This is a presentation given by me and David Donoghue of Holland + Hart for the ALI-ABA recently. Many of the slides are taken from a presentation I've done in the past with the Hon. John Leo Wagner (Ret.) of Judicate West.
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
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