Transcript PATENT LITIGATION REMEDIES: SOME STATISTICAL OBSERVATIONS

PATENT LITIGATION
REMEDIES:
SOME STATISTICAL
OBSERVATIONS
PROF. PAUL JANICKE
UNIVERSITY OF HOUSTON
LAW CENTER
2005 PATENT DISPOSITIONS [2,231]
Adjudicated
summary jgt.
jury trial
bench trial
want of
prosecution
no jurisdiction
default
Total adjud:
Settled
consent judgment
voluntary
dismissal
dismissal stating
settlement
other dismissals
Total settled
160 (7.2%)
53 (2.4%)
19 (0.9%)
38 (1.7%)
21 (0.9%)
43 (1.9%)
314 (14%)
140 (6.3%)
589 (26%)
974 (44%)
314 (14%)
1917 (85.9%)
2
2006 PATENT DISPOSITIONS [2,416]
Adjudicated
summary jgt.
jury trial
bench trial
want of
prosecution
no jurisdiction
default
Total adjud:
Settled
consent judgment
voluntary
dismissal
dismissal stating
settlement
other dismissals
Total settled
170 (7.0%)
52 (2.2%)
22 (0.9%)
31 (1.3%)
24 (0.9%)
28 (1.2%)
327 (13.5%)
124 (5.1%)
611 (25.3%)
1045 (43.3%)
309 (12.8%)
2089 (86.5%)
3
DISPOSITION MODES FOR OTHER
KINDS OF CASES -- 2004
Mode of Disposition
Trademark Copyright All Civil
Cases
Cases
Cases
[3,159]:
[2,316]:
[145,046]
except
prisoner
cases:
Adjudicated
summary jgt:
jury trial
bench trial
167 (5.3%)
15 (0.4%)
24 (0.7%)
152 (7%)
18 (0.7%)
6 (0.2%)
18,375 (13%)
1,852 (1.3%)
1,240 (0.9%)
want of prosecution
no jurisdiction
default
Total adjud:
73 (2.3%)
29 (0.9%)
188 (6.0%)
496 (16%)
49 (2.1%)
15 (0.6%)
181 (8%)
421 (18%)
4,187 (2.8%)
2,144 (1.5%)
10,172 (7%)
37,970 (26%)
340 (11%)
709 (22%)
1255 (40%)
181 (8%)
484 (21%)
908 (39%)
3,244 (2.2%)
24,926 (17%)
51,079 (35%)
359 (11%)
2663 (84%)
322 (14%)
1895 (82%)
27,827 (19%)
107,076 (74%)
Settled
consent judgment
voluntary dismissal
dismissal stating
settlement
other dismissals
Total settled
4
HOW DISPOSITION MODES CHANGED
OVER TIME
Mode of
Disposition
2004: Patent 1986: Patent 1979: Patent
Cases[2,362] Cases [1,013] Cases [786 ]
Adjudicated
summary jgt:
jury trial
bench trial
157 (7%)
60 (2.5%)
18 (0.7%)
78 (7.6%)
20 (2.0%)
53 (5%)
58 (7.3%)
17 (2.2%)
66 (8.3%)
38 (1.6%)
16
14
34 (1.4%)
26 (1.1%)
333 (14%)
10
23
190 (19%)
8
2
165 (21%)
140
481 [all agreed
dismissals]
931 (39%)
150
673 [all
agreed
dismissals]
included
337 (14%)
included
included
2029 (86%)
823 (81%)
621 (79%)
want of
prosecution
no jurisdiction
default
Total adjud.:
Settled
consent judgment 144 (6%)
voluntary
617 (26%)
dismissal
dismissal stating
settlement
other agreed
dismissals
Total settled
included
5
NUMBER OF CASES BROUGHT
• PEAKED AT 3,075 IN FY2004
• DIPPED TO 2,720 IN 2005
• 2,830 IN 2006
* SOURCE: ADMIN. OFFC. of U.S. COURTS ANNUAL RPTS.
6
FY2006 BUSIEST PATENT DISTRICTS:
2006 2004-05
Rank Rank
District
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CD Cal
ED TX
ND Cal
DNJ
ND Ill
SDNY
D Del
D Mass
ND Ga
D Minn
SD FL
ED Mich
ND TX
SD Cal
MD FL
D Colo
D Utah
ED Pa
ND Ohio
D Ore
ED Wis
D Conn
ED Mo
EDNY
ED Va
1
6
2
7
3
4
5
11
13
9
14
8
16
15
12
20
22
10
24
___
___
___
___
21
19
% of national
2006 filings total
262
216
195
143
132
121
120
76
73
66
62
61
54
52
50
48
45
44
41
40
40
39
39
37
35
9.63
7.94
7.17
5.26
4.85
4.45
4.41
2.79
2.66
2.43
2.28
2.24
1.99
1.91
1.84
1.76
1.65
1.62
1.51
1.47
1.47
1.43
1.43
1.36
1.29
7
COST OF GETTING TO
JUDGMENT
• COUNSEL FEES and RELATED COSTS
PER AIPLA 2005 SURVEY:
– $4,500,000 [NATIONWIDE MEDIAN, CASES
INVOLVING >$25M]
– REALITY: PROBABLY VALID FOR
“REGULAR” CLIENTS AND HOURLY
BILLING
– REALITY: CONTINGENCY AND SMALL
TROLL REPRESENTATIONS PROBABLY
MUCH LOWER
8
• DISRUPTION COSTS OF LITIGATION
ARE HIGH FOR LARGE ENTITIES
• TIME TO JUDGMENT IS IMPORTANT
– BIG COS. FEEL PRESSURED TO SETTLE
EARLY
9
WHAT ARE THE JURY
VERDICTS?
• NOT SO HIGH
– PRESS CAPTURES ONLY THE HIGHNUMBER VERDICTS
• IN 2005-2006, VERDICTS WERE
MODEST VIS-A-VIS PRESS COVERAGE
IMPRESSIONS
SOURCE: COURT DOCKET SHEETS
10
PATENT VERDICTS – 2005-2006
6
4 Hynix
Rambus
306,900,000
CA
N
Whyte
6
1 Mallinkrodt Masimo
265,000,000
CA
C
Pfaelzer
6
4 z4
Microsoft 133,000,000
TX
E
Davis
5
5 Translogic Hitachi
86,500,000
OR
6
6 Finisar
DirectTV
78,920,250
TX
E
Clark
6
4 TiVo
Echostar
73,991,964
TX
E
Folsom
6
5 Ariad
Eli Lilly
65,200,000
MA
6
11 Philips
Tatung
53,504,000
CA
51,000,000
CO
Matsch
49,100,000
DE
Jordan
5
5
9 Medtronic BrainLAB
Adv. Med.
5 Optics
Alcon
Panner
Zobel
C
Marshall
11
PATENT VERDICTS – 2005-2006
6
6
11 Muniauction Thomson
Fin.
10 Power
Fairchild
Integrations
W
Lancaster
38,482,008
PA
33,981,781
DE
Farnan
Long's
26,359,405
DE
Farnan
25,000,000
FL
M
Baker, D
12,000,000
CA
N
Wilken
5
3 Tristrata
6
11 800 Adept
5
7 02 Micro
Murex
Monolithic
Power
5
6 Amado
Microsoft
8,960,000
CA
C
Carter
6
7 Invitrogen
Stratagene
7,932,966
TX
W
Sparks
6
12 Genentech
Insmed
7,500,000
CA
N
Wilken
7,000,000
WI
W
Crabb
6,241,000
CA
C
Real
6
5
9 Innogenetics Abbott
10 Int'l Rectifier Ixys
12
PATENT VERDICTS – 2005-2006
5 12 3M
Avery
Dennison
5,897,062
MN
Tunheim
6
Lendingtree
5,794,400
DE
Robinson
5 9 Third Wave
5 12 Paice
5 5 Coca Cola
Stratagene
Toyota
Pepsico
5,290,000
4,296,950
4,167,936
WI
TX
GA
W
E
N
Crabb
6
5 Voda
Cordis
3,800,000
OK
W
Leonard
6
4 Visto
Seven
3,683,000
TX
E
Ward
6
8 Transocean GlobalSantaFe
Mars-Kal
Del Monte3 Kan
Heinz
6 Cryovac
Pechiney
3,629,000
TX
S
Lake
3,560,120
2,514,024
CA
DE
C
Klausner
5
6
1 IMX
Folsom
Story
Jordan
13
PATENT VERDICTS – 2005-2006
5
7 Exergen
5 11 02 Micro
5
6
6
6
9
6
Naturopathic
Black &
Decker
Wal-Mart
2,467,800
MA
Sumida
2,000,000
TX
E
Ward
1,902,173
1,750,000
1,366,612
MO
IL
MI
W
N
W
Fenner
Dermal
Robt. Bosch
Tool
Amer. Seating USSC
Lindsay
St. Eve
Cohn
14
PATENT VERDICTS – 2005-2006
6
5 Stant
Gerdes
1,005,000
IN
S
Young
5 12 Nichols Inst.
Scantibodies
1,000,000
CA
S
Brewster
5
6
5
4 Nikko
7 Floe
7 Exergen
888,308
643,881
254,526
CA
MN
MA
N
Armstrong
6
1 Nexmed
R.E. Service
Newmans'
CVS
Block
Investment
244,000
UT
Stewart
5
Freedom
5 Wireless
Boston
Commun.
200,000
MA
Harrington
Frank
Lindsay
15
PATENT VERDICTS – 2005-2006
Year Mo. Plaintiff
Defendant
District Dist[State] rict Judge
Verdict
5
9 Dystar
CH Patrick
90,000
SC
Catoe
6
4 Wald
Mudhopper
77,017
OK
5 10 Hildebrand
5 4 Andersen
5 9 Acumed
Ark
6 5 Welding
5 9 Mueller
Sports
Steck
Fiber
Composites
Stryker
74,863
46,020
39,170
CO
MN
OR
Meyer
Sportstar
18,688
PA
E
Giles
15,221
WI
W
Crabb
6 11 Ricoh
Pitney Bowes
0
NJ
W
Cauthron
Johnson
Ericksen
Brown, A.
Brown, G
16
PATENT VERDICTS – 2005-2006
Year Mo. Plaintiff
Defendant
Verdict
District [State]
District Judge
6
11 Caritas
Comcast
0
TX
E
Folsom
6
11 Barry Fiala
Stored Value
0
TN
W
Mays
6
10 Verve
Hypercom
0
AR
6
8 Kinetic
Bluesky
0
TX
W
Ferguson
6
6 Sensormatic
WG Security
0
TX
E
Ward
6
6 Fresenius
Baxter Int'l
0
CA
N
Armstrong
6
5 Adenta
Orthoarm
0
WI
E
Curran
6
4 Silicon Labs.
Niknejad
0
TX
W
Sparks
6
4 Ethos
RealNetw orks
0
MA
6
9 Hyperion
Outlooksoft
0
TX
E
Ward
5
12 Haberman
Gerber
0
WI
W
Shabaz
5
12 Hockerson
Costco
0
WA
W
Lasnik
5
10 Cedarapids
Johnson Crusher
0
TN
M
Campbell
5
10 Eberle
Reno
0
AZ
5
6 Custom Leathercraft
Rooster Prods.
0
CA
5
2 Espeed
Brokertech
0
DE
Martone
Young
Campbell, D
C
Keller
Jordan
17
MEDIAN WINNING VERDICT
• $4,167,936
• ONLY VERDICTS ARE VIEWED HERE
• FINAL JUDGMENT CAN BE HIGHER DUE TO
INTEREST AND POSSIBLE ENHANCEMENT; OR
LOWER DUE TO REMITTITUR OR JMOL
• IF THE 2007 VERDICT IN LUCENT v. MICROSOFT
STANDS ($1.5B), THE MEDIAN WILL BE NUDGED UP
18
BY DISTRICTS
• LOOKING AT SOME HIGH-VOLUME
DISTRICTS FOR 2005-06:
19
GROUPED BY DISTRICT
Year
Mo.
Plaintiff
Defendant Verdict
District
[State] District Judge
6
4 z4
Microsoft
133,000,000
TX
E
Davis
6
6 Finisar
DirectTV
78,920,250
TX
E
Clark
6
4 TiVo
Echostar
73,991,964
TX
E
Folsom
5
12 Paice
Toyota
4,296,950
TX
E
Folsom
6
4 Visto
Seven
3,683,000
TX
E
Ward
2,000,000
TX
E
Ward
0
TX
E
Folsom
0
TX
E
Ward
0
TX
E
Ward
5
11 02 Micro Sumida
6
11 Caritas
Comcast
Sensorm WG
Security
6 atic
6
6
9 Hyperion Outlooksoft
20
GROUPED BY DISTRICT
Year Mo. Plaintiff
Defendant
6
5 Ariad
Eli Lilly
5
7 Exergen
5
5
6
District
[State] District Judge
Verdict
65,200,000
MA
Zobel
Wal-Mart
2,467,800
MA
Lindsay
7 Exergen
5 Freedom
Wireless
CVS
Boston
Commun.
254,526
200,000
MA
MA
Lindsay
Harrington
4 Ethos
RealNetwor
ks
0
MA
Young
21
GROUPED BY DISTRICT
Year Mo. Plaintiff
Defendant
5
5 Adv. Med. Alcon
Optics
6 10 Power
Fairchild
Integrations
5
3 Tristrata
Long's
District
[State] District Judge
Verdict
49,100,000
DE
Jordan
33,981,781
DE
Farnan
26,359,405
DE
Farnan
6
1 IMX
Lendingtree
5,794,400
DE
Robinson
6
6 Cryovac
Pechiney
2,514,024
DE
Jordan
5
2 Espeed
Brokertech
0
DE
Jordan
22
GROUPED BY DISTRICT
Defendant
Verdict
District
[State] District Judge
Masimo
265,000,000
CA
C
Pfaelzer
6 11 Philips
Tatung
53,504,000
CA
C
Marshall
5
Microsoft
8,960,000
CA
C
Carter
5 10 Int'l Rectifier Ixys
6,241,000
CA
C
Real
5
3,560,120
CA
C
Klausner
0
CA
C
Keller
Year Mo. Plaintiff
6
5
1 Mallinkrodt
6 Amado
3 Mars-Kal
Kan
6 Custom
Leathercraft
Del MonteHeinz
Rooster
Prods.
23
HOW LONG DOES IT TAKE?
• TIME FROM FILING TO JUDGMENT IN
THE DISTRICT COURT
– FOR SETTLED CASES: SEE THE NEXT
SLIDE
– FOR ADJUDICATED CASES: SEE THE
SLIDE FOLLOWING IT
SOURCE: FROM DISPOSITION INFORMATION CONTAINED IN FED. JUDICIAL
CENTER, INTEGRATED DATABASE 2006
24
Duration of Settled Cases – FY06
Number of Cases
700
600
500
400
300
200
100
0
5
15
m
os
.
25
m
os
.
m
35
os
.
m
os
.
45
m
os
.
Ov
er
50
m
os
.
Time from Filing to Judgment
25
Number of Cases
Duration of Non-Settled Cases – FY06
50
45
40
35
30
25
20
15
10
5
0
5
m
os
.
15
m
25
os
.
m
35
os
.
m
45
os
.
m
Ov
er
os
.
50
m
os
.
Time from Filing to Judgment
26
COMMENTS
• MOST SETTLEMENTS COME EARLY
• FOR NON-SETTLED CASES:
– THE EARLY YELLOW BAR IS MAINLY
DEFAULTS
– DARK GREEN BARS ARE MAINLY
SUMMARY JUDGMENTS
– LIGHT GREEN BARS ARE TRIALS
– BRIGHT GREEN BAR AT RIGHT IS A MIX
OF LATE DISPOSITIONS
27
IMPACT OF eBAY ON
PERMANENT INJUNCTIONS
• SOME
• RATE OF DENIAL PRE-eBAY WAS 16%
• NOW IT IS ABOUT 25%
SOURCES: LEXIS AND WESTLAW RESEARCH; DOCKET SHEETS
28
APPELLATE POST- eBAY RULINGS
ON PERMANENT INJUNCTION
Year
Ruling
P
D
Court
2006
2006
2006
Inj. affd.
Remanded
Remanded
Kemin
Pigmentos Fed. Cir.
Monsanto
Scruggs
Fed. Cir.
Int'l. Rectifier Ixys
Fed. Cir.
29
POST-eBAY DISTRICT COURT RULINGS
ON PERMANENT INJUNCTION
Broadened
Re-granted
Granted (default)
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Denied
Denied
Denied
Denied
Denied
Deferred
Future royalties
ordered
Smith & Nephew
3M
Telequip
Black & Decker
Floe
Litecubes
Rosco
MPT
Wald
Visto
TiVo
Transocean
Novozymes
Verizon
Sundance
Voda
Paice
z4
Oki Am
IMX
Synthes
Avery Dennison
ChallengeExchange
Robt. Bosch
Newmans' Mfg.
Northern Light
Mirror Lite
Marathon Labels
Mudhopper
Seven Networks
Echostar
GlobalSantaFe
Genencor
Vonage
DelMonte
Cordis
Toyota
Microsoft
AMD
LendingTree
W.D.
D.
N.D.
N.D.
D.
E.D.
E.D.
N.D.
W.D.
E.D.
E.D.
S.D.
D.
E.D.
E.D.
W.D.
E.D.
E.D.
N.D.
D.
Tenn.
Minn.
N.Y.
Ill.
Minn.
Mo.
N.Y.
Ohio
Okla.
Tex.
Tex.
Tex.
Del.
Va.
Mich.
Okla.
Tex.
Tex.
Cal.
Del.
Finisar
DirecTV
E.D.
Tex.
14 granted; 5 denied; 1 granted in part; 1 deferred
30
COURTS HAVE NOT YET FULLY
ANALYZED THE CHOICES
• RISKS OF REPETITIVE LITIGATION
DROVE THE PRE-eBAY CASES
• CHOICE TODAY REALLY IS:
– DEALING WITH ANY FUTURE PROBLEMS BY
CONTEMPT PROCEEDING
– DEALING WITH ANY FUTURE PROBLEMS BY
FOLLOW-ON LAWSUIT (WITH INJUNCTION
NEXT TIME AROUND; TREBLE DAMAGES;
ATTORNEY FEES)
31