Yar chaikovsky 2014 Intellectual Property Roundtable February Issue

SPECIAL SPONSORED SECTION
2014 ROUNDTABLE Series
CALIFORNIA LAWYER
EXECUTIVE SUMMARY
JEFF KICHAVEN: Let’s start by discussing recent efforts to
address non-practicing entities. Where do you think reform
efforts ought to go? Do you think the Inventions Act is going to
help, be window dressing, or be counterproductive?
RICHARD HUNG: I think that there is something attractive for
everyone, but there’s also something that everyone hates in the bill.
Because our clients stand on both sides of it, it’s hard for us to take
sides. On things like the attorneys fee provision, the act is really
polarizing. The one aspect that appeals to me personally is limiting
discovery pre-Markman, because clients benefit if we can contain
discovery costs.
MATTHEW POWERS: Most of the components of the act are not
going to survive the process of harmonization with the Senate so
it’s a little dicey to predict what’s actually going to come out of that,
especially on fee shifting, which is a polarizing question.
If you read the discussion that’s animating the debate, it isn’t
about non-practicing entities that actually bring cases; it’s about
NPEs that threaten cases. Legislators are attacking the driftnet fish-
ers who file a case against 500 defendants or 200 defendants and
want to settle each one for $10,000, $50,000, well below the cost
of defense, and this bill may stop those cases. But that’s probably
.0000001 percent of the litigation out there. The bigger problem
is the mass mailing of threat letters to coffee shops that use WiFi,
for instance, and this doesn’t stop anything like that, because what
NPEs hope is that those target companies pay the $500 or $1,000
without a lawsuit being filed.
It’s important to see the “patent reform debate”—and I use that
term in quotes—for what it is. It is not attempting to stop bad-faith
litigation. It is an attempt by some large, established companies to
skew patent litigation in their favor generally. That’s why it’s being
funded by Google and Cisco and others. It’s their right to do it,
but it’s to make litigation against those companies harder, and we
should have that debate in an honest way.
MIKE BETTINGER: Yeah, Matt, to your point about leveling the
playing field, I think Circuit Judge Kathleen O’Malley’s recent
decision in Kilopass Technology Inc. v. Sidense Corporation, (2013
WL 6800885 (9th Cir.), does just that. As I understand it, Judge
O’Malley is saying that for an exceptional case under 35 USC §
285, if defendants are subject to a recklessness standard for purposes
of willful infringement, then it should be a recklessness standard
for purposes of filing the case, too. Judge Randall G. Rader, in his
concurrence, seems to be trying to head off a legislative dictate and,
instead, handle an award of attorneys fees for an exceptional case
through a judicial interpretation of Section 285.
YAR CHAIKOVSKY: On the fee-shifting side, we had Kilopass,
where the Federal Circuit has generally said they’d like to do things
through judicial interpretation, not congressional reform. Plus, you
have Octane (Octane Fitness LLC v. Icon Health & Fitness Inc., No.
12-1184; decision below, 701 F.3d 1351 (Fed. Cir. 2012)) pending
before the U.S. Supreme Court. So by the time we get to June we
will have the Supreme Court stating something on the standard so
that what’s pending before the Senate could become irrelevant—or,
W
ITH NO LETUP IN PATENT LITIGATION AFTER 2011’S LEAHY-SMITH AMERICA
Invents Act (Pub. L. No. 112-29) started taking effect in early 2013, reform-
ing patent law and procedure is back on the congressional agenda. And legis-
lative reform remains a goal of many patent attorneys—especially those who
represent defendants. But others are saying the next step should be allowing trial
and appellate courts to interpret existing laws. For an update on the practice
area, we met with six leading IP litigators: Mike Bettinger of K&L Gates; Yar
Chaikovsky of McDermott Will & Emery; Thomas Friel of Cooley; Richard
Hung of Morrison & Foerster; Matthew D. Powers of Tensegrity Law Group;
and Ashok Ramani of Keker & Van Nest. Mediator Jeff Kichaven moderated
the conversation with Laura Impellizzeri of California Lawyer.
intellectual property
CALLAWYER.COM FEBRUARY 2014 39

Intellectual property
at best, will be marginalized. Highmark (Highmark Inc. v.
Allcare Health Mgt. Sys. Inc., No. 12-1163) also is before
the Supreme Court on that issue.
On discovery, we already have limits going into the
FRCP shortly. I don’t know that you need a separate patent
bill on discovery. On the pleading side, you have DirecTV v. K-Tech,
No.13-618(seeF.3d12777(Fed.Cir.2013))inwhichtheSupreme
Court will consider the proper pleading standard. Whether it’s
coincidence or whether it’s intentional doesn’t matter; having the
rulings pending will slow up the passing of any bill.
POWERS: Following up on Yar’s point, we should note the irony
that the number one statistic being used in the House to support
the need for patent reform was the “explosion” in patent suits, while
99 percent or 100 percent of that increase was the result of the AIA
taking 50 suits and dividing them into 500 by requiring them to be
filed against individual defendants. So the law of unintended conse-
quences is one we should be carefully attuned to.
ASHOK RAMANI: That’s what troubles me the most about this
type of litigation because we handle 50 percent plaintiff, 50 percent
defense,mainlycompetitorcases.Initspresentform,thislawisgoing
to apply across the board, irrespective of the type of patentee who
asserts the case. And we don’t want to see, when we’re representing
YAR R. CHAIKOVSKY is a partner with
McDermott Will & Emery based in the firm’s
Silicon Valley office. He has been recognized as a
leading intellectual property lawyer by Chambers
USA and other publications. In 2012, he was
named to The National Law Journal’s “Intellectual
Hot List” for his jury verdict defending Yahoo
in the Eastern District of Texas. He has been
named by the Daily Journal as a top 20 California
lawyer under 40 and included in the Silicon Valley
Business Journal’s 40 Under 40.
ychaikovsky@mwe.com mwe.com
THOMAS J. FRIEL is head of Cooley’s
national intellectual property litigation practice.
Consistently recognized as one of the top pat
ent litigation attorneys in the U.S., Mr. Friel has
represented trailblazing startups to Fortune 500
companies in complex patent cases for more
than 25 years. Over the course of his career,
he has litigated hundreds of cases, achieved
numerous trial victories, established new legal
precedents, and negotiated very favorable settle
ments in highly contentious litigations.
tfriel@cooley.com cooley.com
ASHOK RAMANI is a partner at Keker & Van
Nest in San Francisco. Netflix, Google, HTC,
and other leading tech companies rely on Mr.
Ramani to resolve their most complex patent
and trade-secret matters, particularly those that
involve groundbreaking technology or lack legal
precedent. In 15 jury and bench trials nationwide,
and before the U.S. International Trade Commis
sion, Mr. Ramani has been adept at translating
sophisticated technologies and legal concepts
into plain English for judges and juries alike.
aramani@kvn.com kvn.com
MATTHEW D. POWERS, founder of Tensegrity
Law Group, tries patent cases, trade secret
cases, fraud cases, fiduciary duty cases, antitrust
cases and contract cases. He tries cases all
over the country and has directed litigations
all over the world. Many of the world’s leading
companies, including Intel, Oracle, Apple, and
Genentech, have called on Mr. Powers to lead
trial teams in difficult cases. He has led teams
winning billion-dollar cases in many of the world’s
most important technologies and industries.
matthew.powers@tensegritylawgroup.com tensegritylawgroup.com
MICHAEL BETTINGER is K&L Gates’s national
lead trial counsel for patent cases. He has tried
21 cases to verdict, including recent jury defense
verdicts for Microsoft, Novatel Wireless and
Varian-subsidiary Zmed, and recent ITC defense
verdicts for Amazon, STMicroelectronics, Kodak
and Spansion. The Daily Journal named his jury
verdicts in 2009 for Abercrombie & Fitch in a
trademark case filed by Levi and in 2012 for Bax
ter Healthcare in a patent case filed by CareFusion
among its Top 10 California Defense Verdicts.
mike.bettinger@klgates.com klgates.com
JEFF KICHAVEN is an independent mediator
with a nationwide practice and extensive experi
ence in intellectual property cases. He has been
honored as California Lawyer Attorney of the
Year in ADR and has been named to the Daily
Journal’s list of California’s Top Neutrals eight
times. He belongs to the American Law Institute
and has taught the Master Class for Mediators
for his alma mater, Harvard Law School. His
views on mediation have been cited in the New
York Times and the Wall Street Journal.
jk@jeffkichaven.com jeffkichaven.com
RICHARD S. J. HUNG is deputy chair of
Morrison & Foerster’s IP litigation group and the
co-chair of its PTO trial practice. He has litigated
dozens of complex technology cases in federal
and state trial and appellate courts, including
high-stakes patent litigation and non-practicing
entity assertions. An electrical engineer by train
ing and a registered patent attorney, Mr. Hung
has overseen matters spanning technologies
such as cryptography, Internet search, and
smartphones.
rhung@mofo.com mofo.com
Serving law firms, corporate counsel, and the entertainment industry for
40 years, Barkley Court Reporters is California’s largest privately held
court reporting company and the first Government Certified Green court
reporting company in the U.S. With 10 Barkley offices in California to
complement its national and international line-up of facilities in Chicago,
New York, Las Vegas, Paris, Hong Kong, and Dubai, Barkley is adept at
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Barkley offers videoconferencing, video synchronization, Internet stream
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www.barkley.com (800) 222-1231
40 FEBRUARY 2014 CALLAWYER.COM
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competitor plaintiffs, things like heightened pleading standards or a
delay in discovery. What’s already taking two or three years to get to
trial in many fora is going to take much longer. Which I don’t think
anyonethinksisagoodidea.
THOMAS FRIEL: This debate could go on the rest of our careers.
There are so many issues, starting with why is patent litigation dif-
ferent? Why should it be singled out? Why should we burden dis-
trict court judges with even more management than they’re forced
todorightnow?We’regoingtobefacingreformbillseveryyear.We
don’t even know what the America Invents Act is yet because the
courts haven’t been through it. We’re arguing to the judges, and the
judges are saying, “Where’s the authority?” There is no authority.
IMPELLIZZERI: What are the most significant changes in case
law that you expect in 2014?
FRIEL: The single most significant issue is what’s patentable sub-
ject matter under Section 101 of the Patent Act. That has come up
in response to what I think are some frankly bad patents that have
come out of the Patent Office after software patents and business-
method patents suddenly became available. The litigation over Sec-
tion 101 and the debates have largely been the result of these types
of patents being issued.
POWERS: Tom’s absolutely right. But I think that the real problem
in the law right now has been judges conflating 101 and 103 issues.
When the examiners were doing their work, they went to look in
their file of prior art for a particular business method, it said noth-
ing, so they issued the patent. And that happened for years. Of
course a lot of those patents are going to be bad, but they’re bad
because they’re obvious or anticipated, not because they’re unpat-
entable under 101. Section 101 law has been polluted by judges
trying to get rid of bad patents that ought to be gotten rid of on
102 and 103 grounds. The real problem is the 101 case law is so
confused right now that nobody on either side of the “V” can give
meaningful advice as to what’s patentable.
CHAIKOVSKY: YouhaveAliceCorp.v.CLSBankInternational(No.
13-298; decision below, 717 F.3d 1269 (Fed.Cir. 2013)) coming up
before the Supreme Court. Just as in Bilski (Bilski v. Kappos (130
S.Ct.3218(2010)),wewillhaveananswerthatisreallyonlyhelpful
for this particular case and whether that specific patent should be
patentable or not, and nothing more.
FRIEL: One point to make about Section 101 versus Section 103:
101 is a judge issue, and 103 is more likely a jury issue. That’s a key
distinction in terms of timing, cost, and risk.
BETTINGER: Wait, Matt [Powers], you even acknowledged not all
patents are created equal and not all cases are the same. There are
dogs out there.
POWERS: Certainly.Therearedogswithfleasanddogswithmange.
BETTINGER: But101isavehicleforajudge.Andyouknow
there are some recent Rule 12(b)(6) motions to dismiss
based on Section 101 that have been granted. Judge Richard
G. Andrews in Delaware has recent case, the UbiComm case
(UbiCommLLCv.ZapposInc.,2013WL6019203(D.Del.),
which is a good example of a patent claiming conditional action: If X
is triggered, then Y, then Z. And he says that’s a completely abstract
idea,notlimitedbecauseitisperformedinacomputer.
CHAIKOVSKY: You actually happen to have the Delaware judges
kind of coming out ahead on 12(b)(6) 101. But there are differ-
ent dogs.
BETTINGER: It empowers the judge to handle his docket. The
judge says, “Wait, I’ve seen a number of these; this doesn’t meet the
threshold test”—you’re not going to come into court with it. If you
get into 102 and 103, you’re two years down the road with a fight
that most of the time is going to be deferred to a jury. It’s like Justice
Potter Stewart defining obscenity: You know it when you see it. I
mean, Judge Andrews really struggled with that, and he seemed to
come from a reasoned approach. Why take that vehicle away?
What’sanabstractidea?Wecandebatethat.Imean,Chief Judge
Rader says you can’t patent an abstract idea, but you can patent an
application of an abstract idea. Is that a meaningful distinction?
HUNG: I think that we’re all agreeing that the tests are separate
under 101, 102, 103. And we probably agree that some district
court judges have blended them. I’m even more pessimistic than
Yar [Chaikovsky] or Tom [Friel] that we’ll get anything out of Alice
Corp. Bilski was fuzzy. Alice was super-fuzzy. And then you have
Accenture (Accenture Global Servs. GmbH v. Guidewire Software,
Inc., 728 F.3d 1336 (Fed.Cir. 2013)) and Ultramercial, Inc. v. Hulu,
LLC (722 F.2d 1335 (Fed.Cir. 2013)) going both ways on this. We
might see the Supreme Court apply an additional factor to clarify
this. But I can’t imagine one that would really help.
KICHAVEN: Isn’t it a matter of having these cases before the right
district court judges, who are experienced and can make these
judgment calls?
POWERS: I don’t think so. The problem is a lack of clear guidance
from above. Once you have Federal Circuit cases going in oppo-
site directions and you have incredibly vague statements from the
Supreme Court, a district judge is in a horrible position because it’s
trying to decide the case on its merits but has no clear rule to do so.
RAMANI: The assumption underlying what Matt [Powers] just
said is that the cases are going to proceed through their appeal, and
they’re going to have a very, very long life. But we’re going to get no
guidance from the Supreme Court so the judge before whom you
end up will make an enormous difference. You may not see any
development in the law for some time.
BETTINGER: I need to interject on that. The notion that we don’t
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haveclearrules,that’saconstructofanengineer’smind—whichyou
find a lot in patent litigation—someone who is used to a system of
binary 1’s and O’s. If you take other areas of law, there still are facts
that matter, issues that come into play. And there’s as much clear-cut
law in the area of patents as there is in a lot of other areas. It’s not fair
to say patent laws are a mess because judges don’t understand pat-
ents and don’t have any clear guidance. It’s just that you don’t always
get clear-cut decisions.
HUNG: I’ll play mediator on this topic. I think we agree that there
are rules but there’s not a lot of case law on 101. As a result, people
don’t know how to apply the rules yet. Over time, just like how the
law on obviousness and the doctrine of equivalents developed, as
more Federal Circuit cases come out, this issue will resolve itself to
some degree. It will just take some time.
KICHAVEN: Let’s discuss other upcoming cases. Can you look
into your crystal balls for the important cases that will be decided
in 2014 and how they might influence
the law?
RAMANI: Well, I know everyone is
focused on Alice v. CLS Bank. But, at
least from having seen the solicitor gen-
eral’s comments, it looks like we may
get some clear guidance about divided
infringement in Limelight v. Akamai
(pending before the U.S. Supreme
Court as No. 12-786; decision below,
692 F.3d 1301 (Fed. Cir. 2012)). My
view, having been on both sides of this
issue, is the solicitor general is right
that liability for inducement under 35
U.S.C. §271(b) is premised upon direct infringement by another.
But that doesn’t mean infringement has to be committed by just
one person.
POWERS: There’s almost a constitutional takings question because,
given the way claims were drafted for years and years, they could
have avoided this question in most cases. And now those patents,
and clearly many were good, are going to be declared essentially use-
less. It’s one thing to say we’re going to change the rules on what’s
patentable.Butnowwe’rehingingitonaconventionofpatentpros-
ecution attorneys back ten years ago, and that deprives whole sets of
patents of value. That feels wrong to me.
FRIEL: There’s a history of changing the patent law rules, though.
And just because someone has assumed the law to mean something,
it doesn’t necessarily mean that it does. It also sounds like you have
sympathy for Judge Rader’s dissent in the Alice en banc decision.
POWERS: Lighting Ballast Control LLC v. Philips Electronics North
America Corp. (500 Fed. Appx. 951 (Fed Cir. 2013)(rehearing
en banc granted)) is another decision that might actually change
some things. It’s another case that, assuming it overrules
Cybor (Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed.
Cir. 1998) (en banc)), we can all probably agree no one is
entirely certain of what it means for how claim construc-
tions are performed.
BETTINGER: The problem that arises is when the same patents are
construed by two or three judges. The first judge construes claims, a
second judge comes along and either says, “I’m not bound by that,”
or, “OK, I understand this argument that’s going to refine the claim
construction.” You see that more and more because, under the AIA,
suits have to be filed individually.
HUNG: On Limelight, I’m not taking a view because I’m at least
happy that the Federal Circuit issued some rules. To me, Lighting
Ballast is more important. This is because the lack of certainty is
affecting parties’ approaches to claim construction. For example,
should you bring in an expert? If you’re worried about deference
right now, you bring in an expert. So
taking Lighting Ballast en banc created
uncertainty that didn’t exist before,
when we all assumed Cybor applied.
The sooner they decide it, the better for
all of us.
CHAIKOVSKY: On the attorneys fees
side, you’re likely to see activity, and
whether that’s a positive or a negative
depends on the wording of the cases.
You’ve seen that action from the Fed-
eral Circuit in Kilopass, and I think
you’ll see some in Octane.
POWERS: The potential sleeper is Fresenius USA, Inc. v. Baxter
International, Inc. (733 F.3d 1369 (Fed.Cir. 2013)), with a cert
petition due in February. That case provides that a process that has
inadequate, or at least less, discovery will trump a decision from the
district court on the question of validity.
FRIEL: The Fresenius case potentially interplays with the AIA when
you have the (new) inter partes review process being promoted and
reexaminations streamlined. If there’s no stay granted, these issues
are much more likely to come up, and I’m not sure if it’s a validity
issue or a grant issue.
HUNG: If you look back on 20 years of cases, I don’t think you
wouldhavebeensurprisedbytheoutcome.Therealissueiswhether
the Supreme Court ultimately overrules that or the Federal Circuit
wants to overturn its own precedent.
CHAIKOVSKY: Well, in In Re Swanson, on an ex parte reexam, that
wasexactlywhathappened,afterajurytrial.ItwentuptotheFederal
Circuit, which had found the patent valid from the jury trial. And
the Patent Office, due to its different standards of review, said no, it’s
“The potential sleeper
is Fresenius... (which)
provides that a process
that has inadequate,
or at least less, discovery
will trump a decision
from the district court.”
–MATTHEW D. POWERS
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invalid.(SeeInReSwanson,540F.3d1368(Fed.Cir.2008).)
RAMANI: AnothercaseofsomeinterestistheMaerskDrill-
ing case (Maersk Drilling USA, Inc. v. Transocean Offshore
Deepwater Drilling, Inc., (cert. pending as No. 13-43; deci-
sion below, 699 F.3d 1340 (Fed. Cir. 2012)). I’m very curious to see
what the solicitor general says. The facts of that case were roughly
that there were two U.S. companies involved in the 2010 BP Deep-
water Horizon oil spill. The parties signed a contract in Scandina-
via and the product was modified before it entered U.S. territory
such that it wouldn’t infringe once it was here. So the question was
whethersigningthecontractandofferingtosellaninfringingarticle
overseas, when the article concededly would not infringe in U.S. ter-
ritory, is an actionable offer for sale or a sale under U.S. patent law.
FRIEL: The question is the territorial limits of U.S. patent law.
RAMANI: We all have clients in Asia and even in Europe who enter
contracts in Asia with other companies that are in Asia and the
products end up going downstream in Asia, several steps, before
theymaketheirwaytotheUnitedStates.Sothequestioniswhether
those activities are subject to the reach of U.S. patent law.
KICHAVEN: Should they be?
RAMANI: My view is, depending on the levels of abstraction away
from entering into the U.S., no. I have several clients who are semi-
conductor manufacturers and designers who go through this pro-
cess where the actual contract and the offer for sale and the sale all
occur overseas. The manufacturing of the product occurs overseas,
the delivery occurs overseas, and then there are several other inter-
mediaries before it comes to the U.S. I think, in that circumstance,
the manufacturer should not be subject to U.S. patent law, other
than the specific statutory carve-outs in 271(f). But I can under-
stand why someone would believe that shouldn’t make a difference.
FRIEL: We have the black letter that supposedly patent law stops at
the border, and we have lots of areas where that’s been tested: anti-
trust law, for instance.
BETTINGER: OneareainpatentcaseswhereIdothinkyou’regoing
to see some play this year is damages. The district court judges are
taking special heed of their Daubert gate-keeping responsibilities
when it comes to damages. Everyone is looking much more closely
atdamagessinceJudgeRichardPosnercamedownwithsomerather
strong views on how patent damages have traditionally been calcu-
lated. Judges have taken a much more active role in striking certain
portions of damages. There was a recent case in Texas where Judge
Rodney Gilstrap struck a damage report based on an improper date
for the hypothetical negotiation, though he later allowed the party
leave to try and fix it. You will see district judges using Daubert
motions to rein in excessive damage requests.
HUNG: On damages, the case law is changing as defendants have
becomemuchmorebullishaboutlitigating.Ifyougobackfiveorten
years,defendantswereworriedtotrycasesoutoffearthatthey’dlose.
On other cases of interest, there’s Hamilton Beach Brands, Inc. v.
Sunbeam Prods., Inc., 726 F.3d 1370 (Fed.Cir. 2013) from last year.
Many patent prosecutors were alarmed by it. The issue was whether
the on-sale bar under 35 U.S.C. § 102(b) was triggered by a compa-
ny’s hiring another company to manufacture prototypes of its prod-
ucts. Lots of companies previously thought this was an exception to
the on-sale bar and their patent would not be invalidated.
CHAIKOVSKY: That’s absolutely right—and an unexpected result.
So prosecutors will have a change. Another thing you’re going to see
alotispeoplefocusingonthePatentTrialandAppealBoard,which
is something litigators haven’t focused on as much because of IPRs.
FRIEL: That’s an unintended consequence of the AIA again.
RAMANI: Circling back to something Mike [Bettinger] said about
damages, one thing I’ve seen is a revival of the 25 percent rule with
the Nash bargaining solution. We’ve managed to knock it out in
two cases, but I know at least in one case in New York where it went
forward to trial and there was a defense verdict.
The 25 percent rule is the basic notion that if you have a con-
stituent component of a product and it’s difficult for you to pin
down exactly what that constituent component contributes to the
product’s sale or success, use just use a rule of thumb, 25 percent.
That was found to be improper by the Federal Circuit. So now you
see somewhat of a revival in the Nash bargaining approach, where
the expert said there would have been only two possible outcomes
so the parties should split the difference and take 50 percent of the
revenue stream.
CHAIKOVSKY: As soon as the Uniloc ruling (Uniloc USA, Inc. v
Rackspace Hosting, Inc., No. 12-375 (E.D. Tex. mem. opinion Mar.
27, 2013) came out, the trial we had in 2011 in East Texas, it went
straight to the Nash bargaining solution. The other thing you’re
seeing is plaintiffs lawyers becoming survey experts. There are unin-
tended consequences again.
RAMANI: It used to be that defendants would evaluate the case on
infringement and validity and that’s it. Now you evaluate a case on
infringement, validity, and damages. And it’s much more likely that
you’ll see defendants willing to try a case, even where they have poor
arguments on infringement and validity, because they’re not so con-
cerned about the risk in their injunction and they think they can
make some headway on the damages.
IMPELLIZZERI: With the new role of the Patent Office and IPRs
and other changes under the AIA, what do you see changing?
Are the reforms changing where plaintiffs are filing or how defen-
dants respond?
POWERS: There are three significant changes on the issue of
venue. One is the International Trade Commission, the second is
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the question of venue transfer, and the third is the chance
of a stay pending an IPR.
The truth is that a plaintiff’s options on where to file
have diminished greatly in the last few years. Sometimes,
you have only two choices: where the plaintiff is and where
thedefendantis.ButifyougobackthreeyearstheITCwasprobably
themostattractivevenueforavarietyofplaintiffs,notjustforNPEs,
because an injunction was fairly certain; it was fast; the trial date was
certain. Now, lots of patents are dying nasty, ugly deaths in the ITC.
KICHAVEN: What’s the cause?
POWERS: Partly political pressure. The ITC is an administrative
body, it’s very small, and it’s highly public. A lot of pressure was
brought to bear on it from various forums. And there was a percep-
tion that it was just essentially becoming the primary place for pat-
ent litigation versus district courts and essentially trumping require-
ments that have long developed in the
district courts. I think a lot of pressure
was brought to bear, and that’s been
bearing fruit.
BETTINGER: It used to be you knew
what to expect in the ITC, but then
fights developed over the scope of
exclusion orders, design-arounds, and
ex parte retrials at Customs over what
the exclusion order meant. And then
I don’t think the Obama administra-
tion did the agency any favors when
it decided to overturn the exclusion order against Apple, but not
against Samsung. Though there are differences in the two cases, the
message is that the ITC is a political body, and not a judicial one.
Potential complainants are shying away from the ITC because they
don’t know what to expect anymore.
CHAIKOVSKY: At that point you would rather take your luck, you’d
rather go in front of a jury, especially with the damage issue, and get
that going as fast as possible, as opposed to the uncertainty.
RAMANI: Let’s not forget, to go into the ITC as a plaintiff requires
much more upfront investment because you have to do analysis,
you have to attach exhibits to your complaint, you have to try to
identify knowledge if you bring in those sorts of claims.
POWERS: Anysensibleplaintiffwillhavedoneallthatworkanyway.
KICHAVEN: We talked about transfer motions. What’s your think-
ing in terms of bringing those transfer motions and the likelihood
of their being granted?
HUNG: To counter Matt [Powers]’s point: Because writs of manda-
mus had been granted transferring cases out of Delaware and Texas,
plaintiffs feel like they’re currently being stuck in certain jurisdic-
tions. But on the defendants’ side, the sense is that writs are harder
to get now. The Federal Circuit is saying that it’s done its job, it’s
issued all these mandamus rulings, and it’s stopped granting them
for fear of getting more petitions.
CHAIKOVSKY: I don’t think it’s fear. You also have now five years of
the Eastern Texas judges looking at what the law is and how the law
is developed. And they’ve developed their opinions in a way that
can stand up to your mandamus petition.
RAMANI: Alotofplaintiffsarebeingmuchmorejudiciousinwhere
they file as opposed to just running like lemmings to one or two
jurisdictions and hoping they’ll stick.
FRIEL: You also are seeing plaintiffs strategically use the rules, fil-
ing a case or two they know will stick in a particular jurisdiction
that they like, letting that case develop for a period of time so the
bench there has some investment in it,
and then filing a second wave that may
be a little bit more dubious in terms of
venue,buttheystickorthey’renotchal-
lenged. Then plaintiffs may file a third
wave of cases that may have little venue
basis at all. But they end up sticking.
Why? Because of judicial economy.
But defendants also tend to act like
lemmings; there’s safety in numbers.
You might want to be transferred to
California, but you don’t know what
judge you’re going to get. And you may
find yourself—even though you were sued later—in trial first and
stuck with some other judge’s claim constructions.
KICHAVEN: It’s been a wonderful conversation about unintended
consequences of reform and the continued need for outstanding
lawyers to devote their energies and attentions to the field. What
closing comments do the expert litigators on our panel have?
HUNG: Onethingthatcompaniesarenotfocusingonisoverseaslit-
igation. The number of cases being filed in China has been jumping
25to40percentyearoveryear,andthenumberofinventionpatents
being issued also has been jumping 25 to 40 percent year over year.
Although our U.S. clients are focusing on U.S. litigation, personally,
I’m more concerned for clients about potential actions in China.
KICHAVEN: As technology continues to change, is the law evolv-
ing with it?
FRIEL: You have Congress involved and everyone competing for
their forum for righting supposed wrongs, excesses, and problems.
The other thing is members of the bar have to fight polarization
between those who represent patent owners versus those who rep-
resent accused infringers, to keep the laws as fair and rational as they
can be and help craft solutions that are fair for everyone. n
“Although our
U.S. clients are focusing
on U.S. litigation,
I’m more concerned for
clients about potential
actions in China.”
–RICHARD S.J. HUNG
S E R I E S
R
T

Yar chaikovsky 2014 Intellectual Property Roundtable February Issue

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Yar chaikovsky 2014 Intellectual Property Roundtable February Issue