MIT RFID SIG December 11, 2006 IP Issues for RFID 2006 Update Michael J. Radin, Esq. Tarlow, Breed, Hart & Rodgers, P.C. 1...
MIT RFID SIG  IPR – THE STATE OF THE MARKET <ul><li>Welcome  </li></ul><ul><li>General Topic </li></ul><ul><li>Introduce P...
MIT RFID SIG  IPR – THE STATE OF THE MARKET <ul><ul><li>Lionel Lavalee </li></ul></ul><ul><ul><ul><ul><li>Shortage of skil...
MIT RFID SIG  IPR – THE STATE OF THE MARKET <ul><li>Adoption of standards presents challenges when there are proprietary s...
MIT RFID SIG  IPR – THE STATE OF THE MARKET <ul><ul><li>U.S. Department of Justice has spoken of this in the Antitrust Gui...
MIT RFID SIG  IPR – THE STATE OF THE MARKET <ul><ul><ul><li>Note: 2 tests </li></ul></ul></ul><ul><ul><ul><ul><li>per se i...
RFID: Standards and Patents MIT Ent. Forum of Camb. RFID SIG December 11, 2006
NOBODY WANTS TO BE LEFT OUT IN THE COLD!
Why Standards? Why Patents? <ul><li>Standards: </li></ul><ul><li>Because Proliferation of RFID is tied to Interoperability...
The Clash and Tradeoff  <ul><li>Standards are built on the backs of those who created the technology </li></ul><ul><li>Pro...
The Arena <ul><li>Source: Centredoc RFIP Portal at http://www.centredoc.ch/en/centreE.asp/0-0-2667-132-76-0/ </li></ul>
Players <ul><li>Intermec </li></ul><ul><li>Symbol </li></ul><ul><li>MIT Auto-ID Ctr/EPC Global </li></ul><ul><li>Consortiu...
The Litigation History <ul><li>2004: Intermec sued Matrics.  Matrics was later purchased by Symbol for $230M.  </li></ul><...
Litigation History – Cont’d <ul><li>Of course not! </li></ul><ul><li>June 2006 -  Alien sued Intermec  </li></ul><ul><ul><...
Litigation History – cont’d <ul><li>In a statement e-mailed to  RFID Journal , Intermec said it continues to believe, and ...
Managing Exposure <ul><li>Take an Intermec Rapid Start License – costs up-front and 5-7.5% royalty; up-front reduced 75% <...
Managing Exposure <ul><li>Safety in numbers: support and adopt the EPCGlobal Generation 2 standard </li></ul><ul><ul><li>S...
Striking a Balance <ul><li>The RFID industry needs standards for interoperability and information exchange </li></ul><ul><...
Striking a Balance – cont’d <ul><li>The EPCGlobal Gen 2 standard is not meant to cover all RFID applications </li></ul><ul...
The Balance – cont’d <ul><li>Adoption of a set of protocol standards actually allows individual implementations to flouris...
The End <ul><li>Thanks for Listening </li></ul><ul><li>Questions and Comments Welcome </li></ul><ul><li>With thanks to my ...
Via Licensing Corporation Joint Patent Licensing Programs MIT SIG - December 11, 2006 Tony McQuinn Director, Licensing Pro...
Agenda <ul><li>Patent Overview </li></ul><ul><li>Joint Patent License Programs </li></ul><ul><li>Via Licensing </li></ul><...
Patent Overview <ul><li>Legal monopoly and right to restrict others from using technique  </li></ul><ul><li>Patent license...
Essential or ‘Blocking’ Patents <ul><li>‘Essential’ means technically necessary to the practice of the standard </li></ul>...
Patent Consequences  <ul><li>Difficult to quantify true program risk and cost, without addressing potential patent cost </...
Are Patent Pools a new Phenomena? <ul><li>Not really, early pools include:  </li></ul><ul><ul><li>Sewing Machines -1856 </...
Anti-Trust view of these programs.  <ul><li>DOJ views these programs as generally pro-competitive </li></ul><ul><ul><li>Re...
Factors which encourage use of these Programs <ul><li>Standards based </li></ul><ul><li>Many essential or “blocking” paten...
Benefits of Joint Patent Licensing Programs <ul><li>Reduced litigation risk </li></ul><ul><li>Clears Blocking Positions </...
Who is Via and how do we fit in?
Mission <ul><li>“Develop and manage IP licensing programs that provide value to licensees and a reasonable return to licen...
Via Background <ul><li>A wholly owned Subsidiary of Dolby Labs </li></ul><ul><ul><li>Founded in 2002 </li></ul></ul><ul><u...
Via’s Businesses Today Programs TBA MPEG-2 AAC MPEG-4 Audio DRM 802.11/WiFi 802.16/WiMax NFC/RFID OCAP TV Anytime GEM 2003...
Via’s Patent Services <ul><li>Patent Program Administration Services </li></ul><ul><ul><li>Program Development </li></ul><...
RFID Consortium <ul><li>In early 2005, Industry leading companies retained Bell, Boyd, and Lloyd (Chicago Law Firm) to for...
Program Development Process. <ul><li>Patent Call for Essential Patents </li></ul><ul><ul><li>Independent evaluation of Pat...
Program Development (Continued) <ul><li>Develop and agree upon terms and conditions </li></ul><ul><ul><li>License committe...
Thank you for your attention Questions?   www.rfidlicensing.com www.vialicensing.com [email_address]
Patent Enforcement from the Individual Inventor’s Perspective Edward W. Goldstein Corby R. Vowell Goldstein, Faucett & Pre...
Enforcing Patents <ul><li>Licensing Campaign </li></ul><ul><ul><li>Writing letters to infringers and potential infringers ...
Fee Arrangements <ul><li>Hourly </li></ul><ul><ul><li>Client pays attorney’s hourly rate + expenses </li></ul></ul><ul><li...
Milestones in Patent Litigation <ul><li>Patentee Files the Complaint </li></ul><ul><li>Defendant files its Answer </li></u...
Major Issues in a Patent Case <ul><li>Claim Construction </li></ul><ul><ul><li>Court construes (defines) terms in the clai...
Venue – Where Suit is Filed <ul><li>Patent cases filed in federal court </li></ul><ul><li>Statute allows case to be filed:...
Eastern District of Texas <ul><li>Why Marshall / Tyler? </li></ul><ul><ul><li>Considered a rocket-docket  </li></ul></ul><...
Multi-Defendant Litigation <ul><li>Patentee can file a single case against multiple infringers </li></ul><ul><li>Common Qu...
Patentee’s Remedies <ul><li>Past Damages </li></ul><ul><ul><li>Lost profits </li></ul></ul><ul><ul><ul><li>Profits patente...
Litigation Statistics <ul><li>Approximately 250,000 civil cases filed each year in Federal Court </li></ul><ul><li>Less th...
Licensing / Settlement of Litigation <ul><li>Potential rights provided by patentee </li></ul><ul><ul><li>Exclusive license...
Questions? <ul><li>[email_address] </li></ul><ul><li>[email_address] </li></ul><ul><li>Goldstein, Faucett & Prebeg, LLP </...
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  • Additional notes: At the request of patent owners, Via is investigating a variety of IEEE wireless standards for possible patent pools.
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    1. 1. MIT RFID SIG December 11, 2006 IP Issues for RFID 2006 Update Michael J. Radin, Esq. Tarlow, Breed, Hart & Rodgers, P.C. 101 Huntington Avenue, Suite 500 Boston, MA 02199 (617) 218-2035 Fax: (617) 261-7673 Email: mradin@tbhr-law.com ©2006 MJR,/TBHR
    2. 2. MIT RFID SIG IPR – THE STATE OF THE MARKET <ul><li>Welcome </li></ul><ul><li>General Topic </li></ul><ul><li>Introduce Panel </li></ul><ul><li>Emerging market </li></ul><ul><ul><li>Dr. Abel Sanchez - spoke about interoperability, integration, protocols </li></ul></ul><ul><ul><ul><ul><li>Open loop/closed loop </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Protection of user information </li></ul></ul></ul></ul><ul><ul><ul><ul><li>EPC Global </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Protocols </li></ul></ul></ul></ul>©2006 MJR/TBHR
    3. 3. MIT RFID SIG IPR – THE STATE OF THE MARKET <ul><ul><li>Lionel Lavalee </li></ul></ul><ul><ul><ul><ul><li>Shortage of skilled personnel </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Managed services showing the largest growth </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Service level agreements </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Ease of implementation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Needs for standards-based interfaces </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Design for technology changes </li></ul></ul></ul></ul><ul><li>Cost effective systems drive the market </li></ul>©2006 MJR/TBHR
    4. 4. MIT RFID SIG IPR – THE STATE OF THE MARKET <ul><li>Adoption of standards presents challenges when there are proprietary systems - islands </li></ul><ul><ul><ul><li>EPC Global standards gain traction when there are open standards that allow systems to interoperate </li></ul></ul></ul><ul><ul><ul><li>Patent pooling can be good </li></ul></ul></ul><ul><ul><ul><li>But need to be aware of anti-trust limitations: horizontal and vertical limitations and impermissible collaborations </li></ul></ul></ul>©2006 MJR/TBHR
    5. 5. MIT RFID SIG IPR – THE STATE OF THE MARKET <ul><ul><li>U.S. Department of Justice has spoken of this in the Antitrust Guidelines for the Licensing of Intellectual Property released April 6, 1995 (note Antitrust Guidelines for Collaborations Among Competitors released April 2000) </li></ul></ul><ul><ul><ul><ul><li>FTC specifically stated that cross-licensing and pooling arrangements can be pro-competitive by promoting dissemination of technology </li></ul></ul></ul></ul><ul><ul><ul><ul><li>But naked price fixing or market division are subject to challenge as per se violations </li></ul></ul></ul></ul>©2006 MJR/TBHR
    6. 6. MIT RFID SIG IPR – THE STATE OF THE MARKET <ul><ul><ul><li>Note: 2 tests </li></ul></ul></ul><ul><ul><ul><ul><li>per se illegal: the arrangement is of a type that is automatically a violation by its very structure </li></ul></ul></ul></ul><ul><ul><ul><ul><li>rule of reason: </li></ul></ul></ul></ul><ul><ul><ul><li>Exclusion from a pooling or cross-licensing arrangement among parties that collectively possess market power can, under some circumstances, harm competition </li></ul></ul></ul>©2006 MJR/TBHR
    7. 7. RFID: Standards and Patents MIT Ent. Forum of Camb. RFID SIG December 11, 2006
    8. 8. NOBODY WANTS TO BE LEFT OUT IN THE COLD!
    9. 9. Why Standards? Why Patents? <ul><li>Standards: </li></ul><ul><li>Because Proliferation of RFID is tied to Interoperability </li></ul><ul><li>Patents: </li></ul><ul><li>To Establish and Protect Market Share, Investment, Profitability, Ability to Deal </li></ul><ul><li>To Establish Reputation and Value </li></ul>
    10. 10. The Clash and Tradeoff <ul><li>Standards are built on the backs of those who created the technology </li></ul><ul><li>Profit Margin vs Volume of Sales </li></ul><ul><li>Cost/Value to User vs Volume of Sales </li></ul><ul><li>(vendor vs customer balancing act) </li></ul>
    11. 11. The Arena <ul><li>Source: Centredoc RFIP Portal at http://www.centredoc.ch/en/centreE.asp/0-0-2667-132-76-0/ </li></ul>
    12. 12. Players <ul><li>Intermec </li></ul><ul><li>Symbol </li></ul><ul><li>MIT Auto-ID Ctr/EPC Global </li></ul><ul><li>Consortium (patent pool) </li></ul><ul><li>DOJ and FTC, non-US agencies </li></ul><ul><li>Lots of companies in the business or wanting to be in the business </li></ul><ul><ul><li>tag manufacturers </li></ul></ul><ul><ul><li>reader manufacturers </li></ul></ul><ul><ul><li>information companies </li></ul></ul>
    13. 13. The Litigation History <ul><li>2004: Intermec sued Matrics. Matrics was later purchased by Symbol for $230M. </li></ul><ul><li>2005: Symbol sued Intermec in 2005. </li></ul><ul><ul><li>Intermec counter-sued. </li></ul></ul><ul><ul><li>Symbol countered that. </li></ul></ul><ul><ul><li>Intermec also got the ITC to investigate. </li></ul></ul><ul><ul><li>In Sept., 2005, they settled with Symbol joining Intermec’s Rapid Start Licensing program and giving a cross-license to Symbol’s 50 or so RFID patents and Intermec’s 145 or so. The CEOs agreed to make nice and work out their other non-RFID issues. </li></ul></ul><ul><ul><li>The End???? </li></ul></ul>
    14. 14. Litigation History – Cont’d <ul><li>Of course not! </li></ul><ul><li>June 2006 - Alien sued Intermec </li></ul><ul><ul><li>Seeks DJ of non-infringement re its tags and readers; names 10 Intermec pts; also claims they are invalid </li></ul></ul><ul><ul><li>Why? Control time and place. Maybe avoid interference with a public offering, other fund-raising, etc. </li></ul></ul><ul><li>Alien chose not to join Intermec RSL </li></ul>
    15. 15. Litigation History – cont’d <ul><li>In a statement e-mailed to RFID Journal , Intermec said it continues to believe, and has said publicly, that Alien and others are selling products infringing Intermec RFID patents. </li></ul><ul><li>Reportedly, during its quarterly conference call on May 8, Intermec said it believes end users have plenty of choices to purchase RFID products licensed through the Rapid Start program, adding that it continues to &quot;pursue infringers&quot; of its RFID patents. &quot;We are putting together cases, and looking at companies that are most disruptive to the industry, such as Alien and others. We expect enforcement actions within the year .&quot; </li></ul>
    16. 16. Managing Exposure <ul><li>Take an Intermec Rapid Start License – costs up-front and 5-7.5% royalty; up-front reduced 75% </li></ul><ul><ul><li>Still exposed to others </li></ul></ul><ul><li>“ Clear” your design </li></ul><ul><li>Join/take license from “RFID Patent Initiative”, a consortium (patent pool) formed by some RSL members & others a la DVD and MPEG pools </li></ul><ul><ul><li>Still exposed to others, incl. Intermec </li></ul></ul><ul><ul><li>Participation carries potential antitrust risks and possible attacks on patent rights. </li></ul></ul><ul><ul><li>DOJ approval needed. </li></ul></ul>
    17. 17. Managing Exposure <ul><li>Safety in numbers: support and adopt the EPCGlobal Generation 2 standard </li></ul><ul><ul><li>Started at MIT </li></ul></ul><ul><ul><li>Basically electronic UPC + Serial No. + DB </li></ul></ul><ul><ul><li>Hired counsel to clear thousands of patents </li></ul></ul><ul><ul><li>Intermec donated 5 patents but has >140 others that may be implicated by various reader and tag designs; but even litigious Intermec needs to be careful </li></ul></ul><ul><ul><li>Standard does not say how to implement it </li></ul></ul><ul><ul><li>If a patent license is needed to implement aspects of the standard, there is a body which can negotiate for the industry </li></ul></ul>
    18. 18. Striking a Balance <ul><li>The RFID industry needs standards for interoperability and information exchange </li></ul><ul><li>Patent owners have a right to compensation (at least) </li></ul><ul><li>The patent pooling models and standard-setting models of other industries have worked well, and might be workable in RFID </li></ul><ul><li>Intermec is the big hold-out but is working with EPCGlobal to a degree </li></ul><ul><li>EPCGlobal standard getting traction </li></ul>
    19. 19. Striking a Balance – cont’d <ul><li>The EPCGlobal Gen 2 standard is not meant to cover all RFID applications </li></ul><ul><ul><li>There will be RFID applications outside the standard </li></ul></ul><ul><ul><li>The standard allows lots of room for proprietary implementations of tags, readers, etc. STANDARDIZATION OF A PROTOCOL DOES NOT PREVENT DEELOPMENT AND ENFORCEMENT OF PROPRIETARY RIGHTS IN SPECIFIC DESIGNS </li></ul></ul>
    20. 20. The Balance – cont’d <ul><li>Adoption of a set of protocol standards actually allows individual implementations to flourish (if the standard is itself not covered by a patent, allowing someone to collect a toll from all) </li></ul><ul><li>Develop the $.01 RFID tag and you WILL have something proprietary to protect </li></ul>
    21. 21. The End <ul><li>Thanks for Listening </li></ul><ul><li>Questions and Comments Welcome </li></ul><ul><li>With thanks to my partner, Rob Hunt, for his suggestions. </li></ul><ul><li>[email_address] </li></ul>
    22. 22. Via Licensing Corporation Joint Patent Licensing Programs MIT SIG - December 11, 2006 Tony McQuinn Director, Licensing Programs and Business Development Copyright © 2006 Via Licensing Corporation
    23. 23. Agenda <ul><li>Patent Overview </li></ul><ul><li>Joint Patent License Programs </li></ul><ul><li>Via Licensing </li></ul><ul><li>RFID Consortium </li></ul><ul><li>Program Development Process </li></ul>
    24. 24. Patent Overview <ul><li>Legal monopoly and right to restrict others from using technique </li></ul><ul><li>Patent license is needed to manufacture, use, and sell </li></ul><ul><li>No bad intention or bad act needed to violate the patent </li></ul><ul><li>Essential Patent Holders can block the adoption and implementation of the standard </li></ul>
    25. 25. Essential or ‘Blocking’ Patents <ul><li>‘Essential’ means technically necessary to the practice of the standard </li></ul><ul><ul><li>Each essential patent holder has the ability to stop implementation of the standard </li></ul></ul><ul><ul><li>A license is needed from each essential Patent holder, many of whom are unwilling or unequipped to license their patents. </li></ul></ul><ul><ul><li>Transaction cost and transaction complexity is prohibitive. </li></ul></ul><ul><li>No one party has all of the rights necessary to implement the standard </li></ul>
    26. 26. Patent Consequences <ul><li>Difficult to quantify true program risk and cost, without addressing potential patent cost </li></ul><ul><li>Patent “Thicket” restricts adoption and implementation of the standard </li></ul><ul><li>Joint Patent Licensing Programs, however, provide everyone access to practice the standard </li></ul><ul><ul><li>Fair, Reasonable and non-discriminatory terms. (FRAND) </li></ul></ul><ul><ul><li>Facilitates easy access to essential patent rights. </li></ul></ul>
    27. 27. Are Patent Pools a new Phenomena? <ul><li>Not really, early pools include: </li></ul><ul><ul><li>Sewing Machines -1856 </li></ul></ul><ul><ul><li>Airplane Development - 1917 </li></ul></ul><ul><ul><li>Radio Development – 1920’s </li></ul></ul><ul><ul><li>Computer, audio and video standards - 1980’s to present </li></ul></ul><ul><li>There are a number of Joint Patent Licensing Programs, which are successful, well established and meet DOJ guidelines. </li></ul>
    28. 28. Anti-Trust view of these programs. <ul><li>DOJ views these programs as generally pro-competitive </li></ul><ul><ul><li>Reduces patent thicket </li></ul></ul><ul><ul><li>Makes it possible for companies to legally practice the standard </li></ul></ul><ul><ul><li>Provides FRAND pricing to essential patents </li></ul></ul><ul><ul><li>Reduces overall legal risk and cost. </li></ul></ul><ul><ul><li>Facilitates easy access to necessary patent rights </li></ul></ul><ul><li>Joint Licensing Programs allow non-patent holders to entrance into the market </li></ul>
    29. 29. Factors which encourage use of these Programs <ul><li>Standards based </li></ul><ul><li>Many essential or “blocking” patents </li></ul><ul><li>Many patent holders </li></ul><ul><li>Many participants which do not hold essential patents to “trade” </li></ul><ul><li>Litigious environment </li></ul><ul><li>Low product margins – No margin to pay excessive royalties </li></ul><ul><li>Need to reduce patent litigation risk </li></ul>
    30. 30. Benefits of Joint Patent Licensing Programs <ul><li>Reduced litigation risk </li></ul><ul><li>Clears Blocking Positions </li></ul><ul><li>Quantifies cost associated with implementing the standard </li></ul><ul><li>Reduce transaction complexity, time and cost of acquiring rights necessary to practice the standard </li></ul><ul><li>Promotes adoption of the standard and dissemination of technology </li></ul><ul><li>Provides a low cost vehicle for Patent holders to commercialize their patent rights </li></ul><ul><li>Avoids costly infringement litigation </li></ul>
    31. 31. Who is Via and how do we fit in?
    32. 32. Mission <ul><li>“Develop and manage IP licensing programs that provide value to licensees and a reasonable return to licensors and Via shareholders.” </li></ul>
    33. 33. Via Background <ul><li>A wholly owned Subsidiary of Dolby Labs </li></ul><ul><ul><li>Founded in 2002 </li></ul></ul><ul><ul><li>Via benefits from Dolby’s infrastructure, resources and over 40 years of licensing experience. </li></ul></ul><ul><ul><li>We represent over 40 internationally recognized companies in our programs </li></ul></ul>
    34. 34. Via’s Businesses Today Programs TBA MPEG-2 AAC MPEG-4 Audio DRM 802.11/WiFi 802.16/WiMax NFC/RFID OCAP TV Anytime GEM 2003 2004 2005 2006 2007 2008 MHP
    35. 35. Via’s Patent Services <ul><li>Patent Program Administration Services </li></ul><ul><ul><li>Program Development </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>End User Licensing </li></ul></ul><ul><ul><li>Royalty Collections and Distributions </li></ul></ul><ul><ul><ul><li>Web based reporting w/ international tax calculations </li></ul></ul></ul><ul><ul><li>Enforcement </li></ul></ul>
    36. 36. RFID Consortium <ul><li>In early 2005, Industry leading companies retained Bell, Boyd, and Lloyd (Chicago Law Firm) to form a consortium. </li></ul><ul><li>Sept. 2005, RFID Consortium publicly announced </li></ul><ul><li>Sept. 2006, RFID Consortium selects Via Licensing as patent administrator </li></ul><ul><li>October 2006, Via Licensing issues patent call </li></ul><ul><li>RFID Consortium now has 9 members </li></ul><ul><ul><li>3M, Alien, Avery Dennison, AWID, RR Donnelley, Symbol, ThingMagic, Tyco, and Zebra </li></ul></ul>
    37. 37. Program Development Process. <ul><li>Patent Call for Essential Patents </li></ul><ul><ul><li>Independent evaluation of Patent’s technical essentiality </li></ul></ul><ul><ul><li>Issued October 16 th , deadline January 15, 2007 </li></ul></ul><ul><li>Establish Licensing Committee </li></ul><ul><ul><li>Will only include Essential Patent holders </li></ul></ul><ul><ul><li>First meeting March 2007 </li></ul></ul>
    38. 38. Program Development (Continued) <ul><li>Develop and agree upon terms and conditions </li></ul><ul><ul><li>License committee members develop terms and conditions </li></ul></ul><ul><ul><li>Via facilitates discussion and program development </li></ul></ul><ul><ul><li>All discussions take place with Anti-trust counsel guidance and oversight </li></ul></ul><ul><li>Submit for DOJ approval (if advised by antitrust counsel) </li></ul><ul><li>Receive DOJ approval </li></ul><ul><li>Launch End User License Program </li></ul>
    39. 39. Thank you for your attention Questions? www.rfidlicensing.com www.vialicensing.com [email_address]
    40. 40. Patent Enforcement from the Individual Inventor’s Perspective Edward W. Goldstein Corby R. Vowell Goldstein, Faucett & Prebeg, LLP Houston, Texas www.gfpiplaw.com
    41. 41. Enforcing Patents <ul><li>Licensing Campaign </li></ul><ul><ul><li>Writing letters to infringers and potential infringers </li></ul></ul><ul><ul><li>Potential problems </li></ul></ul><ul><ul><ul><li>Infringer not responding </li></ul></ul></ul><ul><ul><ul><li>Difficult to be successful unless already licensed/litigated </li></ul></ul></ul><ul><ul><ul><li>Potential declaratory judgment action </li></ul></ul></ul><ul><li>Litigation </li></ul><ul><ul><li>File lawsuit against one or more infringers </li></ul></ul>
    42. 42. Fee Arrangements <ul><li>Hourly </li></ul><ul><ul><li>Client pays attorney’s hourly rate + expenses </li></ul></ul><ul><li>Contingent Fee </li></ul><ul><ul><li>Attorney’s fee is calculated as a percentage of the recovery </li></ul></ul><ul><ul><li>May increase or decrease percentage depending on the stage of litigation and whether client or the attorney pays the expenses </li></ul></ul><ul><li>Hybrid </li></ul><ul><ul><li>Client pays a percentage of attorney’s hourly rate + expenses </li></ul></ul><ul><ul><li>Attorney receives a reduced contingent fee </li></ul></ul>
    43. 43. Milestones in Patent Litigation <ul><li>Patentee Files the Complaint </li></ul><ul><li>Defendant files its Answer </li></ul><ul><li>Scheduling Conference </li></ul><ul><li>Discovery </li></ul><ul><li>Claim Construction / Markman Hearing </li></ul><ul><li>Expert Reports </li></ul><ul><li>Summary Judgment Motions </li></ul><ul><li>Trial (approximately 1.5 - 2 years after filing of complaint) </li></ul>
    44. 44. Major Issues in a Patent Case <ul><li>Claim Construction </li></ul><ul><ul><li>Court construes (defines) terms in the claims </li></ul></ul><ul><ul><li>Patentee typically seeks a broad construction, while Defendant seeks a narrow construction </li></ul></ul><ul><li>Infringement </li></ul><ul><ul><li>Compare claims to the accused products </li></ul></ul><ul><li>Validity </li></ul><ul><ul><li>Compare claims to the prior art </li></ul></ul><ul><ul><li>Claims are presumed valid </li></ul></ul><ul><ul><li>Anticipation </li></ul></ul><ul><ul><li>Obviousness </li></ul></ul>
    45. 45. Venue – Where Suit is Filed <ul><li>Patent cases filed in federal court </li></ul><ul><li>Statute allows case to be filed: </li></ul><ul><ul><li>Where defendant resides </li></ul></ul><ul><ul><li>Any district in which defendant is subject to personal jurisdiction </li></ul></ul><ul><li>May be transferred to another federal court </li></ul><ul><ul><li>Convenience of the parties, witnesses, etc. </li></ul></ul><ul><ul><li>Generally must have some legitimate reason for filing in that district </li></ul></ul>
    46. 46. Eastern District of Texas <ul><li>Why Marshall / Tyler? </li></ul><ul><ul><li>Considered a rocket-docket </li></ul></ul><ul><ul><li>Perceived as favorable for patentee </li></ul></ul><ul><ul><li>Few cases transferred </li></ul></ul><ul><ul><li>Judges have sophisticated knowledge of patent law </li></ul></ul><ul><li>Statistics </li></ul><ul><ul><li>10% of newly filed patents cases filed here </li></ul></ul><ul><ul><li>Average trial setting 14-18 months </li></ul></ul>
    47. 47. Multi-Defendant Litigation <ul><li>Patentee can file a single case against multiple infringers </li></ul><ul><li>Common Questions of Law </li></ul><ul><ul><li>Claim construction </li></ul></ul><ul><ul><li>Validity / Prior art </li></ul></ul><ul><li>Can often lead to early settlements </li></ul>
    48. 48. Patentee’s Remedies <ul><li>Past Damages </li></ul><ul><ul><li>Lost profits </li></ul></ul><ul><ul><ul><li>Profits patentee would have made but for infringement </li></ul></ul></ul><ul><ul><ul><li>Not available to non-practicing patentee </li></ul></ul></ul><ul><ul><li>Reasonable Royalty </li></ul></ul><ul><ul><ul><li>Royalty rate applied to revenues generated from infringement </li></ul></ul></ul><ul><li>Injunction </li></ul><ul><ul><li>eBay case, NTP v. RIM </li></ul></ul><ul><ul><li>Now very difficult to get if non-practicing patentee </li></ul></ul><ul><ul><li>Compulsory license instead? </li></ul></ul>
    49. 49. Litigation Statistics <ul><li>Approximately 250,000 civil cases filed each year in Federal Court </li></ul><ul><li>Less than 2% of those cases go to trial </li></ul><ul><li>Time to trial </li></ul><ul><ul><li>National Average – 22 months </li></ul></ul><ul><ul><li>Eastern District – 14-18months </li></ul></ul>
    50. 50. Licensing / Settlement of Litigation <ul><li>Potential rights provided by patentee </li></ul><ul><ul><li>Exclusive license </li></ul></ul><ul><ul><li>Non-exclusive license </li></ul></ul><ul><ul><li>Covenant not to sue </li></ul></ul><ul><li>Typically a lump-sum payment for paid up license, difficult to get a running royalty </li></ul><ul><li>Large companies will want a license to all of plaintiff’s patents </li></ul>
    51. 51. Questions? <ul><li>[email_address] </li></ul><ul><li>[email_address] </li></ul><ul><li>Goldstein, Faucett & Prebeg, LLP </li></ul>

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