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

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

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

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

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

For full article, click here.

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

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

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

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

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

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

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Courtesy of Charles Fincher at the LawComix Blog. 

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

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

A:  "That's right."

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

A:  "Yes." 

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

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

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

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

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

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

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

____________________

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

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

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

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What can be done to . . . . to stop the international “IP war”?

Read the full-on analysis of the problem to appreciate this excerpt of the solution at Duncan Bucknell's IP Think Tank here. (or download a .pdf here)

The lengthy article by by Dr. Roya Ghafele, Lecturer, University of Oxford is more than worth your time.  I'm hoping that Duncan's posting -- and ours -- will begin a new conversation in the IP blogosphere about our continuing struggle to come to terms with the tensions created by the new global connected culture and the old law of intellectual property.  Below, an excerpt of some proposals for resolution.

Both, business and civil society have an “incentive” to move from a stage of war to a constructive, solution driven approach. For business the increasingly negative publicity that IP is giving it, may actually translate into serious bottom line profit losses due to loss of reputation and image. For civil society again, the stage of continuous critique can not be maintained either. At some point in time donors do want to see solutions and constructive output. Thus, there are good chances to move from a “win” to a “win-win” situation.

So far, IP has been largely looked upon from a legal perspective, which comes as no surprise since current educational systems worldwide only train lawyers in IP. Economists, political scientists, sociologists, historians or even engineers know most of the times very little about intellectual property.  A pity, since it is exactly this multidisciplinary perspective that is needed to turn IP into a tool for economic, social and cultural prosperity and leverage it as a means for wealth and welfare creation.

A different perspective on IP, one that looks at it as a strategic asset more than a legal framework gives way to new managerial perspectives on intellectual property.  While so far, the readjustment of the IP system has primarily been looked upon through the perspective of compulsory licensing (again a very legal approach to IP management), few have taken a more pragmatic approach and asked what types of management choices may work towards obtaining inclusion and an equitable distribution of research and development findings within the existing intellectual property framework.

Public interest IP management seeks to offer strategic choices on how to reconcile the existing contradiction between the exercise of exclusive rights and the universal right to equitable access. Innovation functions as a public private partnership; according to current research by Ashley Stevens at Boston University the vast majority of FDA (Food and Drug Administration) approved pharmaceuticals were developed with public sector support. While the public sector is asked to thoroughly negotiate agreements in the public interest, business can explore opportunities to leverage IP for the wider public interest. 

Public interest IP management comprises different approaches to ownership and access of IP and makes use of market and non-market incentives. It includes defensive publication, the pre-emptive creation of a public domain (including waiving of IP rights) and a deliberate deployment of legal exclusions. The application of the right to exclude can further be used to safeguard the open quality of a shared innovative domain. 

A good example is “humanitarian licensing” where IP is being licensed to market participants on the condition of several tied in arrangements.  In this case the licensor tends to reserve the right to license the technology also out to developing country producers or allow for parallel trading. It is further common practice to assure in licensing agreements “public interest” clauses that aim not only to assure commercial, but also public welfare gains. In practice, “humanitarian licensing” works if regulatory frameworks are in place clarifying ownership over IP developed in the public domain as well as sufficient practice in managing IP. 

A comprehensive, strategic IP approach furthermore represents the public interest as early as the selection phase of a research topic and plays a decisive role in the interaction between the public and the private sector. An ex-ante IP strategy is different from an ex-post intervention. The latter are only public interest remedies treating IP as a commodity, where negotiation is only possible over price. 

Read on here.

I'm most interested in what Dennis Crouch at Patently O, Jackie Hutter at the IP Asset Maximizer Blog, David Donoghue at Chicago IP Litigation Blog and Jeremy Phillips at IP Kat have to say on this topic.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Get it together.  Please.

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We talk a lot here at IP ADR about ascertaining and fulfilling party interests to help you settle your patent, trademark, copyright or trade name and trade dress litigation.  As Entrepreneurship Magazine recently reported in getting into the mind of your negotiating counterpart, knowing your negotiating partner's desires, aims, goals, needs and fears (its interests) will go a long way to getting you the best deal available.

Getting a solid grasp on the other party's interests will help you:

* Determine what you have or can do that might be of value to them, which can make it easier to figure out how best to get what you want;

* Craft deals that acceptably satisfy the other party's interests, which will increase the likelihood that the deal will be sustainable (since the other party will be motivated by their own self-interest to successfully implement the deal);

* Uncover potential sources of value that might otherwise have been missed, which will increase your ability to invent creative, value-maximizing solutions.

Now, thanks to Las Vegas Trademark Attorney's recent post welcoming Michael Hall to the Trademark Blogosphere [Registration Ruminations]we learn how to Help[] Yourself by Helping Examining Attorneys.  In other words, by satisfying examining attorneys' "earned point" interests.

Back in December 1997, Fordham University School of Law hosted a discussion at which Judge Quinn of the TTAB and other panelists spoke about PTO practice.  Richard Friedman, a former examining attorney who had moved on to the NBA (as counsel, not a player!) explained how it works:

[I]f an examining attorney pulls an application that is in perfect order and can be passed right to publication, that is two points for the attorney.  The examining attorneys love that.  They are already thinking ahead to their bonus at the end of the year when they do something like that.

So your job should be to concentrate on making an application two-points perfect. . . .

Let’s say some kind of substantive refusal area comes up, but it is a gray area — not the easy section 2(d) case or the easy descriptiveness refusal.  Let’s say the examining attorney pulls an application that is in a gray area, but everything else is okay.  The examining attorney is apt to say, “All right, I am going to take my chance and not send the refusal so I can get those two points for that first-action publication.”

If, however, there are other things wrong in the application papers, little stuff, and they are going to have to send you a letter anyway, then they might as well put in the substantive refusal to cover themselves.  That is the way things work, whether we on the outside like it or not.

Discussion, Trademark Prosecution in the Patent and Trademark Office and Litigation in the Trademark Trial and Appeal Board, 8 Fordham Intell. Prop. Media & Ent. L.J. 451, 461 (Winter 1998).

In 2005, The Trademark Reporter published an article on the registration of product configuration trade dress with respect to three product types.  For one, the authors specifically observed:

To the extent one central theme existed, those who submitted their evidence of acquired distinctiveness at the time of filing the application, or before USPTO examination, appeared to avoid any challenges to the sufficiency of the evidence provided.

Karen Feisthamel, Amy Kelly, & Johanna Sistek, Trade Dress 101: Best Practices for the Registration of Product Configuration Trade Dress With the USPTO, 95 Trademark Rep. 1374, 1383 (November - December 2005).

This particular study involved a narrow field, but the authors’ observation makes perfect sense if you’re looking at it from an examining attorney’s perspective.  As Richard Friedman said, “The way to make your life easier when prosecuting trademarks at the PTO is to make the examining attorneys’ lives easier.”  Needless to say, following this strategy does not remotely guarantee that you won’t receive a refusal, and obviously there will sometimes be good reason to file an application that you know will result in an office action.  However, it puts you in a position where the examining attorney might be inclined to resolve a close question in your favor.

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

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

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

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

CONTINUE READING HERE

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From the Wall Street Journal's Market Watch, Famed patent firm backs study on touchy subject; Myhrvold, Lemley's study aim for academic neutrality, but some are skeptical

 

By John Letzing, MarketWatch

 

SAN FRANCISCO (MarketWatch) -- Nathan Myhrvold, a former high-ranking Microsoft Corp. executive turned intellectual property mogul, is sponsoring a forthcoming study that aims to resolve a thorny legal issue: Who's responsible for flooding U.S. courts with a torrent of patent litigation over the past decade?

It's an ambitious project, but one also likely to elicit a good deal of cynicism.

That's because while Myhrvold's firm Intellectual Ventures anticipates fostering companies that turn its intellectual property into products, it hasn't yet. Instead, it's focused on amassing tens of thousands of valuable patents through invention, acquisition and partnering with businesses and universities.

That approach generally defines a firm as a so-called "non-practicing entity," though within the technology industry a more derisive term is often used -- "patent troll."

Big technology companies such as Myhrvold's former employer Microsoft Corporation have long complained that many non-practicing entities not only trade in patents without developing products, but also increasingly use them to target deep-pocketed companies with infringement lawsuits. . . . . .

 

If the study finds that non-practicing entities have played a relatively minor role in the rise of litigation, it is likely to raise questions, given the involvement of Intellectual Ventures.

"I'm excited to hear what the results are, but when they come out I'll be sure to take them with a grain of salt," said Kelly Hyndman, an intellectual property attorney with Sughrue Mion PLLC.

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

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

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

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

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

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

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

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

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

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

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

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

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Live Telephone Seminar

ADR in IP Litigation from ALI-ABA

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

Why Attend?

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

What You Will Learn

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

How to choose between litigation and ADR.

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

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

Planning Chair

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

Faculty

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

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

Chief Judge Michel: The State of Patent Law

by R. David Donoghue

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

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

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

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Remember those days - largely before you went to law school - when you believed all lawyers with whom you were going to practice would evidence the benefits of a classical education?    I believed.  As did two ex-husbands until they first attended law firm holiday parties.  No mariner ever pulled them away from the hors d'oeuvres table to arrest them with the power of a seafaring tale. 

Alas, we divorced years and years before I could give them Blawg Review #189 as Exhibit A to restore their pre-law belief in the well-educated and sophisticated legal practitioner.  In #189, Colin Samuels restores the image of the legal profession by following the tale of the Ancient Mariner -- he of the "long grey beard and glittering eye" -- who weaves an irresistible narrative for the transfixed wedding guest, a story seared into the memories of those of us who happily squandered our University years studying literature.  ("what are you going to do with a literature degree, honey?")

Audaciously comparing those of us who blog to the mighty Coleridge, Colin Samuels writes:

As writers, many of us have struggled to find our voices online. Do we write as we would speak to friends and colleagues or as we would write for professional publication? Do we censor ourselves or seek controversy? Do we write on non-legal topics or maintain a strictly professional image online? Will our writing be an end in itself or a means to another end? Each new legal blogger has asked these and many other questions of himself or herself, only to find them being asked again and again as his or her blogging continues. As highly-educated professionals, we are often the severest and most persistent critics of our own writing.
 

Like the Mariner, Samuels' most recent Blawg Review (see his previous brilliant efforts based upon Dante's  Hell, Purgatory, and Heaven) so arrested my attention that I didn't even do what I must admit I always do with Blawg Review -- skim down to see whether one of my weekly posts was included (not).

I can only say to you:  Read it.  Now.  And if you're looking to justify your IP time, here are the IP links you will find woven into one of the great narrative poems of English Literature.

Venkat Balasubramani wrote that the government's use of the Computer Fraud and Abuse Act has led to a muddled discussion which confuses two separate issues: "Somehow the discussion has shifted from whether it's appropriate to use Ms. Drew's commission of a tort to support a CFAA conviction to whether the CFAA should cover access in excess of a website's terms of use. Two conceptually distinct issues that people tend to conflate."

The Media Bloggers Association legal blog explained the import of the verdict for bloggers: "There is understandable concern among many online commentators about the implications of the particular legal theories that formed the basis of the convictions, based fundamentally on the violation of various levels of online terms of service that are seldom more than glanced at and clicked through by experienced Internet users. The MBA encourages responsible use of the online resources via its Statement of Principles...."

Shortly after the verdict, Orin Kerr posted a tongue-in-cheek revised Terms of Service for The Volokh Conspiracy blog. These revised terms, which required such user promises as "Your middle name is not 'Ralph'," "You're super nice," and "You have never visited Alaska," were meant to illustrate how easily (and routinely) we can violate the use terms of many sites, resulting in potential criminal liability after the Drew decision. Scott Greenfield commented that "As terms of service go, Orin's are relatively reasonable." Greenfield noted that his blog has only one rule ("No assholes"), but that he has and will apply it arbitrarily and ruthlessly.

Frank Pasquale considered whether Google, which has become a gatekeeper for much of the world's online information, should have the right to censor that information: "Bottom line: someone in government has to have the right to determine "if the search algorithm [has become] biased." Without that basic assurance, black box search engines now are about as big a menace as the black box economy was five years ago. We trust the math wizards at Google now as much as we used to admire the financial innovators at Bear Sterns and Goldman. Only time will tell if our faith in the mathematicians was misplaced yet again." Meanwhile, Google's weak sister, Yahoo!, has apparently thrown in the towel on its internet radio project, ceding the project to CBS. David Oxenford discussed whether the move would affect the decisions recently made by the Copyright Royalty Board, which relied at least in part on arguments about internet radio's economic power which have not been borne out.

Maya Richard suggested four tactics to preemptively protect patent assets from patent trolls: monitoring patent filings for applications related to your portfolio; hedging risk with patent infringement insurance; retaining skilled IP counsel to build a case for major patent assets; and joining an industry protection group. Also writing on a patent-related topic was R. David Donaghue, who noted that despite the Twombly decision, "many district courts are requiring that patent defendants plead affirmative defenses and, in some cases, counterclaims to the higher plausibility standard." He suggests remedies for this uneven application of the Twombly standards.

id you think road kill would be the most unlikely legal topic addressed in this Blawg Review? Hah! Ron Coleman explained that "tackiness is not grounds for refusal to register" a trademark. The owners of the Chippendale's male striptease concern are hoping to register their distinctive collar-and-cuffs costume as a trademark and Coleman pointed out that they've lined-up some considerable legal and expert support for their efforts. John Welch noted that the PTO has already "conceded that the Chippendale 'outfit' is product packaging rather than product shape" and Ryan Gile added that, faced with "400 pages of evidence [presented by Chippendale's, the] PTO had no problem recognizing that the Chippendales trade dress had acquired distinctiveness." Rebecca Tushnet suggested that the claims were limited in the application, but confused rather than clarified matters: "If the fact that the torso wearing the collar and bow tie is unclothed is not part of the mark, then any man in an outfit with cuffs and a bow tie is copying the Chippendale's mark."

Blawg Review sails on next week when Marc Randazza and his Satyriconistas at The Legal Satyricon host.

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

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

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

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

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

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

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

Join BrightTALK for the Intellectual Property Summit here!

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

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

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

Bilski: the impact on US patentees

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

Patents : Part IV - Business Methods

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

Negotiating a Settlement in IP Litigation

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

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A truly excellent post over at IP Asset Maximizer Blog on reducing legal expenses while still protecting your inventions.  To give you a taste before you speed on over there, blogger and self-described "Intellectual Property and Patent Business Strategist and 'Recovering Patent Lawyer'" Jackie Hutter suggests that the "disciplined" entrepreneur will

obtain[] patent rights that are adequate, but are not so broad as to fully protect the upside opportunity associated with the innovation. The risk to such an approach is that if the innovation is a runaway success, the patent rights may not be broad enough to fully exclude competition. Few product or technology innovations are truly runaway hits, however, so the organization that decided that not all patents must be gold-plated would probably come out significantly ahead in patent legal spends.

To business people, we attorneys can seem like overly anxious mother (and father) hens in the provision of both transactional and litigation services.  I learned this early as a paralegal (back when New York City was bankrupt and Times Square truly frightening to the 23-year old who took her lunch breaks prowling mid-town Manhattan).  Though I worked for the head of the litigation department, my desk was outside the door of the attorney who advised Uniroyal about the potential problems posed by their advertising.  He made the litigators look like pussy-cats, shouting on a daily basis at whoever it was in the ad department who just wanted a little room to create, man, and the "suits" were always worrying about liability for goodness sakes when it didn't much matter if someone sued you if you weren't selling any $%#@^% tires!! (or Sperry Top-Siders).

So remember, everything in moderation.  As Jerry McGuire's infamous mission statement exhorted:  fewer clients; less money. 

(by the way, that's my good friend Russel asking "do you know your name?")

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

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

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

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

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

Finally, the all-important reminder:

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

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

This one from Studionebula.com.

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

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

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

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

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

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

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

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

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

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

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

So what do I mean when I say LegalTED? 

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

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

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

Looking forward to it!

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

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

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

September 19, 2008

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

But both men said they appreciated Prosper's tenacity.

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

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

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

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

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

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

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Thanks, first, to Google Reader for offering me feeds to blogs it knows I'd like but don't have (like Peter Zura's 271 Patent Blog) and then making it easy for me to add them to my Reader, which I can now read on my iPhone thanks to Apple.  Really.  I'm grateful (but could someone now please replace Outlook with a program that doesn't move at a glacial pace?)

On to the real purpose of this post with a hat tip to Peter Zura's 271 Patent Blog for this item out of Denver.   

Lofgren, D-Calif., told a crowd in Denver on Tuesday that it is crucial for Congress to pass legislation to update the U.S. patent system next year -- . . . 

Lofgren, who represents the Bay Area and is a key member of the House Judiciary Committee, said a new effort should begin with "things we know we can agree on." A proposal that would curb judicial "venue-shopping" for favorable courts is critical as is language to address patent abuses, she said. "How do you legally set a framework that prevents abuses and allows for a vigorous system that protects intellectual property?" Lofgren asked aloud. "It's not easy to come up with solutions."
 

Is talking about the things we agree upon first always the best negotiation tactic?  It's certainly helpful when you're brainstorming solutions to intractable disputes -- here -- "set[ting] up a framework that prevents abuses and . . . . a vigorous system that protects intellectual property."

When the debate is particularly rancorous, as is often the case in patent infringement litigation, dove-tailing the parties' differences -- an issue upon which they invariably agree -- is one of the best ways to locate and maximize value to both parties.  Lax and Sebenius in their must-read 3-D Negotiation remind us that "complementary differences -- pairs of high benefit-low cost items" in which one side values the point highly and the other can provide it at relatively low cost is a good place to begin.

Small talk at the commencement of negotiations -- which itself increases the likelihood of a deal -- is one way the parties can locate these high-benefit-low cost items, particularly where they haven't identified them before the negotiation begins.  What kinds of items are easily dove-tailed?  Lax and Sebenius provide us with the categories as follows:

Dovetailing Differences in Forecasts or Beliefs about the Future.

Because the settlement of patent infringement litigation invariably requires one party (or both!) to license the other, the parties' differing expectations of market success or likely technological changes that could make the IP less valuable or even obsolete, are a good place to look for the high benefit-low cost synergies mentioned by Lax and Sebenius. 

If party A firmly believes that sales are going to increase over the next five years and party B is "certain" that they will decrease, their differences in future projections can be dove-tailed by a graduated schedule of fees.  Party B -- who believes there will be minimal to no sales in year five -- can offer higher royalties in year 5+ and lesser in the earlier years.  The attempt to dove-tail these differences is also a good way to call your bargaining partner's bluff.  You'd be amazed how quickly  certainty drains from party predictions when they're asked to put their own money on the gamble.

Dovetailing Differences in Attitudes Toward Risk

I recently negotiated the settlement of a patent infringement case in which Party A and B were considering a merger of the two companies as a means of settling their disputes.  Both parties held multiple patents, a few of which were being litigated in other proceedings. Both parties' valuation of the risk of loss if the event of adverse judgments was approximately the same, i.e., there were no material differences in the parties' forecasts about the future outcome of the lawsuits.

The parties did, however, have substantially different  attitudes toward risk and differing abilities to sustain losses.  Party A, by far the richer player, was much less averse to the outside risks of the pending litigations.  Party B was concerned that the the value of the merged company -- his only real asset -- could be destroyed in the event all of the lawsuits were successful.  The parties had reached impasse on the value of B's shares and of the merged enterprise primarily because of these uncertainties.  Because Party A could weather the outside risk, it agreed to assume it (wagering not only on his ability to satisfy potential judgments but his insurance carrier's willingness to settle existing disputes over coverage).  When these uncertainties were removed from B's plate, he was willing to assign far more value to the merged company, enabling the detailed negotiations for the merger to commence.  /*

For more hypothetical examples, see the following 3-D Negotiation Risk Attitude Dovetailing sub-sections -- Selling a Restaurant; A Joint Venture of Opposites, A Public-Private Real Estate Deal and Assessment Ambiguities.

Dovetailing Differences in Attitudes Toward Time

This category of dovetailing is very like my first hypothetical.  Here, however, the differences in expectations (and desires)  concern the mere passage of time coupled with party shares in a joint venture.  Here, Party A is impatient for immediate returns on his investment, which he needs to fund a new enterprise.  Party B, who is older than A and looking forward to retirement, is more interested in creating a stream of income in the future.

In this scenario, Lax and Sebenius suggest a structure in which Party A earns a smaller share of the early profits and Party B earns a larger share of the later profits.

All of these potential solutions to intractable litigation involve high level financial planning and business forecasting that are far beyond the scope of most "pure money" disputes.  There are few patent infringement disputes, however, that couldn't be more easily resolved by dovetailing party differences.  The law firm's settlement team should be devoting as much time, thought and energy to negotiation planning as its litigation and trial team is devoting to just winning the darn thing.   

______________________

*/   Facts greatly simplified to protect the confidentiality of the mediation and to avoid discussion of unnecessarily complex financial transactions.

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I recently posed the following question to the IP ADR Blog's readers and to my LinkedIn network:  

Which patent infringement litigation parties (if any) benefit from the inefficiencies in the process? 

As usual, my LinkedIn Network delivers.  

The really terrific, thoughtful answers to the question below. 

Thanks to each one who answered.  I'll be following this up with an article or lengthy post soon.

Unless the litigants are disproportional in size there are no winners from these inefficiencies. One can even say that the biggest losers in this process are not even a party to the case. I'm referring to the consumer or the true bearer of the inefficiencies and related cost.

The speed of innovation, the product development, and the marketing efforts will continue to evolve into quicker and more efficient cycles. At some point the legal process will be forced to adapt. A good example of this is the Federal Rules of Civil Procedure on Electronic Discovery.

Change is good, and depending on how business is conducted, it may also be a necessity.

Francis Bueb CPA, CITP of Ueltzen & Co. 

Unless a preliminary injunction is granted, the defendant in a patent infringement case will likely benefit from a longer and less efficient process. Defendants usually want the plaintiff to have to keep shelling out money to keep the litigation furnace burning.

On the other hand, sometimes a plaintiff who is granted a preliminary injunction just wants to keep the defendant out of the market as long as possible. In such a case, the parties are likely competitors and the longer the defendant's competing product is off market the better for that plaintiff. Sometimes, even a litigation loss is a win for such a plaintiff if, say, the plaintiff's product is replaced by a newer version that is accepted by the consumers before the end of the litigation over the product that is replaced. 

Ryan H. Flax, IP Attorney, Dickstein Shapiro, LLP 

The one with more money.

Ed Green, Patent Lawyer, Coats + Bennett
 

The sad truth is that only the defense attorneys benefit from inefficiencies in litigation because they are charging by the hour. As for the litigants, the Plaintiff usually wants a trial as soon as possible. So, inefficiencies and delay benefit the Defendant, i.e. the accused infringer.

Scott C. Kinsel, Partner, Moore Landrey LLP

In fact the Plaintiff would be at lose because he/she may not get justice immediately. There is a proverb, “justice delayed, justice denied” and if the process is inefficient there would be delay and in such a situation the Plaintiff may not get quick justice. Also, if the plaintiff(s) do not succeed in getting an injunction order against the defendant(s), specifically in case of IPR matters, the Plaintiff may not be able to enforce his/her monopoly IP Right granted by the concerned IPR Office.

Ram Prakash Yadav, Manager - IPR at ACME Tele Power Ltd. Gurgaon

I'd agree with Ed on this one, deeper pockets benefit from inefficiencies.

Inefficiencies result in increased expenses. The increased expenses become a point of leverage in the dispute. I have had clients avoid exercising some of their rights in litigation because exercising their rights would have delayed the trial, which would have added expenses.

Generally, the Defendant has the deeper pockets - which I would suggest is part of the reason others have suggested the Defendant benefits.

Additionally, you do not have the number of frivolous law suits in patent litigation that you have in other civil litigation because it is so expensive to litigate patent infringement. Most patent owners cannot afford to file a complaint unless they are absolutely convinced they have a winning case.

The big loser in the process is the independent inventor or small company, who do not seek patent protection for their new ideas because they do not believe (perhaps correctly) that they will ever be able to enforce their patent, so why seek it. Ultimately, any novel products they develop that have a market will be stolen without any need for litigation.

Todd Sullivan, Managing Partner, Hayes Soloway, P.C.

Apart form the lawyers, I would say that alternative dispute arbitrators (such as the asker of this question) benefit - the inefficiencies of the legal process will drive more on both sides to use these alternative solutions. 

Between the two sides, I think either could benefit, it depends on circumstance - sometimes the patent holder benefits as a potential infringer may continue infringing while awaiting a resolution, and end up paying more when the case is settled - sometimes the infringer will benefit as they can continue profiting from their work while the case is argued, whereas if it was sorted earlier they might effectively be stopped in their tracks - I can easily see a case where both the above could be true.

Finally, the customers may benefit. New products may get developed which would never get launched if their weren't the delays and uncertainties that exist in the system.

Bernard Gore, Facilitation, Project & Programme Management

I don't think there's a simple answer to this, I'm sorry.

It depends on the country - some countries allow an ex parte interim injunction to be granted with no ability for the defendant to add evidence in an appeal. (Highly efficient or inefficient, depending on your point of view.) Either way, the inability to add evidence on appeal is inefficent, if justice is your aim.

It depends on the industry - in the pharmaceutical context, say in the US - the whole litigation procedure is skewed by the Hatch-Waxman regime. So here it even depends on the context of the particular dispute. So, if the 30 month stay is rapidly approaching with no prospect of a trial, then then innovator company will benefit from inefficiencies because they will keep the generic off the market longer, or have a good shot at an injunction in the mean time (depending, again on the patent, etc).

There are others, but this gives the general gist.

Duncan Bucknell, IP Strategist, Lawyer & Patent Attorney
 

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Now that my step-son is no longer my legal assistant (sniff) but an IP litigator with one of the best IP firms in the country (Irell & Manella) he's a source!!

Yesterday I asked him this question:  which patent infringement litigants benefit from the inefficiencies of the patent litigation process -- particularly those who are involved in protracted litigation like those lawsuits recently settled by Nokia and Qualcomm.

"Other than parties with frivolous lawsuits," I said, thinking that only marginal (but well-heeled) players might benefit from a system that was procedurally encrusted; unpredictable; costly; and, time consuming.

I've asked Adam to just allow the question to bounce around in his head for awhile as he litigates one of those infringement monsters that the Big Kids litigate.  Though he's new to the profession, it's often the young attorneys who see the process in unconventional and innovative ways because they haven't been doing the exact same thing for 25 years.  At least that's how it felt to me coming into the profession nearly 30 years ago.

Now I'm asking the same question of my readers -- how do the inefficiencies of patent infringment litigation benefit the parties?

To help prime the pump, I'm passing along without comment this article on the use of litigation to extract license monies from companies making products by one that doesn't as reported by the Communications and Technology Blog on Rates Technology Inc.   Excerpt below.

Rates Technologies has sued Nortel, Sharp Electronics and others. Apparently in 1998 the Wall Street Journal quoted Mr. Weinberger in an article titled "Payoff Pending," on December 7, 1998:

In the end, Mr. Marshall might have to sue some company for patent infringement -- and do so successfully -- before the industry takes his rights seriously. Mr. Marshall "had better be prepared to spend more than $1 million on prosecution, because that's what would be required," says Gerald J. Weinberger, president of Rates technology Inc., a Hauppauge, N.Y., company that says it has gone to court six times to prosecute patents in the telecommunications field. Mr. Weinberger says an aggressive stance in court is crucial to any enterprise based on patent licensing. "You don't get any licensees unless the parties become convinced that you will litigate," he says

Jerry Weinberger [of RTI told]  . . . . me that [h]e has agreements in place with 76 large companies such as Huawei Technologies, Lucent, and Cisco at this time. He says the larger companies understand how intellectual property rights work in the US while the smaller ones usually don't.

The following are statements from an e-mail from Jerry Weinburger:

When an infringer will not discuss their alleged patent infringement with RTI, there is little else that RTI can do except to pursue its remedies for the (willful) infringements in a court of competent jurisdiction. The remedies which RTI then seeks include damages, treble damages, a permanent injunction against further making, using, selling, offering for sale, and importing of the infringing products and services for the remaining lives of the Patents, payment of RTI's legal fees, and a product recall of all examples of those infringing items.

Although infringement is based upon a specific evaluation of a company's product(s) the '085 and '769 patents generally apply to hybrid cellphones, gateways, IP Phones, IP PBX's, edge routers, core routers, PC computers, ITSPs, and VoIP products, services and technologies, among several other telecommunications products, services and technologies.

Companies who decide to be covered under RTI Covenant Not Sue ("CNS") agreements are making a combined business and patent determination. The larger companies are easier to deal with, because they have many in house patent attorneys, and they do not feel that they are being roughed- they are making an informed business decision. Smaller companies tend to not respect the intellectual property of others. All makers, users, sellers, and importers are responsible for an infringement, and infringement is determined based upon direct, induced and contributory infringement; all allowing for interpretation of the Patents claims under the Doctrine of Equivalents. 

In total [RTI has] agreements in place with 700-800 companies and have litigated 25 times in 15 years.  . . . . Occasionally [says Weinberger] smaller companies want to negotiate and/or sue. Litigation he says costs about 2 million dollars.

 So how does it work? Generally his company contacts your company and shows you their patents. Your company then checks with its patent attorneys to see what infringes and what doesn't. If you want to be covered, you pay a one-time fee based on five tiers -- according to highest parent companies' worldwide sales... They do not deviate from these tiers. In exchange you get a covenant protecting you from a lawsuit.

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

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

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

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

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

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

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

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

Here are some resources: 

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

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

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

Further negotiation advice from the China Law Blog

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

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

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

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

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

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

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

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

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

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

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

Done. 

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

     This lawsuit was filed five years ago.

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

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

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

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

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

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

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Get ready for a radical new idea.  One that:

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

(image from Wikimedia Commons)

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

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

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

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

What kind of cases has this process been used for?

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

The Drawbacks? 

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

The Systemic Response Elsewhere?

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

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

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

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

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

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

It's no surprise to us that

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

The Academic View from My Own Backyard?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

Why?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Legal Blog Watch

Patent Baristas

Patently O

Pharmaceutical News and Resources

Likelihood of Confusion

Idealawg

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

Chicago IP Litigation Blog

Above the Law

What About Clients?

The Mediation Channel

f/k/a

Quiz Law

Law is Cool

LexBlog

Amateur Economists

Build a Solo Practice

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

Engaging Conflicts

mediator blah blah . . .

The Bizop News

And Google News no less . . .

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

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

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

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

The impediments are:

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

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

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

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

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

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(photo:  from Mediation from Darkness to Light)

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

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

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

That's why god created consultants, right?  

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

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

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

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

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

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

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

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

By Craig Anderson
Daily Journal Staff Writer

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

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

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

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

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

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

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

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

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

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Some cases just need to be tried.  See Law Firms Held Liable for Fees in 'Tissue of Lies' Patent Suit at Law.com.  Excerpt below:

A federal judge has ordered a patent holder and his lawyers to pay attorney fees for bringing an infringement suit based on "nothing more than a tissue of lies."

Irving Bauer had sued Romag Fasteners Inc., a manufacturer of magnetic snap closures for handbags, for infringing a 1996 patent on a new type of closure he claimed to have invented.

But Southern District of New York Judge Paul A. Crotty invalidated Bauer's patent last week, finding that it had been issued through iniquitous conduct. Bauer's testimony about his inventorship "bore clear indicia of fabrication," the judge said, adding that he was "convinced beyond a shadow of a doubt" that Bauer was no inventor. . . . . 

The judge held New York law firm Abelman, Frayne & Schwab, which initially represented Bauer in his suit against Romag, jointly and severally liable for Romag's attorney fees after Feb. 11, 2006. That was the earliest date, the judge said, Abelman Frayne should have realized expert testimony the firm planned to use to support Bauer's claim had been contradicted by testing.

"By persisting with this claim to trial, Abelman counsel played a central role in so unreasonably and unnecessarily multiplying the proceedings so as to give rise to bad faith litigation," the judge said.

Read the full article here.

And hey!  Be careful out there!

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

From the American Lawyer Daily:

Nokia and Qualcomm To Start Trial Wednesday

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

The ADR angle here: 

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

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

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

Continue reading here from FedCirc.us.

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We LOVE the law here at the IP ADR Blog.  And we're huge supporters of the Rule of Law as society's Great Leveller.  We're not, however, all that enamoured of lawsuits as a means to create business opportunity or to stem business losses.

Take a look, for instance, at Bill Gates recent comment about the use of Microsoft Windows in China -- the system is used on 90% of Chinese PC's but most of those OS's are pirated.  

Officially, the software giant has taken a firm line against piracy. But unofficially, it admits that tolerating piracy of its products has given it huge market share and will boost revenues in the long term, because users stick with Microsoft’s products when they go legit. Clamping down too hard on pirates may also encourage people to switch to free, open-source alternatives. “It’s easier for our software to compete with Linux when there’s piracy than when there’s not,” Microsoft’s chairman, Bill Gates, told Fortune magazine last year.

For the full article from the Economist -- Piracy -- Look for the silver lining Piracy is a bad thing. But sometimes companies can turn it to their advantage, click here.

h/t to slashdot

And to show you how deeply our commitment to the Rule of Law runs and why watching television when I was a kid wasn't a completely losing proposition . . . here's Andy Griffith (and Opie aka Director Ron Howard) on eavesdropping . . . . "the law can't use this kind of help"

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

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

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

For the full article, click here.

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

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(right:  Blackberry design patent from Patently-O article on the RIM settlement)

Though the term "patent terrorist" is hyperbolic, the points made in How to fight against patent terrorism by Richard Wilder, a partner  with Sidley Austin and IP counsel for the Association for Competitive Technology provides valuable advice about ways to protect your company from the expense of patent infringement litigation when the process server knocks on your company door.

As Wilder explains:

Patent terrorists are companies whose business models are based on patent litigation as a threat and licensing as a revenue source. With no interest in selling a product or winning new customers, these companies are not bound by the norms of customer relationship building. They would not think twice about suing large software customers if it fit into their legal strategy.

The result is competitive jockeying between companies offering their own indemnification policies in response to the liability risks faced by corporations deploying IT solutions. When it comes to indemnification policies, companies that create open-source and proprietary software are continuously evolving their thinking. Novell, Hewlett-Packard and Red Hat offer varying levels of legal protection to customers for their Linux products. Rather than offering traditional patent infringement indemnification, however, Novell promises to countersue with its own patent portfolio--presumably with the intention of settling on the basis of a cross-license.

Patent terrorists are companies whose business models are based on patent litigation as a threat and licensing as a revenue source. If the litigant is a patent terrorist, however, the countersuit would have little deterrent effect. Microsoft has taken indemnification to a new level by protecting its customers against all patent and copyright claims, and promising to pay for any legal fees or damages resulting from those claims.

The burden is on CIOs to seriously consider the indemnification policies of their vendors before concluding big software purchases. Indemnification should not be the primary factor driving purchasing decisions but rather a key factor in calculating the total cost of ownership for any solution.

For those interested in purchasing open-source solutions but unhappy with the indemnification policy of their vendors, new companies are emerging to provide additional insurance against the threat of intellectual-property litigation. This is really the continuation of a trend of insurers providing coverage against intellectual-property infringement suits.

CIOs have traditionally viewed indemnification provisions as standard boilerplate portions of agreements--and often not as something that can even be negotiated. It's time to rethink that assumption. Indemnification policies and insurance can be important tools to reduce or eliminate long-term risk and maximize the present value of the products purchased.

CIOs may increasingly face the very real threat of patent terrorism. But they can only benefit from the growing competition among software providers to better protect customers from intellectual-property lawsuits.

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

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

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

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

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

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

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

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

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

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

As David explains:

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

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

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

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

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

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

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

They'll be yours for life.

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

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

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

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

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

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

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

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

Continue reading here

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

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

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

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

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

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

To add your own thoughts, click here.

____________________

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For the full article, click here.

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

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

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

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

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

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

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

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

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

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EBay Agrees to Buy Patents From MercExchange, Settling Long-Running Dispute 

EBay Inc. has settled a seven-year patent dispute with MercExchange LLC that prompted an important intellectual property ruling from the U.S. Supreme Court.

The online auction company said in a statement Thursday that it bought the three MercExchange patents it had been accused of violating. The price was not disclosed; eBay said the figure would not materially affect its financial results.

For remainder of story click here.

Hmmmmmmmm, wonder if this could have been accomplished sooner?

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(above, floodgates along the Bitan Dam by Poagao)

The U.S. Supreme Court just denied review of Convolve Inc. v. Seagate Technology.

Why do we care?

Because in Seagate, the Federal Circuit reversed a long established precedent and announced a new and higher standard for obtaining treble damages in patent cases, which could have the impact of making some patent cases more receptive to mediation or other ADR processes.

Prior to Seagate, a patent holder seeking to prove that a defendant willfully infringed (which opens the door for treble damages) had a pretty low burden to satisfy; the court even suggested that it was as low as a negligence standard. Infringers who had actual knowledge of the patent at issue had an affirmative duty to "exercise due care," which most sought to satisfy by way of an opinion of patent counsel.  See Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983). In fact, because of Underwater Devices, a whole new market opened for patent lawyers, the drafting of patent opinions. (This also raised numerous knotty privilege issues during discovery of these opinions, as one might imagine.)

The landscape changed last year with Seagate. There, the Federal Circuit overturned Underwater Devices, and abandoned the defendant's affirmative duty to demonstrate it had exercised "due care." Instead, the Court imposed a more stringent burden on patent holders to demonstrate that the defendant had willfully infringed. Under Seagate, a plaintiff now must show "by clear and convincing evidence" that the infringer acted "despite an objectively high likelihood that its actions constituted infringement of a valid patent," and that this objectively-defined risk was known (or should have been known) to the infringer.

So with the sweep of the pen (a click of the keys?) twenty-four years of precedent was wiped out, along with the need for patent counsel opinion letters (and some of the thorny privilege issues).

Needless to say, patent holders were less than thrilled, and the matter was taken to the U.S. Supreme Court.

To no avail. On Monday, the Supremes allowed the Federal Circuit opinion to stand as-is, without further review by the Court.

So what does this have to do with ADR?

Plenty. Assuming courts apply the new standard properly, the ability to trigger treble damages has just been significantly curtailed in patent cases. There is less of an upside to taking a flyer at trial. Which should meant that there is more of an upside in trying to work out a resolution that is based on the actual value of the dispute in question.

The dispute can be settled by the application of objective standards of value or other measures without having the settlement process derailed by the wish to achieve (or avoid) the home run treble damage award.

This cries out for a more cost effective resolution process, be that mediation or arbitration. Or some hybrid of the two.

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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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($5700 by Andrew Magill)

I just ran across this terrific resource for IP practitioners -- Insurance Coverage for IP Assets. Were I still in practice today, I wouldn't make a move without this great source of IP settlement wisdom. 

Here's the thing about the law of insurance coverage (a sub-specialty of mine for the last ten or so years of my practice) -- you cannot simply read your clients' insurance policies nor simply read the pertinent case law in deciding whether to make -- or more importantly to press -- a claim for coverage. 

There are no easy coverage answers and the difficult questions raised by every coverage dispute vary from state to state.

I live with policy-holder counsel and he can't answer my questions unless I look up the answers and give them to him, at which point he'll tell me why I'm wrong (I usually am) unless I've asked six or seven additional questions.  (thanks honey!)

So add this valuable book to your research library in 2008.  

Publisher's description of contents below; link to publisher's web page featuring the book above. 

Insurance Coverage of Intellectual Property Assets is the first resource to comprehensively analyze the insurance protection issues that must be considered when an intellectual property dispute arises. From determining the scope of coverage under a policy, to tendering of a claim, to seeking remedies when coverage has been denied, this essential guidebook details the interactions among policyholders, insurers and the courts.

You'll find comprehensive and timely analysis of federal and state case law and major commercial insurance policy provisions that address:

• The extent of insurance coverage under the "advertising injury" and "personal injury" provisions
• Language in policies that limits or excludes coverage for intellectual property claims
• Public policy exclusions to coverage for claims of an infringement undertaken with intent to harm
• Interpreting ambiguous language in insurance policies
• Defending a claim under a "reservation of rights" and potential conflicts of interest triggered thereby
• Forum selection and choice of law

And more.

In addition, there's detailed discussion and comparison of the actual language used in most commercial insurance policies and the 1976 and 1986 Insurance Services (ISO) policies.

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(photo: Long Conversation by renatela)

Thanks for the head's up from Ron Coleman at Likelihood of Confusion about the new Securing Innovation Blog from IP.com.

Here's what S.I. has to say about its "mission" -- one with that distinctive Kevin O'Keefe LexBlog flavor that we intuited before we saw his name in the Why We Believe In Business Blogs post (excerpts below)  

We hope you'll read our corporate blog, Securing Innovation, and join with us discussing patents, trademarks, trade secrets, law and policy, and the latest and greatest tools to strengthen your intellectual property assets and manage your IP portfolios more effectively.

What Is IP.com and why read our blog?

In our little corner of the online world, there's a lot happening with patents, trademarks, and trade secrets, and a lot of relevant stuff is being said on interesting blogs by people who really know what they're talking about. So we're joining the conversation, and blogging about how innovation is managed by corporations with a vested interest in their Intellectual Property.

Find the conversation. Join it. Contribute to it. "Conversing is how we learn. It's how we network. It's how we grow as professionals," says Kevin O'Keefe, CEO of LexBlog, whose team of experts guided us in the development of our corporate blog, "Blogging is a conversation. Not only do you learn and grow your reputation by joining in, you will not be conspicuous by your absence." 

Why We Believe in Business Blogs

The IP ADR Blog and IP ADR Services welcomes IP.com and Securing Innovation to the IP Blawgosphere -- it's collaborative, reciprocal and abundant.  It doesn't get much better than that.   

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(photo:  Entering Hyperspace by Éole)

Let's face it.  Unless you're a P.D., D.A., a Federal Prosecutor or a Federal Defense Attorney, the only true alternative dispute resolution mechanism is trial.

The good news is that some federal district courts are adopting new local patent rules that

provide predictable and uniform treatment for intellectual property litigants and streamline the process by which a patent case is litigated, shortening the time to trial or settlement and thereby reducing costs for all parties involved.

Where?  In the Southern District of California for one, say Heller Ehrman attorneys David Kleinfeld and John Benassi in their article New local rules pave way to speedier patent trials.  Those rules also establish what we commonly think of as an ADR process -- an Early Neutral Evaluation option as described in the linked article in full and as excerpted below.

[T]he new rules set up a schedule that will bring the parties to the all-important claim construction (or Markman) hearing approximately nine months after the complaint is filed.

Having the Markman hearing as early as practically possible is crucial for litigants seeking a timely resolution because the claim construction order issued by the court after the hearing generally has a profound impact on the rest of the case.

The parties will sometimes be inclined to settle once they have seen how the court construes the patent claims at issue. If not, the Markman ruling provides focus for the remaining discovery, dispositive motion practice and trial preparation.

Indeed, it is largely because of the early-scheduled Markman hearing that Southern District judges can now set trial dates for 18 months after complaints are filed. . . .

The new patent local rules also incorporate an existing feature unique to Southern District litigation practice: the Early Neutral Evaluation (ENE). As local practitioners know, and as out-of-town litigants will learn if they choose to avail themselves of the southern district, the ENE provides the parties with a real opportunity to settle the case before spending substantial time and money.

Experienced magistrate judges with the power to compel principals to appear in chambers will try to help the parties reach a deal and will usually remind both sides that it is often wise to settle rather than roll the dice on a jury trial.

If you're practicing patent litigation in California, the full article here is well worth a careful read. 

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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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Lawrence Lessig.  You know who we mean.  We just posted his pitch-perfect power point presentation here just the other day.

But who could have predicted at any time before this very moment, a day on which an Austrian art-technology-philosophy group working at the "proto-aesthetic fringe [with] pop attitude, subcultural science, context hacking and political activism" (Monochrom) would make a video recording of a love song to an internet & society law school professor.  Who knew law schools would ever offer a course on the internet?  Who could have foreseen . . . oh, never mind . . . 

Thanks to Boing Boing (first) and Concurring Opinions (second) for allowing us to mark this staggering milestone in international-legal-cultural history. 

Skip the Mr. Wizard science experiment and go straight to the Monochrome Melody at 2 minutes and 30 seconds.

Take it away boys!

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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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(right:  Time Magazine Cover of J. Craig Venter and his scientific competition -- Francis S. Collins -- in the race to sequence the entire human genome; which race, I understand, was declared a "tie" in the year 2000)

After spending the day hosting a research scientist/physician about town before returning him and his son to the airport for their trip home to the U.K., I heard this interview by Fresh Air's Terry Gross with J. Craig Venter.

The NPR web page describes Venter's claim to scientific fame as follows:

In his effort to decode the human genome, scientist J. Craig Venter volunteered his own DNA to be analyzed and made publicly available. . . Venter's early work to decode the genome through private research company Celera Genomics earned him both praise and criticism. His team competed with the National Institutes of Health publicly funded effort, the Human Genome Project.

Here's the reason I'm telling my readers about my semi-scientific day.

The first was my friend remarks about the way in which he believes the U.K.'s national health system is squashing dissent among U.K. physicians, which included this observation.  

The only way to reach consensus is to encourage dissent.

I've never heard this put quite so succinctly.  It impressed me.  

The second impetus for posting these matters is Gross' fascinating (and short) conversation with Venter, who describes the necessity of patent protection for the continued vitality of pharmaceutical research and development.  I've never heard patent protection and policy expressed as clearly as Venter did today.  It's worth a listen here. 

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

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

It boggles the imagination. 

So what is ADR about this? 

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

Read on . . .

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

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(right:  Google CEO Eric Schmidt conjuring the 22nd Century)

Thanks to Ron Coleman of Likelihood of Confusion for passing along this gem from the The Trademark Troll on the S&L Vitamins case:

Almost every case involving the sale of unauthorized but genuine goods is a case where a brand owner is asking the courts to become an enforcer for the brand owner - against the brand owner’s own customers!!…

This brings to mind Jonathan Schwartz's brilliant post Free Advice to the Litigious which spawned our blog category Innovate, Don't Litigate.  This short tale from Sun Microsystem's CEO can't be repeated often enough: 

Years back," he writes, "Sun was under pressure in the market."

Although many users loved our core Solaris operating system, others thought it was built for high end computers, not grid systems. Our computer business had failed to keep pace with the rest of the industry . . . . [W]e gave customers one choice - leave Sun. Many did. Those were the dark days.

Where did they go? They went to GNU/Linux, a free and open source operating system built by a growing community, running on x86 systems. Why? Because the pair ("Linux on a whitebox") delivered, then, better grid performance, with more flexibility. We didn't erect barriers to exit, we promoted customer choice. Even when it cut the wrong way, as it did here. And yes, it hurt.

Was litigation a solution? It was suggested as one:

With business down and customers leaving, we had more than a few choices at our disposal. We were invited by one company to sue the beneficiaries of open source. We declined. We could join another and sue our customers. That seemed suicidal. . And we were encouraged to innovate by developers and customers who wanted Sun around, who saw the value we delivered through true systems engineering.

So we took that advice. . . . We redoubled our focus on innovation, in hardware and software, that would differentiate our offerings. Not just as good as the competition, but vastly better. . . . 

In essence, we decided to innovate, not litigate.

If "Our business Models Are melting Down Around Us," Should We Be Attempting to Freeze Them at the Very Moment in History When They Are About to Revolutionize Our Lives?

Schwartz is not alone in singing the innovation song.  Bruce Nussman advised CEO's this summer to Be Designers, Not Just Hire Them with this explanation.

There are moments in history when the pace of change is so fast and the shape of the future so fuzzy that we live in a constant state of beta.

I mean, let’s face it, our business models are melting down around us, our personal careers are morphing—or disappearing-- and there is less certainty about tomorrow than at any other time in our lives.

Innovation is no longer just about new technology per se. It is about new models of organization.

Design is no longer just about form anymore but is a method of thinking that can let you to see around corners. And the high tech breakthroughs that do count today are not about speed and performance but about collaboration, conversation and co-creation.

Could We Kill Internet 2 and 3.0?

All of this makes me wonder how misguided it might be to prevent the consumer-innovators of internet content sharing sites like YouTube from using, sharing, downloading, mixing, ripping, and burning the content that made YouTube what it is in the first place -- one of the most valuable internet sites on the planet in a mere eighteen months.

I am not the only one who has had this thought, of course.  None of this wild proliferation of creativity could exist had it been planned and controlled by a single corporate or governmental entity.  The internet -- and everything on it -- has arisen in relationship to and as a result of everything else.  No one can truly claim authorship.

Will demanding our "rights" to control our creation kill the creator, i.e., the collective consciousness that built the internet?  

Another innovator (brought to us by Coleman in Google Tumult via a Tech Crunch Post about  Attributor) CEO Jim Brock, has an answer -- snippet below:

If you are playing whack-a-mole and remove something from one site, it will appear somewhere else. Web-wide visibility is what publishers want. . . Smart publishers recognize that the blogosphere is the greatest promotional medium ever created.  . . A lot of publishers are holding back . . . they are fighting digitization. We’d like to see it set free.

While We're At It, A Little Propaganda About Net Neutrality Below

Customers seeking new information and innovative solutions to business problems often meet their needs by internet downloading and online file sharing.  Unfortunately, these activities attract viruses that can corrupt computer data.  For this reason, every strong marketing network requires a comprehensive computer backup solution to recover misplaced or lost data. The data recovery group is a complete data recovery package that focuses on recovering data from computer hard disks.  Of course, high-quality recovery hardware is useless without excellent data recovery software. With the help of disaster recovery application or windows backup software, a company can maximize its recovery hardware output to avoid market fallout caused by viruses.

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This post is brought to you by the letter "I" for Innovation.

Thanks to BlogRiot for the post here with designer's statement and Stumble Upon for taking me places I've never been before!  If you can avoid the StumbleUpon addiction, you may add "stumbling" to your list of "productive procrastination"  techniques.  It could be worse.  You could be watching television or suing someone for patent infringement.

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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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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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(pictured, Kell M. Damsgaard, leader of the Morgan Lewis Intellectual Property Practice)

I want to recommend the September 13, 2007 publication of the “Morgan Lewis Intellectual Property LawFlash.” It does an excellent job in summarizing the main provisions of the Bill that is to become the Patent Reform Act of 2007 after the House vote on this Bill (as amended). The Senate Judiciary Committee started out with an identical version, but the House has since adopted a number of amendments. It is unclear when the Senate will vote on its version of the bill.

As most of our readers know, the Patent Reform Act of 2007, if adopted, will make substantial changes in the way one applies for, manages and exploits, and challenges patents.

Rather than summarize here what those changes are, let me refer you to the Morgan Lewis intellectual property lawflash, which tells it like it is.

This “lawflash” was reproduced in the Lexology newsletter, which I find to be a very informative if sometimes repetitive newsletter. You can subscribe to it free of charge here.   

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(right, "Denny Crane!!")

I expect to see stuff like this on Boston Legal, not on the ABA Law Journal.  And how in the world did I miss this anyway -- from BLAWG's May 15 '07 post? 

The ABA Law Journal recently published an article about patenting legal strategies. The article, by Steve Seidenberg, was published in the May edition and it titled Crisis Pending: Can a Patent on Legal Strategy Prevent a Client From Taking Your Advice? The Courts May Soon Decide.

Based on what the article reports (which is well worth the read, by the way), not only are tax strategies already being patented, but there are innumerable rumors regarding lawyers seeking patents on real estate and corporate law strategies.

Since issuing its first patent for a tax strategy in 2003, the Patent and Trademark Office has issued at least 52 patents covering specific tax strategies. Another 84 published applications for tax strategy patents are pending. But more than just tax strategies could be involved.

Because parties applying for patents may keep their applications secret if they certify to the PTO that they are not seeking similar patents overseas, the legal grapevine is buzzing with rumors that legal strategy patents are pending in other practice areas, like real estate and corporate law.

They're kidding, right?  This was an April Fool's article in May?

More on the drive for possession in our on-going series on the social psychology of conflict tomorrow.

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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 -- 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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HOW IT STARTS

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

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

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

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

HOW IT ESCALATES

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

Why? 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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(photo "or not" by Tal Bright)

O.K., I'm adding B's to the IP ADR Dictionary. First, B was first for Bonobo (coupled with a racy moment of Bonobo physical intimacy).  But really, in any ABC's of negotiation, B must be for BATNA -- the Better Alternative to a Negotiated Agreement.  Lax and Sebenius in their brilliant 3-D Negotiation, call BATNA your "no-deal option."

Whatever you call it, before you knock on the door of any mediation or settlement conference meant to resolve your IP litigation (or pre-litigation dispute) you must know whether the litigation is a better alternative to the range of potential settlement offers that might be presented to you.     

In IP litigation, your BATNA begins with your projection of what the litigation will cost you; what your chances are of prevailing (at trial, on appeal, or on re-trial); and, how much you stand to gain (in dollars, competitive advantage, business opportunities, etc.).  Your opponents' ability to bear the cost is also a critical consideration as well as anticipated changes in the law like the Patent Reform Act recently passed by the House here in the U.S.  The possibility of market changes and alterations of competitors' strategies must also be researched and considered (who, for instance, expected Apple to drop the iPhone's cost by $200 sixty days after its release?)

I have lots and lots and lots to say about your BATNA.  I could, actually, write an entire BOOK on BATNA if someone could find a sexier name for it.  How about Paris Hilton's Sex-Slave BATNA Videotape?  

Today, however, we focus on the expense of patent infringement litigation care of Law.com's Dispute Between Broadcom and Qualcomm Provides Window into World of Big IP Fees, an excerpt of which follows:

If you ever wanted to know how big-name clients negotiate with big-name law firms about work on massive patent lawsuits, Wilmer Cutler Pickering Hale and Dorr has given us all an instructive look.

The Boston-based firm has filed an extensive motion in San Diego federal court detailing its $8.5 million-plus price tag for work on behalf of Broadcom Corp. in a nasty patent dispute with rival Qualcomm Inc.

Some of the highlights include an $850-an-hour rate from the top Boston-based partner assigned to the case, and significantly higher hourlies across the board than another firm charged on the case.

Broadcom did negotiate a significant discount from WilmerHale at one point in the case, and the firm said its rates were fair.

"The rates WilmerHale charges are the same as, or even lower than, the rates it charges to other commercial clients," the motion read. . . .

The motion reveals that Boston-based WilmerHale patent litigator William Lee charged $790 to $850 an hour, hundreds more than local litigators from the San Diego office of McKenna Long & Aldridge. McKenna charged up to $475 per hour for litigation partner Robert Brewer Jr., who manages its San Diego office. WilmerHale associates charged from $275 to $490 an hour.

In the motion and in an interview, the firm said its costs were entirely acceptable.

"We think it's fair and reasonable," said WilmerHale Boston partner John Regan, who, according to the motion, charges $640 an hour. "We think the rates we charge are market rates. Certainly one can't quarrel with the result."

I'm Shocked, Shocked, That Gambling is Going On Here

Anyone shocked by these fees hasn't been practicing in the Southern California legal market for the past ten years.

I too worked on cases in which there was so much money at stake that attorneys' fees of this scale were a drop in the bucket.  You try telling Exxon that the cost of litigation is high.  Its counsel's first response to me was this:  "my client spends hundreds of millions of dollars a year drilling dry holes.  Exxon does not worry about the size of my bills."  

Touche!

You, your opponent and your mediator all know which cases these are.  In these cases, the little lecture about the cost and uncertainty of trial tends to offend the lawyers and clients who do not need schooling in this.

Still, even Exxon might better spend its money drilling for oil than sending its attorneys' children to private schools and Ivy League Universities.  But hey! transferring large sums of money from one player who could afford it to another is how I spent most of my legal practice. 

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We learn this morning from the National Arbitration Forum that a federal district court in the District of Columbia has held that inventorship claims under 35 U.S.C. § 256 are arbitrable. In particular, the Court held that an arbitrator has the power to require parties to a technology agreement to correct a patent by changing the names of the inventors from those presently designated to those required to be designated in the event of breach.   If the respondents failed to comply, held the court, "the arbitration award could be converted into a court order for correction."  

The case is INVISTA North America, S.a.r.l. v. Rhodia Polyamide Intermediates S.A.S., No. 06-2180, 2007 WL 2230273 (D.D.C. Aug. 6, 2007),

For the full text of NAF's article on this important decision, click here. 

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Take it or Leave It?  (cartoon by Charles Fincher at LawComix.com) 

Don't get caught making unproductive settlement moves, learn from some of the best in the U.K., L.A. and Half Moon Bay in October and November. 

For our U.K. readers, Victoria Pynchon will be speaking on IP ADR in the USA: Big Ideas and Fresh Perspectives on 8 October 2007 at the Hatton Conference Centre in London.  Click here to see the day-long schedule and to sign up for early-bird discounts.  A downloadable .pdf of the conference schedule is in our sidebar to the left.

For our Southern California readers, a full-day seminar on Settlement Techniques that Give You the Winning Edge with IP ADR Bloggers Victoria Pynchon and Les J. Weinstein; Judges Alexander Williams, III (full-time settlement Judge) and Victoria Chaney (Ass't Supervising Judge of the Los Angeles Complex Litigation Court); and neutrals the Hon. John Leo Wagner (Federal Magistrate, Retired) and Jay McCauley, will take place at the Wilshire Grande in downtown Los Angeles on November 13, 2007.  Sign up here.  

If your practice crosses over with employment issues, join us for ALFA International's Labor & Employment Practice Group Seminar entitled "Employer of the Year" or "the Office": Which One Are You? (.pdf of the event brochure) at the Half Moon Bay Ritz-Carlton on October 3-5, 2007.

Once again, Victoria Pynchon will be speaking, this time with Joshua Frank, Senior Legal Counsel to DHL (moderated by James M. Peterson of San Diego's Higgs, Fletcher & Mack, LLP) on the Pro's and Con's of Employment Arbitration.

You'll have to get up early for this one -- it's scheduled from 8:45-10:00 a.m. on October 3 -- but we promise you a lively debate and fresh perspectives on an issue that might make corporate and litigation counsel want to rip those arbitration clauses out of their and their clients' employment agreements. Then again, you might just decide to rewrite those ADR Clauses altogether so that you get the best possible dispute resolution mechanism for your and your clients' work-force.

Either way, the time is ripe for reconsidering and revising the way in which you and your clients handle disputes with their employees.

JOIN US!!

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We're delighted to have as one of our bloggers international IP mediator and arbitrator Eric Van Ginkel.

With a background in both transactional and litigation law practices, Eric has been dealing with complex international corporate and business transactions for more than three decades. 

In addition to his IP practice, Eric has also litigated cases and advised clients concerning co-development deals, mergers and acquisitions, commercial real estate developments, straight and syndicated loans, and license and distribution agreements.

Eric acted as in-house counsel for almost ten years, and in that capacity, supervised the litigation of a substantial number of cases in the member countries of the European Union.

Eric is an arbitrator and mediator for the International Chamber of Commerce (ICC), the American Arbitration Association (AAA), the International Centre for Dispute Resolution (ICDR), the World Intellectual Property Organization (WIPO), the National Arbitration Forum (NAF), the Australian Centre for International Commercial Arbitration (ACICA), and the International Mediation and Arbitration Center (IMAC).

He also serves on the Panels of the United States District Court (Central District of California), the Los Angeles Superior Court and the California Court of Appeal (Second Division).

In addition to his LL.M. in dispute resolution from the Straus Institute, Eric holds Juris Doctor degrees from both the Law Faculty of Leiden University in the Netherlands and Columbia Law School in New York City. Being a Netherlands citizen living in California (having lived both in Europe and the United States), Mr. van Ginkel is sensitive to cross-cultural issues.

Eric is fluent in Dutch, English, French and German, and somewhat proficient in Italian and Spanish.

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(Thanks as always to the generosity of the fabulous Charles Fincher at LawComix.com for the greatest law cartoons ever!)

And many additional thanks to Mark Partridge over at the Guiding Rights Blog for sharing this thunderbolt with us:  there were sixteen trademark, twenty-three copyright and seventy-one patent cases tried in the entire U.S. Federal System last year (the only place they can be tried for our foreign readers). 

I don't know what percentage of the total cases filed that is, but I can't believe it is more than one percent.

One of the most common questions I get from attorney-students when I teach Deposition Skills for  the National Institute of Trial Advocacy as I did last week-end is this:

"Should we conduct a killer cross-examination during the deposition or save it for trial?" 

My answer? 

You're not going to trial. 

Don't save anything unless it's for a strategic litigation as opposed to trial tactic.  You'll "try" your case, if at all, to a mediator.  Don't save it for me.

In all fairness to IP trial attorneys, I assume that a great percentage of IP litigation now takes place in arbitration.  If anyone knows how many IP cases are arbitrated every year, please feel free to pass that number along.

And thanks for the statistics Mark!

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(photo:  Lock and Key by Lord Cuauhtli)

I've already seen counsel use the Wayback Machine -- which has archived 85 billion web pages from 1996 to a few months ago -- to show prior art during the mediation of a patent dispute.  

The fact that this excellent means of independent sleuthing might constitute a crime would never have occurred to me.  But that's what creative lawyers are for Jack!  Finding ways to make the other side pay for the unfair advantage of opposing counsel's hard work and creativity. (though it appears the crux of the issue here is "getting lucky" when the Wayback Machine provided screen shots it shouldn't have).

Before proceeding on this topic, I want you to close your eyes for a moment and imagine a different world.  One in which the collective education, creativity, knowledge and experience of the world's litigators could be used collaboratively to . . . . let's say . . . meet the United Nation's Millennium Goals! 

No?  That being the case, here's the new law on using the Wayback Machine to prove your case, whether you prevail by virtue of hard work, good luck or a combination of the two.  

Bottom line -- it's not a crime either to use the Wayback Machine to prove your case nor to reap the benefit of "getting lucky" when it malfunctions.  

Read the opinion here.  Excerpt below:

Healthcare Advocates has not shown that the Harding firm viewed any images that they
were not entitled to see. The facts show that the Harding firm made requests via their web
browsers to the Wayback Machine to view archived web pages, and those requests were filled. 

Kimber Titus testified that she typed the web address she sought into the Wayback Machine, hit the “Take Me Back” button, and a list of screen shots available for viewing was presented. She clicked on the dates individually, and when an image appeared on her computer screen she printed a copy. (Id. at 78.) Ms. Titus testified that sometimes clicking on a date returned the “Robots.txt Query Exclusion” message. 

When this occurred, she clicked on the link that said “search here for all pages,” and was
provided with the list of dates from which she continued searching. No evidence has been
presented showing that the Harding firm did anything to get past the blocking mechanism. The facts show that the Wayback Machine gave Ms. Titus the ability to view archived screen shots of Healthcare Advocates’ website.

No evidence has been presented showing that the Harding firm exceeded that access. The
facts do not show that the Harding firm did anything other than use the Wayback Machine in the manner it was intended to be used. Gideon Lenkey testified that the Harding firm accessed the Internet Archive’s website with only an ordinary web browser, they did not employ any special tools. He wrote that the Harding firm obtained these images because Internet Archive’s servers experienced a condition that made them forget about protective controls.

“On some occasions and for reasons unknown these two servers would determine that robots.txt file did not exist on the HCA site and on those occasions would deliver the protected content.” The Harding firm only viewed the archived screen shots that the Wayback Machine provided.

As the facts do not show that the Harding firm exceeded the access provided, Plaintiff
attempts to convince this Court that determination of this issue must focus on the fact that the Harding firm viewed archived screen shots that the copyright holder did not want them to see. Healthcare Advocates argues that the Harding firm’s access was unauthorized because the images were viewed without its explicit permission. This fact is irrelevant. The statute only penalizes persons who exceed authorization.

The Harding firm was given the power to view the images by the Wayback Machine. While the screen shots may have been returned in error, they were ultimately provided. The Harding firm requested archived images from Internet Archive’s database, and those requests were filled. The Harding firm got lucky, because the servers were
malfunctioning, but getting lucky is not equivalent to exceeding authorized access.

There's a lot more in this case of benefit to litigators -- particularly the cautionary tales about electronic evidence and counsel's obligation to preserve "caches" on their hard drives.

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(photo by Tom Magliery) 

Today's post is brought to you by the letter "E" for emotion.

First of all -- let's not kid ourselves about lawyers, business executives, managers and inventors.  People have been known to draw guns from their waist-bands, pull knives from their boots, engage in fisticuffs or, key one another's cars in suburban shopping malls when Driver A concludes that Driver B has "stolen" "his" parking place.  People have been murdered for this.

But what of the person asserting dominion over the challenged and coveted parking space?  For how long has he owned it?  Generally?  On a typical sunny Southern California day? 

60 seconds?

Now I want you to think about the anger that I've so often seen erupt in a separate caucus when an attorney ventures, for the first time that day, to suggest that the most recent offer to settle a patent dispute is not bad really, particularly given the -- well -- potential problems with the litigation . . . .

Listen, there's nothing wrong with emotion. 

We're territorial.  And when we've created something out of whole cloth, the sweat of our brow, our own hard-earned dollars, ingenuity, creativity, courage, intellect, and, ambition -- our intellectual property -- we're perfectly well justified in getting a little bit heated when someone says they invented it (or patented it) or used its name or imagineered it first.

Why It's So Important to Acknowledge and "Surf" our Emotions in Negotiating Settlement

As Harvard Professor Daniel L. Shapiro (author of Beyond Reason) explains in his terrific essay Untapped Power:  Emotions in Negotiation (the Negotiator's Fieldbook, Schneider & Honeyman, Eds.), emotions can have the following negative impact on negotiations:

• suppressing "resentment, anger or other strong emotions can debilitate a negotiator's cognitive and behavioral functioning" by: 
  • causing us to act in ways that do not serve our long-term interests;
  • consuming "important cognitive energy" that might otherwise be available to "process information [and] think about important substantive or process issues;" or, 
  • incline us to stereotype our "adversary" in negative terms that interfere with cooperative attempts to explore benefits that might be available to both, while
• acting out our anger also has negative consequences such as:
  • communicating to our bargaining partner a degree of hostility that reflects our willingness to go to extremes and unwillingness to soberly reflect upon potential solutions -- conditions that too often lead to premature impasse.

So What's a Justifiably Distressed Negotiator to Do?

Recognizing our anger (rather than denying it) while at the same time choosing to stress the potential for positive fellow-feeling appears to ensure a far more favorable outcome than angry or even aggressive moves at the bargaining table.  

As Shapiro explains:

[N]egotiators in a positive mood achieve more optimally integrative outcomes, use fewer aggressive behaviors and report higher enjoyment of their interaction.  As parties build affiliation with one another and develop fulfilling roles, they become more engaged in their negotiation tasks and experience a state of "flow," a peak motivational experience that is intrinsically and personally rewarding.

The power of positive emotions toward the agreement and toward the other [have the additional benefit of] overrid[ing] the temptation for parties to dishonor their commitments.

Positive emotions also foster cognitive expansion . . . , aid negotiators' attempts to problem-solve creative options to satisfy their interests [and] . . . trigger the release of . . . dopamine, which in turn fosters improved cognitive ability . . . 

[As researcher Barbara Fredrickson has found] certain positive emotions -- including joy, interest, contentment and pride -- all share the ability to broaden attentional, cognitive, and behvioral ability . . . 

[Alice] Isen's research [also] suggests that people experiencing positive affect demonstrate thinking that is flexible, creative, integrative and effcient.  Each of these characteristics is important for an interest-based negotiator, who is trying to brainstorm creative options that satisfy each party's interests.

There you have it.  Not some kum-bay-ya whoo-hoo west coast new age feel-good freak, but a Harvard Professor who has negotiated international business and diplomatic agreements throughout the world reports that acknowledging one's anger, managing it and choosing to use one's positive emotions during any bargaining session will ultimately help us drive the best commercial bargain available.  

"E" is therefore not simply for emotion.  It's also for efficiency, effectiveness and excellence as well.

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(photo by Eole)

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

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

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

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Here's a must read article for anyone involved in or representing a client prosecuting or defending an intellectual property action -- Developing a Coherent Strategy for Managing Intellectual Property Disputes  by Milbank, Tweed, Hadley & McCloy LLP located at Point of Law.  In addition to the links (above) I'm providing you with Milbanks Ten Strategic Points and excerpts of the article on those matters critical to the the negotiation of a winning settlement.  

First the points:

1. Develop A Business Strategy 
2. Choose The Right Location For The Dispute 
3. Carefully Manage The Issues 
4. Pursue "Early Exit" Strategies When Appropriate 
5. Don't Underestimate Your Opponent 
6. Recognize and Understand Weaknesses In Your Case 
7. Fully Utilize Internal Resources 
8. Take Control Of Disbursements 
9. Carefully Review Billing Statements From Outside Counsel 
10. Choose The Right Litigation Team

Business Tactics and Early Exit Strategies

As Milbank stresses, 

too often companies get caught up in "winning" the litigation and don"t explore business solutions to the dispute. You should have definite business goals established as early as possible and should revisit those goals often as the case progresses, looking for opportunities to resolve the dispute in a way that achieves the business objectives.

These business considerations should be front and center at all times so that you're able to derive the maximum benefit from the timing of settlement negotiations.  Milbank counsels that 

your legal team should also be looking for opportunities to bring the case to an early favorable conclusion . . . [T]here may be business opportunities to settle a case. For example, the defendant may have IP that could be cross-licensed to the plaintiff or a supplier relationship could be established that benefits both companies. Often IP disputes can be resolved such that both companies benefit, but such opportunities must be uncovered and pursued.

These may seem like obvious points, but we do tend to lose sight of these business concerns as we fight to win the litigation with strategic discovery battles, early summary judgment motions, and the like.

Settlement Team Anyone?

For any litigation with an amount in controversy exceeding five million dollars, we recommend the creation of a settlement team within the firm that is litigating the case.  The settlement team can and should place its entire focus on potential business opportunities that could be synergized with the ebb and flow of litigation sucesses and reverses.

This team should also keep close track of all corporate and/or commercial/financial market events that might weaken one's adversary's appetite for continued pursuit of the dispute.  This enables the client to make strategic timing decisions -- convening a mediation or settlement conference, for example, just after one's opponent has experienced a shake-up in top management or prior to a merger or major acquisition.  Transactional counsel within the firm in which the trial team is working may be best positioned to serve as "settlement" counsel throughout the litigation.

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See today's Cal Law report on the "crippling sanctions" against Toshiba entered by an East Texas federal judge in patent litigation with Juniper Networks, Inc. (sorry; subscription required).

Cal Law reported that:

Judge T. John Ward slammed Toshiba for "willfully and intentionally" violating the court's order to produce evidence during discovery in a patent infringement case involving Juniper Networks Inc., [specifically its] critical computer code known as BIOS . . . "

If you're a seasoned litigator, you've been here at least once yourself.  During the deposition, a witness testified that Toshiba's BIOS code was not "unavailable" as represented to the Court, but was in Toshiba's possession and available for production.  

The sanctions? They include:

cutting by half Toshiba's voir dire time, number of juror strikes and opening statement time — as well as limiting by two-thirds the company's closing statement time at trial . . . [and] prohibiting Toshiba from using any expert witnesses who could speak about non-infringement at trial. . . .

The Judge also indicated that he "plans to instruct the jury that the company intentionally withheld evidence."

Extraordinary writ of mandate anyone? 

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We received the below announcement yesterday from Les Weinstein's and my good friend Martin J. Trupiano, with whom we both worked.  I worked briefly with Marty at the (now departed) Los Angeles office of Pepper, Hamilton & Scheetz, and Les worked with him for a much longer time at, successively, Pepper; Graham & James and, finally, Squire, Sanders & Dempsey.

Here's the thing about Marty.  He's not simply a sophisticated, creative, careful and dogged advocate for his IP clients, he's truly one of the nicest people I've ever known.  (Is that libel per se when applied to a litigator?)  Marty's no push-over.  But he is one of the last of a breed -- the gentleman lawyer who relies on depth of knowledge, skill and, yes, cunning, rather than threats and obstruction.

If I needed an IP lawyer, Marty would be the first attorney I would call.  He's particularly dear to my ADR heart because he knows the difference between a legal position and a business opportunity and is always ready to craft a deal rather than to endlessly pursue litigation.

An example of Marty's generosity:  when I asked Marty if he'd co-teach a session of my ADR class at Pepperdine Law School on the resolution of religious issues on the job, he did as much or more work than I do in preparing for the class; met with me for two hours to discuss the issues in detail (an experience that deepened my own understanding immeasurably) and taught the class to rave reviews from my students.  Gratis.  For the love of the subject.

He's one of the good ones.  If anyone's looking for representation, you couldn't do better at any "big firm" than to take advantage of Marty's "big firm" expertise in his new boutique practice.

All of that said, here's Marty's announcement:

MARTIN J. TRUPIANO

is pleased to announce the opening of the

LAW OFFICES OF MARTIN J. TRUPIANO

The firm will represent companies and individuals in business litigation relating to patent, trademark and, copyright infringement, theft of trade secrets, unfair competition, antitrust violations, licensing disputes, breach of contract, and other commercial claims in federal, state and arbitral forums in California and throughout the United States.

Referrals welcome.

16000 Ventura Blvd.
Suite 1000
Encino, CA 91436
Telephone: 818-783-5151
Facsimile: 818-783-8585
Email: mailto:MTRUPIANAOLAW.COM

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(click on image to order text)

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

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

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

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

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

Thanks Tim!

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

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

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

Thanks Paul!

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

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

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

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

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

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

Thanks Paul! and to you all!

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

Patent Rendered Invalid through Grammatical Error by Harold Wegner

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

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

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

For the complete article, click here.

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Why is this man smiling?

Because he's CyberSettle's mascot.  What's CyberSettle?   A patented "online, double-blind bid system . . .  followed by . . . telephone facilitation . . . allow[ing[ parties to resolve [disputes] quickly and confidentially."

At least that's what CyberSettle's year old press release -- Cybersettle Wins Major Patent Infringement Suit -- says.  

I'd never heard of either CyberSettle or of any other online settlement "system" until I stumbled upon the smiling man and read the press release (extremely reduced) below::

Cybersettle [which] was awarded United States Patent No. 6,330,551 for the Computerized Dispute Resolution System and Method . . . [brought suit against the] National Arbitration Forum (NAF) [for infringement, after which] the New Jersey Federal District Court ruled that two versions of NAF’s online dispute resolution system in New Jersey were in direct violation of Cybersettle’s patent . . . that covers, among other things, an automated, online, double blind, dispute resolution system capable of multiple rounds of bidding. 

If any of our readers have ever used CyberSettle's system (or the NAF infringing system) we'd love to hear about your experience.

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This is the third part of a three-part interview with Jay Taylor, a partner with the Indianapolis, Indiana law firm of Ice Miller. Mr. Taylor's primary practice area is intellectual property law with a focus on patent, trademark, copyright, and trade secret litigation and mediation. He also concentrates in business aspects of intellectual property law such as acquisition, sale and licensing of intellectual property assets, and computer hardware and software sale and licensing.

MS. PYNCHON: Do you believe that the speed at which technology is changing these days should make mediation even more attractive to attorneys handling IP disputes?

MR. TAYLOR: I can tell you that the technology most effecting litigation practice today is electronic discovery. The new rules and case law on that topic are going to make discovery even more burdensome than it already is. And I’ve no doubt it will be abused by some attorneys for the sole purpose of forcing the opposition to capitulate.

Moreover, as technology advances, the costs required for experts to explain the technology in terms the court and jury can understand increases exponentially.

However, it is true that advances in the client’s patented technology often has an impact on the parties’ desire to settle a lengthy case. Many years ago, I was involved in a case involving a patent on controlling pattern stitching on sewing machines. While the case was pending, the technology advanced to the point where the patented technology was obsolete. The new technology was vastly superior and the old patent was worthless. The case settled quickly and reasonably because the whole market changed. This is going to be even more evident in the future as old technology is replaced more rapidly with new technology.

We will always, however, have the trolls with us, who attempt to reinterpret old patents to cover the new technology. Still, in many fields, the valuable life a patent is more limited today than it used to be by virtue of technology’s volatility.

MS. PYNCHON: Do IP disputes have other characteristics that make them uniquely appropriate for mediation?

MR. TAYLOR: I think the primary reasons IP cases and particularly patent cases are particularly good candidates for mediation is the cost of the litigation and the unpredictability of the results. The law itself is always in a constant state of flux. But with the Supreme Court overruling the Court of Appeals for the Federal Circuit on a regular basis in several very significant areas, that flux has increased to the point that very little is certain.

A patent case that may have looked very good several years ago, may now look less appealing because the standards for obviousness have been lowered, or the likelihood of an injunction reduced, or the likelihood of a willful infringement determination due to the failure to product an attorney opinion undermined.

Trademark disputes raise a whole set of other issues. Most often, the goal is an injunction to prohibit continued use of the infringing mark. Damages are usually less of a concern, so money alone is not going to get the matter resolved. Here, creative settlements are a premium and often the only way a trademark dispute can be resolved.

I once had a trademark case where the two clients reached a business settlement in the courthouse hallway as I was picking a jury. That is a case where mediation would probably have produced a comparable settlement much earlier and at much less expense to both sides, but neither the court nor the parties pursued mediation. At that time, mediation was not as widely recognized and practiced as it is today. Today, knowing what I now know, I would push such cases harder toward mediation.

MS. PYNCHON: Are you seeing a marked increase in mediation in your practice.

MR. TAYLOR: Oh, yes. Quite a bit. I am seeing more and more attorneys recognizing the benefits of mediation and counseling their clients to agree to it. Some courts are also beginning to recognize the benefits of mediation and pushing for and implementing rules for court ordered mediation. The Court of Appeals for the Federal Circuit has implemented a mediation program for all cases appealed to that court. Personally, I think that by the time a case gets to appeal, it is too late to mediate. Only time will tell if the program works.

MS PYNCHON: Thank you so much for sharing your experience and insights with us. It’s been very illuminating and education for me. Do you have any parting thoughts?

MR. TAYLOR: Yes, the mantra for the modern businessman should be "mediate, don't litigate." Litigation is costly, time consuming and disruptive for a business. Businessmen want as few uncertainties in their business as possible, and the result of litigation, by its very nature, is totally uncertain. Mediation, on the other hand, provides both sides with an opportunity to resolve a dispute on terms that are mutually acceptable at a cost far less than litigation. If the dispute is one that can possibly be settled, every attempt should be made to do so as early as possible through negotiation, and if that fails, through mediation.

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Mr. Taylor is a partner with the Indianapolis, Indiana law firm of Ice Miller. His primary practice area is intellectual property law with a focus on patent, trademark, copyright, and trade secret litigation and mediation. He also concentrates in business aspects of intellectual property law such as acquisition, sale and licensing of intellectual property assets, and computer hardware and software sale and licensing.

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Appeal of Arbitration Awards Should Be Permissible 

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Les Weinstein, who remains affiliated with the law firm of Shelton Mak Rose Anderson PC while arbitrating national and international intellectual property cases with the American Arbitration Association, was my boss, mentor and teacher more than twenty years ago (yikes!) when we practiced together at Pepper, Hamilton & Scheetz.

It's a pleasure and privilege to welcome Les as one of the contributors to the IP ADR Blog.  Since meeting one another again in the ADR world, Les and I have co-mediated copyright and patent infringement cases and I have assisted him with some of the most sophisticated and complex arbitrations, including a billion dollar infringement case between two IP industry titans. 

Les has over 40 years of experience as a trial, counseling and appellate lawyer specializing in patent, copyright and trademark law, as well as the law of competition (antitrust, trade secrets, unfair competition and unfair trade practices). Mr. Weinstein's knowledge of patent law and practices is particularly deep.

He is not only registered to practice before the U.S. Patent and Trademark Office, he had early experience as a Patent Examiner, before which he worked as an engineer to ITE Circuit Breaker Co.

No stranger to the courtroom, Mr. Weinstein worked for the U.S. Department of Justice in Washington D.C. under an appointment to the Attorney General's Honor Program. It was there that Mr. Weinstein earned his trial stripes before going on to a long and distinguished private career as a partner with McKenna, Conner & Cuneo; name partner with Bleecher, Collins & Weinstein, and Senior Partner with the law firms of Pepper, Hamilton & Scheetz, Graham & James LLP, Squire Sanders & Dempsey LLP and Sheldon Mak.

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