IP ADR Blog

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 pursu