imageRisky business

Patent infringement cases involve an immense amount of risk. Why?

Answers by people who know — especially plaintiffs-side attorneys who work on a contingent-fee basis — will cluster around three facts of life in patent disputes:

  1. high stakes,
  2. huge costs, and
  3. the propensity of the Federal Circuit to undo trial court rulings.

This post deals with the hazards awaiting you behind door number three.
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PortfolioFinding your patents

Since 1990, 4,008,329 utility patents have won U.S. Patent and Trademark Office approval. In 2014 alone, the USPTO granted more than 300,000 of them. And those awards went to a wide range of patenting entities — 38,000 of them, in fact.

If you do legal work for companies of any size, those clients of yours likely own at least one patent and may have quite a few (several hundred entities received 40 or more patent grants just in 2014). Do you have any idea how many or what inventions they cover?

Don’t worry if you don’t. You can get a list and see a copy of the patents in no time flat.
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FundingBig dollars in business cases

Expenses in big-dollar lawsuits can run into the millions of dollars. An antitrust class action that I’ve handled since 2003, for instance, cost more than $8 million. The law firms representing the class fronted all that money, with no assurance we would ever get any of it back. Why would any sane person do such a thing?
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FundingSizable expenses

A big commercial case can cost millions in expenses — by which I mean out-of-pocket costs that the plaintiff or its counsel must pay net of attorneys’ fees. A portfolio of cases — for infringement of a patent or family of patents, say — can run many millions more. Who will bear that burden? And what will it cost?
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You can send photos and other things via multimedia messaging service
MMS = multimedia messaging service

Summit sued Samsung for infringing a patent on “Web-Based Media Submission Tool”. It alleged that Samsung smartphones infringed the patent by enabling users to send pictures through the web/Internet via multimedia messaging service (MMS). A jury awarded Summit $15 million — a little more than half

DelayEn banc court sidesteps high court

In Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1974 (2014) (post here), the Supreme Court ruled that the defense of laches — unreasonable delay in bringing suit — does not preclude recovery of damages for copyright infringement during the usual statute of limitations period (three years under the Copyright Act). Does the same rule apply to patent cases?

The en banc Federal Circuit held last week, by the smallest of margins (6-5), that Petrella does not govern cases under patent law. Defendants may thus cite a patent holder’s delay in filing a lawsuit as a ground for reducing or barring damages within the six-year pre-suit period that patent law generally allows.
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Patent LawA flood of cases

In the second quarter of 2015, a spate of patent cases washed into the 94 district courts around the country, but a single district drew more than half of them — a record 839 out of an all-time-high 1,656 total.

The receiver of the intellectual property bounty? The Eastern District of Texas.

The fact that a good percentage of the cases went to that district — which rambles from north and west of Dallas to north and east of Houston — will not surprise any lawyer who has handled more than a few patent infringement cases during the last decade.

But what accounts for the big spike in cases nationwide? And why did fully 50 percent go to Marshall, Tyler, Plano, Texarkana, Sherman, and Beaumont, Texas?
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Lessons LearnedA golden age of civil antitrust, from the 1960s into the 1980s, enriched the victims of cartels and monopolies but upset corporate America.  The high cost of paying treble damages claims eventually provoked a spare-no-expense approach to defense. That in turn influenced the way plaintiffs prosecuted their Sherman Act claims.

Much the same thing has