Multiple Defendant Patent Infringement Cases: Complexities, Complications and Advantages

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Multiple Defendant Patent Infringement Cases
Complexities, Complications and Advantages

• Brian M. Buroker, Esq.
• Hunton Williams LLP
• 1900 K Street, N.W.,
• Washington, DC 20006
• [phone]
• bburoker_at_hunton.com
• Maya M. Eckstein, Esq.
• Hunton Williams LLP
• 951 East Byrd Street
• Richmond, Virginia 23219
• [phone]
• meckstein_at_hunton.com
•  
• www.hunton.com  

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INTRODUCTION

• Multi-defendant patent infringement suits are the
  norm.
• Plaintiffs file them because
• reduce costs
• let plaintiffs pursue multiple licensees
  simultaneously
• increase settlement pressures

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Introduction (cont)

• Make cases more complex
• Especially if defendants are competitors
• Increase in defendants exponentially increases
  logistical issues
• Increase complexities
• Can complicate defense
• Can also bestow advantages.

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COMPLEXITIES

• Protective Orders
• Difficult to negotiate when defendants are
  competitors.
• Standard POs dont address multi-defendant
  issues.
• Competing defendants less concerned about the
  plaintiff than about the other defendants.
• Especially so if the plaintiff is a non-competing
  patent holding company.

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COMPLEXITIES -- POs

• Should co-defendants access confidential
  information?
• Concerns require multi-layered POs
• Each confidentiality level defines what type of
  information can be reviewed by what types of
  people.
• Example In-house counsel/personnel can access
  Confidential documents, but not AEO documents.
• Example Only in-house counsel, not business
  executives, can access confidential documents.

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COMPLEXITIES POs

• Should PO include patent prosecution bar?
• In-house lawyers who draft patent applications
  and have access to competing defendants
  confidential information could unknowingly use
  that information in preparing patent
  applications.
• Competing defendant could acquire patents to
  later assert against co-defendant.
• Merits of this view are debatable, but courts
  recognize it as a concern.

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COMPLEXITIES -- POs

• Patent Prosecution Bars
• Patent prosecution bars preclude participation in
  patent prosecution for those with access to
  confidential information.
• Questions arise regarding scope and length.
• Example in-house patent attorney working for
  large software company.

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COMPLEXITIES -- POs

• Should source code escrow be used?
• Crown jewels
• Serious financial damage if gets in wrong hands.
• Risk increases with number of people who may have
  access
• Lawyers
• Paralegals
• Professional Assistants
• Copy Vendors
• Trial Strategy Vendors
• Experts and Assistants
• Court
• Risk especially increases when competing
  defendants have access.

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COMPLEXITIES -- POs

• Source Code Escrow
• PO defines access rules for escrow agent.
• Defendants deposit source code with escrow agent.
  
• Approved individuals can view source code at
  escrow facility
• Under escrow agents watchful eye.
• Copying prohibited/restricted.
• Information may not leave facility.
• Agent maintains log of visitors.

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COMPLEXITIES JDAs

• Joint Defense Agreements
• Extremely common.
• More complex in multi-defendant cases.
• Joint defense privilege precludes disclosure of
  shared information among parties with common
  interest.

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COMPLEXITIES JDAs

• Joint Defense Agreements
• Issues on which to assert common defense
• Invalidity
• Unenforceability
• Lack of ownership
• Must define common issues
• Enforceable only as to communications related to
  common issues
• Cost Sharing prior art searches,
  preparing/taking depositions of inventor(s) and
  plaintiffs witnesses, briefing various issues

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COMPLEXITIES JDAs

• Joint Defense Agreements
• Issues to address
• What if disagreements arise in areas of common
  interests?
• What if one defendant settles?
• What if shared activity greatly benefits one
  defendant over others?
• Who can obligate defendants to payment?
• Advance agreements prevent disputes.

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COMPLEXITIES JDAs

• Prior Art
• Prior art search often lengthy and costly.
• Multi-defendants increase resources/reduce costs.
  
• But defendant who locates prior art can use it
  strategically, i.e. to negotiate better
  settlement.
• JDA should specify prior art obligations amongst
  defendants.

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COMPLEXITIES Time

• How many lawyers does it take to screw in a light
  bulb?
• Meetings
• Hearings
• Depositions
• Briefing
• Joint Experts
• Added noise.

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COMPLICATIONS -- Differences

• Not all issues are common
• Various non-infringement issues
• Various defenses
• Various damages issues

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COMPLICATIONS -- Differences

• Markman Issues
• Differences in defendants products.
• Results in need to emphasize different claim
  terms.
• Single Markman brief required.
• Hearings similarly limited.

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COMPLICATIONS -- Differences

• Discovery Issues
• Courts limit
• Interrogatories
• Total deposition time
• Total length of inventor depositions
• Total length of expert depositions
• Restricts each defendants ability to pursue
  discovery.
• Defendants must prioritize issues and convince JD
  group to address them.
• Some issues may take back seat.

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COMPLICATION Settlement

• Effect on remaining defendants
• Expertise on particular subjects could be lost.
• Each defendant must have knowledge of all issues.
• Increases settlement pressure.
• Last man standing syndrome.
• Individual costs/responsibilities increase.
• Agreement on infringement/invalidity/royalty
  affects others.

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COMPLICATION Trial

• Trial Issues
• Cant control others witnesses.
• Witnesses can be substantively harmful or just
  not likeable.
• Can affect other defendants.
• Cross-examination of each defendants
  non-infringement expert.

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ADVANTAGES

• Cost Sharing
• Prior art search
• Experts
• Briefing
• Depositions
• Written discover
• More Heads Are Better Than One
• Collective thinking.
• Especially helpful to inexperienced defendants.

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ADVANTAGES

• Overwhelmed Plaintiff
• Less capable to timely address discovery
  deficiencies.
• Defendants have more time
• to develop case
• to schedule defendants depositions

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CONCLUSION

• Often saves costs
• But can add costs
• Advantages from cost sharing probably offset (are
  overtaken) by complexities and complications.