What to do in the first 30 days of an IP suit

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What to do in the first 30 days of an IP suit

  1. 1. You’ve just been sued – What to doin the first 30 daysLee Cheng, Newegg, Inc.; John Sganga andLynda Zadra-Symes,Knobbe MartensApril 30, 20132013 ACC-SoCal DoubleHeaderDisney’s Paradise Pier HotelThe recipient may only view this work. No other right or license is granted.
  2. 2. 2© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.You just got sued, so you need to:1. Comply with initial deadlinesa) Retain counsel2. Find someone else to pay for it3. Evaluate riska) In-house case assessmentb) Exposure/meritsc) Is plaintiff a troll?4. Convince IP owner their case is weak5. Counterpunch!
  3. 3. 3© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.Parallel PathsASSESS INTERNALLYDEADLINES/COUNSELINVESTIGATE FACTSLITIGATETime & CostPriority
  4. 4. 4© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.I. Deadline oriented issues:1. Getting someone else to paya) Insurance:• Tender early• Continue to pursue after denialb) Indemnity:• Suppliers• Contractorsc) Indirectly:• Joint defense group
  5. 5. 5© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.I. Deadline oriented issues (cont’d):2) Court-related deadlinesa) Document preservation – litigation hold memob) Timely responsive pleading• When were you served?• State court (30 days)/federal court (21 days)• Waive service? (60/90 days from request)• Remove to Federal Court (30 days firm)c) Compel arbitration?
  6. 6. 6© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.I. Deadline oriented issues (cont’d):3) Possible counterclaims/cross claimsa) Is Plaintiff infringing your IP?b) Breaching license agreement?c) Other competitive tortsd) DJ claims/counterclaims4) Possible motion to dismiss/transfera) Jurisdictionb) Failure to state a claim• Indirect infringementc) Lack of standing• Does Plaintiff own the IP?
  7. 7. 7© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.II. Assessing Merits & Exposure:1) How is plaintiff funded?a) Key competitor or IP holding company?b) Allocate resources for defense accordingly2) Focus on defenses and exposure early in casea) Is defendants activity licensed?b) Is injunction a risk?3) Identify options to resolve dispute:a) $$ exposureb) $$ to settlec) Design around options
  8. 8. 8© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.II. Assessing Merits & Exposure4) Trademark (Supplemental or Principal)?a) Check file history for statements made to PTOregarding no likelihood of confusion with other marks5) Patenta) Has it been litigated/re-examined before?b) Pending related applicationsc) Claim limitations added/arguments in file historyd) Prior art6) Copyrights -- obtain certified copy of file and depositcopy
  9. 9. 9© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.II. Assessing Merits & Exposure (cont’d)7) Should defendants activity cease pending outcome ofsuit?a) Avoid potential willfulness findingb) Reduce damages liabilityc) Effect on strength of defenses
  10. 10. 10© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.III. Fact Investigation: Defense side1) Gather/preserve relevant documents from client2) Identify key witnessesa) Obtain declarations?3) Inform employees about publicity policies4) Third parties to be contacted:a) former employeesb) Joint inventorsc) Other co-ownersd) Contact before Plaintiff does?
  11. 11. 11© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.III. Fact Investigation: Plaintiff and its IP5) Identify Plaintiff and its relationship to defendant6) Confirm status of asserted IP rightsa) Is Plaintiff the owner?b) Are maintenance fees/renewals up to date?7) Has plaintiff enforced the same IP rights?a) Are other defendants cooperative?8) Is Plaintiff in good corporate standing?a) paid State dues/taxesb) filed corporate documents
  12. 12. 12© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.III. Fact Investigation: Plaintiff and IP (cont’d)9) Review copyright registrationsa) Check dates of publication/registrationb) Statutory damages/attorneys fees may be unavailableto prevailing plaintiff,c) But still available to prevailing defendant10)Search for prior rightsa) Do you predate the plaintiff?b) If a third party predates, can you acquire rights?c) Countersue? Attack in PTO?
  13. 13. 13© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.IV. Fee Arrangements/Joint Defense Issues1) Retaining counsel2) Joint defense agreementsa) Confidentiality issuesb) Privilege/common interestc) Settlement control3) Cost-saving tactics:a) Using one firmb) Sharing costsc) Shifting defense burden to other partyd) Mesh strategy with long-term objectives
  14. 14. 14© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.V. Litigation tactics to reduce costs:1) Choice of counsel/managing counsel2) Reduce discovery costsa) Manage vendorsb) Early disclosures of documents/witnessesc) Reduce costly discovery disputesd) Demonstrate preparedness3) Leverage pre-existing work-product4) Stay litigation - File IPR in PTO5) Mediation6) Offer of judgment
  15. 15. Lee Cheng, Newegg, Inc.; John Sganga andLynda Zadra-Symes, Knobbe Martens

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