IP Litigation: Pre-Filing Considerations

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Pre-Filing Considerations in Intellectual Property, presentation at Annual Meeting, State Bar of California, San Diego Sept. 2009

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IP Litigation: Pre-Filing Considerations

  1. 1. Pre-Filing Considerations In Intellectual Property Litigation State Bar of California Annual Meeting September 12, 2009 – San Diego SPEAKERS: Craig Holden, Esq. MGA Entertainment, Inc. Scott Hansen, Esq. Fulwider Patton LLP
  2. 2. Overview of Internet Pre-Filing Issues and Considerations <ul><li>Common Types of IP-Related Internet Claims </li></ul><ul><li>What Type of Site/Activity Is Involved? </li></ul><ul><li>Who Is Responsible For The Site/Content? </li></ul><ul><li>Personal Jurisdiction? </li></ul><ul><li>Pre-Filing Evidence Issues </li></ul><ul><li>Statutes to Keep In Mind </li></ul>
  3. 3. Common Types of IP-Related Internet Claims <ul><li>Copyright </li></ul><ul><li>Trademark/Unfair Competition </li></ul><ul><li>Right of Publicity </li></ul><ul><li>Trade Secret </li></ul><ul><li>Counterfeiting </li></ul><ul><li>Patent </li></ul>
  4. 4. What Type of Site/Activity Is Involved? <ul><li>“ Pure&quot; Business Commerce Site </li></ul><ul><li>Search Engine </li></ul><ul><li>Individual Site </li></ul><ul><ul><li>E.g ., “Fan&quot; Site </li></ul></ul><ul><li>User Generated Content </li></ul><ul><ul><li>Host/Operator of the Site </li></ul></ul><ul><ul><li>Users on/of the Site </li></ul></ul><ul><li>Affiliates/Traffic Drivers </li></ul><ul><ul><li>Email Can Deliver Users Here </li></ul></ul>
  5. 5. Who Is Responsible For The Site / Content? <ul><li>Sometimes obvious </li></ul><ul><li>“ WhoIs.net”-type search (for domains) </li></ul><ul><li>Other “public sources” </li></ul><ul><li>Social Networking </li></ul><ul><li>Blogs </li></ul><ul><li>Chats </li></ul><ul><li>Follow the money </li></ul>
  6. 6. Who Is Responsible For The Site / Content?, Cont. <ul><li>Pre-Naming Formal Discovery </li></ul><ul><ul><li>Potential DMCA subpoena (Copyright) </li></ul></ul><ul><ul><ul><li>Subpoena issued to ISP under DMCA provisions </li></ul></ul></ul><ul><ul><ul><li>But can be limited. E.g, RIAA v. Verizon Internet Svs., 351 F.3d 1229 (C.A.D.C. 2003) (quashing subpoena where ISP was only a transitory network) </li></ul></ul></ul><ul><ul><li>Doe Pleading, Expedited Discovery Under FRCP 26 </li></ul></ul><ul><ul><ul><li>E.g., Arista Records v. John Does 1-19, --F. Supp. 2d --, 2008 WL 1851772 (D.D.C. April 2008) (where plaintiffs showed prima facie copyright infringement and good cause that third-party discovery was needed to identify defendants, early discovery permitted) </li></ul></ul></ul>
  7. 7. Personal Jurisdiction --Website Issue <ul><li>“ Interactive” v. “Passive” </li></ul><ul><li>“ A passive website and domain name alone do not satisfy the . . . effects test . . . .” Pebble Beach Co. v. Caddy , 453 F.3d 1151, 1160 (9th Cir. 2006) </li></ul><ul><li>Anticipate post-filing jurisdictional battle and discovery </li></ul>
  8. 8. Pre-Filing Evidence Issues <ul><li>Get What’s There Now </li></ul><ul><ul><li>Printing </li></ul></ul><ul><ul><li>“ Film&quot; the Action </li></ul></ul><ul><li>Consider What Was There </li></ul><ul><ul><li>Caching and Archive.org (Internet Archive) </li></ul></ul><ul><ul><ul><li>Healthcare Advocates v. Harding, Earley , 497 F. Supp. 2d 627 (E.D. Pa. 2007) (discussing manner in which archive.org operates) </li></ul></ul></ul><ul><li>Admissible? </li></ul><ul><ul><li>Lorraine v. Markel Am. Ins. , 241 F.R.D. 534, 553 (D.Md. 2007) (“Internet Archive is a relatively new source for archiving websites. Nevertheless, Plaintiff has presented no evidence that the Internet Archive is unreliable or biased.”) </li></ul></ul>
  9. 9. Pre-Filing Evidence Issues, Cont. <ul><li>What are users of the site saying? </li></ul><ul><ul><li>May reflect knowledge or obvious problems on the site </li></ul></ul><ul><li>What are others saying about the site? </li></ul><ul><ul><li>Off-site blogs </li></ul></ul><ul><ul><li>Chats </li></ul></ul>
  10. 10. Pre-Filing Evidence Issues, Cont. <ul><li>How will it ultimately be packaged to the Court? </li></ul><ul><ul><li>Keep track of how material is collected </li></ul></ul><ul><ul><li>Be mindful of admissibility issues </li></ul></ul><ul><ul><li>Internet material gets voluminous very fast </li></ul></ul><ul><ul><ul><li>Court/Judge technically savvy? </li></ul></ul></ul><ul><ul><ul><li>Rules on electronic submissions? </li></ul></ul></ul>
  11. 11. Some Statutes To Keep In Mind <ul><li>Digital Millennium Copyright Act (“DMCA”) 17 U.S.C. §512 </li></ul><ul><ul><li>In copyright actions, establishes “safe harbors” for certain types of Internet activities that qualify. </li></ul></ul><ul><ul><ul><li>Transitory network communications </li></ul></ul></ul><ul><ul><ul><li>System caching </li></ul></ul></ul><ul><ul><li>Information at direction of users </li></ul></ul><ul><ul><ul><li>Only if no actual knowledge of infringement, nor </li></ul></ul></ul><ul><ul><ul><li>Awareness of facts/circumstances from which activity is apparent </li></ul></ul></ul><ul><ul><li>Information location tools </li></ul></ul><ul><li>What is the DMCA stated position and policy of the site at issue? </li></ul>
  12. 12. Some Statutes To Keep In Mind, Cont. <ul><li>Communications Decency Act (“CDA”) 47 U.S.C. §230 </li></ul><ul><ul><li>“ No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” </li></ul></ul><ul><ul><li>“ The term ‘interactive computer service’ means any . . . provider that provides or enables computer access by multiple users to a computer server . . . .” </li></ul></ul>
  13. 13. Some Statutes To Keep In Mind, Cont. <ul><li>“ Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.&quot; Section 230(e)(2) </li></ul><ul><ul><li>“ In the absence of a definition from Congress, we construe the term ‘intellectual property’ to mean ‘federal intellectual property.'&quot; Perfect 10, Inc. v. CCBillLLC , 488 F.3d 1102, 1119 (9th Cir. 2007) (CDA immunity does not apply to federal IP claims, and therefore 9 th Cir. concluded there’s immunity for all state-law claims as they are not considered federal IP claims). </li></ul></ul><ul><ul><li>“ [I]nline with the First Circuit’s dictum in Universal, this court disagrees with the Ninth Circuit’s decision in Perfect 10 that [Section] 230(e)(2) exempts only federal intellectual property laws from the operation of [Section] 230. Consistent with its text, §230(e)(2) applies simply to ‘any law pertaining to intellectual property,' not just federal law.&quot; Doe v. Friendfinder , 540 F. Supp. 2d 288, 302 (D.N.H. 2008 ( March )) </li></ul></ul>
  14. 14. For More Details… <ul><li>Go to www.ipsection.org </li></ul><ul><li>From there, go to webpage of IP Litigation Standing Committee </li></ul>
  15. 15. Why Investigate Before Filing? <ul><li>Rule 11, Attorney Fees/Costs, etc. </li></ul>
  16. 16. Why Investigate Before Filing? <ul><li>Increase Chances for Success </li></ul>
  17. 17. Why Investigate Before Filing? <ul><li>Makes Litigation More Efficient </li></ul>
  18. 18. Why Investigate Before Filing? <ul><li>Increase Chance of Early Settlement </li></ul>
  19. 19. Why Investigate Before Filing? <ul><li>Conserve Money, Reduce Unnecessary Costs </li></ul>
  20. 20. Why Investigate Before Filing? <ul><li>Reduce Stress and Uncertainty </li></ul>
  21. 21. Why Investigate Before Filing? <ul><li>Find Show Stoppers in Advance </li></ul>
  22. 22. Why Investigate Before Filing? <ul><li>See the Case Through Eyes of Defendant </li></ul>
  23. 23. Types of IP Litigation <ul><li>Patent </li></ul><ul><li>Trademark </li></ul><ul><li>Copyright </li></ul><ul><li>Trade Secret </li></ul><ul><li>Internet-Related </li></ul><ul><li>Right of Publicity/Privacy </li></ul>
  24. 24. Great Materials/Checklists <ul><li>Go to www.ipsection.org </li></ul><ul><ul><li>Click on Litigation Standing Committee webpage </li></ul></ul><ul><li>Detailed presentation materials by: </li></ul><ul><ul><li>Alan P. Block, Esq. (Patent) </li></ul></ul><ul><ul><li>Jane Shay Wald, Esq. (Trademark) </li></ul></ul><ul><ul><li>Sean Morris, Esq. (Internet-Related) </li></ul></ul><ul><ul><li>Kate Spelman, Esq. (Copyright) </li></ul></ul><ul><ul><li>Randy Kay, Esq. (Trade Secret) </li></ul></ul><ul><ul><li>Future Programs (PI’s, Right of Publicity) </li></ul></ul>
  25. 25. IP Section Webpage
  26. 26. IP Litigation Standing Committee Webpage
  27. 27. Patent Litigation
  28. 28. Patent Litigation <ul><li>Expensive </li></ul><ul><ul><li>$500K-$1.5million through discovery </li></ul></ul><ul><li>Patents are: </li></ul><ul><ul><li>Complex technical documents </li></ul></ul><ul><ul><li>Sometimes very valuable </li></ul></ul><ul><ul><li>Hard to understand </li></ul></ul><ul><ul><ul><li>“… whereas said frictionless coupling is interposed in a proximal spacial relationship with respect to said gear box…” </li></ul></ul></ul>
  29. 29. Some Pre-Filing Considerations <ul><li>Is it worth it? </li></ul><ul><li>Which patents? </li></ul><ul><li>Who to sue? </li></ul><ul><li>Where to sue? </li></ul><ul><li>Pre-Filing Investigation </li></ul><ul><li>Checklist </li></ul>
  30. 30. Is it Worth It? <ul><li>Award in patent case </li></ul><ul><ul><li>Damages; or </li></ul></ul><ul><ul><li>Reasonable Royalty; and/or </li></ul></ul><ul><ul><li>Injunction </li></ul></ul><ul><li>Estimate your damages </li></ul><ul><li>What is “reasonable royalty” in your industry? </li></ul><ul><li>Worth of case (1 approach) = </li></ul><ul><li>% Chance of Winning x Range of Possible Recovery </li></ul>
  31. 31. Which Patents? <ul><li>What is in your portfolio? </li></ul><ul><ul><li>Are multiple patents being infringed? </li></ul></ul><ul><ul><ul><li>How many to include? </li></ul></ul></ul><ul><ul><li>Are there continuation patent applications pending? </li></ul></ul><ul><ul><li>Is a broadening reissue a possibility in this case? </li></ul></ul>
  32. 32. Which Patents? (continued) <ul><li>Are you practicing your patents? </li></ul><ul><ul><li>Reasonable royalty v. lost profits </li></ul></ul><ul><ul><li>No guarantee of injunction </li></ul></ul><ul><ul><li>Consider ITC (must have domestic business) </li></ul></ul><ul><li>Make sure your products are marked </li></ul><ul><ul><li>Or, give early notice of infringement </li></ul></ul>
  33. 33. Where to Sue? <ul><li>Local Patent Rules? </li></ul><ul><ul><li>N.D. California Local Patent Rules </li></ul></ul><ul><ul><ul><li>S.D. California </li></ul></ul></ul><ul><ul><ul><li>E.D. Texas </li></ul></ul></ul><ul><ul><ul><li>Some Judges </li></ul></ul></ul><ul><ul><li>C.D. California: No Local Patent Rules </li></ul></ul>
  34. 34. Pre-Filing Investigation <ul><li>Good to know problems in advance </li></ul><ul><li>Rule 11 and Section 285 of patent act require an inquiry that is reasonable under the circumstances </li></ul><ul><li>Understand limitations of your patent </li></ul><ul><li>Get a good sense of whether the patent is valid </li></ul>
  35. 35. Pre-Filing Investigation <ul><li>What do the claims mean? </li></ul><ul><ul><li>What would an accused infringer say? </li></ul></ul><ul><li>Review the file history for limiting statements or anything else that’s unusual </li></ul><ul><li>Consider prior art problems </li></ul><ul><li>Can accused infringer design around the patent? </li></ul><ul><li>Consider hiring consulting expert </li></ul>
  36. 36. Possible Defenses <ul><li>Prior Art </li></ul><ul><li>Enablement </li></ul><ul><li>Written description </li></ul><ul><li>Indefiniteness </li></ul><ul><li>Best mode </li></ul><ul><li>Inventorship </li></ul><ul><li>Ownership </li></ul><ul><li>Inequitable Conduct (any prior art not submitted to the Patent Office?) </li></ul>
  37. 37. Pre-Filing Investigation <ul><li>Infringer’s Activities </li></ul><ul><ul><li>Try to obtain samples of accused product </li></ul></ul><ul><ul><ul><li>At least ask for one and an explanation why there is no infringement </li></ul></ul></ul><ul><ul><li>Try to reverse engineer the accused product </li></ul></ul><ul><ul><li>Don’t make guesses about the product when you could have known more detail </li></ul></ul>
  38. 38. Pre-Filing Investigation <ul><li>Prepare a claim chart </li></ul><ul><ul><li>Compare patent claims w/accused product </li></ul></ul><ul><ul><li>Be ready to justify your case to the court and accused infringer early on ! </li></ul></ul><ul><li>Conduct infringement study BEFORE lawsuit is filed </li></ul><ul><ul><li>Rule 11 not satisfied by post-filing investigation </li></ul></ul>
  39. 39. FOR MORE DETAILS… <ul><li>See, “Some Pre-Filing Considerations in Patent Litigation” </li></ul><ul><ul><li>Alan P. Block, Esq., Hennigan Bennett & Dorman LLP </li></ul></ul><ul><ul><li>Powerpoint /Checklist available at www.ipsection.org </li></ul></ul><ul><ul><ul><li>Go to Litigation Standing Committee Webpage </li></ul></ul></ul>
  40. 40. Conclusion
  41. 41. Conclusion <ul><li>Watch IP Litigation Committee webpage @ www.ipsection.org for more pre-filing checklists (Preliminary Injunction, Right of Publicity, Design Patent) </li></ul>

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