IP Litigation: Pre-Filing Considerations

Pre-Filing Considerations In Pre-Filing Considerations In

Intellectual Property LitigationIntellectual Property Litigation

State Bar of California Annual MeetingSeptember 12, 2009 – San Diego

SPEAKERS: Craig Holden, Esq.

MGA Entertainment, Inc.

Scott Hansen, Esq.Fulwider Patton LLP

Overview of Internet Pre-Filing Issues and Considerations

• Common Types of IP-Related Internet Claims• What Type of Site/Activity Is Involved?• Who Is Responsible For The Site/Content?• Personal Jurisdiction?• Pre-Filing Evidence Issues• Statutes to Keep In Mind

Common Types of IP-Related Internet Claims

• Copyright• Trademark/Unfair Competition• Right of Publicity• Trade Secret• Counterfeiting • Patent

What Type of Site/Activity Is Involved?

• “Pure" Business Commerce Site• Search Engine• Individual Site

– E.g., “Fan" Site

• User Generated Content– Host/Operator of the Site– Users on/of the Site

• Affiliates/Traffic Drivers– Email Can Deliver Users Here

Who Is Responsible For The Site / Content?

• Sometimes obvious• “WhoIs.net”-type search (for domains)• Other “public sources”• Social Networking• Blogs• Chats• Follow the money

Who Is Responsible For The Site / Content?, Cont.

• Pre-Naming Formal Discovery– Potential DMCA subpoena (Copyright)

• Subpoena issued to ISP under DMCA provisions • But can be limited. E.g, RIAA v. Verizon Internet Svs., 351

F.3d 1229 (C.A.D.C. 2003) (quashing subpoena where ISP was only a transitory network)

– Doe Pleading, Expedited Discovery Under FRCP 26• E.g., Arista Records v. John Does 1-19, --F. Supp. 2d --,

2008 WL 1851772 (D.D.C. April 2008) (where plaintiffs showed prima facie copyright infringement and good cause that third-party discovery was needed to identify defendants, early discovery permitted)

Personal Jurisdiction --Website Issue

• “Interactive” v. “Passive”• “A passive website and domain name alone do not

satisfy the . . .effects test . . . .”Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1160 (9th Cir. 2006)

• Anticipate post-filing jurisdictional battle and discovery

Pre-Filing Evidence Issues

• Get What’s There Now– Printing– “Film" the Action

• Consider What Was There– Caching and Archive.org (Internet Archive)

• Healthcare Advocates v. Harding, Earley, 497 F. Supp. 2d 627 (E.D. Pa. 2007) (discussing manner in which archive.org operates)

• Admissible?– Lorraine v. Markel Am. Ins., 241 F.R.D. 534, 553 (D.Md. 2007)

(“Internet Archive is a relatively new source for archiving websites. Nevertheless, Plaintiff has presented no evidence that the Internet Archive is unreliable or biased.”)

Pre-Filing Evidence Issues, Cont.

• What are users of the site saying?– May reflect knowledge or obvious problems on the site

• What are others saying about the site?– Off-site blogs– Chats

Pre-Filing Evidence Issues, Cont.

• How will it ultimately be packaged to the Court?– Keep track of how material is collected– Be mindful of admissibility issues– Internet material gets voluminous very fast

• Court/Judge technically savvy?• Rules on electronic submissions?

Some Statutes To Keep In Mind

• Digital Millennium Copyright Act (“DMCA”) 17 U.S.C. §512

– In copyright actions, establishes “safe harbors” for certain types of Internet activities that qualify.

• Transitory network communications• System caching

– Information at direction of users• Only if no actual knowledge of infringement, nor • Awareness of facts/circumstances from which activity is

apparent– Information location tools

• What is the DMCA stated position and policy of the site at issue?

Some Statutes To Keep In Mind, Cont.

• Communications Decency Act (“CDA”) 47 U.S.C. §230– “No provider or user of an interactive computer service shall

be treated as the publisher or speaker of any information provided by another information content provider.”

– “The term ‘interactive computer service’ means any . . . provider that provides or enables computer access by multiple users to a computer server . . . .”

Some Statutes To Keep In Mind, Cont.

• “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property." Section 230(e)(2)

– “In the absence of a definition from Congress, we construe the term ‘intellectual property’ to mean ‘federal intellectual property.'" Perfect 10, Inc. v. CCBillLLC, 488 F.3d 1102, 1119 (9th Cir. 2007) (CDA immunity does not apply to federal IP claims, and therefore 9th Cir. concluded there’s immunity for all state-law claims as they are not considered federal IP claims).

– “[I]nline with the First Circuit’s dictum in Universal, this court disagrees with the Ninth Circuit’s decision in Perfect 10 that [Section] 230(e)(2) exempts only federal intellectual property laws from the operation of [Section] 230. Consistent with its text, §230(e)(2) applies simply to ‘any law pertaining to intellectual property,' not just federal law." Doe v. Friendfinder, 540 F. Supp. 2d 288, 302 (D.N.H. 2008 (March))

For More Details…

• Go to www.ipsection.org• From there, go to webpage of IP

Litigation Standing Committee

http://www.ipsection.org/

Why Investigate Before Filing?

• Rule 11, Attorney Fees/Costs, etc.


• Increase Chances for Success


• Makes Litigation More Efficient


• Increase Chance of Early Settlement


• Conserve Money, Reduce Unnecessary Costs


• Reduce Stress and Uncertainty


• Find Show Stoppers in Advance


• See the Case Through Eyes of Defendant

Types of IP Litigation

• Patent• Trademark• Copyright• Trade Secret• Internet-Related• Right of Publicity/Privacy

Great Materials/Checklists• Go to www.ipsection.org

– Click on Litigation Standing Committee webpage

• Detailed presentation materials by:– Alan P. Block, Esq. (Patent)– Jane Shay Wald, Esq. (Trademark)– Sean Morris, Esq. (Internet-Related)– Kate Spelman, Esq. (Copyright)– Randy Kay, Esq. (Trade Secret)– Future Programs (PI’s, Right of Publicity)


IP Section Webpage

IP Litigation Standing Committee Webpage

Patent Litigation

Patent Litigation

• Expensive– $500K-$1.5million through discovery

• Patents are:– Complex technical documents– Sometimes very valuable– Hard to understand

• “…whereas said frictionless coupling is interposed in a proximal spacial relationship with respect to said gear box…”

Some Pre-Filing Considerations

• Is it worth it?• Which patents?• Who to sue?• Where to sue?• Pre-Filing Investigation• Checklist

Is it Worth It?• Award in patent case

– Damages; or– Reasonable Royalty; and/or– Injunction

• Estimate your damages• What is “reasonable royalty” in your

industry?• Worth of case (1 approach) =

% Chance of Winning x Range of Possible Recovery

Which Patents?

• What is in your portfolio?– Are multiple patents being infringed?

• How many to include?

– Are there continuation patent applications pending?

– Is a broadening reissue a possibility in this case?

Which Patents? (continued)

• Are you practicing your patents?– Reasonable royalty v. lost profits– No guarantee of injunction– Consider ITC (must have domestic

business)

• Make sure your products are marked– Or, give early notice of infringement

Where to Sue?

• Local Patent Rules?– N.D. California Local Patent Rules

• S.D. California• E.D. Texas• Some Judges

– C.D. California: No Local Patent Rules

Pre-Filing Investigation

• Good to know problems in advance• Rule 11 and Section 285 of patent act

require an inquiry that is reasonable under the circumstances

• Understand limitations of your patent• Get a good sense of whether the

patent is valid


• What do the claims mean?– What would an accused infringer say?

• Review the file history for limiting statements or anything else that’s unusual

• Consider prior art problems• Can accused infringer design around

the patent?• Consider hiring consulting expert

Possible Defenses

• Prior Art• Enablement• Written description• Indefiniteness• Best mode• Inventorship• Ownership• Inequitable Conduct (any prior art not

submitted to the Patent Office?)


• Infringer’s Activities– Try to obtain samples of accused product

• At least ask for one and an explanation why there is no infringement

– Try to reverse engineer the accused product

– Don’t make guesses about the product when you could have known more detail


• Prepare a claim chart– Compare patent claims w/accused

product– Be ready to justify your case to the court

and accused infringer early on !

• Conduct infringement study BEFORE lawsuit is filed– Rule 11 not satisfied by post-filing

investigation

FOR MORE DETAILS…

• See, “Some Pre-Filing Considerations in Patent Litigation”– Alan P. Block, Esq., Hennigan Bennett &

Dorman LLP– Powerpoint /Checklist available at

www.ipsection.org• Go to Litigation Standing Committee Webpage


Conclusion

Conclusion

• Watch IP Litigation Committee webpage @ www.ipsection.org for more pre-filing checklists (Preliminary Injunction, Right of Publicity, Design Patent)


IP Litigation: Pre-Filing Considerations

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