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

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

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

CCP 2019.210 Review

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

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

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

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

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

So what can go wrong with this? Plenty.

Does 2019.210 Apply to Federal Cases?

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

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

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

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

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

Fairness

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

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

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

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

-MY

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

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

Step One – In Depth Review of Plaintiff’s Technology

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

Continue reading here.

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

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

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

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

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

For full article, click here.

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

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(left, the T-shirt at issue)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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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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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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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Students Dropping Out Of School To Pay RIAA Settlement Fees?

from the educational-campaign,-huh? dept

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

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

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

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

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

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

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

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

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

Here are some resources: 

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

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

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

Further negotiation advice from the China Law Blog

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

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

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

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

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

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

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

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

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

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

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

Done. 

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

     This lawsuit was filed five years ago.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

Why?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Legal Blog Watch

Patent Baristas

Patently O

Pharmaceutical News and Resources

Likelihood of Confusion

Idealawg

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

Chicago IP Litigation Blog

Above the Law

What About Clients?

The Mediation Channel

f/k/a

Quiz Law

Law is Cool

LexBlog

Amateur Economists

Build a Solo Practice

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

Engaging Conflicts

mediator blah blah . . .

The Bizop News

And Google News no less . . .

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

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

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

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

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

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

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

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

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

Find out here!

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

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

The impediments are:

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

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

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

By Craig Anderson
Daily Journal Staff Writer

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

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

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

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

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

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

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

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

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

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

From the American Lawyer Daily:

Nokia and Qualcomm To Start Trial Wednesday

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

The ADR angle here: 

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

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

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

Continue reading here from FedCirc.us.

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

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

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

For the full article, click here.

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

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

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

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

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

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

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

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

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

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

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

As David explains:

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

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

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

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

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

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

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

They'll be yours for life.

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

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

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

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

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

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

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

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

Continue reading here

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

For background on this fascinating Copyright dispute, click here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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From Concurring opinions here

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

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

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

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

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

For remainder of post click here.

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

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

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

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

Mike asks why not mediation?

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

The Rowling docket sheet is here.  

The Rowling motion for injunction is here. 

The RDR Books opposition is here.   

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

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

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

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

Continue reading here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The easiest way to get along with our fellow artists?  

Get a license! 

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

"I really love your work." 

Then ask for permission to use it. 

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

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

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

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

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

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

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

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

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

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

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

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Unbelievably extensive link roll to global IP resources in a single week!  Check it out.  I just subscribed but am thinking I'd need to take a vacation to keep up!

Thanks Duncan!

By the way, the patent infringement case I was talking about involved one co-defendant selling its business to another co-defendant where the two businesses had different geographic markets; different distribution channels; different strengths; different weaknesses; and, the seller was cash poor due to the litigation.

Thanks for picking up our post.

And welcome to the neighborhood.  When I get a moment, I'll add IP Think Tank to our Blog Roll.

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

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

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

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

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

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

A Bird in the Hand

Why would anyone consider settlement at a time like this? 

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

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

Advantage Saffran. 

Let the games begin.

_______________________

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

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

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

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

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

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

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

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

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 (left, the victorious Karen R. Thorland of Loeb & Loeb)

Just as we're waxing philosophic about litigation's questionable ability to effectively and efficiently resolve a dispute requiring factual findings, along comes a ruling that not only resolves a mixed question of law and fact, but does so at the pleading stage without giving Plaintiff a chance to amend the Complaint.

Hearty congratulations to Karen R. Thorland of Loeb & Loeb LLP who pulled this rabbit out of the hat for BMG Music.  The new year just doesn't ever start better than that!

The Opinion in Brief 

In Leadsinger, Inc. v. BMG Music Publishing, the Ninth Circuit held today that there was no set of facts which would permit the manufacturer and distributor of karaoke machines to make and sell its devices in the absence of reprint and synchronization licenses.  In concluding that the District Court properly granted defendant's motion to dismiss without leave to amend, the Ninth Circuit explained:

No amendment would change the conclusion that Leadsinger’s karaoke device falls within the definition of an audiovisual work and outside the scope of § 115’s compulsory licensing scheme. Indeed, the conclusion that Leadsinger’s device displays a series of related images that are intrinsically intended to be shown by a machine together with accompanying sounds is justified by Leadsinger’s own description of how its all-in-one microphone allows a consumer to sing lyrics “in real time” with recorded music.

Any amendment relating to Leadsinger’s purported fair use also would have been futile. Leadsinger’s allegations support that its use of copyrighted song lyrics is commercial, that song lyrics fall within the core of copyright protection, and we have drawn the reasonable inference that Leadsinger uses song lyrics in their entirety. Thus, the only possible amendment relating to fair use would address the harm to the potential market for or value of the copyrighted work. That amendments relating to the fourth § 107 factor are a possibility is not enough to find that the district court abused its discretion given that the first three factors under § 107 unequivocally militate against a finding of fair use, and we are not to consider these factors in isolation. See Campbell, 510 U.S. at 591 n.21.

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

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

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

That guidance?

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

Is This Guidance Sufficiently Certain to Recommend Litigation?

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

Why? 

Because litigation makes sense only if:

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

Judges have hearts? 

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

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

But They Infringed My Trade Dress!!!!

Let's stick with artificial sweeteners here. 

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

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

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

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

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

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

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

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

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

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

3-D Negotiation at 37.

Try it.  You'll like it!

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

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

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

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

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

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

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

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

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


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

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

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

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

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

Happy New Year.

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. . AND THEN SETTLE YOUR COPYRIGHT CASE.  

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

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

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

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

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

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

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

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

Beware the Mobile Employee

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

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

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

The Leverage of Time

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

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

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

Time to Call the Mediator

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

The Leverage of Sanctions

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

Thirty percent!  $27 million! 

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

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

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

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

$27 million and damages? 

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

(Though I’m a pie guy myself.)

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Join Stanford Professor Larry Lessig's Creative Commons 50,000 Friends Drive!

You can join the Creative Commons Facebook "Cause" here.  Text below from the Creative Commons Cause page:

The Mission:  to build a layer of reasonable, flexible copyright in the face of increasingly restrictive default rules

Description: Too often the debate over creative control tends to the extremes. At one pole is a vision of total control — a world in which every last use of a work is regulated and in which "all rights reserved" (and then some) is the norm.

At the other end is a vision of anarchy — a world in which creators enjoy a wide range of freedom but are left vulnerable to exploitation. Balance, compromise, and moderation — once the driving forces of a copyright system that valued innovation and protection equally — have become endangered species.

Creative Commons is working to revive them. We use private rights to create public goods: creative works set free for certain uses. Like the free software and open-source movements, our ends are cooperative and community-minded, but our means are voluntary and libertarian. We work to offer creators a best-of-both-worlds way to protect their works while encouraging certain uses of them — to declare "some rights reserved."

Positions: Copyright can be exercised in such a way that it promotes collaborative culture while still protecting the author's legal rights.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here's the description:

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

About Larry Lessig

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

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

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

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

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

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

Don't miss it.

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(right:  Working by Mark Menzies)

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

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

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

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

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

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

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

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

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

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

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(photo:  Sun Pavilion in Second Life)

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

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

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

But we digress.

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

The concerns being expressed are the common ones

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

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

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

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

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

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

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

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

The Problems Litigation Brings and Their Potential Solutions

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

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

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

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

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

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

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

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(right, from car-toon-studio, just in time for halloween, a dementor)

Straight from Slashdot's mouth to IP ADR's ear we get the very truth from IBM about its plan to corner the market in marketplace bullying with its Patented Protection Racket.  

It boggles the imagination. 

So what is ADR about this? 

ADR is soul, man.  And IBM, for reasons known only to someone in legal, wins the monthly IP ADR anti-soul prize.  I.B.Dementor.M.

Read on . . .

Wikipedia defines a protection racket as an extortion scheme whereby a powerful non-governmental organization coerces businesses to pay protection money which allegedly serves to purchase the organization's 'protection' services against various external threats. Compare this to IBM's just-published patent application for 'Extracting Value from a Portfolio of Assets', which describes a process by which 'very large corporations' impress upon smaller businesses that paying for 'the protection of a large defensive patent portfolio' would be 'a prudent business decision' for them to make, 'just like purchasing a fire insurance policy.' Sounds like Fat Tony's been to Law School, eh?

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Thanks once again to Liklihood of Confusion for its post The Red Cross Fights Back.  The links provided by Confusion's Ron Coleman bring you this nugget from the PR war that we cannot imagine anyone other than the Red Cross winning.

It is particularly regrettable that J&J's lawsuit would seek to interfere with the preparedness mission of the Red Cross – increasingly important post 9-11 – during National Preparedness Month when everyone should be working together to get prepared.

Research shows only 7 percent of Americans have taken the necessary steps to prepare for disasters, but that 82 percent would get prepared if it was easier to do. Red Cross items such as those that are the subject of the amended complaint help families take the necessary steps to Be Red Cross Ready: to get a kit, make a plan and be informed.

The basis for many of J&J's claims focuses on an alleged agreement between Clara Barton and J&J in 1895 . . . 

The Red Cross will aggressively protect its longstanding right to use the Red Cross emblem in support of its humanitarian mission.

Post-9/11 humanitarian relief and protecting American families from terrorism.  Got anything to top that J&J?

See our previous post on interest-based potential negotiated resolutions to this dispute here.

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(newly famous teen camper, Alison Chang, flashing the peace sign at her camp counselor)

Oh what a tangled web the internet can be. 

As reported yesterday by the Sydney Morning Hearld, a teenager whose photo was taken by a camp counselor who posted it under a Creative Commons license on flickr and which eventually showed up on a Virgin Mobile televsision ad, has sued everyone in sight, including (mysteriously) Creative Commons itself.  See Virgin Sued for Using Teen's Photo here.

We have to clean up the kitchen after a delicious Sunday brunch, after which we will return to this post with reasons why an early mediation of this dispute could solve all of the parties (not to mention society's interests better than litigation ever could.

I'll just leave you with this thought:  if you had the choice between making your own rules and letting the Courts make them up for you, which do you think you'd choose?

_____________________________________________________________________________

California is one of the few states where you can study for the bar at home. A guide to online law schools can be found here.

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The IP ADR Blog is pleased to announce that we are being joined in our IP blogging venture by John Leo Wagner, Federal Magistrate (Ret.).

Judge Wagner is a colleague of Mike Young's and mine at the Southern California ADR firm Judicate West.  His impressive credentials will soon be posted in the "About" section of the blog (up at the top there).  We provide only the highlights of his judicial and private practice career below.

Welcome John!!  We know that our IP ADR Blog readers will greatly enjoy hearing your thoughts on the negotiated resolution of IP disputes.

ABOUT JUDGE WAGNER

Judge Wagner has been engaged in the settlement and trial of intellectual property disputes for over 20 years. He is currently a full-time neutral with Judicate West Alternative Dispute Resolution, where he mediates and arbitrates all manner of patent, copyright, trademark, trade dress and trade secret disputes.

John was formerly Of Counsel with the Los Angeles-based law firm of Irell & Manella LLP, where he was the head of the firm’s ADR practice group and Director of the firm’s Alternative Dispute Resolution Center. He worked for over seven years as one of the ADR Center’s primary neutrals, settling a myriad of difficult intellectual property disputes.

Before joining Irell & Manella, John served for over twelve years as a United States Magistrate Judge in the Northern District of Oklahoma, where he founded and administered the Court’s mediation program, and served as the resident expert in settling IP disputes.

John has mediated and arbitrated thousands of cases and was recognized as a Southern California Super Lawyer in the field of Alternative Dispute Resolution in 2007. He has also been selected for inclusion in he 2007 edition of The Best Lawyers in America in the specialty of Alternative Dispute Resolution.

John is the President-Elect of the International Academy of Mediators, a Fellow of the American College of Civil Trial Mediators, a Member of the CPR International Institute for Conflict Prevention and Resolution’s Panel of Distinguished Neutrals and a Diplomate Member of the California Academy of Distinguished Neutrals.   John is also a member of the Board of Directors of the Federal Bar Association's ADR Section.

John has been active in guiding national ADR policies and practice for over two decades. He was appointed by Chief Justice Rehnquist to serve on the Court Administration and Case Management Committee of the U.S. Judicial Conference, where he helped to formulate rules and policies governing ADR programs in the Federal Courts. He also served on the CPR Advisory Committee dealing with Mediation Procedures and the CPR/Georgetown Commission on Ethics and Standards in ADR.

Judge Wagner frequently teaches and lectures on ADR topics.  

We're happy and proud to have him join us here.

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Thanks to IPKAT for noting this newsworthy IP settlement, especially since we're getting too old (and busy!) to keep up with pop music. 

Right, the settlor -- Amy Winehouse. 

Click on the image to be transported to her "official site" where you too can be introduced to her music for the first time if you're similarly generationally impaired.

If you're considering offering an apology as at least part of the "compensation" for a wrong you or your client has been accused of committing, take a look at Stanford University Professor Frederic Luskin's Nine Steps to Forgiveness here.

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 (photo left BOOH by Mohammed)

 When we say "contenious tactics can hurt you" we don't mean the kind of "hurt" imposed by Courts when they ever so reluctantly and after years of bad faith litigation behavior impose monetary sanctions on the parties &/or their attorneys.

No, we mean hurt, as in Patently O's recent observation that the Federal Circuit (here) justified the lower court's 29.2% royalty rate as damages based in part on the parties "contentious history."  See Damages:  Contentious History Between Parties Justifies High Royalty Rate.  OUCH!!

ELEMENTARY BUILDING BLOCKS:  WHY WE'RE SO CONTENTIOUS 

As promised, we're going to lay a little social psychology of conflict on you for the next several weeks to help you understand not only how and why we use contentious tactics in litigation, but also how to strategically escalate or de-escalate litigation's contentious nature.      

First, a definition.  Conflict occurs when the parties believe their needs or desires cannot be achieved simultaneously.  (see Law Professor Richard Reuben's great power-point presenation on this topic here). Conflict emerges into a "dispute" when one (or more) of the parties suffer an "injurious event."  (See Conflict Map here).

Remember that active verb "believe."  The perception that the parties cannot simultaneously achieve their needs or desires ain't necessarily so. 

Whenever one person sues another for patent infringement, s/he alleges that the defendant is interfering with her ability to achieve her needs (income) or desires (wealth) based upon what she perceives to be hers.  The defendant, more or less predictably, responds by contending that the plaintiff is interfering with his ability to achieve his needs and desires based upon what he believes to be his. 

One of the ways to resolve the resulting conflict is to use a contentious tactic, which is what litigation is.  For the defendant the "perceived injurious event" that triggers the dispute is the litigation itself.  For the Plaintiff it was something else -- something that often becomes so lost in time to the litigators that only the Plaintiff continues to carry the "injury" with him.

CONTENTIOUS TACTICS for resolving conflict include Ingratiation and Gamesmanship; Shaming, Threats, Promises & Arguments, and,Coercive Commitments or Violence. 

The goal of all these tactics is to induce your opponent to yield to your clients' desires.   

Active litigation is, of course, both a coercive commitment -- "I will pursue you and this lawsuit until . . . trial .. . appeal . . . re-trial (etc.)" and a form of economic violence (imposing legal fees, lost time from productive business activities, potential loss of reputation in the business community or decreased value of actively traded securities, etc. upon your opponent).

So back to the question why litigation is always so contentious. 

IT'S CONTENTIOUS BECAUSE ITS A CONTENTIOUS TACTIC TO BEGIN WITH AND CAN ONLY BE PURSUED CONTENTIOUSLY.  It need not, however, be pursued in such a way that it will inflame your opponent.  Any litigation (as opposed to settlement) strategy or tactic, however, will invariably escalate conflict. 

How and why you might wish to de-escalate the conflict between the parties to litigation for your clients' strategic or tactical advantage tomorrow.

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HOW IT STARTS

"They cheated me," said the C.E.O. of a Fortune 500 company. 

"They stole my invention [or process, design, employees, product, market, or, customers]."

"They copied, knocked off, lied, misled, withheld, and, denied."

This is how the litigation begins.  You can recite it in your sleep because you drafted the complaint, the counter-claim, and, the interrogatories.  You prepared the examination, the cross-examination, and the jury instructions.

HOW IT ESCALATES

With each passing day, their wrongful, outrageous behavior and the injustice done to your client grows. 

Why? 

Because they prove their essential bad character and malicious intent with each litigation thrust and parry.  Your conduct is righteous, avenging, and, pure, while theirs only confirms their bad faith.  They destroy documents, alter evidence, mislead the Judge, and file pleadings at 5 p.m. the day before three-day weekends.

HOW IT COMES INTO THE JUDGE'S SETTLEMENT CHAMBER OR THE MEDIATION CONFERENCE ROOM

Although no one "takes it personally," by the time you bring your clients to a settlement conference or mediation, they cannot bear the sight of one another. 

I have not only been instructed that joint caucuses will not be tolerated, I've been asked to assure that the parties will not lay eyes on one another because the other side's very corporeal existence might so inflame the disputants that the negotiation session will melt down before it has had the chance to begin.

If you are a litigator with at least five or six years of experience representing clients in hotly contested intellectual property litigation of any stripe, you know that I am not exaggerating.

I want you to keep this litigation posture and emotional climate in mind for the next few weeks because all of my posts are going to be based it.

WITH A LITTLE HELP FROM OUR FRIENDS -- ENSURING THE BEST POSSIBLE NEGOTIATION   

In the coming weeks, we will be discussing some concepts in the social psychology of conflict that will help you de-esclate the conflict, which will, in turn, help everyone brainstorm and negotiate a deal as effectively and efficiently as possible.  

Toward that end, we'll talk about cognitive biases, with a little help from our friend Michael Webster, whose Psychology of Compliance and Due Diligence Law Blog was just last week named one of the ten best legal blogs on the internet. 

We'll also rely upon Harvard Business School's Working Knowledge, an invaluable, free resource that will improve every commercial litigator's ability to "cut to the chase" of the business interests that lie at the heart of every great settlement. 

Today's post, for instance, in fact the entire series of posts, was inspired by the HBS Working Knowledge Newsletter article -- Why We Aren't as Ethical as We Think - A Temporal Explanation by Max Bazerman (author of the great new negotiation text Negotiation Genuis) and his colleagues Ann E. Tenbrunsel, Kristina A. Diekmann, and Kimberly A. Wade-Benzoni. 

Other on-line resources we'll be using to explore this topic include:

Beyond Intractability (this link, for instance, is to our friend Ken Cloke's article on Mediators without Borders, which describes several great techniques for de-escalating conflict). 

The Freakonomics Blog, covering, among other things, marketing strategy that often overlaps with negotiation strategy, see e.g. Should Apple Burn its Economics Textbooks here and monetizing the value of spending more time with a loved one here. 

Brains on Purpose, our friend Stephanie West Allen's Neuroscience and Conflict Resolution Blog, see e.g. this recent article -- Conflict, Is it All In Your Head?, which appears, along with another cool dozen-plus conflict resolution blogs at Mediate.com's "Featured Blogs" page and Geoff Sharp's 40 Sites in 40 Minutes  including Gini Nelson's Engaging Conflicts on such topics as The Ethics of Compromise here and Diane Levin's Online Guide to Mediation on such topics as Is Your Negotiating Style Leaving Value on the Table? here.

Roger Dooley's brilliant Neuromarketing Blog, see e.g. our Negotiation Blog post on Small Talk and the Value of Joint Sessions here.

The Legal Theory Blog, see e.g. Negotiation and Time Perspective.

The Trial Lawyer Resource Center, whenever we need reminding that trial may well be the better alternative to a negotiated resolution, and to avail ourselves of the settlement insights posted there such as Listening During Settlement Negotiations. 

Malcolm Gladwell's Blog (the Tipping Point and Blink), see, e.g., this post on why journalists failed to detect the Enron debacle.  

The texts on which we usually rely will also be cited to assist you, including 

Professor Leigh Thompson's introductory-intermediate guide to negotiation, The Mind and Heart of the Negotiator (2d ed) -- the first chapter is online here.

Lax & Sebenius' essential 3D Negotiation -- excerpt online here.

Bazerman and Malhotra's newest compilation of negotiation advice, with which to earn your own post-graduate negotiation degree, Negotiation Genius.

The American Bar Association's massive compendium of negotiation strategic and tactical advice, The Negotiator's Fieldbook (online chapters include Analyzing Risk by Jeffrey Senger)

 Every new or existing website can benefit from search engine marketing.     Although many web hosting service providers supply domain registration, internet safety, and general marketing services, they do not locate the dedicated IP addresses you need. Just as  advertising agencies promote their client’s products or services online, search engine marketers facilitate web marketing through link exchange, email marketing, adsense promotion and the like.  An abundance of websites and articles provide internet marketing information. By reading seo reviews you can improve your chances of finding the best company to provide SEO services for your company.

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(right:  1915 New York Times logo from the Project Gutenberg eBook)

It's one of those days when nearly everything in the massive Sunday New York Times seems laser-directed at my interests, which also happen to be those of the IP ADR Blog.  So in case you didn't have my relaxing reading day, here are the good reads from today's NYT.

1. how and why we deal with money and possessions the way we do (Even in a Virtual World, Stuff Matters);
2. new ways to value the intangibles driving the post-industrial economy (Re:Framing - When Balance Sheets Collide with the New Economy);
3. the painful personal results of conflict avoidance (much more about this soon) (How to Avoid, Well, You);
4. poker strategy and tactics (yes, law/busines/IP is more poker than Clue) (When to Hold 'Em, and When to Go to Poker School);
5. patent reform (of course) (House Passes Bill to Curb Suits by Patent Owners) 
6. wait for a final ruling, negotiate settlement or pursue an at-risk launch -- Teva weighs its options after federal court refuses to enjoin its release of a copycat generic (Wyeth Loses Bout in Fight on a Generic);
7. a challenge to negotiation orthodoxy raised by San Diego, California real estate "range pricing" to encourge the parties to negotiate in the ZOPA (A Pricing System with Wiggle Room); and, finally,
8. the history of knockoffs (The Knockoff Won't Be Knocked Off) (more on this later as well).

That's it.  It's one of those rare Sundays when, as a result of our interior painting project and the kindness of neighbors whose new pool was finally ready to be christened, I could read the entire Sunday New York Times.

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In the extremely unlikely event any IP ADR Blog readers haven't yet heard about the Nixon Peabody Theme Song Brouhaha, go to Blawg Review here (It's Not Just Fair Use . . . ) for the must-see YouTube video posted after NP sent YouTube a DMCA take down notice.

Listen, anyone over 50 could have made this mistake, so we're really sorry, NP, that it came to this.  The internet isn't just a two-dimensional chess game in which you've got to predict the other side's moves, if you mess with the Web 2.0 generation, you're deep into string theory. 

My best advice?  Don't make a YouTube move without checking it out with your first and second year associates first. 

There you go, that alone justifies the $160K first year salaries.

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(right:  the triangle, on sale now at the IP ADR Blog)

Aggressive fighting wins human cock-fights and aggressive marketing corners the market in geometric shapes.  

The urge to possess and monetize just about everything continues to possess us.  And we at the IP ADR Blog wonder whether that's a good thing, or even an efficient or profitable one.

If you want your new sport (a brutal human cock-fight)  to grow into the new American pass-time, for instance, does it really make any sense to prevent  others from staging similar fights in an octagonal "ring" just because you used that shape first (or marketed it more fiercely than others)? 

Are we gearing up for a playground revolution with trademarked four-square courts and copyrighted hop scotch squares? 

We don't criticize the legal reasoning of the decision reported by the WSJ Law Blog today -- an opinion penned by our own federal court Judge Dean D. Pregerson -- that the Ultimate Fighting Championship (UFC) could lawfully prevent other promoters from staging similar fights within an octagonal "ring."  

We do, however continue to question what seems to have become an absolutely frenzied mania to take possession of -- and monetize -- just about everything.  

I'd give this entire topic more thought, but need to finish packing for our upcoming Hawaiian vacation -- where no one is trademarking the scent of the ocean or the curve of the white sand beach or the waves that seem to hesitate just a moment before breaking, as if they might decide to pause there for a last cigarette. 

With those images in mind, I give you the the law on geometric shapes as reported by WSJ Law Blog Today:  Octagon -- Trademark of the Ultimate Fighting Championship excerpted here and linked below:

UFC’s owner received a trademark on the octagon-shaped fighting mat back in 1998, and the court ruled UFC established common law rights on the eight-sided fence as well. 

Last year, UFC filed a suit against [a competitor's] company after he refused to pay $2,500 a year for a license to use the octagonal fence and mat. Meacham, 39 years old, claimed octagonal fences and mats are generic to the sport and told the Law Blog that he fought in eight-sided rings long before the creation of the UFC in 1993. 

In last month’s ruling, Judge Dean D. Pregerson in Los Angeles cited the aggressive promotion of the octagon mat and ring in ruling that “there was persuasive evidence that the marketplace associates the UFC with the octagon,” leading to a likelihood “the consuming public” might confuse Meacham’s company with UFC. A jury trial will take place as early as this fall to assess damages.

Meacham . . . says the decision is tantamount to “telling some boxers they can’t box in a four-sided ring.” The court disagreed, saying promoters of mixed martial arts use rings and mats of various shapes and that the sport, unlike baseball and basketball, has no regulation size for its “playing field.”

J. Bennett Clark, an intellectual property partner at Bryan Cave in St. Louis, says the decison “comes close to providing overly broad protection for such a basic geometric shape.” That said, it’s not an outlier. . . .

Click here for the remainder of the article.

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(right:  Signs of Human 4 by Zach Stern)

In his recent Concurring Opinions post Art in an Age of Digital Reproduction, Frank Pasquale takes the time to discuss the pro's and con's of expanded "moral rights" in artwork.  Excerpt below, link above.

 
I recently went to the Art Institute of Chicago to see the Jeff Wall show. I’d seen some of his photographs in the newspaper, but I wasn’t buying the critical praise. .  .  

I’m glad I did. One of his pieces, Dead Troops Talk (a vision after an ambush of a Red Army patrol, near Moqor, Afghanistan, winter 1986), struck me as a Dulce et Decorum Est for our time. The visual monotony of a desert landscape and dull Russian officers’ uniforms is relieved only by gore and improbably animated faces, some laughing profanely, others enigmatically contemplating their fate. The startlingly inventive “Flooded Grave” . . . is set in a drab cemetery and features an open, water-filled tomb filled with a riotously colorful array of sea anemones and urchins. All the work was backlit, achieving a luminosity no printed page (or monitor I've seen) can convey.

Which brought me back to my initial lack of enthusiasm for Wall’s work. Did the newspaper copy mislead me? Would thumbnails on the web have done the same thing? . . . I’m . . .  wondering about the extent to which an artist might want the power to stop inferior copies of his or her work, if only to avoid misimpressions like mine.

On the other hand, I’d never have even gone to the show if I hadn’t seen the reproductions in the New York Times article on Wall. So I'm not sold on the need to, say, expand moral rights so as to permit artists to assure that only those appreciating the "real presence" of the work itself can see any copy of it.

BLOGGING WITH IMAGES FROM THE INTERNET

Because I use so many images to illustrate this blog and the Settle It Now Negotiation Blog, I'm keenly interested in the apparently contradictory interests of making an author's work available to an audience likely to appreciate it and keeping one's hands off another's work without first obtaining permission. 

In my own case, I've found that simply asking permission, giving credit and providing a link to a web site of the artist's choosing generally (99%) results not simply in permission but also in gratitude for the exposure.

Because posting a few thoughts on the blog, along with a vivid image, is such a spontaneous act (at least in my case) there were times in the past when I did not seek permission before posting but only gave credit and linked to the artist's site.  I figured everyone googled themselves occasionally, the artist would see his or her name, take a quick look at the context and object if the use was objectionable, in which case I'd promptly remove it.    

That, as you can imagine, finally led to a dispute, in consequence of which I no longer post any images other than those for which I've received permission, which I firmly believe constitute "fair use" or those with creative commons licenses (like the one above).

The ability to download material already on the internet in just a few seconds makes it difficult for even an IP specialist to resist.   

Nevertheless, I have learned my lesson and hence only link to but do not post a Jeff Wall image here.

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There are some publicly reported disputes that fairly scream out for comment by a mediator with integrative solutions at the tip of her fingers. 

The Red Cross/Johnson & Johnson trademark dispute reported today by the Wall Street Journal Law Blog is one of them.  

First the facts.  The Red Cross -- which is really a movement comprised of several separate and distinct organizations -- has been engaged in humanitarian work world-wide since 1863 (the Int'l Committee of the Red Cross); 1919 (the International Federation of Red Cross and Red Crescent Societies); and, at various other dates (the 185 National Red Cross and Red Crescent Societies in nearly every country in the world).

The Red Cross on white background was the original protection symbol declared at the 1864 Geneva Convention.  Article 7 of the 1864 Geneva Convention, Chapter VII ("The distinctive emblem").

This is the Johnson & Johnson logo (right).  The first ready-made, ready-to-use surgical dressings were pioneered by J&J in the mid-1880's.  According to its web site, this also marked the birth of the company.

I don't know if J&J used the red cross logo as early as the 1880's, but the Red Cross, which first used it twenty years before J&J was "born" clearly used it first.

OK There are a Lot of Legal Issues Here

I can name those legal issues in three notes, Bob.  But as my friend Richard Millen is fond of saying:  "People (natural and fictitious) don't have legal problems.  Lawyers have legal problems.  People have people [and businesses business) problems."

(My husband (also a lawyer) was just in the room discussing the "legal issues" of ownership with me.  I say, "I'm not writing about ownership.  I have zero interest in ownership and J&J ought to have zero interest in it in this case too," to which he agrees, as he leaves the room still talking about ownership issues.  We can't help it, we're litigators). 

So I'm not even going to begin with a legal analysis (or end with one for that matter).  I'm going to begin (and end) with a strategic business analysis.  Here it is:  IS J&J SO OUT OF ITS FREAKING MIND THAT IT CAN'T NEGOTIATE A RESOLUTION WITH THE RED CROSS WHICH DONATES ALL OF THE PROCEEDS OF SALES USING THE RED CROSS LOGO TO HUMANITARIAN AGENCIES?

I can't resist this top-of-my-head list of potential ways to serve both the Red Cross' fund-raising and J&J's advertising interests at the same time.  

1. cross-licenses (duh)
2. a certain percentage of J&J profits go to Red Cross sponsored initiatives
3. the Red Cross lends its name and logo to certain J&J products in the same way the International Olympic Committee does for products -- you know -- J&J, Official Sponsor of the Red Cross Initiative to Heal Darfur.    
4. the Red Cross places J&J logos on its own products that meet J&J standards.
5. the two companies jointly sponsor a rock festival; the half-time show at the Super Bowl; an Olympic event; festivities associated with the World Cup; etc., etc.
6. J&J donates much needed ambulances carrying both the J&J and the Red Cross logos to war torn areas of the world (I won't suggest that similar ambulances be used at sporting events . . . too grim, even for a band-aid company). 

That's it for free advice.  I invite any and all of my mediator friends who want to spend a couple of brain cells on the issue to leave their integrative solutions here.

In the meantime, see Bad PR Move over at Patent Baristas and the IPKat coverage here.  

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(photo by Eole)

The fact of settlement by way of license agreements between BIG PATENT is no surprise, but rarely does a suit filed in March of year One (3M Sues Sony on March 8) get settled by July of Year One (3M Settles with Sony on July 30). 

That's four months, folks -- barely enough time for the junior associates to pull the canned patent infringement interrogatories out of the computer and begin tinkering with the details, let alone to negotiate a deal whereby "Sony Corporation and Sony Electronics [become] 'licensed sources of batteries containing 3M's cathode technology.'"  

We don't know how they did it, but we LIKE IT, WE LIKE IT.

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(click on image to order text)

I recently surveyed some of my "linked in" contacts to determine the critical "deal points" IP attorneys should come prepared to a mediation to resolve. 

The few points I mentioned off the top of my head were:  licenses & royalty rates, including fields of use/territorial restrictions and beneficiaries (e.g., current and future affiliates, downstream customers, distributors and sales representatives); potential business synergies; indemnities; identification of IP to be transferred/licensed (e.g., patent applications, know-how, trademarks, copyrights); approvals by affiliates and third parties; assignability and succession; waivers and, dispute resolution regarding performance of the agreement.

Here are the extremely useful responses generously provided by IP attorneys Timothy Fearnside, Paul Jorgensen and Todd Sullivan.

Timothy Fearnside  (Associate General Counsel at Boise State University) suggests the following (after noting that his list comes "from the perspective of University counsel, which is often within the context of sponsored research -- an animal unto itself.")

1. Perhaps most important, make sure you define both the IP and the ownership issues carefully, i.e., does it include prior research; future or related inventions; any differences between IP developed solely by one party, or jointly?, etc.
2. When dealing with Universities, publication rights will often prove sticky, i.e, while Universities may be willing to license IP to third parties, they are typically reluctant to surrender publication rights, and/or, the right to use research results for University purposes. You may need to address these types of issues in your agreement.
3. Exclusivity.
4. Termination/renewal/revocation, i.e., is there a time frame under which the licensee must patent and/or commercialize the invention? If so (and if the licensee fails to do so within the allowed time), does the license revert back to the licensor? May the licensee extend the license? 
5. Confidentiality/non-disclosure issues. 
6. Use of copyrights, trademarks (also IP, of course, but often a separate issue) 
7. Miscellaneous- warranties (if any), liquidated damages, limitations on damages, jurisdiction, venue, attorney fees.

Thanks Tim!

Paul Jorgensen, owner of the Jorgensen Law Firm PLLC was also generous with his response:

Don't forget term, termination and post-termination obligations. These seem self-evident, but I have seen many agreements fall apart because they forget them. I would also suggest that the parties agree on the level of confidentiality they want about the agreement, the relationship going forward, and materials they may exchange during that relationship. Although not clear from your question, you need quality control provisions if you are licensing.

Paul wisely suggested omitting "potential" business synergies from an agreement as "imprecise" and "prospective."  Wise counsel.  I was, however, suggesting that the parties discuss potential business synergies on their way to a negotiated resolution -- synergies that could be precisely defined after an agreement in principle is reached. 

Thanks Paul!

Finally, Todd Sullivan, Managing Attorney at Hayes Soloway PC, weighed in with the following: 

I am not sure this business deal would be substantially different from any other IP business deal, so I would take a look at all the 'deal points' of a standard IP agreement.

I would add choice of law and forum. If the license is exclusive, will the licensee have the right to pursue future infringement cases against third parties?

Minimum royalties (which may be required both to continue the license and to satisfy past transgressions).

Other hurdles to reach a deal may include compensation for past acts (and release thereof), willingness to license, and publication of the settlement (IP owners like to show others they successfully enforce their rights).

Finally Paul recommended a book on Patent License Agreements by Brian Brunsvold that I will definitely pick up before my next patent infringement mediation.  

Thanks Paul! and to you all!

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From IP Frontline.com we are given yet another reason why it makes sense to take your IP back into your own hands by negotiating a business deal with your legal adversary.

Patent Rendered Invalid through Grammatical Error by Harold Wegner

In Microstrategy, a panel affirmed a summary judgment of invalidity under 35 USC § 112, ¶ 1, keyed to poor English usage. The Court’s conclusion rendered fatal the patentee’s grammatical mistake.

He should have claimed ““the client system transmitting the retrieved information to the at least one web server”, but he instead claimed “the client system using and transmitting the retrieved information to the at least one web server[.]”

As a matter of English grammar, the clause rendered the claim indefinite because it “lacked an object, and there was more than one plausible way to correct the error (i.e., by adding an object or deleting the phrase ‘using and’). [The patentee] contend[ed] this was error, and that the district court should have instead construed ‘the retrieved information’ to be the object of both ‘using’ and ‘transmitting.’”

For the complete article, click here.

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Julie Turner of the Turner Law Firm has platinum educational and law firm IP experience.  In the LinkedIn Q & A section, she responds to Supriya Sun's  inquiry about the available "techniques and approaches for assessing (and extracting maximum value from) an owned patent portfolio" as follows:  

 

There are a number of ways to value IP, from the "Monte Carlo Method" (really a combination of other ways), to assessing the prices and availabilities of alternatives, to looking at royalty rates in an industry and for what type of IP, to determining whether to license separately or as a portfolio.

There is an outstanding article on this topic at WIPO: Really goes through it very nicely and it's freely available.

One of the best IP valuators and writers on this subject is Richard Razgaitis. His qualifications are unparalleled for this kind of thing. He wrote a book called "Valuation and Pricing of Technology-Based Intellectual Property" that I highly recommend.

Another source if you are near a good library is the journal, Les Nouvelles. This is the journal of the Licensing Executives Society, a fabulous journal all about licensing and IP valuation.

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(PHOTO BY Jason Matthews)

I am slowly coming to understand the power of LinkedIn, recommended to me by my favorite marketing guru (not just my web log guru) Kevin O'Keefe at LexBlog.

LinkedIn not only connects you with your market's markets, it also provides some pretty high level advice.  Here, I reprint an answer to the question:  What's the Best Way to Handle Licensing.  The question was asked by a "third degree" contact of mine -- systems architect Paul Robichaux.  

The question was answered by several LinkedIn experts.  This answer in the international marketplace was provided by Legal & IPR Counsel at TNO ICT Folkert J.M. Teernstra:

The aim of any licensing model is to extract the added value created during research and development. In an ideal world, you would aim for the maximum value. However, this is not always possible. In case of ongoing development you might have a need for instant cash. This can be accomplished by either licensing against a lumpsum or by an arrangement that allows for advance payments of future revenues. This is often called "frontloading". It goes without saying that this is usually not the best way to maximize returns.

If you have no "frontloading" requirements, a better way to maximise returns would be to charge for a combination of a one-off fee for access to background knowledge and turnover-dependent per item payments (royalties). In this arrangement, the licensee is usually free (within certain limits !) to set their own selling price. This is a preferred model where the licensee has better insight in a specific market than the licensor. However, make sure you ask for minimum annual license fees !

As to technology valuation, there are three classic approaches: cost based, market based and income based. The overall license fee paid by the licensee should be a reasonable percentage of the true market value. If you overcharge, the market will probably not buy your licensees product..There is a rule of thumb called the "25% rule".

As an alternative you could also consider a distribution or OEM or white label agreement with a reseller. In this case an IPR license would not be required.

Once you have determined the value of your technology and the appropriate licensing model, have a license contract drafted by an experienced licensing professional or a lawyer with experience in this field. Especially in case of cross border licenses there are numerous possible complications, eg in some jurisdictions you are not allowed to charge for expired patents, in others your licensee might be required to pay a witholding tax (to be deducted from YOUR license fee..) or you license arrangement might be held to be anti-competitive.

Be also VERY aware of the risks involved in granting a patent indemnification to your licensee. This is best avoided altogether.

There are many pitfalls in technology licensing. If substantial amounts of money are involved in your technology product, hire a professional !

Mr. Ternstra cautions, of course, that

THIS IS NOT A PROFESSIONAL LEGAL ADVISE AND MAY NOT BE CONSTRUED AS SUCH. I TAKE NO LIABILITY FOR ANY ACTS OR OMISSIONS THAT MIGHT RESULT FROM THE TEXT ABOVE.

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