Mediators and litigators don't talk to one another nearly often enough. We've therefore recently begun to interview IP litigators to increase our understanding of one another's interests, needs, desires and concerns.
Jay Gordon Taylor is the classic L.A. hyphenate -- in his case, the hyphen connects litigator and mediator. Jay continues to represent his own clients while at the same time helping other lawyers find the best resolutions available for theirs. Though a hyphenate, Mr. Taylor does not live and work here in L[hyphen]A but in in Indianapolis, Indiana. We have, by the way, already published the first part of this interview here.
We're pleased and honored to have Mr. Taylor join us for our first day "live" on our new site.
Thanks Jay!
MS. PYNCHON: Mediators are always talking about the way in which mediation reduces expense, creates greater opportunities to craft one’s own “remedy,” and (of course) avoids the risks and burdens of litigation. Assuming litigation/trial could deliver a relatively quick and efficient means to resolve the matter, would mediation still be a better alternative.
MR. TAYLOR: Often the goal of patent litigation is to force a competitor out of the market. If that is the goal, mediation is probably fruitless. I had a case, years ago, where the settlement demands by the other side were very simple -- agree that you are infringing, pay us everything we think we are entitled to -- including our attorney's fees -- and stop selling the allegedly infringing product. Their demands never changed.
Needless to say, the case did not settle, even though my client would have been willing to pay a reasonable royalty by way of compromise. After a very lengthy, costly trial and appeal, plaintiff's six patents were held either invalid or non-enforceable. Thus, by being unreasonable, they deprived themselves of a substantial royalty stream.
MS. PYNCHON: Do you believe that a mediator with industry knowledge and experience representing clients in patent litigation could have made a difference in that case? I recently mediated a patent infringement case with a similar motive on Plaintiff’s part. Nevertheless, we were able to craft a business deal that capitalized on the defendant’s international marketing network. This was an opportunity that wouldn’t have been available to Plaintiff by way of trial and I believe the settlement provided the Plaintiff with more value than winning the litigation would have.
MR. TAYLOR: It is possible that mediation might have been beneficial. I could never determine if the client was driving this hard settlement position or whether the lawyers were not properly advising the client on the merits of the case. It is possible the mediation might have produced a settlement in that case if the settlement position was the result of bad advice. However, if the client's sole goal was to get my client out of the market, I doubt that mediation would have been successful.
EXPLORING COMMERCIAL INTERESTS
MS. PYNCHON: I often find that the attorneys representing their IP clients haven’t fully explored all of the commercial interests that are driving the dispute, or at least not all of the business opportunities of which the client is aware. Have you found that in your practice as an advocate or as a mediator?
MR. TAYLOR: I think it is unusual that the client does not communicate its goals to the attorney. I have found it far more likely that the attorney does not candidly inform the client of the merits of the case and the risks of loss. Sometimes I've believed that the attorney has torpedoed a settlement for personal reasons, either ego or money. I have observed the philosophy by some litigators that it is always in the best interest of the client to litigate through trial. In reality, of course, it is rarely in the interests of the client to go to trial, particularly where there is an acceptable settlement that makes business sense. It is always more lucrative for the attorney to try the case, and unfortunately, some of our brethren overlook or push the ethical envelope in advising clients regarding settlement.
MS. PYNCHON: I have heard many mediators and settlement Judges express that opinion and it may be true. But my experience has been that an attorney is always eager to settle a case if s/he believes the settlement will truly make the client happier than continued litigation.
MR. TAYLOR: Well, that should be the goal of every attorney, but none of us knows what is truly motivating the other side. There is, however, another factor that enters into IP cases that is not reflected in the general commercial litigation case.
THE PERILS OF AN ENGINEERING OR SCIENTIFIC MIND-SET
Many IP attorneys simply do not understand the reasons for settlement or how to best settle a case. Often, IP attorneys are engineers or scientists whose undergraduate training has not prepared them to fully understand the nuances of the legal issues being litigated. I’ve found that some engineers and scientists who are also attorneys continue to view the world in black and white terms and to ignore the grey. They have reviewed the case and arrived at their conclusions. Because they are convinced that they are right, they often refuse to see any basis to settle a patent infringement case on any terms other than their own. This failure – maybe this inability -- to recognize the potential that the other side might also be “right,” often prevents settlement.
EVALUATIVE AND FACILITATIVE SOLUTIONS
This is an instance where evaluative mediation by an IP specialist mediator can be very helpful. The client gets an opportunity to see and appreciate both sides of the case and to appreciate the risks involved. I once had a client that would not accept my candid advice and counseling regarding the merits of the case and the desirability of settlement until he heard the other side's presentation during mediation. Somehow, hearing it from the other side made more of an impact than hearing it from me.
MS. PYNCHON: I know. I’ve often had counsel pull me aside and say, “listen, when I tell my client his case has holes, he thinks I’m being disloyal. I need you to do it.” I also often find that the attorney sometimes cannot bring himself to deliver the bad news to his client in the way his client can hear it. The case, of course, doesn’t necessarily get better over time but the client often continues to believe it’s as pure and pristine as the day he first brought it to his attorney. Helping the attorney save face is something I see as a pretty common part of my job as a mediator.
MR. TAYLOR: Yes, I’ve experienced that as well. And as you suggest, one of the greatest benefits of mediation is the opportunity for the parties to examine the business issues as opposed to the legal issues. The lawyers get too bogged down in the legal issues and fail to recognize that litigation is and should be merely a business tool for the client.
All clients should be advised up front that litigation must be approached in the same manner as every other business decision -- what are the goals or benefits, what are the risks and what are the costs. The same benefit, cost, risk analysis should be done whether it is a decision to enter a market, produce a new product or bring a law suit. If the business goals or benefits can be achieved by settlement as opposed to trial, there is no reason to go to trial.
Stay tuned for the conclusion of the Jay Taylor interview tomorrow!
Why is this man smiling?
This is the third part of a three-part interview with Jay Taylor, a partner with the Indianapolis, Indiana law firm of 
(photo Patent Pending by 
I am slowly coming to understand the power of 
Entrepreneurship
Mr. Taylor is a partner with the Indianapolis, Indiana law firm of 
