intellectual property disputes.  My observations on this topic in the next post.  For now, a sampling of some of the comments made by local mediators and ADR panel executives below:  

Some Question Mediators' Liability Waivers

by Greg Katz
Daily Journal Staff Writer

LOS ANGELES - Mediators, perhaps more than anybody, know how expensive and time-consuming litigation can be.

So it should come as no surprise that many of them insert professional liability waivers in the forms they use for their mediations, using clauses, like: "The mediator has no liability for any act or omission in connection with the mediation."

While the State Bar prohibits attorneys from putting prospective liability waivers in contracts with their clients, mediators, who are unregulated, face no such restrictions.

Major providers, including JAMS and ADR Services, insert liability waivers in mediation forms posted on their Web sites, as do leading independent practitioners.

Now, some mediators and other participants in the industry are questioning what the waivers say about the ethics of mediation as a field. They warn that, despite the state's strict confidentiality rules that prohibit using anything said or done in mediation in court, it is likely mediators eventually will face lawsuits.

"In both law and medicine, it's unethical in California to seek a prospective waiver of liability from the people for whom you perform services," said Los Angeles mediator Jeff Kichaven, who has long expressed concerns about those waivers and does not use them himself. "If mediators want to have the same kind of respect in society, the way to do it is to try to emphasize their ethical standards."

While not all of the ethical standards imposed on lawyers should be applicable to mediators, Kichaven said, this one should.

"To me, it's a basic willingness to stand behind the quality of your work, which every professional ought to be willing to do," he said. . . . . .

                                   *                 *                   *

Jay Welsh, JAMS' general counsel, said ethical standards should be different for attorneys and mediators because the professions are "totally different."

"We want mediators and arbitrators to remain out of the fray so that they can take people who are contentious, and in litigation and make sure that litigation is focused on each other and no one else," Welsh said. "So that's why it's in our agreements."

                                            *              *            *

Peter Robinson, managing director of the Straus Institute for Dispute Resolution at Pepperdine University School of Law, said he had qualms with the use of liability waivers. He said they may not stand up if challenged in court. But, he added, attorneys don't sue mediators because they look at mediation as a public service profession akin to fire fighting.

"The fire department is a helping profession - whenever they go out, they're heroes. And in a similar way, mediators are there to help people get the case resolved, and I think most of the time they're perceived as a resource or an asset, as compared to a person who's responsible," Robinson said.

Finally, the always colorful Jeff Kichaven noted that:

"When I discuss these matters with other mediators, oftentimes the response I've met is, 'I've been doing this for a long time, and nobody has sued me,'" he said. "That's like a conversation with a hypothetical teenage daughter who says, 'What's the big deal with condoms? So far, I haven't gotten pregnant.'"
 

For full article,

.

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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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By Greg Katz

Daily Journal

Staff Writer

LOS ANGELES - The crowded Los Angeles mediation market is about to get a new competitor.

Professional Mediation will open its doors in January. It is the brainchild of Cary Sarnoff, president of Sarnoff Information Technologies, whose main enterprise is Sarnoff Court Reporters.

Among the company's first signees is Jeff Kichaven, who is leaving JAMS for the new provider after two years with the dispute resolution giant. He said that although he has enjoyed his time with JAMS, he had tired of the large company's bureaucracy and was feeling "entrepreneurial."

"The new company will be shared with a very small number of mediators, all very skilled," Kichaven said.

Sarnoff billed Professional Mediation as a high-end dispute resolution boutique. Unlike some large panels, he said, it will have no more than 25 or 30 panelists.

By comparison, JAMS has 262 neutrals nationwide, including 133 in California alone.

"We don't want to be the biggest - we simply want to be the best," Sarnoff said. "I think that we can create an environment where very well-respected and well-thought-of mediators can collaborate together."

Sarnoff said he decided to open a mediation shop after his children, who are lawyers, began using mediators more frequently. The new panel has been in the works for several months, he said.

Professional Mediation will be a subsidiary of Sarnoff Information Technologies, he said. It will operate out of that company's five existing offices in California and Nevada, as well as a forthcoming office in Century City. Its downtown Los Angeles office shares a floor with JAMS.

Besides Kichaven, the panel also will include Los Angeles mediator Deborah Rothman, who said she will continue to work with the other providers she has been with recently.

Independent San Diego-based mediator Scott Markus, who was affiliated with JAMS in the 1990s, and Irvine mediator John McCauley, also said they plan to sign on.

To continue reading, click here.

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

 

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

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

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

What Is a Mind Map Anyway?

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

Read the full post here!

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

Book Review Monday: Intellectual Property Culture

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

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

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

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

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

For full review, click here.

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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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TIMES ARE ALL PACIFIC STANDARD TIME:  WEB CASTS ARE ALL FREE

Join BrightTALK for the Intellectual Property Summit here!

IP litigation in China
  1:00 am
  Presenting Moderator: Peter Ollier, Asia editor, Managing IP

Are Google Adwords Trademarks?
   7:00 am
   Presenting Jason M. Drangel, Partner, Epstein Drangel

Winners and Losers in the Patent War
  8:00 am
Presenting Patrick J. Flinn, Partner, Alston & Bird LLP

Bilski: the impact on US patentees

   9:00 am
  Presenting Moderator - Eileen McDermott, Americas Editor, Managing IP

Patents : Part IV - Business Methods

  11:00 am
  Presenting Thad Gabara, Patent Agent and Inventor

Negotiating a Settlement in IP Litigation

   12:00 pm
   Presenting Victoria Pynchon, Judicate West, CPR, Settle It Now, IP ADR Blog

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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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Guest Blog Post by Tamera H. Bennett

Thank you to Victoria Pynchon for allowing me to be a guest blogger. In preparing to write the post I had several topics going through my mind, but I thought it would be interesting to pitch this topic out to the fantastic readers of this blog for some feedback.

This may be the first blog post that asks more questions than it answers.

Is the IP arena ready for the “Collaborative Law” process?

You may be asking what is “Collaborative Law?” A colleague of mine that has been in a trademark transactional/litigation/mediation practice for over 25 years did not know what I was asking about when I posed the same question.

“Collaborative Law” is an approach to resolve disputes by removing most, if not all, of the court house adversarial nature of litigation. It began in the family law arena and numerous states now have statues codifying the process for family law matters.

The ABA states:

The process is a structured, voluntary, non-adversarial approach to resolving disputes. The process is based on cooperation and team work, full disclosure, honesty and integrity, respect and civility, and parity of costs. The collaborative process enables individuals, families, businesses and organizations to maintain control over their relationships with others by empowering them with the ability to peaceably resolve their disputes.

You can read more about how the ABA is assisting in developing the practice area here.

In Texas, after one party files for divorce, the parties may agree to move into the Collaborative Law process. At that point the parties enter into a participation agreement outlining how they will behave and what is expected of them.

Below are the typical points to the participation agreement you will find in most statutes:

1.      The lawyers will not litigate the case. If the process fails, and litigation is the only recourse, the original lawyers must withdraw and the parties must retain new lawyers (the "disqualification" provision);

2.      Neither party will take advantage of mistakes by the other side;

3.      The parties will freely disclose all pertinent information and will not hide any material facts;

4.      What is said in the settlement meetings remains confidential;

5.      All experts will be neutral, and hired jointly by both parties and their children; and

6.      Everyone will behave courteously and in good faith.

The process should help eliminate that “hide the ball” and bury the other side in discovery mentality. One of the reasons it has taken off so successfully in family law is because there is a pre-existing relationship between the parties. In the event there are children impacted by the divorce, there are also good reasons to play nice because of the continued relationship of the parties. 

Back to my original question.  Is the IP arena ready for the “Collaborative Law” process?

Although there are more than three types of IP disputes, I am going to generalize them into three categories:  Infringements, Inter-related Parties/Joint Owners, and Contract Disputes.

1.  Infringement Actions: My gut tells me that in unrelated third party infringement actions we are not ready for the Collaborative Law process. Would an alleged infringer readily come to the table to settle the dispute? In this scenario, there would have to be an admission of infringement and the only issue remaining would be damages before I believe the parties would even come to the same table.

Would an alleged infringer really walk in the door with all of its accounting records and allow a jointly approved expert analyze them for a determination of profit? Probably not.

What happens to statutory damages and attorneys' fees? By the nature of electing the Collaborative Law process has the plaintiff given up statutory damages and attorneys’ fees (when appropriate) unless they then move out of Collaborative Law and back into the litigation system? I think so.

Could we move the owner of the copyright/trademark/patent and the alleged infringer into interest based talks as opposed to position based arguments?

2.  Inter-related Parties/Joint Owners: This is an area where I believe the IP practice field is ready for Collaborative Law and could embrace the process for helping their clients. 

How often do we face the dispute of two or three business owners wanting to remove a partner/shareholder or wanting to dissolve the business completely? In the division of assets the question becomes who really owns the copyrights, trademarks, patents, trade secrets, the website, the domain name, and on and on.

Typically one or more of the shareholders wants to continue the business and needs certainty as to the assets he controls before he moves forward. The scenario begins to sound more like a divorce, and often that is exactly what we tell our clients. Like a divorce, there was a prior relationship and like a divorce there are “kids” of the marriage that will need to be taken care of and raised after the fact.

If there is no truly “bad actor,” I believe Collaborative Law will work well in inter-related disputes. The books and records are already available to all the parties. The parties may need to hire several joint experts: a legal expert to analyze the ownership of the IP and a valuation expert to determine the value of the IP and the business as a whole. In the family law field, there is also a communication coach/expert to help the parties express themselves and work together. This could also be an option in IP/business disputes.

3.      Contractual Disputes: I am still undecided on where I fall on contractual disputes. Like a divorce, there is a prior relationship and most likely a continued desire to work together in the future. You are more likely to have a balance of power issue in contractual disputes than in inter-related parties dispute. In a licensee/licensor relationship, if the licensor files suit because there is breach of contract related to royalties, will the licensee simply hand over the books and records and agree to one expert’s report?

Can you move a licensee and licensor into interest based talks? It seems more attainable in a contractual dispute than in an infringement action. Again, it is probably only feasible if the parties will continue to have a relationship after they reach a resolution.

I have asked more than I have answered. When I first learned about Collaborative Law three years ago, I thought it could be an amazing process for areas beyond family law. I would enjoy your feedback on whether or not you think it could work for our IP clients.

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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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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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In Friday's Daily Journal, mediator and former U.S. ambassador Pierre-Richard Prosper talks about his efforts to help the Bratz/Mattel parties settle their long-running patent infringement lawsuit.  Mediator Mike Young wonders about mediation confidentiality as both Prosper and counsel talk about the potential to settle the case and the way in which trial proceedings have impeded resolution.   

Though the disclosures are general, I'd be cautious in talking to the press about on-going mediations, particularly where the mediator is talking to the parties nearly every day as Prosper says he is. 

There's a word to the wise contained in today's appellate opinion on mediation confidentiality Rael v. Davis, expressly holding that all parties to a mediation must agree to waive confidentiality in writing and in person, not through counsel.  Excerpts from the DJ article troubling Mike are below.  You can read the entire article only if you're a subscriber. 

September 19, 2008

DOLL DIPLOMACY
A former ambassador is called in as a mediator to help toy makers settle their expensive differences.
By Jason W. Armstrong
Daily Journal Staff Writer

RIVERSIDE - Pierre-Richard Prosper has helped guide a lot of high-stakes negotiations. His job as U.S. ambassador in charge of the secretary of state's Office of War Crimes Issues several years ago included forging agreements with foreign ministers on the return of their nationals held at Guantanamo Bay, Cuba.

Later, along with his duties as counsel at Arent Fox in Los Angeles, Prosper became an oft-tapped mediator in complex cases . . .

But he said this week his latest meditation - helping to settle a four-year federal court battle that is essentially a hair-pulling dust-up between two dolls - has proven to be one of his thorniest assignments. . . .

"We are in the midst of litigation - the fog of war," Prosper said. "Both parties firmly believe in the strength of their positions. Getting them to move from their respective corners is a major challenge."

But Prosper said he "firmly" believes "there is an agreement out there that can be reached."

"The real question is, is there the political will to reach such an agreement?" he said. "That's the harder issue."

The litigation involving the edgy, wide-eyed Bratz - dolls credited with cutting into sales of Mattel's longstanding Barbie - has been gritty: Mattel sued MGA, accusing the Bratz manufacturer of pirating its concept for the highly lucrative line by working on the idea with a Mattel employee . . . 

Christa M. Anderson, an attorney for Bryant, said Prosper's persistence stood out. While she said she couldn't comment directly on his negotiations in the case, Anderson said he "worked very hard" to achieve a consensus.

"He's good at bringing the parties back to the table again and again through creative ideas and persistence," Anderson, a partner with Keker & Van Nest in San Francisco, said. "He's very diligent."

In the Mattel-MGA spat, Prosper said the parties have appeared close to an agreement on several occasions. But numerous clashes between the lawyers and sudden twists and maneuvers in the trial drove a wedge into discussions, Prosper said. He declined to discuss specific instances.

"There were a couple of times in the past weeks where we have moved closer to [an agreement], but then because of events in court its caused us to take a step back," Prosper said.

Prosper declined to comment on the negotiations, but Larian told the Wall Street Journal last week that he was "open to all different options as long as they are reasonable." He told the paper he would be willing to share with Mattel a portion of royalties from the "first generation" of Bratz dolls manufactured in 2001, but he refused to share other revenues and future sales of the line.

Thomas Nolan, lead trial attorney for MGA in the case, declined to comment on settlement talks. He is a partner with Skadden Arps Slate Meagher & Flom in Los Angeles.

John Quinn, lead trial lawyer for Mattel, also wouldn't discuss the negotiations. Quinn is a name partner with Quinn Emanuel Urquhart Oliver & Hedges in Los Angeles.

But both men said they appreciated Prosper's tenacity.

He "won't give up," Quinn said.

Nolan agreed, and said he admires Prosper's "ability to stay calm" when "everyone else around him is emotional."

In the Bratz case, for the past several weeks, Prosper said he's had almost daily in-person or telephonic meetings with the lawyers and executive officers for Mattel and MGA.

"This case has an interesting landscape that has constantly shifted, so it's required almost daily communications with the parties," Prosper said.

Prosper has been credited with successfully negotiating, along with former Secretary of State Colin Powell and others, with Serbia to hand over former Yugoslavian leader How does Prosper compare war crimes negotiations to the doll fight he's now immersed in?

"The parties are in the throes of litigation, and this is the most important thing to them," Prosper said. "But this case isn't about life or death. It's about dolls and money. There are more important things we should be spending our time and resources on."

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(mind map from Knowledge Aforethought)

Check out the brilliant copyright flow charts and checklists which the The Corner of Lex and Biz has thoughtfully aggregated for the rest of us here.

When I prepare for an IP mediation, I take the parties' briefs and make flow charts, mind maps and checklists from them.  Though your deathless prose is a joy to me as an old Lit Major, writer and literary journal editor, it's not so useful to me in getting what I need to understand about a complex commercial transaction really quickly, including the party relationships, legal and fatual issues, party interests, points of potential impasse, junctures at which party differences might be put to good negotiation advantage and similarities that might be used to smooth the way toward a reasonable settlement that makes good business sense for everyone.

Here's what I tell my litigants -- MAKE THE CHARTS FOR ME.  If you're the only "side" that does this, I'm far more likely to keep YOUR CHART before me throughout the course of the negotiation.  And though I do not see my primary role as a 13th juror -- particularly in cases where the lawyers have being living with the case for years -- the opinions I express -- sometimes reluctantly -- on the merits, do have an effect on the parties' decision to settle and their valuation of the case.

As I'm always saying, please help me help you.

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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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by Jay McCauley

Every time I ask attorneys to identify the single worst drawback of arbitration, their overwhelming answer is “no appeal."  With Arbitration comes the nightmare of losing for no good reason with no possible fix.  

In March of this year, the Supreme Court closed the door to the best solution, finding that contracting parties who choose arbitration lack the power to write appellate review into their arbitration agreements.  Hall Street Associates, LLC v. Mattel, Inc. (2008) __U.S.__, 128 S.Ct. 1396. (see opinion below)

 Just last week, the California Supreme Court, addressing the very same issue under the California Arbitration Act, re-opened the door. Cable Connection, Inc. v. DirecTV.

Both the Federal Arbitration Act and the California Arbitration Act expressly provide that an award may be vacated if it is “in excess of the arbitrator’s powers.” FAA section 10; CAA section 1286.2. The question presented to both courts was whether parties may contractually define those powers by providing that arbitrators who fail to base an arbitral award on the law exceed them. The United States Supreme Court answered: “No, parties may not define those powers.” The California Supreme Court declared the opposite: “Yes, they may.”

A Tale of Two Visions

In Hall Street, the U.S. Supreme Court made the finality of erroneous awards a feature so hard-wired into arbitration's nature that it cannot be contractually averted. The California Supreme Court, by contrast, makes arbitration a malleable institution whose features may be designed by the contracting parties.  For the U.S. Supreme Court, arbitration’s essential virtues are efficiency and finality. For the California Supreme Court, arbitration's essential virtue is customizability ––  efficient for those who seek efficiency and reliable in its outcomes for those who crave predictability.  

Last November, before either decision was issued, I mispredicted in a post at the Settle It Now Negotiation Blog that the United States Supreme Court would side with the freedom of contracting parties to protect themselves against lawless awards. I did so not only because a majority of the Circuit courts had thus far gone that way (the First, Third, Fourth, Fifth and Sixth, with the Ninth teetering hopelessly back and forth and the Second not yet heard from) but also because the power of the argument was blindingly evident:

Congress expressly said Courts may vacate when the arbitrator exceeds his power [I said]. It never prohibited the contracting parties from defining what those powers are…. What Congress said it intended was to put arbitration agreements “on the same footing” as all other agreements. That should mean “carry out what the parties contracted for” as long as their contract is neither  illegal nor contrary to public policy.

This is why the U.S. Supreme Court's decision was so disappointing.  It didn't deny contractual freedom on ordinary grounds of illegality or contravention of established public policy, but on the ground that “maintain[ing] arbitration’s . . . . virtue of resolving disputes straightaway” is essential.  Apparently the Court feels obliged to protect this one beneficial trait of arbitration against the supposed peril of those who might use arbitration for its other benefits.

For the same reason, the California Supreme Court's decision is gratifying, particularly as it pauses to note frank mystification by what the U.S. Supreme Court has done.  Before upholding the rights of people who are of legal age and sound mind to opt for the rule of law and expect the courts to honor their wishes, the Court noted that "[b]efore Hall Street, we would have had no difficulty concluding that enforcing agreements for judicial review on the merits is consistent with the fundamental purpose of the FAA [the Federal Arbitration Act].”  The California Court went on to counter the notion that arbitration has any single essential characteristic -- such as finality -- explaining, 

Review on the merits has been deemed incompatible with the goals of finality and informality that are served by arbitration and protected by the arbitration statutes. However, … those policies draw their strength from the agreement of the parties. It is the parties who are best situated to weigh the advantages of traditional arbitration against the benefits of court review for the correction of legal error.

Id. at 31.

Finding no reason to fear that parties favoring dependability over efficiency imperil any public interest, the California Court found it quite legitimate for "sophisticated parties in high stakes cases" to  "desire . . . . the protection afforded by review for legal error" in light of their often unfortunate experience with arbitration awards that "deviated from the parties’ expectations in startling ways.”  Rather than harming the institution of arbitration, the Court concluded that “the development of alternative dispute resolution is advanced by enabling private parties to choose procedures with which they are comfortable.” Id.at 33 (emphasis added).

We Dug Our Own Hole

How did we reach the point where a state court, rather than the U.S. Supreme Court, would protect the parties’ freedom to contract for a private adjudication that calls upon the rule of law?  I believe that we –– the ADR community –– have done this to ourselves. Endless tracts on the benefits of arbitration tout its primary benefit (compared to litigation) as its efficiency, isolating a common characteristic of many arbitrations and universalizing it into a necessary trait of all arbitrations.  

The largest private ADR provider in the world, the American Arbitration Association, saw fit to file an amicus brief in the Hall Street matter, opposing its own customers' contractual freedom on the ground that arbitration's fruits cannot properly be anything other than finality and efficiency, even if parties want it to produce something more appealing for them.  As the AAA argued,

Permitting enhanced judicial review by contract would not only eviscerate the principle of finality in individual cases, but would likely transform arbitration into traditional litigation. If procedural efficiencies in arbitration were lost, and if courts increasingly intervened in the process, the value of arbitration would inevitably decline.

AAA Amicus Curiae Brief, p. 6

That efficiency and finality are necessary features of arbitration is not a new argument, and it has been made elsewhere than in the courts.  Stephen Ware, the most insightful intellect in the field of Arbitration today, brilliantly decries the habit of many fellow ADR academicians to reify arbitration into an institution having necessary features apart from the contracts that create it. Responding to ADR guru Edward Brunet’s attempt to inventory the “core values of arbitration,” Ware says:

I do have one quibble with [that approach]. Unlike Professor Brunet, I do not see secrecy, arbitrator expertise, adjudication efficiency or finality as necessary values of arbitration. I see autonomy as the value that transcends those other values. Because arbitration law gives the parties autonomy, they can choose to have their arbitration be secret or not. Because arbitration law gives the parties autonomy, they can choose to have their arbitration use quick and efficient procedures or not. . Because arbitration law gives the parties autonomy, they can chose to make their arbitration final or – by having an appellate arbitration panel or expanding the grounds for vacatur – not.

It is certainly true that most parties to arbitration agreements choose to use their autonomy to advance the values of secrecy, arbitrator expertise, adjudicatory efficiency and finality. But, in my view, that does not show that these are core values of arbitration; it shows that these are core values of most of the parties who agree to arbitrate.

Brunet, Speidel, Sternlight and Ware, Arbitration Law in America, a Critical Assessment, Cambridge University Press, 2006, p. 339

The Solution is Simple -- Leave the Federal Arbitration Act in the Dust

What are the implications of the California Supreme Court rejecting this limited view of arbitration? Quite simply: it reestablishes a critically needed arbitration vehicle that the United States Supreme Court had eliminated. The addition (or retention) of this vessel to the ADR fleet does not impair the rest.  Nor is our ability to use this vessel undermined by the United States Supreme Court’s limiting  interpretation of its own arbitration institution –– that created by the Federal Arbitration Act. That Act does not preempt the States' ability to go in the opposite direction from the FAA, even under the auspices of identically worded legislation.  Counsel concerned about preserving judicial review do not have the contractual freedom to provide for such review in contacts governed by the FAA, but they absolutely have the contractual freedom to specify that their contracts are not governed by the FAA.

The upshot: For those with California disputes, or those in states whose courts have taken their own arbitration acts in the same direction California has taken its, or for those in states whose choice of law rules permit a binding contractual provision that California Law applies (procedural geeks will know this is not so far fetched; interestingly, the Cable Connection case itself began with a motion to compel proceeding in Oklahoma) the solution is simple: draft the arbitration clause to specify that the arbitration shall be governed by the law of an appropriate friendly state [e.g. the California Arbitration Act]. Otherwise stated: Leave the Federal Arbitration Act in the dust.

The irony: This is exactly the opposite of the advice sensible counsel would have given last year for those concerned with finding refuge from erroneous awards. Last year, four appellate courts in California had said you can’t contract for review, while the majority of the Federal Circuit Courts had said you can.  Even those circuits that did not allow the parties to agree to review could give the cold comfort of potential reversal for extremely bad awards under the “manifest disregard” doctrine, a doctrine that has been expressly rejected by the California Supreme Court applying the California Arbitration Act.

California the New Delaware?

Decades ago, Corporations found a refuge from the anarchy of irrational or incompetently administered corporate law when the tiny state of Delaware turned itself into a Mecca for such matters. It is not far-fetched to envision California as an analogous Mecca for Arbitration. In this fertile ground, arbitrations reviewable on the merits –– a species of arbitration the U.S. Supreme Court viewed as a platypus too weird to exist –– will be permitted to thrive.

Attorney-Mediator-Arbitrator Jay McCauley will soon be joining IP ADR as a regular blogger.  We'll provide his specific IP expertise in the bio soon to be included above.  Until then, here are Jay's essential credentials. 

After practicing since 1980 as a Harvard Law School educated, AV rated trial and appellate lawyer, Jay McCauley turned his experience and skills to full-time mediation and arbitration in 1998. He has had extensive training at the Straus Institute for Dispute Resolution, and now teaches as an adjunct professor at that Institute. He serves on the Large Complex Case Panel as well as the Employment panel of the American Arbitration Association, where he has handled a broad range of disputes, including several whose value has exceeded $50 million. He also serves as a mediator with Judicate West, where he specializes in the resolution of complex business, employment and real property disputes.


 

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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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Here in California, there's no stronger rule of confidentiality than that applied to a mediation.  It cannot be impliedly waived (Simmons v. Ghaderi) like most privileges, including the near-sacred attorney-client privilege.  You cannot be estopped from relying upon it.  (Eisendrath).  And if you want your mediated settlement agreement enforced, you must strictly comply with the requirements of Evidence Code section 1123 (Fair v. Bahktiari).

Over at the Settle It Now Negotiation Blog, insurance policy-holder counsel Kirk Pasich questioned many recent interpretations of the mediation confidentiality statutues on the ground that they permit insurance carriers to use mediation proceedings to engage in acts of bad faith.  

"Why should a carrier get a license to act in bad faith in mediation," Pasich asked, adding,

Cases settled, and still settle, in mandatory settlement conferences without that same shield. I don't think a process should exist that encourages, rather than discourages, a party from acting in bad faith.

Why indeed?

If you do not understand the differences between settlement conferences and mediations, you are not alone.  My informal surveys indicate that litigators believe there's no difference whatsoever between the two and few mediators are able to distinguish them despite their training in the field. Nor have California's Courts been of any real assistance.

Though it may make no difference to counsel or the parties whether the process by which they seek to settle litigation is a mediation or a settlement conference, the  application of California's Rules of Evidence to mediations has significant potential economic consequences -- consequences so serious that mediator and litigator malpractice actions are surely looming on the horizon. 

The Parade of Mediation Horribles

What type of misbehavior can occur in a mediation?  Here are just a few examples:

1. one party can make a misrepresentation of material fact upon which the other relies in entering into a settlement agreement;
2. as Pasich notes, an insurance carrier can act in bad faith; 
3. one mediating party could tortiously interfere with a third-party's contract or prospective economic advantage;
4. the mediating parties can enter into a collusive settlement agreement, depriving the settling parties' co-defendants from learning facts necessary to challenge the settlement in a hearing to determine whether it was made in good faith (terminating the non-settling defendants' right to seek indemnity and contribution from the settling defendants)
5. even if all parties have expressed complete agreement during the mediation, which they then memorialize in a term sheet, absent strict compliance with the requirements of Evidence Code section 1123, no evidence probative of that agreement will be admissible in a California court.

If the mediating parties are engaged in a settlement conference, none of this potentially bad behavior would be protected.  If they're mediating, these proceedings can neither be the subject of discovery nor introduced as evidence. 

Given the adverse economic consequences that can flow from a mediation, California's courts have clarified the differences between the two procedures, right?

Not so much. 

In Jeld-Wen, the appellate court forbade trial courts from compelling parties to mediate (and precluded them from requiring payment to the mediator) because mediation is voluntary.  Raising form over substance, the Court concluded that trial courts could accomplish the goal of compelling settlement conferences (mediations in disguise) by appointing a referee-neutral under California Code of Civil Procedure section 639.

The differences between the two proceedings in substance?  You couldn't name them by reading the California Evidence Code.  It defines mediation as “a process in which a neutral person ...  facilitate[s] communication between the disputants to assist them in reaching a mutually acceptable agreement.”  Evidence Code section 1115(a)

So the Judge who chooses waterboarding as a means to settle the case isn't mediating.  Thanks for clearing that up.

When directly asked to distinguish between the two, our own Second District Court of Appeal  in Travelers Cas. and Sur. Co. v. Superior Court  declined.

We expressly decline to consider or clarify any differences that might exist between a mediation and voluntary settlement conference. ( Foxgate Homeowners' Assn. v. Bramalea California, Inc. . . . .)  Therefore, our decision should not be construed as holding that all voluntary settlement conferences are mediations which are subject to the rules concerning the conduct of mediation proceedings. 

Thanks a lot. 

But That's Not All, with Thottam We Throw In a Set of Ginzu Knives

The most recent wrinkle in mediation confidentiality comes to us from the Second District Court of Appeal in Estate of Thottam.  In Thottam, the Court held that an exception to an exclusion contained in a mediation confidentiality agreement expanded the scope of the confidentiality protections and then eliminated those protections when one party attempted to enforce the resulting settlement agreement.  The Court accomplished this sleight of hand by finding an express waiver of confidentiality in the exception to the expanded confidentiality protections and/or by supplementing the parties' non-compliant mediated settlement agreement with the terms of the Confidentiality Agreement itself.  If that's unclear, a full explanation of Thottam can be found here, here and here ("the big print giveth and the small print taketh away.").  

What to Do, What to Do

When the law is uncertain and the terrain dangerous, there are generally two paths for attorneys to follow:  (1)  follow the statutory requirements to the letter;  or (2) make up your own law (recognizing the dangers posed by the Thottam opinion).  

If you want your settlement discussions to be unburdened by strict mediation confidentiality provisions, you can ask the Court to appoint your "mediator" as a referee under section 639 and call the ensuing discussions a settlement conference.  Under those circumstances, your referee-assisted settlement discussions should be controlled only by Evidence Code section 1152. /**  To put both belt and suspenders on it, expressly agree that the negotiations are meant to be protected only by section 1152 and not by sections 1115 et seq.  And for heaven's sake don't use the word "mediation." 

If you want the protections of mediation confidentiality, all well and good.  But you must:

• memorialize your agreement in strict compliance with the requirements of Evidence Code section 1123(c) */
• make the accuracy of statements upon which your client relied conditions precedent to the enforcement of the agreement or, at a minimum, include them in WHEREAS clauses; and,  
• if you feel you must enter into a confidentiality agreement, limit its provisions to a recitation of the parties' intent to be bound by the requirements of Evidence Code section 1115 et seq. This should protect you against unanticipated interpretations of Confidentiality Agreement language that differs from the Code.  

Are we clear now?  Crystal!

___________________________

*/  A written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure, by provisions of this chapter if the agreement is signed by the settling parties and any of the following conditions are satisfied:

(a) The agreement provides that it is admissible or subject to disclosure, or words to that effect.
(b) The agreement provides that it is enforceable or binding or words to that effect.
(c) All parties to the agreement expressly agree in writing, or orally in accordance with Section 1118, to its disclosure.
(d) The agreement is used to show fraud, duress, or illegality that is relevant to an issue in dispute.

Note that "words to that effect" pretty much means "those precise words" according to the Supreme Court's decison in Fair v. Bahktiari

**/  Section 1152, protecting communications during settlement negotiations is actually extremely limited, making "offer[s] to compromise and, statements made during an effort to negotiate a compromise of a disputes claim are inadmissible in evidence to prove liability.

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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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Though the headline -- Cybersex Patent Case Leads to Bad Vibes Between Firm, Client -- may draw you in, it's the hyper-compounded conflicts of this litigation that will make your eyes roll.  You don't even need to understand who's who or what's what to get a good taste of the procedural nightmare playing out here:  

Calling the heated struggle with Piccionelli a conflict of interest that threatened the firm's loyalty to Internet Services, Keker filed a motion to withdraw from the case, saying it could no longer represent Internet Services under State Bar Rule 3-700(b), which addresses mandatory withdrawal. The Keker lawyers also argued that there had been a breakdown of the attorney-client relationship with Internet Services.

The company protested vehemently, hiring Timothy Dillon of San Diego's Dillon & Gerardi to handle the battle with Keker. Internet Services argued that there was neither a breakdown nor a real conflict of interest with Piccionelli. They accused Keker of trying to get off the case because it wasn't getting paid as expected.

Internet Services President Layne Britton suggests in a declaration that Keker had been hoping for some kind of contingency fee, and in a heavily redacted section about the firm's retainer agreement, Britton says the dismissal of all of Internet Services' claims left "no possibility that [Internet Services] will have a 'recovery' in this case."

The company's opposition to Keker's second motion to withdraw -- Judge Wilken denied the first -- was titled "[Keker's] Alleged Conflicts of Interest Are a Pretext For Its Inability to Receive Fees."

Keker prevailed in late June, when Wilken let the firm off the case. Citing Rule 3-700(b) in her brief order, she wrote that "a conflict of interest has arisen that requires" Keker to withdraw from Internet Services LLC v. Immersion Corp., 06-02009.

MOVING ON

Internet Services has a new law firm, Los Angeles' Spillane Shaeffer Aronoff Bandlow, ironing out remaining counterclaims by Immersion.

Outside the courtroom, no one seems to want to talk about the fractious teledildonics case. The new lawyers declined to comment, as did Internet Services' Britton and attorney Piccionelli. Keker's Durie did not return phone calls seeking comment and Kamber declined to comment.

Lemley wouldn't discuss the dispute with the client, but he said he thinks the courts got the patent and contract issue wrong. He also said he doesn't regret having taken it to start with, even if the subject matter may seem less refined than the Keker firm is used to.

"My view is, those sorts of patent issues are sort of interesting issues no matter who raises them," Lemley said.

Interesting?  This is one of those reports that would make any lawyer ask "What About the Clients?"

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

     This lawsuit was filed five years ago.

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

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

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

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

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

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

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Get ready for a radical new idea.  One that:

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

(image from Wikimedia Commons)

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

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

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

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

What kind of cases has this process been used for?

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

The Drawbacks? 

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

The Systemic Response Elsewhere?

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

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

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

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

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

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

It's no surprise to us that

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

The Academic View from My Own Backyard?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

Why?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Legal Blog Watch

Patent Baristas

Patently O

Pharmaceutical News and Resources

Likelihood of Confusion

Idealawg

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

Chicago IP Litigation Blog

Above the Law

What About Clients?

The Mediation Channel

f/k/a

Quiz Law

Law is Cool

LexBlog

Amateur Economists

Build a Solo Practice

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

Engaging Conflicts

mediator blah blah . . .

The Bizop News

And Google News no less . . .

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

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

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

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

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

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

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

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

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

Find out here!

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

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

The impediments are:

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

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

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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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. . . 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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MEDIATION 'MAGIC' HAPPENS WHEN NEUTRALS REVITALIZE JUSTICE ISSUES

By Victoria Pynchon 

There comes a point in every mediation when the attorneys need help in understanding their clients and the clients need to be reminded of the limitations the legal process imposes on everyone's efforts to resolve the conflict at hand. A mediator knows this time has come when the parties begin to complain that their counsel is "forgetting" to emphasize their most important losses; "editing" their stories or refusing to let them speak their minds. Sometimes it's the attorneys who alert the settlement officer to the lawyer-client communication gap.

"My client's expectations of success are unrealistic," they'll say, or, throwing up their hands, they'll exclaim, "She just doesn't understand. No matter how carefully I try to explain the law's limitations, she just won't accept them."

As litigators, we do forget that what we're doing for our clients - transforming their narratives of injustice into actionable claims - is as mysterious to the parties as quantum physics is to most of us.

On those occasions when it becomes clear that the parties need to re-visit their justice issues along with the limitations of the legal system, this is what I usually say:

"The dispute you're having exists in the world of injustice.

"Picture the earth.

"Now picture a grain of rice somewhere on the earth.

"The grain of rice represents the injustices the law will remedy. The earth represents the injustices the law will not."

Then I sketch a round green "earth" surrounding a small yellow square.

"It feels as if your attorney is 'editing' or 'shaping' or 'spinning' your story of injustice," I continue, "because she is. This tiny yellow area represents the facts necessary to obtain relief in court (damages or an injunction, for instance) or to defeat your opponent's claim (failure to satisfy a condition precedent; inability to state a claim the law will recognize and the like).

"The entire dispute - everything that happened inside the green circle - is what you, the client, want to resolve. Unfortunately, what you want would often require the disclosure of facts that would be harmful to your case. That's why your attorney doesn't let you talk in the presence of the 'other side' and asks you not to discuss the dispute with your opponent again. She's protecting you from revealing something in the green area that's bad for proving your case in the yellow square."

"Here's the good news. Mediators work in the green area - where injustices the law will not remedy reside. That's why we're here today in this conference room negotiating a 'deal.' As my friend the mediator Richard Millen says, 'People don't have legal problems. Only lawyers have legal problems. People have people problems.' But people don't seek out lawyers to help them resolve those problems unless they're accompanied by a justice issue.

"If you were only seeking money - as your opponent believes - you'd buy a lottery ticket or borrow the sums you need to open that restaurant you told me about. When you sought legal advice, you were asking your lawyer to "monetize" injustice. And that's what he's done. He calculated the value of your rights and called them remedies. He assessed the worth of your injuries or traced the transfer of your monies by your opponent to restore the benefit of their investment to you. He'll even ask the jury to punish the opposition by asking them to look at its net worth and then award enough damages to make it 'hurt.'"

On those rare occasions when mediation feels like "magic," its almost always because the mediator has helped the parties and their counsel re-vivify the justice issues that the legal dispute has flattened for the purpose of precedent, consistency and predictability. We're successful in this task when we allow the parties to restore to the conflict the life, texture, nuance and gray tones that "the law" has removed from it.

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DAILY JOURNAL NEWSWIRE ARTICLE
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© 2008 The Daily Journal Corporation.
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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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The Perils of Using Email in Litigation - Get more Legal Forms

Enlarge by clicking on upper right hand arrow.

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Considering a settlement?  Conducting a risk analysis?  Pay attention to those cognitive biases.

From Psychology today -- 10 Ways We Get the Odds Wrong

Our brains are terrible at assessing modern risks. Here's how to think straight about dangers in your midst.

The human brain is exquisitely adapted to respond to risk—uncertainty about the outcome of actions. Faced with a precipice or a predator, the brain is biased to make certain decisions. Our biases reflect the choices that kept our ancestors alive. But we have yet to evolve similarly effective responses to statistics, media coverage, and fear-mongering politicians. For most of human existence, 24-hour news channels didn't exist, so we don't have cognitive shortcuts to deal with novel uncertainties.  . . . 

Our emotions push us to make snap judgments that once were sensible—but may not be anymore.

I. We Fear Snakes, Not Cars -- Risk and emotion are inseparable.

II. We Fear Spectacular, Unlikely Events -- Fear skews risk analysis in predictable ways.

III. We Fear Cancer But Not Heart Disease -- We underestimate threats that creep up on us.

IV. No Pesticide in My Backyard—Unless I Put it There -- We prefer that which (we think) we can control.

V. We Speed Up When We Put Our Seat belts On  -- We substitute one risk for another.

VI. Teens May Think Too Much About Risk—And Not Feel Enough -- Why using your cortex isn't always smart.

VII. Why Young Men Will Never Get Good Rates on Car Insurance -- The "risk thermostat" varies widely.

VIII. We Worry About Teen Marijuana Use, But Not About Teen Sports -- Risk arguments cannot be divorced from values.

IX. We Love Sunlight But Fear Nuclear Power -- Why "natural" risks are easier to accept. 

X. We Should Fear Fear Itself -- Why worrying about risk is itself risky. 

For full article, click here!

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

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

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

Click here for remainder of article.

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

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

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

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

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

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

But it wasn’t.

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

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

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

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

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

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

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

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What follows is a Press Release from the National Arbitration Forum

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

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


YouTube.net

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

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

CTV.com

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

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

AmericanGirl.net

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

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

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

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

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