Best Practices in Litigation Management: Money Saving Technologies & Techniques. N. Thane Bauz Patrick McBride Paige Hunt Wojcik December 8, 2011
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1 Best Practices in Litigation Management: Money Saving Technologies & Techniques N. Thane Bauz Patrick McBride Paige Hunt Wojcik December 8, 2011
2 Patrick McBride Patent and Licensing attorney with seventeen years of corporate and law firm experience. Specializes in intellectual property, licensing, open source, patents, software and litigation Currently serving as Director for IP Defense and Protection at Red Hat, Inc. Manages the company's defense in patent litigation matters and the development of its patent portfolio. Manages Red Hat's relationship with RPX, a defensive patent aggregation company. Played a leading role in the recent sale of Novell patents to a Microsoft-led consortium for $450 million, and the $400 million interoperability and patent partnership between Microsoft and Novell. Helped found the Open Invention Network, a patent consortium among Sony, IBM, Red Hat, Philips, NEC and Novell that defends Linux against patent attacks. Graduated with a J.D. from Georgetown University Law Center and a Bachelor of Science in Electrical Engineering from Washington State University. 2
3 N. Thane Bauz Managing Partner, Perkins Coie San Diego Office 20 Years of Patent Litigation Experience In the Matter of Certain Electronic Imaging Devices, Camera functionality in cellular telephones Datascape Inc. v. Kyocera, Internet protocols used by Internet-enabled cellular phones MediaTek v. Sanyo Electric Co., MPEG and audio encoders Autobytel Inc. v. Dealix Corp., Business-to-business extranet technology Integraph Corp. v. Intel Corp., 64-bit Microprocessor Architectures Bell Communications Research Inc. v. FORE Systems, Inc., Telecommunications Networking Architectures and Related Equipment Former Boeing Electrical Engineer & Counsel Former Federal Circuit clerk GWU Law School IP Advisory Board Member, '10-'13 San Diego Top IP Litigation Attorney (peer selected) 3
4 Paige Hunt Wojcik Director of E-Discovery Services, Perkins Coie Directs Strategy and Services of Practice Technology Services Team Directs Discovery Service Attorney Team Consults with Clients re Litigation Readiness 12 Years Litigation Support Experience Electronic Discovery Reference Model, Member ILTA, Litigation and Practice Support Steering Committee 4
5 Problem Statement Patent litigation landscape has changed USPTO is issuing more patents per year Patents have liquidity more transactions 80% of cases brought by "NPEs" Increased use of litigation to monetize a patent portfolio Economy-linked changes for in-house counsel Managing risk vs. managing budget More lawsuits to defend on fixed or reduced budgets 5
6 Agenda Relationship money saving tips Saving money before the case starts 26(f) Conference & pre-discovery savings Case management money saving tips Saving with discovery tools Working with RPX to save money 6
7 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 7
8 Relationship Savings Preferred provider programs result in savings Attorneys gain familiarity with client products Volume discounts Increased, repeat client interaction avoids miscommunication Examples Intel Microsoft Boeing 8
9 Per-case Savings Proactively managing the life cycle of the case Not just reacting to procedural schedule deadlines Using software to organize information and track progress Continually assessing staff efficiency and staffing requirements Managing to the budget Tailored approach based on particular case Plaintiff identity (competitor, NPE, etc.) Relevance of technology at issue to customer acceptance of the client's products Scope of patent claims at issue Tailored approach based on client goals for a particular case 9
10 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 10
11 Client communication Initially Identify in-house contacts Understand client goals and budgetary constraints Discuss client guidelines regarding expenses, reporting, etc. Throughout the case Review / revisit client goals Adjust litigation strategy as necessary Client involvement As appropriate, client joins in team meetings via telephone Client oversight of attorney staffing, roles and responsibilities, and completion of tasks Client may communicate with any team member as needed Immediate reporting of filings and major events, monthly reports on status On-going budget management Partner review of tasks and budget with client Task and budget forecasts for upcoming month/quarter Mid-month estimate of the monthly bill No "surprise" monthly bills that unexpectedly deviate from estimates 11
12 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 12
13 Initial Case Assessment Proactive, early case assessment helps to reduce cost Identify case specific issues Infringement issues (products & evidence) Anticipated discovery issues (costs, witnesses, document custodians, electronically stored information, etc.) Validity issues (searches & evidence) Identify potential damages (lost profits, reasonable royalty, and/or injunction) Identify opponent strengths, weaknesses & settlement strategy Prepare case outline, decision tree, budget, etc. 13
14 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 14
15 Settlement Calculate settlement value of the case Phone call with opposing counsel Assessment of plaintiff and its goals Early view of plaintiff's infringement theories Present evidence of limited damages base Discussion of prior art, reexamination 15
16 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 16
17 Patent Reexamination Ex parte reexam may result in stronger patents Patentee may overwhelm examiner with all known prior art Reexam requester has no opportunity to interact with the patent office, patentee often "wears down" the examiner to allow claims There is now enough data on inter partes reexam to justify its early use Higher invalidity rates than ex parte reexams However, issue preclusion on prior art If a thorough prior art search results in very good prior art, file an inter partes reexam followed by a motion to stay the case The threat of filing a reexamination request may lower the settlement value of the case 17
18 Inter Partes Reexamination Statistics (as of 6/30/2011) Total Reexam Certificates Issued (since 1999) 278 Certificate with All Claims Confirmed 35 Certificates with All Claims Canceled 123 Certificates with Claim Changes 120 Canceled 44% Confirmed 13% Changed 43% 18
19 Ex Parte Reexamination Statistics (as of 6/30/2011) Total Reexam Certificates Issued (since 1981) 8,375 Certificate with All Claims Confirmed 1,913 Certificates with All Claims Canceled 960 Certificates with Claim Changes 5,502 Confirmed 23% Canceled 11% Changed 66% 19
20 Probability of Stay Reported Cases (January 2001 June 2011) % 58% 32% 35% 67% N.D. Cal. D. Del. E.D. Tex. E.D. Va. W.D. Wis. Stay Granted Stay Denied Note: probability of stay increases if requested early in the case (e.g., before significant discovery) 20
21 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 21
22 Vendor/Tool selection Save costs by using software tools such as Microsoft OneNote and Lexis CaseMap TM to continually update and organize information and case theories Avoids redundant review and analysis of source materials Improves sharing of information among the team Focuses team on developing evidentiary record in support of case theory outline Using document analytic tools such as RiverGlass reduces filtering/review costs Automated pre-classification of documents for privilege, confidentiality Eliminate repetitive review by thread grouping and duplicate document grouping 22
23 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 23
24 Joint Defense Agreements A joint defense agreement is an opportunity to reduce costs by avoiding redundant work, but: Joint defense agreements must address settlement Sharing of experts Transfer of work in progress to remaining parties Over-reliance on one party creates risk if that party settles A joint defense agreement is not a substitute for thorough preparation of the case for trial Coordinating tasks among counsel may reduce cost savings In-house counsel ultimately must agree on the scope of the agreement and to honor its terms 24
25 Joint Representation Better potential savings than joint defense Use one team for all clients not one team for each client to achieve savings Assess suitability for joint representation: Damages cases must be comparable Non-infringement positions must be aligned Consolidating trial raises additional considerations 25
26 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 26
27 Proper Case Staffing Proper team selection results in savings Appropriate technology backgrounds for the case Litigation team members should have strong technology backgrounds Staff cases based on attorney subject matter expertise Avoids over-reliance on experts Appropriate experience level of team members Appropriate number of attorneys for the stage of the case Leaner staffing at initial stages of the case begin with one partner and one associate who will be staffed for the entire life of the case Expand litigation team as appropriate New team members have clearly defined roles and responsibilities Appropriate use of technology to reduce staffing 27
28 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 28
29 Retaining Experts Retain the appropriate expert and do so early Use one expert for validity / noninfringement / claim construction if possible Avoids inconsistent positions that may be attacked by opposing counsel Expert prepares the report Less hourly expense than associate attorney Less expert preparation time Use "good" expert, even if higher rate Lowest hourly cost expert is not necessarily the least expensive expert 29
30 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Small changes that add up to large savings Conclusion 30
31 Discovery Federal Rule of Civil Procedure 26(f) conference E-discovery stipulations reduce cost: Production format Types of electronically stored information Scope of discovery Clawback of privileged documents Protective orders can reduce cost Source code computer location Reasonable restrictions on source code review Management of printed source code Proposed case schedule can reduce cost Jurisdiction specific, but there is an opportunity to advocate for a specific schedule based on early case assessment Example: pre-markman case dispositive claim construction process (Global Sessions LP v. Travelocity LP, et al. (E.D. Tex.)) 31
32 Discovery Depositions Communication with client Early case assessment should define required depositions Client can pre-approve depositions Client receives deposition summary Opportunity to adjust discovery plan or case strategy Send only one attorney to the deposition if possible Telephonic participation in less important depositions where the case involves multiple defendants Deposing attorney designates relevant testimony shortly after the deposition More efficient than designating testimony before the procedural deadline in the case schedule Avoids the multiple attorneys reviewing the transcript 32
33 Discovery Discovery specialists save costs Lower cost than using associate attorneys to review documents and manage document review and production Discovery centers, e.g., 80 Perkins Coie employees Discovery attorneys are technology specialists with litigation experience Foreign Language expertise Reviewers are experienced in Relativity Key document analysis/review, privilege review Standard workflows reduce cost Discounted rates Negotiated discounts with vendors Tool flows are compatible with foreign language documents 33
34 Discovery Defusing petty disputes saves costs Responding to unreasonable discovery requests Cooperate and reasonably respond Offer production but shift costs Limit letter writing campaigns Respond to inaccurate discovery letters, but refrain from retaliation Fear of misappropriation of produced information not justified Motion for Protective Order Used in Datascape case Use Motions to Compel and Motions for Sanctions only when necessary to advance the case Judges generally disfavor inflammatory allegations and motions Judicial response is often unsatisfactory Only effect is that costs increase Perceived benefit of discrediting the opposing party is often illusory 34
35 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Small changes that add up to large savings Conclusion 35
36 Motion Practice Involving the client before and throughout the process lowers cost Pre-approval of motions by client Associate attorney drafts detailed, annotated motion outline, partner revises as needed Client reviews detailed motion outline Avoids cost of reviewing/revising fully drafted brief Motion drafted from approved outline Outside counsel guidelines can define the process 36
37 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Joint defense agreements / joint representation Proper case staffing Retaining experts Discovery Motion practice Small changes that add up to large savings Conclusion 37
38 Small Changes to Save Cost Travel guidelines discussed between client and outside counsel Skype for long distance calls Leveraging firm size for reduced vendor costs Green initiatives 38
39 Reducing Cost While Maintaining Quality Relationship savings Per-case savings Client communication Initial case assessment Settlement Patent reexamination Vendor / tool selection Proper case staffing Retaining experts Discovery Motion practice Other small changes that add up to large savings Conclusion 39
40 Conclusions We anticipate significant cost savings for clients without a loss in quality though: Understanding client goals and budgetary constraints at the outset of a litigation matter Partnering with a client to address their business needs Continuing to communicate with the client throughout the case Adding the right attorneys at the right time to a case Strategic decisions that will delay or reduce cost (early settlement discussions, inter partes reexam) Smart use of technology to organize and share information 40
41 41 Thank You!
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