Leveraging the AIA s Joinder Provision, Recent Decisions, and New Court Procedures in Defending Infringement Disputes

Transcription

1 Presenting a live 90 minute webinar with interactive Q&A NPEs in Patent Litigation: i i Latest Developments Leveraging the AIA s Joinder Provision, Recent Decisions, and New Court Procedures in Defending Infringement Disputes WEDNESDAY, JANUARY 9, pm Eastern 12pm Central 11am Mountain 10am Pacific Td Today s faculty features: R. David Donoghue, Partner, Holland & Knight, Chicago Dana M. Herberholz, Parsons Behle & Latimer, Boise, Idaho The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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4 NPEs in Patent Litigation: Latest Developments R. David Donoghue Holland & Knight LLP 131 S. Dearborn Street Chicago, Illinois Telephone: Dana M. Herberholz Parsons Behle & Latimer 960 Broadway, Suite 250 Boise, Idaho Telephone: Copyright 2011 Holland & Knight LLP. All Rights Reserved

5 OVERVIEW A troll by another name? NPE-proofing Doesn t patent reform (AIA) fix everything? Is more patent t reform on the horizon? Responding to trolls a plan Defending the suit a plan NPE costs a plan Considerations o s for prevailing parties 5

6 A TROLL BY ANY OTHER NAME? Patent troll? Non-practicing entity? Patent assertion entity (DOJ/FTC)? The effort to define is the key. 6

7 NPE-PROOFING Avoid success and profit Do not win industry awards Do not engage in prominent marketing campaigns No internet-based marketing Avoid products with internet-based offerings Develop an NPE plan 7

8 NPE-PROOFING Avoid products with internet-based offerings Develop an NPE plan Pre-litigation demand strategy Litigation strategy Defense costs 8

9 Doesn t patent reform (AIA) fix everything? The AIA s key provisions: First-to-file to system False marking heavily restricted No joinder of unrelated defendants Revisions to Inter Partes Rexams and addition of Post-Grant Review Nothing has changed the number or severity of NPE suits. 9

10 Doesn t patent reform (AIA) fix everything? The AIA s key provisions: Best mode defense eliminated No opinion letter willfulness or inducement Expanded prior use defense 10

11 Doesn t patent reform (AIA) fix everything? The AIA s non-joinder provision: No joinder unless claims against unrelated defendants: arise out of the same transaction, occurrence, or series of transactions, or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process ; ; and raise questions of fact common to all defendants 35 U.S.C. 299(a)(1)-(2) (emphasis added)\ 11

12 Doesn t patent reform (AIA) fix everything? The AIA s non-joinder provision (cont d): [A]ccused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit. 35 U.S.C. 299(b) (emphasis added)\ 12

13 Doesn t patent reform (AIA) fix everything? Courts are dismissing suits for misjoinder Digitech Image Technologies, LLC v. Agfaphoto Holding GMBH, 8:12- cv-1153-odw (CD Cal. Oct. 1, 2012) (Wright, J.) Phoenix Licensing, LLC v. Aetna, Inc., 2:11-cv-285-JRG (ED Tex. Aug. 15, 2012) (Gilstrap, J.) Jaffe v. LSI Corp. et al., 3:12-cv-3166-RS (ND Cal. Dec. 19, 2012) (Seeborg, J.) 13

14 Doesn t patent reform (AIA) fix everything? BUT courts are using Rule 42(a) to consolidate cases (often sua sponte) until trial Azure Networks LLC, et al. v. Mediatek Inc., 6:12-cv-252-LED (ED Tex. Nov. 8, 2012)(Davis. J.) (courts have considerable discretion in consolidating actions involving a common issue of law or fact) Ameranth, Inc. v. Pizza Hut, Inc. et al., 3:11-cv JLS-NLS (SD Cal. Oct. 4, 2012) (Sammartino, J.) (consolidating 30 cases through claim construction) Secured Mail Solutions LLC v. Advanced Image Direct LLC, et al., 8:12-cv (CD Cal. Oct. 11, 2012) (Carter, J.) (granting sua sponte motion to consolidate three cases for discovery and pretrial purposes) 14

15 Doesn t patent reform (AIA) fix everything? Percentage of patent infringement lawsuits filed by NPEs increased in 2012: 2012: 61% 2011: 45% 2007: 23% Data through December 10, 2012 Source: US Patent Lawsuits Now Dominated by Trolls Study, December 10, 2012, Reuters 15

16 Is More Patent Reform on the Horizon? SHIELD Act Fees awarded for cases without reasonable likelihood of success TRIPS problems and only applied to computer hardware and software cases Executive Branch appears to be investigating NPE problem December 2012 FTC/DOJ workshop and public comment PTO is seeking comment on patentability of software & instituting a duty to register assignments Appears to suggest an Executive Branch Interest in solving the patent litigation problem broadly and the NPE problem more specifically Patent small claims court? ABA investigating $1M or $10M maximum Shorter time frame Bench trial 16

17 RESPONDING TO TROLLS APLAN Review and understand d allegations Seek clarification if you do not understand Many NPEs will give an early presentation 17

18 RESPONDING TO TROLLS A PLAN(CONT D) Due diligence Do we do it? Did we do it before them? Any revenue? The patent(s) Expiration Priority Scope 18

19 RESPONDING TO TROLLS A PLAN(CONT D) Indemnitors Take over defense or file separate action Competitors Counsel? 19

20 RESPONDING TO TROLLS A PLAN(CONT D) Respond courteously (if at all) Get time. Do not engage Tell them if they are wrong, but only if absolutely clear Less is more 20

21 DEFENDING THE SUIT-A PLAN Reexam and stay Cannot change course May not get to stay Super-validity/lose validity arguments IPR & PGR come with estoppel IPR is very expensive to file, even if it is not accepted. IPR can be withdrawn upon settlement. Answer and fight Expensive Resource drain people p and corporate attention 21

22 DEFENDING THE SUIT-A PLAN (CONT D) Transfer Jurisdiction dependent Move to dismiss Jurisdiction dependent (Twombly/Iqbal) Early mediation eda Only if settlement possibility Early exchange of sales data? 22

23 DEFENDING THE SUIT-A PLAN (CONT D) What works? Start telling your story Show early strength th respectful, but difficult Propose ways to streamline (early SJ or Dep) Early mediation (sometimes) Get experienced counsel/know the rules and judge Motion o for exceptional case finding, costs, s, attorneys fees, and/or Rule 11 sanctions (in appropriate cases) 23

24 DEFENDING THE SUIT-A PLAN (CONT D) Plan early for discovery Rule 26(f) conference scope of ESI custodians/keywords production format privilege logs and non-waiver agreement cost-shifting provisions discovery phases? ESI guidelines or checklist in your district? ND Cal ESI Guidelines and Checklist 24

25 DEFENDING THE SUIT-A PLAN (CONT D) Plan early for discovery (cont d) E-Discovery Order Model Order Regarding E-Discovery in Patent t Cases (Fed. Cir.) Similar model order in ED Tex General orders re ESI e.g., ND Cal., Delaware, Kansas, Maryland Pilot Projects: Jointly Submitted E-Discovery Plans ND Ill., SDNY 25

26 DEFENDING THE SUIT-A PLAN (CONT D) What does not work? Waiting Avoiding discovery Fighting the process 26

27 NPE COSTS A PLAN Get a realistic budget Tight leash Regular weekly updates Partner with counsel Engage business leaders In-house dedicated resources? Early discovery gathering and production Strategic fights, not all fights Smart, early trial preparation 27

28 Considerations for Prevailing Parties Covenants Not to Sue and Voluntary Dismissal Impact on invalidity counterclaims? Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d 1054 (Fed. Cir. 1995) Demand dismissal with prejudice Taxable costs (Rule 54(d)(1)) 28

29 Considerations for Prevailing Parties (cont.) Motion For Exceptional Case Finding/Attorneys Fees (35 U.S.C. 285) Elements Misconduct (in obtaining the patent or litigation misconduct) OR Litigation brought in subjective bad faith AND was objectively baseless Recent and Notable Cases Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314 (Fed. Cir. 2011) MarcTec v. Johnson & Johnson, 664 F.3d 907 (Fed. Cir. 2012) Raylon, LLC v. Complus Data Innovations, Inc.,, (Fed. Cir. Dec. 7, 2012) 29

30 QUESTIONS R. David Donoghue Holland & Knight LLP 131 S. Dearborn Street Chicago, Illinois Telephone: Dana M. Herberholz Parsons Behle & Latimer 960 Broadway, Suite 250 Boise, Idaho Telephone: