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What is Litigation?

Litigation is the legal process through which the plaintiff and defendant (litigants) argue their side in court to achieve a specific outcome (monetary award, injunction to stop use of patented invention, avoidance of paying a settlement, etc.).

Both businesses and individuals can file complaints with the court to start the process. In the end, the side that provides the best argument or demonstrates enough proof of their claim wins the suit. Typically a judge determines which side wins in litigation, but in some states, sides may request a trial by jury instead.

The Litigation Process

The party who initially files a complaint with the court is known as the Plaintiff. The party or parties named in the complaint are known as the Defendants. Once a complaint has been filed, defendants have a specific amount of time to file a response. From there, other documents providing evidence against the defendant or plaintiff may be filed along with compensation demands.

In many cases, these lawsuits never make it to a courtroom. Other means including mediation and arbitration may be used to help plaintiffs and defendants reach some sort of agreement (monetary compensation, injunction or other constraints, etc.). Mediation and arbitration typically cost less than a trial and help ensure that both parties feel satisfied with the end result – unlike a trial where a judge (or jury) rules either for the plaintiff or defendant.

If the case goes to trial, the party that doesn’t win the lawsuit may file an appeal. This may or may not lead to a retrial or the overturning of a ruling.

Mediation

The mediation process involves each side sitting down and negotiating the finer points of the lawsuit until an agreement is reached. A trained, professional mediator acts as a neutral third-party to help both sides reach a fair agreement. Agreements reached during mediation are non-binding, which means that neither party has to legally follow-through with the agreed upon settlement. In most cases, however, both parties involved really want resolution and try their best to adhere to the agreement. If a mutual agreement is not possible or is not upheld, the lawsuit may continue to trial.

Arbitration

Similar to mediation, the arbitration process helps both parties reach a fair agreement. The only real difference is that all agreements reached during the process are binding – meaning that both parties must adhere to the agreement or face further charges.

Types of Litigation

There are many types of litigation including:

  • business litigation
  • commercial litigation
  • civil litigation
  • securities litigation
  • personal injury litigation
  • intellectual property (IP) litigation

The type of litigation a particular lawsuit falls into depends on the nature of the suit.

Business Litigation

This type of litigation involves one or more businesses or individuals. Lawsuits pertaining to breach of contract, copyright or patent infringement, fraud, or unfair competition, commonly fall into this category.

Commercial Litigation

This type of litigation involves one or more businesses or individuals. Lawsuits pertaining to aspects of business include partnership disputes, business dissolution, employee disputes, licensing agreements, class action suits, and other related business matters may fall into this category.

Civil Litigation

Civil litigation typically involves one or more individuals seeking monetary damages rather than a legal ruling. Reasons to file a civil lawsuit include wrongful death, medical malpractice, anti-trust issues, employee safety issues, personal injury, and landlord/tenant disputes.

Securities Litigation

Securities litigation include lawsuits filed by employees, partners, shareholders, fund managers, pensioners, and others that pertain to potential violation to the Securities Act of 1933, breach of contract, or misuse of company or organizational funds.

Personal Injury Litigation

This type of litigation may also fall under civil litigation as most people that file personal injury lawsuits seek monetary damages for work-related, medical malpractice, slip and fall, or other types of personal injury that may inhibit their ability to earn a living or advance in their career.

Intellectual Property (IP) Litigation

This type of litigation may also fall under business or commercial litigation. IP litigation typically involves businesses or individuals that file a complaint for infringement of their ideas, recordings, or trade names. Typically, the plaintiff claims the defendant knowingly or unknowingly used their protected works or processes without permission.

The Lexero Law Firm Can Help

If you want to file a complaint for litigation or you’ve been named in a litigation complaint, contact Lexero Law Firm today. The firm offers an attorney roster that is can offer expert counsel, advice, and representation in court, mediation, and arbitration proceedings.

Understanding Patent Litigation

If you’ve been accused of ‘stealing’ a patented invention, you may face a myriad of legal obstacles that could result in the loss of time and money for your business due to fighting the charges brought against you.

Patents allow businesses and individuals to legally protect their property from use by another business/individual in its entirety or in conjunction with other products. The use of a patented invention without permission from the patent holder is called patent infringement.

The Patent Litigation Process

Unfortunately, the patent litigation process is a long one. First, those holding the patent need to prove patent infringement had taken place. This means more than just accusing a business/individual of ‘stealing’ an invention. Also, if the defendant has ample financial resources and time to defend themselves, patent litigation cases may be dragged out for years.

After the patent holder files a complaint, the defendant must provide a response. Then both sides begin preparing for trial. Both must provide evidence supporting their claims.

Possible outcomes of these types of lawsuits generally include:

  • Temporary or permanent injunction – this prevents the defendant from continuing to use a patented invention for a specific amount of time or indefinitely.
  • Monetary Award – issued to the patent holder as a way to cover the loss of potential earnings related to patent infringement, tarnished reputation, time and money spent on legal fees and other costs, etc.
  • Settlement – each side comes to an agreement as to how to end the lawsuit (defendant pays monetary award, agrees to stop using invention, injunction, or patent holder agrees to licensing terms, etc.)

In some cases, both parties may agree to mediation instead of a trial. Mediation usually costs much less than litigation and helps both sides come to terms that are fair and reasonable in less time.

Having an experienced litigation attorney on your side can make the difference. If you find yourself involved in a patent litigation consider contacting Lexero for assistance in obtaining the best possible result in your patent matter.

Apple Settles iPod Lawsuit

 

Apple recently settled a patent dispute with Burst.com for $10 million. Burst alleged that Apple infringed four patents for transmission of compressed audio and video files in iTunes, iLife, QuickTime and the iPod. A similar suit was settled with Microsoft for $60 million previously.

The real story of this settlement is the relatively moderate amount of payment from Apple. Particularly given a previous settlement of nearly six times more, it seems that Apple may have received a real bargain with its most recent settlement.

[Read more...]

Vonage Digging Out of Patent Hole

 

Vonage, whose very existence was threatened due to numerous
patent infringement complaints by several major telecommunications companies, finally
appears to be reaching the light at the end of the tunnel, agreeing to settle
another lawsuit
with AT&T.

 

Vonage has become the poster child for a tenuous business
model: total reliance on others’ networks to deliver its services. It was a
business gamble, of course, but also a legal gamble, because no one could have
predicted that Vonage would have continual unfettered access to others’
networks in the present or future. While Vonage eventually paid its way out of patent-infringement
danger by settling the numerous patent suits, the result could have been much
worse. Stricter rulings from courts or the infringement claimants’
unwillingness to settle might have made Vonage totally obsolete and bankrupt.

 

Even Vonage’s ability to wiggle out of its legal clutches
was not without cost. Until this year, Vonage’s VOIP service was the largest
competitor to traditional phone companies. As Vonage has dealt with its legal
and financial troubles, large cable companies like Comcast and Time Warner have
surpassed it in the total number of VOIP phone subscribers.

[Read more...]

Patent Wars: Tech v. Drugs

 

An article on the increasing lobbying pressure for patent
reform provides a nice explanation of the “different sides of the aisle” when
it comes to patent reform. On one side are pharmaceutical firms that prefer
substantial penalties and roadblocks for patent infringers. The other side
typically consists of technology firms that want fewer patent protections and
less damages when infringement occurs. The article takes the view that the tech
firms are winning. On the whole, this is true. Recent court decisions and proposed
legislation have sought to create more fluidity in patent processes.

 

The correct policy, however, is understanding that different
industries may need different rules. Tech firms deserve fewer protections,
because the investment of time, money and other resources is usually substantially
less than that of pharmaceutical developers. Drug companies, on the other hand,
often invest billions and billions of dollars in research and development for the
chance at a big payout. Drug companies follow the classic “high risk, high
reward” business model. If there is less incentive, that is, less potential
profits and protections, these firms will be less likely to take big chances at
drugs that could help save lives and cure serious diseases.

 

Bottom Line:
While having “one system” of patent protection may be preferable, such an arrangement
ignores important differences in the business models, risks and interests of
each industry. Legislators and courts would be wise to understand these
differences and adjust policies to account for the differing needs of contradistinctive
industries.

[Read more...]

New Patent Reform Gaining Ground

 

The House recently passed legislation that would lead to new reforms in determining ownership of patents. The legislation is intended to reduce patent litigation, which often turns on the identity of the innovator. Lawmakers are attempting to change the method via which courts determine the owner of a patent. Presently, the "true owner" of a patent is determined by identifying the first to invent. Proving the first to invent is often difficult and costly, particularly in litigation.

 

The proposed legislation relies on a "first to file" model. That is, the first person to register the innovation as their own would be the presumptive owner of the intellectual property.

 

This idea is not new. Many states use a similar method of defining ownership when it comes to determining the true owner of real property. Common law required that an individual attempting to determine ownership of property would have to follow "chain of title," often hundreds of years of documents, to determine the true owner. Many states now use a system that resolves conflicts by simply checking the state-maintained records. If there is a conflict about ownership the records on file with the state are the "tiebreaker" between the parties. Such laws are in place for two main reasons: (a) States want to encourage property owners to register their properties for tracking, tax, and realted purposes, and (b) having a simple-to-understand "tiebreaker" between conflicting parties helps to avoid litigations before they begin. Any potential litigant would immediately know whether he or she had a chance of prevailing in a matter with a simple check of the state or county records.

Bottom Line: While this legislation has not gone further than House approval, it is a proposal that has the potential to become law. Particularly given past successes with real property, there is little reason to doubt that the same principles could not be effectively applied to intellectual property matters as well.

[Read more...]

Debating Patent Infringement Relief

 

As patent law begins to transform in the 21st century we see
more and more discussions about appropriate patent policy. While there are many
discussions about the merits of patent awards themselves, there is also a
debate about appropriate relief for patent infringement.

 

One discussion centers on injunctive relief for patent
infringement. A popular theory, the Lemley-Shapiro theoretical model of “patent
holdup,” argues that the threat of a potential injunction often inflates
royalty payments above and beyond an appropriate market rate. The theory also
promotes the removal of injunctive relief as a presumption for patent
infringement. On an elementary level, the Lemley-Shapiro model promotes a
reduced role for injunctive relief while promoting monetary damages.

 

Gregory Sidak takes a different view, arguing that the
problem is not potential injunctive relief, but the failure to create an appropriate
marketplace to determine proper royalty rates in cases where infringement
exists. Sidak sees a continued feature role for injunctive relief, but suggests
that minor revisions will better serve rights holders and potential infringers.

 

Bottom Line: While
this is the most elementary summary of the arguments, this current debate is a
barometer of the ongoing discussions about patent rights in the new information
economy. We can expect to continue to see academics, policy groups and industry
passionately argue their beliefs and interests in a watershed time for
decisions about the future of patents and other intellectual property rights.

 

[Read more...]

Patent Reviews Now Public Domain

 

The United States Patent and Trademark Office has unveiled its new program that allows the general public to provide feedback on pending patent applications. The program allows users to comment, support or oppose certain patent applications. The patent applications currently at issue are those in computer technology, which has become a “hot” area of patent law with the rise of the open source software movement. The current program is a test run, and will be reevaluated in a year. If the program is a success the USPTO plans to expand the program to other types of patent applications.

Bottom Line: The experiment has substantial promise. Still, there will unquestionably be attempts to undermine or promote patents in the public forums based on respective personal interests and other similar problems. If the program can survive these road bumps the IP community can expect this type of program to become the rule of intellectual property evaluation as opposed to its current exception status.

[Read more...]

Supreme Court: Obvious Patents Under Siege

 

The Supreme Court recently handed down its opinion in KSR
International v. Teleflex
. The matter involved an adjustable pedal system for
cars, which allows drivers to adjust the position of the gas and brake pedals
themselves. KSR developed a model adjustable pedal and was selected by General
Motors Corporation to supply the parts. Teleflex, who had previously registered
a license for “a position-adjustable pedal assembly with an electronic pedal
position sensor attached a fixed pivot point,” sued for patent infringement
under § 103 of the Patent Act. That section provides:

 

“the differences between the subject matter sought to be
patented and the prior art are such that the subject matter as a whole would
have been obvious at the time the invention was made to a person having
ordinary skill in the art.” 35 USC 103

 

The Supreme Court, reviewing the matter on appeal from the
Federal Circuit, found that the inferior court had examined Teleflex’s claim in
a manner that was “too rigid.” The Supreme Court found that if a person of
ordinary skill in the art can implement a predictable variation, and the
benefit of the variation is also apparent, §103 will bar its patentability.

 

The Court held that the “proper question was whether a . . .
designer of ordinary skill in the art, facing the wide range of needs created
by developments in the field, would have seen an obvious benefit to upgrading”
the pedal.

 

Several important principles can be found in this opinion.
First, it is worth noting that this opinion was unanimous, with all members of
the Court agreeing with the outcome in the case. Unanimous opinions help to
convey the message that “this is the way it’s going to be,” and are typically
less likely to be subject to future challenges. Second, the Court clearly
implied that intellectual property litigation based on mere minor improvements
would not be viewed favorably.

 

Of course, this interpretation also indicates that the
number of patents initially granted to those who apply for protections will
likely fall. Applications for minor improvements on an existing invention will
now be examined with a vengeful eye. The question remains: how does one determine “obvious?” The
Supreme Court offered some guidance:

 

“One of the ways in which a patent’s subject matter can be proved
obvious is by noting that there existed at the time of invention a known
problem for which there was an obvious solution encompassed by the patent’s
claims.”

 

A hypothetical example is as follows. A refrigerator, a
patented idea, suffers from being dark when being opened for purposes of
preparing a late night snack. The late night snacker has the idea of placing an
automatic light switch in the refrigerator, to be activated when opened and
shut, and obtains a patent for the idea. When a manufacturer also installs its
own version of the automatic light switch, the patent holder sues. The patent
holder can expect to lose this battle. There was an obvious problem at the time
of the light switch patent: it was dark in the refrigerator. The problem was
obvious at the time of the patent. The manufacturer’s version of the light will
likely not be liable for infringement because, as the Supreme Court notes:

 

“Common sense teaches . . . that familiar items may have obvious uses
beyond their primary purposes, and in many cases a person of ordinary skill
will be able to fit the teachings of multiple patents together like pieces of a
puzzle.”

 

The fact that the snacker had the idea first is of no matter
because familiar items, such as a light and a simple sensor, and the obvious need to see the food in the fridge, led to the
eventual improvement.

 

Bottom Line: The message is clear: minor
improvements that fail to offer relatively significant new ideals should not be
granted protection. Those that have already been granted are skating on the proverbial
thin ice of intellectual property rights.

[Read more...]

Microsoft Prevails in Software Patent Dispute with ATT

 

Microsoft prevailed in its defense of a patent infringement
claim by AT&T related to copies of the Windows operating system sold
overseas. The matter is Microsoft Corp. v. AT&T Corp., No. 05–1056. The technology at issue was codecs, which is software used to
compress speech signals into data, in copies of Windows shipped and sold
overseas. AT&T claimed that the codec infringed on its registered patents,
and should result in damages paid to AT&T.

 

The law at issue was explained by the Court in its opinion:

 

It is the general rule under United States patent law that
no infringement occurs when a patented product is made and sold in another
country. There is an exception. Section 271(f) of the Patent Act, adopted in
1984, provides that infringement does occur when one “suppl[ies] . . . from the
United States,” for “combination” abroad, a patented invention’s “components.”
35 U. S. C. §271(f)(1).

 

The Court came to three main conclusions. First, the Court
held that “A copy of Windows, not Windows in the abstract, qualifies as a “component”
under §271(f). Section.” Second, the Court found that Microsoft did not
“supply” the technology at issue from the United States. Third, the Court noted
the presumption in favor of foreign law for resolution of issues that arise in
foreign lands.

 

The Court additionally addressed the concern that certain
loopholes would exist for software manufacturers and distributors, apparently
contemplating a circumstance where a domestic manufacturer could copy patented
software, distribute it internationally, and force the patent owner to seek
redress in numerous foreign lands. The resolution of this concern, however, was left to Congressional will.

 

The 7-1 opinion in favor of Microsoft, written by one of the
Court’s more liberal members, Ruth Bader Ginsburg, hints at the likelihood that
the Court will begin to take a more conservative view of patent infringement, particularly in
the software world.

 

Software has long been a battleground for patent rights. Many
commentators feel that software of almost any type is simply not unique or
novel enough to protect under patent law, because of the elative ease of
writing, developing, and modifying software technologies. This is in contrast
to the classic contrary case of pharmaceuticals patents, where protections tend
to be quite strong because of the substantial monetary and scientific resources
invested in the development of new drugs.

 

The appeal to the Supreme Court came from U.S. Court of
Appeals for the Federal Circuit, which handles many intellectual property
matters, such as copyright and trademark disputes. Accordingly, the reversal of
the Federal Circuit’s opinion will likely be felt in future matters heard in
the Federal Circuit.

 

Bottom Line:
Microsoft’s victory is likely the first in a line of upcoming victories for information
technology defendants in patent infringement cases. In particular, software
patent holders should be ready to accept broad defeats in patent infringement
litigation barring extreme factual circumstances.

[Read more...]

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