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Speaker Firms and Organization:
Morris, Manning & Martin LLP
John P. Fry
Partner
Thank you for logging into today’s event....
March 03, 2016
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 Please note the FAQ.HELP TAB located to the right of the main presentation. On this page you will find ...
March 03, 2016
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 Follow us on Twitter, that’s @Know_Group to receive updates for this event as well as other news and pe...
March 03, 2016
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 If you are listening on a laptop, you may need to use headphones as some laptops speakers are not suffi...
March 03, 2016
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Welcome to the Knowledge Group Unlimited Subscription Programs. We have Two Options Available for You:
FR...
March 03, 2016
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Knowledge Group UNLIMITED PAID Subscription Programs Pricing:
Individual Subscription Fees: (2 Options)
S...
Partner Firms:
March 03, 2016
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Kasowitz, Benson, Torres & Friedman LLP is a national law firm primarily
focusing on compl...
Brief Speaker Bios:
Jonathan K. Waldrop
Jonathan K. Waldrop represents industry leading companies in patent and trademark ...
Non-practicing entities also known as patent trolls have been a common problem faced by
many companies seeking business de...
While changes to patent law and practice may have turned the tables somewhat, innovators
should still be cautious since a ...
Featured Speakers:
March 03, 2016
11
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
SEGMENT ...
Introduction
Jonathan K. Waldrop represents industry leading companies in patent and trademark litigation involving intera...
13
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
Kasowitz, Benson, Torres & Friedman LLP (“...
Developments Affecting IP Decision Making
Supreme Court precedent
Limelight v. Akamai, 134 S. Ct. 2111 (U.S. 2014)
• Divid...
Developments Affecting IP Decision Making
America Invents Act
• The AIA represents the most significant change to the U.S....
Developments Affecting IP Decision Making
America Invents Act
• Results:
– The U.S. patent system changed from a “first to...
Developments Affecting IP Decision Making
Supreme Court precedent
Nautilus v. Biosig Instruments, 134 S. Ct. 896 (U.S. 201...
Developments Affecting IP Decision Making
Supreme Court precedent
Octane Fitness v. Icon Health, 134 S.Ct. 1749 (U.S. 2014...
Developments Affecting IP Decision Making
Supreme Court precedent
Highmark v. Allcare Health Management, 134 S. Ct. 1744 (...
Top Five Developments Affecting IP Decision Making
Supreme Court precedent
• The Supreme Court has shown an unprecedented ...
Top Five Developments Affecting IP Decision Making
Supreme Court precedent
Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 ...
Developments Affecting IP Decision Making
Supreme Court precedent
Limelight v. Akamai, 134 S. Ct. 2111 (U.S. 2014)
• Divid...
Developments Affecting IP Decision Making
Supreme Court precedent
Nautilus v. Biosig Instruments, 134 S. Ct. 896 (U.S. 201...
Developments Affecting IP Decision Making
Supreme Court precedent
Octane Fitness v. Icon Health, 134 S.Ct. 1749 (U.S. 2014...
Developments Affecting IP Decision Making
Impact of NPEs
March 03, 2016
25
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz...
Top Five Developments Affecting IP Decision Making
#5: Impact of NPEs
• As of 2004, the cost of defending against a patent...
Developments Affecting IP Decision Making
Impact of NPEs
• In 2011, United States business entities incurred $29 billion i...
Developments Affecting IP Decision Making
Impact of NPEs
• From 2009 through mid-2013, Apple Inc. was the defendant in 171...
Developments Affecting IP Decision Making
Impact of NPEs
• Patent troll-instigated litigation, once mostly confined to lar...
Developments Affecting IP Decision Making
Impact of NPEs
• In 2005 patent trolls sued 800 small firms (those with less tha...
Developments Affecting IP Decision Making
Impact of NPEs
• A July 2014, PricewaterhouseCoopers study concluded that non-pr...
Developments Affecting IP Decision Making
Impact of NPEs
• Emphasis became progressively focused on patents covering softw...
Developments Affecting IP Decision Making
Impact of NPEs
• A GAO study concluded that the proportion of patent lawsuits in...
Developments Affecting IP Decision Making
Impact of NPEs
• Software patents were described as "particularly prone" to abus...
Core vs. Non-Core IP Assets
• This is an approach to IP portfolio management that takes into account a company’s strategic...
Most Challenging Patent Issues Facing In-House Counsel
• Global prosecution
• Managing costs
• International IP regimes
Ma...
Most Important and Influential Patent Litigation Trends
• More U.S. patent litigation (if not from NPEs, then the fight ov...
Introduction
John Fry is a Partner in Morris Manning and Martin’s Technology and Intellectual Property Litigation Practice...
Disclaimer
The materials and information presented and contained within this document are provided by MMM as
general infor...
Identifying Patent Trolls
• Attempts to define in Patent Reform Legislation have been largely unsuccessful
• “the Court sh...
Attacking Patent Troll Assertions
• The Patent Abuse Reduction Act (S. 1013), would have required the court to award attor...
Attacking Patent Troll Assertions
• Impact of Octane Fitness v. Icon Health & Fitness (Sup. Ct. 2014)
• Redefined “excepti...
Attacking Patent Troll Assertions
March 03, 2016
43
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
Attacking Patent Troll Assertions
• Vehicle Operation Technologies LLC v. American Honda Motor Co., Inc., et al., 67 F. Su...
Rule 12 Practice
• Abrogation of form 18 for direct infringement
• Judge Dyk’s separate opinion in McZeal concluded that t...
Pleading Standard H.R. 9, 114th Cong. (2015)
• each patent allegedly infringed;
• each claim of each patent allegedly infr...
Rule 12(b) Practice
• Lack of Personal Jurisdiction May not be Dead
• Smaller companies sued for infringement may not have...
Not All Troll Cases are Created Equal
• VirnetX Inc. v. Apple Inc., Civil Action No. 6:12-cv-855-RWS (EDTX, February 3, 20...
Gaining Leverage in Low Value Cases
• Effective use of joint defense groups
• Organize early
• Multiple representations
• ...
What’s Next? Willfulness
• In re Seagate, 497 F.3d 1360, 1370 (Fed. Cir. 2007) (en banc) (overruling Underwater Devices
st...
March 03, 2016
51
Contact Info:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres &
Friedman LLP
E: JWaldrop@kasowitz.com...
► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on t...
March 03, 2016
53
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March 03, 2016
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Emerging Issues: Patent Trolls and Deceptive Tactics - Impacts and Implications Explored! LIVE Webcast

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Non-practicing entities also known as patent trolls have been a common problem faced by many companies seeking business development and innovation through patentable technologies. More importantly, a recent distressing trend shows that more and more small developers and companies are being targeted by these trolls. These companies may be forced to pay disproportionately high settlements or damages to the trolls or close down because of the costly expenses associated with defense.

In November 2015, a legal analytics company reported a huge rise on patent lawsuits, with many of them filed by patent trolls. Last year's spike was likely tied to several changes made to the Federal Rules of Civil Procedure, most especially the elimination of Form 18. The form let plaintiffs file a patent lawsuit without naming the specific claims or products that are infringed. Without Form 18, parties who sue for patent infringement will likely be required to provide more detailed contentions in the initial complaint.

While changes to patent law and practice may have turned the tables somewhat, innovators should still be cautious since a number of new cases were filed by patent trolls after the elimination of Form 18 on December 1, 2015. Our panel of key thought leaders and practitioners will help you better understand how patent trolls make their way through court battles and be able to strategize a winning defense against their deceptive tactics.

In a two-hour LIVE Webcast, the speakers will discuss:

Identifying Patent Trolls
Patent Troll Methods
Attacking Patent Trolls Assertions
Litigating Patent Troll Cases
Monetary Remedies
Recent Trends on Patent Litigation

To view the webcast go to this link: https://youtu.be/RasJhRDiyz4

To learn more about the webcast please visit our website: http://theknowledgegroup.org

Published in: Education
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Emerging Issues: Patent Trolls and Deceptive Tactics - Impacts and Implications Explored! LIVE Webcast

  1. 1. Speaker Firms and Organization: Morris, Manning & Martin LLP John P. Fry Partner Thank you for logging into today’s event. Please note we are in standby mode. All Microphones will be muted until the event starts. We will be back with speaker instructions @ 2:55 pm. Any Questions? Please email: info@theknowledegroup.org Group Registration Policy Please note ALL participants must be registered or they will not be able to access the event. If you have more than one person from your company attending, you must fill out the group registration form. We reserve the right to disconnect any unauthorized users from this event and to deny violators admission to future events. To obtain a group registration please send a note to info@theknowledgegroup.org or call 646.202.9344. Presented By: March 03, 2016 1 Partner Firms: Kasowitz Benson Torres & Friedman LLP Jonathan K. Waldrop Partner
  2. 2. March 03, 2016 2  Please note the FAQ.HELP TAB located to the right of the main presentation. On this page you will find answers to the top questions asked by attendees during webcast such as how to fix audio issues, where to download the slides and what to do if you miss a secret word. To access this tab, click the FAQ.HELP Tab to the right of the main presentation when you’re done click the tab of the main presentation to get back.  For those viewing the webcast on a mobile device, please note: o These instructions are for Apple and Android devices only. If you are using a Windows tablet, please follow the instructions for viewing the webcast on a PC. o The FAQ.HELP TAB will not be visible on mobile devices. o You will receive the frequently asked questions & other pertinent info through the apps chat window function on your device. o On Apple devices you must tap the screen anywhere to see the task bar which will show up as a blue bar across the top of the screen. Click the chat icon then click the chat with all to access the FAQ’s. o Feel free to submit questions by using the “questions” function built-in to the app on your device. o You may use your device’s “pinch to zoom function” to enlarge the slide images on your screen. o Headphones are highly recommended. In the event of audio difficulties, a dial-in number is available and will be provided via the app’s chat function on your device.
  3. 3. March 03, 2016 3  Follow us on Twitter, that’s @Know_Group to receive updates for this event as well as other news and pertinent info.  If you experience any technical difficulties during today’s WebEx session, please contact our Technical Support @ 866-779-3239. We will post the dial information in the chat window to the right shortly and it’s available in the FAQ.Help Tab on the right.  You may ask a question at anytime throughout the presentation today via the chat window on the lower right hand side of your screen. Questions will be aggregated and addressed during the Q&A segment.  Please note, this call is being recorded for playback purposes.  If anyone was unable to log in to the online webcast and needs to download a copy of the PowerPoint presentation for today’s event, please send an email to: info@theknowledgegroup.org. If you’re already logged in to the online Webcast, we will post a link to download the files shortly and it’s available in the FAQ.Help Tab
  4. 4. March 03, 2016 4  If you are listening on a laptop, you may need to use headphones as some laptops speakers are not sufficiently amplified enough to hear the presentations. If you do not have headphones and cannot hear the webcast send an email to info@theknowledgegroup.org and we will send you the dial in phone number.  About an hour or so after the event, you'll be sent a survey via email asking you for your feedback on your experience with this event today - it's designed to take less than two minutes to complete, and it helps us to understand how to wisely invest your time in future events. Your feedback is greatly appreciated. If you are applying for continuing education credit, completions of the surveys are mandatory as per your state boards and bars. 6 secret words (3 for each credit hour) will be given throughout the presentation. We will ask you to fill these words into the survey as proof of your attendance. Please stay tuned for the secret word. If you miss a secret word please refer to the FAQ.Help tab to the right.  Speakers, I will be giving out the secret words at randomly selected times. I may have to break into your presentation briefly to read the secret word. Pardon the interruption.
  5. 5. March 03, 2016 5 Welcome to the Knowledge Group Unlimited Subscription Programs. We have Two Options Available for You: FREE UNLIMITED: This program is free of charge with no further costs or obligations. It includes:  Unlimited access to over 15,000 pages of course material from all Knowledge Group Webcasts.  Subscribers to this program can download any slides, white papers, or supplemental material covered during all live webcasts.  50% discount for purchase of all Live webcasts and downloaded recordings. PAID UNLIMITED: Our most comprehensive and cost-effective plan, for a one-time fee:  Access to all LIVE Webcasts (Normally $199 to $349 for each event without a subscription). Including: Bring-a-Friend – Invite a client or associate outside your firm to attend for FREE. Sign up for as many webcasts as you wish.  Access to all of Recorded/Archived Events & Course Material includes 1,500+ hours of audio material (Normally $299 for each event without a subscription).  Free Certificate of Attendance Processing (Normally $49 Per Course without a subscription).  Access to over 15,000 pages of course material from Knowledge Group Webcasts.  Ability to invite a guest of your choice to attend any live webcast Free of charge (Exclusive benefit only available for PAID UNLIMITED subscribers).  6 Month Subscription is $499 with No Additional Fees Other options are available.  Special Offer: Sign up today and add 2 of your colleagues to your plan for free Check the “Triple Play” box on the sign-up sheet contained in the link below. https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964
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  7. 7. Partner Firms: March 03, 2016 7 Kasowitz, Benson, Torres & Friedman LLP is a national law firm primarily focusing on complex commercial litigation. The firm’s highly talented lawyers are committed to pursuing creative, aggressive and innovative approaches to our clients’ most challenging legal matters. Our clients include leading companies in the high-tech, manufacturing, chemical, computer, energy, entertainment, consumer products, pharmaceutical and telecommunications industries, as well as major hedge funds, private equity firms, commercial banks, real estate developers and investors, regulated utilities and individuals. Our lawyers have been recognized by, among others,Chambers USA, The Legal 500, Benchmark Litigation, Best Lawyers in America, Law360 and Lawdragon for excellence in their fields. The firm has offices in New York, Washington, DC, Silicon Valley, Los Angeles, Houston, Atlanta, San Francisco, Miami, and Newark. Morris, Manning & Martin (MMM) is an AmLaw 200 law firm with national and international reach. The firm is dedicated to the constant pursuit of its clients’ success. To provide clients with optimal value, the firm combines market- leading legal services with a total understanding of clients’ needs to maximize effectiveness, efficiency and opportunity. MMM enjoys national prominence for its intellectual property, litigation, technology, real estate, corporate, healthcare, energy & infrastructure, capital markets, environmental, insurance, and timberland & forest products practices. The firm has offices in Atlanta, Raleigh-Durham, Savannah, Beijing and Washington, D.C. and an alliance with GCN in São Paulo, Brazil.
  8. 8. Brief Speaker Bios: Jonathan K. Waldrop Jonathan K. Waldrop represents industry leading companies in patent and trademark litigation involving interactive web technologies, video-on-demand telecommunications, cable technology, computer-assisted sales processes, medical devices, cooking ovens, gaming systems and complex financial transactions. He is also experienced in handling commercial and antitrust litigation matters. Jon’s clients include Google, YouTube and Adobe, world-leading technology companies, and Cox Communications, the third largest cable television provider in the U.S. He has acted as lead trial counsel in many cases for his clients and has a history of achieving favorable jury verdicts. March 03, 2016 8 John P. Fry John Fry is a Partner in Morris Manning and Martin’s Technology and Intellectual Property Litigation Practice, as well as the practice group leader. Mr. Fry practices primarily in the areas of patent, trademark and copyright infringement, unfair competition and trade secret litigation with a secondary emphasis on the strategic acquisition and management of intellectual property, particularly in the international context, and on complex patent, trademark and copyright license agreements, technology and software development agreements and concept evaluation agreements. He also counsels clients on antitrust issues, particularly in the area of the antitrust implications of intellectual property enforcement and licensing. Mr. Fry’s practice covers a wide variety of industries, including information technology, electronics, electrical distribution, telecommunications, manufacturing and chemical. In 2010, Mr. Fry retired as a Captain from the U.S. Navy after 30 years of combined Active and Reserve Service. ► For more information about the speakers, you can visit: https://theknowledgegroup.org/event-homepage/?event_id=1573
  9. 9. Non-practicing entities also known as patent trolls have been a common problem faced by many companies seeking business development and innovation through patentable technologies. More importantly, a recent distressing trend shows that more and more small developers and companies are being targeted by these trolls. These companies may be forced to pay disproportionately high settlements or damages to the trolls or close down because of the costly expenses associated with defense. In November 2015, a legal analytics company reported a huge rise on patent lawsuits, with many of them filed by patent trolls. Last year's spike was likely tied to several changes made to the Federal Rules of Civil Procedure, most especially the elimination of Form 18. The form let plaintiffs file a patent lawsuit without naming the specific claims or products that are infringed. Without Form 18, parties who sue for patent infringement will likely be required to provide more detailed contentions in the initial complaint. March 03, 2016 9
  10. 10. While changes to patent law and practice may have turned the tables somewhat, innovators should still be cautious since a number of new cases were filed by patent trolls after the elimination of Form 18 on December 1, 2015. Our panel of key thought leaders and practitioners will help you better understand how patent trolls make their way through court battles and be able to strategize a winning defense against their deceptive tactics. In a two-hour LIVE Webcast, the speakers will discuss: • Identifying Patent Trolls • Patent Troll Methods • Attacking Patent Trolls Assertions • Litigating Patent Troll Cases • Monetary Remedies • Recent Trends on Patent Litigation March 03, 2016 10
  11. 11. Featured Speakers: March 03, 2016 11 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  12. 12. Introduction Jonathan K. Waldrop represents industry leading companies in patent and trademark litigation involving interactive web technologies, video-on-demand telecommunications, cable technology, computer-assisted sales processes, medical devices, cooking ovens, gaming systems and complex financial transactions. He is also experienced in handling commercial and antitrust litigation matters. Jon’s clients include Google, YouTube and Adobe, world-leading technology companies, and Cox Communications, the third largest cable television provider in the U.S. He has acted as lead trial counsel in many cases for his clients and has a history of achieving favorable jury verdicts. Jon is recognized in The Best Lawyers in America©, The Legal 500, and as a Northern California and Georgia “Rising Star” by Super Lawyers. Jon also earned the National Institute for Trial Advocacy's "Master Advocate" designation in 2015, and is a fellow in the Litigation Counsel of America's Trial Lawyer Honorary Society. March 03, 2016 12 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  13. 13. 13 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP Kasowitz, Benson, Torres & Friedman LLP (“Kasowitz”) disclaims all liability in respect to actions taken or not taken based on any contents of this presentation. Use of information in this presentation is entirely at your own risk. The reader should not act nor refrain from acting on the basis of information in this presentation without seeking legal counsel from an attorney licensed in the reader’s state. Kasowitz provides legal advice only to individuals or entities with which it has established a client- lawyer relationship and such advice will always be based on the particular facts and circumstances of each matter. The reproduction or retransmission of the contents in this presentation is prohibited without the prior written consent of Kasowitz. ©2016 Kasowitz, Benson, Torres & Friedman LLP. All rights reserved. Disclaimer
  14. 14. Developments Affecting IP Decision Making Supreme Court precedent Limelight v. Akamai, 134 S. Ct. 2111 (U.S. 2014) • Divided infringement – “A defendant is not liable for inducing infringement under §271(b) where no entity has directly infringed under §271(a) or any other statutory provision.” – It is not enough that all steps are performed (across multiple actors), and that one actor encourages the other actor to perform some of the steps. March 03, 2016 14 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  15. 15. Developments Affecting IP Decision Making America Invents Act • The AIA represents the most significant change to the U.S. patent system since 1952. March 03, 2016 15 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  16. 16. Developments Affecting IP Decision Making America Invents Act • Results: – The U.S. patent system changed from a “first to invent” to a “first inventor to file" system – Eliminates interference proceedings – Develops post-grant opposition (IPR) March 03, 2016 16 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  17. 17. Developments Affecting IP Decision Making Supreme Court precedent Nautilus v. Biosig Instruments, 134 S. Ct. 896 (U.S. 2014) • Lowered standard for indefiniteness • Old Standard: A claim is indefinite only when it is "not amenable to construction" or "insolubly ambiguous.“ • New Standard: A patent is invalid for indefiniteness if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention. March 03, 2016 17 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  18. 18. Developments Affecting IP Decision Making Supreme Court precedent Octane Fitness v. Icon Health, 134 S.Ct. 1749 (U.S. 2014) • Lowered the bar for finding a case “exceptional” to award attorneys’ fees to prevailing party • Based on the totality of circumstances, an exceptional case stands out from the others with respect to: (1) the substantive strength of a party’s litigation position considering both the governing law and the facts of the case; (2) the unreasonable manner in which the case was litigated. (3) presenting subjective bad faith; or (4) presenting exceptionally meritless claims. • No evidentiary standard March 03, 2016 18 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  19. 19. Developments Affecting IP Decision Making Supreme Court precedent Highmark v. Allcare Health Management, 134 S. Ct. 1744 (U.S. 2014) • All aspects of a district court’s determination of whether a case is exceptional under 35 U.S.C. § 285 is to be reviewed on appeal for abuse of discretion. • A district court is better positioned to decide whether a case is exceptional because it lives with the case over a prolonged period of time. March 03, 2016 19 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  20. 20. Top Five Developments Affecting IP Decision Making Supreme Court precedent • The Supreme Court has shown an unprecedented interest in patents this year. March 03, 2016 20 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  21. 21. Top Five Developments Affecting IP Decision Making Supreme Court precedent Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (U.S. 2014) • Software patents at issue disclosed a computer-implemented scheme for mitigating settlement risk • Held claims at issue directed to abstract idea of intermediated settlement, “an economic practice long prevalent in our system,” patent ineligible • Using some unspecified, generic computer to carry out abstract idea is not enough to constitute an inventive concept March 03, 2016 21 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  22. 22. Developments Affecting IP Decision Making Supreme Court precedent Limelight v. Akamai, 134 S. Ct. 2111 (U.S. 2014) • Divided infringement – “A defendant is not liable for inducing infringement under §271(b) where no entity has directly infringed under §271(a) or any other statutory provision.” – It is not enough that all steps are performed (across multiple actors), and that one actor encourages the other actor to perform some of the steps. March 03, 2016 22 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  23. 23. Developments Affecting IP Decision Making Supreme Court precedent Nautilus v. Biosig Instruments, 134 S. Ct. 896 (U.S. 2014) • Lowered standard for indefiniteness • Old Standard: A claim is indefinite only when it is "not amenable to construction" or "insolubly ambiguous.“ • New Standard: A patent is invalid for indefiniteness if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention. March 03, 2016 23 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  24. 24. Developments Affecting IP Decision Making Supreme Court precedent Octane Fitness v. Icon Health, 134 S.Ct. 1749 (U.S. 2014) • Lowered the bar for finding a case “exceptional” to award attorneys’ fees to prevailing party • Based on the totality of circumstances, an exceptional case stands out from the others with respect to: (1) the substantive strength of a party’s litigation position considering both the governing law and the facts of the case; (2) the unreasonable manner in which the case was litigated. (3) presenting subjective bad faith; or (4) presenting exceptionally meritless claims. • No evidentiary standard March 03, 2016 24 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  25. 25. Developments Affecting IP Decision Making Impact of NPEs March 03, 2016 25 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  26. 26. Top Five Developments Affecting IP Decision Making #5: Impact of NPEs • As of 2004, the cost of defending against a patent infringement suit is typically $1 million or more before trial, and $2.5 million for a complete defense, even if successful. • Because the costs and risks are high, defendants may settle even non-meritorious suits they consider frivolous for several hundred thousand dollars. • The uncertainty and unpredictability of the outcome of jury trials encourages settlement. March 03, 2016 26 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  27. 27. Developments Affecting IP Decision Making Impact of NPEs • In 2011, United States business entities incurred $29 billion in direct costs because of patent trolls. • Lawsuits brought by “patent assertion companies” made up 61% of all patent cases in 2012, according to the Santa Clara University School of Law. March 03, 2016 27 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  28. 28. Developments Affecting IP Decision Making Impact of NPEs • From 2009 through mid-2013, Apple Inc. was the defendant in 171 lawsuits brought by non-practicing entities (NPEs), followed by Hewlett-Packard (137), Samsung (133), AT&T(127), Dell (122), and Google (103). • In 2013, Apple (59); Amazon (50); AT&T (45); Google (39); and Dell (39). March 03, 2016 28 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  29. 29. Developments Affecting IP Decision Making Impact of NPEs • Patent troll-instigated litigation, once mostly confined to large companies in patent-dependent industries such as pharmaceuticals, came to involve companies of all sizes in a wide variety of industries. March 03, 2016 29 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  30. 30. Developments Affecting IP Decision Making Impact of NPEs • In 2005 patent trolls sued 800 small firms (those with less than $100 million annual revenue). • The number grew to nearly 2,900 such firms in 2011. – The median defendant's annual revenue was $10.3 million. March 03, 2016 30 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  31. 31. Developments Affecting IP Decision Making Impact of NPEs • A July 2014, PricewaterhouseCoopers study concluded that non-practicing entities (NPEs) accounted for 67% of all patent lawsuits filed—up from 28% five years earlier. • Although the median monetary award size decreased over time, the median number of awards to NPEs was three times higher than those of practicing companies. March 03, 2016 31 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  32. 32. Developments Affecting IP Decision Making Impact of NPEs • Emphasis became progressively focused on patents covering software rather than chemical or mechanical inventions. • Due to the difficulty in defining the scope of software patent claims in comparison to the more easily defined specific compounds in chemical patents. March 03, 2016 32 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  33. 33. Developments Affecting IP Decision Making Impact of NPEs • A GAO study concluded that the proportion of patent lawsuits initiated by trolls hadn’t changed significantly from 2007 through 2011. • The GAO speculated that the raw numerical increase in both troll and non-troll instituted lawsuits may be due to the “inherently imprecise” language and a lack of common, standardized, scientific vocabulary in constantly evolving emerging technologies such as software. March 03, 2016 33 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  34. 34. Developments Affecting IP Decision Making Impact of NPEs • Software patents were described as "particularly prone" to abuse because software is "inherently conceptual“ • Research indicates that a software patent is 4 times as likely as a chemical patent to be involved in litigation, and a software "business method patent" is 13 times more likely to be litigated. March 03, 2016 34 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  35. 35. Core vs. Non-Core IP Assets • This is an approach to IP portfolio management that takes into account a company’s strategic goals, revenue goals and core competency. Factoring all these together, a company can classify IP and products as core and non-core and develop and IP strategy for protecting those assets. March 03, 2016 35 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  36. 36. Most Challenging Patent Issues Facing In-House Counsel • Global prosecution • Managing costs • International IP regimes March 03, 2016 36 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  37. 37. Most Important and Influential Patent Litigation Trends • More U.S. patent litigation (if not from NPEs, then the fight over who controls the robotics landscape) • More foreign patent litigation • More legal uncertainty on the state of the law • More need for strategic, smart, and nimble in-house and outside counsel March 03, 2016 37 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP
  38. 38. Introduction John Fry is a Partner in Morris Manning and Martin’s Technology and Intellectual Property Litigation Practice, as well as the practice group leader. Mr. Fry practices primarily in the areas of patent, trademark and copyright infringement, unfair competition and trade secret litigation with a secondary emphasis on the strategic acquisition and management of intellectual property, particularly in the international context, and on complex patent, trademark and copyright license agreements, technology and software development agreements and concept evaluation agreements. He also counsels clients on antitrust issues, particularly in the area of the antitrust implications of intellectual property enforcement and licensing. Mr. Fry’s practice covers a wide variety of industries, including information technology, electronics, electrical distribution, telecommunications, manufacturing and chemical. In 2010, Mr. Fry retired as a Captain from the U.S. Navy after 30 years of combined Active and Reserve Service. March 03, 2016 38 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  39. 39. Disclaimer The materials and information presented and contained within this document are provided by MMM as general information only, and do not, and are not intended to constitute legal advice. Any opinions expressed within this document are solely the opinion of the individual author(s) and may not reflect the opinions of MMM, individual attorneys, or personnel, or the opinions of MMM clients. The materials and information are for the sole use of their recipient and should not be distributed or repurposed without the approval of the individual author(s) and Morris, Manning & Martin LLP. This document is Copyright ©2016 Morris, Manning & Martin, LLP. All rights reserved worldwide. March 03, 2016 39 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  40. 40. Identifying Patent Trolls • Attempts to define in Patent Reform Legislation have been largely unsuccessful • “the Court shall award the recovery of full costs to any prevailing party asserting invalidity or noninfringement, including reasonable attorneys' fees … if the court determines that the adverse party” was not (1) the original inventor, (2) an exploiter of the patent through sale of an item covered by the patent, or (3) a university or technology transfer organization, “unless the court finds that exceptional circumstances make an award unjust.” 2013 Shield Act, H.R. 845. • patent assertion entities include entities that: “do not practice their patents, do not help with technology transfer, wait until after industry participants have made irreversible investments before asserting their patents, acquire patents solely for the purpose of extracting payments from alleged infringers, take advantage of their non-practicing entity status during litigation, acquire patents with broad or unclear claims, and hide behind numerous shell companies.” 2013 White House Study. March 03, 2016 40 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  41. 41. Attacking Patent Troll Assertions • The Patent Abuse Reduction Act (S. 1013), would have required the court to award attorneys' fees to any party, plaintiff, or defendant unless the position and conduct of the non-prevailing party was objectively reasonable or substantially justified, or exceptional circumstances make the award unjust. Thus, this act seeks to curb abusive litigation practices that are neither reasonable nor justified, instead of focusing on the entity bringing the action. • Alternate proposal to remove the word “exceptional” from 35 U.S.C. §285, which states that, “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” March 03, 2016 41 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  42. 42. Attacking Patent Troll Assertions • Impact of Octane Fitness v. Icon Health & Fitness (Sup. Ct. 2014) • Redefined “exceptional” to be a case “that stands out from others with respect to the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated.” District courts are to “determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances.” • Highmark v. Allcare (Sup. Ct. 2014) • Attorney fee award reviewed for abuse of discretion. March 03, 2016 42 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  43. 43. Attacking Patent Troll Assertions March 03, 2016 43 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  44. 44. Attacking Patent Troll Assertions • Vehicle Operation Technologies LLC v. American Honda Motor Co., Inc., et al., 67 F. Supp. 3d 637 (D. De. 2014) • Granted Rule 11 sanctions for advocating claim construction position that was not objectively reasonable; pre-suit investigation unreasonable • Denied monetary sanctions only because of failure of notice • Icon Health & Fitness, Inc. v. Octane Fitness, LLC, 112 F. Supp. 3d 888 (D. Mi. 2015) (Remand from Supreme Court) • Found to be an exceptional case and awarded fees under 35 U.S.C. §285 • Arguments advanced by Icon bore no resemblance to what the ‘710 patent disclosed and covered • No reasonable pre-filing infringement analysis March 03, 2016 44 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  45. 45. Rule 12 Practice • Abrogation of form 18 for direct infringement • Judge Dyk’s separate opinion in McZeal concluded that to provide adequate notice, the complaint should list the specific asserted claims, the features of the accused product that are alleged to infringe and an explanation of how the accused product infringes • IPO: identification of claims and a statement explaining infringement • Core Wireless Licensing v. Apple, 1025 WL 4910427 (EDTX August 13, 2015) (pre rule change regarding pleading indirect infringement) • Complaint “fails to allege any facts that establish a plausible inference that Apple had the specific intent to induce its customer's actions, and knowledge that those actions amounted to infringement.” • “In other words, generic allegations that an alleged infringer provides instructional materials along with the accused products, without more, are insufficient to create a reasonable inference of specific intent for the purposes of an induced infringement claim.” March 03, 2016 45 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  46. 46. Pleading Standard H.R. 9, 114th Cong. (2015) • each patent allegedly infringed; • each claim of each patent allegedly infringed; • each process, machine, manufacture, or composition of matter (“accused instrumentalities”) alleged to infringe the claim; • the name or model number (or a representative model number) of each accused instrumentality, or if there is no name or model number, a description of each accused instrumentality; • for each identified claim, a description of the elements alleged to be infringed by the accused instrumentality and how the accused instrumentality is alleged to infringe those elements; and • for each claim of indirect infringement, the acts of the alleged infringer that contribute to or induce direct infringement March 03, 2016 46 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  47. 47. Rule 12(b) Practice • Lack of Personal Jurisdiction May not be Dead • Smaller companies sued for infringement may not have large jurisdictional footprint • Possible dismissal without prejudice March 03, 2016 47 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  48. 48. Not All Troll Cases are Created Equal • VirnetX Inc. v. Apple Inc., Civil Action No. 6:12-cv-855-RWS (EDTX, February 3, 2016) • Jury awarded VirnetX $625.6 million • Jury found infringement to be willful • eDekka LLC v. 3Balls.com, Inc., Civil Action No. 2:15-cv-541-JRG (EDTX, December 17, 2015) • Judge Gilstrap found no claim construction proceeding was necessary and that no reasonable litigant could have expected success on the merits in light of the pending Alice motions • Exceptional case under 35 U.S.C. §285 March 03, 2016 48 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  49. 49. Gaining Leverage in Low Value Cases • Effective use of joint defense groups • Organize early • Multiple representations • 12(b) and transfer practice • Can be done fairly economically by sharing briefs or parts of briefs • Ample motions in prior cases • Putting plaintiff on notice claim is frivolous • Early and often to set up possible Rule 11 or 35 U.S.C. §285 motion • Accelerating the Markman schedule • Early Rule 11 motion may be predicated on claim elements that do not need construction as in eDekka • Investigate assignment history and payment of maintenance fees • Insurance and indemnification March 03, 2016 49 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  50. 50. What’s Next? Willfulness • In re Seagate, 497 F.3d 1360, 1370 (Fed. Cir. 2007) (en banc) (overruling Underwater Devices standard for willfulness, requiring a showing of objective recklessness and abandoning affirmative duty of due care) • Stryker Corp. v. Zimmer Inc., Supreme Court Case No 14-1520 and Halo Electronics Inc. v. Pulse Electronics Inc., Supreme Court Case No. 14-1513 – Oral Argument on Tuesday 2/23/2016 • Supreme Court granted cert. to consider standard under which the trial court can enhance up to treble damages under 35 U.S.C. §284 • Is willfulness required for enhanced damages? • USPTO filed amicus brief urging rejection of Federal Circuit test March 03, 2016 50 SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
  51. 51. March 03, 2016 51 Contact Info: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP E: JWaldrop@kasowitz.com T: (650) 453-5425 John P. Fry Partner Morris, Manning & Martin LLP E: jfry@mmmlaw.com T: (404) 210-5841
  52. 52. ► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type your question in the box that appears and click send. ► Questions will be answered in the order they are received. Q&A: March 03, 2016 52 SEGMENT 1: Jonathan K. Waldrop Partner Kasowitz Benson Torres & Friedman LLP SEGMENT 2: John P. Fry Partner Morris, Manning & Martin LLP
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