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The Adept IP Mediation Advocate

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    Notes on slide 1

    This chart shows a reversal rate at the Markman preliminary hearing to be between 25% and 1/3. If we factored in trial, appeals, reversals on appeal and re-trials, we probably approach a 50-50 chance that any patent infringement plaintiff will prevail and any defendant will successfully resist. If your dispute resolution mechanism is no better than a flip of the coin, it’s time to find a better way to resolve the dispute at hand.

    Today we’ll cover four strategic decisions every IP litigator and client need to make during the course of any IP or complex commercial litigation: driving the timing of negotiations and mediations; preparing for those negotiations; dealing with deception; bridging gaps and closing a deal.

    Former Disney GC and new Los Angeles Superior Court Judge Lou Meisinger always counseled his clients to finesse impasse in settlement negotiations by using the litigation itself as an opportunity to make a business deal. If you are a litigator, it’s good for you to know that 70% of your clients believe the management of their IP should be treated as a STRATEGIC rather than a LEGAL issue. We’re assuming for this seminar that you are already engaged in IP litigation; your client has already decided that its business problem is burdened with legal issues that should be resolved in the courts. The enthusiasm for that process usually begins to wane six months into the litigation, particularly where discovery burdens are great & progress cannot yet be charted.

    Let’s take a look at the types of results clients can achieve through negotiation , some of which will not be achieved even by victory in the trial court. Throughout this discussion, we will be assuming that the settlement of the litigation itself is simply one bargaining chip that IP owners can use in a more complex and sophisticated negotiated business deal: Items 1-6, 9 and 10 are goals while numbers 7 and 8 are really just two of the means to reach those goals. The bargaining chips the parties have to exchange include their different technologies; their ability to combat common enemies; their ability to market or leverage the value of their IP; and, their common and differing commercial goals. 1.

    The negotiation means to achieve the twin goals of settlement and commercial advantage include preparation; guarding against and using permissible means of deception; bridging the gap between the parties and closing the deal.

    If we have any experience in mediating complex commercial cases, we know that we knowingly and unknowingly serve as the parties’ tools to achieve the ends they wish to reach. Your first opportunity to learn how to use (or manipulate) your primary mediation tool – the mediator, is with a pre-mediation telephone call. The bullet points are the LEAST you can gain through a telephone call with your mediator. More sophisticated counsel will . . . Next slide . . .

    Preparation for the negotiated resolution of a lawsuit is more like preparation for buying a business than it is preparation to prove your case at trial; what are the goals; strengths; weaknesses; needs of your “adversary” – what does it need that you have; can you use differences of opinion about future & differences in risk tolerance to make trade; synergies possible? The terrain is not constrained the facts relevant to the litigation; it is as broad as your client’s CEO’s imagination

    Who to bring from the outside counsel team; the in-house legal team and the corporate transactional team is as important a decision as any other in approaching the negotiation

    On bet the company cases; some attorneys are trial running their mediations; playing both sides of the table before the day at hand and sometimes hiring a mediator to play the “role” of a mediator; it’s usually not difficult to identify the best negotiator and it may well not be the lead trial attorney

    We’re in litigation but we are always open to making a business deal should be said early and often and it should be sincere

    We mentioned “mock” mediations before. They can help not only with delivery of planned message but also tease out the weaknesses in your game before the day of the game; it also assists the parties come to grips with early rosy predictions & later reverses in the litigation itself

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    The Adept IP Mediation Advocate - Presentation Transcript

    1. 06/28/09 ADR Services, Inc.
    2. 06/28/09
      • Series of mediations
      • Patent portfolios
      • In-house settlement teams
      • Case management order?
      • Court compulsion
      06/28/09
      • 70% executives believe IP should be treated as strategic, not legal, issue
      • 60% executives believe accounting practices understate IP value.
      • 60% executives believe significantly more value could be obtained from existing IP and IP formation
      • Results from a national survey of Fortune 500 Companies
      06/28/09 Finesse Impasse by using the Litigation as an Opportunity to Make a Business Deal
      • Goals of IP Litigation
        • Exchange Technical Information re: Product and/or Patent Portfolio
        • Exchange Market Information
          • Geography
          • Distribution channels
        • Exchange manufacturing/design advantages held by one but not the other
        • Identify Common Enemies
        • Exchange long-term business plans
        • Exchange short-term commercial goals
        • Identify of bargaining chips with different values to each player
        • Explore underlying motivations for suit
        • Explore cross-license opportunities
        • Settle
      06/28/09
      • Prepare
      • Deceive?
      • Explore
      • Bridge
      • Close
      06/28/09
    7. 06/28/09
      • Technical education
      • Markman Hearing? Trial Date?
      • Gather same data as would if intending to purchase competitor or sell client’s business
      • Personalities, interests and emotional tone
      • Identify & strategize re presence/absence of stakeholders
      06/28/09
    9. 06/28/09
      • securities filings for past 5-10 years
      • “ google” major decision makers
      • review management/shake-ups
      • review opinions of the media, if any, for problems the company has or may have in the future
      • review market position for all publically traded companies
      • obtain litigation profile – all public filings here and abroad
      • WayBackMachine for prior art
      • Isolate, compartmentalize, explain or withdraw any person on your side who is a source of embarrassment, distrust or friction.
      • Find and deploy the “peace-makers”
      • Find and deploy the deal-makers
      06/28/09
        • designate a leader -- mediation no place to act out internal power struggles.
        • lead trial lawyer may not make the best lead negotiator
        • split leadership role by designating a lead “settlement counsel”
        • assemble team
        • assign roles
        • Control own people
      06/28/09
      • If your only job is to settle the case, you can address settlement at any time without showing weakness.
      • This sets up a line of communication with the other side that is entirely different than that between litigators and/or trial counsel.
      • Using settlement counsel can open a back door to the other side’s castle.
      06/28/09
      • mock mediations help your team members develop a conditioned response that corresponds with their assigned roles.
      • mediator hired for the mock exercise gives a neutral evaluation of the merits.
      • forces decision-makers to appreciate the other side of the case (particularly if they are assigned to role-play the other side)
      • permits both joint session and caucus presentations to be fine-tuned.
      06/28/09
      • business objective or goal
      • potential business deals and licensing arrangements
      • Identify and diffuse emotional content: remembering that IP is someone’s “baby”
      • “ Reality Session” to manage expectations
      • Assign the client a role
      • Explain the role of each participant
      • Cover logistics
      • Agree on an “exit strategy” but remain flexible
      06/28/09
    15. Everybody lies to the mediator 06/28/09
    16. -Sun Tzu, The Art of War 06/28/09
        • ABA Formal Opinion 06-439 – Truthfulness In Negotiations: It’s O.K. to:
        • (1) Understate willingness to make concessions
        • (2) Misstate bottom line
        • (3) Deceive as to ultimate goals and objectives
        • (4) Exaggerate strengths, minimize weaknesses of factual or legal position
        • (5) Overstate confidence in alternate sources of product
      06/28/09
      • Realize that the parties are not just “playing” each other, they are also “playing” the mediator
      • New Mediators (especially former judges) can get pretty touchy about being deceived, but it is all part of the process
      • Expect deception, and you will be deceived less often
      06/28/09
    19. The tactical use of puffing, selecting, emphasizing, spinning, omitting, exaggerating, obscuring, ignoring, lying and misrepresentation is tolerated—to some extent—in mediation. 06/28/09
    20. -Niccolo Machiavelli 06/28/09
      • We are always “too far apart”
      • We are always “wasting time”
      • The other side is always “not dealing in good faith”
      • “ Bottom Lines” are laughable
      • Storming out is stupid (unless choreographed with the mediator for maximum effect—and it can only be done once)
      • Repetitive use of whiny tactics will make you seem silly to an experienced mediator.
      06/28/09
    22. Keeping your ducks in order as you get from point “A” to point “B” 06/28/09
      • Relegate isolated issues to arbitration
      • Gap-bridging games
      • Licensing arrangements & business deals
      • “ Hard Stop” with follow-up
      • Bracketed proposals and offers
      • The “timed” smoking gun disclosure
      • Tax treatment
      • Mediator’s proposal
      • Baseball Arbitration
      • Hi/Lo Agreements
      06/28/09
    24. There is nothing like a done deal 06/28/09
      • MOU
      • Written Settlement Agreement
      • Czar or Arbitration Clause
      • License terms
      • Client sign-off
      • Scope of Release
      • Dismissal with prejudice
      • Confidentiality and Publicity
      • Payment terms
      • Fee shifting
      • Etc.
      06/28/09
      • technical & prolonged
      • useful if the mediator stays “in the loop” by asking the parties to copy him or her as the documentation is exchanged
      • mediator is ready to jump in and resolve any “snags” in the documentation
      06/28/09
      • IP and ownership issues -- prior research; future/related inventions
      • Termination/renewal/revocation
        • time frame for licensee to patent and/or commercialize the invention?
        • If licensee fails to do so within allowed time -- license revert to the licensor? May the licensee extend the license? 
      • Use of copyrights, trademarks  
      • quality control provisions if you are licensing.
      • right to pursue infringement cases against third parties?
      • Minimum royalties -- may be required both to continue license and to satisfy past transgressions).
      06/28/09
      • MEDIATOR’S PLAYBOOK
        • Facilitate
        • Retaliate
        • Conclude the Deal
      06/28/09
    29. 06/28/09 Thank you!!
    SlideShare Zeitgeist 2009

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