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Greetings IP ADR Blog readers!

Mediator, Arbitrator and Adjunct Professor of Alternative Dispute Resolution at the Straus Institute for Dispute Resolution will be a panelist at the Annual ABA Conference on Friday August 6 from 4-5 p.m. The panel discussion entitled "Maximize Your Success with Court-Connected ADR" will focus on how litigators can settle at the point of maximum benefit for their client!

Most IP cases settle--but often it is late in the litigation process after the money runs out.  This panel will help litigators prepare for each type of ADR session and help them settle successfully, discuss pitfalls to avoid and provide advice for choosing the best ADR procedure for a particular case.  The discussion will be moderated by Suzanne Nusbaum of Los Gatos, CA and takes place on the 4th Floor at the Intercontinental, San Francisco at 888 Howard Street, San Francisco, CA.

-RR

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Jordi Masdevall, Senior Information Technology Attorney at Baker & McKenzie’s Barcelona office reports that the World Intellectual Property Organization’s Arbitration and Mediation Center, in cooperation with the “Format Recognition and Protection Association” (FRAPA), now provides ADR services in disputes relating to television formats.

These disputes may concern allegations of format plagiarism or the unauthorized copying of TV formats, such as those used for game, reality or talent shows and sitcoms. Programs using these formats are often remade in different markets using local parties.

The agreement between WIPO and FRAPA provides that WIPO will take on the latter’s existing mediation activity and will administer TV format-related disputes filed under the WIPO Mediation and Expedited Arbitration Rules for Film and Media.

The Film and Media Rules were adopted in December 2009, and are specifically tailored to the specific characteristics of disputes arising in the film and media sectors. They foresee appointment of a specialist from a dedicated international WIPO Panel of film and media mediators, arbitrators and experts. The WIPO Center and FRAPA also envisage providing specialized training and information sessions on format dispute resolution.

The undersigned, though not (yet) a member of this particular panel, is a mediator and arbitrator for WIPO.

-EvG

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On April 6th of this year, the Patent and Trademark Office announced its new Ombudsman Pilot Program for patent examinations. David Kappos, the USPTO’s Director, states in his blog entry of May 12, 2010 that the program was established to assist in meeting the Agency’s priority to improve relations with its stakeholders.

Sounds good, doesn’t it? Admittedly, it is refreshing to see that the PTO is responsive to complaints from patent attorneys. Patent practitioners and applicants alike have often been frustrated with the process. Director Kappos gives examples such as when the examination process has stalled, or where applicants are unsure of the appropriate person to contact for assistance. Or where attorneys need assistance getting connected with the right person to help them resolve a particular issue. In other words, he says, the program is intended as a “pressure relief valve”.

This is all very laudable, but is this really the job for an ombudsman, Mr. Kappos? I always thought an ombudsman was there to resolve disputes you might have with an agency, not just a sophisticated receptionist who can connect you with the right person.

Maybe this person ought to be called a Facilitator rather than an Ombudsman. Yes, I hear you wonder: “Isn’t an ombudsman a facilitator?” Yes, all mediators and ombudsmen are facilitators, but not all facilitators are mediators or ombudsmen. The online Merriam-Webster dictionary defines ombudsman as “a government official (as in Sweden or New Zealand) appointed to receive and investigate complaints made by individuals against abuses or capricious acts of public officials.” That is not, at least not at the moment, what the USPTO’s ombudsman is supposed to do.

The USPTO’s webpage dedicated to the Pilot Program describes its purpose as:

“enhanc[ing] the USPTO’s ability to assist applicants and/or their representatives with issues that arise during patent application prosecution. More specifically, when there is a breakdown in the normal prosecution process, the Ombudsman Pilot Program can assist in getting the process back on track.”

The “official” purpose sounds more meaningful, and even somewhat at odds with what Director Kappos describes. I can see that such an Ombudsman could be useful if the normal prosecution process has stalled or even broken down completely, and nobody seems to know why. But when you read on, the details are pretty much the same as what Director Kappos describes. So, back to “Facilitator”?

According to the aforementioned website, the Ombudsman Pilot Program is not intended to circumvent normal communication between applicants and examiners or Supervisory Patent Examiners (SPEs). Applicants are encouraged to continue to use established customer service offices throughout the USPTO for information on other related topics. But wait, SPEs also function as ombudsman representatives!

The Program is running across all Technology Centers, using TC ombudsman representatives who are Supervisory Patent Examiners (SPEs) and Quality Assurance Specialists (QASs) prepared to field questions and concerns from the public and work with the appropriate PTO employees (SPEs, Directors, Petitions contacts, etc.) to facilitate responses. The ombudsman representative will help ensure that the applicant's issues are addressed quickly – usually within five business days. The ombudsman representative will also ensure confidentiality when requested by the applicant or applicant's representative.

The good news is that this Pilot Program provides an additional tool in helping to move the patent application process along. Presumably, another set of eyes can look at the situation and inquire why the process is stalled. I hope the staff members who are expected to play a role in the Pilot Program will get adequate training to use mediation-derived techniques that they can use in dealing both with the applicant and their colleagues who have been assigned to the matter.

Note, however, that the Ombudsman Program is not designed to deal directly with the merits of the application. An answer to a “FAQ” summarizes it nicely:

“When you have a question about a specific application in prosecution and have been unable to find the correct person to assist you or have been unable to obtain assistance from the examiner or SPE to whom the application is assigned, then the Ombudsman Pilot Program is the venue to use. If your question is a general question and not associated with a particular pending patent application, then the Ombudsman Pilot Program is not the appropriate program to use. The Ombudsman Pilot Program is not meant to be a universal assistance center but rather a place to get prosecution assistance when you have exhausted normal channels in the Technology Center (TC).”

The Pilot Program is scheduled to run for a year. After that, the Notice in the Federal Register indicates that the USPTO may extend it with “appropriate modifications based on feedback from the participants, the effectiveness of the pilot program and the availability of resources.”

To use the program, you need to complete a form on the PTO website, which you will find by scrolling down all the way. This form requests basic information, such as name, e-mail address and telephone number. You submit this information directly from this webpage, whereupon someone will call you within one business day.

So, patent applicants, let the USPTO know how this program is working for you, and whether or not you would like to add certain tasks to the Ombudsman, such as receiving and investigating complaints, and acting as an intermediary to help resolve them. Under the form just described, you will find the e-mail address you can use to give feedback, questions or comments!

-EvG

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Cultivating Qualities of Being

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

In my experience, they are all connected...

Mediation

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

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

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

Meditation

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

Integration into a Contemplative Practice

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

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

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

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

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

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

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

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

-MZ

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

Why?

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

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

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

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

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

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

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

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

-EvG

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As a mediator reflecting on the label “Evil” attributed to the proposed Google Book Settlement (article by Tom McNichol in California Lawyer, Saving the World from Google: Public and private interests band together to fight a deal that, they say, would destroy competition on the Internet), I wonder under what alpha-tag Google might fall in Vickie Pynchon’s new book, A is for Asshole, the Grownup's ABC's of Conflict Resolution.  Is there an E for Evil?

I am also curious about where this Evil metaphor might fit within Google, Inc.’s Senior Copyright Counsel, William Patry’s new book, Moral Panics and the Copyright Wars, which asks that we look at the moral panic generated by such labels not as aggressors, but rather as mediators in the copyright wars. As Patry describes in his blog, copyright is a system of social relationships, and that “the advantage in regarding copyright as a system of social relationships is that it focuses attention where it belongs: in mediating conflicts within that system… .”

If you would like some background and context use The Public Index, a project of the Public-Interest Book Search Initiative and the Institute for Information Law and Policy at New York Law School.  For audio listen to Pamela Samuelson’s recent lecture, and for balance see the Google Public Policy Blog.

Here’s how Google became the Evil villain:

In September, 2005, the Authors Guild, representing about 8,000 US published authors and screenwriters, brought a class action against Google The Authors Guild, Inc. v. Google Inc., No. 05 Civ. 8136 S.D.N.Y Sep. 20, 2005), claiming that Google’s Library Project, launched as the Google Book Search, a project which scanned millions of in-copyright books from the collections of major research libraries, was copyright infringement. Google’s goal at the time was to make indexes of the books’ contents and to provide short snippets of the book contents in response to its users search queries.

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

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

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

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

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

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

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

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

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

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

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

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

6. What is the Mediator's Availability Like?

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

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

We will discuss “ripeness” in a future post.

-EvG

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

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

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

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

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

1. What Training has this Mediator Received?

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

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

2. How Much Experience Does the Mediator Have?

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

3. How is the Mediator's Reputation?

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

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

To be continued… 

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U.S. Statutory Remedies Unavailable to Unregistered Berne Foreign Authors, Making Pre-litigation Mediation a Good Strategy to Resolve Infringement Disputes for All Authors

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

§ 412. Registration as prerequisite to certain remedies for infringement

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

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

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

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

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

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

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

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

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

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

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

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

Nota bene!

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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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From the files of the World Intellectual Property Organization

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

M1. A WIPO Patent Mediation

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

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

Continue reading here.

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

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

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

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

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

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

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

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

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

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

 

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by

of Sheldon Mak Rose & Anderson

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

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

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

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

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

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

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

____________________

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

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

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

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

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

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

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

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

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

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

The Supporting Research

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

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

 WHY ANCHORS AFFECT US THE WAY THEY DO

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

MAKING THE FIRST OFFER

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

HOW EXTREME CAN IT BE?

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

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

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

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

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

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

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

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

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

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

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

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

People Make Irrational Choices

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

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

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

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

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

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

Continue reading (or listen to the broadcast) here.

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

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

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

By Jason W. Armstrong
Daily Journal Staff Writer

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

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

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

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

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

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

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Mediation is all about story, even when everyone thinks it's only about money. Here's the story of ADR Services, Inc., which I joined today, and its dynamic founder and CEO, Lucie Baron. From ADR Services' Website, one of those stories that you must meet the hero of to believe.

About ADR Services, Inc.

Lucie Barron, our founder and President, has quite a compelling story to tell. A single mother with seven young children, her indoctrination to the legal system came during a fee dispute with her lawyer, who was seeking additional compensation. A formidable competitor even then, she went about the daunting task of reconstructing the file on her case, arguing that she had actually been overcharged. The panel agreed, dismissing the attorney's claim and awarding for her.

ADR Services, Inc. had humble beginnings in 1994, sub-leasing a couple of rooms from a law firm and handling cases on a catch as catch can basis for a handful of retired judges who agreed to work through its panel. Until recently and a maturing of the marketplace, the company managed the impossible, virtually doubling in size every year. Today, the ADR Services, Inc. panel consists of more than 150 neutrals, both retired judges and attorneys throughout the state.   

A highly visible player in the ADR market, Ms. Barron is indefatigable, working countless hours while seemingly attending every industry event. In February 2007 the company headquarters moved to a beautiful new suite of offices in Century City that is 50% larger than before, and a new, Northern California office opened in April 2006 in San Francisco. After the addition of offices in Downtown Los Angeles, San Diego, and Las Vegas, ADR Services opened its newest office in Orange County in 2007. The company projects to administer more than 7,500 cases in 2008.

Originally from Australia, Lucie Barron was a psychologist by training with an MBA from McGill University, Canada and had a keen eye for business. Ms. Barron needed to find a way to support her children, and she realized that ADR was important for business and a legal trend. After spending months devouring any information she could find on the subject at UCLA business and law schools, she wrote to a list of retired judges and invited them to join her fledgling panel. Enticed by her vision and determination, eight judges initially agreed to join what has now become the fastest growing ADR provider in California.

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Live Telephone Seminar

ADR in IP Litigation from ALI-ABA

Wednesday February 18, 2009 from 1:00-2:00 pm EST

Why Attend?

In a difficult economy, intellectual property protection and assertion is more important than ever. The combined stressors of a poor fiscal climate and shrinking legal budgets place a significant strain on any business dependent upon IP assets. as companies face difficult economic decisions, it is increasingly difficult to fit the expense and extended uncertainty of copyright, patent and trademark litigation into a forward looking business plan. This one-hour seminar explores the use of alternative dispute resolution as a means of protecting intellectual property and business activity, while minimizing the expense and devotion of time related to traditional IP litigation.

What You Will Learn

This program examines how to move an IP dispute toward alternative dispute resolution; best practices for controlling the expense and length of the process; and best practices for successful alternative dispute resolution. Whether you are an experienced IP practitioner or simply one grappling with IP issues in your general commercial practice, knowing how to offer your clients a wide array of ADR options might make the difference between a practice that survives and one that thrives. The seminar will cover the following topics:

How to choose between litigation and ADR.

• The most successful strategies for guiding your dispute into the best ADR forum at the most productive time.
• The five basic rules of “distributive” or “fixed sum” bargaining that will give you the “edge” in all future settlement negotiations.
• The five ways to “expand the fixed sum pie” by exploring and exploiting the client interests underlying your own and your opponents’ legal positions.
• The Ten Mediation/Settlement Conference Traps for the Unwary.
  

Invest just 60 minutes at your home or office to learn about alternative dispute resolution in the IP field from this duo of experts. This audio program comes to you live on Wednesday, February 18, 2009, 1:00-2:00 pm EST, via your phone or your computer. Materials corresponding to the course may be downloaded or viewed online.

Planning Chair

R. David Donoghue, Esquire, Holland & Knight LLP, Chicago, IL

Faculty

Victoria Pynchon, Esquire, Settle It Now Dispute Resolution Services, Beverly Hills, CA

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

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

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

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

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

Honor and Integrity

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

Ethics

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

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

The ABA notes in its comments section to the Standards that

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

STANDARD I. SELF-DETERMINATION

STANDARD II. IMPARTIALITY

STANDARD III. CONFLICTS OF INTEREST

STANDARD IV. COMPETENCE

STANDARD V. CONFIDENTIALITY

STANDARD VIII. FEES AND OTHER CHARGES

STANDARD IX. ADVANCEMENT OF MEDIATION PRACTICE

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

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

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

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

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

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

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

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

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

_________________

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

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By Greg Katz

Daily Journal

Staff Writer

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

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

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

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

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

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

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

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

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

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

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

To continue reading, click here.

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

Daily Journal Bio from the Top 40 List Below

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

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

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

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

 

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

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

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

What Is a Mind Map Anyway?

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

Read the full post here!

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

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

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

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

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

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

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

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

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

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

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

So what do I mean when I say LegalTED? 

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

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

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

Looking forward to it!

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

Law, blogs and technology

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why indeed?

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

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

The Parade of Mediation Horribles

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

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

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

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

Not so much. 

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

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

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

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

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

Thanks a lot. 

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

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

What to Do, What to Do

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

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

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

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

Are we clear now?  Crystal!

___________________________

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

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

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

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

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Get ready for a radical new idea.  One that:

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

(image from Wikimedia Commons)

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

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

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

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

What kind of cases has this process been used for?

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

The Drawbacks? 

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

The Systemic Response Elsewhere?

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

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

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

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

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

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

It's no surprise to us that

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

The Academic View from My Own Backyard?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Joe:  You still don't get it, do you?

Vickie:  What?

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

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

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

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

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

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

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

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

Those are interests.

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

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

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

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

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

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(photo:  from Mediation from Darkness to Light)

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

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

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

That's why god created consultants, right?  

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

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

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

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

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

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

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

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MEDIATION 'MAGIC' HAPPENS WHEN NEUTRALS REVITALIZE JUSTICE ISSUES

By Victoria Pynchon 

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

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

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

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

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

"Picture the earth.

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

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

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

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

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

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

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

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

To continue reading, click here (subscription required).

DAILY JOURNAL NEWSWIRE ARTICLE
http://www.diailyjournal.com
© 2008 The Daily Journal Corporation.
All rights reserved.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Click here for remainder of article.

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

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

13 HVNLR 313 Student Note by Sarah Tran

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

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

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

*321 B. Expert IP Mediators Cut Costs, Quickly

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

C. Clients Get Better Remedies

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

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

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

D. Society Benefits

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

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

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

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

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

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

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

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

But it wasn’t.

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

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

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

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

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

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

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

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

PRE-NEGOTIATION TIPS – MEMORY JOGGERS 2  (summary)

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

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

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

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

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

Guess what?  You could do this for me. 

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

Help me help you.

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

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

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

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

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

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

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

Continue reading here.

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

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

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

But that’s the Carrie Bradshaw question.

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

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

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

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

So, what’s a neutral mediator to do?


For the tentative resolution, click here.

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

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

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

For the uninitiated:

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

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

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

Continue reading here.

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

As David explains:

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

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

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

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

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

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

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

They'll be yours for life.

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

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

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

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

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

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

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

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

For background on this fascinating Copyright dispute, click here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Former Executive Vice-President and General Counsel to The Walt Disney Company, entertainment law heavy-weight Lou Meisinger knows more about driving a hard bargain than anyone I know. 

Yet it is Lou who taught me that the deal you drive too hard is the one that will come back to bite you.

Why?

Because you have to leave enough profit in it for your negotiating partner to survive.

Once, Lou says, his company drove so hard a bargain, leaving so little profit to its bargaining partner, that the contract had to be renegotiated, on terms less favorable than originally offered. Had the stronger party been content with the deal that could have kept its negotiation partner healthy, it would not have had to take a worse deal months later based upon the other's inability to comply with the harsher terms originally imposed.   

You not only have to leave them "face," you also have to leave them with enough money to survive.

You protest that Lou's wisdom doesn't apply to a one-time deal. Maybe. But I'm getting older and it's a small world.  

A fair agreement is a durable agreement.

Hard bargainers love to quote Machiavelli's The Prince on fear and love, though they forget that Machiavelli cautioned only that it is much safer to be feared than loved, when, of the two, either must be dispensed with.

Most people also forget -- or never read -- his final words on the subject:

Nevertheless a prince ought to inspire fear in such a way that, if he does not win love, he avoids hatred; because he can endure very well being feared whilst he is not hated, which will always be as long as he abstains from the property of his citizens and subjects and from their women.

Drive too hard a bargain and you take what belongs to another, engendering ill will in your industry's community that you may never reverse.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Go for it! 

And please. 

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

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From ALTERNATIVES TO THE HIGH COST OF LITIGATION, INTERNATIONAL INSTITUTE FOR CONFLICT PREVENTION & RESOLUTION VOL. 26 NO. 3 MARCH 2008

UPDATE: DESPITE MEDIATION RELATED INCARCERATION, GIRLS GONE WILD FOUNDER IS HEADED FOR MORE ADR

A federal judge has rejected a recusal motion from the maker of the Girls Gone Wild videos, who challenged the judge’s impartiality for first ordering mediation, and then sending the producer to jail for contempt based on his ADR conduct. That means the civil case against still incarcerated Joseph Francis will proceed. And, surprisingly, the case will go back to mediation.

In an order accompanying the . . . . opinion . . . U.S. District Court Judge Richard Smoak . . . told the parties to try mediation again. Smoak ordered . . . . mediation by June 27, with a “mediation report” deadline six days later.

In his 22-page opinion, Smoak strongly defends his record as a mediation supporter, and rejects claims that he tried to force Francis to settle before sending Francis to jail for contempt.  The defense charges stem from a suit brought by Francis’ video subjects.  . . . .  

The support for the defense motion included Los Angeles attorney Michael Young’s 2007 Alternatives article, “Mediation Gone Wild: How Three Minutes Put an ADR Party Behind Bars,” 25 Alternatives 97 (June 2007) (available at WileyInterscience. com). Young wrote that Smoak’s moves intruded into the mediation process and hurt ADR.

Court's opinion below:

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

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

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

Continue reading here.

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

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

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

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

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

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

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

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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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(image from the U.K. Trademark Application Blog)

What's the difference between an IP arbitrator or mediator and a general commercial arbitrator and mediator?  Some of us -- like Les Weinstein and Michael Young -- have devoted substantial parts of their careers to patent (Les) and trademark (Michael) litigation.

The rest of us -- the Hon. John Leo Wagner (Fed. Magistrate, Ret.), Eric van Ginkel, the soon-to-be-added Jay McCauley and I -- have litigated patent, trademark, copyright and other IP cases in the course of our more general commercial litigation careers.

What unites us is an avidity for the topic and an interest in keeping up with the law.  So in addition to being the quick studies that all general commercial litigators are, we're already all the way (Les, Mike) or half way there when you lay your fabulously instructive briefs on us.   

To help our clients and ourselves, we print tutorials from time to time by law firms who our statistics page tells us are reading our blog.  Today we excerpt and link to Lindquist and Vennum's terrific Trademark tutorial -- The Trademark Dilution Act of 2006 -- A Summary of Changes Affecting Trademark Owners

When is a mark famous?

A mark is famous if the general consuming public of the United States widely recognizes it as a designation of a source of goods or services.

In determining whether a mark is famous enough to merit protection under the Trademark Dilution Revision Act, a court may consider all relevant factors, including:

1. The duration, extent, and geographic reach of advertising and publicity of the mark, including whether the mark is advertised or publicized by the owner or third parties
2. The amount, volume, and geographic extent of sales of goods or services offered under
   the mark 
3. The extent of actual recognition of the mark 
4. Whether the mark was registered

Because no registry of famous marks exists, determining whether a particular mark is famous requires the court to evaluate these factors on a case-by-case basis.

What constitutes tarnishment and blurring?

Dilution by tarnishment is an association arising from the similarity between the famous mark and the diluting mark that harms the reputation of the famous mark—that is, when the diluting mark is used in connection with undesirable or inferior goods or services that could create a negative association with the use of the famous mark.

Dilution by blurring is an association arising from the similarity between the famous mark and the diluting mark or trade name that impairs the distinctiveness of the famous mark. Dilution by blurring reduces the connection in the minds of consumers between the famous mark and the goods and services for which it is used.

In determining whether a mark is likely to cause dilution by blurring of a famous mark, a court may consider all relevant factors, including:

1. The degree of similarity between the mark or trade name and the famous mark 
2. The degree of inherent or acquired distinctiveness of the famous mark 
3. The extent to which the owner of the famous mark is engaging in substantially
   exclusive use of the mark 
4. The degree of recognition of the famous mark 
5. Whether the user of the mark or trade name intended to create an association with the
   famous mark 
6. Any actual association between the mark or trade name and the famous mark

For the remainder of this excellent article, click here.

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

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

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

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

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

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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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Patent infringement settlements sometimes include the drastic remedy of selling your company.  It is the exception, but by no means any longer surprising, when the parties to a patent infringment mediation inform me that the co-defendants have been exploring the option of a buy-out while I was in separate caucus with the plaintiff.

That being the case, it is wise to come to a mediation prepared to explore valuation issues.  In that regard, I direct your attention to an article by Dennis L. Monroe of Krass Monroe entitled All Company Valuations are Not Created Equal.  Below is an excerpt.  For the full article, click here. 

“What is the value of my company?” is a question I am frequently asked. In the franchisor world (whether it be franchisors or franchisees), we usually focus on a multiple of earnings. In recent times the multiple of earnings have been going up; and there has been a feeding frenzy as it relates to the purchase of franchise companies.

What determines the value of a company? We normally look at the valuation in terms of a third-party sale. However, there are other times when we look at valuations for purpose of financing, estate planning, management compensation and other events that may necessitate a valuation.

There are a number of valuation firms in the country. I wanted to go to someone who is known for valuing businesses of all kinds and for various purposes, not just someone who values franchise businesses, because they can be formulaic in their approach. I had the honor of recently speaking with Mike Bochert, a [former?] Managing Director of Cherry Tree Companies, a 25 year old investment banking and investment management firm. Mike is a long-time investment banker and valuation expert of private companies, whether very small or very large.

Dennis Monroe question: How are company valuations not alike?

Mike Bochert response: To understand why all company valuations are not alike, think “P-C-A.” In other words, valuations vary in Purpose, occur under differing company Circumstances and each is directed to a specific Audience. Each of those variables has an effect on the judgments and considerations which are appropriate for any valuation.

Without trying to be exhaustive, the Purpose of the valuation could be:

• Determining value pursuant to a buy-sell agreement
• An estate valuation
• Obtaining growth financing
• Acquiring another multi-unit business
• Considering being acquired
• Strategic decision making
  

The company’s Circumstances might be:

• Profitable company with substantial growth opportunities
• Franchisee with multiple concepts, one performing well and one performing poorly
• An economically strong operation which is considering the acquisition of another operator
• Troubled operation considering an acquisition by another operator

The Audience for the valuation could be:

• Private equity firm
• Mezzanine financing firm
• Internal Revenue Service
• Litigation attorneys
• Management or Board of Directors

To continue reading, click here.

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(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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I was once contacted by one of the writers for the hit series House who wanted to know what the parties may do doing a mediation.  After explaining several current mediation "processes" to him, I said this. 

The beauty part is that you can actually do anything you want during a mediation.  There are no rules.

Then we had a great conversation about what Dr. House might do in a mediation, none of which made it to the screen because it was too wild to appear there  But we had a lot of fun. 

Mediation advocacy is not too much different from trial advocacy except that the page is blank.  The stage is empty.  The computer hasn't yet booted up.  The first word hasn't been penned.  None of the characters has spoken.  The sun is not yet up.  

As our former national poet laureate Billy Collins has written in his great poem Aristotle,

This is the beginning.
Almost anything can happen.
This is where you find
the creation of light, a fish wriggling onto land,
the first word of Paradise Lost on an empty page.
Think of an egg, the letter A,
a woman ironing on a bare stage as the heavy curtain rises.
This is the very beginning.
The first-person narrator introduces himself,
tells us about his lineage.
The mezzo-soprano stands in the wings.
Here the climbers are studying a map
or pulling on their long woolen socks.
This is early on, years before the Ark, dawn.
The profile of an animal is being smeared
on the wall of a cave,
and you have not yet learned to crawl.
This is the opening, the gambit,
a pawn moving forward an inch.
This is your first night with her, your first night without her.
This is the first part
where the wheels begin to turn,
where the elevator begins its ascent,
before the doors lurch apart.

Mediation is a writers' blank page.

Writing is easy. All you do is stare at a blank sheet of paper until drops of blood form on your forehead. - Gene Fowler

Aside from writers' block, I have no answer to the question why there isn't more great mediation advocacy.  But I can steer you in its direction.  Take a look at Stephanie West Allen's interview with Diane F. Wyzga -- an attorney, nurse, and a professionally trained storyteller, who helps lawyers tell their clients' stories to juries.  Read the entire interview.  I provide only a tantalizing excerpt below.  Then we'll talk more about mediation advocacy next week.  As attorney Wyzga explains:

What could I teach a lawyer about storytelling? Robert McKee had the answer:

Storytelling is the art of expressing meaningful change in the life situation of a character in terms of values to which the listener reacts with emotion.

This is what lawyers do all the time! I just needed to overcome law school’s linear analytical training that says he who dies with the most facts, wins. And show lawyers how we listen to stories.

In the grip of a heartfelt story artfully told, the factfinder listener’s mind is fully engaged creating a parallel world of social judgment based on their world views and experiences. Now the attorney and factfinder are one: working in concert in a cooperative enterprise considering options, possibilities and outcomes.

As of a recent verdict in June, I have 11.11 million reasons why I continue to believe that a heartfelt story artfully told using language with power, passion and precision will engage your jury every single time.

Read on here . . . .

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Recently, I've noticed Yahoo telling me the number of seconds I've been waiting to get my hands on my email when it doesn't appear instantaneously.  I'm  a little abashed when I realize I'm already getting annoyed by the time Yahoo  informs me I've been waiting for only 22.546 seconds.  

Now Be Specific debunks the myth of a google generation of computer scholars who search the  technological Library of Alexandria with grace and ease.  (pictured here:  the new Alexandrian library)

Not only are our children impatient with the internet's search and navigation functions, so are those who used to spend their time in dusty archives after laboriously flipping through the tattered index cards of the Dewey Decimal System -- University Professors.

We are all, says a recent report from the Brits, not only lacking the "critical and analytical skills [necessary] to assess the information that [we] find on the web" but so impatient that we demonstrate "zero tolerance for any delay in satisfying [our] information needs.  Click here for the full short report (wait time:  3.5 seconds).

This is not good news for IP negotiators.  Our impatience to "get on with it" is probably the primary reason for the breakdown of negotiations for the settlement of IP litigation. 

This is not surprising because no one likes to sit for long in the uncomfortable (but creatively generative) process of exploring the business interests of our bargaining partners when we are pretty certain of the righteousness of our cause and the demonic nature of our opposition.

In survey after survey, lawyers report that the best mediators are patient and persistent.  This is reason alone to bring your IP opponents over to your favorite mediator for whom patience is a central daily practice. 

Thanks to Les Weinstein for passing Be Specific along to us.  We'll be adding it to our Favorite Blogs Link this weekend.

Off to work!

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The Wall Street Journal Law Blog reports Domain-Name Disputes at an All-Time High. 

What interests me is not the number of complaints filed by trademark owners against cybersquatters under the “Uniform Domain Name Dispute Resolution Policy” (UDRP) -- 1 in 1999 and 2,156 in 2007 -- but WIPO's report that "[a]bout 85% of trademark owners prevail when they bring these complaints."

When someone who asks me for a mediation "evaluation" is being over-confident of their chances of success, I always tell them that I would never tell a client that he had a better than 70% chance of prevailing even when I thought every single fact and legal principle lined up in my "victory" column.

I have to tell you that when I say this, lawyers generally blanch and turn to their clients saying something along the lines of "you know I never promised you victory." 

Now the WSJ Law Blog gives me a figure I would never use -- 85% victory. 

It makes me wonder what's behind that figure -- limited resources of cyber-squatters?  Trademark owner bias? 

Anyone have any ideas other than suggesting that trademark owners are almost always right?

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Thanks to Colm Brannigan for posing this question to the LinkedIn Legal Community:  What Qualities Do Counsel Look for in a Mediator? 

We've already posted -- here -- the answer of L.A. Sheppard Mullin attorney Jim Burgess.

Below, we give you the thorough and insightful answer of Vermont attorney, mediator and arbitrator Richard Cassidy of Hoff Curtis. 

From Richard's response you can tell that he understands mediation theory and practice from every angle you want a mediator to know. 

So if you practice in Vermont and are looking to settle a commercial case (he also does labor and personal injury) you probably couldn't do much better than to give Richard a call. 

So herewith and all that, we give you Ricahrd Cassidy's thoughts on what qualities lawyers are looking for in mediators:

From my perspective, it’s important to analyze what you want from the mediation and attune your selection to your needs and goals.

Choice of Mediator -- "Someone Who Will Have Credibility with my Opponents"

In selecting a mediator, I am often most in need of someone who will have credibility with my opponents. I do my best to understand the strengths and weaknesses of my case before I get to mediation. Hopefully, there is little a third party can teach me about my own case. Of course, it is human to be imperfect and so sometimes there is more to learn at mediation than I would prefer. So good judgment is important.

Case Assessment

But assuming that enough work has been done to properly assess the case before mediation, I am often hoping to use the mediator’s knowledge and credibility to help persuade my opponents to see things more my way. In such cases, I am happy to agree on whomever my opponent wants, so long as they have the basic skills.

A Mediator My Client Will Respect:  "Seeing a Neutral Learn About the Case and Then Point Out Important Weaknesses Can Be Very Powerful"

Sometimes, however, client control is a real issue. You wonder why some clients hire you and ignore your advice, but it happens. Seeing a neutral learn about the case and then point out important weaknesses can be very powerful for clients who do easily accept a realistic evaluation of their prospects. So, on such occasions I am looking for a mediator my client will respect.

The Basics:  Interpersonal Skill, Patience, Persistence, Stamina and Optimism

Of course, there are basics that one almost always wants. Good interpersonal skills are essential. An understanding of the mediation process and technique is critical. I look for lots of patience, persistence, stamina and optimism. (I have seen many a mediator throw away a real chance of settlement by trying to move too fast or quitting too early. As a mediator, I do not quit until at least one party insists that I do so). Timing is often important. In most of my cases, knowledge of the litigation process is very important because it gives the mediator the ability to point out the problems of the “best” alternative to a negotiated settlement.

Substantive Knowledge

Knowledge of the substance and dynamics of the particular subject area is very important. For example, I do lots of work as an advocate and as a mediator in employment litigation. Many plaintiffs and many plaintiffs’ lawyers don’t understand up front how hard the process is going to be for them, and how bad the statistics are for the employee. A mediator who can genuinely show empathy for the plaintiff’s plight and deliver the bad news when it’s called for is what is needed.

Co-Mediating with Experts

Sometimes, in more esoteric subject areas, substantive knowledge can be hard to find. As a mediator I have successfully occasionally co-mediated with experts (not necessarily mediators) in fields that are outside of my usual range, such as in patent cases.

Evaluator or Facilitator?

On the facilitative/evaluative question, I usually want a mix. It is almost always a mistake for the mediator to try to impose his or her view of the right the resolution on the parties. But for cases in litigation or headed there, I find that a mediator who is unwilling to express any view of the case is usually not very helpful. I understand that, particularly in domestic relations matters, many mediators are unwilling to do any evaluation at all. I understand that if the real goal of the process is not to resolve the specific issues then holding the parties attention but to transform their communication so that they can resolve things themselves in the future, evaluation can be a road block. Ordinarily, however, in my cases (civil litigation, mostly employment, commercial, construction, or personal injury disputes) someone usually needs the kind of reality check that a few well timed evaluative comments can provide.

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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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. . 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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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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(right: author and IP litigator and mediator Michael D. Young, an IP practitioner at Weston Benshoof and mediator with Southern California's Judicate West)

Is the IP world ready to mediate its disputes yet?

While many of us believe IP practitioners are late in coming to the mediation party, at least one prominent mediator is banking that the right time is now.

London's Mark Jackson-Stops, founder of In Place of Strife and a fellow Fellow with the International Academy of Mediators has recently established a specialty mediation panel for  disputes "in the UK and jurisdictions around the world in unfair competition and passing off, patents, trade marks and copyright and competition and anti-trust law, as well as franchise, music, media and domain name disputes."

Jackson-Stops noted "this is an excellent fit with the often cross-border nature of disputes in intellectual property and technology."

Obviously, I support the efforts of any mediators who band together in a specialty mediation practice or joint venture (or even simply a cross-pollination site like this one).

Mark's efforts do, however, raise a question that has been nagging me for some time.

Why has it taken IP attorneys and disputants so long to hear the siren call of negotiated resolution?

I have heard some disputants say that sophisticated high-stakes patent infringement disputes are so significant that the parties simply can't afford to "compromise."

Aside from the fact that negotiated resolutions needn't result in compromise, no one specializing in the field could give this explanation much credence.  

Almost all of these disputes end up settling -- sometimes before and sometimes after Markman hearings -- so compromise is a fact of life unless you're able, with the help of a great mediator, to expand the parties' opportunities to obtain better benefits from a negotiated agreement than they could obtain by victory at trial.  

Given the opportunties created by interest-based negotiation and the inevitability of compromise if the parties wait to settle on the courtroom steps, why does the mediated or negotiated resolution continue to be a "last step" and one of "giving up" and "giving in" rather than "finessing impasse by transforming it into an opportunity to make a deal" (as our friend Lou Meisinger so often counsels).

Are IP litigators pessimists who just don't believe that mediators are up to the intellectual challenge of mediating complex technology and business disputes?  Or are they overly optimistic, believing that they can win by turning over their own and their client's decision-making to a judge or a jury?

Whatever the reasons, reluctance seems to be the rule.  

Case in point.

In the Oracle v. SAP lawsuit concerning claims that SAP employees stole Oracle's copyrighted software by hacking into a website to steal software codes, the parties are preparing for a February 2009 trial. Despite the looming trial date (and the misery of the holidays caused by a February trial) the parties apparently had no intention of attempting to mediate their way into a happy holiday season with their families.  Rather, the Court took matters in hand and ordered counsel and litigants to proceed to mediation.  

Still, the parties resist.

Granted, there are often legitimate means to postpone a mediation -- particularly when information gathering is incomplete and necessary to asses the risks of trial.  But is seems to me that more arm-twisting is necessary to bring IP litigants to the negotiation table than required in most other civil disputes.  

Another case in point.

A few days ago, LeapFrog Enterprises settled an East Texas patent dispute involving devices that allow children to use blocks or other objects to control their computers. The details of the dispute (claims of patent trolling, forum shopping, etc.) can be found on any number of blog sites, including The Prior Art here.  

It was just reported yesterday that the plaintiffs in LeapFrog -- two attorney/inventors -- will share the $7.5 million settlement.  A very good day for plaintiffs.

For present purposes, I note that the settlement occurred, "literally on the courthouse steps in Marshall, Texas, with jury selection 15 minutes away." (quote from the Los Angeles Daily Journal which, unfortunately, requires a subscription to read). 

Again, why the wait? Wouldn't an earlier negotiation with a bang-up IP mediator have made more logical sense, not to mention far greater financial cents.

After all, preparing a patent litigation case for trial in East Texas is not for the feint of heart, or shallow of pocketbook.

Some say the attorneys are to blame -- that they are reluctant to bring a significant IP matter to mediation any earlier because it's "bad for business."  But I'm not that cynical.  And my colleague Victoria Pynchon has to be positively restrained when someone suggests that attorneys, by and large, settle late to maximize the dollar value of litigation.

"That strategy," she says, "is a recipe for client-retention failure and a cynical, not to mention, unsupported libel of some of the most ethical people I have ever had the pleasure to know -- litigators -- particularly those engaged in IP and other sophisticated commercial litigation."

I refuse to believe this explanation as well.

So I'd like to open the floor to our IP litigators to weigh in on this issue:

Why the hesitation to use mediation for complex IP disputes?

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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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It is hard for an ADR junkie like me to admit this (and don't spread this around please), but sometimes you just need to try the darned case. I am referring to, in particular, the trademark lawsuit between Internet giant eBay and scent seller PerfumeBay.

The lawsuit was fairly simple.

eBay, naturally protective of its distinctive "Bay" web-moniker when it comes to on-line sales, was none too pleased when "Perfume Bay" (aka "Perfumebay" and sometimes "PerfumeBay" sought to register the Perfume Bay trademark for use in on-line perfume sales.

The fact that "PerfumeBay" actually contained the entirety of "eBay's" name did not help matters.

As an eBay trial witness testified, eBay has a "fragrance section" which moved approximately $6 million in cologne and perfume during a 2-1/2 year period.  eBay was concerned that consumers might confuse PerfumeBay as an eBay affiliate of some kind. Or, it might dilute the eBay name.

PerfumeBay, for its part, argued that the "bay" in its name reflected "a bay filled with ships importing perfumes from all parts of the world and this bay would be the place where perfume lovers could go to locate its selection of fragrances . . . .”

Uh, okay.

In any case, the two parties entered into negotiations to resolve this dispute, without success and apparently without a mediator. There's a rant in this but I'll do that later.

PerfumeBay predictably brought a declaratory relief action in federal court, asking for a ruling that it was not infringing the eBay trademark. eBay prevailed at trial with the court finding a likelihood of confusion based upon survey evidence concluding that 70% of consumers, when faced with the word "Bay" and internet shopping, thought of "eBay."

The Court ordered Perfume Bay to un-conjoin the two parts of its name.

The Ninth Circuit affirmed in part and reversed in part, approving the order forcing Perfume Bay to separate the "e" in Perfume from the "B" in Bay.  

So what does this have to do with ADR?

On the one hand, the parties clearly could have settled this case with an equally good, or better, resolution for both sides. 

On the other hand, eBay possesses something it could never have obtained in mediation or arbitration: precedent, glorious, future-designing precedent, contained in a Ninth Circuit opinion suitable not only for framing, but also for demand letters to any other online company slipping little "e"-big-"B" Bay into its tradename.

For the price of a single trial, eBay earned itself a great tool for dominating the online market, one that shoud effectively dissuade other internet marketers who might have been thinking of climbing onto the eBay wagon as a portal to successful online sales.

Maybe that's why the names "WineBay" and "GameBay" are still available in the url market.

By NOT using an ADR process to resolve this dispute, eBay will, in the long run, likely save considerable grief, conflict, and legal fees.

It's difficult for an ADR junkie to admit this, but sometimes -- very rarely, I submit -- when important public policy issues are at stake or when precedent is needed to resolve likely future disputes, the alternative dispute resolution of the future -- litigation -- is often called for.

If you are interested in Perfume Bay's take on all this, the company's owner, Jacquelyn Tran, has a blog of her own at here.  Jacquelyn vows to continue the fight to the Supreme Court, stating:

This battle has been exhausting and expensive, but I refused to give up. Too often, Goliaths are victorious in these types of battles. I am fighting for small businesses everywhere, for our more than 300,000 customers (YOU!), and for my American Dream.

Coverage of this matter along the way has been provided by DomainNews.com here; the IP News Blog here; and a helpful article on How Entrepreneurs Can Survive Trademark Lawsuits here. 

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(photo:  Get Out of Jail Free Card by Mark Strozier)

Because there are criminal penalties for copyright infringement, the question whether the Plaintiff can agree to withdraw criminal charges in exchange for a civil settlement is often raised in an IP mediator's practice.

I am reminded of this issue by today's New York Times article "Insurer Sues Over Mississippi Inquiry."  As the Times reports:

State Farm Insurance is suing Mississippi’s attorney general, accusing him of violating an agreement to end a criminal investigation of the insurer’s handling of claims on the Gulf Coast after Hurricane Katrina, according to court papers unsealed Friday.

State Farm’s lawsuit claims that the attorney general, Jim Hood, reopened a criminal investigation of the company and its employees “for the purpose of harassment” and to coerce the insurer into settling civil litigation spawned by the Aug. 29, 2005, hurricane.

State Farm says Mr. Hood agreed in January to end his office’s criminal inquiry as part of a settlement agreement that called for the company to reopen and possibly pay thousands of policyholder claims.

State Farm suing Mississippi for failing to honor an agreement to drop a criminal inquiry in exchange for the settlement of civil claims?  

I must be missing something because the settlement sounds unethical and the lawsuit without merit because civil claims were settled in exchange for the termination of a criminal investigation.  (the first attempted settlement is reported by the Mass Tort Litigation Blog in Birmbaum, Scruggs and the Katrina Settlement here).

In California, the State Bar Committee on Professional Responsibility and Conduct has expressly opined that "An offer to dismiss a criminal prosecution may not be conditioned on a release from civil liability because that practice constitutes a threat to obtain an advantage in a civil dispute in violation of the Rules of Professional Conduct." (See Formal Opinion 1991-124 here)

Looking into the issue a little more deeply in the context of copyright infringement litigation, I found this excellent Manual -- Prosecuting Intellectual Property Crimes prepared by the U.S. Department of Justice containing this useful Chapter on Ethics and Obligations.

In regard to the question whether it is ethical to drop criminal charges in exchange for a civil settlement, the DOJ advises that the answer is "unclear."

X.B.2.a. Victims Who Seek Advantage by Threats of Criminal Prosecution

It is commonplace for an IP-owner's attorney to send a merchant a letter directing him to cease and desist sales of infringing merchandise. If the merchant continues to infringe, the letter will be solid evidence of the defendant's mens rea during any ensuing criminal case.

Sometimes the IP owner's letter will include an express or implied threat to seek criminal prosecution should the merchant persist. The extent to which a lawyer can ethically threaten to press criminal charges to advance a civil cause of action is not clear.

The lack of clarity stems in part from a patchwork of ethical rules. The ABA's Model Code of Professional Responsibility (1969, amended 1980) explicitly prohibited strategic threats of prosecution: “A lawyer shall not present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter.” Disciplinary Rule 7-105(A). The ABA's Model Rules of Professional Conduct, adopted in 1983, omitted the rule as redundant or overbroad or both.” See ABA Formal Ethics Opinion 92-363 (1992) (allowing a lawyer to use a threat of a criminal referral to obtain advantage if the civil claim and criminal matter are related and well-founded).

Not all states have dropped the old rule, and some have adopted other specific provisions addressing the issue. Compare Office of Disciplinary Counsel v. King, 617 N.E.2d 676, 677 (Ohio 1993) (disciplining a lawyer under the old rule for threatening to seek prosecution unless opponent in property dispute paid disputed rent or vacated the property) with Disciplinary Rule 7-105(A) (Or. 2003) (allowing such threats “if, but only if, the lawyer reasonably believes the charge to be true and if the purpose of the lawyer is to compel or induce the person threatened to take reasonable action to make good the wrong which is the subject of the charge”).

This is a tricky area and one all IP counsel are advised to research prior to negotiating the termination of civil proceedings when criminal charges are also pending.  If you, like me, are fond of "templates," take a look at this negotiated Permanent Injunction settling the civil pretexting case brought agaisnt Hewlett Packard by the State of California. 

Note that the Attorney General's Press Release announcing this $14.5 Million Civil Settlement -- earmarked to help "Law Enforcement Efforts to Fight Identity, Intellectual Property Theft" -- expressly cautions that 

The filing and settlement of the civil complaint have no effect on the criminal case, which remains pending against all five defendants in Santa Clara County Superior Court.  

UPDATE:  Thanks to the Mass Tort Litigation Blog for Professor Erichson's generous and thoughtful post on the civil settlement/criminal prosecution ethical question -- link in comment below-- and for hipping us to David Rossmiller's post (including extensive links to the court documents) on the facts of the matter in his Insurance Coverage Blog  post State Farm Sues Mississippi AG Hood.  

From Rossmiller's post on this issue and many others I have read, I have to tell you that Rossmiller's Blog is the only one anyone concerned with coverage really needs to read.  I must also admit that anyone who says that "work is the curse of the blogging class" has captured my heart as well as my mind.

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(photo:  Victory is Mine! by Rentahamster)

Just a note for the moment when you need to convince your client that it's time to settle the patent litigation.  

No, I'm not suggesting you tell them about the potential for a patent malpractice action (this one in the news to tell us that patent malpractice litigation must be waged in federal, not state, court).

I leave the analysis of the case law to Patently O's coverage here.  My purpose is simply to remind everyone of just how endless patent litigation can be.  

First the patent litigation.  Then the motion to arbitrate some portion of that litigation.  Motion denied.  Appealed.  Reversed.  Litigation stayed.  Arbitration hearing conducted.  Decision made.  Reconsidered.  Rehearing.  Decision.  Litigation re-opened.  Trial.  Appeal.  Reversal.  Remittitur.  Retrial.  Final judgment. 

Then the malicious prosecution action. 

And if we're really really really unlucky, the patent malpractice litigation. 

Breathe in you win, breathe out you lose, breathe in, breathe out . . . . . wouldn't you really rather control your own destiny?

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(photo Quiet Please by Ian Grainger)

Post by Michael Young

Speaking of mediation confidentiality, there's a new horrible "opinion" from New York that is making the rounds in the ADR community. While in the context of a divorce case, the opinion could have ramifications for all New York mediated disputes, including IP cases.

But let's hope not.

In the one paragraph Hauzinger v. Hauzinger "opinion" (and I use that term generously, I'd prefer "mistake"), the Supreme Court of New York, Appellate Division, upheld a trial court order compelling a mediator to testify in court. While facts are sketchy, it appears that the mediator did nothing more than assist a divorcing couple negotiate a separation agreement, all pursuant to a signed confidentiality agreement.

After the mediation was concluded, one of the parties challenged the separation agreement in court.  New York law required the trial judge to determine whether the terms of the separation agreement "were fair and reasonable at the time of the making of the agreement." To prove this, the moving party subpoenaed the mediator to obtain his testimony about the confidential mediation negotiations.  

The appellate court's affirmance of the trial court's order requiring the mediator to testify was bad enough.  More troubling is the absence of any analysis to support this decision.  The "opinion" merely states that the Court rejected the mediator's contention "that the court abused its discretion in refusing to enforce the confidentiality agreement...."

Though providing no rationale to reject the mediator's adherence to the parties' agreement, the Court did state that its decisioon was "a matter of public policy,"  citing another one-paragraph opinion of the New York Supreme Court appellate division in which the court upheld the confidentiality of a mediation report pursuant to the parties confidentiality agreement.

Where is the discussion on the importance of mediation confidentiality to the entire mediation process? Where is the recognition that by simply ignoring mediation confidentiality, despite the parties' clear acknowledgment of confidentiality at the time, the court is undermining all future mediations in the State? How about an explanation for why this unspecified "public policy" is so important that it outweighs another appellate division's recognition that strong "public policy" favors keeping mediations confidential?  How about a citation to a precedent that supports the court's conclusion, rather than to authority that completely contradicts the ruling.

Any New York attorneys out there who can explain this to me? I would welcome your comments, because I just don't get 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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NEVER LEAVE VALUE ON THE BARGAINING TABLE AGAIN!

Head's up!!  Vonage and Verizon settled their patent dispute using only two settlement techniques well-known to your transactional colleagues but rarely used by litigators.  There are dozens more like this, many of which you may be familiar with but few of which you ever attempt to use.

Let some masterful settlement judges (Complex Court Assistant Supervising Judge Victoria Chaney and full-time Settlement Judge Alexander Williams, III) and highly respected mediators and arbitrators teach you how to use these techniques to get a settlement that's nearly as good as actually winning the case.

We've also added a negotiation and mediation ETHICS section to the course so that those of you who need those credits by year-end can get them.

If you read this blog, you are officially a "friend or colleague of the speakers" and are entitled to a 20% discount on our day-long Winning Settlement Techniques Seminar.  In addition to Judges Chaney and Williams; former Federal Magistrate John Leo Wagner, Patent Arbitrator and Mediator Les Weinstein, and Arbitrator and Law School Professor Jay McCauley will bring you the techniques necessary to settle and make your clients very very happy at one and the same time.  

Your blog-reader coupon code is S3SETL. Enter in the coupon code when you register on-line and receive 20% off the registration price.

Register here now.

The fomal course description below:

Settlement Techniques that Give You the Winning Edge

Novice and seasoned litigators will learn to maximize the value of their litigation positions by learning winning settlement techniques from a panel of seasoned ADR experts.

Experienced mediators and Judges teach the latest settlement techniques, such as distributive (splitting the settlement “pie”) and integrative or interest-based (expanding the settlement “pie”) bargaining. Topics also include the dynamics of conflict resolution, settlement best practices, negotiating techniques, settling complex and patent litigation cases, and international disputes. Don’t miss this chance to hear from those who truly know -- how you can best maximize your client’s settlement opportunities and outcomes.

What You Will Learn if You Attend This Seminar

• The ten social psychological insights that will minimize your own self- defeating negotiation behavior and maximize your opponents’ bargaining weaknesses (preview here)

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

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

• The ten ways to get your case settled to your clients’ best advantage at Mandatory Settlement Conferences for both routine and “bet the company” cases

• The Top Ten Errors Made by Parties When Attempting to Settle Disputes that their Contracts Require Them to Arbitrate

• The Ten Rules of Cross-cultural negotiation in International Arbitration

• The Ten Laws Critical to the Enforcement of Mediated Settlement Agreements

• The Ten Mediation/Settlement Conference Traps for the Unwary (preview here)

Instructors

Hon. Victoria Chaney--Assistant Supervising Judge, Complex Litigation, Los Angeles Superior Court

Hon. John Leo Wagner--ADR Neutral/Hearing Officer, Judicate West

Hon. Alexander Williams, III – Judge, Los Angeles Superior Court, presiding over the full-time Settlement Court

Les J. Weinstein--AAA Arbitrator and Mediator, Patent and Antitrust Attorney

Jay McCauley--Hearing Officer, Dispute Resolution Provider, Judicate West

Victoria Pynchon--Complex Commercial Mediator, Settle it Now


November 13, 2007 - Los Angeles

Check-in: 8:30 - 9:00 a.m.

Seminar: 9:00 a.m. - 4:30 p.m. (Lunch on your own)

Wilshire Grand Hotel

930 Wilshire Blvd.

Los Angeles , CA


Pincus Communications certifies that this seminar has been approved for 6.0 MCLE credits and ethics credits will be given.

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The Washington Post reports today that Patent Deal May be Charitable Agreement.  Excerpt below:

Patent disputes rarely end up helping charities, but two local organizations could get sizable donations from the resolution of a year-long legal battle between Verizon and Vonage.

As part of the settlement reached last week between the two companies, a total of $2.5 million will be given to five educational nonprofit organizations, two of which are based in the District [of Columbia].  . . . .

If Vonage loses its rehearing on either of the patents in question, it will pay $120 million, including $2.5 million for the charities. If it wins, it will pay Verizon $80 million, and nothing will go toward charities.

Both companies said the idea of giving money to charities came up during settlement negotiations.

This settlement takes advantage of two settlement tools that every lawyer, IP or not, should have in his/her negotiation tool box.

The first tool is the use of contingent agreements to hedge against gains or losses that can only flow from future events.  Here the parties made both the charitable contributions and the higher Vonage pay-out contingent upon Verizon defeating Vonage's motion for rehearing on either of the two patents at issue.  

As M.I.T. and Harvard Professor Lawrence Suskind has written in Why Technology Negotiations are Different: 

One novel way to accept uncertainty is through contingent agreements—promises that negotiators add to a contract to reduce risk. An agreement might include a table that accounts for many future scenarios, including different prices, deadlines, and obligations to perform.

Contingencies add complexity and incur the wrath of general counsel; they also make it difficult to book the value of the deal (and allocate bonuses) when the agreement is signed. Nevertheless, when uncertainty is high, parties will be best served by spelling out "who gets what" under a variety of scenarios.

Contingent agreements in the litigation context are also used to control for uncertainty.  Here the parties are wagering on the Court's decision on Vonage's upcoming motion for a rehearing on either of the two patents at issue.  And you thought gambling was illegal in our nation's capital./*

This agreement also builds in whatever tax advantages and benefits to corporate good will that flow from making charitable contributions.  These corporations likely have already planned their charitable giving for the year and may well have "re-purposed" those funds to help them settle the litigation.  

I rely on any tax expert who drops by this post to answer the question about the tax benefits that would flow from this agreement.

There is one thing I can tell you as a full-time mediator. 

The next time you're engaged in litigation with this much at stake, ask Vonage or Verizon who it is that brokered this deal.  It's not rocket science, but it shows a level of creativity and ability to persuade that is frankly rare.  I, for instance, have suggested charitable contributions and contingent agreements on many occasions.  I have not, however, succeeded in convincing the parties that they make good sense. 

So I defer to and tip my hat in praise of the mediator and negotiators who can later tell some great war stories about how this deal ended up on the pages of the Washington Post.

Good work!

___________________

/*  Note:  most states and the District of Columbia outlaw wagering on games of chance, not on games of skill.  

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When Fulbright and Jaworski recently surveyed a broad range of senior corporate counsel on Litigation Trends, the vast majority responded that the "most impressive deed by outside counsel in the past 12 months" was "winning a case."  

The "what have you done for me lately stats" in order of their impressiveness to Fortune 50 GC's and executives are as follows:  :

WON A CASE: U.S. 32%; U.K. 50% 
SETTLED A CASE: U.S. 15%; U.K. 25%
BUSINESS TRANSACTION: U.S. 12% (no U.K. figure available)
HAD CASE DISMISSED (the litigators' holy grail) U.S. 13% (no U.K. figure available)
GOOD SERVICE U.S. 13%; U.K. 25%
GOOD AVICE: U.S. 4% (no U.K. figure available)
OTHER: U.S. 11% (no U.K. figure available)

How to make settling as good (or better!) than winning in tomorrow's post.

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First Let's Talk About Anger

Please raise your hand if your clients -- corporate clients -- are angry about the burdens of litigation.  Irritated with the document "demands" and interrogatories.  Frustrated about the e-discovery.  Ticked off at the way opposing counsel asks them questions as if they're lying.  Hot under the collar about the mounting attorneys' fees and the distance between the day suit was filed and the probable day on which a trial might eventually be scheduled.  Simmering about the time the litigation consumes, time they'd prefer to be spending doing their actual jobs -- planning for and implementing business strategies for a profitable future instead of fighting about the unprofitable past.    

And we're not even talking about your clients' anger at the defendant who has stolen their intellectual property or that of the company they work for.  And if you believe that powerful people in highly sucessful and profitable businesses do not fear that litigation might hurt their careers, follow the Qualcomm/Broadcom e-discovery story and the fate of its general counsel for a little while, here, here and here.  

Why I'm Talking About Anger

Dealing with anger is my job.  As a negotiation coach, mentor, facilitator, and mediator, I need the parties to intellectual property litigation to be thinking as clearly as they possibly can when challenged to settle an important piece of litigation.  Everyone arrives at the mediation in some degree of anger -- from mild irritation to controlled rage.  Because anger tends to prevent the parties from thinking clearly and from sharing information that would dramatically increase their ability to achieve the best possible negotiated resolution, I'm usually called upon to help the parties move from hostility to collaboration.  

So What's "Fundamental Attribution Error"? 

Social scientists who study the reasons people act the way they do have discovered something fundamental about the way we explain to ourselves the behavior of others.  What researchers have found is that whenever someone else's behavior causes us harm, we tend to assume that person intended to cause us the harm we experience or, at a minimum, caused us harm by virtue of their carelessness in regard to our well-being.       

If our spouse arrives home late on the evening we've scheduled an outing with our friends, we'll  reflexively blame their tardy arrival upon their desire to thwart our plans or their careless planning.  Our spouse, on the other hand, will reflexively ascribe his late arrival to traffic conditions.  Though both spouses might be at least partially right, the injured spouse will almost always ascribe her harm to her husband's intentional or careless conduct and the injury-causing spouse will almost always ascribe her harm to the traffic or the weather or an unexpected but necessary business obligation.

Why do we make this error in our dealings with others?  Because we crave control.  If we attribute the cause of our harm to the intentional or careless conduct of the person who harmed us, there is some chance that we can convince them -- by way of "punishment" for their misdeeds -- not to do it again.  If it's really not their fault, there is no way we can prevent a similar occurrence from taking place in the future.     

So What Does FAE Have to Do With Settling IP Litigation?

First, FAE makes us angry, preventing us from thinking as clearly as possible.  

Secondly, FAE prevents us from seeing "our own part" in the conflict at hand.  This latter effect has been found by researchers to prevent athletes, for instance, from finding and addressing the causes of their substandard performance.  Why?  Because in ascribing their substandard performance to the fault of others, they fail to search for and find those causes over which they have actual control, i.e., the errors they are making that cause them to fail.

When Everyone is Able to Give Everyone Else the Benefit of the Doubt, Tension Eases and the Parties Can Work on Their Mutual Problem Collaboratively and Effectively.

Now that you know about fundamental attribution error, you can never again be quite so perfectly certain that your righteous indignation is justified.  You might just be able to give your opponent the benefit of the doubt.  He is not the malicious, cheating liar you believe him to be.  And you are not the saint upon whom harm has been imposed without any fault of your own.

Most people are so certain that the conflict to be resolved is the other guy's fault that they can't even begin to see that resolving the dispute is a mutual problem that is best resolved by way of collaboration rather than further posturing, hiding evidence and "spinning" one's tale of loss, injury and innocence.

Because I could write an entire book on this subject, I think I'll just stop there and let you and your clients ponder it for a little while.  It may sound ridiculous, but learning about FAE made all of my relationships much better almost immediately. I think understanding it might help my readers out as well.

For other law- and business-related blogs addressing FAE, click here, here, here, here and here.

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(right:  Avon Anew, the microdermabrasion product at issue)

Although there are many reasons to read the Ninth Circuit's recently reported opinion in Rhoades v. Avon Products, Inc. (full text here) we limit ourselves to the Court's discussion of the admissibility into evidence of statements made during settlement negotiations to prove facts necessary to demonstrate the existence of a federal "case or controversy."   

Very briefly, the Circuit Court in Avon reversed the District Court's dismissal of its competitor's trademark infringement action based upon defense contentions that:  (1)  no constitutionally sufficient case or controversy arose from threats to bring an infringement action during four years of settlement negotiations;  (2) existing TTAB proceedings justified dismissal of the action based upon the doctrine of primary jurisdiction; and, (3) the court properly exercised its discretion under 28 U.S.C. § 2201 in declining to assert jurisdiction.

Threats Made During Settlement Negotiations Are Admissible to Prove the Plaintiff's "Real and Reasonable Apprehension that It Will Be Subject to Liability if It Continues to Manufacture its Product."

As the Circuit Court explained, although “a simple opposition proceeding in the Patent and Trademark Office generally will not raise a real and reasonable apprehension of [an infringement] suit,” there are circumstances where notices of opposition can "create [such] apprehension . . . " 

In this case, instead of relying upon TTAB proceedings, however, Plaintiff cited "three alleged threats of a trademark infringement action in federal court."

Because these threats were made during the course of settlement negotiations, the defendant claimed they were not admissible in evidence to prove the necessary prerequisite to jurisdiciton in the District Court.

The court disagreed, holding that Federal Rule 408 did not restrict the use of litigation threats made during (and pursuant to) ongoing settlement negotiations.  We quote the Court at length here for the benefit of practitioners for whom the boundaries of the settlement negotiation confidentiality rules are critical. 

The text of the rule is clear: evidence from settlement negotiations may not be considered in court “when offered to prove liability for, invalidity of, or amount of a claim that was disputed
as to validity or amount, or to impeach through a prior inconsistent statement or contradiction.”

Rule 408, however, does not bar such evidence when “offered for [other] purposes
. . . ” [citation omitted] . . . [S]tatements made in settlement negotiations are only excludable under the circumstances protected by the Rule. 

Here, [defendant] does not rely on the threats in an attempt to prove whose trademark is valid, or to impeach Avon. Instead, it uses the threats to satisfy the jurisdictional requirements of an action for declaratory relief. This is perfectly acceptable under Rule 408. . . . .

Avon makes much of the “policy behind” Rule 408, as if any recognition of statements made during settlement will ruin the “freedom of communication with respect to compromise” that the Rule protects. [citation omitted] Yet the Rule, by its own terms, is one of limited applicability. . . . Rule 408 is designed to ensure that parties may make offers during settlement negotiations without fear that those same offers will be used to establish liability should settlement efforts fail. When statements made during settlement are introduced for a purpose unrelated to liability, the policy underlying the Rule is not injured. 

Id. (emphasis supplied).

The Result Would Be the Same if the Threats Had Been Made During a Confidential California Mediation Proceeding.   

If the defendant's threats to bring an infringement action were made during a confidential California mediation proceeding, they would not be admissible in a California court for any purpose.  Unlike rule 408 or its California counterpart, CCP section 1152, the provisions governing the confidentiality of mediation communications are not limited by their own terms.

Under several recent federal decisions, however, they would likely be admissible for the purpose of determining the existence of a "case or controversy" under federal law.

The District Court in ABM Indus., Inc. v. Zurich Am. Ins. Co. (N.D. Cal. 2006) 237 F.R.D. 225, for instance, permitted the plaintiff to amend its complaint to allege bad faith settlement practices based upon the insurance carrier's conduct in the course of a California-based mediation.  Although the Court based its ruling on defendant's waiver of the issue, it suggested that it would not be required to apply the California mediation "privilege" /* in any event.  

We thus need not consider whether a federal mediation privilege exists to bar use of the letter for purposes of demonstrating the removability of the case. Nor need we decide whether it may be appropriate in some cases concerning the amount in controversy for federal jurisdiction purposes, pursuant to Rule 501, to defer to state law evidentiary privileges out of comity and respect for state policies. See Conference Report on Rule 501 of the Federal Rules of Evidence, H.R. Rep. No. 93-1597, at 7-8 (1974) (Conf. Rep.), quoting D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 471 (1942) (Jackson, J., concurring) (“In some cases [federal courts] may see fit for special reasons to give the law of a particular state highly persuasive or even controlling effect . . . .”).  

Thanks to Hamline University School of Law for this case from its Mediation Case Law Project here.

Subsequently, the Ninth Circuit explicitly held that the California mediation "privilege" /* did not apply where the question before the District Court was the amount in controversy necessary for a diversity action to proceed in federal court.  See Babasa v. LensCrafters (thanks to California mediator Phyllis Pollack for the case summary and link here).  As the Circuit Court explained:

Under Federal Rule of Evidence 501, privileges provided by state law apply in civil actions only “with respect to an element of a claim or defense as to which State law supplies
the rule of decision.” FED. R. EVID. 501; [remainder of citation omitted] State law does not supply the rule of decision here. Federal law governs the determination whether a case exceeds the amount in controversy necessary for a diversity action to proceed in federal court. [citation omitted].  Thus, even if the California mediation privilege applied to the Bruinsma letter, which we do not decide, it would not preclude a determination that the Bruinsma letter constituted § 1446(b) notice for purposes of removal to federal court.

/*   The Court's use of the term "mediation privilege" is not simply a harmless misnomer.  Because California mediation confidentiality provisions are not privileges under California law, they are not, for instance, subject to the same exceptions as California's evidentiary privileges such as those protecting attorney-client communications.  Whether this would have (or could) make a difference in the federal court's analyses of the applicability of the confidentiality protections for mediation in California remains an open issue.

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The IP ADR Bloggers have just gone "live" with our new web site:  ipadr.com.

Come on by and check us out!  

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Deal Yourself a Winning Hand

November 13

Los Angeles

 (photo:  Four Aces by Ian Grainger)

 Novice and seasoned litigators will learn to maximize the value of their litigation positions by learning winning settlement techniques from a panel of seasoned ADR experts.

Experienced mediators and Judges teach the latest settlement techniques, such as distributive (splitting the settlement “pie”) and integrative or interest-based (expanding the settlement “pie”) bargaining.

Topics also include the dynamics of conflict resolution, settlement best practices, negotiating techniques, settling complex and patent litigation cases, and international disputes. Don’t miss this chance to hear from those who truly know -- how you can best maximize your client’s settlement opportunities and outcomes.

Speakers

Complex Court Assistant Supervising Judge Victoria Chaney

Full-time Settlement Court Judge and Adjunct Professor (Straus Institute) Alexander Williams, III

The Hon. John Leo Wagner, Federal Magistrate (Ret.) (Judicate West Panelist)

Judicate West Neutral and Adjunct Professor (Straus Institute) Jay McCauley

AAA Arbitrator, Mediator and Patent Attorney Les J. Weinstein

Judicate West Mediator and Adjunct Professor (Straus Institute) Victoria Pynchon

For more of what you'll learn, click here.

Flyer and Order Form Here

Fees Individual: $349 per person

Group: $324 per person for 2 or more from the same company pre-registering at the same time.

Government employee/Non-Profit* Rate: $299

Students: $199 (current students only)

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Avoiding jury duty?  Would it be more convenient to serve from a laptop in your own home?

The disputes iCourthouse is apparently set up to handle appear to be of the Judge Judy variety.

Still, as law firms outsource patent applications and  legal research to India and litigants settle their disputes online (see posts on CyberSettle here and here)  can net jury trials be far behind?

Please do let us hear from anyone who's used either Indian legal outsourcing services or iCourthouse before.

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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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by Eric van Ginkel

You can probably guess that  most of us here at the IP ADR Blog think it's a good idea to  include in your ADR clauses specialty requirements for the arbitration or mediation of your  commercial or IP disputes. 

Not to mention a bad idea to serve your infant beer before bed! 

The need for an ADR neutral with specialized legal or industry knowledge is particularly true for patent litigation but also important for the other "soft" forms of IP disputes.  

Let's not go overboard however, by requiring that the arbitrator have at least twenty-five years experience in trademark litigation, an office in Santa Barbara County, belong to a lawfirm with at least five offices and no fewer than 1,000 attorneys, and . . . . serve his clients beer before bed!

Riduculous you say?  Don’t be surprised, I have seen weirder clauses.

The Beer Before Bed Amendment to the Business and Professions Code

I was reminded of this problem today when I came across a proposed amendment to the Business and Professions Code introduced by Gloria Negrete McLeod, California State Senator for the 32nd District (San Bernardino County) back in February of this year. It is currently on Governor Schwarzenegger’s desk awaiting his signature.


This is a good example of legislators going overboard.  

The proposed legislation requires the arbitration of disputes concerning the termination of an existing wholesaler by a company aquiring a beer brewery.  If the terminated wholesaler believes the new brewer has not paid him the fair market value of his distribution rights, the dispute over compensation must be submitted to arbitration. So far so good.  But here's where the legislation goes astray.

The proposed amendment requires that the arbitration of the dispute must be held

through a private arbitration services provider with at least three offices in California and a statewide roster of at least 70 neutral arbitrators, of which at least 30 have prior experience as a sole arbitrator in franchise, distribution, or related business litigation.

We don't even want to go tothe "additional amendments" that will govern the "arbitration process."

So, as in all things, moderation is key.

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(photo, left, Duke University Constitutional Law Professor Erwin Chemerinsky)

(courtesy of the Wall Street Journal Law Blog, we Interrupt this Post to Bring You the Breaking News that Chemerinsky has Accepted Irvine's New Offer).  

If you've been following the news about the U.C. Irvine Law School Brouhaha this week, you'll know what it feels like to hear a story out-of-sequence, over time and from different sources the same way arbitrators, mediators and juries do.  

I heard the astonishing news that U.C.I. had hired, then fired, one of the most highly respected Constitutional Law professors in the country -- for the expression of his political opinions in the Los Angeles Times -- over coffee and orange juice.  I didn't read the story; my husband just casually mentioned it from behind his newspaper. 

His summary was pretty much like that of the Orange County Register's:  

U.C. Law Dean Hired, Fired:   

UC Irvine officials hired and then promptly fired the founding dean for their fledgling law school, because he was "too controversial," according to Erwin Chemerinsky, the Duke University law professor who had already signed a contract to take the job.

Next thing I heard was that U. C. Irvine Chancellor Michael V. Drake -- the guy who fired Chemerinsky -- denied that politics had anything to do with his decision, stating that he had: 

made the very difficult decision that Professor Chemerinsky was not the right fit for the dean’s position at UC Irvine. I informed him on Sept. 11 that we were rescinding our offer and continuing the recruitment process. /**

The Story Plays Out

Chemerinsky says Drake found him "too controversial" and Drake says "I made a management decision -- not an ideological or political one -- to rescind the job offer." 

Though I still hadn't read the full story anywhere, I concluded that Drake must be  . . . well . . . dissembling.  The temporal connection between the appearance of a Chemerinsky Op-Ed piece on the death penalty -- and his nearly simultaneous termination made the connection between ideology and firing appear incontrovertible. 

When I finally had the time to read an L.A. Times article on the controversy, I was surprised to hear that Dean Edley of U.C. Berkeley's Boalt Hall School of Law, said Drake consulted him before withdrawing the offer.  I was even more surprised to hear that he didn't think Drake's decision was based on the content of Chemerinsky's public opinion, but rather upon the fact that Chemerinsky opined at all.  Most surprising was Edley's opinion that asking Law School Deans to stop writing politically polarizing op-ed pieces was normal and reasonable.    

Such is the power of expert opinion.  This made me re-think my position. 

"Judged too soon," I said, reading my husband the news article that evening.  

But there was more to come.   

By the time I'd heard that Chemerinsky here and Drake here had each published his own editorial in the Times, the Times was reporting that UCI [Was] Working on a Deal to Re-hire Chemerinsky. 

That was no suprise.  But this was.  Despite Drake's denial that he'd been "pressured" to terminate Chemerinsky by un-identified "conservatives," the Times learned that U.C.I. had received:  

criticism of Chemerinsky . . . [shortly before] Drake rescinded the job offer from . . .  California Chief Justice Ronald M. George, who criticized Chemerinsky's grasp of death penalty appeals [as well as] a group of prominent Orange County Republicans and Los Angeles County Supervisor Mike Antonovich [who] wanted to derail the appointment. 

Drake's colleagues are scratching their heads ("it's not like him") and UCI is doing some serious damage-control while Chemerinsky punts ("I'm not really thinking about it.").    

I should've checked the Wall Street Journal Law Blog first (the model of concise legal reporting) which I just now see reports Anthonvoich saying that "making Chemerinsky the head of UC Irvine’s new law school 'would be like appointing al-Qaida in charge of homeland security.'"  This is just embarassing for Antonovich and one wonders who would want to teach at a new law school in such an environment.  

Still, with feelings running into thermoneuclear  hyperbole, you can imagine the pressures Drake must have been feeling.

We're Deep Into the Social Psychology of Conflict Here

Early yesterday, I was pretty much believing Drake's explanation.  Chemerinsky acknowledged the pre-employment discussion they'd had about a Dean needing to focus on less controversial issues.  I assumed Drake knew Chemerinsky's appointment might be unpopular in Orange County. That's why Drake tried to ensure that Chemerinsky understood he'd have to tone down his public advocacy of liberal causes. 

Drake thought Chemerinsky got it, but he didn't. 

The same day the offer went out, Chemerinsky's op-ed piece appeared in the Los Angeles Times, raising just the type of problem that Drake had imagined might arise.  

Oh %$^#@!!!

If Drake's not now in a state of fear (which interferes with cognitive function) I'll eat my old Con Law textbook.  He must have felt the need to make a decision fast (which also interferes with reasoned and ethical decision-making -- time pressure).  If he rescinded the contract before the Regents approved it, he wouldn't have to "fire" Chemerinsky.  He could just withdraw the offer.  

I'm assuming that Drake wasn't feeling very good about having to "fire" Chemerinsky in response to pressure.  I'm also assuming he was irritated to be dealing with this problem after his little chat with Chemerinsky about op-ed pieces.   It may well have been against his own principles to be rescinding the offer.  

He doesn't want to tell Chemerinsky that he's changed his mind because of the op-ed piece. It just feels wrong.  So he does what anyone in a bind under time and outside pressure might do.  He blames somebody else, some unidentified "conservatives."  Chemerinsky won't think badly of Drake for that.  He'll understand. 

But That's Not What Happened

In the absence of information, people make stuff up.  And that's precisely what I had done.  

Drake had been pressured by conservatives and he'd folded like a lawn chair.  He'd told Chemerinsky the truth, not simply provided an excuse or shifted the blame.  But when the news cameras were rolling and the reporters were biting pencils hovering over news pads, Drake blinked.  The reporters would want to know who had pressured him and that would be messy.  So Drake said he hadn't been pressured.  It was a management decision.

Here's the Social Psychology of Conflict -- FINALLY!!

I was just talking about Bazerman et al.'s new working paper Why We Aren’t as Ethical as We Think We Are: A Temporal Explanation earlier this week.  Bazerman and his colleagues report that we believe we'll be more ethical in the future than we really will be and that we rearrange our recollection of past events to recall that we acted more ethically than we actually did.    

No one is immune from "errors" in prediction -- "forecasting errors" -- and we are most likely to make them in the heat and stress of conflict.  As Bazerman, et al. report, in controlled negotiation experiments,

individuals who imagined facing a very competitive opponent predicted they would be much more competitive and more likely to stand firm than those who imagined facing a less competitive opponent . . . [When confronted with a competitive negotiator, however]  participants gave in and agreed to worse outcomes than they predicted they would.

The findings are not much different for "mis-remembering" the past.  As Bazerman, et al. explain:

There is substantial evidence that people selectively remember past events in a manner that supports their preferred self-image. It is widely assumed that memory for affectively potent information about oneself is highly selective (i.e., distorted) . . . 

While convenient for our self-esteem (and even our happiness), the selective memory mechanism represents a barrier to an accurate understanding of our ethical selves and thus impedes our ability to strive for higher levels of ethics in our everyday lives.

But what does this have to do with the U.C. Irvine mess or negotiation for that matter?

A lot. After all, the U.C. Irvine "mess" is really just a negotiation gone extremely bad, as too many negotiations do, resulting in the disruption of plans, strained or severed business relationships and, too often, litigation.  At U.C. Irvine, it means plans to open the school in 2008 have been stalled.

Bazerman again:

Effective decision-making requires accurate planning and reflection on one’s decision  . . .  The contextual inconsistencies that exist in the prediction, action, and evaluation phases, however, circumvent these critical feedback loops.

Here are a few suggested solutions to making as reasonable and ethical a decision when under pressure as we hope to make when in a state of rest, any one of which might have helped Drake do the right thing -- or at least the most prudent one -- in this instance.  

• Recognize our multiple selves

[T]o make more ethical decisions, people first need to recognize their own susceptibility to unconscious biases. This entails recognizing that our behavioral forecasts are incorrect, that our recollections of our past behavior are subject to cognitive distortions, and that the roles of the want and should selves are misaligned.

• During action, increase the influence of the should self

No matter what we do during the prediction phase, the "should" self needs to be able to flourish during the action phase if we are to improve our ethical behavior. This entails increasing the power of the should self during this phase while controlling that of the want self.

[A]n effective way to overcome an immediate temptation (i.e., eating a tasty pretzel) is to refocus one’s attention from the concrete qualities of the temptation (how yummy and tasty the pretzel is) to its abstract qualities (thinking of the pretzel as if it were a picture of a pretzel).

• Increase the prominence of the should choice by changing the temporal distance between the decision and its consequences

[I]mplementing long-term ethical action might require acceptance that we cannot get agreement if we try to implement decisions now (e.g., in Congress), but that our chances will go up if we accept a delay in implementation. . . . . [I]t is far easier [for example] to get employees to start saving for retirement if you ask them to agree now to implement the decision later than if you seek an immediate take-home-pay reduction now. .

• Ensur[e] that the ethical infrastructure promotes ethical versus unethical decisions, reducing uncertainty surrounding the decision, and addressing the euphemisms that disguise the ethical implications of the decision should also allow the should self to be a more dominant force during the action phase.
  
• During action, decrease the influence of the want self

In an ethical dilemma, when people understand that their want selves will drive their decisions, they may be able to use self-control strategies directed at that self . . . Part of this strategy may involve pre-commitment devices. Rather than focusing on the should
self, these devices seek to suppress the rearing of the want self.   

We'll apply these principles to IP Disputes in our next post on the Social Psychology of Conflict.

_____________________

**/  Any first year law students reading this post will find the reason why this is not a breach of contract in Drake's short statement.  The offer, though accepted, was "contingent" upon approval by the Board of Regents.  The offer was withdrawn before that contingency occurred.  

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O.K., I never listen to Talk Radio because it's all about conflict and I get enough conflict in my day job.

Here's a relief, some talk radio exists to FIX YOUR CONFLICTS.

Upcoming Doug Noll and Robert Creo, both masters in the field, talk about making felicitous that which is already necessary -- dealing with conflict.  

CHECK IT OUT HERE 

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(photo -- Friendster or Foe -- and comment here) 

We learn this morning (via StumbleUpon kismet) that Love Deactivates Brain Areas for Fear, Planning and Critical Social Assessment.   

Briefly, it appears that

love [not only] turns down activity in some areas of the brain in part so that we will not see flaws in the object of our affections [but also that]  particular locations are deactivated . . . 

Among other areas, parts of the pre-frontal cortex – a bit of the brain towards the front and implicated in social judgment – seems to get switched off when we are in love and when we love our children, as do areas linked with the experience of negative emotions such as aggression and fear as well as planning. The parts of the brain deactivated form a network which are implicated in the evaluation of trustworthiness of others and basically critical social assessment. (Future Pundit's full post here).

What does this have to do with negotiated settlements?  A lot.

The parties to litigation often enter the mediation room or settlement conference chambers in a state of "autistic hostility," i.e., the litigants have each maintained a hostile relationship with one another without any opportunity for adjustment of their attitudes based upon the other's post-dispute conduct.   

We also know from Professor Thompson at Northwestern that "in controlled experiments, only seven percent of negotiators sought information from their bargaining partner that would have revealed [his/her] true goals when it would have been dramatically helpful to do so."  Thompson, The Mind and Heart of the Negotiator.

Why?

Because the parties not only withhold information from one anotheer, but often fail to even ask questions because the level of distrust is so high. 

Should they trust one another more?  Well, maybe a little.  They might, for instance:

• trust that their bargaining partner isn't so self-destructive that s/he would forgo the opportunity to negotiate a resolution to satisfies the greatest number of her interests just to deprive her opponent of similar benefits;
• trust their bargaining partner to behave with a sufficient degree of civility and candor  to justify a joint session in which genuine low levels of trust may begin to develop and grow so that the parties can begin exchanging the information that is so often critical to an optimal  negotiated resolution.

Certainly there are times when all of our defenses must be activated to avoid harmful admissions and prevent your opponent from gaining an unfair litigation advantage.  I find, however, that in joint session, business people are able to guage these matters with a great deal of intuition and insight.  The mediator can also be used in break-out sessions to raise issues about which the parties are feeling vulnerable.

Bottom line?  You needn't love your adversary to negotiate a dynamite deal.  Nevertheless, the strategic use of joint mediation or settlement conference sessions may well give rise to a sufficient degree of fellow feeling to "deactivate" some of your brain's "danger-here" defenses, permitting a deal-expanding exchange of critical information between the parties.  

Try it.  You don't have a lot to lose but you do have a great deal to gain.

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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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by Eric Van Ginkel

Remember Martha’s conviction for perjury that sent her off to jail a few years back? She served a 5-month prison term and 5 months in home detention (not so bad, I guess, if your home sits on 153 acres!). Her conviction, if you recall, arose from allegations concerning insider trading of ImClone stock.

Jail was also the fate for ImClone founder Sam Waksal, after he pleaded guilty to charges of securities fraud and other charges relating to insider trading, as well as wire fraud and other charges in connection with evading sales tax on some significant art purchases. Sam is still serving a seven years and three months sentence (about three more years to go).

Here is the news: ImClone just announced it has settled the patent suit that Repligen and MIT initiated against it.

The suit involved ImClone’s cancer treatment drug, Erbitux.

The connection?  Erbitux was the drug at the center of Sam and Martha’s insider trading debacle.

So, in a way, this is the end of the Martha/Erbitux saga.

Why do I write about this case?

Because it settled only one week before trial. 

That means, of course,  that all discovery was completed, briefs written and trial preparation done. Imagine the millions of dollars wasted before the parties came to the bargaining table ready and willing to finally negotiate a settlement that constituted a better alternative to the cost and uncertainties of trial. 

For ImClone, not all the misery is behind it. It is still facing the lawsuit Abbott lodged against it earlier this year.

Could this be a wake-up call to ImClone and Abbott?

It's not just about "trying mediation" anymore.  It's about having the skill-set necessary to make the mediation or settlement process as important as the litigation process.   It's about "thinking like a negotiator" as often as you "think like a lawyer."

How does a negotiator think? 

S/he thinks like a lawyer about interests instead of about legal positions.  

More on the negotiation mind-set in future posts.

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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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(photo right i hate da flea by ms. oddgers)

If you don't yet know New Zealand mediator Geoff Sharp's blog Mediator blah blah . . . you're missing an opportunity to see one of the best facilitative negotiation coaches on the planet work what some may call "magic" but is really just drawing out the best in the litigants. 

Today's post on business accountability (Eat Toast in Bed -- Go to Sleep with Crumbs) exemplifies why I vastly prefer to mediate the type of commercial and IP cases I litigated -- the litigants are business people who will choose the pragmatic future over the vengeful past any day of the week.  

Here's an excerpt of Geoff's post.  For the unedited version, click here.

I [recently] ever so gently broached the subject of responsibility. . .

In [a joint venture] case [I asked the litigants] what . . . they [would] factor in for their own decision to partner with someone who was perfectly honest and competent, but just ended up not to be a good fit for them?

The response[ was] were interesting. 

[T]he JV people were, it turned out, angry at themselves for a rare lapse in judgement and happy to learn (and pay for) a lesson that would stand them in good stead for the future.

As they said, a little harshly I felt - 'if you lie down with dogs - you get up with fleas'.

And thanks, as always, Geoff, for reminding me that the well-placed question in a settlement negotiation can do more work than a thousand persuasive arguments.

If you live or work in New Zealand, we here at the IP ADR Blog of course encourage you to hire this man if he can fit you into his busy schedule.

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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