Intellectual Property, Patents, Trials

Managing The Unmanageable Patent Case (Part 2)

Large patent cases present both an opportunity and a challenge for everyone involved -- including the courts.

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Last week, we discussed how judges often look for ways to get parties in large patent cases to settle. One oft-used technique used to achieve the desired effect is to force parties to streamline their cases, either early on in the process, or on the eve of trial. This approach — espoused by district court judges nationwide — has proven effective in getting large patent cases to settle. Why might this be so?

On the one hand, focusing a plaintiff on its best arguments also forces plaintiffs into recognizing their vulnerabilities in a more direct way. This can help soften plaintiffs into a settling mode, particularly when combined with a clear signal from the presiding judge that there is no intention of indulging plaintiffs in an unfettered presentation of the totality of their case. Put another way, clients and plaintiff’s lawyers quickly recognize when a judge has no patience to hear all of their grievances, and an order early in the case requiring that the plaintiff present a single set of claims for prompt adjudication before the rest of the case can proceed sends a very clear message to that effect.

On the other hand, defendants confident in their ability to fend off a plaintiff’s early assault must also remain mindful that the plaintiff asserting multiple patents musters additional forces in reserve, which can help make a settlement more palatable to a defendant seeking to avoid years of litigation disruption and uncertainty. Even when a defendant has invested in defending a case through discovery, eve-of-trial settlements are still possible for as long as the defendant wants to avoid the uncertainty of trial. Furthermore, when the defendant is facing a piecemeal trial on a subset of the patentee’s claims, there is even more motivation to settle the case once and for all rather than go through a cycle of trials and appeals.

For these reasons, courts continue to work hard to force parties to streamline complex multiple-patent cases. A recent example of this phenomenon helps to illustrate matters. In Intel v. Future Link Systems LLC (D. Del. C.A. No. 14-377), a technology giant filed a declaratory judgment action hoping to fend off 15 asserted patents owned by a smaller company — with a damages claim of $10 billion on the table for trial. Both sides boasted top-notch trial teams, and even a cursory review of the docket made plain that no quarter was given by either side as the case progressed to trial. Faced with what it called an “oversize” patent case, the judge decided to adopt the “bellwether” approach to trial (whereby three of the patents would be tried first on both liability and damages), over the objection of the patent owner, who preferred that a mini-trial on damages take place first. Tellingly, both sides recognized that the full case could not be tried in the originally allotted six trial days. For its part, the court recognized that even its streamlined approach could lead to many years of additional litigation. To everyone’s likely relief, however, the case recently settled, just weeks after the judge decided to move ahead with the streamlined order of trial.

While the eve of trial often presents an opportune time to discuss settlement generally, courts will also look to try and streamline cases earlier on in the case as well. Many local patent rules call for contention exchanges, which often call for some form of claim election to help streamline cases. Sometimes, however, that process is a fraught one, especially in hard-fought cases where neither side wants to prematurely give up a claim or defense. When that happens, attentive judges will often take steps to force the recalcitrant litigants to streamline the case at an early stage. For example, I saw a recent decision where the court required the parties to talk to each other about streamlining the case at issue, especially where the judge felt that the parties were using the contention process as a way to gain a competitive advantage. This example is just one of many which illustrate how courts will seek to impose case management directives on parties in complex multi-patent cases well before trial.

Ultimately, large patent cases present both an opportunity and a challenge for everyone involved — including the courts that those cases are filed in. To some extent, everyone in the process bears a responsibility for the effective management of these behemoth cases, even as they seek to advance the interests of the litigants or the court’s interest in managing its docket efficiently. What is clear is that many judges will put the onus on the parties to cooperate in this regard, as modern court dockets are often ill-equipped to deal with the demands of managing and getting to trial on cases involving multiple patents. Accordingly, even if their clients balk, it is the lawyers for each side who must help manage the unmanageable.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Earlier: Managing The Unmanageable Patent Case (Part 1)

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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