Knowledge Management During Pretrial Patent Litigation : Secrets of the Super Searchers

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  • 1. Knowledge Management During Pretrial Patent Litigation : Secrets of the Power Searchers © 2009 Professor Jon Cavicchi
  • 2. Knowledge Management
    • Internal information
    • External information
      • Public sources
      • Acquired via discovery
        • Document organization & retrieval
    • Law
    • Factual information
  • 3. A serious undertaking
    • Patent litigation is among the most time-consuming and expensive types of litigation.
    • According to a 2001 survey conducted by the American Intellectual Property Lawyer's Association (AIPLA), a patent litigant can expect to spend at least $500,000 and up to $6 million to try a patent case.
    • On average , a patent suit in which $1 - $25 million is at risk costs $797,000 through discovery and just under $1.5 million through trial, with some litigants reporting costs in excess of $2.5 million.
    • For those cases in which more than $25 million is at risk, the average litigant can expect to spend $1.5 million through discovery and roughly $3 million if there is a trial.
    • Knowledge management can save time and money
  • 4. Prolonged uncertainty…
    • The costs of patent litigation, however, often go far beyond attorneys' fees and associated expenses. In bet-the-company situations frequently encountered in patent suits, long, drawn out litigation can have devastating effects on a party's business. The prolonged uncertainty of a patent suit can have a dramatic impact on stock prices, and a company cannot adequately plan for its future with a potentially crippling judgment looming on the horizon.
  • 5. 80% of all research done in patent law firms has nothing to do with legal research…. Library Director of Testa Law Firm to Meeting of Law Librarians of New England
  • 6. Gathering law & facts
    • Substantive Issues of a Patent Case  
    • Investigation Needed Before Bringing Suit  
    • Opening Phase  
    • Discovery and Privilege  
    • Attorney-Client Privilege and Work Product Immunity  
    • Organization, Vendor Support, and Cost Control  
    • Nondiscovery Motions and Court-Initiated Procedures  
    • Witnesses Special to a Patent Case  
    • Damages and Attorney Fees  
    • Injunctions  
    • Pretrial Proceedings  
    • Trial  
    • Appeal  
    • Patent Litigation Other than District Court Infringement Actions 
    •   Insurance Coverage  
  • 7. Whose role is it to do searching?
    • Legal research to patent searching to fact gathering
    • Context specific
      • Paralegal (such as at Seed, Lyon…)
      • Runners…gophers…(Lyon)
      • New associate (such as Steol)
      • Librarian
      • Professional searcher
  • 8. Resources to figure this out…
  • 9.  
  • 10.  
  • 11.  
  • 12. Also on Lexis
  • 13. Also on Westlaw
  • 14. Also on Lexis & Westlaw
  • 15. What do patent lawyers study…ten year review of PLI
    • ADR
    • Claim construction
    • Corporate counsel role
    • Damages
    • Discovery
    • Examining witnesses
    • Experts
    • Infringement
    • Injunctions
    • Inequitable conduct
    • Infringement
    • Injunctions
    • Invalidity
    • Inequitable conduct
    • Jury trials
    • Laches
    • Markman
    • Obviousness
    • Opinions of counsel
    • Prefiling considerations
    • Willfulness
    • Witnesses
    • Written aspects of trial
  • 16. Patent litigation is just that…use many of the same tools as any other litigation…process of litigation as applied to patent law
  • 17. Elements of a patent owner’s case
    • Proof of title
      • Original patent grant
      • Certified assignment
    • Infringement (make..use…sell)
      • Direct
      • Induced & contributory
    • Damages
      • Injunctive relief
      • Lost profits or reasonable royalties
  • 18. Defenses of the accused infringer
    • “ Patent lawsuit is a defendant’s case”
    • Is the defendant a licensee?
    • Counter plaintiff’s case
    • Defenses against patent validity
      • §282 presumption of validity
      • Expiration or nonpayment of fees
      • Collateral estoppel by prior adjudication
      • §102 & §103
      • Inequitable conduct before the PTO
      • laches
  • 19. Pretrial Investigation Players and strategies
  • 20. Rule 11
    • Bare minimum of pre-suit investigation
    • Have real or likely evidentiary support
    • Opinion letter useful in defending Rule 11 motion
  • 21. What is the strategy to reach objective?
    • Injunction?
    • Damages?
      • Compensation…lost profits
        • Big 5 accounting firm IP Departments
      • Reasonable royalty rate
      • Where do we search?
        • Trade publications provide estimates of sales
        • Patent owners own marketing and sales departments
        • Royalty rate calculation firms
  • 22.  
  • 23. Determining Royalty Rates Royalty rates are a tricky thing to find, as they are usually not made public.  Nonetheless, there if you want to spend time weeding through a lot of results, there are methods available. * SEC filings Sometimes public companies, especially smaller ones, will make terms of licensing agreements available.  Searching through SEC filings, especially 10-Ks and S-1s, for "royalty and patent" or "royalty and license" will sometimes prove fruitful.  The vast majority of numerical data in these licensing agreements are redacted out, so you will have to wade through a lot of false hits for the few pieces of real information.  Places to search SEC filings include: 
  • 24. News articles… Once again, every so often, terms of a licensing agreement will turn up in a press release or an article.  In most instances, terms of the deal will not be revealed, but a persistent soul can usually turn up a few bits of information.  Any of the article databases could be used for this.  (RDS, PROMT, DowJones, etc).  Reported Decisions online… In some legal decisions involving patent cases, a judge or jury must determine a "reasonable royalty" rate.  While this royalty may differ from what parties may agree to outside of litigation, it can provide some information.  Plus, in some cases a judicial decision may describe the evidence and rationale used to arrive at the royalty rate. 
  • 25. Time commitment?
    • Rocket dockets - 1 year or less
    • Other districts - longer
    • Key company employees
      • Discovery
      • Deposition
  • 26. Pre-suit investigation team
    • Corporate IP counsel
    • Patent attorney
    • Trial attorney
    • Technologist most familiar with field of invention - inventor?
    • Allied information gathering professionals
  • 27. Selecting experts
    • Liability & damages phases
    • Choose before the lawsuit begins
    • Judge is gatekeeper who may prohibit expert from testifying ( Daubert )
    • Use expert to help get facts that help in discovery
    • Caution: communications not protected
  • 28. Patent Attorney or Agent?
  • 29. Patent Examiner?
  • 30. Find the “movers & shakers…”
    • Search everywhere for anything by or about the expert
      • Transcripts of all testimony
        • Contact court
        • Electronic versions?
      • General and industry specific news and literature
      • Comments in court decisions
  • 31. Where to search…
    • Expert databases
    • Patents
    • Non-patent literature
    • Word of mouth
      • Your inventor
      • Build a list by asking each other best experts in the field.
  • 32.  
  • 33.
    • Expert Witness Resumes - EXPTRESUME
    • Profiles of Expert Witness - PROFILER-EW
    • Expert Witness Journal
    • Expert Witness Checklists
    • Expert Witness in Civil Trials
    • National Expert Transcript Service
    • West Legal Directory - Experts
  • 34.
    • EXPTRESUME : Resumes of expert witnesses from the Lawyers Desk Reference Plus, including such information as education and training; licensing, certifications, and professional associations; previous experience as a consultant or witness; other cases in which the expert has testified, the issues involved, and the results obtained; detail concerning the expert's areas of expertise; and information on fees and rates .
  • 35. EXPTRESUME
  • 36. PROFILER-EW
    • Profiles of expert witnesses from across the United States that include links to summaries of settlements and jury verdicts; other expert witness directories; and law review and bar journal articles, CLE materials, and abstracts of articles from the Selected MEDLINE Abstracts database that they have authored or that mention them.
  • 37.  
  • 38. Search patents…
  • 39.  
  • 40. “ Big 5” accounting firm IP departments Assist with discovery Determine lost profits Audit defendant’s records
  • 41.  
  • 42. Pre-Suit Search for Weaknesses in Case
    • Title and right to sue
    • Maintenance fees
    • Marking & notice
    • On sale and public use
    • Inequitable conduct
    • Conferring with likely witnesses
    • Locating important documents
    • Purging misuse
  • 43. Title and right to sue
    • Ownership
      • Companies are acquired & reorganized
      • Search assignment records to see what opponent will see
      • PTO may not have current records
      • check to see the patent was properly transferred
    • Right to collect damages
      • Must be expressed in an assignment
      • Revise assignment or join previous owner as plaintiff
  • 44. Ways to search assignment records Patents ASSIGN CD data is derived from assignment deeds recorded after August 1980, including assignments of patent grants and patent application publications (filed after November 29, 2000) recorded before and after publication or issue.
  • 45. CLAIMS R&R US-PAT-ASSIGN PATENTS - US ASSIGN FULL TEXT
  • 46. Locating important documents
    • Inventor’s files & notebooks
    • Intracompany documents relating to the invention
    • Prior art collections
    • Marketing and sales documents relating to the invention and infringing product
  • 47. Validity Search
    • A validity search is an extended search to ascertain whether a patent will withstand attack in litigation
    • A validity search may be described roughly as an extensive or a comprehensive patentability search
    • It differs from the patentability search in that, unlike the latter, its purpose is not to determine whether or not a patent can be obtained for a given invention but instead to determine whether or not a patent that has been obtained for an invention is valid
  • 48. Considerations
    • Price
    • Who to perform the search
      • A prior art searcher can be a high school student
    • Role of lawyer
  • 49. Scope of validity search
    • The validity search may, in important cases, involve the systematic review not only of all prior United States patents but also of all foreign patents.
    • In addition to encompassing both the United States and foreign patents, exhaustive validity searches will include a search of non-patent literature.
  • 50. Inapplicability of the Privilege: the Communication Does Not Seek Legal Advice
    • Opinions of a patent attorney that were deduced from a patent search are not to be distinguished from legal advice sought in any other confidential relationship between an attorney and his client and, therefore, ought to be privileged.
    • On the other hand, a patent search report by itself is essentially nothing more than information obtained from third parties or outside sources. Accordingly, it is not the subject of the attorney-client privilege, even though that information came to the attorney, while acting for the client on a confidential matter.
  • 51.
    • With inventions directed to technical subjects - such as chemistry or electronics - these searches will include literature surveys through scientific and technical journals and, with mechanical inventions, may include searches through catalogs, brochures, or compendiums.
  • 52. Prior art databases…free to premium In January 2003, esp@cenet® held data on 38.3 million patents from 71 countries, of which 22.5 million have a title, 17.6 million have an ECLA class and 5.5 an abstract in English.
  • 53. Standard international databases
    • Derwent World Patents Index
      • comprehensive database of 11 million unique value-added patent bibliographic documents published in the world.
      • 1.5 million patent documents added into the database each year from 40 patent-issuing authorities
      • Team of 350 specialist editors assess, classify and index these documents to provide concise English language titles and abstracts, which are readily searched and easily understood
    • INPADOC (INternational PAtent DOcumentation Center)
      • contains the bibliographic and family data of patent documents of 71 patent-issuing organizations including the European Patent Office (EPO) and the World Intellectual Property Organization (WIPO). In addition, the legal status data of 40 patent-issuing organizations are included. It is estimated that INPADOC covers some 95% of all patents published worldwide since 1973.
    • PlusPat
      • world’s largest international patent file, seamlessly merging the EPO's (European Patent Office) worldwide collection with the USPTO (U.S. Patent and Trademark Office), WIPO (World Intellectual Property Organization), EPO and Japanese patent information.
    • European Patents constitute 85% of all cited patents, so some feel comfortable searching European Patent Databases
  • 54. Basic approaches
    • Keyword
    • Classification
      • Patents are classified according to various classification schemes covering all possible technical domains. When conducting a search, it is essential to systematically use this tool that offers an objective criteria to access relevant documents. Keywords are much more subjective as there are many words to describe a same concept.
  • 55. Types of patent records
    • Full text
    • Bibliographic
    • Hybrid
  • 56. Typical searches
    • Parts of a patent document
      • Title
      • Inventor
      • Classification
      • References cited
      • Abstract
      • Specifications
      • Claims
  • 57.  
  • 58. The file wrapper
    • The prior art contained in the file wrapper of a patent, whether cited by the Patent and Trademark Office or referred to by the patentee, should be carefully considered.
    • A patent is presumed to be valid by virtue of its issuance by the Office.
    • Inasmuch as the examiners of the Office are credited by the courts with expertness, the allowance of a patent over stated prior art constitutes the judgment of an expert that the patent contained patentable subject matter over that of the prior art.
  • 59.
    • The presumption of validity places the burden of persuasion on the party challenging validity. The burden never shifts.
    • The accused infringer must establish invalidity by clear and convincing evidence.
    • When the infringer offers new prior art not considered by the PTO that is more relevant than the PTO-cited references, the burden of persuasion is more easily carried.
    • If the references found in the validity search that are not contained in the file wrapper are no more pertinent than those contained in the file wrapper - being merely cumulative - then little advantage may be gained by relying upon these references.
  • 60.
    • A validity study is not limited to consideration of the prior art or the defenses of prior public use and sale.
    • There are a myriad of defenses in addition to those that have been considered.
    • Thus a thorough study of the file wrapper of the patent application may reveal the existence of informalities of such a serious nature as to invalidate the patent.
    • Similarly, other patents of the inventor and, indeed, other publications and journal articles of the inventor may lead to defenses useful in attacking the validity of the patent.
      • For example, the inventor may, through an oversight, have claimed the same invention in more than one patent. This slipup will permit the establishing of a defense of double patenting. Other publications of the inventor may ascribe the invention of the patent to someone else or may conflict with the disclosure contained in the patent. These matters will aid in upsetting the patent's validity.
  • 61. How to search file wrappers…
    • You must get a copy
    • Electronic Patent Application Records Replace Paper Files at USPTO
    • Almost all patent information vendors will copy and deliver file wrappers
    Over 80,000 “ in stock”
  • 62. Public use
    • A validity search and study in connection with patent litigation may also include an investigation to determine prior public use
    • There are a number of patent "detective agencies" available for the procurement of such information.
  • 63. Competitor intelligence begins at home…
    • Companies have mostly relied upon internal resources to keep up on technology and identify potential patent infringers. Employees know the business, the key players, the technology, and often spot competitors that are infringing on process patents. Discussions with corporate patent attorneys indicate this has been, and to some extent remains, the process of choice for identifying process patent infringers.
  • 64.  
  • 65. Patent Owner’s Choices
    • Choice of defendant
    • Choice of forum
    • Choice of type of trial
  • 66. Choice of defendant
    • Bundle of Rights
      • Make, use, sell
      • Inducing & contributory infringers
    • May relate to choice of forum
    • Multiple suits are expensive
    • Factors
      • Damages - who is causing the biggest loss?
      • Which is the best infringement case?
      • Upstream stop at the source?
      • Deep pockets?
      • Foreign parties?
  • 67. Choice of forum
    • Is there jurisdiction?
    • Speed of trial?
    • Sophistication of judge?
    • Size of awards?
    • “ home court effect”?
    • Where defendant’s employees would be within subpeona power of the district court?
  • 68. Venue
  • 69. How to find out speed of trial
    • For a plaintiff considering bringing a patent action, the choice of forum can have a significant impact on the cost of litigation. The duration of a patent lawsuit can vary dramatically depending upon where the suit is filed.
    • Federal Court Management Statistics
    • Teddy Database at Cornell
      • 5 million federal district-court civil cases terminated over the last 22 fiscal years. The data were gathered by the Administrative Office of the United States Courts, assembled by the Federal Judicial Center, and disseminated by the Inter-university Consortium for Political and Social Research.
  • 70. Rocket dockets
    • The best known “rocket docket” is the district court for the Eastern District of Virginia (Richmond). But there are others, including one in Madison, Wisconsin – the Western District of Wisconsin. Others are the district courts for the Western District of Arkansas, the Eastern District of Oklahoma, the Western District of Oklahoma, and the District of Maine.
  • 71. Factor of a rocket docket…
    • District court judge T. S. Ellis from the Eastern District of Virginia states that “the essential factors of an expeditious docket include (1) the early setting of a fixed and immutable trial date; (2) setting the discovery period at the outset and limiting it to no more than four to five months; (3) creating a hospitable legal culture; and (4) prompt engagement and resolution by the judges of the often difficult and daunting technical issues that arise in patent cases.”
  • 72. How do we find info on judge?
    • District Court Judge T. S. Ellis from the Eastern District of Virginia example
    • Biographical data
    • Reported decisions
    • Published writings
    • Discussed in legal periodicals
    • Word of mouth
  • 73. Who’s Who on Westlaw
  • 74. Almanac of the Federal Judiciary
  • 75. PROFILER-WLD
    • Fulltext of cases 1990-
    • Settlements
    • Jury verdicts
    • Briefs
    • Directories
    • Articles
  • 76. Legal Resource Index
  • 77. JLR- Fulltext of journals and law reviews
  • 78. Reported Decisions
  • 79. Reported decisions - patent cases
  • 80. Docket files
  • 81.  
  • 82. Dockets- Ellis patent cases
  • 83. How do we find info on size of settlements and jury verdicts?
  • 84. How to find out who to serve…
    • The CORP-ALL database contains state Corporate, Limited Partnership, Partnership and Reserved Name records from 49 states, the District of Columbia, Puerto Rico and the Virgin Islands. Use the CORP-ALL database to:
    • Obtain information on businesses including the correct name, address, and date of incorporation or organization
    • Identify names and addresses of officers, directors and partners
    • Locate a corporation's registered agent for service of process
    • Verify that a client or adverse party is in good standing prior to closing
    • Review existing business names for possible conflicts of interest
  • 85. Coca-Cola example
  • 86. Dunn & Bradstreet Family Tree
  • 87. Can we serve their lawyer? Combined District Court Dockets
  • 88. Finding counsel in reported cases
  • 89. PROFILER-WLD or WLD-LIT RCL(PESPSICO) SEARCH
  • 90. What can the Pepsico Site tell us?
  • 91. Patent Litigation: 4:2.2 Discovery Objectives for a Patentee
        • The nature of the accused infringer's acts, whether making, selling, using, or offering to sell the accused infringing product or method, or inducing, or contributing to, the infringement of the patent by another;
        • The details of the accused infringing product or method (for example, the design, the manufacture, the specifications, what it does, how well it works);
        • The history and development of the accused product or method;
        • The accused infringer's external characterizations of the accused infringing product or method (for example, advertising and marketing materials, publications, press releases, manuals, governmental submissions, product inserts, and instructions;
        • Third party characterizations of the accused infringing product or method (for example, documents by manufacturers and distributors, relevant trade literature, scientific publications, and third party reports, comparisons, evaluations and complaints);
        • The accused infringer's internal memoranda and reports regarding the accused infringing product or method;
  • 92.
        • Government filings relating to the accused infringing product or method (for example, SEC, FDA);
        • Patents or patent applications that the accused infringer has relating to the accused infringing product or method;
        • Prior art;
        • Characterizations of prior art;
        • Characterization of the level of skill in the art;
        • Corporate reports;
        • The accused infringer's knowledge of, use of and/or evaluation of, the patentee's products or methods, including any evidence of copying;
        • Any comparison between the accused infringer's product or method and those of the patentee;
        • The accused infringer's knowledge of, use of, and/or evaluation of, the patentee's patent (or any other similar patent or patent applications, such as published foreign versions), including any evidence of copying;
        • Access by the accused infringer to any of the patentee's technological information;
  • 93.
        • Any opinions rendered to the accused infringer regarding the patents-in-suit and related patents, the validity and/or enforceability of the patents-in-suit and related patents, and infringement issues;
        • All financial information relevant to the accused infringer's sales (for example, amount and dates of sales, profits, costs);
        • All financial and other information relevant to the accused infringer's collateral sales;
        • Any licenses in the relevant industry and/or negotiations therefor;
        • Prior communications with the patentee regarding the patent;
        • The accused infringer's proposed claim construction;
        • The accused infringer's noninfringement position;
        • All facts relevant to the accused infringer's invalidity and/or unenforceability positions; and
        • Any other facts relevant to defenses raised by the accused.
  • 94.
    • If reasonable royalty is at issue, the following subjects should also be included:
        • The accused infringer's sales and profits and related financial information;
        • All licenses for comparable patents;
        • Any royalties received by, or made by, the accused infringer for the licensing of the comparable patents;
        • The effect of selling the patented products on sales of other products;
        • The commercial success of the patented product;
        • The utility and advantages of the patented invention over other devices; and
        • The portion of the profit or price which is derived from the patented feature.
  • 95.
    • If lost profits are at issue, the following subjects should also be included:
        • Long-range business plans;
        • The accused infringer's sales and profits, and related financial information;
        • Marketing surveys;
        • The presence or absence of noninfringing substitutes;
        • Sales of patented or infringing product versus competitive nonpatented or noninfringing products;
        • Advantages or desirable features of the accused product or device;
        • Comparison of products; and
        • Prices of the products (patented product versus competitive products).
  • 96. Depositions to uncover…
  • 97. Who do we depose?
    • Liability
      • Production manager
      • Anyone who worked with the patent attorneys
        • Inventor
        • Department head
        • Product VP
        • Marketing manager
    • Damages
      • controller
  • 98. And the hunt for information goes on and on…