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Law Firms Compound Cost Of Patent Litigation

A recurring issue the past few years in patent litigation is the amount of detail that patent owners are required to provide when they initiate a lawsuit. The truth is, most judges will tolerate a very scant amount of information, essentially amounting to identification of the patent at issue along with a description of the products or services believed to be infringing.  Exemplifying this, is a recent decision from Judge Ward, where he agreed to allow a patent infringement complaint that identified “payment services” as the accused products or services.

I’ve suggested before that filing motions to dismiss based on pleading requirements is largely a waste of time.  For example, with respect to Interval Licensing, I observed that a defense “win” on the pleading issue couldn’t even be considered pyrrhic because of a prior agreement to make information available in discovery that was more detailed than Rule 8 required:

In other words, the date that Interval is required to update its complaint to include more specificity is the same date that it has already committed to provide more specificity. While some reports might try to spin this as a “win” for Google, consider this: If you punish your children by making them do something they were required to do anyway, do you consider that effective parenting?

Via An Examination Of Patent Sausage-Making

Earlier this year, Judge Davis, in Tyler, Texas, made a similar observation in an order granting (in part) a motion to dismiss:

The Court notes that Prompt has already served its Patent Rule 3-1 disclosures. See Docket No. 184. Rule 3-1 disclosures are far more detailed than Rule 8’s pleading requirements. Thus, before the Court ruled on this motion, Defendants had already received greater specificity than what they sought in this motion, rendering this motion superfluous for all practical purposes. The Court strongly encourages the parties to try this case on the merits and not unnecessarily burden the Court with technical issues that lack practical substance.

Via Pleading infringement standards: motion to dismiss granted in part (but would you guys stop filing motions on issues that moot already?)

Last year, Judge Davis also openly questioned whether lawyers always have their client’s best interests in mind when filing motions.  Knowing Judge Davis’ opinions about Rule 8 motions, the briefing schedule and likely timing of any order by the court, you would expect that these motions would be significantly abated … but earlier this month, another law firm took a cavalier approach with its client’s money by seeking dismissal under Rule 8.  (Kenyon & Kenyon’s motion on behalf of Volkswagen)

Some lawyers might argue that the lawyers are just preserving the client’s rights on appeal, but since complaints can be freely amended (including during and after trial), many questions of pleading sufficiency will be mooted by the time an appeal is filed.  The only reason Bell Atlantic v Twombly reached the Supreme Court was that the original court granted the motion to dismiss, which allowed Twombly to challenge that dismissal up the chain.  Ashcroft v Iqbal dealt with a denied motion to dismiss and an “interlocutory” appeal filed by the government.

In addition, Kenyon’s client is being accused of infringing a patent, which is a fairly straightforward legal action for which discovery and litigation procedures are highly developed. Cases like Twombly and Iqbal raised speculative, conclusory allegations of conspiracy and novel legal theories, respectively.  Further, while it’s possible that Volkswagen would seek an interlocutory appeal, I highly doubt that we’ll see one filed in this case.

Thus, a motion to dismiss here serves very little real purpose, other than to increase legal fees for the parties involved.

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Discussion

5 thoughts on “Law Firms Compound Cost Of Patent Litigation

  1. The exception to this would be causes of action where fraud is being pleaded, which require specificity under Rule 9(b). Since the Federal Circuit just told us that false marking requires such specificity, I would recommend filing a motion to dismiss for this kind of case. Otherwise, often all motions do is make associates busy and judges pissed off. Clients need to understand that litigation strategy is often “lawyer strategy” not “making sure client’s business wins strategy.”

    Posted by JACKIE HUTTER | March 30, 2011, 9:58 am
    • Jackie,

      Thanks for the comment. You’re absolutely right on both points.

      Sadly, you can’t always trust your in-house counsel to manage your outside counsel either when it comes to cost effectively managing litigation. That said, I don’t expect CEO’s and CFO’s to become experts at litigation strategy, but I do want to increase the quantity of information available, so that companies complaining about the high cost of litigation can figure out for themselves where the blame lies …

      Posted by Patrick | March 30, 2011, 10:29 am
  2. Hi Patrick

    Believe it or not in most other parts of the country but Texas the Judges are getting extremely strict on identifying “specifically” the product or service. Its so bad now in some jurisdictions (I won’t name) that the Court practically wants you to list every model number of every conceivable product, long in advance of any discovery. Lord forbid you should try to amend and add another later on after that!

    Posted by JNG | April 2, 2011, 11:10 am
  3. JNG,

    It all goes back to 1) likelihood of winning, and 2) what do you get when you win.

    If you get to narrow your opponent to whatever model names/numbers are disclosed in the first complaint, it may be worth it. But even in the (perceived defendant-friendly) N.D. Cal, they gave Interval Licensing a chance to amend the complaint after the infringement contentions were due … at that point the accused products/infringement theories are more or less locked in, so “winning” the motion doesn’t net you a whole lot…

    Posted by Patrick | April 4, 2011, 9:10 am

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