Best Practices in Multi-Defendant Litigation

Transcription

1 Best Practices in Multi-Defendant Litigation IPO Annual Meeting September 12-14, 2010 IPO 2010 Annual Meeting 1

2 Speakers Moderator: Elizabeth Ann "Betty" Morgan The Morgan Law Firm P.C. William Bergmann Baker & Hostetler Julianne Hartzell Marshall, Gerstein & Borun Preston Ratliff Paul Hastings Jayna Whitt Apple Inc. IPO 2010 Annual Meeting 2

3 Considerations at Different Stages of the Case Filing and Initial Case Assessment Discovery Claim Construction Summary Judgment Trial Settlement IPO 2010 Annual Meeting 3

4 Plaintiff s Initial Considerations Who to name and what to accuse? Expense Goals Where to file? Transfer potential Severance potential Staging of case phases and trial Time limits on trial Speed of jurisdiction IPO 2010 Annual Meeting 4

5 Defendants Initial Considerations Counsel Sharing and fee arrangements Actual or potential conflicts Co-Defendant relationships Alignment and trust Indemnity Philosophy (e.g., reexaminations, early resolution potential, discovery and disclosures, motion practice, etc.) IPO 2010 Annual Meeting 5

6 Common Interest / Joint Defense Agreements - A More Detailed Look IPO 2010 Annual Meeting 6

7 Overview and Advantages of a Joint Defense Agreement (JDA) Joint Defense Agreement allows defendants with a common interest to share information Facilitates coordination of defense strategy Defendants benefit from having a consistent theme and consistent positions, particularly in patent cases (claim construction, invalidity, and noninfringement) Courts would rather receive coordinated filings from defendants Defense tasks can be divided up (brief writing, prior art searching, etc) to reduce costs and increase efficiency Memorializes understanding of parties and increases chances of privilege being upheld IPO 2010 Annual Meeting 7

8 Background of Privilege Protection of communications among clients and attorneys allied in a common legal cause has long been recognized In re Regents of University of California, 101 F.3d 1386, 1389 (Fed. Cir. 1996), citing In re Grand Jury Subpoena Duces Tecum (S.D.N.Y. 1975) Privilege has its origins in criminal cases in which defendants jointly retained counsel and has been expanded to civil cases Privilege goes by several names and courts have defined it variously community of interest privilege common interest rule or doctrine joint defense privilege See Intex Recreation Corp., 471 F.Supp.2d 11, (D.DC 2007) IPO 2010 Annual Meeting 8

9 Representative Elements of Joint Defense Privilege The party asserting the privilege must show: Communications were made in the course of joint defense effort (common legal interest and joint defense effort) The statements were designed to further the effort Underlying privilege (attorney-client or work product) has not been waived Intex, citing In re Bevill, 805 F.2d 120 (3 rd Cir. 1986) IPO 2010 Annual Meeting 9

10 Litigation is Not Always Required for Privilege to Attach 1 st, 4 th, 7 th, 9 th, and Federal Circuits have held that a threat of litigation is not required in order for privilege to attach BDO Seidman, 492 F.3d 806, 816 (7 th Cir. 2007) 5 th Circuit requires palpable threat of litigation U.S. v. Newell, 315 F.3d 510 (5 th Cir. 2002) IPO 2010 Annual Meeting 10

11 Privilege Applies in Patent Cases In Re Regents of Univ. of Cal. (Fed Cir 1996) Inventor worked with his company s patent attorneys and then later with patent attorneys representing exclusive licensee to obtain patents Common defense privilege held to apply to communications between attorneys and their clients (even though litigation not imminent) Federal Circuit follows law of the Circuit from which appeal arises in interpreting JDAs. IPO 2010 Annual Meeting 11

12 Considerations When Entering Into Joint Defense Agreements Define Common Interest of Group Enter into an oral ( memorialized) JDA as early as possible Promptly enter written agreement Update and include the law of the relevant circuit in written agreement and ensure that required elements of privilege are enunciated in JDA Structure the JDA such that it is open-ended (i.e. does not end when defendants settle) Structure the JDA such that it is flexible enough to add new parties IPO 2010 Annual Meeting 12

13 JDA Clauses to Establish Privilege Statement defining common interest Reference to proceedings creating interest Intent to work together to jointly defend Intent not to waive attorney-client or work product privileges Need to share information to further interest IPO 2010 Annual Meeting 13

14 JDA Clauses Relating to Use of Joint Defense Information Definition of joint defense information All parties agree to keep joint-defense information as confidential and will limit access to it Provisions that continue to limit access to information even if party withdraws (e.g. settlement), when a third party requests access to information, and governing use of joint defense information by defendants in other proceedings IPO 2010 Annual Meeting 14

15 Other Important JDA Clauses Participation in JDA does not create new attorneyclient relationships, does not limit counsel s defense of his own client or ability to present case, and cannot be used to disqualify any party s counsel in other litigation Participation in JDA and receipt of prior art does not constitute notice of prior art for purpose of disclosing it in unrelated prosecution proceedings or for purpose of establishing willful infringement Provisions must allow parties to independently settle litigation and withdraw IPO 2010 Annual Meeting 15

16 JDA Negotiated/Optional Clauses Conflicts provisions Can counsel representing one defendant depose or cross-examine another defendant that is a member of the joint defense group, or are they conflicted out? Standstill and tolling of indemnity or other claims between parties (can be separate side agreement) Provisions governing initiation of reexamination proceedings by parties to JDA Cost Sharing, Task Sharing, Expert Selection? IPO 2010 Annual Meeting 16

17 Next Steps IPO 2010 Annual Meeting 17

18 Defendants Early Decisions Answer or file motion to dismiss Move to sever and/or transfer Move to advance some Defendants ahead of others (e.g., suppliers or primary defendants) Coordinate and divide up labor In-house involvement Divide prior art searching and other invalidity analyses Common interest fund for shared costs and expenses IPO 2010 Annual Meeting 18

19 Motion to Sever Split of authority on whether mass patent cases can be severed under FRCP 20(a) Likely to succeed if: False marking case with different products accused Single manufacturer and multiple retailers accused for single product. Retailers agree to be bound by findings against manufacturer More difficult: Infringement allegations against similar products and Court finds shared claim construction, invalidity, and unenforceability issues IPO 2010 Annual Meeting 19

20 Discovery Issues Limits on number of depositions, duration and interrogatories (common and individual) Attendance at co-defendants depositions Division of time and labor for key depositions of plaintiff Protective Order IPO 2010 Annual Meeting 20

21 Protective Order Provisions Challenge: Reaching consensus Heavily negotiated provisions Access by competitor co-defendants and in-house representatives of plaintiff and defendant Patent prosecution bar provisions and competitive decision making restrictions when large numbers of counsel are involved Source code inspection provisions Restrictions on experts IPO 2010 Annual Meeting 21

22 Expert Selection Challenge for Plaintiff: Finding experts without conflicts Challenge for Defendants: How many are needed? Can the group share experts? Invalidity Non-infringement Damages Inequitable conduct if needed IPO 2010 Annual Meeting 22

23 Contentions and Claim Construction Plaintiff s challenge cover all accused products and avoid prior art Consider settlement with some defendants if accused products weaken position Defendants challenge reasonably limit number of disputes while accommodating different interests IPO 2010 Annual Meeting 23

24 Summary Judgment Plaintiff s and Defendants Challenge: Limiting number of issues to address on Summary Judgment Judges may limit ability to file summary judgment motions Defendants may want to file individual motions that may depend on confidential information Plaintiff may have to handle a large number of motions IPO 2010 Annual Meeting 24

25 Trial Plaintiff s challenge: Consistency and ability to create record on large number of products Defendants challenge: To share time with large number of parties Confidentiality concerns Due process concerns IPO 2010 Annual Meeting 25

26 Settlement Plaintiff s challenge: Identify optimal timing to approach defendants Settle with parties who weaken case Create licenses that strengthen and do not weaken damages case and settlement ability with remaining parties Overcome group dynamic and strength in numbers Defendants challenge: Remain able to take primary role if needed without losing efficiency Assess potential to negotiate as a group versus plaintiff s offer for an early discount IPO 2010 Annual Meeting 26