Benefits of Copyright Registration

If your company’s core products are original works of authorship — like software, websites, video games, music videos, graphics, photographs, musical compositions, cartoons, on-line publications, articles, books, or even automated databases — you may want to get enhanced benefits by filing a formal copyright registration with the Copyright Office.

There are several important reasons to file a federal copyright registration before infringement.  First, registration is necessary to even get to court. Second, if you win, the court may award statutory damages –- from $750 per infringed work to as high as $150,000 for willful infringement — and attorneys’ fees, which alone can be hundreds of thousands of dollars.

This big statutory hammer is very important when you send a cease and desist letter to an infringer.  If an infringer may face paying hundreds of thousands of dollars (or even millions) to the copyright owner pursuant to the statute, they should be more likely to stop infringing and settle out of court.

And the hammer is relatively cheap.

The registration fee for a simple work filed electronically is $35. (Fees vary depending on the type of work and method of filing.)

To get the statutory benefits, however, you must file for copyright registration before infringement or within three months of publication of the work.  If you file late, you will have to prove the amount of actual damages you have suffered because of the infringement and pay all of your own costs and attorneys fees. In some cases, without registration, the costs of enforcement may be too high to justify going to court.

The difference between statutory damages and actual damages can be astronomical and the copyright litigation in the music industry is illustrative.

Really, what are the actual damages from illegally downloading a song? 99 cents?

In one case, however, a jury found that a single mother who willfully downloaded 24 songs on the KaZa’s file sharing network liable for $1.9 million in statutory damages. Now, that’s a big hammer.

For software developers it’s especially important to note that to get the full statutory benefits you need to file registrations for new versions of your work that may be infringed.  For example, it’s not enough that you have a registration on an original version of your software when the work that is actually infringed is a newer version.  A common defense in a software copyright infringement case and a reason for dismissal is that the registration does not cover the software at issue in the lawsuit.  It can be a very, very expensive mistake to fail to file new registrations when you revise or update your work. (See the article Version Control Blues, about Airframe’s System’s legal woes for failure to register the new version of its software).

Of course, new registrations are a hassle when the copyright is for a work that is frequently updated, like software or a website. But it can be well worth the trouble.

Take Time to Review Your IP Strategy and Protection

As I explained in my last post, January is a great time of year to review your IP protection strategies and see if you need to file additional copyright registrations (and trademark registrations and patent applications)!  You may think this is a simple point but you may be amazed at how many companies screw up protection by not reviewing the status of their filings as their startup grows and changes.  All too often they find out too late that another company has beaten them to the PTO and filed a trademark or patent on a key part of their business. Or they lose in court because they screwed up and didn’t get their registrations up to date for new versions.

Filing with the Copyright Office

The Copyright Office has tried to make things simple.  Go to www.copyright.gov for more extensive information.  They have many circulars and brochures explaining what you need to do to file registrations for your specific type of work. Some brochure examples include:

• Copyright Registrations for Computer Programs
• Copyright Registration for Online Works
• Copyright Registrations for Multimedia Works

Registrations require filing out the proper form, paying a fee, and giving the Copyright Office a deposit of the work – a good copy of what you are registering.  And registrations for many works can be done electronically through the electronic Copyright Office (eCO), saving time, money and a trip to the Post Office.

Filing Considerations

There are several things that give people trouble when filing.

Type of Work. First, people tend to be confused and think they can register ideas, concepts, procedures, methods, short phrases, titles, or software program logic or algorithms.  You can’t.  Make sure you are registering a type of work that can be registered like software source code, literary works, photographs, artwork, text, sculpture, choreography, or music.

Publication.  Second, you also need to identify the first date of publication.  Publication of on-line material is confusing, even to the courts, but it basically means when you distribute copies of the work to the public for sale, rental or lease or an offering to others for further distribution or public display.  Just figure out the first date you sold the work or allowed others to freely distribute or download it.

Copyright Claimant or Author. To file a registration you need to be the author or the owner of the copyright, the Copyright Claimant.  A super common mistake for startups is that they don’t own the copyright to the works created for them.  Remember you must have a signed, written assignment agreement with the proper language from the author of the work – like the logo designer or software developer – before you can register the copyright for the work.  You must also identify all authors of the work even if you are the owner. You must also own all of the rights to the parts of the work you are registering.

Don’t get tripped up when they ask if the work is a “made for hire.”  Unless you have a contract specifying the work as a “work made for hire” or the author is your employee, the made for hire doctrine does not apply.  See related posts.

Deposit. Third, sometimes the deposit requirement trips people up because they don’t know what to deposit or they don’t want to give a deposit.  For example, software is special and the filing is frequently screwed up.  This is why you need to read the circulars carefully and follow the directions.  Generally, for a software deposit of a program with more than 50 pages of source code, you can file the first and last 25 pages of a printout of the source code, which can uploaded electronically in PDF format.

In your software source code deposit, you can black out trade secrets and vary what you file.  But of course, you need to be able to identify a trade secret to block it out.

Ask yourself:   Are there any special sections of the source code for a cool features you want to keep secret because it gives your company a competitive advantage over other programmers who don’t know the code?  Black out those sections with a magic marker.

If you unwittingly disclose a trade secret, you lose legal trade secret protection.  Because some developer’s don’t want anyone to have any of the source code and they choose to forgo statutory benefits of an early filing or file object code.

Short on-line works can be uploaded in the electronic system very simply.  Long on-line works need to be sent in on a CD-ROM with representative paper copies and the length required varies.  Again the Copyright Office has brochures trying to explain what you need to do.

Make sure you use an acceptable file type of electronic submissions like .jpeg or .pdf or logos or art; .wav or .mp3 for audio files; and .pdf for text and .ppt for presentations.  The Copyright Office has a list.  The wrong file format is a common trip up. If you can’t upload the file, check the file format.

Taking the time to file copyright registrations can give your little company a big statutory hammer and help protect its valuable works.  Just remember to update your filings, especially in the new year.

One of the biggest, most frequent mistakes I see as an intellectual property attorney is a startups’s lack of ownership to all of the exclusive rights to the intellectual property created for it.

One of the most damaging omissions is not taking the proper steps to ensure the company owns all of the rights to the IP created by all founders.

You should all sign the IP assignment agreements at the very beginning when everyone is committed to the company’s success.

If your company does not own the rights to the founders’ work, a founder may walk off and take their IP rights with them. This may leave the company in a precarious position if the founder’s IP is central to the company’s key technology.

For the company to own all of the IP rights, all founders must sign an IP assignment agreement that transfers the IP to the company.

And the contract must have a provision that sweeps back and captures work done before incorporation.

Most standard form agreements don’t have this provision. It is special to the needs of startups. If a corporate attorney gives you the IP assignment forms, make sure you ask about this type of retro-provision and get it included in the agreements signed by the founders. Also, beware of do-it-yourself contracts drafted by non-lawyers. They usually don’t have the proper “magic” legal language that transfers the IP to the company despite the attempts to do so.

If you don’t have a written assignment agreement that sweeps back and captures the IP created before and after incorporation, your company won’t own all of the IP rights of the founders.

Lack of proper contracts may have very serious consequences.

If the departing founder created the work on his own before incorporation or when he was not a company employee, he may own all of the IP rights to his work. And when he walks out the company may be left with shallow arguments about fiduciary duties and his obligation to transfer the IP back.

Worse yet, the departing founder may start a new company in competition with the old company and transfer his IP rights to the new company.  Leaving the prior partners with a worthless, empty shell of a company.

Reports say this is exactly what Mark Zukerberg did with Facebook.  The original Facebook company was incorporated in Florida but Mark did not assign the IP rights to the Facebook software to the first company.  And after Mark had a falling out with his partner Eduardo Saverin, Mark hired a real startup lawyer, incorporated Facebook in Delaware (like a savvy startup would do), and assigned the IP rights for the software to the new company.

The resulting lawsuit was eventually settled. But I bet the legal bills were huge.

Similarly, if the work of the founders was a joint work, and the remaining partners assign their rights, the company may have rights to exploit the work. But the rights won’t be exclusive.  The departing founder may exploit the work too, without any obligation to make an accounting or pay the other creators. This scenario makes most investors run scared.

Do your startup a favor. Get all founders to sign a decent contract drafted by a professional that transfers all IP rights to your company. And do it before the founders walk out the door.

Jill Hubbard Bowman is an intellectual property attorney who helps startup companies own their IP.

A repeating theme on iplawforstartups.com revolves around the question: “Does my company have intellectual property?”

Our resounding answer is always, “Yes!”  Not only does every company we can possibly imagine have intellectual property, but often, intellectual property is the core corporate asset – the goodwill of the brand, a patented technology, copyrighted content, or valuable tradesecrets.

A savvy tattoo artist beautifully illustrates our mantra:

“Your company does have IP and it’s important to protect it.”

My friends tell me I am quite an amateur; I’ve only seen The Hangover one time.  The rest of the free world has been anxiously awaiting the opening of The Hangover Part II, to bask again in fresh hilarity and genius one-liners.  A savvy tattoo artist almost successfully put the breaks on our National Joy over Mike Tyson’s fabulous face tattoo! As we have all seen on the billboards, movie trailers, and movie posters, Stu – who woke up married to a gorgeous stripper named Jade in The Hangover – wakes up in The Hangover Part II with Mike Tyson’s face tattoo on his face!

Hilarious, correct? Not for Warner Brothers. Little did they know that the tattoo artist had taken steps to protect his intellectual property rights in the tattoo.  He sued Warner Brothers in federal court for copyright infringement and attempted to stop the release of The Hangover Part II. Here is a link to the official complaint with photos of the tattoos. The judge denied the motion for preliminary injunction that would have stopped the release of the movie because the harm would have been too great for Warner Brothers and the movie theaters.  Warner Brothers had already spent $80 million dollars to advertise the movie for Memorial Day weekend.  The judge, however, found that the tattoo artist was likely to succeed on the merits of the case as it goes forward in court.

The tattoo artist, S. Victor Whitmill, did several things correctly to protect his intellectual property rights:

• He recognized that he had intellectual property – a tattoo is an original work that is fixed in a tangible medium of expression. In this case, the tangible medium was Mike Tyson’s face.
• He recognized that his intellectual property was an important asset that he should protect.
• He identified the appropriate route of protection – a copyright.
• He used contracts to make sure the rights to his work were clean and clear – Tyson received the limited right to display the tattoo on his body – Victor retained all other rights in the tattoo.  In otherwords, Tyson received only the limited right to display the tattoo but Victor retained the broader more important rights to authorize copies, create derivative works, and to sublicense the work to others.

Victor did not register his copyright with the U.S. Copyright Office until April 2011, just before filing suit.  In order for Victor to assert his rights in the Tyson Tattoo, Victor had to have a Certificate of Registration.  Victor waited until the last minute to do this, which increases his litigation costs and increases his burden in litigation (he will only be able to recover the damages he can prove).  If he had registered his tattoo design with the Copyright Office within three months of applying the design to Tyson’s face – Victor would have been able to recover statutory damages, attorneys fees, and other remedies regardless of the amount of actual damage he could prove.

Therefore, all of our tattoo and creative-work startup friends out there (and there are some!) take note of the following lessons from The Hangover II lawsuit:

• Identify your creative works that may be protected by intellectual property law.
• Register your work with the Copyright Office.  IDEALLY register your work within the first 3 months of publication – for example:  You tattoo me on June 1, 2011 – you register your work BEFORE September 1, 2011.  Registering your work will make you eligible for statutory damages and attorneys fees if there is infringement.
• Have CLEAR CONCISE contracts with your client.  The contract should address:
  • Who owns the Copyrights in the work – you or the client?  (In the Tyson case – Victor the tattoo artist retained the copyright.)
  • The rights granted to each party;  (In this case, Tyson had the limited right to display the tattoo, Victor retained all other rights.)
  • Both parties should agree in writing that the amount the client paid for the rights received was fair and adequate.

And Finally, What happens in Vegas stays in Vegas, except for . . . tattoos! They will come back with you!

Heather N. Schafer is a tattooed  IP attorney who helps entrepreneurs protect their intellectual property.

A well drafted contract can do many great things for your company and your business deals.  Overall, a well drafted contract can save your company a lot of headaches, time, and money.  Below is a quick summary of my favorite benefits:

1.  Clarify the Deal Terms

First, a well drafted contract can clarify the deal terms between the parties.

Who is specifically going to do what?

How much money is going to exchange hands?

How are you going to get paid? Upfront? In installments? Monthly? When work is complete?

What is the time frame for the work?

Who is going to own what?

How is risk going to be distributed?

Nailing down the specifics within the four corners of the document will add clarity to the entire deal.  When disagreements arise over what everyone agreed to do, you can refer back to the contract terms.

A well drafted contract will tell you the answer.

2.  Clarify and Transfer Ownership of Intellectual Property

Of course, as an intellectual property lawyer, this one is my favorite.  A well drafted contract will specify who owns any intellectual property rights that are created in the course of the deal.

For companies who hire contractors to create logos, websites, or software for the company, it is critical to understand the following counter-intuitive concept.  Under the copyright statute, if you don’t have a written assignment of copyrights from the contractor who created the work:

YOU DON’T OWN THE COPYRIGHT EVEN IF YOU PAID FOR THE CREATION OF THE WORK!

Many companies without a well drafted contract are horrified to find out that they don’t own the intellectual property rights to their company’s key branding, website, or even the software product that they paid developers to create and are peddling.

Moreover, of critical importance to software developers:

If you are developing software for a company under a broad contractor’s agreement that gives away ownership of all intellectual property rights, you may not be able to legally resuse the software that you brought to the deal and incorporated into the client’s software.  The whole kit and caboodle will belong to your client.

It is critical to have a carve out in the contract for your developer’s tools and software if you want to reuse and retain the IP rights to your original software.

Software developers need to make sure they understand the implications of what they are signing and giving away. A company who gives you a contract to sign will be giving you a contract that is well drafted to only account for their interests.  It will usually be slanted horrifically in their favor.  These terms, however, are usually negotiable and you can get a fairer deal.

A well drafted contract will specify and clarify who owns what intellectual property rights.

3.  Limit Liability

After doing litigation for over a decade, limiting liability is also one of my favorite reasons to have a well drafted contract.  Sadly, it is often neglected in contracts drafted by non-lawyer entrepreneurs.

It is hard to know what you don’t know.

Liability hidden in statutes and the common law is like an iceberg.  If you don’t know it is there, you may hit it and your startup will go under like the Titanic.  Lawyers went to law school to know how to spot liability icebergs.

A well drafted contract can greatly limit a company’s liability in the following ways:

• by limiting statutory warranties that apply whether you know they do or not.  Such warranties can be excluded with very specific legal language and can save your company huge headaches and potential damages, especially if you are creating software or a dangerous product.
• by excluding crazy types of damages that are available under statues and common law.  Broad consequential damages and lost profits can be limited with very specific language in a well drafted contract.
• by limiting the total amount of damages available to the other party.  If you preformed the work for a specific fee, it is possible to limit the amount of potential damages in the contract to the amount you have been paid. Without limiting liability in the contract, a little deal may end up costing you far more than you had ever imagined.

You don’t want the potential liability to outweigh the benefit of the bargain.

A well drafted contract can limit your potential liability and dramatically help minimize your risk.

There are many other reasons to use a well drafted contract for your business but overall they can save you a lot of money.

Jill Hubbard Bowman is an intellectual property lawyer in Austin, Texas.  She can be reached at hubbardbowman [at] me.com

In my last post, I gave an overview of the current Facebook ownership litigation in which Paul Ceglia is claiming that he owns 84% of Facebook based on an old software development contract with Facebook’s founder Mark Zuckerberg.

A few years ago, Zuckerberg and Facebook also faced legal allegations that Zuckerberg stole the business idea and source code from some Harvard classmates to start Facebook.

Assuming for the sake of discussion that the allegations in both lawsuits are true:

What can entrepreneurs learn from Zuckerberg’s legal troubles?

Here are my top ten lessons.

1.  If you are wildly successful, people claiming ownership may come out of the woodwork.

If your business gets VC funding or becomes valuable, your company will become the target for any person or entity who has a potential case for ownership.

The skeletons will come out of the closet.

IP ownership disputes are very common.  Old employers, co-workers, partners or even classmates may claim that they are entitled to a piece of your new company based on former agreements, verbal or written, or intellectual property rights that they own or claim to have originally created.

2.  Don’t contaminate your company’s IP with any IP that you don’t have the right to use.

A cavalier attitude regarding ownership of software code can get you in trouble.  Just ask Zuckerberg. He’s probably lucky.  Taking someone else’s code can land you in jail.

To minimize the chance of any claims, it’s important to understand basic information about intellectual property law, especially trade secret law, so you know what you can and can’t use from what sources for your new venture.

When you incorporate intellectual property that you don’t own into your company, you contaminate your IP and make your entire company vulnerable to claims by others.

Some plaintiffs are very aggressive and may claim that they own everything that was built on the foundation of contaminated IP.  It’s sort of like fruit of the poisonous tree.  A plaintiff may try to get all of the fruit, especially VC money and related intellectual property rights.  (For another famous example, see my discussion of the famous Bratz doll case.)

Clean IP is very important to maintain the value of your company.  In the Facebook case, if the plaintiff can prove that it owned the intellectual property rights to the foundation of Facebook as well as the future alleged business interests, the plainitff’s damages expert will have a heyday.

3.  Software genealogy is important.

It’s super simple to copy and take software code.

Unfortunately, many software programmers freely use code written by others without understanding that copyright law and sometimes trade secret law protects software.

To keep IP ownership clean, it’s important to understand who wrote each section of code and what rights or licenses are related to it.  A company will want to make sure that it owns the code created by its employees and independent contractors and that it has an appropriate license for any open source code used.  Make sure your company really owns the code provided by the founder.

Ask your software programmers: Where did you get the code?  Did you write it? If not, who did?  If yes, when and where did you write it?  Does anyone else have a potential claim to the code?

Watch out for sections of code that is legally owned by others, especially former employers.  It’s very easy to do a software code comparison and it makes a stunning exhibit in litigation.

4.  Assume your business will be successful and treat equity like gold and not penny candy.

In the alleged contract between Zuckerberg and Ceglia, Zuckerberg allegedly gave up 50% ownership to the Face Book software and business interests.  The contract also had a bizarre penalty clause for delay in completion of the Face Book website of a 1% interest in the business per day.

This is crazy but not uncommon.  Some entrepreneurs don’t have an understanding of the potential value of a business interest.  Although equity in something worthless is worthless, even a small piece of equity in a valuable company may be very significant.

Don’t give away equity lightly as payment for services.  You may be paying a much higher price than you intended.

If someone is asking for equity they are assuming that you will be successful, you should assume so too.

5.  Read and understand any contract concerning ownership of intellectual property before you sign it.

I can’t stress this enough.  If you are giving away your IP rights, know and understand the boundaries of what you are giving up.  Make sure they are fair and reasonable for the circumstances. As an independent contractor, you have more negotiation power than you think.

Zuckerberg’s alleged signature on the Ceglia contract looks real.  My hunch is that Zuckerberg signed the alleged contract but didn’t read or understand it.  I’m also betting — considering the bizarre, hodpodge nature of the alleged contract — that the drafter didn’t understand the contract terms either.  It looks like part of it was copied from another unrelated source.  Indeed, the alleged contract is so convoluted the parties may be fighting about the meaning in court for a long time.

I’m sure Zuckerberg has read the contract by now but it is a little too late.

6.  Beware of contracts drafted by non-lawyers and don’t sign bizarre, crazy contracts.

Contracts like the alleged contract in the Facebook case make the hairs on the back of my neck stand up.

No one should ever sign a contract that looks like that.

7.  Know what you’ve signed and keep a copy of all contracts.

This is basic housekeeping.  Keep a copy of all contracts that you sign.  Know what you own and don’t own.

8.  Make sure you use proper assignment language in your contracts.

The alleged assignment language in the alleged Facebook contract is improper and bizarre.  Courts are very picky about the specific wording of IP assignments.  If the assignment provision in a contract is written incorrectly, it may not do what you think it does.

Moreover, don’t count on the “work made for hire” doctrine in the Copyright Act if you don’t understand it.  There are only a few statutory categories of work that apply to independent contractors.  Always have a fall back assignment provision if you really want to own copyrights for work you didn’t create.

9.  Understand that you will be subject to broad discovery if you are sued.

In litigation, everything within your possession, custody and control that is relevant must be given to the other side.  Archive tapes, random disc drives, thumb drives, old non-working computers and boxes in your attic and garage are all fair game.

Again, the skeletons will come out if you keep them.

10.  Even a crazy, amateur contract may be the basis for a lawsuit and enforceable.

This item is my favorite.  Just be aware that anything that looks like a contract may come back to haunt you if your startup is successful.

Other posts about IP ownership claims:

• Analyzing the Risk:  Will My Current Employer Claim Rights to My Startup’s IP?
• Preventing Your CA Employer From Owning Your Inventions
• Who Owns the IP Rights to Custom Software?

I’ve litigated for over ten years and I’ve always been keenly interested in how clients manage their cases.  Some clients, even mega companies with billions, are very strict and closely monitor litigation costs.  Others don’t.

If you’re a small company facing patent litigation, it’s important to act like the former rather than the latter.  Patent litigation is one of the most expensive types of litigation in our judicial system.  Attorneys’ fees and costs can quickly spiral out of control.  Patent lawsuits typically cost millions in litigation fees, with most of the money going to the attorneys.

Whether as the plaintiff or the defendant, you don’t want to go bankrupt because of litigation costs before a final decision has been reached on the merits of the case.  As a startup, you ultimately lose if you run out of money.

There is an unspoken taboo in big law firms about explaining to clients how to pay the law firm less money.  It’s not in the firm’s best interest.  But with a few strategies and close case management, a company can significantly decease litigation costs without hurting the odds of winning.

After picking a small litigation team with a pragmatic lead attorney, here are my top ten tips to decrease litigation costs in a typical patent case:

1. Insist on a budget and review it monthly

Insisting on a budget and regularly monitoring it can save money and prevent unpleasant surprises.  Attorneys are more thoughtful about what they do when they know they need to stick to a budget.  It encourages them to be more pragmatic.

2. Stop musical associates

Limit the number of attorneys who work on the case.  Some law firms seem to play a game of musical chairs with the junior attorneys.  This can be extremely expensive for the client.

Although the senior attorneys may balk and complain that it cramps their style, require pre-approval before any attorney or paralegal works on your case or stops working on your the case.  Shifting attorneys can hurt the case from the brain drain from exiting attorneys to the expense of getting new attorneys up to speed on the facts and issues.  The law firm’s bill will reflect how many attorneys are billing to the case and increase accordingly.

Moreover, develop a good relationship with the core attorney and make sure she’s happy working with you.  You want the core attorney to be energized and excited about your case.  Her work is central to your success.  If the core attorney leaves the case, it may be difficult if not impossible to replicate the former work and expensive to get someone else up to speed.

To decrease the potential harm to the case if an attorney quits or has to be removed, encourage the attorneys to write short litigation memos for the file that summarizes their knowledge and work.  Don’t get a copy, just make sure they are being written and put in the case file.  You want to preserve the work that you’ve paid for.  If possible, you don’t want to pay for the same work more than once.

3. If your company is the plaintiff, consider the jurisdiction carefully

If you’re a plaintiff, where you sue is important.  There may be a broad range of places where you may file the lawsuit.  It’s important to get a smart judge who likes patent cases.  Some judges hate patent cases and drag their feet about deciding anything.   Some jurisdictions specialize in patent litigation and have special rules for patent cases that smooth out the litigation process.  This can save a significant amount of money, especially in the event of an appeal.

It’s also important to know the average time from filing the case to trial in a particular jurisdiction.  The longer the case drags out the higher the bills.  Some former rocket dockets for patent cases have almost slogged to a standstill.  If you’re the plaintiff, you don’t want to run out of money before the defendant settles and you get a licensing deal.  If you’re the defendant, you want to minimize the overall cost of the case.  A faster schedule with the court will save you money and allow the case to be litigated on the merits.  Litigation disrupts the business operations of both parties and can be a time-consuming, financial drain for years. (Of course, some big company defendants want a longer time before trial because they know the plaintiff can’t afford the attorneys’ fees.)

It’s also important to find out whether the judge allows early summary judgment motions or whether he waits to rule on summary judgment until the eve of trial.  An early judicial decision disposing of the case can save everyone a lot of money.

It’s also important for plaintiffs to consider potential damages or settlements.  Some jurisdictions, like the Eastern District of Texas, strike fear in the hearts of attorneys who understand the potential jury pool.  Some people in rural, conservative areas are more prone to award a plaintiff damages just because they own a patent.  The location of the case matters.

4. Insist on playing nice with opposing counsel

Fighting with opposing counsel on non-essential issues can cost the client a lot of money and not help the case.  Moreover, many judges get angry when lawyers fight over trivial matters or act nasty, which many do.  Demand that your lawyers act nicely and it can save money without hurting the case.  You want the judge to have a favorable opinion of your lawyers and you.

5. Negotiate discovery boundaries early

Negotiating early and reasonably with opposing counsel can save a significant amount of legal fees.  If you want to save money, it’s important to negotiate reasonable parameters for discovery with the other side.

It’s possible to negotiate the scope of time for discovery, the number of people subject to search, whether backup tapes will be included, the key words for searching electronic documents, and the products or processes at issue.  Agree not to seek drafts of expert reports and have a claw back provision in the protective order that requires the other side to give back privileged documents that are inadvertently produced.  Narrow discovery is cheaper.  These simple steps can save hundreds of thousands or milions of dollars.

6. Have regular, short status meetings and keep the attorneys accountable

Status meetings can ultimately save money and keep the case on track.  It’s important to know who is doing what and why.

Always ask how a proposed motion or plan is going to help the case and how much it is going to cost.

Make sure the attorneys are focused and that they don’t go off on wild tangents.  Some attorneys are not pragmatic.  A goose chase can cost a lot of money that doesn’t move the case toward victory.

7. Require pre-approval for motions, especially discovery motions

Patent cases are not like trade secret cases or other types of cases where plaintiffs need to find a smoking gun.  Patent cases are technical with complex law.  There are a limited number of documents that can significantly impact the case.

Unnecessary fighting over discovery can cost a lot of money without significantly helping the case.   Some lead patent attorneys are pragmatic and focus on litigating the case on the merits.  This is a much cheaper strategy for the client and focusing on the core issues can increase the odds of a victory.  In a patent case, it’s usually far more important to focus on the claim construction, the infringement analysis and invalidity.  Requiring pre-approval and justification before filing motions is in your company’s best interest.

8. Review the bills carefully

You can learn a lot of information by closely reviewing the bills from the law firm.  Keep a close eye on who is doing what and ask a lot of questions.  Require detailed descriptions, especially about what specific research is being done.  I would want to make sure that I wasn’t paying for the same work over and over because a junior attorney was sloppy or inept.  If you find discrepancies, ask them to cut the time.

9. Require pre-approval for large expenditures with outside vendors

Don’t get a nasty surprise with an enormous bill from a document service vendor.  Make sure that the attorneys get pre-approval before they spend more than a capped amount on outside services.  For example, the fees vary for document service vendors who can prepare documents.  Do the math and make sure you know how much will be spent.  Ask how to reduce the bill.  Sometimes an in-house IT person can help save costs in this area.

10. Be accessible and help with the case, especially during discovery

A company can actually save a significant amount of money by being organized and helping the attorneys.  Be aware of their hourly rate.  The attorneys may be charging $500 an hour to collect documents.  You can reduce their billable time in many ways.  First, have a high level executive communicate with the employees and emphasize the importance of cooperation during discovery.  Require the attorneys to prepare a discovery collection memo specifically explaining what they need and have the company president send it to the employees.

Second, appoint someone in the company to be in charge of document collection to specifically help the attorneys and find information.  An inside person can help identify who may have relevant documents, their positions and responsibilities with the company, and the types of documents they may have in their possession. They can also follow up with people and hound them to turnover their records.

Third, appoint an IT person to be responsible for helping segregate, search, and collect relevant electronic files.  An organized IT person in-house can save a very large amount of money that would be paid to outside vendors.

Further, you can sometimes save money by helping the lawyers find consulting experts and expert witnesses.  Your company’s technical people can often find better and cheaper expert witnesses than the attorneys. Your company’s technical employees can also be a great resource to teach the attorneys about the technology at issue and answer their questions.

Careful selection of your litigation attorneys and close case management can save a company millions in litigation costs and actually increase the odds of winning by focusing on the key issues that will ultimately determine the case.

I’d love to hear more tips from subscribers, especially litigation attorneys who read this blog.  What can clients do to save money in litigation?

This is the conclusion of the series, Saving Money in Patent Litigation.  Here are links to the other posts in this series:

• Series Overview
• Hiring the Best Law Firm
• Hiring the Best Lead Litigation Attorney
• The Best Litigation Team

In an ideal world, I would want to know the personality type, temperament, and action style of the attorneys working on my company’s patent case.

An important key to success in litigation is the core personality of the litigators.

Are they highly competitive?  Do they thrive on winning?  Do they love complex, difficult challenges?  Are they strategic, big picture thinkers? Are they creative in crafting arguments?  Can they see multiple meanings and quickly identify ambiguity?  Do they obsessively dig into the law to find the best legal support and use it in creative ways?  Do they love research and writing?  Do they love technology? Are they curious?

Frankly, some attorneys are natural litigators who would answer a resounding “Yes!” to the above questions and some are not.

Worse yet, some attorneys who practice litigation hate it.  They may hate conflict, competition, research, and writing.  You can usually spot these anti-litigators by their bad attitudes, grumbling, and crappy briefs.

Many of these attorneys regret that they went to law school.  When they took a job in litigation, they didn’t realize they would hate it until they tried it.  Unfortunately, most anti-litigators didn’t realize that their core personality type was unsuited for litigation.  I don’t blame them for feeling trapped in their jobs because of their enormous law school loans, but I wouldn’t want them on my company’s litigation team.

I’ve worked with and against attorneys in some of the top law firms in the country and I can tell you that all firms have both natural litigators and anti-litigators working on cases for clients.

I believe that a case can actually be staffed with fewer attorneys who will ultimately do a better job if the core team attorneys are natural litigators who actually love litigation.  Natural litigators can save money and greatly increase the odds of winning.  They tend to work harder and smarter because they enjoy their work.

To decrease costs in a typical patent case with one to three patents and under $250 million at stake, I would want only three main attorneys working on the case.  Optimally, I would want at least two of the three attorneys to be natural litigators.

When doing litigation, the more attorneys working on a case the higher the cost.  I would want to keep the overall numbers of attorneys who do anything on a case to a minimum.  Occasional help with document review by a very junior attorney or prior art review by an in-house expert would be cost effective, but I wouldn’t want to add attorneys to the team if possible.

If a law firm tells you that they can’t manage a typical patent case with a team of only three primary attorneys — run.  This may mean that they are very inefficient and your bill will be very high.  (However, if they tell you that they can’t use three attorneys because your company lacks a document retention policy and you have millions of potentially relevant documents, then it’s your own fault.  Be prepared to spend millions because of your lack of foresight.)

For a patent case, I would want to hire three main types of attorneys who are primarily litigators and not patent prosecution attorneys.  Ideally, I would want them all to be registered patent attorneys and natural litigators.

Lead Attorney

I would hire one lead attorney.  See my last post in this series about saving money in patent litigation for details about the characteristics I think are critical for the lead attorney to contain costs and increase the odds of winning a patent case.

At a big general firm I would hire a competent junior partner.  I would want the lead attorney to be intimately involved in the claim construction.

In my jaded opinion, if you hire a very senior partner at a big, general law firm, it is unlikely they will add significantly to the case, no matter how persuasively they argue to the contrary.  They are unlikely to really run the case or dig into the claim construction.  If you hire a top partner at a general law firm, you are likely to end up with two or three other partners billing to your case.  This can be very, very expensive.

I would hire an experienced junior partner to save costs.  At a big firms, junior litigation partners are typically, highly experienced and competent.  They are really running the cases anyway.  If you just hire the junior partner, you won’t have to pay for all of the dead weight of partners on top.

At an IP specialty firm, I would hire either a senior or junior partner to lead the case.  Many senior partners at a patent specialty firm are very active in their cases and actually work on the claim construction.  They may actually run the case and can be well worth the higher, billable-hour fee.

Core Attorney

The core attorney is really the workhorse of the team who will be billing the most hours.  I would want an attorney with 4-7 years of primary patent litigation experience. I would want someone who is a very good writer and who has lots of experience writing briefs and motions.  Frankly, I’ve been shocked by how poorly some patent attorneys write.  If they spend a lot of time doing patent prosecution and they don’t have extensive experience writing briefs, I wouldn’t want them on my case.

The core attorney should be doing the majority of the work including writing briefs and doing the preliminary claim construction analysis.  It is critical that this attorney be engaged and energized by litigation.  I think it is critical that this person be a natural litigator.

Junior Attorney

Finally, I would want a junior attorney with 2-4 years of experience.  I would want someone who really loves research and writing.  This attorney should be in charge of document collection and review in discovery.

By screening all potential attorneys for the case, hiring natural litigators, and minimizing the number of attorneys on the team, you can decrease the cost of litigation while increasing the odds of winning.

If you are someone who loves information and wants to know more about personality types, temperament and action styles as they relate to litigation attorneys, read my analysis below.  This blog post is a good representation of my core action styles.  I’m an obsessive researcher and a compulsive information giver.  I also love quick summaries, which is why the summary and simple description of a natural litigator is above.  Luckily, I’m also a quick writer.

Personality Types, Temperament, and Action Styles in Litigation Attorneys

I’ve had a keen interest in personality types and people’s core characteristics for many years.  In my twenties, I felt stuck and demoralized when I worked in clinical laboratories. I loved science but I worked in jobs that were antithetical to my core personality and strengths.

I didn’t know that people could be energized by their job or that a career was possible for a woman.  What can I say?  I was raised on a farm in Utah.

Eventually I discovered the helpful frameworks of the Myers/Briggs personality type and Keirsey temperaments.  I got out of dreary labs and went to law school to follow a career that was a great fit for my core self who loves strategy, systems, complexity, difficult problems, in-depth research and writing.

Over the last decade that I’ve spent doing litigation, it has be interesting to watch the variety of personality types and action styles of attorneys who love litigation verses those who would rather walk over hot coals.

My conclusion based on my extensive reading, observations, and informal field research is that natural litigators have certain traits in common.

Natural litigators have an ENTJ or INTJ personality type with the corresponding Conceptualizer temperament and both a Fact Finder and Quick Start action style. These characteristics are explained in more detail below.

Personality Types

First a micro-primer on basic personality types.  In the Meyers-Briggs framework there are 16 different personality types based on four sets of opposite characteristics.

• (E) Extraversion — an orientation toward people vs. Introversion — an orientation toward solitude (I)
• (S) Sensing — focus on detailed information vs. Intuition — focus on the big picture (N)
• (T) Thinking — making decision logically vs. Feeling — making decisions based on others’ feelings (F)
• (J) Judging – prefers closure and structure vs. Perceiving — prefers spontaneity and flexibility

Although a person can function in both dimensions, a person will have an innate preference for one side of the continuum.   For example, extraverts get their energy from other people. But some people, like myself, may only be mildly extraverted and still enjoy spending large amounts of time alone.  Some people are extremely extroverted and hate spending any time in solitude.  People have a natural set point where they are more comfortable and act more naturally.

(E) Extraversion /  Introversion (I)

This dimension concerns how people are orientated to other people and the outside world.

Extraverts are energized by contact with other people.  They tend to think out loud and speak before they think.  They talk more than they listen and they respond quickly. Introverts are energized by solitude.  They think before they speak.  They listen more than they talk and it takes more time for them to respond verbally.

I don’t think this characteristic matters much for litigation attorneys.

I’ve known excellent, articulate litigators who were Introverts.  Some people confuse being personable and articulate with Extraversion.  Some Introverts are highly verbal and articulate but prolonged contact with people drains their energy.  Since most attorneys spend a lot of time alone reading and writing, being somewhat introverted can be an asset.

Some extreme Extraverts need to speak while they think.  This can increase litigation costs if they need to chat with another attorney to develop their arguments.

(S) Sensing / Intuition (N)

This set of characteristics has to do with how people process information.  Sensors focus on concrete, immediate details.  They are often literal and practical.  Many engineers are Sensors.

In contrast, Intuitives focus on concepts, meanings, and the big picture.  They are imaginative and creative.  They naturally focus on strategy.

Although I think there is a place in litigation for people with a natural inclination toward both dimensions, I think Intuitives are the most creative litigators and the best at patent claim construction.  Intuitives focus on meanings and can see patterns instinctively.  Claim construction is all about the meaning of words and being able to see the big picture in order to recognize the implications for the infringement analysis.

Litigators must think about strategy and be able to see the implications of their actions.  I would want the core attorney for my company’s litigation team to be an Intuitive.

Frankly, far more patent attorneys are Sensors than Intuitives.  Although some Sensors have developed the ability to think strategically, at their core, they are still very detail orientated.  Sensors can provide value to a patent case by focusing on technical details but I wouldn’t want them in charge of claim construction unless they had consciously developed their Intuitive side.  Some Sensor patent litigators who have done litigation for years have developed both sides and are can be excellent at both mastering the details and strategy.

(T) Thinking / Feeling (F)

This dimension has to do with how people make decisions and their orientation to the feelings of other people.  The titles of these characteristics are misleading and are miscorrelated with specific genders.

The titles are misleading because Feelers may be highly analytical and technical.  Feelers simply focus on how other people feel when they make decisions.  Contrary to popular belief, I know many engineers who are Feelers.

Moreover, in our culture, men are supposed to be Thinkers and women are supposed to be Feelers.  But this isn’t reality.  I know many men who are Feelers.  It just isn’t gender appropriate.  People may not realize that an Introverted male is a Feeler because he is analytical and quiet.  I’m actually married to one.

Thinkers make decisions rationally and logically.  They are not naturally oriented to others’ feelings.  They are often direct and blunt.  In our culture, men are supposed to be Thinkers.  Many women, however, are Thinkers, myself included. Women Thinkers tend to be nicer than their male counterparts because they have been socialized as females to be nice and consider other’s feelings.

In my experience, extreme Feelers don’t like litigation.  They generally don’t like conflict and fighting.

In stark contrast, Thinkers don’t take litigation personally and thrive in argument mode.  A Thinker is more likely to laugh at a nasty letter from opposing counsel and write a nastier one back — while chuckeling.

Litigation can be war.  I’ve had senior opposing counsel yell and swear at me.  Litigators need to be tough-skinned.  I wouldn’t want to hire someone who is going to get his feelings hurt or worry about being competitive. In litigation, I would want an attorney who is a more cold-blooded.  If you are a defendant, you really want to hire a patent litigation attorney who gets a thrill from destroying patents.  And some of the best patent litigators who do are are women.

(J) Judging / Perceiving (P)

This set of characteristics concerns the need for structure and closure.  My favorite description of the difference between a Judger and a Perceiver is that a Judger loves having a list and crossing off items on it.  In contrast, if a Perceiver makes a list, he will probably never look at it again.

Most lawyers of all types are Judgers.  It would be difficult if not impossible for an extreme Perceiver to make it through law school and pass the bar exams.

Temperaments

When you put one of each dimension together, you get one of the 16 different personality types.

Each personality type has different strengths and at the heart of each personality type is a core temperament:  Conceptualizer (NT); Traditionalists (SJ); Idealists (NF); and Experiencers (SP).

For a patent litigation team you will primarily be dealing with Conceptualizers and Traditionalists.

(Idealists don’t usually like litigation, unless it is in the area of human rights or social justice. I haven’t seen very many in patent litigation. Experiencers are the adventurous types who usually don’t go to law school — it’s too conceptual and not fun enough.)

Conceptualizers (NTs) gravitate to the law as a profession and are the natural litigators.  Only about 10% of the American population has this temperament.

Conceptualizers are natural strategic thinkers who are curious and hard driving.  They automatically see the big picture and many sides to an argument.  They love complex, difficult challenges.  They thrive when things get hard.  They are creative and generate many ideas easily.  Many love technology and science.

Traditionalists (SJ) are about 45% of the American population.  They focus on facts and love data.  They thrive when there is structure and order.  They love rules and conformity.  Traditionalists are dependable, practical, organized and systematic.  Many engineers and registered patent attorneys are Traditionalists.  In fact, because of their orientation as Sensors, Traditionalists are very good at navigating the PTO’s complex rules.

Frankly, in my experience working at both a large general firm and an IP specialty firm, there are more Conceptualizers and people with an ENTJ and INTJ personality type at big law firms.   This may be why general firms claim to have better litigators.  ENTJs have a reputation for being mean legal sharks.  In my experience, an IP specialty firm has more Traditionalists and the Conceptualizers stand out as an anomaly.  Traditionalists tend to be nicer people in general.

Both types of firms have attorneys with both Temperaments.  At a minimum, I would want at least the core attorney on the litigation team to be a Conceptualizer.

I’ll admit that I’m biased:  I’m an ENTJ.  But from years of doing litigation, I really believe that a Conceptualizer can outlawyer a Traditionalist, even in a patent case.

Action Styles

As if this post was not already too long, I wanted to mention conation, also called action style or mode.  Research in this area is fairly recent and a pioneer in the field is Kathy Kolbe of the Kolbe Institute.

According to Kolbe, action styles don’t describe what a person can do — they describe what a person will do naturally.  Conation is about instinctual action.

There are four main action styles:  1) Fact Finder; 2) Quick Start; 3) Follow Thru; and 4) Implementor.

• Fact Finders focus on data and love research and writing.
• Quick Starts love variety and are highly creative and verbal.
• Follow Thrus love organization and structure.
• Implementors love physical objects and movement.

You can take a test to find out your action style at Kolbe.com.  The test will give you a score for each action style on a scale from 1 to 10, which indicates resistance to acting in a specific mode to insistence in that mode.  If you score high in an area, you are insistent in that action mode.  You are basically compulsive in that behavior.  It is the way you will naturally act on your own volition.  (If you have read this far and just clicked that link it is highly likely that you are a Fact Finder.)

Again according to Kolbe who says that she works with law firms, people who are both insistent Fact Finders and Quick Starts are good at litigation.  As Fact Finders, they compulsively research and enjoy writing.  As Quick Starts, they are highly creative and verbal.

I was surprised at my results and also in total agreement with Kolbe’s assessment of litigators.  I’m both an insistent Fact Finder and a Quick Start.  This combo explained why I obsessively research and I’m a walking encyclopedia about subjects that interest me.  I also enjoy writing and easily reach a state of mental flow when writing a brief or blog post.  I also get bored easily and love doing many things at once.  I love depositions where being a quick thinker and talker is a big advantage.

There are many litigation attorneys who are Fact Finders.  I think insistent Fact Finders are the best litigation researchers and brief writers.   I would be happy to have one on my litigation team.  But I really think the most natural litigators are insistent in both Fact Finder and Quick Start modes.  And if I had my druthers, I would want to know the action style of the attorneys on my company’s litigation team.

If you happen to be a Fact Finder, the type of person who might have actually read this whole post, and you want even more information about how personality and action styles relate to careers, send me an email at hubbardbowman [at] me.com. I will send you a longer article that I wrote with more examples on this fascinating topic.  If you do work that is in synch with your personality and action style, you will be a much happier person.

If you hire a team of natural litigators, it is more likely that you will be much happier with the bill and the outcome of your patent case.

Fact Finders rock!  Really, who else is reading legal blogs?

Whether you make the strategic decision to enforce your patents or your company has been sued for infringement, you will need to hire litigation attorneys.  As I discussed in my last post in this series, winning and cost effective litigation is really predicated on the personality, skill and experience of the individual attorneys and not the law firm at large.

Consequently, you want to hire the best lawyers without bankrupting your company.  Most importantly for cost containment, you want to hire the best lead litigation attorney to run the case.

But what are the characteristics of the best, lead, patent litigation attorney?

Some companies think that a flashy, fast-talking trail lawyer, like on TV, is the best attorney to lead a patent case.

I don’t.

I’ve done patent litigation for over a decade in federal courts across the country.  I’ve worked with and against hundreds of litigation attorneys at some of the most well-respected and prestigious law firms from New York to San Francisco.

What I know for sure is that patent cases are not like other types of general business cases where the trial skill and verbal ability of an attorney can be the key to winning the case.

Patent litigation is far more difficult, complicated, and convoluted than typical business litigation.  In large part this is due to the complicated nature of patent law.  When you add complex technology, patent litigation becomes a very specialized and tricky game.  It becomes insanely difficult when you add foreign parties and key documents in Chinese.

What many companies don’t understand is that the key to winning a patent case is the interpretation of the claims in the patent — the claim construction.

Very, very, very few patent cases ever go to trial.  After a judge determines the interpretation of the patent claims, most patent cases are settled or decided by a judge on summary judgment, usually on briefs that the parties write outlining their arguments about why they should win without a trial.

Both parties propose their claim construction in what is called a Markman brief.  Usually, the judge will allow both parties to explain the technology and their respective claim interpretations at a Markman hearing.  There the judge may ask tough, critical questions about the technology and relevant patent case law.At the Markman hearing, the lead litigation attorney needs to be able to answer anything the judge asks very quickly while projecting an air of knowledge and certainty.  The lead litigator will lose credibility if it looks like he doesn’t understand the technology or isn’t fully prepared to address any legal issue.

The interpretation of the scope of the claims of the patent determines whether a product or process infringes.  The claims may be interpreted narrowly and in a way that does not read on the accused device or process.  This is critical!

Claim construction usually means the difference between winning and losing a patent infringement case.

A narrow claim construction for the plaintiff  either means non-infringement or a cheap settlement.

In my experience and opinion, the key to success in a patent case is the intimate involvement of the most experienced, lead attorney  in the claim construction. If the claim construction turns out badly, it is also critical that the defendant’s lead attorney be an expert in destroying patents and the testimony of expert witnesses.  They need to know patent law and understand the technology.

It is highly unlikely that the flashy, trial attorney will dig into the minute details of the claim construction or even understand the basics of the technology at the claim construction stage.  Some head trial attorneys barely know what is going on in their cases before the trial stage.  They may hand over the most important part of a patent case to an inexperienced, junior attorney who may or may not even be able to think at a high, strategic level or have any idea how to craft the critical claim interpretation in creative, supportable ways.

Even if I had a billion dollars at stake, I wouldn’t hire a flashy, superficial trial lawyer.  I would rather hire the brilliant, patent guru who had mastered the intricacies of patent law and who was intimately involved in the claim construction.  Even jurys seem to give more credibility to the trial attorney who clearly knows the technology and the law, even if he isn’t the most articulate or personally engaging attorney.

I’ve known a few patent guru trial experts but they are rare, in large part because patent cases seldom go to trial.  Registered patent lawyers with extensive trial experience have sometimes gotten their trial experience in another context like criminal law or in ITC actions.  Some of these super patent litigators are highly articulate women.  These type of litigators are in a league of their own and well worth the cost if you can find them.

The Best Head Lawyer for a Typical Patent Case

If I were going to select a lead lawyer for a typical patent case, with under $250 million at stake and one to three patents at issue, I would hire what I call a Pragmatic Litigator. (I would have a different strategy and hire a different type of lawyer if the damages at stake in the case were over $250 million and there were many patents at issue.  These types of cases are an order of magnitude more difficult.)

Case management styles vary widely among lead attorneys.  A Pragmatic Litigator sees the big picture, runs a tight ship with a small team and actually considers the costs verses the benefits of each motion or inquiry.

A Pragmatic Litigator can save a company millions of dollars during a case.  And I’m not exaggerating.

In my experience and opinion, the best Pragmatic Patent Litigator:

• has a technical degree;
• is registered as a patent attorney with the PTO;
• spends most of his or her time doing litigation and not patent prosecution;
• runs a case with a small, carefully chosen team;
• focuses on the big picture and doesn’t waste time with pointless motion practice;
• negotiates nicely with opposing counsel and limits discovery early;
• minimizes discovery motions;
• stays within a budget;
• is intimately involved in every aspect of claim construction;
• knows what is going on in the case and understands the facts and time line; and
• thinks strategically about summary judgment and settlement.

Choosing the right lead attorney for a patent case is critical for the case’s success and cost containment.

But it is difficult to judge a lawyer’s litigation style and involvement from the outside.  This is why it’s important to talk to wide network of people regarding their experiences with particular litigators and firms.

When selecting a head attorney for a typical patent case, I would look at both general and IP specialty firms.  I would carefully look at the bios of the attorneys.  I would watch out for senior attorneys who claim to have litigated patent cases if that is not their primary specialty.  They may know little about patent law if their primary practice is other types of litigation.  Their actual patent experience may be limited to a sub-issue like damages.

After researching attorneys, I would select a few who are highly experienced in patent litigation and have done at least one case in the general technical area of the patents at issue.

Then I would ask some hard questions like the following:

What is your personal experience with patent litigation?  How many cases have you litigated?  What was your primary role in the cases?  Where you responsible for claim construction? Infringement? Invalidity?  Expert Witnesses? Damages?

Get a sense of what the attorney really knows.  If you get the attorney talking, it may be evident that they are not really a patent expert.

How many attorneys are usually staffed on a patent litigation team?  How many partners?  How many different attorneys usually work on a case during the course of the litigation?

I wouldn’t want more than three main attorneys on a typical patent case, including partners.  The more attorneys and partners, the higher the cost.  If attorneys are typically shuffled between many cases, the bill will be much, much higher.  I wouldn’t want to pay to get new attorneys up to speed.

What attorneys would work on the case?

It’s important to vet all of the attorneys.  Ask who the litigation pitch partners propose to work on the case.  You want to see bios on the associates as well as the partners.  You want to find out who is really going to do the core work. Some law firms also have in-house experts in certain technical areas that can be brought on for a limited time to review prior art.  You want to know who is available to do the work.  This is where an IP specialty firm may have an advantage.

Of the attorneys who would work on the case, how many other cases are they staffed on?

Watch out.  Some attorneys at large firms work on four more cases at once.  The reality is that your case may conflict with another case and other attorneys may be brought in to cover the work — attorneys who don’t know the case well.  This increases costs and is not efficient for the client.  The temp attorneys may not do as good of a job because of their lack of background knowledge.  Of course, sometimes, the pitch hitter is actually a better litigator and after reviewing their work you may want them assigned to your case.

What is the billable hour rate for firm attorneys, paralegals, and in-house consultants?

You want to find out the rate for attorneys and paralegals at different skill levels.  Rates vary widely among firms.  Firms headquartered in New York and California typically have the highest rates.

Firms who have a specialty in patent litigation usually practice in federal courts across the country.  Attorneys are routinely admitted to a court for a specific case in a different state location. You can hire a more reasonably priced firm in the middle of the country to litigate anywhere.  Most attorneys have to travel to the court anyway.  Few live anywhere near the patent-docket, hot spots.   A difference of a hundred dollars an hour can really add up over the lifetime of a case.

What has been the average amount of attorneys’ fees in similar patent cases?  How much is commonly spent during discovery?

Watch out if they haven’t litigated a patent case for under $5 or $10 million dollars.  Beware if they typically spend millions in the early stages of discovery.  It may be because they are having senior attorneys doing document review.  It may be because they love to churn out discovery motions and fight with opposing counsel.

What do you estimate is the cost range for this case? What is your estimate based upon?

Attorneys should be able to give you a ballpark number and be able to explain their estimate.

What is their philosophy about discovery motions?

Some pragmatic litigators will actually say that they don’t fight in discovery but focus on claim construction and summary judgment motions — the core of the case.  Millions can be wasted in discovery motions that don’t significantly benefit the case or move it forward.  I’m cynical, but sometimes it seems the law firm is benefiting the most in fees from extensive discovery motion practice.

What is their philosophy about negotiating with opposing counsel?

Do they believe in playing nice?  Nasty litigation is more expensive.  I would want to know if they negotiate discovery limitations reasonably.  It is possible to save costs by limiting the time frame of discovery, the people providing documents, the scope of products at issue, and whether they will seek draft reports from experts.  Both sides can save money by being reasonable and litigating the case on the merits.  Some attorneys don’t negotiate well with opposing counsel and again, from my cynical viewpoint, I think some of them want to generate more attorneys’ fees.

Judges actually hate stupid fighting and it can be a negative for the actual party when its attorneys refuse to be nice or negotiate.

In their last few cases, how many hours did the head attorney personally spend working on claim construction before the Markman hearing with the judge?

Who will be drafting the claim construction in this case?

I wouldn’t want to hire a lead lawyer who isn’t intimately involved in the claim construction.  I would actually want the head lawyer to spend more time!  I wouldn’t want to hire a lawyer who has to be prepped on the proposed meaning of the claims the day before the Markman hearing with the judge.  If you really want to win, the head lawyer at the hearing needs to be able to answer any type of question that the judge has about claim construction. They need to really know the technology, the patents, and what is going on in the case.

In interviewing potential attorneys, you should be able to get a sense of whether they are excited and energized by patent litigation and whether they really have an expertise in the area.  Don’t hire anyone who hates litigation.  A surprising number of litigation attorneys do, especially registered patent attorneys.

Picking the right law firm and attorneys is critical for success in patent litigation. Taking the time to interview and investigate more attorneys can save a lot of money  over the lifespan of your case, which may last for many years.  In my next post, I’ll discuss the characteristics of the best attorneys for your litigation team.

RELATED POSTS IN THE SAVING MONEY IN PATENT LITIGATION SERIES:

• Series Overview
• Hiring the Best Law Firm

Patent litigation is a high stakes game.  Potential damages can be astronomical and the cost of litigation alone can bankrupt a startup.  When you engage in patent litigation, whether as the plaintiff (the party suing) or as the defendant (the party being sued), you want to win.

To win, most companies want to hire the best law firm.  And many companies believe the hype and think the best law firm is the biggest and brightest—the flashy law firm with the big marketing budget, hundreds of lawyers from the top schools, and slick, well-dressed litigators.

In reality, to win a patent case, you want to hire the best team of lawyers — lawyers who understand litigation strategy, patent law, and technology.  And those patent litigation lawyers may or may not be in the mega law firms with the opulent offices. The best lawyers for your case may not have flashy personalities or wear expensive suits. They may be nerdy and stutter, but the best lawyers will understand patent law in all of its ugly complexity.

Patent law is a difficult specialty.  Patent law concepts can be obtuse, fuzzy, and difficult to translate and apply.  Frequently, patents involve devices and processes that are complicated and highly technical.  Consequently, to prosecute patents before the US Patent and Trademark Office (the PTO), a person must have a science degree or a minimum number of college credits in physics and chemistry and take a test about patent law and the complex PTO rules (the patent bar).

If an attorney passes the patent bar, they can become a registered patent attorney.  In the old days when I took the test, the pass rate for the patent bar was less than 50%.  In my exam room, there were many people who were taking the test for the second or third time.  I passed the first time I took the test, but it was hard to pass precisely because patent law is so convoluted and complicated. Registered patent lawyers have demonstrated that they understand patent law.

Attorneys who specialize in patent litigation — litigation involving patent infringement or patent validity — may or may not be registered patent attorneys.

I’ve done patent litigation for over a decade and I’ve worked with and against hundreds of patent litigators in a range of law firms from the flashy to the plain.  You can find amazing patent litigators in all types of law firms.

There are two primary types of law firms who do patent litigation:  (1) big, general firms;  and (2) intellectual property (IP) boutiques.

The Law Firm Hierarchy and Big General Law Firms

In order to explain the differences in these types of law firms, I’m going to discuss general law firm prestige, law firm hierarchy, and how both give clients a perception of value.

The core worth of lawyers is their intelligence, knowledge, and experience.  Big, general law firms who pay big salaries want to hire and train the lawyers that they deem to be the best and the brightest.  This means that they usually hire people who graduate from the top law schools.  A law firm’s prestige is based in part on the prestige of the law schools attended by its lawyers.  (A lawyer explained this to me before I went to law school, which is part of the reason I went to an expensive, top-tier law school instead of a cheaper, lower-ranked, local one.)

Law schools admit students primarily based on their grades in college and their law school entrance exam (LSAT) scores. Thus, big law firms end up full of lawyers who went to top schools.  Consequently, these firms are supposed to have the smartest and therefore best lawyers.

In the context of patent litigation, the problem with some big law firms is that they end up full of English, political science, and history majors who know little or nothing about technology or patent law.  It is far easier to get good grades in English than chemistry and get into a top law school.  Consequently, at big, general law firms, there can be a dearth of attorneys with science backgrounds who can understand complex technology — the type of technology that is frequently at issue in a patent case.  This is why these types of law firms frequently allow non-patent lawyers to litigate patent cases:  the attorneys may have graduated from a top law school but they are not qualified to take the patent bar.  Some of these top grads are still great at patent litigation and some are not.  In large part it depends on the lawyer’s general curiosity level and interest in science and technology.

Many technical people with science degrees work while they go to law school and therefore attend local law schools at night.  Many of these attorneys couldn’t get an interview with a top, general law firm because of the ranking of their law school.  I think this is far more a reflection on the law firm than the person.

Intellectual Property Boutiques

In contrast to big general law firms, intellectual property boutiques that specialize in patent law care most about a lawyer’s technical background rather than the ranking of their law school.  A patent boutique understands that intelligence and competence doesn’t necessarily correlate with the prestige of a top law school.  Understanding technology is critical for patent specialists.  These firms are full of people with technical degrees, many with PhDs, some of whom went to less than stellar law schools.  At these types of firms, usually only registered patent attorneys do patent litigation.

Some large general law firms have tried to address this technical gap by swallowing small IP specialty firms whole, thus increasing the numbers of technical lawyers and registered patent attorneys in their ranks and improving their ability to do patent litigation.

What type of law firm has the best patent litigators?

There are two general types of law firms who compete for patent cases:  the big law firm generalists and the boutique patent specialists.  Some big general law firms claim that the attorneys in IP boutiques are not “real” litigators and therefore not as competent as big, general firm litigators.  In turn, some IP specialty firms claim that big, general firms don’t have attorneys qualified to litigate patent cases with complex technology.

I’ve worked at both types of law firms and I’ve seen that the quality of litigators actually depends on the personality, skill, and experience of the individual attorneys.  When I worked at a big general law firm, I saw great patent litigators who didn’t have science degrees and couldn’t qualify to be registered patent attorneys.  But when I worked at a IP boutique, I also ended up as co-counsel to a big firm that lacked enough attorneys who understood both chemistry and patent law.

What I know for sure is that high profile law firms, whether general or specialist, will cost a company the most in attorneys’ fees because the big firms generally have a much higher billable hour rate.  Many also have astronomical overhead. Beautiful offices and high salaries raise rates.

Big law firms may or may not be worth their fees depending on the individual lawyers running the case. With the right lawyers, it can be cost effective to hire a large, expensive firm but you have to select your lawyers carefully and manage the case closely.  (This is assuming that you don’t go with a law firm that takes cases on contingency, which raises a whole host of other issues.)  The biggest cost is losing the case.

In the end, it is the individual lawyers  who are critical to success in a patent case — not the type of law firm.

And in my personal, cynical opinion, it is the management style and sometimes greed of the lead attorneys and law firm that can dramatically vary the cost of the attorneys’ fees in patent litigation.

A company can save millions by knowing what to look for to find a pragmatic, efficient, winning litigation team.

In my next posts, I will describe what I believe are the characteristics of the best and most cost effective patent litigation attorneys.

Patent litigation is expensive—often horrifically expensive—with attorneys’ fees quickly escalating to millions of dollars, even in relatively small cases.  A plaintiff’s claim for patent infringement damages can be in the hundreds of millions and even billions of dollars.

It’s a high stakes game.  Patent litigation can break a company or conversely lead to market success when a competitor is stopped in its tracks.

And startup companies that have venture funding sometimes find themselves playing the game.  A nimble startup with a stunning new product can scare a giant into suing it.  The emerging startup may be sued for patent infringement when it’s about to launch a key product that threatens a giant company with a giant patent portfolio.  Sometimes a startup with pioneering patents on cutting-edge, key technology will sue a giant and spur a licensing campaign.  A startup may take the risk and incur the expense in the hopes of winning big.  Even giants are scared of patents and patents can give a startup negotiating leverage.

Ultimately, playing the patent litigation game is expensive.  But there are ways to greatly reduce costs while actually increasing the odds of winning.

I’ve done patent litigation for over a decade.  I’ve spent many years at large law firms and I’ve litigated with and against some of the biggest law firms in the patent litigation industry.  I’ve seen a lot and I have an insider’s knowledge of how to cut costs—the knowledge that big law firms don’t necessarily want their clients to know.

It’s the elephant in the room that the client and  the attorneys don’t usually discuss.  Except in rare contingency cases, the interests of the law firm in increasing billable hours and making money is directly at odds with a company’s interest in reducing its litigation bills.  The lawyers are generally not going to help the clients figure out how to pay the law firm less.

I’m going to spill the beans.

This is the start of a four part series, Saving Money in Patent Litigation, where I discuss ways to reduce costs while actually increasing the odds of winning.

The posts will discuss:

• Hiring the Best Law Firm;
• Hiring The Best Lead Litigation Attorney;
• The Best Patent Litigation Team; and
• Case Management Strategies.

I’m going to do something unusual.  I’m going to write from the prospective of a client while using the knowledge that I’ve gained as a litigation attorney.  I’m going to discuss what I would do if I were paying the lawyers to win a typical patent case.

My goal is to help companies pick the best attorneys for the job, ask the hard questions, and demand accountability from their litigation lawyers in order to reduce litigation bills without compromising the ability to win the case.

And to all of the litigation attorneys who subscribe to this blog, I would love to hear your comments.  How can we really help our clients most effectively?