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Innovation and litigation summit – key takeaways

Speakers at Managing IP’s inaugural innovation and litigation summit at the Fairmont in San Francisco discussed topics ranging from using data in IP to litigation strategies at the PTAB and ITC


Here are some highlights from the event:

Core elements of a successful patent strategy


  • Jeremiah Chan, head of patents at Facebook in San Francisco, said that he has been unpleasantly surprised at how few law firms take advantage of the enormous amount of patent data available. He requires his outside counsel to include relevant PAIR data in their prosecution recommendations. “You have to study for the test,” Chan said. “Look at examiners’ history, how they perform, and their preferences.” Read about Chan’s other recommendations here.

IP defence and prosecution strategy in 2020 and beyond


  • Jeremy Taylor, San Francisco-based partner at Baker Botts, outlined the factors devaluing US patents: Section 101 uncertainty, alternative venues, and the high cost of enforcement. On the other hand, John Blake, vice president of IP strategy at TiVo said that “the pendulum is swinging back” for rights holders, but that perceptions of patent values are lagging, which makes licensing negotiations difficult to enter. “They are essentially conversations about risk,” he said. “The other side doesn’t agree that there’s any value at all, so that’s where the rubber meets the road.”


  • Christiana State, associate general counsel at Wave Computing, agreed that the pendulum may be swinging, but not fast enough. She’s had to recommend to startups that they shouldn’t litigate against blatant infringers because litigation would bankrupt the company. “The system favours big pockets,” State said. “Not everyone has a fair shot, and that’s not the American way.” Patrick Zhang, head of IP at software company Atlassian, painted a bleak picture for progress: “The law on 101 is irretrievably broken,” he said. “The Federal Circuit’s attempts to reign it in will be overturned again at the Supreme Court. I won’t put money on Congress resolving 101, but their intervention is needed.”


  • On a more optimistic note, Zhang said that the legal uncertainty means that “it’s a really good time to buy patents right now”. Subroto Bose, senior director of IP operations at Dolby Laboratories, agreed: “It’s a buyer’s market.” However, Bose warned people to consider the reasons certain patents are not selling; “there’s a lot of junk out there”. In a Slido-enabled survey of the room – a mix of in-house and outside counsel – 63% said that they would invest more in patent acquisitions going forward, while 29% said their acquisition budget would stay the same and 8% would spend less.

Using the ITC as an enforcement body


  • If you have the budget and standing to go to the ITC, “it’s an effective tool to get a remedy,” according to Mike Schwartz, senior vice president of IP litigation at Rovi. “It’s not for small disputes,” he said, but in the common case of concurrent litigation, “the ITC’s speed is an advantage because you get an injunction for one to two years even if you lose that patent at the end”.


  • Another advantage of the ITC is that it’s easier to sell to upper management, according to Tim Schade, general counsel at Lifetime Products. “When you say district court litigation takes five years, you lose your audience,” he explained. “Two years at the ITC is easier to stomach than half a decade.” On the other hand, Schade said, speed can be a two-edged sword; “it can be hard to keep up.”


  • Uma Everett, director at Sterne Kessler in Washington, DC, agreed with these points, and added that injunctive relief is more powerful at the ITC than in district courts because they can potentially knock out whole product lines when only a small number of products were actually litigated. However, Everett warned about the time commitment: “Litigation at the ITC is a full-time job, on top of business people who already have a full-time job. There are no limits at the ITC, so the volume of depositions is tremendous.”

Strategies for efficient PTAB defence


  • Ever since the claim construction standard changed from broadest reasonable interpretation to Phillips in 2018, patent owners with cases at the Patent Trial and Appeal Board (PTAB) and in district courts have had to become more mindful of making consistent arguments. Scott McKeown, DC-based partner at Ropes & Gray, explained: “You used to be able to reserve the right to change your argument in a different forum because there was a different claim construction standard, so this change is not necessarily good for patent owners.” On the other hand, it will improve the consistency of decision-making, according to Charles Boudreau, administrative patent judge at the PTAB in San Jose. Also, Boudreau said that the change to the Phillips standard won’t make much of a difference in practice because “we’ve been applying it all along if the patent had already expired, which is a significant fraction”.


  • Boudreau explained that one of the reasons that institution rates have come down is because they’re “looking more closely at petitioners filing repeat petitions” after “some instances of abuse”. In response, strategic petitioners should “look at the ecosystem,” advised Kirupa Pushparaj, IP director at Square. “Even if you’re not part of the original set of defendants,” he said, “look at what’s happened before to that patent. Are you bringing new issues, or is it cumulatively the same?”


  • The PTAB launched a claim amendment pilot programme on March 15. Cases that were instituted since then are just now coming to the stage where motions to amend are due, so “it’s too early to tell” about its popularity or success, said PTAB judge Boudreau. Square’s Pushparaj said that he thinks it’s appropriate to have strong controls on patent owners’ ability to amend because “it’s an adjudication, not a reexamination!” If the pilot “opens the floodgates for easy amendments,” he cautioned, “that would go too far”. Duo Chen, director of IP at Box, added that she is worried about the pilot programme because it creates more uncertainty at the PTAB, and “it could get more expensive”.

Brand protection, defence & anti-counterfeiting


  • An important part of brand management is internal, according to Hillary Schroeder, senior trademark counsel at e-cigarette company Juul Labs in San Francisco. On one hand, “management needs to understand how much of a problem counterfeiting is,” she said. On the other hand, non-IP folks have a tendency to “lose their minds” when they see counterfeit products on that market, so it can be a tricky balance of emphasising yet minimising the issue. Schroeder introduced a scale for reference, from how bad it is to how NOT bad it is.


  • External optics are vital to be aware of as well. For example, in some regions like Latin America, “enforcement efforts are with an eye to press,” Schroeder explained. However, strategic raids for deterrence don’t work in China, so she said “we only go after high-volume, high value targets there”.


  • As an e-cigarette company, Juul enforces based on risks to public health and safety rather than just lost sales, which may be the more relevant number in other industries. And as a popular global brand that inspires fans as well as nefarious organisations to infringe, speedy prosecution is particularly important for Juul. “Office actions are often at the bottom of the pile with outside counsel,” said Schroeder, “but that’s not how Juul operates because we are enforcing all over the world. We focus on expanded class coverage, particularly in China (classes 1-39) and we also file for translated marks in jurisdictions where it matters, with Cyrillic, Arabic, Chinese characters, and so on.”  

Patent litigation post-TC Heartland


  • As a result of the Supreme Court’s 2017 TC Heartland decision, patent litigation has shot up in Delaware and plunged correspondingly in the Eastern District of Texas, as Managing IP reported here. Sarah Brooks, partner at Venable Fitzpatrick in Los Angeles, recommended keeping in mind when choosing a venue that Delaware has become congested: “It’s not a rocket docket by any means,” she said. The proper venue depends in part on the urgency of the matter. Brooks added that “we’re seeing a lot more up-front costs than in the past” because the burden of proof is on the plaintiff in venue challenges, which is especially difficult without discovery. “I’ve seen courts more willing to grant convenience motions recently,” she said, “because there’s a willingness to find the proper venue.”


  • Deanna Kwong, IP litigation counsel at Hewlett Packard, said another effect of TC Heartland was an increase in filings at the ITC, as well as in federal district courts against foreign parent companies even if it’s clear that the alleged infringing activities are those of a domestic subsidiary and not the foreign parent. “NPEs like IP Edge are trying to get quick settlements,” said Kwong, and US district courts are no longer the most attractive option for them.


  • As for venue motions, “as long as they are not frivolous, go ahead and file,” said Danielle Coleman, litigation counsel at VMware. “I like to think judges are fair.” HP’s Kwong added: “You need a good argument for why another venue would be better, but we haven't felt any blowback from the judge if it’s denied.” In that vein, Shane Brun, partner at Venable Fitzpatrick concluded: “The key is you don’t want to ruin your credibility with the judge. You want to be the most honest person in the courtroom, starting with that motion.”

Effectively managing and protecting trade secrets


  • The majority of respondents to a Baker McKenzie survey consider protecting trade secrets as a board-level issue, and that trade secrets are more important to them than patents. However, less than one third take even the most basic measures to define or protect them, “so there’s a disconnect between the level of importance and the measures to deal with them,” explained Brian McCormack, partner at Baker McKenzie in Dallas, Texas.


  • He presented a checklist: identify your trade secrets; maintain an inventory; implement protective contractual, physical, technical, and organisational measures; then create a misappropriation action plan. McCormack also recommended keeping only a vague description of trade secrets in the inventory, as well as ascribing a value to each for prioritisation purposes. When asked if ascribing values could create tax obligations to report the secrets as intangible assets, McCormack amended the advice: “Ask your tax lawyer, but maybe say the value is low, medium, or high instead of an actual value.”


  • The Defend Trade Secrets Act and Section 337 at the ITC provide mechanisms to enforce trade secrets in the US. MacKenzie Martin, Dallas-based partner at Baker McKenzie, noted that “criminal prosecutions are gaining popularity,” particularly via the Computer Fraud and Abuse Act and the Economic Espionage Act. “Restitution is available,” Martin explained, “which can include attorney’s fees, and provide an economical way to combat theft.”


  • In terms of preventative measures, Martin recommended including provisions recognising high-level descriptions of trade secrets in software licences. She also suggested policies around technical safeguards, paper shredders, regular training, confidentiality notices on documents, restricting access to need-to-know basis, cyber audits, password protocols, non-competes for key employees, and protocols around off-boarding.


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