How to Succeed in Patent Litigation Without Breaking the Bank

October 5, 2017

Michael N. Rader

(as published by Corporate Counsel)

Patent litigation—with its complexity, high stakes and correspondingly high costs—has been referred to as the “sport of kings” of the legal world. Fiscal realities for most litigants, however, require that the “sport of kings” be played without spending a king’s ransom. Following are 10 recommendations on how to position your next patent case for success without breaking the bank.

1. Hold an in-person “all hands” strategy meeting, including a live demonstration of the relevant product(s), as soon as possible after a case begins. During the initial case assessment period, and of course during the discovery period, outside counsel must collect a significant amount of information about the company, the technology, and a variety of issues related to the merits of the case. While an in-person meeting can be expensive (particularly when it involves travel by some participants), it will deliver significant savings in the long run by providing outside counsel with a complete understanding of the technology, and introducing members of the in-house and outside counsel teams who will be communicating extensively over the life of the case. The initial meeting is also an ideal opportunity to discuss likely trajectories of the case and business goals, to ensure that outside counsel is approaching the case in a fashion commensurate with the amount at stake and the overall business context in which the case fits.

2. Hire local counsel who know the practices of the court and the judge. Unless the stakes are very low, do not use local counsel solely as a mail drop; rather, involve them in key decisions to be sure that those decisions account for the judge’s views and inclinations. Doing so will save money in the long run by avoiding strategies that will not work with the judge and focusing on the approaches most likely to succeed.

3. Maintain intense focus throughout the litigation on those tasks that are calculated to winning the case: the merits of your infringement and validity arguments, damages, and trial themes. This recommendation sounds astoundingly simple but is often overlooked as lawyers begin taking and defending discovery and develop tunnel vision, fighting every issue tooth and nail, no matter how minor or tangential. Looking the other way with a sigh, rather than filing a motion, can be a winning strategy when an opposing party delves into collateral issues. You will remain focused on winning, while the other side spends time and money burrowing down rabbit holes.

4. Define roles clearly. In assembling the team (both outside counsel and in-house), it is important for each member to have a clearly defined role so that all relevant bases are covered without duplicating effort. Designating a discovery manager (both outside and in-house) can be particularly effective, to insulate the merits team from a discovery burden that distracts from developing the best possible positions on the merits. Make staffing decisions with an eye toward trial: for example, the attorney who will be presenting an expert should be intimately involved in the preparation of that expert’s report, and the attorney who will be cross-examining a witness should be the one to take his or her deposition.

5. Hold regular meetings and/or calls. A weekly discussion allows in-house counsel to keep close tabs on the progress of the case, to ensure that the case is being handled within budget and according to business goals. While preparing to present a report on such a call makes extra work for outside counsel, in the long run it forces greater efficiency, more than compensating for that additional effort.

6. Apply common sense at all times. For example, require outside counsel to stay current on all patent-related decisions from the Court of Appeals for the Federal Circuit. Only by knowing the law well can counsel provide instinctive, quick (and hence cost-effective) advice. Not every issue justifies a memo to the file. By being up to speed on the current state of the law, attorneys burn less time figuring out which arguments will work in court and become not only better advocates, but cheaper ones as well. If you find that relatively straightforward issues are generating significant billing, have a frank discussion with outside counsel.

7. Invest time and money developing robust procedures for handling discovery internally to the extent possible, and develop a preferred relationship with a good discovery vendor. Document and privilege review are expensive activities for which law firms charge a lot of money. Developing an internal capability to handle these tasks, so they do not primarily reside with outside counsel, can result in significant savings. Likewise, developing your own vendor relationships can result in preferred fee structures that are not available to law firms.

8. For friendly third parties outside the subpoena power of the court, take targeted trial-oriented video depositions that can be played at trial, rather than securing the witness’s agreement to appear at trial. Having a witness’s testimony “in the bag” means one less examination to prepare in the period leading up to trial, and is inevitably cheaper than presenting an additional witness live. Keep in mind as well that parties often end up agreeing to present video deposition testimony from witnesses even when they could have been compelled to appear—so treat every deposition as the opportunity to present that witness’s trial testimony.

9. As a defendant, consider filing inter partes review (IPR) petitions as early in the process as possible. IPR is often the best way to challenge the validity of a patent, because arguments that would be difficult to make to a jury can be persuasive to a panel of Administrative Patent Judges. IPRs can also be a helpful tool for driving early settlement. In addition, IPRs often lead judges to stay cases, significantly reducing your legal spend.

10. If you decide to file an IPR, either use the same lawyers for the IPR and the litigation, or ensure that the two teams are in close communication. One of the reasons patent litigation is so complex is that it is filled with double-edged swords. Arguments made in one forum can undercut your position on other issues (or potentially even the same issue) in the other forum, so coordination is critical.