Posts Tagged ‘litigation’

Share via email

With a mighty crescendo, the jury has returned a verdict in the Apple v. Samsung suit.  And the verdict is… guilty!  Well, at least lots and lots of infringement, and even more damages.  At first, it was $1,051,855,000 in damages.  However, that later became $1,049,343,540.  But hey, what’s $2.5 million between, well, enemies?  However, this difference in damages might belie a more troubling and uncomfortable possibility about this verdict, that it was based on something other than the law.

An excellent summary of the goings-on after the verdict is available at Groklaw.  To start, there is the small matter of the $2.5 million.  It turns out that the jury made a slight mistake in awarding Apple damages for some Samsung device that the jury decided did not infringe Apple’s patents.  It appears the connection between infringement and the awarding of damages wasn’t fully formed in the minds of the jurors.

This is where the sausage is made

As unsettling as that is, it’s merely the first in a chain of apparent missteps by the jury.  As reported by Groklaw, the jury foreman stated “the jurors had reached a decision without needing the [jury] instructions.”  Given the complexities of patent law, it is unfathomable that a lay jury can arrive at a logical, legally maintainable decision without reading the damn instructions.  On top of this, there’s the fact that the jury returned their verdict in three days.  Three days to carefully analyze each allegedly infringement of each device against each claim.  Given the amounts in controversy, in addition to simply performing their sworn duties, three days seems grossly inadequate for every count to be given its due consideration.

Comments from another juror seems to support the contention that the jury failed in its task.  A CNET interview with juror Manuel Ilagan quotes Ilagan as saying “After we debated that first patent — what was prior art –because we had a hard time believing there was no prior art.  In fact we skipped that one, so we could go on faster. It was bogging us down.”  When jurors skip analyzing prior art to determine the validity of a claim, they unequivocally shirk their responsibilities.  The audacity to simply omit this analysis because it is difficult to perform makes me irate and does little to bolster the concept of jurors as suitable triers of fact in difficult patent cases.

In my last post I discussed a variety of theories that are commonly used in   calculating damages.  I have to apologize, for I omitted a crucial one, where the jury makes it up.  If not making it up, the jury in this case certainly used something other than actual economic damages suffered by Apple in awarding damages.  Again quoting the jury foreman, “we wanted to make sure the message we sent was not just a slap on the wrist. We wanted to make sure it was sufficiently high to be painful, but not unreasonable.”  Never mind that damages awarded by the jury are not punitive, but compensatory.  Of course, had the jurors bothered to read the instructions, this is something they likely would have been informed of.

 

A growing chorus of experts and journalists anticipate some degree of reversal of this verdict, and I am in agreement.  The multitude of errors committed by this jury, and the serious consequences, monetary and otherwise, are too severe to go ignored an unaddressed.  Let’s hope the courts can sort out this mess.

 

Share via email

It comes as a surprise to nobody that adversaries in litigation disagree over nearly everything they can come up with contrary positions for.  Along with infringement and invalidity, the determination of damages is one of the most crucial determinations made in the course of a patent infringement suit.  As such, when it is time for damages to be addressed, much time and effort is expended by both parties in conjuring up a monetary figure that represents the damage done to the patent holder in the case.  The methods used by each party can result in drastically different figures being reached by each of the parties.  The two main methods of calculating damages are lost profits and reasonable royalties.

THAT’S where the lost profits went!

Lost profits are a very patentee-friendly damage calculation that attempts to determine how many sales were diverted from the patentee by the infringement, and how much profit was “lost” as a result of the diversion.  Practitioners use the Panduit factors to inform their calculation, which include: 1. the demand for the patented product; 2. the absence of accepted non-infringing substitutes, meaning there is nothing on the market or that could be on the market that would essentially similarly divert the sales from the patented product without infringing the patent; 3. the manufacturing and marketing capability of the patentee to exploit their patent; and 4. the amount of profit made from each diverted sale, essentially revenue minus cost.

In contrast, the reasonable royalty school of thought uses a hypothetical negotiation between the patentee and the infringer, wherein the court does its own conjuring in determining what royalty the infringer would have paid the patentee before any infringing activity.  Among the presumptions made by this method are that the negotiation takes place as the infringing activity begins, that both parties are willing to come to an agreement, and that the activity will indeed infringe the patent.  This method results in substantially lower damages, and hence is favored by infringers, whereas lost profits is favored by patent holders.  One interesting and sensible concept should be kept in mind when using the reasonable royalty method, which is that the infringer can, and indeed likely should, make a profit.  Even a court is unlikely to engage in a thought experiment where a purveyor of goods would enter into a deal where they would not profit.

Recently, Bernard Chao posted an article at patentlyo.com that discussed the Dr. Evil-like award of

One BILLION dollars! MUHAHAHAHA!

damages in the Monsanto v. DuPont patent infringement case where DuPont was determined to have practiced the RoundUp Ready soy bean patent without a license.  No fireworks there.  However, DuPont never sold any soy beans produced by such infringing activity.  Nonetheless, the jury arrived at damages of one billion dollars.  As Dr. Chao’s article points out, because the relevant court documents are under seal, nobody outside that courtroom has the foggiest idea as to what damages theory led to such an award.  Unsurprisingly, DuPont is appealing this decision, and time will tell what the ultimate damages will be.  However, it is clear that as long as money in sums of this magnitude are at stake (or, perhaps more precisely, can be put at stake), damage theories are a critical element in end-phase patent litigation.

Share via email

 

Most people have a pretty good grip on the basics of criminal law; however, civil law tends to give people a little more trouble. Criminal law covers crimes, prosecution, and defense. That’s really as good a definition as any. However, more specifically, criminal law encompasses the dealings with any criminal activity that causes harm to another individual or the general public. Within the criminal law realm, there are written rules and statutes that set out the punishment to be imposed on people who do not obey the law. Civil law, on the other hand, deals with disputes between individuals or organizations, in which compensation may be awarded to the victim.

First and foremost, civil and criminal cases begin in two different places. In criminal law, a person accused of a crime is charged in a formal accusation, and the government, on behalf of the people of the United States, prosecutes the case. In civil law, a private party (the plaintiff) claims that another person or entity (the defendant) has failed to carry out a legal duty owed to him/her.

One of the biggest differences between civil and criminal law is the idea of punishment. Typically, a losing defendant in civil litigation reimburses the plaintiff for losses caused by the defendant’s behavior. In contrast, a criminal law defendant is punished by incarceration in jail (and in exceptional cases, execution of the defendant) and/or a fine made payable to the government.

Defendants in criminal cases are presumed innocent while parties in a civil case stand on even ground. In civil law cases, the burden of proof requires the plaintiff to convince the trier of fact (whether judge or jury) of the plaintiff’s entitlement to the relief sought. This means that the plaintiff must prove each element of the claim, or cause of action, in order to recover. In criminal law cases, the burden of proof is always on the state. The state must prove that the defendant is guilty beyond a reasonable doubt, while the defendant must prove nothing.

It is worth dissecting this difference between criminal and civil law in a bit more detail. Legal authorities tend to believe that “beyond a reasonable doubt” means that there is at least a 98% or 99% certainty of guilt. In that case, the triers of fact in a criminal case have to be essentially CERTAIN that the defendant is guilty. On the other hand, in civil cases, if the trier of fact believes that there is more than a 50% chance that the defendant is liable, the plaintiff wins. Therefore, it is basically a balancing act, where the trier of fact must decide which side they believe more, even if only a touch more.

 

Share via email

Most of the time, people call me in time when they’re served with a lawsuit. But often enough, they wait until the last minute or beyond. Usually, they’re sticking their head in the sand, ignoring the problem, deluding themselves into thinking that there’s nothing they can do — or nothing they should do. It’s only when things get real that they get moving. In a foreclosure case, that’s usually a few days before the home they’re living in is going to be sold, or at best a week before summary judgment. But if you wait that long, chances are, it’s too late.

A recent Florida appeals case (Phadel v. Deutsche Bank, 83. So. 3d 893 (Fla. 4th DCA 2012) illustrates this all too common scenario. The homeowners failed to defend themselves and a foreclosure judgment was entered. Later, they asked the judge to vacate (cancel) the judgment. They even had what appeared to be good defenses, but they didn’t raise them at the onset, and the Court said, to paraphrase, “too bad, so sad, next case.” Don’t make that mistake.

Being an attorney, let me lay out an exception to the rule. If there’s real fraud (not ‘they don’t have the note’ “fraud”) or if the bank didn’t serve you properly you might have something even very late in the game. But don’t count on it.

A lot of people think that “since the bank doesn’t have the note, they can’t foreclose”. There are many issues with this statement, but my main concern is that people are being led to believe that they don’t need an attorney, because, well, the judge won’t let the bank take my house when they don’t even have the note, right? Wrong.

Judges are not and usually should not be advocates for either side. The judge isn’t your lawyer. He is not the bank’s lawyer either. When you don’t defend yourself, the judge is usually not much more than a ministerial paper-signer (with all due respect to the judges). You have to defend yourself, and I promise you, you don’t want to go it alone.

On the balance, defending a foreclosure is a solid economic investment. But if you do nothing, or wait until it’s too late, don’t count on the judge, or anyone, coming to your rescue.

Share via email

As recently detailed by Gene Quinn at IPWatchdog.com, Sony has partnered with Article One in order to better defend itself against what it calls “low quality patent assertions.”  Gene gives an excellent description of the services provided by Article One.  However, no matter how excellent  a research firm may be in combing through patent and non-patent literature, when an alleged infringer has their damning reference in hand, the question remains, what now?

 

Non-Practicing Entities (or NPEs for those into the whole brevity thing) have been the target of much derision and venom, with some being more deserving than others.  While not debating the merits, or lack thereof, of NPEs, the fact remains that they are asserting patents that are presumed valid, they have the right to do so, and they are (for the time being) not going away.  A neighbor of mine recently recounted his own encounter with a cease-and-desist letter, and how, after paying a settlement, had a bad taste left in his mouth.  However, being the owner of a small company, settlement was the only viable option for him.  By and large, patent litigation is simply not an option for start-up business owners like my friend.  The immediate demand for cash associated with defending against such a charge is simply out of the question by no fewer than one order of magnitude.

I freely admit that this is armchair (well, couch) business owner-ing, and my chutzpah might be diminished if I were making the decision, but I think ex parte reexamination, coupled with a search firm such as Article One, may be the answer for someone with the will to fight, but not necessarily the means to litigate.  I can quite clearly imagine a scenario where, after receiving a C&D, a search firm is retained and digs up prior art casting doubt on the validity of the asserted patent.  Suddenly, the pursuer becomes the pursued.  The last thing an NPE wants is to have to defend their patent’s validity, at least until they are playing ball with heavy hitters.  Even then, this strategy appears to have gained favor.  And the fee for ex parte reexamination, currently $2,520, while by no means cheap, pales in comparison to the expense of litigation, and after accounting for the risk of the patent’s validity being maintained, may very well be a good option for a feisty target of an NPE.

Mostly, I think ex parte reexamination offers a third option to litigating and capitulating.  It’s a way for the not-so-big guy to assert himself without breaking the bank.  It offers the chance to stand up and fight for what he believes is right in an otherwise grim situation.


Subscribe

Login



TUESDAY, MAY 21, 2013

Bad Behavior has blocked 13273 access attempts in the last 7 days.