Strategies for speedy ends to patent litigation
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Strategies for speedy ends to patent litigation

It is often in the best interest of those involved in IP litigation proceedings to resolve the dispute early, argued several participants in a web seminar entitled Successful Early Resolution Strategies for IP Disputes, held by Managing IP in association with the law firm of McAndrews Held & Malloy

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You can view the webinar by clicking here.

During the presentation, Edward Mas, an attorney with McAndrews, listed what he considered to be the three “universal truths” of complex patent litigation: it can be wildly expensive; it can be long and arduous; and it can ultimately have a negative impact on your business.

“Although often necessary, IP lawsuits expend significant company resources,” said Mas, who led the discussion. “Not only do such litigations burden the fiscal resources of a company, they also require a substantial amount of attention from key stakeholders within the company. Employees are frequently called upon to spend countless hours responding to discovery requests, preparing for depositions, and reviewing and attesting litigation papers.”

Vaishali Udupa, an IP litigation manager with Hewlett-Packard, agreed with Mas. “Generally the costs associated with defending NPE suits are astronomical… Without a doubt, these cases are disruptive.”

The potentially-disruptive nature of IP disputes thus makes it imperative to try to end them quickly. Mas identified nine important strategic understandings that would help hasten a speedy resolution for most such disputes, a list that would become the basis for the presentation:

1. The importance of preparation

2. How to select an appropriate forum

3. Assessment of litigation costs and potential exposure

4. Identifying potential counterclaims

5. How to conduct early discovery and avoid delays

6. Filing an early motion for summary judgment

7. The utility of settlements

8. Properly-timed PTO and ADR proceedings

9. How a redesign might solve your problems

The adequate preparation step is truly critical to ending an IP dispute quickly. Such preparation involves a great deal of analysis: analysis of the closest prior art, of key personnel, the accused product or process, and of the opponent’s potential case theories, to name but a few areas. According to Mas, such analyses are not only important for plaintiffs, but also for defendants as well.

“A defendant should undertake many of these same preparations once a plaintiff has filed or threatened a lawsuit. By performing these tasks a party can develop a detailed litigation plan which outlines the evidence necessary to prove the party’s case and how the evidence will be gathered.”

The panel stated that once the initial preparation is completed, it is then important to choose a forum that is amenable to a party’s interests. This would possibly entail considering a court that is experienced in patent cases, many of which sometimes have special procedures for such proceedings. Another consideration would be a so-called “rocket docket”—a court known for its timely disposition of cases. The advantages to a speedier court are numerous, including them being generally less expensive, more likely to result in settlements, and less likely to cause business disruptions.

Before beginning litigation, the panel also agreed that it is important to assess whether the action is even truly worth the trouble. Expense definitely plays a part in such a decision, as does potentially negative exposure.

“A party should make an early decision as to whether the dispute is worth litigation or whether resources should be directed at other means to resolve the dispute,” said Mas. “Because your opponent is going to likely file counterclaims, it will not always be possible to extricate yourself from the suit once it has started. Therefore, if you initiate a lawsuit, you must be prepared financially to go the distance.”

Prepare for counterclaims

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Preparation for the possibility of counterclaims is again imperative. Adequate time should be put towards examining the competitive landscape, assessing the validity of potential challenges, and looking for opportunities for a solid business solution. Mas was unequivocal in the importance of this step, for both plaintiffs and defendants.

“It is critical to identify potential counterclaims early. All too often these are not known or identified until it’s too late, or maybe at a point when you no longer can amend your pleading or plead your counterclaim. And so identifying these potential counterclaims very early on highlights the strengths and weaknesses of a particular case and exposes possible avenues for settling the case.

“Failing to do this and do it early can really place you at a very significant disadvantage with regard to both the litigation and the potential settlement.”

Due diligence does not only apply to researching counterclaims, however: adequate preparation can also yield dividends when conducting early, pre-trial discovery. According to the panel, targeted early discovery demonstrates strength and displays a willingness to proceed with litigation if necessary. A party must be careful, however, to avoid unnecessary extensions of time—these only suggest a lack of confidence and commitment to the task, and have the potential to increase the costs of the case.

The pre-trial phase is also the time to determine whether or not to file a motion for summary judgment. Because favourable rulings on summary judgment are relatively rare, it is important to carry out careful preparation and targeted discovery. Yet many parties applying for pre-summary judgment may find that several factors in the decision remain outside of their sphere of influence.

“This is a matter that tends to be very judge-specific,” said Leland Hansen, also a partner at McAndrews. “Some judges welcome an early summary judgment motion, [while] some judges won’t consider it seriously until after claim construction or even until facts and expert discovery have been completed. So it’s important to understand the judge and the judge’s practice.”

The panellists were adamant that, upon entering into trial, a party should not discount the utility of settlements. Early settlement does not have to signal a sign of weakness, since more litigation tends to mean that less is available for settlement; thus, the longer litigation continues, the less there is to really discuss.

The participants went on to extol the virtues of inter partes review and post-grant review in litigation proceedings, and covered what one should consider when following through with ADR proceedings.

Finally, the panel discussed how a great deal of litigation could be saved by a simple product redesign. A redesign, it was pointed out, has the potential to mitigate damages, reduce the threat and harm of an injunction or ITC exclusion order, and ultimately makes for a more competitive product.

During the webcast, viewers were asked a number of questions. When asked what the biggest driver of early resolution of IP disputes was, 52% said cost, 24% said uncertainty, 17% said business disruption, 3% said delay, and 3% said “other".

When asked how helpful courts are in facilitating early settlement, 65% said they were neutral, 15% said very helpful, 10% said somewhat helpful, 10% said somewhat unhelpful, and 0% said very unhelpful.

When presented with five options and asked to name which was the most helpful in early resolution of IP disputes, 70% picked inter partes review, 10% picked re-examination, 10% picked mediation, 10% picked arbitration and no one picked post-grant review.

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