Intellectual Property

Riding In Place: 3 Insights From 1 Complaint

Recognizing and considering important insights about IP cases is a pretty good return on a few minutes’ investment in reviewing filings that catch your interest.

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I have long been a fan of scanning newly filed complaints in patent cases. The practice is one I place on a par with the necessity for patent lawyers to at least scan newly issued Federal Circuit decisions. In my view, a dedicated client counselor must have as close to a real-time understanding of the patent litigation landscape as possible, so that one’s advice to clients is as well-informed and timely as can be. Consider for example the premium Wall Streeters place on having access to as much non-confidential information as possible about companies they have invested in. IP lawyers should have the same level of curiosity about the state of play in our profession.

For some IP lawyers, such as those who focus the majority of their practice in a specific district or technology area, a better use of their time may be to focus only on complaints — or issued decisions from the Federal Circuit or their local District Court — that are most relevant to their particular niche. At the same time, every patent litigator can benefit by spending at least 5-10 minutes a day just reviewing the list of filed complaints (available through a variety of sources such as DocketNavigator or RPX) and taking a quick read of any that strike their interest. In some situations, monitoring filed complaints may be helpful from a business development perspective as well, especially if a case is filed against a former, current, or prospective client of your firm.

But let’s assume you are just scanning complaints to stay abreast of the general litigation environment. What should you be looking for? At a basic level, it is always important to consider potential filing trends, such as whether or not there is an increased level of litigation activity in an industry that you have clients in. Or whether there is an increased number of filings in a particular district, which may impact on how quickly cases progress as the docket gets more crowded in that locale. Likewise, it can be helpful to consider whether competitor cases are increasing, or whether a new crop of non-practicing entities is behind a flood of new filings. All of these considerations can help inform the advice you give clients.

While monitoring filings for general trends is important, you can also learn a lot from even a cursory review of a particular new complaint. Especially when that complaint involves interesting companies, or presents more than the usual notice-pleading level of information. My attention was brought to such a complaint recently, courtesy of a colleague on Twitter. In fact, after reviewing the complaint, I quickly drafted a tweet of my own laying out three quick thoughts about the filing. While these quick takes are nowhere near the level of analysis I would do if given the opportunity to pitch the defense of the case, they do unveil just how much insight can be gleaned from even an initial review of a filed pleading.

To start, the level of storytelling in the complaint was striking. Most patent complaints still skew more toward notice pleading, even as practitioners have increasingly started to comply with the increased level of detail — particularly about the accused products — necessary to avoid motion to dismiss practice. So this one definitely stood out, with its focus on telling the story of the inventor, the market impact of the Peloton devices, and the various and sundry reasons why the defendant’s infringement compelled the case being filed. Here, Peloton clearly hoped that the complaint would provide fodder for favorable media reporting, so as to cast the company as both an innovator and a victim of a competitor’s underhanded business tactics.

When I encounter a complaint with that level of factual detail — which may be interesting but irrelevant to the merits of the infringement claim at some level — I immediately get the sense that the purpose of filing the case was at least partially to create a media narrative or broadcast some broader message to the market. Tellingly, such storybook complaints tend to appear more in competitor cases, or in inventor-driven cases against a corporate defendant. Furthermore, another reason why this level of detail gets crammed into a complaint is because complaints are the plaintiff’s best chance to lay it the story it wants to tell, unimpacted by later developments in the case. Finally, complaint filings — especially between competitors or in David v. Goliath scenarios with a sympathetic plaintiff — are easy and compelling stories for journalists to cover.

Next, patent lawyers have been conditioned to focus on venue propriety in every case, a telling testament to TC Heartland’s impact. Because venue matters, particularly when one considers the very different approaches different courts take to case management in patent cases. Here, despite the fact that both Peloton and Flywheel are headquartered a few blocks from each other in Manhattan, the Eastern District of Texas was Peloton’s forum of choice. Does the Eastern District need a more ringing endorsement as a (continued) top destination for patent filings?

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Finally, it is almost impossible to find a non-pharma or mechanical patent case these days where the specter of a potentially case dispositive Alice motion doesn’t immediately materialize upon seeing an asserted patent involving software-enabled functionality. Not a surprise, since almost everything around us includes some type of software-enabled functionality nowadays. And Alice’s case-disrupting potential has proven so potent that it seems impossible to even consider starting to analyze the defense of a case anywhere else.

Ultimately, these three insights can be summed up as follows: 1) paying attention to the story (or lack thereof) presented in a complaint can offer insights into the filer’s motivations for filing and hoped-for results, 2) East Texas is still top of mind for patent plaintiffs, and 3) Alice must be reckoned with by patentees in certain industries, no matter how innovative they think they are. In my view, recognizing and considering insights of this type is a pretty good return on a few minutes’ investment in reviewing filings that catch your interest at periodic intervals. Reading leads to thinking, which hopefully leads to a better-informed and thoughtful patent litigator. The alternative is riding in place, which may be good aerobic exercise, but not what clients are looking for in their counsel.

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.

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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